Novartis AG (NOVN) Earnings Call Transcript & Summary

Good morning and good afternoon, and welcome to the Leqvio FDA Approval Investor Call. [Operator Instructions] and the conference is being recorded. [Operator Instructions] A recording of the conference call, including the Q&A session, are available on our website shortly after the call ends. [Operator Instructions] With that, I would like to hand over to Samir Shah, Global Head, Investor Relations. Please go ahead.

Thank you very much, and thank you to all of you who are participating in this call. And it's good afternoon for the people in Europe, and good morning for the people in the U.S. Very pleased to hold -- host this particular call with you. With us, we have Marie-France Tschudin, who is the President of Novartis Pharmaceuticals; we also have David Soergel, who is the Global Head of Drug Development for cardiovascular and metabolism; and we have Victor Bulto, who is the Head of Novartis Pharmaceuticals in the U.S. Before we start, I just wanted to read through to you the safe harbor statement. The information presented today contains forward-looking statements that involve known and unknown risks, uncertainties and other factors. These may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. For a description of some of these factors, please refer to the company's Form 20-F, and its most recent quarterly results on Form 6-K that, respectively, were filed with and furnished to the U.S. Securities and Exchange Commission. And with that, I'm now going to hand the call to Marie-France.

Thank you, Samir, and good morning, good afternoon. Thank you all for joining us today on the cusp of the holiday season. It's with great pleasure that we update you on the FDA approval of Leqvio and of course, talk to you about our launch strategy for the U.S. market. If I move on to Slide #5. As you all know, cardiovascular is a really important area for Novartis. You've seen with Entresto, we have a strong presence in the market. We've also successfully changed clinical practice in an area that hadn't seen any progress for decades. So it's with the same philosophy that we see our next generation of assets and why we have the confidence that we can impact cardiovascular disease at scale. We have high ambitions for both Leqvio and pelacarsen. And we know that in order to bring these products to market, we will need to bring the evidence, we'll need to bring the right level of engagement and, of course, new commercial approaches in order to really change the standard of care. And that's what you can expect to see from us over the next months and years to come. So if I move on to Slide #6, if we look more carefully at the CV burden in the U.S., you know that for decades, we've had effective medicines to lower LDL-C, yet in the U.S. alone, we're losing 900,000 lives a year and mortality keeps growing. This is not because we're not investing enough in the field either. In fact, 14% of health care expenditure goes towards cardiovascular disease. And based on the current estimates, costs are actually expected to reach $1.1 trillion by 2035. So the challenge is big. And given the size of the challenge and also the lack of progress that we've seen in the space, we know we need to bring a new approach in order to really make an impact at scale. If we look at Slide #7 and look at U.S. clinical barriers more in detail, you'll see that only 20% of U.S. ASCVD patients are at goal today, while the vast majority, so about 80% of patients, remain at risk of cardiovascular events. And what's actually getting in the way of better outcomes is a number of nonclinical barriers. In particular, adherence, access and affordability. And Victor will talk about these in more detail. Now we believe with twice-yearly HCP-administered Leqvio, which has a proven sustained LDL-C lowering, we actually have an opportunity to rethink how it's managed. We also think a different go-to-market model, working with health care systems, prioritizing ASCVD, making it easy for HCPs to administer and, of course, affordable for patients to use Leqvio that we can actually bring this ambition to life. So we know that we have to change, and that's what you're going to see. You're going to see a lot of change in how we transform ASCVD care. And now that we've got approval, we're really, really excited to get started. So before we get to the details on the commercial model, I'd like to ask Dave to recap on the science and also to explain the label. And then, of course, Victor will provide you with the details of our launch strategy. So over to you, Dave.

Thanks, Marie-France. Appreciate it. It's a great pleasure to be here to talk about Leqvio. I mean Leqvio is an exciting and innovative approach that will help patients get control over their LDL-cholesterol. We just heard from Marie-France about the burden of cardiovascular disease. And we believe that Leqvio could be a real advance for patients trying to control their cardiovascular risk. So what's that based on? So if we look at Slide 9, Leqvio is the first and only approved siRNA LDL-cholesterol lowering agent. Now why is that important? The profile of an siRNA is fundamentally different than any other treatment for LDL cholesterol. It produces effective, powerful and sustained LDL cholesterol lowering, as you can see in the middle part of this slide, and it does this with only twice-a-year dosing administered by a health care practitioner. So it takes the burden away from the patient to determine whether or not they need to take a medicine and remember to take a medicine every day. If we go to Slide 10. So when we talk about LDL-C, it's important to reflect on the fact that there are about 50 years of evidence now linking LDL cholesterol to cardiovascular outcomes. And specifically, the more you can lower LDL cholesterol and the more sustained that lowering is, the better your cardiovascular outcomes will be, the more likely you are to avoid a heart attack or a stroke. So the graphic on Slide 10 shows you a representation of this. If you look on the x-axis, it shows you lowering LDL-cholesterol, long-term exposure to lower LDL cholesterol. And on the y-axis, it shows you reduction in cardiovascular risk. And as you can see, there's -- it's not just the extent of lowering of LDL cholesterol, but it's how long you have that LDL cholesterol lowered. So the more you reduce your cumulative exposure to LDL cholesterol over a lifetime, the better your cardiovascular outcomes will be. And this is -- this becomes important if we go to the next slide on Slide 11, when we talk about guidelines. Guidelines recognize this link between lower LDL cholesterol and improving cardiovascular outcomes. And they recognize this by being very specific about the LDL-cholesterol targets that practitioners should try to achieve for their patients. As you can see, these numbers 70 milligrams per deciliter in the U.S. for very high cardiovascular risk patients or as low as 55 milligrams per deciliter for very high CV risk patients in the EU are very aggressive targets. But what we know is actually the lower you can reduce your LDL cholesterol, the better your outcomes will be. And this is where Leqvio comes into play, if we go to Slide 12. Leqvio has shown in its Phase III program to deliver powerful and sustained LDL lowering. So it reduces that cumulative exposure to LDL cholesterol over a long period of time. And this fundamentally differentiates it, Leqvio, from other options to lower LDL cholesterol. As you can see in the Phase III program, Leqvio reduced LDL-cholesterol by up to 52% in patients who are already on maximum lipid-lowering therapy, maximum tolerated statins. If we go to Slide 13, it's important to consider tolerability when you're developing a medicine for millions of patients. And as you can see in the Phase III program, Leqvio was very well tolerated. And so this gives us a lot of confidence, as should give practitioners confidence, about using Leqvio to better manage their patients' cardiovascular risk. If we go to Slide 14. What we know, as I just said, what we know is that lowering LDL cholesterol improves cardiovascular outcomes. We also know that there's an opportunity with Leqvio to highlight this differentiated profile in a variety of clinical settings and in patient subtypes. And as you can see on Slide 14, there is a comprehensive plan to demonstrate Leqvio's profile and confirm its benefits in a variety of clinical settings and in clinical uses. So if we go to Slide 15, we now touch on the label that was just approved by the FDA. And as you can see from the indication statement, Leqvio is approved for patients with heterozygous familial hypercholesterolemia or ASCVD, who require additional lowering of LDL cholesterol. This reflects essentially 16 million individuals, as Marie-France alluded to in the initial section, who can't achieve their LDL-cholesterol goal today with the current therapies. And as you can see, likewise, Leqvio should fit seamlessly into the patients' current health care routine by being a health care administered product twice a year. So therefore, we expect also that Leqvio will be covered under the medical benefit. So with that, I'd like to pass on to Victor to talk about the U.S. market and launch readiness. Victor?

Well, thank you very much, Dave and Marie-France. Now if we move to Slide 17, and we go to the specifics of the U.S. plan, as Dave has mentioned, despite the availability of lipid-lowering therapy, a significant unmet need remains in ASCVD, both from a clinical and a nonclinical perspective. I mean the clinical unmet need is very clear, with 80% of the statin-treated ASCVD patients currently not at LDL-C goal, which equates to 16 million patients in the U.S. And from a nonclinical perspective, there are 3 key needs that drive this challenge. The first one is adherence to therapy, as Dave has alluded to. The second one is access and access interpreted as how difficult is it for a health care provider and a patient to get on the medicine they have prescribed. And the third one being patient affordability. And these 3 are also the key elements that we believe are key differentiators versus the PCSK9s. So now let's go deeper into each one of them. So if we move to Slide 18. When it comes to adherence, we know that real-world challenges compromise outcomes. And we can see that on the graph here on the right. And as you can see, statin appearance in secondary prevention is actually around 50%. So 50% of the patients not adherent to these therapies today. And if you look at the PCSK9s, we see that 76% are not adherent after 24 months. Now if we move to Slide 19, we'll see that Leqvio has the potential to address these adherence challenges, right, with an effective and sustained LDL-C reduction, covering that challenge that Dave was explaining about how important it is to have sustained reduction of LDL-C over time. With a twice-yearly dosing, that may integrate seamlessly into a patient's health care routine as most of these patients visit their main provider every 6 months. And finally, the fact that it's HCP administered and that gives the HCPs the confidence that therapy is being taken appropriately. Now as we move to Slide #20, the second pillar is access, right? And we know access has become extremely important. If we understand access as, again, the hurdles that an HCP has to go in to put a patient on the prescribed medicine. And this has become more and more challenging in the U.S. market in general. And that's why it's become one of the key drivers of selection of therapy. So since it's administered by an HCP, the majority of Leqvio patients will be covered by the medical benefit and thus reducing the access hurdles, particularly for the 40% of patients covered on the Medicare Part B fee for service. So here, we have outlined the difference in access in different populations. And if I start with the Part B fee for service, for these patients, access mirrors the FDA label at launch, right? So -- and that's a very important part of the population with 40%. For the Medicare Advantage and commercial patients that represent 19% and 35%, respectively, we do expect some access limitations and it will take between 3 to 9 months for policies to be established, right? In the meanwhile, physicians can access the medicines through the medical exception process. Now irrespective of the fact that a patient may be Part B, Medicare Advantage or commercial, we expect the majority of these patients to be routed and reimbursed through a buy-and-bill process. And what that means is that the efforts for the administrative effort will be reimbursed, which is an important differentiation versus pharmacy benefit drugs like the PCSK9 inhibitors, where physicians have to put the effort, but there's no reimbursement for that effort at all. Now of course, this comes with a challenge of equipping cardiologists and lipid-lowering prescribers to buy and bill, and that's part of the plan, right? And that's why we are putting so much emphasis there. And I'll go there in a couple of slides. Now if we move to Slide #21. Finally, when it comes to affordability, to patient affordability, we know that has been a big part of the ongoing debate in the U.S. And that's why we are really happy to see that with the medical benefit coverage for Leqvio, we're creating the opportunity for a $0 co-pay for 2/3 of the patients at launch. And in particular -- and this is particularly critical for a chronic and asymptomatic disease such as ASCVD. And you can see that on the chart on the left, on Slide 21, you see that the PCSK9 abandonment rate by out-of-pocket cost goes up quite substantially the moment we start having some co-pays. So on the right, I'm going to explain how we come to the $0 per co-pay for 2/3 of the patients. So if you take the Medicare Part B population, which is 39% of the eligible population, we anticipate that 80% of them will pay as little as $0 co-pay because they have medigap insurance. For the commercial patients, we will be providing a co-pay assistance for eligible patients to pay as little as $0. And it will be really the Medicare Advantage population that will have a co-pay that will vary between 0% and 20% coinsurance with the rest of the populations with Medicaid and Federal paying less than $10 co-pay. And that's how we come up to the $0 co-pay for 2/3 of the patients at launch. Now moving on to Slide 22. I wanted to talk about the price. So the price of Leqvio of $3,250 per dose or $6,500 per price in the -- per year in the maintenance phase reflects its value as an innovative LDL-lowering treatment that uniquely addresses the key unmet needs in ASCVD, both from a clinical standpoint and also equally important on the nonclinical perspective. Now if we move to Slide 23, I wanted to share more on the go-to-market model. Because this go-to-market is basically the combination of 2 synergistic and complementary models. One is based on systems of care or provider networks. And this is the approach that should give us scale over time, right? Because we want to tackle a challenge, a public health challenge that affects 16 million patients. And as Marie-France said, we'll have to do it differently if we want to achieve that ambition. And we will be complementing that as well with a direct-to-HCP approach, which would be the more traditional approach for cardiovascular launches. So if I go first a little bit more in depth into the health care professional model, we will be leveraging our highly skilled cardiovascular field force that has been extremely successful with Entresto and they will be targeting HCPs that represent around 60% of the new NBRxs in the lipid-lowering market. As you can imagine, there's a very high degree of overlap between these customers that will be critical for Leqvio and the customers that we have been visiting for a number of years with Entresto. So we know these customers really well. And as I said, we are targeting them with a highly skilled and successful field force. Now to complement that from a reimbursement perspective, we are deploying the largest field reimbursement team in the industry to support these HCPs to decide whether they want to establish buy-and-bill capabilities on their own, whether they want to use and [ route ] their systems of care capabilities or if they want to use an alternative injection center, which I will go a little bit more detail -- into detail in the next slide. And then, as I mentioned, this approach will be complemented importantly with the systems of care approach. Because we want to tackle this challenge at scale, we strongly believe that going one HCP at a time, one patient at a time will not be sufficient over time. And that's why we are partnering with the top 200 health care systems in the U.S. to create the right defaults in the system to tackle this challenge at scale. And that means we are working on changing the default in terms of patient identification within the system, changing the default in terms of patient stratification as well and creating guideline-directed pathways within the system that by default would treat patients to goal rather than current situation where most of these patients, as we've seen, are currently not at goal. From the pathway, we're also working within these health care systems with cross-functional teams from a reimbursement perspective, population health perspective, access perspective to understand what is the best pathway within these systems to create a default for a prescription of Leqvio and administration of Leqvio. And as I said then, these 2 approaches should give us more the short-term uptake with HCPs and the more long-term, more broad scale scalable impact with health care professionals down the road. Now moving to Slide 24, I also wanted to spend some time on another critical aspect of this launch. We've really learned through other launches in this space and other launches that we've executed at Novartis, that flexibility, support and optionality are key for seamless customer experience and timely access to Leqvio in this case. We know how important that experience is, particularly in the first months post launch. And that's where most of our efforts have been geared to in the months coming to the launch. From a flexibility perspective, what we've built is a very robust network of alternative injection centers. Basically, what an alternative injection center will do, if the HCP does not want to stand up buy and bill in their practice, and they don't want to go through their health care system buy-and-bill procedures, they can refer through a medical request, the patient to an alternative injection center that will buy and bill and administer the products for the patient. These centers are highly skilled, highly specialized in just doing that. And therefore, we believe they will offer tremendous flexibility and service to these HCPs and patients. As of today, we have established a relationship with more than 40 companies that run these alternative injection centers across the country and we have more than 1,000 centers ready to inject inclisiran or Leqvio at launch. That means that 75% of the target HCPs that I mentioned in the previous slide that we're targeting will have an AIC within 25 miles of their office. Now from a support perspective, we will also support HCPs with the largest access and reimbursement field team in the industry, all highly skilled in buy and bill, and they'll be providing support to establish the buy-and-bill infrastructure, if needed, understanding coding and reimbursement and navigating prior authorizations and the medical exception process. And finally, from an optionality perspective, we are also deploying both dedicated case managers and social workers to support HCP office staff and patients around benefit verification, co-pay assistance, adherent support and others. And of course, a strong -- Leqvio access and reimbursement website available with all the tools that will be required by these HCPs as well. Now moving to Slide 25. In terms of expectations, we are convinced of the multibillion dollar potential for Leqvio based on 3 things: one is the magnitude of the unmet need; second is Leqvio's unique profile, both from a clinical and a nonclinical standpoint; and thirdly, based on our go-to-market model. And we expect a modest initial ramp in the first part of the year as we lay the foundation for this multi-blockbuster potential. In the first half of the year, we'll be laying the foundation. We expect the majority of prescriptions to come from independent HCPs, early adopters, who are either ready for buy-and-bill or mostly will be referring patients to these alternative injection sites, and we will be having coverage to label for 40% of the population covered by fee-for-service. Now in the second part of the year, we will be getting to scale. We expect to have permanent J-code available in July. We will have more and more buy-and-bill capabilities established. Also, health care systems going through their P&T committee review, and we expect the finalization of commercial and Medicare Advantage payer coverage policies as well. And we, therefore, expect most of the patient initiations and sales in the second part of the year. Now of course, I mentioned COVID here, as we are also watching and monitoring the uptake of Omicron and the potential it may have, which is really hard to predict, but I can really tell you is that we have become used to work in this environment over the last couple of years. Our teams have the right tools to engage in a hybrid approach, if needed and we're ready to pivot. And from a patient outflow, I mean, we expect the majority of patients in the second half of the year by when we expect the challenges to be -- to have lessened. Now moving to Slide 26 to wrap up. I just wanted to reinforce how confident we are in the successful U.S. launch. We have an effective and sustained LDL-C reduction with twice-a-year maintenance dose administered by HCPs. We have a broad label covering 16 million U.S. ASCVD patients who are currently not at goal. We have a go-to-market model designed to overcome clinical barriers and address access, adherence and affordability. We have sales, reimbursement and medical teams with deep experience and expertise in the U.S. cardiovascular market and in buy and bill. We have established a network of alternative injection centers, more than 1,000 centers across the country, to provide acquisition and administration flexibility. We are launching with a value-based price per dose of $3,250, have a comprehensive patient and HCP support programs available at launch to ensure timely access. And we expect the product to be available from specialty distributors in early January, when our promotional launch will start as well. And with that, I'll hand it over to Samir for the Q&A. Thank you very much.

Thank you, Victor. Thank you, team. So operator, we're now ready for the Q&A session.

[Operator Instructions] And your first question comes from the line of Peter Welford from Jefferies.

So I guess congratulations for the approval. I think there are a few questions on this. Firstly, just with regards to the administration, curious whether you have considered or it could potentially be considered nurses for sort of at-home admin, whether that's something that this drug, really the scale of it, it's not something whether we can consider for this drug. Just curious whether -- you said for 70% or 75% of HCPs [ go ] within 25 miles, are there steps you can put in place to hit the other 25% of HCPs with perhaps alternative arrangements? Secondly then, just curious with regards to the price we should be considering when we do modeling. Can you give us any sort of idea as to what sort of rebate discounts long term we should be considering for this drug relative to the list price of $3,250 that you quoted? Just so we can think about how we should think long-term value per patient could build. And then thirdly, more to be honest out of curiosity, but in the end, did FDA do an inspection of Schaftenau in Austria? Or were the virtual inspection or questions asked? Or was the FDA just happy with the facility and so neither was required for the approval?

Thank you, Peter. So I'll probably say, we'll begin with the last question, which would be for Dave, with respect to whether we needed an inspection or not. The first two, whether we consider nurses for 25% of HCPs and also the pricing for modeling purposes, I'll hand across to Victor. But so perhaps we'll go with Dave first and then Victor after.

Yes, sure. Thanks for the question, Peter. Yes, with respect to inspection, FDA knows the Schaftenau site well, and they were satisfied with our responses during the review, and so there was no preapproval inspection conducted.

Thank you. And Victor?

Yes. So in terms of the administration and nurses at home, so no, we will not be having nurses add-on. So we have either a preference to have these patients go to their HCPs, they go there every 6 months anyway or they have highly skilled teams in the alternative injection centers where the drug can be administered by a nurse. In terms of rebates, we expect this to minimal. So we'll have the statutory rebates and there will be minimal beyond that based on the dynamics on the buy-and-bill space and average selling price.

Thank you very much, Victor.

And your next question comes from the line of Andrew Baum from Citi.

I completely get the absence of formulary management and the economic benefits for payers. And I'm sure, Victor, you and your team will do a great job with P&T committees and infusion sites and so on. What I'm struggling to quantify is 3 things and perhaps you can help me. So firstly, the depth of physician concerns and what it's going to take to overcome them, so namely the chronic administration of a GalNAc conjugate, as well as the lack of outcome data compared to the monoclonals. The second thing is, perhaps you can help me on what percentage of these HCPs have in place a treatment algorithm with prioritization for inclisiran, whereby the physician's desire, if you like, is overruled by the treatment algorithm, which they must follow? So what percentage do actually have that algorithm in place right now at launch? And then the final question is, you highlighted, of course, the lack of co-pay contribution for inclisiran for the vast majority of patients as compared to the PCSK9s, but you still require medigap for Medicare patients, and there's going to be a significant percentage, I would imagine who would not have medigap and therefore, may need to purchase it. So perhaps you could help me just by outlining what percentage of the target patients will already have Medicare -- sorry, excuse me, medigap in place versus need to purchase it in order to gain reimbursement for the out-of-pocket?

Thank you, Andrew. So the first question in terms of the lack of outcomes data is for Dave. The other 2 questions are for Victor. So Dave?

Yes. Thanks, Andrew, for the question. Well, I think the first thing to consider is how LDL-cholesterol lowering is strongly linked to cardiovascular outcomes benefit, as I showed in the slide. So what we know and what the science has shown us over the last several decades is that the lower you get LDL cholesterol, even to very, very low levels, you get more benefit in terms of cardiovascular risk reduction. So in terms of the target of LDL lowering, and safety and tolerability, I don't think there's any question with respect to how profound lowering of LDL is safe and effective in terms of improving outcomes. I think the -- your second question around a GalNAc conjugate and siRNA technology in this population, we have a great set of Phase III data already showing us that there -- that Leqvio is extraordinarily well tolerated in this population of ASCVD patients. And the thing to consider is the benefit as well as the tolerability. So we don't see any tolerability issues other than some injection site reactions and the benefit is profound. So as we've described, substantial lowering of LDL cholesterol that's sustained and can be achieved with only twice-a-year administration. So in terms of benefit risk, it's a strong proposition, I'd say. Now I'll hand it back to Victor.

Yes. Thank you very much, Dave. And thank you, Andrew, for your questions. In terms of the percentage of HCPs that have strong pathways mandated, as you said, right now, the reality is that it's minimal. And that's why actually we see that 80% of ASCVD patients are not at goal. And actually, our aim is to work with these health care systems, 45% of which already prioritized ASCVD and have population health teams to really establish defaults that are based on guideline-directed practice to set up those defaults to get patients at goal, right? And we believe that once those are followed, Leqvio will be a unique solution in the armamentarium to get patients at goal. In terms of your question on the co-pay, so in terms of the Medicare fee-for-service patients, 80% of the patients have medigap insurance. And for the Medicare Advantage patients who are 20% of the total, these patients are not eligible for medigap or supplemental insurance.

Thank you, Victor.

And your next question comes from the line of Simon Baker from Redburn.

It's Simon Baker from Redburn. A couple of questions, if I may please. Going back to Slide 21, you gave the payer mix and co-pay outlook for Leqvio at launch. I just wonder if you could tell us what percentage of patients will be accessible at launch. And on that slide, you also gave the discontinuation rates on the PCSK9s by out-of-pocket expense. You're suggesting that you can have most eligible patients with zero co-pays. Given that your list price is higher than the PCSK9s, I just wonder if you could flesh out the reasons for your confidence in that co-pay outlook.

Thank you, Simon. And both questions for Victor.

Yes, Simon, thank you very much for your questions. On the access side, in terms of the number of patients who would be eligible at launch, I would refer you to Slide 20, where we see that 39% of the eligible patients, so ASCVD patients are currently covered by Medicare fee-for-service. And these patients will have access that mirrors the FDA label at launch. That means that there's no prior authorization, there's no appeal and physicians can prescribe to label. And as you saw from Dave, the label is ASCVD patients who are not currently at goal with maximally tolerated dose of statins. Now for Medicare Advantage patients who are 19% of the population and commercial patients, coverage will be a medical exception until these individual payers establish payer policies, right? And these payer policies can take between 3 to 9 months to be established and they'll be different in nature. We'll see different levels of restrictions, right? And as I said, in the meanwhile, the avenue for physicians to get access will be through the medical exception process. Now in terms of the out-of-pocket for patients, I'll refer you to Slide 21. We expect these 2/3 of the patients who have a $0 co-pay with the current price that we have established, right? And that's why -- that's because for Medicare Part B patients, 80% of them, referring to Andrew's question, have medigap insurance. That's an insurance that covers for the access for their own personal liability when it comes to that out of pocket. And then for commercial patients, we have a co-pay assistance that enables us to provide them with as little as $0 copay.

Thank you, Victor. Thank you, Simon.

And the next question comes from the line of Steve Scala from Cowen.

You noted the high interest from early adopters. How does this early high interest compare to that for Entresto or maybe even Cosentyx upon their approvals? And do you think Entresto's rollout is a reasonable proxy for Leqvio's rollout? Or could Leqvio be better or less good? Entresto hit 1 billion in its third full year and Cosentyx hit 1 billion in its second full year. So that's the first question. And then the second question is, where does the IP for Leqvio reside, and can it be moved to a tax-advantaged location?

Okay. So with respect to the first question, that's for Victor or Dave. It's the proxy versus Entresto, when would it reach 1 billion? Will it be like Cosentyx in 2 years? Or will it take 3 years? And perhaps you can talk also about early adopters as well, please?

Yes. So thank you very much, Steve, for your question. I mean we are seeing high interest from clinicians. And this is a highly expected launch from their perspective, both because they're excited from a clinical standpoint, but also because of how we are addressing the nonclinical barriers. So in terms of the comparison with Entresto, I think there's 2 clear differences here. One is that for Entresto, we were talking about a new mechanism after many years with very delicate patients that can destabilize when changed therapy. Here, we're talking about a much more straightforward intervention, lowering LDL-C. And there's a very strong recognition that lower LDL-C is better, right? And here as well, we are focusing a lot removing these nonclinical barriers because that's the remaining challenge, right? The remaining challenge is that these physicians are not used to buy and bill, and that's why we're really indexing strongly on the reimbursement support and the optionality to work with alternative injection centers as well. And for the IP question, I think we'll hand it over to Marie-France.

Maybe I can take that, Steve. Actually, that sort of a question is something which we don't always say where all the IP status reside with the various products. And to be perfectly honest, I'm not sure we actually know the answer either. So we'll look into it. We'll get back to you or talk to you as to whether we can or cannot provide that information for various reasons, Steve. Bear with us.

Perhaps the one thing I can say is that we have a very long IP. And so our patent protection goes to 2035 on composition of matter, and then we have dosing regimen in the U.S. That can -- that goes to '36 and can be also extended. So we have a long life with this product and enough time to really build on the ambition that we've talked about so far.

And your next question comes from the line of Seamus Fernandez from Guggenheim.

So I was just hoping to get a couple of clarifications. So can you just help us understand what the codes that are going to be used and that your team are going to be recommending at launch as it relates to administration and the reimbursement for administration at launch? And then how long will it take to shift to an official J-code? Or -- and are those -- I mean, just because of the health care provider dynamics, just wanted to better understand that. Separately, as it relates to the price, the price kind of strikes me as a little bit high, particularly for the initial 3-dose regimen. Will you basically be giving away the first dose? And then following that up with the second 2 doses? And just wanted to get a better understanding of also the gross to net pricing dynamics that we should anticipate relative to the $6,500 price. And again, my question there is really more relative to the net price of the antibodies. So just wanted to get a better understanding of the pricing comparison.

Great. So the -- both questions are for Victor. I think the first one is fairly straightforward in terms of which code from a reimbursement perspective and when do we get a permanent J-code. And the second one is more related to net pricing as well. Victor?

Okay. So in terms of -- let me start with the first dose question that you have. So we do have -- we will be offering a commercial bridge program. That means that for commercially eligible patients, we may offer the first dose for free when there's either a reimbursement delay of more than 14 days or there's a denial, right? That affords the HCPs the possibility to work for the first 90 days until the second dose to secure that medical exception. Then in terms of how long will it take for a shift to a permanent J-code, we are planning to submit the application before January 3, and that should give us a permanent J-code by July 1. So that's what it comes to that. And that's important because a permanent J-code offers a stronger predictability and confidence in the physicians that buy and bill. In terms of the specific code -- yes, you asked for the specific miscellaneous J-code, it's J3490 for the procedure. And the CPT code is 96372.

And Victor, I think also the question was asked by Seamus about gross to net, if you want to answer it?

Yes. No, in fact -- so in terms of the gross to net, so we will expect to see some statutory discounts. But beyond that, we should see minimal gross to net discounts.

And your next question comes from the line of Sam Isaly from Exome Asset Management.

Is it possible to get too much reduction of LDL-C? In other words, it's just important for the cell wall and so on. Does that happen clinically? And if it happens, is there any way to reverse the power of Leqvio? The second piece is, can you confirm that the raw material for Leqvio, the oligos, are at least in part sourced from ST Pharm in Korea? And what percent of production will you do in-house for the raw material?

Okay. Thank you very much, Sam. So the first -- probably both the questions are for Dave. So the first one is, can you get such a thing as too much reduction in LDL-C, and if you do, can you reverse it? And the second question was just from a manufacturing perspective, what you can say, what you can't say, Dave, as well.

Yes. Great. Thanks for the questions. Yes, so the question about reducing LDL cholesterol too much and the safety and tolerability of doing that was a real question, I'd say about 5 to 10 years ago when the PCSK9 monoclonals were being developed. What's borne out over time is through execution of more trials, both with those medicines and with other medicines in the field is that lower is better is the rubric. So the more you can lower your LDL cholesterol, the better your cardiovascular outcomes are likely to be, which is why that relationship I showed on the slide is a linear relationship. So the answer from what we know today from a scientific standpoint and a clinical standpoint is that there is no lower threshold to the benefit of LDL-cholesterol lowering. The second question, I have to apologize, I don't know the answer to the question. So I can't address it. But Samir, maybe we can get back to them.

Yes, Sam, we'll get back to you on that question. I think you've asked it previously as well. Thank you. And we're now ready for our last question of today's call. Operator, please?

And your last question comes from the line of Simon Baker from Redburn.

Actually, operator, we've had 2 more other people who have now joined the list for Q&A. If you could perhaps move to the next question, please, operator? And we'll see if Simon comes back.

Okay. And your next question comes from the line of Richard Vosser from JPMorgan.

Could you give us a little bit of help? Of that 16 million patients, what proportion are heterozygous familial hypercholesterolemia patients? Are those around about 1 million of those patients? Could you give us some help there? Then of those heterozygous familial patients, what proportion are currently treated with PCSK9s? And would you look to switch those patients? And how quickly do you think you could? And then third question, just on the remaining residual patients that are just a CVD patient, those -- how easy do you think it is to actually capture those patients? So I think they're mainly sort of lost to treatment. So just some thoughts on how easy it is to bring those patients back into the fold, and whether you'll need to step through a statin to get your -- to get treatment of those patients.

Okay. Great. Thank you very much, Richard. So the first question, probably for Dave, is out of the 16 million in the U.S. who are familial heterozygous, what -- sorry, out of the 16 million, what proportion of familial heterozygous are they on PCSK9s and will we do a switch? And the second question with respect to residual ASCVD and whether there'll be a step through and that will be for Victor. The first question for Dave, please.

Okay. Yes. Thanks for the question. Yes, the numbers -- the 16 million patients refer largely to the ASCVD population. As you know, heterozygous FH is actually relatively -- is a relatively common condition. It's about 1 in 250 to 1 in 500 people, but it's significantly underdiagnosed. So one of the opportunities I think we have to improve cardiovascular health and have the biggest public health impact we can is to improve screening for HeFH and get more patients on optimal therapy. As you know from our Phase III program, ORION-9 was the study in which we evaluated Leqvio, specifically in heterozygous FH patients. And we saw, again, a very profound reduction in LDL-cholesterol that was both significant and sustained. Victor, do you have anything to add on that with respect to how the current treatments are used?

Yes, I'll address the second and third question. I think, Richard, you had a question on, will we get switches from PCSK9s? And the answer is, yes. We've heard strong interest there, either in patients who are not responding well to PCSK9s over time or patients who have adherence challenges, for example. So we've heard strong interest there. But I think it's important to note that our ambition is to go well beyond that. There's limited utilization of PCSK9s today, and therefore, they're not the benchmark here but quite away from that. I take the opportunity as well, Richard, to mention that in the way we're going to track the launch, NBRxs and TRxs are not going to be a good indicator because this is a medical benefit drug. So we are basically going to track sell-in and sellout. And I think that's important as we all together track this launch, we will be providing quarterly updates on these metrics, that will be a good way of tracking this uptake. And you had a second question on patients, do they have to step through statin? I mean, in the label, the label we have is in secondary prevention patients who have not been at goal despite treatment with maximally tolerated dose of statin. So yes, they have to be on maximally tolerated dose of statins before they can be treated with Leqvio.

Thank you, Victor. We now move to our final question, operator.

And your last question comes from the line of Jo Walton from Credit Suisse.

Just a few, please. Moving on, I think, from really the last question, but what step edits do you think might be put into place because you highlight them as an issue? You also say that people see their doctors every 6 months. Given that we know that 76% of people who in the secondary prevention status, you think were concerned about their health are giving up on drugs, do they actually -- how realistic is it for people to be seeing their doctors every 6 months? Do you have to pay to see your doctor? You may not have to pay to see the -- to get the prescription as a medical benefit, but do you actually have to fork out to actually see that doctor on that 6 monthly side? A question just on ICER, are you expecting an endorsement by them anytime soon? Is this something where we could see them coming up with their expected price? I'm assuming that you're hoping that it's very much in the region that you have put together. And a question just so that I understand this, you normally -- as I understand it, buy and bill, you get effectively 4% of the value of the product. So this is about $130 per injection that the doctor might receive. Is that enough for all of the admin? And in particular, is it enough for him to do the -- he or she to do the referral to an alternate site center and for them to do it? I just don't know it seems maybe it's not as much per injection that they might have expected. And just my final question is, is there any update on the recruitment that you're getting into your initial clinical studies for your CVOT data. So is there any chance that something like ORION-4 could report before July 2026?

Thank you, Jo, and you've got 5 questions there. So I'm going to -- I think 4 of them are for Victor and one is for Dave. And I'm going to let him answer the first one on the update and recruitment for ORION-4. And so Victor can answer the other 4 questions on step edits, how realistic is it for a doctor to come back every 6 months, ICER, and buy and bill. To Dave first.

Yes. Thanks for the question, Jo. Yes. So as you alluded to, we expect the Cardiovascular Outcome study to report in 2026. ORION-4 is being conducted in the NHS and at centers in the U.S. by Oxford University. We did see some impact of COVID early on that we had talked about a few months ago, of course, with respect to recruitment. We're ramping back up now. And your question specifically was could it deliver earlier? And the answer, of course, is yes, because it's a cardiovascular outcome study. So what really matters is when the requisite number of events accrue during the study, and then, of course, the trial would end at that point. So it's not purely on the basis of a calendar time set.

Thank you. Victor?

Well, thank you, and thank you, Jo, for your questions. So let me start with the step edits. So we expect the statin step to be included as per the label, right, in every payer coverage. When it comes to Medicare Advantage and commercial plans, there is a possible step edit to [ ezetimibe ] or the PCSK9s, right, not for the Medicare Part B fee for service. But yes, for some of the other payers. And in terms of your second question on how much of these patients -- see the patients -- see their doctor every 6 months. We have to remind ourselves that these are secondary prevention patients. They're patients at very high risk and the majority of them do see their provider on a regular basis. Now on your question on ICER. So we know that ICER is one of the bodies that looks at cost effectiveness in the U.S. and they've published a range between -- that goes all the way up to $6,000 per year in terms of cost effectiveness. So we believe our price is roughly in range. We have a couple of differences from the methodological perspective. So we are confident that our yearly price is well within range of cost effectiveness as well. Now asking your question -- answering your question on buy-and-bill and the reimbursement for the effort, I think 3 thoughts that are important. That 4% that is the 6% minus the sequestration as reimbursement for Medicare Part B, right? And as per our discussions, it will be enough for the majority of providers. It's a very simple administration, right? And there's no management. So it covers the label. And therefore, all the administrative burden of prior authorizations appeal does not exist. In terms of the commercial and Medicare Advantage plans, as we've heard, it may be more restrictive in terms of access, but the reimbursement also is likely to be higher, significantly higher than 4%, and it really varies on the negotiated deals that they have, each provider or alternative injection center has with the individual payer.

Great. I think that's everything. So on behalf of the team, I think we're just going to the top of the hour, I want to thank everybody who participated in the call. And I want to thank the speakers for going through the slide preparations and responding to the questions. Thank you, everybody, and wish you a fantastic vacation and a great start to the new year.

And this concludes today's conference call. Thank you for participating. You may now disconnect.