Alexion Pharmaceuticals, Inc.
Q3 2020 Earnings Call Transcript

Published: 29 Oct 2020

[Operator:]

Ladies and gentlemen, thank you for standing by, and welcome to Alexion Pharmaceuticals Third Quarter 2020 Results Conference Call. Please be advised that today’s conference may be recorded. I’d now like to hand the conference over to your host today, Mr. Chris Stevo, Head of Investor Relations. Please go ahead.

[Chris Stevo:]

Thank you, operator. Good morning. Thank you for joining us on today’s call to discuss Alexion’s performance for the third quarter of 2020. This has been our practice recently, we are practicing physical distancing and are each doing the call from home. Today’s call will be led by Ludwig Hantson, our CEO. Ludwig will be joined by Aradhana Sarin, our Chief Financial Officer; John Orloff, our Global Head of R&D; and Brian Goff, our Chief Commercial and Global Operations Officer. We will begin the call with a brief presentation, and we’ll reserve the rest of the time for your questions. You can access the webcast slides that will be presented on this call and other earnings materials by going to the Events section of our Investor Relations page on our website.

[Ludwig Hantson:]

Thank you, Chris and good morning, everyone. I’m pleased to share our third quarter performance today. COVID-19 continues to test the global community healthcare systems and families worldwide. Our ability to successfully navigate through this challenging time is a testament to the strength of our business and the resilience of our global organization. Alexion’s patient centric culture and focused rare disease infrastructure continues to shine in this new environment. I would like thank our employees worldwide for their hard work and commitment to our mission of transforming the lives of people with rare diseases and devastating conditions. Despite the challenges posed by COVID-19, the Alexion team has continued to deliver. Third quarter financial results were strong with 26% revenue growth and 16% non-GAAP EPS growth year-over-year. As a result, we’re increasing our full year financial guidance to reflect the momentum of the business. We continue to progress our revised capital allocation strategy and are well on track to achieve our 2020 commitment to return capital to shareholders of $500 million to $550 million in share repurchases this year. Our commercial execution remains resilient across the portfolio. With ULTOMIRIS, we have now achieved our ambition of greater than 70% conversion across each of our top markets in PNH. And we remain on track to achieve the same ambition in atypical HUS. Our first quarter with ANDEXXA was strong with integration efforts underway and approximately $39 million in sales within the quarter. We look forward to continuing to drive this momentum as the integration progresses. Finally, progress continues in our R&D portfolio. During the quarter, we received approval for the ULTOMIRIS 100 milligrams per mL, high concentration formulation in the U.S. and ULTOMIRIS approval for atypical HUS in Japan. We continue to advance our pipeline, including nearing completion of enrollment in our Phase 3 ULTOMIRIS gMG trial and our partner Caelum’s initiation of the Phase 3 CAEL-101 one programs in AL amyloidosis.

[Aradhana Sarin:]

Thank you, Ludwig. Starting with Slide 10. We reported third quarter total revenues of approximately $1.6 billion, an increase of 26% year-over-year. We are pleased with the momentum we saw over the quarter, which was driven by trends in our neurology franchise, continued growth in the PNH, atypical HUS and metabolic businesses and our first quarter of ANDEXXA revenue. Operating margins trends continued in Q3 with non-GAAP operating margin of 56%. Non-GAAP EPS was $3.24, representing 16% growth year-over-year driven primarily by strong top line growth. Moving to Slide 11. Third quarter total net product sales were primarily driven by volume growth across each of our medicines and key markets. Tuning to Slide 12. SOLIRIS revenues in the third quarter were approximately $1,042 million. Year-over-year SOLIRIS revenue was up 5% and growth in SOLIRIS neurology indications was partially offset by conversions to ULTOMIRIS in PNH and atypical HUS. ULTOMIRIS revenue in the third quarter was $289 million, including contribution from the ongoing launches in atypical HUS. Recall, we made the strategic decision to lower the annual cost per patient of ULTOMIRIS as compared to SOLIRIS. ULTOMIRIS for atypical HUS represents a 30% lower annual cost for patients compared to SOLIRIS during maintenance treatment, which will carry through to future ULTOMIRIS indications that we are pursuing. Total C5 franchise revenues were $1.3 billion, an increase of 23% year-over-year. Metabolic revenues for the third quarter were $218 million, representing 19% growth versus prior year driven by volume. On the right side of the slide, we highlight ANDEXXA’s third quarter sales of $38.9 million, representing Alexion’s first consolidation of these sales after the closing of the Portola acquisition. Performance in the quarter was driven by return of hospital demand and further benefited by some normalization of stalking activity. Turning to the P&L on Slide 14. During the quarter non-GAAP R&D expense was $269 million or 17% of revenues. Non-GAAP SG&A expense was $301 million or 19% of revenues. The non-GAAP effective tax rate in the quarter was approximately 16%. Non-GAAP third quarter EPS was $3.24, growing 16% year-over-year, GAAP earnings per share was $2.62. We ended the third quarter with approximately $2.3 billion in cash and marketable securities and repurchased approximately 0.6 million shares at a cost of $74 million during the third quarter of 2020. As of the end of the quarter, we’ve repurchased $434 million in shares in 2020, leaving us well with inside of our target of $500 million to $550 million for the year. Free cash flow in the third quarter was approximately $812 million, bringing up to $2.1 billion year-to-date.

[John Orloff:]

Thank you, Aradhana. Starting on Slide 18, you can see our robust clinical stage pipeline. As we shared on our Investor Day earlier in October, we have made tremendous progress thus far in 2020 on our breadth of development. The 20 plus clinical programs we have planned today support our ambition for seven potential blockbuster franchises, expanding our existing presence in hematology, nephrology, metabolic, neurology, and acute care, and also aim to support our entrance into new areas, such as cardiology and ophthalmology. We continue to advance our C5 platform with an emphasis on reaching even more rare disease patients. This includes numerous ongoing late-stage programs with ULTOMIRIS, and two newly announced indications we planned to pursue with ALXN1720, our third generation C5 inhibitor. We will be taking 1720 forward initially to expand our presence in neuromuscular diseases with both gMG and dermatomyositis, and expect to share top line data from the recently reinitiated Phase 1 healthy volunteer study in the first half of next year. We also continue to make great strides in diversifying our portfolio and expanding our pipeline outside of C5 therapies. Earlier this month, we provided an update on our innovative Factor D platform, including plans to advance ALXN2040 into geographic atrophy. We are excited about this program, given the proof-of-concept that has already been established with complement inhibition, as well as the number of properties, which we believe make this asset well-suited for ophthalmology. We also see the potential for an oral dosing regimen to have huge advantages over intravitreal injections, both in terms of patient preference and in the ability to treat both eyes simultaneously with a systemic approach. We look forward to initiating this Phase 2 program in the second half of next year. Now turning to Slide 19, we remain committed to our ambition for 10 launches by 2023. You can see here the current programs that we view as likely to launch within that window with the potential opportunity each presents. The once weekly ULTOMIRIS subcutaneous program for PNH and atypical HUS remains on track for filing in the third quarter of next year. We are also expanding our ULTOMIRIS’s portfolio with additional neurology and nephrology programs. I am pleased to share that our ULTOMIRIS gMG trial has achieved greater than 90% enrollment. And we have closed the screening process for patients globally.

[Brian Goff:]

Thank you, John. Turning first to Slide 22, within the third quarter, PNH in Germany reached over 70% conversion of SOLIRIS patients to ULTOMIRIS rounding out our top three markets to have achieved this ULTOMIRIS launch ambition. Collectively making up roughly two-thirds of our global revenues, all three countries have established a new best-in-class standard by achieving this conversion in less than 18 months well ahead of our initial two-year ambition. This speaks to the value ULTOMIRIS brings to patients and our teams’ excellent expertise and execution capabilities. Our ULTOMIRIS journey continues as we remain on track to achieve a similar ambition of 70% conversion within two years for atypical HUS. As John mentioned earlier, we received regulatory approval for atypical HUS in Japan in September, and the local team is quickly progressing with launch activities. We continue to innovate for patients to attempt to improve their holistic treatment experience. We’re making progress with the launch of the 100 milligram per milliliter higher concentration of ULTOMIRIS in the U.S. reducing the average annual infusion time by approximately 60% for patients. And we look forward to expanding the ULTOMIRIS franchise with a potential once weekly subcutaneous formulation with the goal to provide an alternative choice to patients who prefer to self-administer. Turning to neurology on Slide 23, within the third quarter, our U.S. team added 111 new patients for a total of 2,452 U.S. gMG and NMOSD patients on SOLIRIS. Since setting the ambition earlier this year to quadruple the number of U.S. neurology patients by 2025, we’ve continued to drive growth despite the challenges posed by COVID-19. SOLIRIS’s strong value proposition in both gMG and NMOSD as well as the resilience of the commercial team makes this possible. While new patient additions have slowed from pre-COVID levels, we do continue to see balanced growth across both indications. And our teams are focused on continuing to pivot to new ways of working in light of the pandemic. Specifically, we continue to improve our virtual effectiveness to support communications efforts with stakeholders across the healthcare ecosystem and given the strong value proposition of SOLIRIS, we continue to focus on driving depth of adoption with physicians who are experienced with the benefits of SOLIRIS for both gMG and NMOSD patients. We’re also implementing artificial intelligence aided targeting to identify high potential new prescribers more efficiently, with the ambition to drive prescribing breadth. Finally, our OneSource organization in the U.S. provides trusted and consistent support services for patients. In rare diseases, it often takes some time for a patient to initiate treatment once they’re identified and OneSource helps support patients throughout that journey. In addition to navigating reimbursement, OneSource helps facilitate sharing infusion site information with HCPs and patients. And increasingly, many of our neurology patients have taken advantage of at-home infusion availability. Our ambition for neurology is one of our key value creation drivers and we remain confident in its long-term growth trajectory. We continue to be pleased with the progress we’re making with NMOSD despite new insurance. SOLIRIS offers an incredible efficacy and safety profile for patients who risk facing devastating consequences from each and every relapse. We also continue to see ULTOMIRIS in gMG as a potential key contributor to our long-term growth. Once available, we see a path forward for expanding the addressable population we serve with ULTOMIRIS, with the Phase 3 trial enrolling patients, regardless of their prior treatment regimen. Given the great progress John’s team has made with enrollment. We anticipate a potential U.S. launch for ULTOMIRIS in gMG in the second half of 2022. And we expect to ultimately expand our unique target market to approximately 20,000 patients with the opportunity to move earlier in the patient journey. We see this goal as achievable, even as new products come to market. Given the large number of gMG patients in the U.S. and the remaining unmet needs many of these patients face, we believe new insurance have the possibility to expand the overall treated patient population and to facilitate disruption of earlier line often cyclical treatment regimens. So while we’re seeing a slowdown in new patient adds over the past two quarters, we’re confident in the path forward. As we continue to navigate COVID-19 evolve and innovate a growing new set of capabilities and build on our foundation in neurology over the years to come. Turning to Slide 24, this was the first quarter we had ANDEXXA fully in-house and integration efforts are well underway. As you heard from Ludwig and Aradhana, we saw strong performance from ANDEXXA in the U.S., even when excluding the impact from some one-timers. For the first time this year, we saw demand return consistent with pre-COVID levels as access to medical care has reopened more broadly, and people have started to return to more active lifestyles. Outside of the U.S., we also achieved a significant milestone by securing reimbursement in the UK for GI related bleeds. We’re continuing our pursuit of UK reimbursement expansion to intracranial hemorrhages, as well as reimbursement in Germany. While we’re very pleased with our ANDEXXA progress in just a few short months and the stabilization seen in sales for the quarter, we still have a ways to go in order to maximize the opportunity in line with our ambitions. As we’ve discussed previously, we plan to refocus the allocation of commercial resources to shift to a multifaceted hospital system approach. We’ve started this process and we’ll continue to make inroads on hiring and onboarding over the coming months. To execute on this approach in hospitals, we plan to optimize both new and existing top tier accounts. First, we’ll work to achieve formulary status with ANDEXXA and its inclusion in bleeding protocols. And we’ll also educate to facilitate having ANDEXXA built into the EMR systems and to complete a drug use review. This way, when a physician intends to use ANDEXXA, the necessary steps are already in place from an economic standpoint to access the drug seamlessly. Secondly, we’ll partner with institutions to raise awareness and build advocacy for ANDEXXA. We’ll work to identify clinical champions that understand the strong clinical value proposition of ANDEXXA and appreciate its healthy economic value. All with the goal to ensure stakeholders throughout the hospital are aware of and willing to use ANDEXXA, when a Factor Xa patient is suffering from a major bleed. Finally, we’ll continue the efforts initiated by Portola to ensure demand is created and HCPs choose to use ANDEXXA at the time of need. We’ll focus on education in both network and affiliated centers to ensure broad pull-through, expanded cross functional teams are already deployed against many of these target accounts and more will follow, as we make progress in fully deploying our new mix of field facing teams and enhanced capabilities. And to drive even longer-term growth with ANDEXXA, we believe the geographic and label expansion are both key to success. Plans are underway to seek access in reimbursement in new markets and our clinical team is working on developing plans to pursue a broader label. As you heard on our Investor Day, we see ANDEXXA as one of the key drivers of Alexion’s mid-term growth potential and each of these pieces are essential to deliver the full value of ANDEXXA. While this will take some time to fully execute, I’m incredibly pleased with the progress the teams have made in just the first quarter alone. And I look forward to sharing more updates with you on future calls. So with that, I’d now like to hand it over to Ludwig for closing comments. Ludwig?

[Ludwig Hantson:]

Thank you, Brian. In the third quarter, we continue to build on the momentum of the last few years. We remain focused on executing against our value creation strategy and believe in our trajectory towards future growth. As we have shared, with our focus where in disease expertise, we have the team and the resources to deliver on the promise of our broad and diverse pipeline and to be the leader in rare disease. We see continued double-digit revenue growth in our portfolio, and we believe we have a clear path to $9 billion to $10 billion in revenue by 2025. There is vast potential in our pipeline, which is anchored by three novel platforms and several novel assets of which we believe will allow us to significantly grow the number of patients or rare diseases we serve. We anticipate multiple pivotal readouts for some of these key programs over the next 12-plus months. I’m very proud of the progress the entire Alexion team has made over the last several years. And I’m confident that our continued momentum will drive long-term value. With that, we will now open the call to questions. Operator?

[Operator:]

Our first question comes from Josh Schimmer with Evercore ISI. Your line is now open.

[Josh Schimmer:]

Well, congrats, great quarter. A couple of COVID related questions, if I may. For the Phase 3 study of ULTOMIRIS, can you provide an enrollment status update? And are there going to be any interim looks in that trial? And as we think about the answer to that question and timing for the data, how are you thinking about a potential effect of these new waves that are extending throughout the globe, as it may impact Q4 and into 2021. And then also relatedly, is there any reason to think that the third quarter was benefiting from some pent-up demand from some of the lockdowns that that slowed adoption in the second quarter and first quarter? Thank you.

[John Orloff:]

Hi, Josh. It’s John here. I can take the first question on the clinical, on program, but as you know, there’s growing evidence for the involvement of complement in severe progress of pneumonia, both on the inflammatory side, as well as the cardiomyopathy based patients’ experience. Because of the pandemic, that the slowdown over the summer, enrollment fell behind a little bit. It’s picking up now because we have a growing activity with second wave surges in U.S., as well as France and UK. So we’ve seen an uptick in enrollment. We’re over 30% enrolled now and we do in plan to have an interim analysis after a certain number of patients that have completed likely in the first part of 2021.

[Aradhana Sarin:]

Thanks, John. I’ll take the second question. We are obviously seeing some impact from COVID. I wouldn’t necessarily say that the third quarter was driven by pent-up demand, though, we did see some orders, as we mentioned, particularly in tender markets and certain international markets that we’re forecasted in fourth quarter come in the third quarter. If you look at our guidance for the fourth quarter, for the full year, we are definitely taking into account not only sort of the selling days and the ULTOMIRIS price headwinds, but additional COVID waves are still force in many countries. And in the U.S. also remains sort of working remotely. And we have seen the slowdown in, for example, the neurology patient that we mentioned. So we are taking that into account.

[Josh Schimmer:]

Yes, go ahead. I was going to ask…

[Brian Goff:]

Yes, I’ll just jump into Josh. This is Brian. And as it relates to this kind of bolus effectors surge that could happen when COVID slows down, as Aradhana said, I don’t think we’re seeing that, certainly, not in the U.S., because there’s been so much regional variation that’s just continued throughout. And one supportive point that’s interesting in the third quarter is that medical claims actually in the U.S. for gMG patients have been down about 20% overall. So even the impact that we’ve seen is not just SOLIRIS patients alone, it’s really for the overall utilization. However, on the converse, interestingly, we had a kind of experiment, I guess you could call it in Germany, where as you know, third quarter for Europe was in a different state in key geographies relative to the U.S. So in the third quarter, Germany, actually in neurology, though, we didn’t give the specific numbers, had very nice pop growth in both NMOSD as well as gMG. And so we look at that as that could be one example of the fact that first evidence that patients may queue up during the COVID shutdowns. And then what you have is, when things cool off, you can have a higher volume during the decline period. So that’s one example in Germany. We haven’t yet seen that in the U.S., but of course we’ll be monitoring. I think the more important part of the whole equation is that, as I had mentioned in my comments, we’re focused intensively on capabilities that we believe we’re going to need with, or without COVID for the future state. And that’s virtual promotional effectiveness, really healthy mix of in-person as well as virtual. Secondly, we are pretty excited about the artificial intelligence guided healthcare practitioner targeting efficiency, and that’s really intended to help us out with breadth of prescribing. We have the OneSource team, of course, with very strong patient support, particularly in the U.S. And then the thing I’m most proudest of is that, in neurology, we’ve got a team now that is highly experienced in both gMG as well as NMOSD with three years and counting experience. And so those are the areas that we’re going to lean on as we go forward.

[Ludwig Hantson:]

Okay. Operator, we will take the next question.

[Operator:]

Our next question comes from Cory Kasimov with JPMorgan. Your line is now open.

[Cory Kasimov:]

Thanks for questions. Two of them for you, I guess the first one is kind of follow-up on what Brian was just talking about in the commercial front, as it relates to geographic mix where U.S. SOLIRIS growth remains strong, but the third quarter, nine months sales were down year-over-year in Europe and Asia Pacific. So wondering if you can kind of go into that some more color on that dynamic, and we’re just talking about tailwinds in Germany, but I was kind of broadly speaking, what are we seeing there and how should we be thinking about potential inflections going forward? And then the second question is, just wanted to ask about the rationale for taking ALXN2040 into GA versus your next-gen asset. And maybe you can provide some clarity on timing for 2050 and the incremental benefit you could expect there over the first-gen molecule. Thanks a lot.

[Brian Goff:]

Yes. Aradhana, do you want to start with the moving parts financially, and then I can speak to some of the geographic differences.

[Aradhana Sarin:]

Yes. I think so – sure. So if we talk about the third quarter. You can see that our – we obviously had a very, very strong third quarter. And some of it was clearly because of different regions. As I mentioned, there was some pull-through in the third quarter from some international markets and rest of world markets. We are seeing strong growth in Japan though going forward, again, our neurology business is growing strongly in Japan, though we may have more effect from, for example, competitor trials there and so forth. I would say other regions, the U.S. continues to be strong with the exception of neurology, which as we mentioned, the new patient adds are slowing down. And in international, we won’t see the $17 million sort of a one-time, I would say, or what was forecast in fourth quarter happening in third quarter. We won’t really see that repeat again in fourth quarter. So those are some of the moving pieces we’re forecasting.

[Brian Goff:]

Yes. And Corey, I would just – this is Brian, again. I would just reflect back on the comments I was giving to Josh that you guys know that U.S., Germany, Japan is about two-thirds of our revenues. So just to keep it simple, those three countries are really what we continue to monitor, particularly with the COVID impacts. And what was interesting in the third quarter is, the U.S., as I mentioned, as everyone knows, was still in very much a hot zone in most of the regions throughout the U.S. Germany had a cooling off period, Japan was probably in the best position in the third quarter. And as Aradhana said, we actually are really pleased with the way things have continued in Japan. Though I think it’s fair to say, it’s not opened up in the traditional sense as it was pre-COVID. And so what we continue to monitor is, again, making sure that we’ve got the capabilities in place to be successful with or without COVID. I will also just say, keep in mind the fact that we’ve added 111 patients for gMG while that’s an admitted slowdown. This is easily the most intense headwind period we could have imagined in terms of the COVID dynamics. So we are, I must say pleased, certainly in the short term with the fact that we’ve continued to grow, and we definitely have the same remaining persistent ambition with 4x neurology growth in the U.S. in the longer term.

[Ludwig Hantson:]

John, do you want to talk about…

[Aradhana Sarin:]

Sorry, one other thing I forgot to mention is regarding the ULTOMIRIS price headwind that given we’ve now achieved 70% conversion in our major markets and we’re on our way in terms of conversion for atypical HUS there’s the ULTOMIRIS provides headwind as well. Sorry, John, you want to comment on 2040 for GA?

[John Orloff:]

Yes, sure. So Cory, you’re right. The pharmacokinetics and the pharmacodynamics of 2050 when delivered systemically are better than danicopan. However, in our preclinical experiments using a rabbit model of geographic atrophy we found that 2040 is actually as a high affinity for melanin in the back of the eye, where it’s concentrated and essentially allows for our prolonged distribution to the retina, which is very important to treating geographic atrophy. So as the disease starts with the choroid and the retinal pigment epithelium, which provides nutritional support to the photoreceptors and so based on that model, we predict that 2040, despite its inferior systemic of the pharmacokinetics can be delivered to the eye with a low dosing frequency, such that it could support to Qday dosing in humans. And so that’s why we’re taking 2040 based on that rabbit model, we don’t have similar pre-clinical data for 2050. In contrast 2050, as we’ve announced as going into PNH as monotherapy and that study is ongoing right now, Phase 2. And we should have data in the middle of next year. For that the Phase 3 program for Danicopan on 2040, we’ll be starting this quarter.

[Ludwig Hantson:]

Operator, we’ll take the next question.

[Operator:]

Our next question comes from Geoffrey Porges with SVB Leerink. Your line is now open.

[Geoffrey Porges:]

A couple of questions on subcu ULTOMIRIS, I’m wondering, John, if you can just confirm that the point estimate is better than 0.9 and that the confidence intervals are not particularly wide. And secondly, as you think about subcu ULTOMIRIS, will that expand your penetration of any of your treatments in any of the major indications. And then lastly, do you intend to study subcu in gMG and NMO? And could you just comment, sorry, on the patent life, is there a patent extension opportunity with subcu? Thanks. Sorry for all the questions on the program.

[John Orloff:]

So Geoff, with regard to the top line data that we shared in the spring, yes, we have achieved very strict non-inferiority criteria. In fact, the lower bounds are well above the margin. So there’s no issue there, very strong data. And we agreed to the criteria with a regulatory agency. So we’re on solid ground there. As you know, we’re generating additional safety and drug device combination data, which would position us for a filing in the third quarter of next year. We do plan to attempt to extrapolate the data from this program, which is being conducted in patients with PNH, the regulatory agencies, both in the U.S. and the EU have granted us the extrapolation to atypical HUS. We’re in conversations now to see whether the same data set can support a subcu filing in myasthenia gravis and NMO.

[Brian Goff:]

And Geoffrey, maybe – this is Brian, again, maybe I’ll just add on your question about subcu and whether or not it’s expands the market. We certainly see that potential because there are a cohort of patients where subcu will be the way that they want to receive therapy, more home-based therapy. That said, we don’t see this as another sort of massive conversion going from ULTOMIRIS every two months, which is incredibly meaningful for patients to have that kind of minimal invasion in their life, while they’re managing the rare disease over the subcu once weekly. But we do think it’s a very important addition of optionality for patients to have.

[Ludwig Hantson:]

Operator, we’ll take the next question.

[Operator:]

Our next question comes from the line of Chris Raymond with Piper Sandler. Your line is now open.

[Chris Raymond:]

Just two questions. So I know you talked to – from the previous question around the development of ULTOMIRIS in COVID-19, but we’ve kind of heard some chatter around off-label use happening now with SOLIRIS in hospitalized COVID-19 patients. I wonder if you could maybe talk sort of qualitatively about any sort of measurable level of use of SOLIRIS off-label in these patients that you might be seeing, regardless of geography. And then I think Brian, I think I heard you talk about balanced growth across both neurology indications for SOLIRIS. But then I think I heard you say the 111 U.S. neurology adds were gMG. Could you just sort of clarify that? What’s the mix between NMO and gMG? Thanks.

[John Orloff:]

So, Chris, this is John. I’ll take the first question. Yes, we do have experience with SOLIRIS and COVID-19. Earlier in the pandemic we had compassionate use and expanded access program in France and it was used in Italy as well. There was a case series published by professor Diano with five patients that showed benefit of SOLIRIS in those patients. But again, it’s uncontrolled data. There are also some experiences in France, as well as in the UK with C5 inhibition, suggesting that there’s a potential benefit. But we won’t know until we actually have carefully controlled data. Our COVID-19 305 study, as I said, is enrolling. And we should have interim data in the first part of 2021. There is strong scientific rationale for blocking terminal compliment supported by recent publications where the dual mechanisms of inflammation and a MAC deposition along with the activation of a coagulation cascade, which is clearly interlinked with compliment physicians the C5 inhibition for success. There have been other anti-inflammatory that have been not successful as you’ve seen some of the data. We believe were upstream of that cytokine storm and many of the downstream mediators can be blocked by blocking C5.

[Brian Goff:]

And Chris, just picking up on the second part of your question, and it may have been misinterpreted. When I referred to the adding 111 patients in the U.S. for neurology, that’s a combination of gMG and NMOSD. The point I was trying to make is that we have balanced growth with both of those indications and we didn’t split out exactly how that breaks down. But there’s – they’re obviously very different disease states. In the case of gMG, there is more promotional sensitivity as far as we can tell. And it might be because gMG tends to be – I’ll put quotes around it “A little more forgiving for patients than the intensity of a relapse associated with NMOSD.” So what we see is in the U.S. as I had mentioned, the claims for gMG have been down not including SOLIRIS, just overall about 20%. NMOSD, when a patient relapses they need treatment. And we do see that continued progress that we’re making. And the other point I’ll just make is, it’s important for this quarter to note that we’ve had no observable competitive impact with NMOSD to date.

[Ludwig Hantson:]

We’ll take the next question.

[Operator:]

Our next question comes from the line of Phil Nadeau from Cowen and Company. Your line is now open.

[Phil Nadeau:]

Good morning. Congratulations on the quarter. Two-related questions for me. First, as we do think about another COVID wave, what is the most recent data that you have on the proportion of your patients across indications that are getting home infusions? In fact increased over the last six or nine months. And then second, Brian, just follow-up on the point you just made. In your comments about Germany, it sounded like there was some warehousing of patients during COVID that – it was Ebola’s once COVID subsided a bit. And the answer to the last question, it sounded like you also suggested maybe some gMG patients just simply go away, if they don’t go on therapy immediately because there’s promotional sensitivity and it’s a more forgiving disease. So I guess, I’m trying to square those two comments. What do you think will happen in the U.S. once COVID subsides, will we see Ebola’s warehouse patients, particularly in neurology? Or is there likely to be some proportion of patients who aren’t starting now for whatever reason will never ever go on to C5 therapy? Thanks.

[Brian Goff:]

Yes. Good morning, Phil. Good questions. On the first one with home infusion, it’s a relatively small part of overall utilization. That said, we do see some growth. And part of that is the growth that you would expect naturally motivated by COVID burden of access to hospitals and fusion center dynamics. And we’re doing what we can appropriately to make sure that that we make that available to patients as much as possible. Secondly, on Germany and the dynamics around gMG neurology, I would not characterize it as patients go away with gMG. I think what you’re seeing is a rephrasing of treatment because a lot of patients in this era are likely managed on the typical high dose corticosteroids where doctors can kind of do that remotely without a lot of intensive therapeutic education, talking to patients through compliment therapy and the like. But the gMG, of course, doesn’t go away. So I think what we saw in Germany is that you saw a case of patients being managed during the intensity of COVID. And then when COVID relaxed, patients came in, the doctors had those appropriate educational discussions around compliment, and we saw really nice progress with patients being converted to SOLIRIS therapy. So it’s very tough to say from where we sit right now about put some takes on the timing on when that happens. But I think overall, we take that as a very encouraging sign about the strength, first of all, of compliment as a key part of the underlying path of physiology. And secondly, just the resilience of the unmet need that’s out there. And the fact that when you have different geographies that move into different phases of COVID that we expect that there will be continued growth with SOLIRIS. And eventually when we get to that point with ULTOMIRIS as well as I had mentioned.

[Ludwig Hantson:]

Okay. We’ll take our next question.

[Operator:]

Our next question comes from the line of Mohit Bansal with Citigroup. Your line is now open.

[Mohit Bansal:]

Great. Thanks for taking my question. A couple of questions, if I may please. So other than ANDEXXA, it seems like the guidance is still fairly conservative considering the 3Q sales of $39 million. Could you talk a little bit about that? And the other one is actually on subq ULTOMIRIS. Since you mentioned MG patients are relatively sensitive to promotion is there a possibility subq ULTOMIRIS could expand or maybe have more utilization in MG patients given that the relative age compared to other diseases, as well as disease state and also competing against future competition that could be subq in FcRn space as well. We’d love to get your thoughts here. Thank you.

[John Orloff:]

Yes. Good morning, Mohit. I’ll start with ANDEXXA, just in the order that you asked. And first I would just remind everyone that this is our first full quarter of having ANDEXXA, because the deal closed the beginning of July. So we are really pleased with the progress we’re making on integrating the Portola team. We’re thrilled to have these colleagues on board. We’ve got a lot of really healthy mix now of people who came from our organization already, who have critical care – acute care experience. And now we’ve got all the expertise that came with the Portola team. So what we’re focused on near-term is rebalancing efforts. And I’ve talked a number of times about the best way to think of the opportunity with ANDEXXA is it’s a three-part story. So first is ensuring that we’ve got really good awareness and really good advocacy with clinical champions, that’s critically important in the complex institutions that we’re focused on to make sure that you’ve got bleed protocols in place, formulary acceptance and ultimately demand generation, which is the second pillar. But the third is about access. And that’s a two-part story. Physical access, making sure the product is on site as well as economic access. And that continues to get strengthened as time goes on. So when we look at quarter-to-quarter, I would not over extrapolate what we have in this quarter, or frankly, even the next quarter. These repowered, rebalanced mobilizations that we’re doing will take time to pull through. And that really is the story within ANDEXXA. It’s a long-term value creation story that we’re so excited about. And by the way, the second one, which was similar to the question that Geoffrey Porges asked on ULTOMIRIS subq. And as I mentioned, we do believe emphatically, that’s an important offering to build out more of a portfolio of choices that are ULTOMIRIS space for patients. So I do think there’s a potential to grow the market. I also think that there may be patients that say that for their home-based treatment, that that’s the best option subcutaneous and perhaps not once every two months, which for the majority of patients, we believe will be the key profile that they’ll want.

[Brian Goff:]

And to that end, in addition to developing ULTOMIRIS in myasthenia gravis that I just mentioned a moment ago, we are pursuing our third generation C5 inhibitor 1720, which is finishing it’s a Phase 1 study shortly, we’ll be moving into myasthenia gravis with 1720. And that’s a small volume subcutaneous administration that’s ideally suited for auto injector. In addition to that, we have our own FcRn program, which has been rebooted going back into healthy volunteers to generate data in the first part of 2021 with the plans to move into myasthenia gravis in the second half of next year. So we do believe that having a subq offering is a good option for patients with MG, in addition to those that they already have.

[Ludwig Hantson:]

Okay. Operator, we’ll take our last question.

[Operator:]

Our last question comes from the line of Geoff Meacham with Bank of America. Your line is now open.

[Geoff Meacham:]

Good morning, guys. Thanks for the question and congrats on a good quarter. I just have two and they’re probably for Brian. So in PNH this 30% of patients that haven’t switched to ULTOMIRIS, does that inform your view of the switching dynamic? Let’s say in a few years when multiple competitors are theoretically on the market, just trying to get a sense for the stickiness of that population. And then in the three major commercial countries you’ve highlighted. So Germany, U.S. Japan, should COVID persist longer in the 2021. Are there some new strategies that you’ve implemented today to help with new patient adds? It does seem like maintaining stable patients’ is more straightforward, but new adds is a little bit more of a dynamic process. Thank you.

[Brian Goff:]

Yes. Good morning, Geoff. And thanks for the kudos on the quarter. We are very pleased with the progress we’ve made in a very challenging period. So on the question about the 30%, well, roughly 30%, let’s say that if not converted to ULTOMIRIS. For PNH, especially that’s more a story about – there’s a long tail of PNH prescribing. So a lot of the conversions that we’ve achieved at this stage are doctors who may have more than one PNH patient. Then you’ve got a long tail, it just takes time to get everything in sync with the education of the doctors. So they’re aware of ULTOMIRIS. The doctor then educating the patient about all the benefits of the efficacy that they’ve had with SOLIRIS plus every two months opportunity, which is less burdensome for them. And we figured that that’s going to take us some continued months. We have plenty of time to help the patient navigate through that journey, but I wouldn’t necessarily over extrapolate that into all the other future indications that we’re pursuing with ULTOMIRIS. By the time we get there, we believe the awareness of ULTOMIRIS, all the benefits that the community will be aware of will be well-established. And with respect to COVID oriented new strategies to be successful in that continued era, yes, definitely. And as I had mentioned, we’re mobilizing a lot more virtual promotional effectiveness technology-based training of our teams. I think even without our efforts, customers on the receiving end are becoming more oriented to that form of engagement. And then just as one of many examples that I’ve cited openly, the artificial intelligence claims-based HCP targeting that we’re doing is much more efficient than deploying our teams and having them try to go out and find clinicians who might be high potential to treat rare disease patients. So that’s just one of many examples that we’re putting in place.

[Ludwig Hantson:]

Thanks, Brian. And thanks all presenters. We’re at the top of the hour. So we had another strong quarter. I really want to thank all my Alexion colleagues again for their hard work. Needless to say that this team has been delivering quarter after quarter and we plan to continue to do so. So thanks to all of you for dialing in and enjoy the rest of your day. Thanks everybody.

[Operator:]

Ladies and gentlemen, this concludes today’s conference. Thank you for participating. You may now disconnect.