Novartis AG (NOVN) Earnings Call Transcript & Summary

Good morning and good afternoon, and welcome to Novartis Conference Call and Live Webcast. [Operator Instructions] A recording of the conference call, including the Q&A session, will be available on our website after the call ends. With that, I would like to hand over to Mr. [ Anish O'Dardi ], Executive Director, IR. Please go ahead, sir.

Thank you, Dylan. Good evening, and welcome to our conference call on Remibrutinib in MS . I'll first read our safe harbor statements. 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 Form 6-K that respectively were filed with and furnished to the U.S. Securities and Exchange Commission. Before we get started, I would also like to remind our analysts to please limit yourself to one question at a time and we'll cycle through the queue as [indiscernible]. And with that, I'll pass it over to Nazem.

Thank you, Anish. Good evening, everyone. My name is Nazem Atassi. I'm Global Head of Neuroscience Development Unit Novartis We. Are calling from MS Toronto. I'm delighted to be here in the room with Victor Bulto, from Novartis President, U.S. for Novartis and Professor Heinz Wiendl. Professor Director of Department of Neurology and Neurophysiology at University of Feinberg. Next slide. The agenda, I'll start by giving an introduction about remibrutinib, and then Dr. Wiendl will walk us through the results of the REMODEL-1/-2 trial. After that, Victor will go over the commercial opportunity in MS and beyond for remibrutinib. Next slide. Novartis has a long legacy in multiple sclerosis. And this is a history that transformed MS care over the past 2 decades, starting with that Extavia, Gilenya, Mayzent and Kesimpta. And today, we have remibrutinib results presented at MS Toronto and with simultaneous publication at the Lancet. Remibrutinib is the next chapter in the MS legacy for Novartis and the focus of today's presentation. Slide #7. Remibrutinib is a BTKI inhibitor with a pipeline in a pill potential. As you can see on the slide, it is in multiple indications, including approved indications, such as chronic spontaneous urticaria and chronic induced urticaria in the U.S. In addition to and SPMS, which is the focus -- RMS is the focus of today's discussion, in addition to a number of late-phase development in immunology and dermatology. Next slide, Slide 8. The promise of BTK inhibition is in addressing both the relapses and the disability progression without chronic B-cell depletion. Remibrutinib has dual mechanism of action. It targets B-cell in the periphery with adaptive immunity to reduce acute inflammation and relapses. It also targets microglia with innate immunity in the CNS to reduce chronic neurodegeneration and disability progression. Remibrutinib is very different than B-cell [ declare ] such as anti-CD20s. As opposed to anti-CD20, it modulates B-cells without depleting them. It also targets not only B-cells, but also microglia in the CNS. It has -- it's a covalent binder with short half-life, which allows for fast start or stop if needed to. And it has, as you will see, a safety profile that is favorable. Next slide. Slide #9. Remibrutinib is unique. It was designed to deliver the potential of BTK inhibition. It is a covalent reversible binder for sustained inhibition of BTK beyond the PK exposure. It is also CNS penetrant reaching levels above microglial IC50 in the CNS. It is highly selective compared to other BTKI inhibitors. It allows for need complete BTK occupancy and high potency versus other BTK inhibitors tested in vitro. It has optimal PK and PD were short half-life. And as you can see in the middle, it has distinct chemistry compared to other BTKI. Slide #10. This is published data showing remibrutinib selectivity as a highly selective compound tested in vitro, leading to fewer off-target effects and a differentiated benefit risk profile. As you can see, compared to other BTKI's, it has -- it achieved 100% BTK inhibition without off-target effects on other kinds. Next slide, Slide 11. And as I mentioned, remibrutinib is approved in other indications. We have extensive clinical data that reinforces its proven and robust favorable safety profile. The comprehensive evidence of favorable safety profile includes not only the remibrutinib trial data that you will see today, but also includes more than 4,500 participants across 40 different studies with dosages up to 600 milligrams that took this drug. There is no liver safety signal, including no high law cases in any of these programs or patients. In the [indiscernible] REMIX-1/2 Phase III trials, the safety profile of remibrutinib was comparable to placebo. That includes adverse events, infections, liver enzyme abnormalities were less than 2% in each of the arms, the placebo arm and in the treatment arm. And in terms of discontinuation rates, low discontinuation rate to less than 3% in both arms. We also have more than 10,000 patients that were treated with remibrutinib for CSU commercially with no liver safety signals reported. That translated to 2 FDA approvals for remibrutinib with a clean label, no black box warning, no contraindication and no requirements for routine lab monitoring. And with that, I'll turn it over to Dr. Wiendl to walk us through REMODEL-1/-2 results in RMS. So Dr. Wiendl.

Yes. Thanks, Nazem. Yes, my name is Heinz Wiendl. I'm a neurologist participating in the remodel steering committee. And I'm presenting the data that has been released in full transparency today. So this is the trial design, and this is a trial design that is rather classical remibrutinib is tested against teriflunomide as an active comparator. Remibrutinib is given in the MS indication with twice a day 100-milligram teriflunomide is given with 14-milligram. The trial has been done in a double-blind, double-dummy fashion. So that means patients have to take 3 pills and the trial design was an event-driven trial designs. That means that participants were actually in variable duration within the trial and the trial endpoints were powered on events. The inclusion was the diagnosis of relapsing MS, and patients had to have signs of activity based on either relapses or the presence of gadolinium-enhancing lesions on MRI. This is the list of the prespecified endpoints. So this trial was basically designed to show a superiority of remibrutinib against teriflunomide based on relapses. So reduction of relapse is calculated by the annualized relapse rate. We know in contemporary trials in [ macro sclerosis ] that the number of relapses in general, but particularly also on the comparator arms is going lower and lower, which makes the key secondary endpoint, such as MRI even more relevant. Why is that? MRI is 10x more sensitive than relapses, clinical relapses. That means a very objective measure of what a drug is doing in regard to suppressing [ focalesion ] development or gadolinium announcing lesion development can be objectively measured on MRI. The visibility progression is then the next secondary endpoint. And in difference to the shown endpoint on the left side, I'm on Slide #14. They have been done not independently in the both trials. There were 2 trials. One was REMODEL-1 and the other REMODEL-2, it was done on pooled trials to increase the likelihood of the number of events. I will explain later what the difference is between the 3 months confirmed disability progression, which is CDP and the 6-months confirmed disability progression. And then there is a combination endpoint, which is called NEDA, no evidence of disease activity. And then there is a biological marker of neurodegeneration, which is neurofilament light. There is then a other endpoint, which is secondary, which we will show is progression independent of relapse activity over 6 months. And of course, safety and tolerability, very importantly as endpoints in addition. So Slide #15 shows you the baseline characteristics and to run you through this graph and the table. First of all, you have to note that the balance between REMODEL-1 and REMODEL-2 looks very good. That means there is no major differences in age or sex ratio or in time since diagnosis, et cetera. This is a typical trial in relaxing MS population with rather mild affection of those patients, which you can see as measured by the expanded disability status score. And what you also can see on the basis of the previous relapses. So it's not a typical to see this number of relapses and a rather mild affection of the EDSS score, which goes from 0 to 10, but it's a very typical relapsing and mass population nowadays. On average, those patients had approximately 6 years since first MS symptoms and approximately 4 years since diagnosis. So this is Slide #16 that shows you our primary end point. And remibrutinib demonstrated a strong relapse control, translating to approximately 1 relapse every 13 years. So the independent analysis show in REMODEL-1, a 35% relative reduction of relapse rates and then REMODEL-2, it's 31.2%. If you translate that, how often a relapse then occurs is as written in the title, approximately 1 relapse every 13 year, which is a quite robust disease control. Next slide shows you the MRI outcome measures. And I was mentioning already that they are have to be looked at with equal attention despite being secondary outcomes because they are more sensitive to changes and therefore also to differences between the 2 arms. And here, remibrutinib reduced new enlarging T2 lesions on an annualized rate by 65.3% or 70.3% in the 2 trials. And when you look at contrast enhancing lesions, you are seeing a reduction of 66% and 66% in both trials. When you look at the absolute numbers, you will realize there is virtually no more gadolinium-enhancing lesion, so it's 0.08 or 0.07. So all in all, this is a very significant reduction on MRI. And why am I emphasizing this. I mean we've seen -- now a couple of BTK inhibitors. And the first ones we've seen, they basically did not really have a superior effect on MRI efficacy parameters in contrast to teriflunomide. And when you look at also comparative data fenebrutinib, which is another compound that has been kept in relapsing and mass population. These reductions are in the same ballpark region suppressing new T2 lesions and gad-enhancing lesions. So when you look at the MRI, this is a quite impressive effect. Next slide. So this is now the combined analysis of the disability end point. You've heard from Nazem that this compound is expected to work in the body, both in the periphery, but has also the potential to penetrate into the central nervous system. We do have data that there is CNS measurable dosages. And therefore, we assume that it penetrates into the CNS when you calculate, you would assume that the dosages that reach the central nervous system have the potential to inhibit myeloid cells there. And that is the explanation why an endpoint that is mostly dominated by not the relapses, but also a relapsed independent or relapse dependent visibility progression could depend on how well the effects in the CNS compartment are played out. And when you read this 3 months and 6 months confirmed disability progression graphs, you see there is a difference that is already starting quite early and that actually is statistically a difference of 20% risk reduction of 3-month conformability progression which is typically not significant at the 6-month confirmability progression is statistically significant, but the pattern looks the same in both graphs. If you have a look at what is different in 3 months versus 6 months means, it's actually the robustness of the measure. So European health authorities, they only accept basically the 6-month confirmed visibility progression because they say it's less contaminated. You definitely have more events with 3 months confirmed disability progression, but it is also contaminated by transient worsening that might be picked up. And therefore, the more robust measure is in the community, the 6 months confirmed disability progression. If you count this the other way around, so if you look here that only 7.7% had a visibility progression confirmed after 6 months, the rest is stable. But that means over 92% of the patients remain free of this progression. This means they are stable on the visibility scores. This is all in all, a quite remarkable difference that can be shown with the compound. And we also did not see that in all of the other BTK inhibitor trials that we have seen so far. When you combine all even that show you some sort of instability of the disease means either clinical relapses or change in the disability score or the occurrence of new lesions, we call that evidence of disease activity. And the opposite is called no evidence of disease activity. And these 3 parameters make up this acronym NEDA and it's NEDA-3. This is a prespecified point that you can calculate, and that has been done by counting MRIs after a so-called rebaselining after month 3. What you see is you're increasing the number of NEDA patients up to 55%, which is highly significant and the [indiscernible] ratio of 2.81%. We have also data on a biological marker that is meanwhile measurable in peripheral blood, and it's called neurofilament glide. The neurofilament glide is spilling out of the brain when there is subacute damage. So it's mostly as a consequence of focal activity. And it has established itself. Meanwhile, as a marker to get an additional support for what the drug is doing in suppressing inflammation and reducing brain damage. And what we do see is a reduction in this market as geometric mean over time, remibrutinib reducing 9% and 7% in the 2 trials. Not part of the prespecified endpoint, but very often and relevantly opt for is a parameter we call PIRA. PIRA stands for Progression Independent of Relapse Activity, which means that you do not want to have a contamination by so-called focal disability or focal biology, which in essence means you're eliminating the clinical relapses and you have to find ways to eliminate this. And this is then called PIRA. So you basically calculate how a drug effect disability accrual in the absence of any relapses. This has been done with a strict actually definition of PIRA, there are more definitions than you will see. On this graph, we are at Slide 22 that you see the same pattern, basically, a separation of curves with an impact on PIRA that is pretty much looking like the CDP curves that we have seen previously. We're showing that because the community meanwhile, ask for this. And it is an indication that a drug or a compound or an intervention is doing something that has rather little or in the best case, nothing to do with inflammatory activity outside of the central nerve system. That's something obviously in, we call it nonfocal disease biology. So I'm moving to Slide 23 and coming to the important safety profile. So this is the major categories we are looking at comparing remibrutinib and teriflunomide in the pooled analysis, thousands in each arm. And what you do see immediately is that there is no major differences even that you have to acknowledge that there is less percentage of discontinuations due to adverse events, which already speaks towards a good safety and the tolerability. We have seen 2 deaths in the trial, both in the remibrutinib arm. One was a carbon monoxide poisoning happening at day 3 and another one was a suicide at month 12 in a patient that had a previous psychiatric illness, and both are considered not related to the investigator drug. The other section is infections. This is something, of course, any immunological therapy is to be looked at with caution. And you do see really no difference in either direction and a class effect that is also listed here that is known from the class of BTK inhibitors and which is known also from the dermatological indications where remibrutinib is approved bleeding events. Those bleeding events are predominantly minor, and they are actually skin manifestations that are transient and reversible. And in very few cases, lead to discontinuation of the drug. They actually resolve even when you continue the drug. I think you're all aware that one major red flag in this discussion around BTK inhibitors is liver toxicity. And this is particularly carefully looked at also, of course, in comparison to teriflunomide. And what you do see here is much less elevation of the most sensitive liver enzyme ALT in different, let's say, altitude. And the combination of certain liver enzyme elevation over 3 tons upper limit of normal with total bilirubin is called [ High Law ], which is actually considered a very yes, very clear red flag for liver toxicity. We didn't see any cases of [ high law ] and also the rates of liver enzyme elevation are comparably much lower than in teriflunomide, which is known to have a bit of a liver signal and also requires little monitoring in the approved condition every month for the first 6 months. By the way, this is also what has been done in this trial. So for the first, let's say, 2/3 of the patient at teriflunomide liver monitoring was applied. So every month, but when the signal in the trial programs from the BTK inhibitors came out, the monitoring requirements were intensified. So the monitoring was then shifted to every 2 weeks which didn't really change the picture. And what you see in the elevation is basically the background noise of any liver enzyme elevation that you would see in placebo-controlled trials. So all in all, you can summarize that this trial is pretty clean in terms of showing a significant reduction in the primary endpoint relapses which translates to a disease control, showing up 1 relapse every 13 years. For me, very important, the MRI activity reduction by 65% to 70% with basically very few [ gallalinium ] and housing lesions that ever occurred under the trial product, remibrutinib. We do see a population of more than 92% that are free from visibility progression. You do increase the likelihood of no evidence of disease activity by times 3 and we also show a 6-month reduction of progression independent of relapse activity by approximately 30%. This all in combination with a very robust and favorable safety profile, particularly as a standout no liver safety signals. We do not yet have. This is a question I got today with my presentation at the late-breaking news, together with the publication from colleagues we do not yet have data for how immunoglobulins develop over time and how B-cell levels develop over time, but it's not expected that this drug is really meaningfully depleting B-cells, definitely not in the way that antibodies would do it.

Well, thank you very much, Professor Wiendl for this comprehensive review. Before we move to the next slide, I just wanted to pause on the next steps. We have global regulatory filings ongoing with the U.S. expected by the end of the year with a priority review voucher. So now moving on to Slide 27. we are going to move to the next section where we will cover how we are planning to maximize remibrutinib opportunity in multiple sclerosis. So here in Slide 27, based on this unique profile that Professor Wiendl described in the previous section, we believe that remibrutinib has a broad potential to address patient needs across the RMS treatment landscape. In this chart, we outlined the main patient segments that have the potential to benefit from this treatment. And as you can see, there are 3 main patient segments in this market. The naive patients, patients currently on an oral treatment and patients currently treated with an anti-CD20 like [indiscernible]. And in the coming slides, we will go in depth into each segment, focusing first on the U.S. market to then describe the U.S. opportunity. So moving on to Slide 28. The first segment represents naive patients, which are about 40,000 patients in the U.S. who are newly diagnosed with [indiscernible] MS. The majority of these patients start on an anti-CD20, but about 30% of naive patients in the U.S. are not prescribed around [ 320 ], citing the safety trade-offs and/or route of administration preferences. And as you can see in this chart, about 15% start on an overall treatment with the rest typically starting on injectables other than anti-CD20. For this patient population, remibrutinib offers a comprehensive disease control with a robust favorable safety profile in an oral without the burden of frequent injections or infusion center visits as we see it, it's a safe treatment to start early and stay on for the long term. Now moving on to Slide 29. This next segment is characterized by patients that are currently treated with an oral therapy. It's about 60,000 patients in the U.S., and these patients tend to have a strong preference for an oral treatment and/or safety concerns related to long-term B-cell depletion. 20% of oral patients actually switch treatment each year, and up to 40% are at risk of treatment failure due to efficacy or intolerance. So for these patients, remibrutinib is a differentiated oral option outperforming teriflunomide on comprehensive disease control and safety with 50% fewer discontinuations due to adverse events. Our initial focus during the launch will be on the 40% of oral patients who are switching or continuing despite port treatment outcomes with the opportunity to expand over time to the entire oral population. We also expect, over time, growing safety focus to support a higher switch rate. Now moving on to Slide 30. This is the third segment and the largest one with approximately 140,000 patients currently treated with an anti-CD20. Only 10% of these patients are switching each year but we believe that with a new treatment option, up to 45% are eligible to sequence to another treatment like remibrutinib. As patients age and accumulate treatment exposure concerns around infection risk and long-term B-cell depletion become more relevant. And also, there are patients who are progressing on anti-CD20 and I want to switch to an oral that offers clinical benefit in terms of PIRA, as Professor Wiendl explained. Remibrutinib offers for these patients comprehensive disease control and a robust favorable safety profile we have the need for chronic B-cell depletion. And just to note that we are currently enrolling the Phase IIIb RESHAPE study, which is expected to provide further evidence to informed post anti-CD20 switch. Now moving on to Slide 31. Last but certainly not least, the ex U.S. opportunity also represents a significant one for remibrutinib as orals remain a sizable market, as you can see on the chart, there's about 440,000 patients treated and the top 7 x U.S. markets. And about 60% of mild to moderate naive patients in EU5 steroid orals anti-CD20 is the fastest-growing class, creating an increasing [ Postans ] opportunity as well. And in these geographies, remibrutinib offers high efficacy or option with a comprehensive disease control and favorable safety without the need for chronic B-cell depletion. Now it's also important to note that we have very strong ex U.S. commercial capabilities in multiple sclerosis to maximize this opportunity where Kesimpta leads in NBRx share in 7 out of top 10 markets. Now moving on to Slide 33. To further build remibrutinib's potential, we have several studies underway and on planning phase that I wanted to review to support switching in RMS and expansion into SPMS. So beyond the REMODEL trials that we just presented, we are now in recruiting phase for the RESHAPE trial, which is a Phase IIIb study that looks at patients switching from ocrelizumab. This study has the potential to build further evidence to establish remibrutinib as the oral option after anti-CD20s without the need for chronic B-cell depletion. The earliest readout is expected in 2028. It's a noninferiority trial versus ocrelizumab with new enlarging T2 lesions as primary endpoint and a key single endpoint of no evidence of disease activity. We're also currently recruiting the REMASTER trial, which is a Phase III study in nonrelapsing SPMS and we are studying the potential to slow disability progression, 6 months CDP. The readout for this trial is expected in 2031 with that primary endpoint of 6 months confirmed disability. Finally, we are also planning additional studies in other settings and after other therapies to inform and support switching. Now moving to Slide 33. I want to bring it all together now to show you that remibrutinib has the potential to be a $4 billion-plus medicine and in relapsing multiple sclerosis with potential further upside from nonrelapsing SPMS. In the cheart below, we have shaded in orange the populations who have the potential to most benefit from remibrutinib and as you can see, it's north of 50% of the RMS population over time. And then also, we have included an additional 85,000 nonrelapsing SPMS has potential further upside if the REMASTER study shows a benefit in this population. So now moving on to Slide 34. I want to highlight that to maximize this opportunity it's important to note that remibrutinib launches into an established MS footprint in the U.S. but also across the globe. At Novartis, we have been commercializing MS drugs uninterruptedly since 2009, and many of our colleagues, including myself and [ Sriramaradila ] have been involved in the development and commercialization of Extavia, Gilenya, Mayzent, Kesimpta and now remibrutinib. And during all these years, we have been compounding expertise and capabilities that we will now put in service of this medicine. As you can see below, in terms of HCP reach, remibrutinib will have 100% overlap with established Kesimpta prescribers. And we also have an exceptionally strong marketing team who has been optimizing patient activation channels for years. And here, you can see how in terms of patient awareness. The team achieved very strong patient awareness increases for Kesimpta over the last years. Same in terms of market access, we have extraordinary expertise in market access as demonstrated by our very strong Kesimpta access as well as patient support programs to pull through patient requests as well. Now moving on to Slide 35. I want to highlight that beyond MS-specific commercial capabilities we also -- I wanted to highlight that for this launch, we're building on capabilities compounded across multiple U.S. self un-ministered specialty launches, but with a fully owned patient support model with industry-leading breach program that enables between 3 and 5 days average time to dispense with market access team that has enabled more than 70% access to label within 6 months across most recent launches as well as free-to-paid conversions and a really strong customer engagement [indiscernible] has driven a 20% improvement in engagement effectiveness over the last 3 years. So as you can see, we are planning to launch remibrutinib with a proven launch engine that enables fast access rapid onboarding and effective engagement as well. Now moving on to Slide 36. In this last section before the Q&A, I want to quickly zoom out and provide a broader perspective on the opportunity that remibrutinib offers as a pipeline in appeal. So moving on to the next slide. Slide 37. Here, we currently have this chart that shows that we have 2 approved indications in CSU and CIndU. We just discussed the MS opportunity. Now we will highlight our plans in [indiscernible] and food allergy. Now before I do that, I just want to mention as well that there's 2 additional late-stage trials in chronic pruritus of unknown origin and in [indiscernible]. So now moving to the next slide, A quick summary on our launch performance in CSU as this is the first commercial footprint, proof point, sorry, for remibrutinib with strong momentum building towards first-line leadership. As of Q2, we had 200,000 U.S. patients treated more than 4,000 prescribers across allergy and dermatology with the majority of patients prescribed in first line right after antihistamines and with strong access secured as well. As a reminder, it's a very large opportunity with above 500,000 U.S. CSU patients on control and antihistamines, and we have extra lab also ongoing. Just to highlight in terms of upcoming catalysts and adolescent Phase III readout this year and also a Phase IIIb reclaim study, which is a head-to-head versus DUPIXENT with a readout in the first half of 2027. Now moving to Slide 39, just briefly also mentioning that [indiscernible] is also expanding into CIndU with the first and only FDA approval in symptomatic nermographism, building on that same prescriber base as CSU. This -- we received approval in October 2026 for this subgroup, the symptomatic dermographism that represents 2/3 of CIndU patients. And in this population, we saw twice as many adults taking [indiscernible] or achieving complete hydresolution by week 12. Again, a very important opportunity with about 100,000 patients in the U.S. with this indication. Now moving on to Slide 4. Briefly, in [indiscernible], our Phase II data support remibrutinib as an oral option and it has a large another treated market. Just as a reminder, HS is a chronic and debilitating disease characterized by painful nodules, abscesses and tunnels with [indiscernible] with about 440,000 moderate to severe patients, it's an underdeveloped and undertreated population. And in our Phase II, we observed biologic-like efficacy at week 16 versus placebo. And we are now conducting that RECHARGE-1 and 2 Phase III trials, which are 2 identical trials that -- with the primary endpoint of hydrantugrativa clinical response 50 at week 16. And this weak sustain readout is expected in Q4 2026 with the first filings in 2027 with 52-week data. Moving on to the next slide, in food allergy. We also saw a rapid dose-dependent Phase II results that support remibrutinib's multi-allergen Phase III program. In food allergy, there are more than 3.5 million high-risk eligible patients across major markets with few targeted options and the constant risk of accidental exposure that create a need for a fast allergen agnostic protection. And as you can see in the chart in our Phase II trial, we observed dose-dependent response as early as week 4. In the Phase III trial, we are testing remibrutinib 75 milligrams versus placebo with multi-allergen focus for the global market in patients 12 to 65 years old. In the Phase III, just to note that it was initiated in Q3 2026 with an expected readout beyond 2029. So finally, moving to the Slide 42. I just wanted to say in closing that with remibrutinib, we have a medicine that is differentiated by design, slightly selective, potent covalent BTK inhibitor that enables immunomodulation without chronic B-cell depletion that with remibrutinib, we are able to offer comprehensive disease control with significant reductions in relapses and MRI lesion activity as well as clinically meaningful delay in disability progression coupled importantly with a robust, favorable safety profile with no liver safety signal, no infection imbalances versus the [indiscernible] and nearly 50% fewer discontinuations due to adverse events. We also saw how at Novartis, we have both the scale and the capabilities to maximize this opportunity that has broad potential across naive, oral and anti-CD20 switch patients and launching into an established MS footprint. Now finally, last but not least, with remibrutinib, we've seen that we have a pipeline and appeal. We've indicated a $4 billion peak sales potential in RMS with upside from nonrelapsing SPMS and also a $4 billion peak sales potential in CSU and CIndU plus a Phase III HS study reading out in Q4 in '26 and additional studies ongoing in food allergy, CPU and papulopustular rosacea. And with that, we will open the line for questions. So please, operator?

[Operator Instructions] And I show our first question comes from the line of Michael Leuchten from Jefferies.

I was wondering if you could speak to the split of efficacy between treatment naive and treatment experienced patients. You had 60% of patients naive in the trial and a professor talked to how this is a pretty standard patient population that he would see. But is there any data you could share on the efficacy naive versus experience, please?

Well, thank you very much for the question, Michael. Nazem?

Yes, Michael, we -- so the results are for the overall population. And this population 60-40 breakdown between naive and prior treated patient is relatively typical for MS population. We have not looked at subgroup analysis at this point, but we will for sure. And when we have this information, we'll be happy to share it at future compound.

And I share our next question comes from the line of [ Trunk Huen ].

I have a question on the label. So the 6 months confirmed disability progression that was reduced by around 30%. It had a nominal p-value. The 3-month CDP showed a trend 20% with a p-value of 0.09. So do you think you can get the 6-month CDP benefit on store label? And then just your thoughts on if FDA could impose the class-wide liver monitoring requirement for all BTK inhibitors in MS. I know your data showed no high law cases, and I appreciate that PSU that's free but that was 25 mg versus 100 mg for MS. So I just thought on the label, please.

Yes. Well, thank you very much for your questions, Frank. On the first one, right, in terms of what's going to come in the label, these will be further discussed with regulatory agencies across the globe. But overall, we feel very confident that we have a package that is solid and broad enough that will allow us to promote this drug appropriately, both across comprehensive disease control and safety. Now in terms of the FDA lever monitoring potential. Nazem, do you want to take that one?

Yes, yes. No, absolutely. I can take this one. So when it comes to safety, I would say that remibrutinib is a class on its own. We don't expect to have monitoring in the label. Obviously, this is pending discussions with the regulators. But we believe we have a very strong case to make to the regulators, both the data that we have in REMODEL-1 and 2, which is a pretty substantial number of patients that were exposed to remibrutinib we're clean as you have seen, no liver enzyme elevations and no high's low cases. This is in addition to the 4,500 patients that were treated in trials up to 600-milligram dosages and the 10,000 patients that took this drug on the market for CSU. And as you have seen in the CSU label, we don't have monitoring requirements or a black box for this one. So because of all of these things, we don't believe that -- we don't expect that to have monitoring in the label. One thing maybe I would add that having monitoring in clinical trials does not automatically translate to having the same monitoring in the label. And the CSU trial is a good example for that. So we had to monitor for the remibrutinib in the REMIX-1 and 2 trials, but there were no requirements and then that's a good example. But it's an important question. And I know you're asking about the monitoring, which is the burden both on the physician HCPs and on the patients to come in and do these tests which sometimes also can be false positive or slightly elevated, they have to come back, and it is a big burden. But also, I think we should not forget the real problem, which is the liver tox. I mean high lock cases in other programs having a high lock case in these -- in drugs is not a simple thing. It's really a major safety risk that we need to keep in mind. So [indiscernible] important. We don't expect to have that in the label, but also safety is even more important than that.

Our next question comes from the line of [ Alex Etlin ] from UBS.

It's on fatalities. So you noted 1 suicide in the remi arm, which I understand was in a patient with a history of psychiatric illness. But given that the fenebrutinib RMS and PPMS trials, both had suicides in the active arm and not in the comparator arm. And since BTKI's are brain penetrant, how do you kind of rationalize this? And to kind of further to that, would you consider adding a mood scale or something similar in other remi MS trials?

Thank you, Alex, for your question. I'm going to ask Professor Wiendl to offer this perspective.

Well, first of all, given the high number of more than 2,000 patients, a suicide in such a population might very well be a background noise. That's one thing. The other thing is I already noted that this patient specifically had a history of psychiatric illness and depression. So it's rather unlikely and by the principal investigator, not related to the drug described. I know the fenebrutinib data, and these cases look really different. And they are hard to explain because they seemingly be associated with the drug. And I don't see this like being a real question to come up with remibrutinib, honestly. I also don't think this is a class effect. But this is a good pick that you made. This is a struggle that fenebrutinib has to solve. I don't think that this is really something that is seriously coming up with this percentage or number we have seen.

Our next question in the queue comes from the line of Thibault Boutherin from Morgan Stanley.

Yes. Maybe a question for Victor. Just considering the different dosing classifications. How should we think about potential for different brands for each indication and sort of tailor pricing. So you're thinking about this and sort of preventing the arbitrage between dosing and indications.

Yes. Thank you very much, Thibault. We are, of course, thinking about it very carefully. What I can tell you is that we've aligned with the FDA to have separate brands in immunology and in multiple sclerosis. So these will be filed a separate NDA. And in terms of pricing, we will, as we always do, disclose that at launch.

Thank you. And I show our next question comes from the line of James Quigley from Goldman Sachs.

Just reading -- one for Dr. Wiendl. So reading the stats plan in the Lancet, the trial was initially powered to detect a 45% reduction in ARR and a 40% benefit on CDP, and this looks fairly consistent across all the other Phase III design. So is that what would have been considered clinically meaningful? So how do you put the data here in the context of that? And you mentioned that the MRI was similar to fenebrutinib but the ARI endpoints are not? So what could be the reasoning here?

The line was not perfect. But if I understand your question is, would I consider this reductions of clinical relapses clinically meaningful. The answer is, while it's definitely statistically meaningful. And if you translate what it means to a patient with them has to have 1 relapse in, let's say, 13 or 14 years, that's clearly meaningful because to eliminate relapses, we are considering the goal of 0 disease activity or 0 colorants that's definitely. The difference to fenebrutinib is another question, and I already referred to it's hard to compare across trial. What can be said is that the fenebrutinib trial had a different population. They were more active. There were more patients that were treatment naive and they had for that reason, higher, let's say, relapse activity when they were included. And this partly explained to me why the relative relapse rate reduction numerically the entire 50% plus. But when you look at the MRI, which I already alluded to is, in my opinion, the more objective and sensitive measure what a drug is statistically also doing, there is not that much difference, okay? The problem is, and I guess this has to be really sensed very few relapse events in a condition where there are not that many events actually changed the numbers quite significantly. When you look in this high number of recruited patients, there were very few events. So this is what I mentioned with it's a rather low active contemporary population. And therefore, the reduction would be considered, yes, definitely clinically meaningful. And it's hard to say whether there is so much of a difference in regard to fenebrutinib.

And I show our next question comes from the line of Richard Vosser from JPMorgan.