Pharming Group N.V. (PHARM) Earnings Call Transcript & Summary

Hello, everyone, and welcome to the Pharming conference call. My name is Nadia, and I will be coordinating the call today. [Operator Instructions] I will now hand over to your host, Dr. Sijmen De Vries, CEO, to begin. Please go ahead.

Thank you very much, and good morning, good afternoon, ladies and gentlemen. On the occasion of the approval of leniolisib, now known under the brand name Joenja. And we're very proud to have achieved this FDA approval, obviously. Before I go there, I would like to point out to the next slide, about forward-looking statements. As this presentation may contain forward-looking statements, and forward-looking statements are statements of further future expectations that are based upon management's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. And of course, I'll leave it to you to further read that entire statement. Then I would like to move on to the next slide because I'm here with a number of my colleagues Dr. Anurag Relan, our Chief Medical Officer; Stephen Toor, our Chief Commercial Officer; and Jeroen Wakkerman, our Chief Financial Officer. And we will be taking you through the following agenda that you can see on the next slide. I will do a very brief introduction and then Dr. Relan will take you through the APDS overview, the label and data followed by Stephen Toor, who will take you through the commercial launch plans and then Jeroen Wakkerman will take you through some financial considerations. And I will find -- I will finalize this call with a brief overview of the strategy and some closing remarks, upon which we open the line for questions. So let me start first and show you this beautiful new branding on the next slide where we are very proud of the brand named Joenja for leniolisib going forward. And of course, if you look on the next slide, we are very proud that we now have the first and only FDA approval for APDS. And APDS, of course, is a newly discovered disease, that has very serious impact on people's lives. And it's one of those rare primary immune deficiencies that now going forward in the U.S.A. will have a treatment that treats the root cause of this disease. A very important step forward today for all those APDS patients aged 12 years and older that are now eligible for treatment with leniolisib -- with Joenja should get used to that. And Joenja is the PI3 kinase delta inhibitor with that demonstrated efficacy, safety and tolerability that was shown in a 12-week randomized placebo-controlled trial for the treatment of APDS and Jeroen Wakkerman will give you a lot more details on that. And of course, last but not least here, we are already started the development for pediatric patients because we recently announced that our first pediatric study already enrolled the first patient. And we are absolutely fully prepared for the launch of Joenja in early April. It is -- because it is not our first rodeo, it's our second commercial rare disease product that we bring into the market. And we have very experienced and dedicated commercial and medical teams that are in place. We also have APDS assist programs to help those patients with medication, access, education and all sorts of support services. And Stephen will go into much more detail later on during this presentation on all these -- on the commercial preparedness that we have to launch Joenja in the United States. Last but not least, as you well know, the MAA is also still under review by the European authorities. And we expect a reply from the European authorities in the second half of this year. So without further ado, I would like to now turn over to my colleague, Dr. Anurag Relan, to give you the APDS overview. Anurag, over to you.

Thank you, Sijmen. So let's begin by talking about APDS, and then we can get into the data and the label on Joenja. So as Sijmen mentioned, APDS is a condition that was first described in 2013. It's a rare primary immune deficiency that we believe affects more than 1,500 patients worldwide. To date, we have already identified more than 500 of these patients. Up till now, the treatment for APDS has really been aimed at addressing the symptoms of the disease which manifest in early childhood, but not the root cause. And we'll be talking a little bit more about what those symptoms are and what the root cause is. Symptoms and signs vary among patients, but we know that these patients do experience significant delays to treatment and diagnosis because of the misdiagnosis and the difficulty in making the diagnosis in rare disease. But fortunately, there is a genetic test available that can make a definitive diagnosis, and we'll be talking a little bit about that as well. So when we think about APDS, of course, we think about the physical manifestations, which stem from the underlying immune defect that causes frequent infections cause this problem of lymphoproliferation or swollen glands, manifests itself in the lungs and can cause shortness of breath and coughing and a whole variety of symptoms that you see there that greatly impact the patient's life. And of course, as those physical manifestations impact the patients life, they impact the other aspects of their life, too. Their social well-being, their mental well-being and then lead to these patients frequently being in the hospital requiring multiple surgeries, sometimes unnecessary surgeries, requiring numerous doctor visits, numerous visits to specialists that all take up significant part of their time and, of course, have significant burden on these patients. We think about APDS, we can actually think about it as this genetic disease that evolves over time. And you see at the top here of the slide how this evolves. So beginning early in life, these patients start to have infections, frequent infections. And this is very common with other primary immune deficiencies as well. One of the hallmarks, however, of the disease is what's called lymphoproliferation. So this is swelling of the lymph nodes, enlargement of the spleen, and you can begin to see that also early in childhood. Eventually, this begins to manifest itself in the GI tract, and you can see a condition called enteropathy. Later in life, you can -- in then later in life, I'm talking about still around the age of 10, these patients can begin to have autoimmune manifestations. And then again, early in childhood, early in their adolescence they can have lung manifestations in a condition called bronchiectasis, where they have scarring from these recurrent infections and from this lymphoproliferation. Most serious complication, of course, is malignancy, and that happens in a high proportion of these patients due to this propensity to develop lymphoma. And as I mentioned, this condition also has numerous other manifestations such as cytopenias, arthritis or other manifestations of immune dysregulation. As a result of this varying clinical presentation, all of these different symptoms, it's difficult for these patients to get a diagnosis. One, because the condition is rare; two, because up until now, there hasn't been a specific treatment available; but three, because of all of these different manifestations. And you see here some of these initial diagnoses that these patients have had when they when they initially were presenting with these symptoms, and you see a whole variety of things from hyper IgM syndrome because many of these patients or almost all of these patients have high elevated levels of IgM, a specific type of antibody. You see recurrent infections. You see other immune diseases that they're diagnosed with, including combined immune deficiency or common variable immune deficiency. And in the worst case, you see that for some of these patients, their initial diagnosis was the lymphoma. And if you go back and look, you see that these patients unfortunately suffered for many years before they even had the diagnosis of lymphoma. So clearly, improved identification of symptoms, better genetic testing and earlier diagnosis are needed for these patients. And that's one of the things that we've been very much committed to in helping support the entity with. So when we think about what actually leads to the problem in these patients, it's really quite straightforward in that there is a specific genetic abnormality in one of these two genes that leads to this hyperactive intracellular signaling pathway that you see in the cell there on the left. And that hyperactive PI3K delta signaling pathway leads to a dysregulated development of the immune cells. So B and T cells do not develop properly. And as a result of their not developing properly, they don't function properly. When the immune system doesn't function properly, the most the most obvious manifestation is recurrent infections, and you see that on the right. But as I mentioned earlier, lymphoproliferation and autoimmunity are also key manifestations of this condition, and that's from this dysregulated immune system. You see all of those other manifestations on the right, including lymphadenopathy, the enlarged spleen and liver. You see this proliferation of lymphoid tissues throughout the body, in the lung, in the gut. And then these autoimmune cytopenias and other autoimmune disorders that gravely affect these patients. And then lastly, it's important to remember that this is a progressive disease. So this gets worse over time. And that's one of the key manifestations of that is the bronchiectasis. And then we also know that these patients do, like I said earlier, have this propensity to develop lymphoma. Management of APDS up until now has really been trying to address these different symptoms, these different manifestations of the condition. So on the one hand, there's the immune deficiency. So that can be treated with giving antibiotics either preventively or to treat an infection. Most of these patients are also on what's called immunoglobulin replacement therapy. So that's basically collecting antibodies from plasma and giving it to these patients on a regular basis. But on top of that, remember that these patients have this dysregulation. So not only is their immune system not able to fight infections, it's actually overactive in a sense. So it also needs to be controlled, and that's typically done with drugs such as corticosteroids, other immunosuppressants or mTOR inhibitors, such as rapamycin. None of these therapies, however, are approved for the treatment of APDS by the FDA. And then, of course, in a small minority of patients, stem cell transplantation has also been used to try to address their underlying immune problem. However, this is not an easy procedure and also comes with a lot of its own complications and issues. Now we have a new therapy available, Joenja, which is an immune modulator targeting the root cause of APDS and the principle here is to try to modulate that overactive PI3K delta pathway to allow for a balanced immune function. So allowing these immature cells to develop properly into functional cells and have a balance between these different aspects of the immune system so that they can develop properly and really trying to correct the underlying immune defect that's present in these patients. So I'm going to walk you through now some of the data on Joenja as well as the label that was approved by FDA on Friday. Here's a graphical depiction of the bottle and the carton as well as the overview of the prescribing information. So you can see there the indication statement that Joenja is approved, they are indicated for the treatment of APDS in adult and pediatric patients that are aged 12 and older. There are no contraindications or box warnings. There is not a REMS or a risk evaluation and mitigation strategy in place and you see some other details on the dosing there for patients who are over 45 kilos. There are some warnings and precautions that are mentioned there. And then the most common adverse reactions were headache, sinusitis and atopic dermatitis. So let's go through some of the data on the clinical trial itself. The trial really was in three parts. Part 1 was the dose-finding part, and this was done in six patients, looking at three different doses to make sure that the correct dose was selected and that was done on the basis of the immune findings as well as the clinical findings and safety and tolerability. And on that basis, the 70-milligram twice daily dose was selected for Part 2. As Sijmen mentioned, this was a 12-week randomized, blinded, controlled study, placebo-controlled study. And what we saw there, what we were looking for was changes in the immune phenotype. So looking at how immune cells function and then also looking at this underlying fundamental issue in APDS, which is lymphoproliferation. And so we looked at the size of lymph nodes in these patients. Numerous secondary and exploratory endpoints, and of course, safety was a critical concern. And then these patients then had the ability to roll over into the open-label extension study on the far right there. See there, and you see that there were, in total, 37 patients. This is a study that's ongoing. We reported some of these data at the ASH conference at the end of 2022, and we expect to continue to report these data throughout the course of this year as well as wrap up the study as regulatory approvals come in. Let's look at the data. And what we can see here when we look at the primary endpoints is that Joenja restores this immune balance, again, correcting that underlying immune defect. Then on the left, when we look at the immune dysregulation aspect, which is looking at the size of lymph nodes, and you see a dramatic change even in 12 weeks. You can see that on the scan there, on the image there as well as when we look at all patients and you see a statistically significant difference when we look at the patients who received Joenja versus placebo in terms of the reduction of these index lymph node lesions. And then on the right panel, you can see the immune deficiency aspect. And so this is a measure of what's called naive B cells. So naive B cells or B cells that can respond to infections and antigens. And you see a dramatic increase, again, in a matter of 12 weeks in Joenja-treated patients versus the placebo-treated patients. And this really was the heart and the basis of the FDA decision to approve Joenja on the basis of these primary endpoints. On top of that, you can see the safety profile in this slide. So in the Phase III profile -- in the Phase III study, you can see the most common adverse events reported by patients treated with Joenja in at least two patients and you see the list there. And then in the open-label extension study, we also -- where we had patients treated going up to several years. We see the tolerability profile there. And across all of these studies, you see that we had a median exposure of 2 years as well as some patients who were greater than 5 years of exposure since this study began. Then when we begin to look at some of the secondary endpoints, we can also see how correcting that immune defect addressing that overactive pathway begins to manifest itself in these patients. And one of the clear manifestations is when we look at something such as the size of the spleen, these patients, again, have enlarged spleens as a manifestation of that lymphoproliferation and you can see that in the images on the right there, we have an example, patient of a 17-year-old male who had enlarged spleen. And then even by 12 weeks, we can see a significant reduction in the size of the spleen. And this was seen also when we looked at the comparison across all patients in the study in terms of Joenja treated patients and placebo-treated patients and you see a statistically significant difference in the size of their spleens over the treatment of this 12-week period. And we presented data at ASH, as I said earlier, where we showed that this type of reduction continues in the open-label extension study so when these patients are treated for a longer period of time as well. Likewise, I mentioned earlier that IgM is a -- elevation is a clear hallmark of the disease. Again, a manifestation that these patients' immune system is not developing properly. In this case, they are not doing -- their immune cells are not doing what's called class switching. So they're not switching from IgM production to IgG production. And what you see here is that they have high IgM at baseline. But when patients were treated with Joenja and you can see that beginning to happen as early as 4 weeks, you see that their IgM levels begin to drop and they're within the normal range. Certainly by 4 weeks and then continuing to 12 weeks. Again, we've seen this data even in the open-label extension study where patients are treated for much longer periods of time. In contrast, you see the placebo treated patients at the top. And you see those patients who do not change their IgM level significantly. On top of that, and we'll be sharing more of this data as we move forward. When we treat those placebo-treated patients with Joenja, we can see those levels come down too, which is nice for these patients. And then probably one of the most important aspects is, okay, now you've shown that you can correct the underlying immune defect, you can allow these patients' immune cells to develop properly, you can address the lymphoproliferation, you can reduce the size of the spleen. We can show demonstrations in lower IgM levels. But what about other -- the clinically -- other clinically relevant manifestations. And you can see here the number of infections that these patients experience, the number of days of inspection -- infections over time, how that comes down nicely as the patients are treated with Joenja. Likewise, when we were observing these patients, we noticed that there were fewer patients now using immunoglobulin replacement therapy. This was actually not driven by the protocol. This was sort of a spontaneous decision that investigators and patients made where they said, look, the patient is doing better. We can take them off this IRT therapy, and we see that a little bit more than 1/3 of patients, again, spontaneously did this. And what was interesting was this was happening not only during the study, which occurred during COVID for patients that were coming off of Ig replacement therapy at that time. But we also see while they were coming off, they had less infections which is, again, I think, a demonstration that the underlying immune defect was being corrected. So in the end, what we have with Joenja is a medication that's indicated for the treatment of APDS in adult and pediatric patients over the age of 12. We've seen randomized placebo-controlled data showing the both primary endpoints were met with significant -- we've seen other improvements in the secondary endpoints and exploratory parameters. Overall, we've seen that the drug was generally safe and well tolerated, including from long-term use in the open-label extension study. We've seen improvements there in some infections and the use of IRT. And we've also seen that these results are consistent with the RCT study. So with that, we are positioned to hit the ground running with Joenja and I'm going to turn it over now to my colleague, Steve Toor, to talk to you a little bit more about how we're going to bring Joenja to patients.

Thank you, Anurag, and thank you all for joining the call this morning to discuss the significant event for the APDS and broader PID community and, of course, Pharming. Over the next few minutes, I'll walk you through the strategic imperatives that have driven our planning over the past 3 years and that will underpin the execution of the launch. Our core business drivers and how we're structuring for a successful launch, and I'll confirm the price of Joenja. The strategic imperatives you see on this slide are most easily summarized by the phrase find, treat and keep or find patients, treat patients, keep patients. And that's exactly what these four strategic imperatives are designed to do. So firstly, identify, that's achieved through a combination of our deep understanding of the patient journey, analytics, partnerships with relevant stakeholders and working directly with treating HCPs or physicians. As previously stated, we believe there are at least 1,500 patients or more across the U.S., EU, Canada and Japan. And we've already identified 500 patients globally with just under 200 of those in the U.S. That includes approximately 25 in the EAP and OLE and they'll start transitioning to pay product in the coming months. We've also identified the majority of the physicians that patients -- current patients and future patients are likely to see to get diagnosed and treated. Finally, if APDS is suspected, we partnered with Invitae, the country's biggest genetic testing provider. But of course, allied to identifying patients is education. This disease, as Anurag said, was defined only 10 years ago. It's incredibly rare and most HCPs are unaware. So therefore, patients are easily misdiagnosed, and they're often hiding in plain site. In addition to the work of our own team, we've effectively partnered with patient organizations, health care provider societies, such as the JMF, IDF and the American Society of Hematology, or members you see on this slide. Primarily to expand their knowledge of APDS because it's critical to ensure that HCPs recognize the constellation of different symptoms Anurag mentioned, that could be APDS and would, therefore, trigger their need to test and then subsequently treat and treat early. That effort has been ongoing for the last 2 years, and it's going to continue for some years to come as we uncover more and more patients globally. The third strategic imperative, differentiate Joenja. It seems really obvious, but we can't afford to be complacent. It's key for us to emphasize that this is the first indicated treatment, it's disease modifying and it treats the root cause of the disease because all other treatments focus purely on the symptoms and the consequences. So we won't launch assuming being the first indicated product is enough. We'll continue to drive this messages to home to HCPs and really drive their need to recognize this and test and treat early. And then finally, establish access. Once all that heavy lifting is done, we need to get Joenja into patients' hands as quickly as possible. And to ensure that we've created APDS assist an industry-leading program like RUCONEST Solutions, and we'll go into that in more detail in subsequent slides. On this slide, you can see how we're setting up for success as we go to market. So in the first column there, you see our commercial field teams. That's 54 sales representatives and leaders. Half of them are the current RUCONEST team, and we believe 30% of patients are treated by our customers already well served by the HAE team. Additionally, we've set up the new Joenja institutional team and they'll focus on the central locations where specialties such as pulmonology, hematological, oncology and GI based and where we believe the other 70% of patients will be treated. So between these two excellent teams, the vast majority of the APDS market, if not all, will be covered. And importantly, I want to flag, like RUCONEST, the new teams comprised of sales representatives with rare disease experience, specialty and hospital experience and experience of finding patients and launching products. So as with RUCONEST, we've built a team of award-winning salespeople to drive a successful launch. The other feet on the street are identifying patients. We also, though, have other key colleagues, including clinical educators to drive family mapping and testing. And I just want to remind us all that APDS is also more dominant. So there's a 50-50 chance of each child in a family having APDS. So family mapping and family testing is an important source of new patients for Pharming, and it's a key step in ensuring all patients get access to this much needed therapy, which as we've seen from Anurag's presentation, treats a progressive disease with significant sorry -- clinical consequences. Now let's look at the support services and APDS Assist, which has been built, trained and staffed to get patients on therapy and keep them on therapy despite the challenges sometimes presented by our health care system. APDS Assist is a dedicated full-service concierge program that ensures once the patient is diagnosed, there are 0 distractions to addressing the challenges of getting Joenja in a patient's hands. The program covers financial aid, filling prescriptions and ongoing support to ensure adherence and ongoing access. And the staffing includes APDS care assistant or APDS assistance care coordinators and they provide a single point of contact for patients and it will often be the same person. That delivers a consistency of service and care, and we believe provides reassurance to patients versus the more commoditized call center approach. We also, as I mentioned, have APDS clinical educators that provide overall support and education to patients. And importantly, there will be clinical pharmacists on hand 24/7 to process and fill the prescriptions and answer any and all questions patients might have. I also want to note that we partnered with PANTHERx to provide these services. PANTHERx is an excellent value partner that specializes in rare and ultra-rare therapeutic conditions. And that really gives them unique insights to both what ultra-rare disease patients need and the highly personalized service standards Pharming needs to be delivered. Our dedicated program and staff will speed access by minimizing bureaucracy and mistakes and catering to the very specific needs of individual patients and their families. Delivering such a high-quality access program as we have in hereditary angioedema is one of the reasons we expect this launch to be very successful. I'd like now to provide a little more color about what happens when a patient is enrolled and the support they can expect at that point. So once the benefits are verified patients are entered into our starter program. That means they'll get a 30 days supply -- that means they've got a 30-day supply 1 week after -- within 1 week of enrollment. Most patients should then be on paid therapy at the end of that time. However, as we all know, the insurance process and approval can sometimes take a little longer. In that instance, a bridge program is available that will take the patient through until insurance is confirmed. For commercial insured patients will also provide co-pay assurance, which can help with some out-of-pocket costs, but importantly, can bring the cost of the monthly prescription down to as little as $0 per month. But finally, we have a patient assistance program in place so that any patients who are uninsured or who their plan doesn't cover it will still receive Joenja. So with these options, we believe we have all bases and all scenarios covered for our patients. As Anurag and I have shared, Joenja is the only indicated treatment for APDS. It's disease-modifying, it works on the root cause of APDS for both immune deficiency and dysregulation. It's a precision medication. So if a patient tests positive, HCPs and payers know they're providing and paying for the right option. And as you've seen, Pharming's allowed innovation to education to ensure all stakeholders understand the value Joenja delivers to patients and their HCPs and payers. And we're providing those concierge-level support services to ensure patients get quick access and continued access to Joenja, the very least this patient population deserves. Finally, I'd like to cover the price of Joenja which represents value -- the value that Joenja delivers to all of Pharming's stakeholders. Joenja will launch at $750 per tablet with an annual cost of $547,500 per year. As you know, we have a track record of success in rare disease and rare disease development, and we prepared meticulously for this launch. We've used the commercial knowledge gained in the execution of the HAE program. And we put in place programs that we believe will get Joenja into the hands of the patients and their families as quickly as possible. I'd like now to hand over to or Jeroen Wakkerman, our CFO, to go through the financial considerations.

Yes. Thank you very much, Stephen. And indeed, I will take you through some of the financial considerations of this FDA approval of Joenja. So Pharming licensed the global rights to leniolisib from Novartis in 2019. And at the time, contractual terms were agreed for if we got the approval and started commercializing. And the contractual financial terms are as follows: number one is we will pay shortly a near-term milestone payment to Novartis and another party for an amount of $10.5 million for the approval and the first commercial sale of Joenja in the U.S. The second is the future potential milestone payments. And those sales milestones can be up to, in total, $190 million and they are related to the net sales level and are structured in a layered way. And basically, the story is here, the more we sell, the more we pay. And the higher the sales level, the higher the particular milestone payments. The third financial contractual term is the royalties. So we've got tiered royalties on net sales ranging from the low to the high teens percentages. And the fourth term is the -- concerning the priority review voucher received by Pharming from the FDA. And Novartis has agreed the right to purchase the voucher for a small minority share of the value of the voucher and the value of the voucher is based on the recent PRV transactions. So overall, we have market-based conditions for a contract of this nature. And the more we sell, the more we pay, and obviously, we will be happy to do so. With that, I would like to hand over to Sijmen de Vries for closing remarks.

Thank you, Jeroen. Yes. And on the next slide, you see that this today marks a very important day for our company because we have just transformed from this one product, one market company, to a 2-product company because leniolisib and RUCONEST will now help to fund the future investments in our pipeline and the management of our assets. And of course, we are now at the -- we are now about to embark as you just heard from my colleagues up on the commercialization of Joenja in the United States. But obviously, Joenja will also support our business going forward and will enable us to establish a very strong business basis in Europe and beyond. And last but not least, as we all know, as stated before, we have plans to actually branch out to Japan as well on the basis of Joenja. And furthermore, we will also update you later on during the year on our plans to develop the subsequent indications for Joenja because Novartis has done already a lot of research in various new additional indications where we have built upon, and we are exploring additional further indication as well. And that you'd be updated later on during the year. And then last but not least, because we have a very scalable commercial operation, and we have a strong track record in the development and commercialization of rare disease assets, we continue our hunt to get advanced projects. Projects in advanced clinical stage to add to our pipeline. And you can still see that, of course, on the next slide, our pipeline is now significantly strengthened with Joenja, of course, being approved for commercialization in the U.S. There's still a very significant gap between Joenja, and leniolisib, of course, in the European Union and U.K. and the early-stage internal projects that we have. So we are still very active in the business development front to either in-license or acquire additional rare disease assets where we can again make a big difference for patients that are suffering from these rare diseases. And on the next slide, you see the milestones for Joenja going forward. We now, of course, have achieved the FDA regulatory approval. You heard from Stephen, that we are more than ready to launch in the U.S., the commercial launch. We will start the Japanese clinical trial shortly. And of course, in the second half of the year, we look forward to the response from EMA, respectively, followed by the filing in the United Kingdom. And that brings me to the outlook, which we shared with you recently when we actually presented our full year results for '22. So the outlook continues as it was. We continue to expect low single-digit growth in RUCONEST revenues during 2023. Of course, we're starting to now launch Joenja very soon in the United States, and they will have the product available in April, as you heard before. We still expect the positive EMA opinion in the second half of '23 and followed by the marketing authorization in Europe 2 months later. We then filed leniolisib with the U.K. MHRA following the ECDRP route. We continue to invest significantly to accelerate further growth. We'll update you on our plans to develop leniolisib for additional indications, I said before, in the second half of '23. And we continue to focus on the potential acquisitions or in-licensing of other late-stage opportunities to treat rare diseases. And this brings me to the last slide of this, a big thank you, a big thank you to the patients and their families who participated in the clinical trials first and foremost. A big thank you to all the investigators, care givers and physicians that worked diligently on the development of leniolisib. And big thank you to the patient advocacy organizations who are so important for patients suffering from rare diseases. And last but not least, a big thank you to our Pharming and of course, the Novartis teams who have supported the development of Joenja and can be very proud of this FDA approval for Joenja today. That brings me then to the next stage of this meeting, opening the floor for questions. So operator, we can hand over for questions.

Thank you. [Operator Instructions] And our first question today goes to Christian Glennie of Stifel.

My congratulations on the FDA approval for Joenja, quite a significant achievement for you guys. Just then, I guess, the first question is then around pricing, just to follow up on sort of pricing and reimbursement and uptake. So -- is your understanding obviously, there's no -- on the reimbursement side, there's obviously nothing predetermined in terms of testing for the confirmed genetic tests as required by the FDA label, but is it your understanding that insurance companies that may well be a prerequisite for it?

Stephen?

Yes. So Christian, it's possible, and we expect that it will be put through the normal insurance process and prioritization, et cetera, and they may well require that, but there is no policies as yet. Those policies will be developed as the first patients come in. At this point, we accept almost -- expect almost all patients to go through the medical exception process and be approved that way. And that would take the normal 30 to 60 days.

Okay. That's helpful. And then thinking about the price, obviously, you said that you effectively on an annual basis, $547,000. Just so we're clear, I wouldn't expect much of a sort of gross to net or discounting here, but just to clarify that that's expected the net price. And then linked to that, any -- clearly, the data shows that the duration of treatment is -- continues to be ongoing. The open label, the patients continue the treatment, assuming they continue to tolerate and get disease control. But any reason why duration of treatment on an ongoing basis would be less than 12 months.

Well, I'll take the first part of that, Christian and ask Anurag to perhaps to take the second. I think your assumptions around net pricing are reasonable. That said, until we see the patient mix in the coming quarters, it'll be tough to determine. But in terms of the price -- sorry, the ongoing treatment and whether a patient will be treated for less than 12 months, Anurag, could you?

No, we do expect that these patients would be treated chronically and continuously with Joenja.

And then one final one for me, but if I can't, I'll drop in the queue. Just to clarify, I think you mentioned there were 25 U.S. patients that are currently on the extension trial and you expect -- if that's the right number and then the expectation that presumably they all -- assuming they want to continue on drug, they all will then convert to the commercial drug and obviously, the pricing according to their insurance plans or whatever, but there should be a relatively -- what should that transition time period be for the 25 patients?

I think Christian, there -- I mean, there are patients, approximately 25, it's around that number, and they're in the EAP or the early access program and the open-label extension. That overall transition will be several months, but it will be this year depending on therapies the patients have on hand and the speed at which we can pull them through the insurance process. But it will happen this year.

The next question goes to Hartaj Singh of Oppenheimer.

Congratulations again on a really important approval. I think you touched on this a little bit, just -- maybe you can just divide the -- in the U.S, what is the process you're going to go through or patients are going to go through for private versus public reimbursement? And is there a CMS procedure that's going to be in play here and how to just think about that? And I just had a quick follow-up question.

Certainly, I think the process is broadly similar regardless of the type of insurance you have Hartaj, and who covers you. There will be going into that prior authorization process, some patients may require a confirmed genetic test. It's entirely possible that insurance companies will want to have a peer to peer and better understand and be educated on the disease state. We expect that to probably be enough in most cases, regardless of the payer type and that most patients should be approved at that midpoint in the process. And that would take anywhere between 30 to 60 days, typically, as you saw. Until that process finishes, we'll make sure that patients have therapy on how to treat their APDS.

Great. And then the other question is just a more broader question, which is that as we're thinking about European and U.K. approval potentially in Japan, how to think about pricing ex U.S.? I know it might be early days. This is a very high-value therapy in an ultra-rare disease condition. Some therapies analogous to this for Soliris, for example, Alexion had a very tiny difference between ex U.S. and U.S. pricing. So Stephen, any thoughts there?

Certainly. I mean, obviously, that's some time out. So we can't give specifics. And the Alexion launch was, as you know, some time ago. I think in the current environment, especially in Europe, it's our expectation that the price will be somewhere in the 60% to 70% range of the U.S. price. But that's work ongoing and still to be determined, but I think that's a reasonable expectation at this point.

Thank you. And the next question goes to Joe Pantginis of H.C. Wainwright.

Congratulations as well. A couple of questions. So first, on the PRV is there a timeline for Novartis' right to pursue the small minority share? And what freedom do you have right now ahead of that or after that to be able to sell it externally?

So there is -- in the contract, it's clearly defined how this works. We can't go into too much specifics, but one of the options is that Novartis obviously uses the PRV for its own purposes. The alternatives, as you rightfully point out, that we jointly agree to sell it off to a third party. And we will, of course, be updating the market as and when there's further news on what Novartis decides on what to do with the PRV.

Got it. Got it. Yes. And one quick logistical question before my other question is making sure that we have the checkbox of supply being all set and the other checkboxes among the 54 sales reps and leaders, are they all in place currently? Or is there still any ramp?

And in both cases, I can confirm, we are ready to roll. Supplies are being sorted out as we speak there. The product has already landed in the U.S. for a while. The final labeling, of course, was known as well. So basically speaking, the product will be -- we expect the product to be ready by mid-April. Is that correct, Stephen?

That's correct, Sijmen.

And with regards to sales rep, we can confirm that as well, I think, Stephen, right? Sorry Joe?

Yes. We have people in place. They'll go to their final training this week. Now we have the label, Joe, and they will launch at the end of this week.

Perfect. Perfect. And then, I guess, maybe just something regarding the kinetics of the disease and especially when you had that longer-term AE profile around the 2-year mark where you have some infections where based on seeing the switch to IgM to IgG over time that you would -- or potentially expect to see those infection rates continue to come down.

Anurag?

That's right, Joe. And that's exactly right, Joe. We've seen that in the open-label extension study data is how these infection rates come down over time. We see and then in the concomitant, we see that the use of Ig decreases over time. So both of those things that we've seen over time and again, the Ig use decrease was really spontaneous. That was something that the protocol did not direct the investigators to do or even guide them how to do this. This is something that they started to do on their own as they saw these patients improve.

Fantastic. Thanks and best of luck with the launch.

Thank you, Joe.

And our next question goes to Max Herrmann of Stifel.

Congratulations on the approval, great milestone. Just a couple. One is you talk about 500 patients identified in the U.S. of the 1,500 globally. I wondered how many are actually suitable for treatment versus those that have had already bone marrow transplants and may not be therefore needing of therapy? And then a second follow-up question.

Max, a very small percentage, probably it's less than 10% that have had a transplant already. Interestingly enough, we do also know of patients who've had transplants but are still not doing well and actually have, we have had physicians reach out to us and request compassionate use access even for post-transplanted patients, which we haven't studied yet, of course. But to answer your question, it's less than 10% of patients that are have had a transplant.

And then just in terms of drug compliance in this area of organ disease. I mean it comes a bit to the net -- or gross to net calculation. Do you expect pretty much 100% compliance? Or do you normally expect a bit of missing of doses. So we should do some sort of adjustment between now expecting the BID treatment?

This is a serious disease and the condition we know worsens over time. And we also know that patients improve rapidly on therapy, which likewise means they would rapidly not improve if they withdrew from therapy. And we've seen that actually in some patients early on who were switching from one study to another when Novartis was moving them. So I would expect a very high compliance rate. We're going to educate patients on this too.

And our final question goes to Christian Glennie of Stifel.

Just one follow-up then. Just curious on the testing side, on the Invitae side. obviously, at the moment or until now, you have been paying for those tests to be conducted, obviously, and a clear rationale for that. Now that it's commercial, is there a scenario in which the test itself also gets reimbursed and that, therefore, you don't have to provide that? Or do you think that will continue on your own hands?

Christian, it's certainly possible, but it's obviously early days. So at this point, we're simply focused on getting patients on therapy and getting payers to put their policies in place. As part of that discussion, we would certainly follow up and talk to them about the coverage of testing. But the situation regarding that's not immediately clear and it's obviously not a launch priority. We're going to continue to provide testing in order to get patients on therapy.

Thank you. We have no further questions. I'll hand back to Dr. Sijmen for any closing remarks.

Thank you very much. Thank you, ladies and gentlemen, for being here today on this very important day for both APDS patients and for our company. As you just heard, we have today transformed from a one product to a 2-product commercial company. We have experienced and dedicated commercial and medical teams in place in the U.S. undergoing their final training this week to launch leniolisib and bring it to those APDS patients that are in need of a treatment that treats the root cause of their disease. And we have all the assist programs in place to help them with access to medication, education and support services. So we look forward to bringing this to the patients from next week onwards. And to update you in the future about how we progress into the market -- into the U.S. market with Joenja. Thank you very much for being here, and we look forward to speaking to you next time. Goodbye.