Novartis AG (NOVN) Earnings Call Transcript & Summary

Good morning and good afternoon, and welcome to the Novartis Iptacopan ASH update. [Operator Instructions] And the conference is being recorded. [Operator Instructions] A recording of the conference call, including the Q&A session, will be available on our website shortly after the call ends. With that, I would like to hand over to Mrs. Sloan Simpson, North America Head of Investor Relations. Please go ahead, Madam.

Thank you so much, Sharon, and thank you to everyone on the line for joining us today. Before we get started, I'll quickly read 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. Now to introduce our speakers. On the call with us today, we have Dave Soergel, who is the Global Head of our Cardiovascular, Renal and Metabolism Development Unit, which has been overseeing the development of iptacopan across indications, including PNH; and Reshema Kemps-Polanco, who's Executive Vice President and Head of our Oncology business in the U.S. I'll now hand it over to Dave to get us started with the presentation. Dave?

Thank you so much, Sloan. Appreciate it. Could you advance the slide, please, to the first one? It's a pleasure to have the opportunity to try to update today on the iptacopan's progress and, of course, to review the compelling data from the APPLY-PNH trial that we recently presented here at ASH. Dysregulation of the complement system plays an important role in a variety of rare hematologic and renal diseases. And iptacopan is a homegrown, first-in-class oral selective inhibitor of complement factor B. Factor B is important because it plays a crucial role in the activation of the complement system via the alternative pathway. Mechanistically, the selective inhibition of the alternative pathway leaves the other 2 activation pathways, classical and lectin, intact. So clearance of antibody-bound pathogens and bacteria can still occur. Next slide, please. Based on its mechanism of action, iptacopan may be effective in a diverse set of disease states. That's why we refer to it as a pipeline in a pill. Today, we'll focus on PNH because of its first Phase III study to read out. However, there are 4 other Phase III studies in progress or in planning in rare diseases: C3 glomerulopathy, IgA nephropathy, atypical hemolytic uremic syndrome and immune complex-associated membranoproliferative glomerulonephropathy. The profile of iptacopan that we're seeing in PNH gives us additional confidence in iptacopan's promise in these other indications. Next slide, please. We recently read out 2 Phase III studies in PNH: APPLY-PNH, which was just presented at ASH; and APPOINT-PNH, which we announced was positive a few days ago. These 2 Phase III studies span the PNH patient population. APPLY enrolled patients with residual anemia despite treatment with anti-C5 monoclonal antibodies and compared the hemoglobin response on iptacopan monotherapy head-to-head with continued anti-C5 use. In APPOINT, we enrolled patients who were naive to complement targeted therapy and treated them with iptacopan monotherapy. In this single-arm trial, on-treatment hemoglobin values were compared to baseline. APPLY and APPOINT together will provide a strong evidentiary basis for iptacopan in PNH. Next slide. So let's dig into the details now on PNH. PNH is a rare acquired blood disorder with a prevalence of about 10 to 20 cases per million or about 6,000 to 7,000 patients in the U.S. In PNH, the complement system destroys abnormal blood cells through hemolysis, leading to chronic anemia and, if untreated, a higher risk of thromboembolic events. Parenterally administered anti-C5 monoclonal antibodies are the current standard of care. These antibodies inhibit the final steps of the complement cascade and thereby prevent the destruction of red blood cells. However, because of anti-C5's mechanism of action, over 60% of patients continue to have evidence of ongoing hemolysis, 1/3 of patients continue to need transfusions, and 75% have persistent fatigue. So a treatment option that more completely targets the disease pathophysiology would be an important advance for PNH patients. It's important to reflect that in many cases, people who were diagnosed with PNH are in their late 30s and early 40s, and providing a treatment option that improves debilitating fatigue and reduces the need for repeated health care visits for infusions or blood transfusions would allow people with PNH to live their lives to the fullest potential. Next slide, please. The root cause of PNH is the production of abnormal red blood cells in the bone marrow, which are then destroyed by the complement system. In a normal red cell, the surface proteins, CD55 and CD59, prevent the accumulation of complement components on the red cell surface and prevent the complement system from attacking it. Next -- click, please. Red cells from PNH patients are called clones, lack these key counterregulatory proteins on their surface because of acquired mutations in hematopoietic stem cells and subsequent clonal expansion. Red blood cells from these clones become more susceptible to complement attack and will lyse through intravascular hemolysis. Elevated lactate dehydrogenase or LDH is a marker of ongoing intravascular hemolysis. Click, please. Anti-C5 inhibitors work by preventing the terminal portion of the complement cascade from activating, thus preventing intravascular hemolysis. It's important to note that these terminal steps of the alternative pathway are shared by the classical and lectin pathways. So terminal complement inhibition will inhibit the entire cascade, including the classical and lectin pathways, leading to broader impairment of the complement system. Click, please. Anti-C5 do not, however, prevent continued activation of more proximal C3 convertase of the alternative pathway and conversion of C3 into C3b. Since the red cell clones lack CD55, they are unable to prevent optimization by C3b, which results in clearance by the liver and spleen by a process called extravascular hemolysis. In contrast to intravascular hemolysis, LDH is not markedly elevated in patients with extravascular hemolysis. Extravascular hemolysis leads to clinically meaningful residual anemia and up to 2/3 of patients treated with anti-C5 antibodies. Next slide. Iptacopan is a small molecule, orally available factor B inhibitor that selectively prevents both intravascular and extravascular hemolysis. Click. Iptacopan binds to the active site of factor B, preventing the activation of C3 convertase and generation of C3b. Next. In addition to its role as an opsonin, C3b has another important function. It's a component of the C5 convertase, which leads to activation of the terminal pathway and intravascular hemolysis. So effectively inhibiting the alternative pathway more proximally than a C5 may address anemia due to both intravascular and extravascular hemolysis. Next. An earlier Phase II proof-of-concept study gave us confidence that iptacopan could deliver better hemolysis control and potentially be an important medicine for patients with PNH. Next slide, please. Now to APPLY-PNH. APPLY-PNH was designed to test whether iptacopan monotherapy could be a superior alternative for patients with PNH who had a suboptimal hemoglobin response to anti-C5 antibodies. After an initial screening period, 97 patients were randomized to receive either iptacopan monotherapy or to continue with their anti-C5 regimen for 24 weeks. The 2 co-primary endpoints were the proportion of patients achieving 2 different measures of hematologic response, an absolute increase in hemoglobin of more than 2 grams per deciliter and an increase to at least 12 grams per deciliter. In addition to the primary endpoints, several clinically relevant secondary endpoints were included in a testing hierarchy. These data give a holistic picture of iptacopan's efficacy profile in patients with PNH. Next slide. In APPLY, iptacopan monotherapy was statistically superior to continued anti-C5 therapy on both hematologic measures. 51 out of 60 patients in the iptacopan arm had an increase in their hemoglobin levels by at least 2 grams per deciliter compared to 0 patients in the anti-C5 arm. And 42 out of 60 saw their hemoglobins rise towards more normal levels above 12 grams per deciliter compared to 0 in the C5 arm. When you model these observed proportions to reflect the predicted results in a larger population, you get the population estimates in the lower half of this slide and the highly statistically significant results on both of these measures. Next slide. In APPLY, about 60% of patients required at least one transfusion in the 6 months prior to entering the study. After entering the trial, 60 out of 62 patients in the iptacopan arm did not need a transfusion while only 14 of 35 avoided a transfusion in the C5 arm. In addition, during the randomized treatment period, iptacopan patients who needed a transfusion had a lower transfusion burden as they needed only half as many transfusions as the anti-C5 patients who required transfusion. Next slide, please. Iptacopan-treated patients experienced a rapid, consistent and durable increase in hemoglobin over the 6-month treatment period while the hemoglobin in the anti-C5-treated patients did not change significantly. The relative increase in hemoglobin and the iptacopan arm compared to the anti-C5 group was 3.63 grams per deciliter by the end of the treatment period. Next slide, please. Fatigue is a life-altering consequence of chronic anemia. In APPLY, we use the FACIT-Fatigue PRO to measure patients' response to treatment. In the iptacopan arm, patients experienced a clinically significant improvement in fatigue. The average scores achieved in the iptacopan group were similar to population mean fatigue scores measured in healthy adults. This compares with little change in the anti-C5 group in measures of fatigue. Next slide. Absolute reticulocyte counts also decreased in the iptacopan-treated group versus little change in the anti-C5 group. Reticulocytes are immature red blood cells, and they are more present in the circulation when there is active hemolysis and the bone marrow is replacing the stored red cells. So this result is consistent with better control of hemolysis in the iptacopan group. Next slide. Similarly, as mentioned earlier, elevated LDH levels are a marker of intravascular hemolysis. In APPLY, LDH levels were low at the start of the study in both groups since intravascular hemolysis was well controlled on the preceding anti-C5 regimen. Intravascular hemolysis continued to be well controlled throughout the randomized treatment period in both groups. Next slide, please. So considering the data in total, iptacopan showed excellent control of both intravascular and extravascular hemolysis as reflected by retic count, LDH and hemoglobin measures while there was little change from baseline in these measures in the anti-C5-treated group. The annualized rate of breakthrough hemolysis was tenfold lower in the iptacopan group compared to the C5 group. Next slide, please. In this population with well-controlled intravascular hemolysis, it's not surprising that there was only one major adverse vascular event of a transient ischemic attack. This event was, however, deemed to be unrelated to iptacopan treatment by the investigator, and the patient is indeed continuing to receive iptacopan approximately 9 months after this event. Next slide, please. Overall, iptacopan was well tolerated in this trial. There were no discontinuations due to adverse events. And even though this trial was conducted during the COVID pandemic, and COVID is known to activate complement, it's reassuring that there were no serious breakthrough hemolysis events in the iptacopan group, while there are 2 serious breakthrough hemolysis events, one intravascular and one extravascular, in the anti-C5 arm. Next slide, please. Now just a brief overview of APPOINT. As noted earlier, APPOINT was a single-arm Phase III trial enrolling PNH patients with anemia and hemolysis and naive to complement inhibitor therapy. Next slide, please. Enrolled patients were to have a hemoglobin less than 10 grams per deciliter and an LDH greater than 1.5x the upper limit of normal. Like APPLY, there was a 6-month treatment phase in APPOINT followed by a 6-month extension. The primary endpoint is the proportion of patients achieving a sustained increase in hemoglobin greater than 2 grams per deciliter over the 6-month treatment period. Next slide, please. We announced recently that APPOINT met its primary endpoint and that the safety profile was consistent with previously reported data. We expect to present these data at an upcoming medical meeting in 2023. Next slide. So in summary, the APPLY-PNH trial shows us that iptacopan has the potential to be practice-changing treatment for patients with PNH and become the new standard of care. By selectively inhibiting factor B of the alternative pathway, iptacopan effectively addresses both intravascular and extravascular hemolysis. This leads to superiority compared to the anti-C5s on a number of clinically meaningful measures: increases in hemoglobin levels, reductions in need for transfusion, improved patient-reported fatigue without serious breakthrough hemolysis. Moreover, the positive readout of APPOINT indicates that iptacopan could also be an alternative for patients with newly diagnosed PNH. In addition to this compelling efficacy and tolerability profile, iptacopan would be the first oral monotherapy option for patients. If approved, a medicine with this total profile, strong efficacy, excellent tolerability and oral treatment, represents a significant advance for patients living with PNH. Next slide. Briefly, our next steps for iptacopan in PNH are to discuss the APPLY results with health authorities worldwide and to make submissions in 2023. I'll hand it over back to Sloan.

I'm Reshema. Yes. Hello, everyone, and thank you, Dave, for that presentation. My goal here is to share briefly around the unmet need from a patient perspective, the addressable population and opportunity we see in terms of value creation and then, third, our intent to commercialize the product to be a new standard of care, as Dave mentioned earlier. Next slide, please. When we think about what is the delay of the patient who has been diagnosed with PNH, we know that there are delays in diagnosis and the treatment. It can take anywhere from a month to up to 3 years to be diagnosed. And we also know that these patients can be relatively young. While we saw the average age or the median age of our patients in the trial around 50 years, here, we know that patients can be as young as in their 30s or 40s. And this is very important when we talk about the patient mix from a standpoint of access but also from the standpoint of their lives in managing around treatment when they are quite young in their journey. The second piece is that there's limited options, available treatments for these patients. And we know until 2021 that only the anti-C5s were available for treatment. And we know also that there is a relatively long waiting period to understand how well the treatment is working. And these patients are essentially tied to regular infusions about every 2 months. And we also heard from the presenter this morning at ASH that about 2/3 of these patients can be transfusion-dependent. And so we know that these patients need more choice, not only in switch but also in first line, and the job to be done is to not only bring an efficacious and well-tolerated product to market but also one that is manageable for the patients' lives. And so we would like to see these patients unburdened from infusions and actually get more out of their treatments. Next slide, please. When we think about the addressable population and the opportunity, there are essentially 2 segments. One is the prevalent segment and obviously the incident. Let me start with prevalent. Thereabout, we believe about 6,000 to 7,000 patients in the U.S. with 30% of them being treated and the majority of those patients being treated with a complement inhibitor and 70% remaining untreated. And then we see about 400 new patients each year in the U.S. If I were to prioritize the segments here in terms of where we will be focusing once the product is approved, provided the product is approved, we will really be focusing on the treated population and with a goal to displace the anti-C5s. We will also be looking at, how can we improve treatment rates? We know that this will be a slower piece here just because when patients are -- there's a lot of heterogeneity when these patients are presented and making sure that we can identify the patients, we can educate the patients and we can raise the treatment rate. So we expect that to be a ramp over time. And then obviously, as we share the APPOINT data, hoping to get an approval there in the near future, and we would obviously go after those patients as well. Next slide, please. And so when we think about how we want to commercialize this product and what is our experience in this space, you all know that this is an ultrarare disease, as you can see, 400 patients a year. We have considerable experience with our success with Promacta as the market leader in SAA. And also, what we also know about SAA is that we also can see that PNH is sometimes embedded in this disease as well. And that disease itself is about 500 patients a year. And so we have considerable experience there as well as ITP, which is a more rare condition. And it is notable to say that we've been able to garner success in an infusion-driven market with an oral option with Promacta. And in many cases, these are the same customers when we look at overlap with hematology. There are, on average, I would say, about, in total, 14,000 hematologists in the U.S. Those who are really focused on treating PNH are about 2,500. And if you really boil this down to the top medical experts, it's about 20 or so. And so it is a very manageable group of customers, customers where we are already present and have existing relationships and customers that are familiar with Novartis and other products that we have in the hematology space. And so I feel very confident in our ability to bring our experience to bear here in PNH. Next slide, please. We are very focused on launch readiness at this point. A strategic choice that we have made is really focused on patient engagement and activation. In ultrarare and rare diseases, there's a disproportionate impact of engaging with patients early on in terms of understanding the disease, understanding the unmet need and really driving that education. Disease state education just launched recently at ASH last week. We're very pleased with the engagement that we're seeing there. We also at Novartis have a legacy with strong support in terms of patient services in multiple diseases, not only rare disease, oncology but also muscular sclerosis as well as the best practice. So we will be bringing the scale of the full IMUS organization to support these patients. And then last, as you heard from Dave, comprehensive evidence generation through not only APPLY but also the APPOINT data in treatment-naive patients. And I would say that now our people on the ground are already in place, our MSLs have been trained, they understand the data, and we have field teams already in place that are calling on these customers currently with Promacta. Next slide, please. And in summary, I think there are 2 key points to take away here. One is, we believe that iptacopan will be practice-changing with superior efficacy to the anti-C5. Also what we see with the significant quality of life benefits, and one of the things I didn't mention is that what we hear from patients is sometimes they do have such fatigue that you have a young patient in their 30s or 40s or 50s who feel that they cannot get out of bed. And so we think that is also going to be very important along with the efficacy and tolerability of the product. We believe that we have great -- a strong track record of success with orals in an infused market. And again, we believe and our intent is for this to become a new standard of care. We are on track with launch readiness. I won't read all of the bullets there, and I won't repeat what we said before, but we feel really confident about really driving forth and bringing this medicine as a significant medicine to patients. And so now I believe we'll move to the Q&A.

[Operator Instructions] And your first question comes from the line of Graham Parry from Bank of America.

Great. So you didn't really mention much about C3 glomerulopathy there. So the Phase III reads out next year, and apologies if you speak -- you seem to think there's quite an unmet medical need there. I just wonder if you could sort of lay out what you see as being the unmet need there? And then just a broader question for any of the IR team that are on the call. We're getting a lot of questions at the moment as to whether NATALEE interim have actually passed at this point. Just given this is a public call, wondered if now there's an opportunity to update the market on that.

Yes. Thanks, Graham. I mean I think we want to keep this call focused on the iptacopan update at ASH. I don't know, Dave, if you want to speak to C3G at all or if we should take that off-line.

I'm always happy to talk about C3G, for sure. Look, I mean I think -- Graham, thanks for the question. I mean I think one of the key things about iptacopan is that it targets a fundamental part of the innate immune system that's involved in many different disease processes, as I laid out in the slide. C3G is one of those diseases that really has no good therapies right now that afflicts very young people in many cases and many of whom end up needing to be transplanted or go on dialysis. So there's a huge unmet need in C3 glomerulopathy. And so we're very much looking forward to reading that trial next year.

Okay. I did have a PNH question actually for follow-on. So we also hear from docs that oral might not be an advantage due to copay and compliance issues. So they may be more reticent to use it. So maybe you can just stress that point from the PNH point of view.

Yes. Thanks, Graham. Maybe we'll pass that one to Reshema.

Sure. It's interesting because we -- when we think about that patient unmet need, we tend to hear a little bit of the opposite. The first thing I will say is on the copay, it's important to understand the payer mix there. With these patients skewing younger than we would normally see in an oncolytic market where most of the patients are Medicare Part D, these patients mostly are skewing commercial where as you know, there's a lot more we can do as an industry to help support these patients in access. So that's the first point. The second point is that we believe that there is great benefit in patients being transfusion-independent as well as infusion-independent with the oral. In terms of compliance, here, because many of the patients are symptomatic, what we've learned in compliance over the years across different disease areas is that compliance can sometimes be a challenge when patients are asymptomatic. But here, with the proper patient education and the efficacy and improvements and the ability to manage this around their lives, again, given their age, we believe that this is something that we can manage. And I'm not saying that it is not something that we would not be focused on. We certainly would be from an adherence standpoint as we would with any oral, but we do not believe that this is insurmountable, is my point.

Dave, do you want to add anything to that?

Yes. Thanks, Sloan. Yes, I mean, again, I think just putting more emphasis on what Reshema was mentioning about the symptomatic nature of this disease and the fact that these are young people with active lives, and in many situations, they're tied to the health care system because they need these -- they need transfusions or they need infusions of therapy. And so an oral therapy that makes them feel better, as we see from the FACIT data from this trial, and in addition to helping them achieve their treatment goals by improving their hemolysis rates and hemoglobin scores, we think that those are very, very -- are going to be very important and very compelling reasons for patients to want to stay on the medicine.

Thanks, Dave.

And your next question comes from the line of Charlie Mabbutt from Bernstein.

Charlie Mabbutt from Bernstein. So factor D and factor B are quite closely interlinked. And one of your competitors has highlighted a few potential advantages of targeting factor D, such as differences in plasma concentrations and the fact that factor B levels can fluctuate during infections while factor D levels are stable. So I was just wondering if you could provide your perspectives on the different targets and whether you see any potential advantages of factor B.

Dave, do you want to take that one?

Yes, sure. Yes. Thanks for the question. Well, I guess I'd simply start by saying that the data speaks for itself. I mean what we see from APPLY is a very strong efficacy and tolerability profile of iptacopan through factor B inhibition, where we're able to control -- maintain the control of intravascular hemolysis while improving extravascular hemolysis and improving patients' hemoglobin counts. So what we're seeing from a clinical standpoint in the trial, I think, speaks to the strength of factor B as a target if you target it well, which iptacopan does.

Thanks, Dave. Thanks, Charlie.

And your next question comes from the line of Jo Walton from Crédit Suisse.

Of the 6,000-odd patients that you talk of in the U.S., only 30% are treated, but of those, 80% of them have low hemoglobin. If we were to look at the other 70% that aren't treated, how severe do you think on average their symptoms are just to give us an idea of the likely ability to really increase penetration? So with the others, the other 70% also have low hemoglobin. And as a follow-on, please, you looked at the C5 naive and you looked at the C5 failures, as I understand it, those people with residual symptoms while still being on C5. Is there a meaningful cohort that really respond very well to the C5 that don't have residual disease who therefore probably aren't your target audience especially as we'll have biosimilar SOLIRIS in the relatively short term?

Thanks, Jo. Dave, do you want to take the second one first, and then Reshema can take the first question?

The second one with respect to C5 responders?

Yes.

So -- yes. I think the question was in individuals who respond well to C5, what would be -- why would they -- is there an opportunity there for iptacopan? I'd say the answer is yes. I mean the fact of the matter is that iptacopan is an orally available agent. So with the currently available C5, you have to go to the health care provider and get an intravenous infusion of these medicines. So an oral alternative might be compelling for some patients. Especially since what we see in -- from APPLY is that iptacopan when you target more proximally through factor B inhibition, you can control -- you can both maintain that control of intravascular hemolysis as well as better address the extravascular hemolytic component as well. So there will certainly be some patients who prefer that oral option.

Thanks, Dave. And Reshema, maybe on the 70% of patients who aren't treated.

Right, right. It's a really good question. So what we see is that these patients present in various states. And so it's -- we are still looking to be [ quite temporary -- ] we're still looking into how these patients present and what percent of them we believe will be impactable in terms of helping to educate around getting them treated. And we also know, and this is one thing that as well can be confounding is that we have some patients who would be treated, but they're unwilling to commit to get regular infusions. And so we think that, that would be an easily identifiable population. And so because some of the patients present with hemolytic anemia and others with thrombophilia, we think those may be more easily identifiable, but the exact number of those patients, we are still evaluating.

Thanks, Reshema. Thanks, Jo.

And the question comes from the line of Tim Anderson from Wolfe Research.

So APPLY-PNH enrolled patients with hemoglobin less than 10 grams per deciliter. And then on Slide 27, you note that of C5-treated patients, 80% have hemoglobin less than 12. So that figure is kind of apples-to-oranges to the enrolled population. I'm wondering if you know what percent of C5 patients have hemoglobin less than 10, which would match the trial population. And then if I can just sneak in a second one, APPOINT-PNH in C5-naive patients did not include a control arm. It seems like it would have provided more info if you compare it against standard of care because you will be going directly against those products. Can you comment?

Thanks, Tim. Maybe, Dave, on the label we would expect based on the data package.

Yes. I mean the -- yes, so based on APPLY, right, so I think there was a question, Tim, you're asking a question about the enrolled population less than 10 grams per deciliter versus the statistic of 80% of patients less than 12. So I mean fundamentally, the disease process in PNH is the same irrespective of hemoglobin level, right? So the absence of CD55 and CD59 result in the hemolytic process of red cells, and inhibiting the complement system through iptacopan like we showed in APPLY can reverse that effect. So the reason why you set a threshold for hemoglobin in these clinical trials is to ensure that you have an opportunity to show a treatment benefit on top with the therapeutic intervention. So a 2-gram per deciliter increase in hemoglobin is what one normally expects from a transfusion -- a red blood cell transfusion, which is why it's set as the measure for hemoglobin response in these trials. And as we said, getting to 12 grams per deciliter is getting towards the normal range in terms of hemoglobin count. So those are the rationales for how we enrolled the study, but the disease process irrespective of hemoglobin level is the same.

I'm sorry, if I could just clarify, I'm just trying to understand, if 80% of patients are -- at baseline are less than 12, what percent are less than 10 at baseline? So it's going to be something less than 80%. So that's just what I was trying to figure out.

I don't have those statistics at hand.

Yes. I think we've -- Tim, I think we've said before, hemoglobin less than 10 is about 40% of patients. Dave, did you answer the question on APPOINT as well? I'm sorry, I might have missed it.

Can you repeat the question on APPOINT?

Tim was asking -- sorry, go ahead, Tim.

It was just why APPOINT-PNH was only a single-arm trial as opposed to having relevant comparators in a C5-naive patient population.

Yes. It's a great question. In a naive population, so in APPOINT, we recruited patients again with hemoglobins less than 10 and evidence of active hemolysis. So we have objective measures in this study where you can compare to baseline in terms of the response. So a comparison directly to an active control isn't strictly necessary in that case. So APPOINT provides very important supportive data, as I said earlier, expanding the evidentiary basis for iptacopan in PNH, as we described.

Thanks, Dave. Thanks, Tim.

And the question comes from the line of Seamus Fernandez from Guggenheim Securities.

So a couple here. Just as we just think about the APPLY versus the APPOINT data set, I wanted to get a better sense of breakthrough bleeds and where your expectations are with regard to breakthrough bleeds as we move from the C5, I guess, refractory patient population to the treatment-naive patient population. I wanted to just get an understanding of how you guys are feeling about the competitive profile of the product in the naive patient population. How is it -- how do you see this potentially opening up a switch opportunity for patients who are perhaps even doing well on C5? Do you see that as a real opportunity commercially? And then separately, as we think about the sort of magnitude of the different indications represented by iptacopan, can you maybe just help us understand the scale of each given the different unmet need, entrenched competitors? Just wanted to get a better sense of how you're thinking about PNH versus aHUS versus the kidney -- the complement-driven kidney disorders.

Thanks, Seamus. Maybe I'll just get the last one out of the way quickly. So we've given peak sales guidance for iptacopan across indications and globally of multi-blockbuster $3 billion plus, but we haven't broken it down and we won't break it down between indications. Unfortunately, I can't answer that one. First 2, Dave, do you want to comment?

Yes. So I think the question, Seamus, was APPLY versus APPOINT, so treated patient -- previously treated patients versus naive patients and how we think about the read-through, I guess, is what you're describing of breakthrough hemolysis. So what we see in APPLY, I guess, very briefly makes us very confident that the hemolytic control naive population in APPOINT is also going to be very good. As I alluded to earlier, in response to Tim's question, the disease process in these patients is very similar, right? The inciting event and response to the complement system is very similar. So because in APPLY, we see both the maintenance of control of intravascular hemolysis and an improvement in extravascular hemolysis, we would expect a similar profile to be seen in the naive patient population also just from a mechanistic standpoint.

Thanks, Dave. I think there was a third question in there about the switch opportunity in patients doing well on C5. Reshema, would you want to talk about that?

Yes. So in terms of -- we do believe there could be a meaningful opportunity there. But as I said earlier, where we're really looking to prioritize the focus once this product is approved is on those patients where we know that they can benefit from greater efficacy or greater quality of life. And that is a very easily identifiable population in terms of changing physicians' behavior and patient behavior. And we will continue to evaluate the other segments such as the increasing -- as we were asked earlier, increasing the treatment rates but then also looking at those patients who are seen or perceived as controlled or stable but could benefit from iptacopan.

Perfect. Thanks, Reshema.

And the question comes from the line of Mark Purcell from Morgan Stanley.

I wonder if you can help us understand the total cost of care with C5. It's not just the cost obviously of the medicine, it's the cost of infusions and the cost of transfusions. So to help us understand how iptacopan could be priced in this indication, I wondered if you could provide some thoughts there. And obviously, one of the other cost of care with C5 is the risk of meningococcal infections. I just wondered whether you could help us understand if you would expect a class labeling there or if you'd [ divide ] a black box with iptacopan based on that meningococcal infection point.

Thanks, Mark. I think Reshema will take the first one and maybe Dave the second one.

Yes. In terms of the total cost of care with the C5, I believe that the payers are going to be a significant stakeholder here because we believe this is one of the areas they will be looking at in terms of the cost of care for the actual treatment and then transfusions and other things that go along with the base therapy. We do know that iptacopan will create a value proposition for payers in their ability to look at how do you manage the overall patient. And so while we won't talk about or comment on specific pricing schemes or pricing strategies, we believe that we will have a strong value proposition with payers that will ultimately also help to shape physician behavior.

Thanks, Reshema. And Dave on meningococcal infection?

Yes. Yes, I think obviously, how the label looks is going to be part of our discussions with the agencies, health authorities in the near term. What I can say is in our trials with iptacopan as with any complement inhibitor, vaccination for encapsulated organisms is a requirement. So how that ends up being reflected in the label, I think, will be subject to discussions, but we would expect there to be some mention of the need for vaccination in patients treated with iptacopan.

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

First one, just thinking about the relative opportunities, U.S. versus Europe, Japan and China, how you're thinking about that, I think Alexion and Astra has mainly penetrated U.S. and a bit of Europe. So how you're thinking about the relative sizing relative to the U.S. And then maybe one, just given the competition and the point with the factor D that could be coming, how are you thinking about the stay time on the product? From the clinical data that you've seen, would you expect any sort of cycling in the future between treatments? How should we think about that?

Thanks, Richard. So Reshema, on the relative opportunity in U.S. versus ex U.S.?

Yes. So here's what we know. The PNH prevalence is about 10 to 20 cases per million, and that really equates that in the U.S., it's about 6,000 patients, as I mentioned. PNH, the market overall globally is about $2 billion, with half of that being in the U.S. and the other half in ex U.S. So we do know there is significant opportunity ex U.S., including China where the C5 haven't been available until recently. But I would just say in terms of where we're focused, it's really focused on the U.S. launch as my remit is to really oversee the oncology business here in the U.S. But we continue to believe that this has a possibility of a multibillion-dollar asset across indications and across geographies.

Thanks, Reshema. And Dave, maybe just one more on the factor B versus factor D.

Yes. I think again, the key point is that the data that we see from APPLY tells us that iptacopan could be an oral monotherapy for patients with PNH and is highly effective at controlling hemolysis without breakthrough and is well tolerated and highly effective. So I think that the data are very strong that we've seen and I think [ points ] to a strong profile and a meaningful profile for patients with PNH.

Thanks, Dave.

There are currently no further questions. [Operator Instructions] And your follow-up question comes from Jo Walton from Crédit Suisse.

Can I just ask whether there's any need for a head-to-head with a C5 outside of the U.S.? I know that you said that you don't need it. But clearly, payers who are maybe less sophisticated like to see this, and in particular, in Europe, that might be something that you'd be required to do. So just if there are any additional regulatory or follow-on studies that you'd be looking for ex U.S., please.

Dave, that one's for you.

Yes. Well, of course, APPLY was head-to-head. So the individuals enrolled in APPLY were -- had been on C5 inhibitors in the past, had been previously treated with C5 inhibitors, had inadequate hematologic response and then were either randomized to iptacopan or to C5 inhibitors. So there is a direct head-to-head comparison. We've, of course, had discussions with health authorities outside the U.S. as well. And we'll, of course, talk to them about the data in the near future and anticipate files, as we've said on the slide, in 2023.

Thanks, Dave. And thanks, Jo. Operator, if there are no more questions, then I think we can close the call.

There are no more questions.

Perfect. Thank you so much. Well, thank you, everybody, again for joining today for this iptacopan update from ASH. Really appreciate everyone's interest and attention, and hope you all have a great week.

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