Global Blood Therapeutics, Inc.
Q2 2021 Earnings Call Transcript

Published: 3 Aug 2021

[Operator:]

Greetings, and welcome to Global Blood Therapeutics Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the prepared remarks. . As a reminder, this conference is being recorded. I would now like to turn the call over to Steven Immergut. Please go ahead, sir.

[Steven Immergut:]

Thank you, and welcome to GBT's conference call to discuss the company's financial results for the second quarter of 2021 and to provide a business update. I'm Steven Immergut, Head of Communications and Investor Relations. Joining me on the call are Dr. Ted Love, our President and CEO, who will provide an update on our progress in the second quarter; Jeff Farrow, our Chief Financial Officer, will review our financial results; David Johnson, or DJ, our Chief Commercial Officer, will give an update on the Oxbryta launch; Dr. Kim Smith-Whitley, our Executive Vice President and Head of R&D, will discuss our pipeline. Ted will then give a few closing remarks on the catalyst for GBT’s future. Earlier this afternoon, we issued a press release announcing GBT's progress and financial results for the second quarter ended June 30, 2021. Before we begin, I would like to remind you that certain statements we make on this call that are not historical facts may be forward-looking statements that are subject to risks and uncertainties. Information concerning factors that could actual results to differ materially from those expressed or implied by such forward-looking statements are contained in our SEC filings, including, but not limited to, our most recent quarterly report on Form 10-Q as well as in today's press release. Copies of our SEC filings and press releases can be obtained from the Investors page of our company Web site at gbt.com. Forward-looking statements made on this call are only as of the time they are made, and you should not place undue reliance on such statements. Future events or simply the passage of time may cause our beliefs to change and we disclaim any obligation to update any forward-looking statements other than as required by law. With that, I'll turn the call over to Ted.

[Ted Love:]

Thank you, Steven, and good afternoon, everyone. In the second quarter, GBT made solid progress on our mission to transform the care of sickle cell disease and improve the lives of patients around the world. The fundamentals of the Oxbryta U.S. launch remains strong and GBT is setting itself up for long-term success by advancing our regulatory strategies and our robust pipeline. I want to highlight that just recently we announced the initiation of two pivotal Phase 3 clinical trials for inclacumab, a P-selectin inhibitor for vaso-occlusive crisis in SCD that we think will be best in class. We also initiated our Phase 1 trial of GBT601 in sickle cell patients. We remain on track with our goal of delivering proof of concept data for 601 by the end of the year. We're very excited by these developments and our potential to bring further therapeutic innovation to sickle cell disease. Now turning to Oxbryta. We delivered approximately 925 new prescriptions in the quarter, consistent with the range we've seen since the onset of the COVID-19 pandemic. While we anticipated this result, we are not satisfied with it. Looking forward, we are encouraged by several key factors. First, the net number of Oxbryta patients continues to increase each quarter. This is a key driver of delivering on our second quarter revenue expectations. Second, experience in the real-world setting continues to validate the role of Oxbryta as a potential foundational therapy for sickle cell disease, a growing body of real-world evidence demonstrates improvement in overall clinical status of patients and of key lab values. And third, our latest market research demonstrates high levels of satisfaction among prescribers and patients who have tried Oxbryta. In addition, we are receiving positive feedback on our recently launched educational and marketing programs, and we have several exciting initiatives planned for the rest of the year, including a groundbreaking direct-to-consumer advertising campaign. In the second quarter, the COVID-19 environment began to show signs of gradual improvement for sickle cell patients as overall vaccination rates increased and restrictions began to lift in many geographies. For sickle cell patients, sentiment towards the vaccine is improving. However, Black Americans still have the lowest rate of vaccination. As we all know, more recently, the Delta variant has begun to drive an increase in COVID-19 cases and a return of restrictive guidelines. COVID-19 continues to be a headwind for GBT and the sickle cell community, along with the longstanding health inequalities experienced by our patients. Too often, sickle cell disease is characterized as a disease of pain, when it is in fact a disease of multi-organ failure and premature death. Patients are often told they are doing well if they aren't experiencing pain crises. So we know these patients are suffering premature deaths due to hemolysis. This is a meaningful opportunity to create change, and we are not standing still. We are focused on creating a greater sense of urgency among HCPs treating people with SCD, along with other significant gaps in the care of those living with this disease. A few highlights of our actions include, we are continuing to educate the healthcare community on the urgent needs of patients with sickle cell disease. We formed a sickle cell disease Health Equity Council with advocacy leaders and other prominent members of the community. This group is working to prioritize actions on systemic issues that impact access to care. In addition, our ACCEL grant program provided approximately $450,000 in funding this year to community-based organizations and institutions for sustainable programs that improve access to high quality care for sickle cell patients. And in September, we will co-host the 10th Annual Sickle Cell Disease Therapeutics Conference with the Sickle Cell Disease Association of America, bringing together leaders in the community to discuss the latest advances in future trends in SCD. All of these efforts and more are designed to improve health equity for patients with sickle cell disease, including helping them access innovative medicines like Oxbryta. With that, I will turn the call over to Jeff to review our second quarter results.

[Jeff Farrow:]

Thank you, Ted. Total net revenue from sales of Oxbryta was 47.6 million for the second quarter of 2021, an increase of 16.1 million or 51% year-over-year. On a sequential basis, second quarter revenue increased by 22% from the first quarter. The sequential growth was driven by the continued increase in the net number of patients on Oxbryta, including demand from existing and new patients. Days of inventory on hand in the second quarter was relatively flat, although absolute levels of inventory increased, reflecting the growing Oxbryta patient base. Gross to net was flat from the first quarter at approximately 15%. This reflects an increase in the mix of 340B sales offset by a decrease in patient copay support following the reset of commercial insurance out-of-pocket deductibles in the first quarter. We are closely tracking new COVID case rates being driven by the Delta variant, particularly in geographies that include the most patients with sickle cell disease. Given the ongoing headwind, we want to provide specific expectations. For the third quarter, we expect revenue of 52 million to 54 million, which anticipates relatively flat new prescriptions gross to net and inventory dynamics, and reflects the current uncertainty around COVID as well as the impact of two major holidays in the third quarter. Looking forward, we continue to anticipate that if the pandemic gradually improves, we will see a corresponding improvement in new prescriptions and revenue growth. Now turning to expenses. Cost of sales for the second quarter was 748,000 as compared with 377,000 for the second quarter of 2020 and consistent on a gross margin basis year-over-year. Cost of sales was low in both years as the majority of manufacturing costs related to Oxbryta sales were incurred prior to FDA approval, and thus were recorded as R&D expense. R&D expense for the second quarter of 2021 was 52 million compared with 34 million for the same period in 2020. The increase in R&D expense in the second quarter was primarily due to costs related to the advancement of our preclinical programs, along with Oxbryta and inclacumab clinical programs. We continue to anticipate a sequential increase in R&D expense in the third quarter as we begin enrollment in the two Phase 3 studies for inclacumab, which will trigger a $5 million milestone payment by GBT. We also expect an incremental increase in the fourth quarter driven by the inclacumab program, the advancement of GBT601 studies and our other expected pipeline-related activities. SG&A for the second quarter of 2021 was 61 million compared with 49 million for the same period in 2020. The increase in SG&A expense was primarily due to increased employee-related costs, including non-cash stock compensation and other professional consulting services associated with the commercialization efforts for Oxbryta. We anticipate a stepwise increase in SG&A expense in the third and fourth quarters, driven by the rollout of Oxbryta materials, including our DTC advertising, our measured expansion into Europe and the initiation of multiple investigator sponsored studies. Net loss for the second quarter was 70 million compared to 53 million for the same period in 2020. Basic and diluted net loss per share for the second quarter was $1.12 per share compared with $0.86 per share for the same period in 2020. We continue to be well positioned with a strong balance sheet, with cash, cash equivalents and marketable securities of 437 million at quarter end compared with 561 million at December 31, 2020. And with that, I will now turn the call over to DJ.

[David Johnson:]

Thank you, Jeff, and good afternoon, everyone. We delivered another quarter of solid progress and are excited about our recent launch and upcoming initiatives. As I've done in prior quarters, I will provide an update around the three key metrics that will give you further insight into our progress. These metrics are new prescriptions for Oxbryta, which informs underlying patient demand; the number of healthcare providers prescribing Oxbryta, which captures the progress we are making in adoption; and payer coverage, which speaks to the access environment for Oxbryta. First, new prescriptions. There were approximately 925 new prescriptions for Oxbryta during the quarter, consistent with the range we have seen since the onset of the pandemic. While it appears that in-person patient visits improved somewhat in Q2, overall visits, inclusive of in-person and telemedicine, remained below pre-pandemic levels and consistent with the past several quarters. Over time, we believe there's a significant potential for Oxbryta in new prescription growth, particularly from deeper penetration with existing prescribers. For example, among our existing prescribers, we are around 30% penetrated into their patient population. This compares to our top 50 Oxbryta prescribers who have an average penetration of 75%, demonstrating ample opportunity for growth. As a result, the priority of our team is continuing to engage with our top targets. In the second quarter, we reached 75% of these healthcare providers, including the growing number of in-person interactions. As Ted mentioned, we launched a targeted direct-to-consumer marketing campaign at the end of July. The centerpiece is a new TV commercial that features actual Oxbryta patients and their families. It highlights Oxbryta messages and serves as an empowering call to action for patients who engage with our healthcare providers. The commercial will also be available on Oxbryta.com and on social media. This groundbreaking commercial is the first of its kind in sickle cell disease, and we believe that it will have a positive impact on patients’ awareness and adoption and help prompt patients to ask for Oxbryta by name. We are also closely monitoring additional factors that influence prescriptions. With respect to COVID-19 vaccinations, data from the CDC and Kaiser Family Foundation highlight that the Black population is vaccinated at a lower rate than Hispanic, White or Asian populations. Specific to those with sickle cell, our market research from around 100 patients in May-June showed 43% already received the dose and 17% plan to as soon as possible. This is a significant increase from the February-March timeframe, which showed 10% dosed and 31% planning to be. For the remaining 40%, vaccine hesitancy remains prominent due to fears around safety and side effects as well as waiting for longer term data. Turning to other initiatives. We are focused on providing support to help patients start and stay on therapy. To improve the rate and speed of new prescription conversions, we are now partnering with CoverMyMeds, which provides an integrated platform for healthcare providers to submit prior authorization forms electronically to payers. We believe this will be easier and more efficient for healthcare providers. Oxbryta adherence, which includes both compliance and persistence, was stable and well within the range of our analogs during the quarter. In addition, a significant number of patients that discontinued therapy are restarting on Oxbryta. We have received positive feedback on our recently launched initiatives to support adherence and are optimistic that they will lead to further improvement. These initiatives include our getting started guides and brochures, new patient kits, gbtsource.com Web site and our transition to a 100% high touch model for patients accessing our patient hub, GBT Source. Our market research also continues to support the strong fundamentals of Oxbryta. Nearly all patients report that they experienced some form of symptom improvement and are likely to recommend it to others. And for the majority of healthcare providers who are aware of Oxbryta, they have already or plan to prescribe it in the future. Looking at Oxbryta use, we continue to see a broad range of characteristics such as baseline hemoglobin and VOC burden, suggesting that prescribers are increasingly recognizing the importance of addressing polymerization and long-term health, which leads me to my second metric, healthcare provider penetration. During the quarter, total interactions with healthcare providers remained steady compared to the first quarter, with the percentage of in-person interactions incrementally increasing each month, but still substantially lower than pre-pandemic levels. In addition, hospitals and institutions remain cautious around in-person visits. Against this backdrop, we added about 140 prescribers in the quarter, bringing our total prescribers to around 1,700 since launch. When we look at the breakdown of writers, we continue to see prescriptions being written by both specialists and non-specialists, which we believe is a positive trend for the long-term trajectory of the launch. Turning to payer coverage. In 2020, we achieved broad coverage with more than 90% of covered lives having access in the United States. This strong coverage has contributed to improved efficiency in converting new prescriptions to patients starting therapy. We have been pleased to see expanded utilization of our copay card program in the first half of 2021, after streamlining access for patients that work through our specially pharma partners. As a result, we have been helping more patients than ever before. And a large majority of our patients across all payer types have a copay of $10 or less. Having achieved almost 100% coverage in Medicaid, we are now focused on making it easier for physicians to prescribe and patients to receive Oxbryta. For example, similar to our success in Texas, Michigan has just added Oxbryta to their common formulary, which all managed Medicaid must follow. This provides for open access to Oxbryta to label as of August 1. This is an important win that improves our ability to get patients on therapy and speaks to the growing confidence in Oxbryta. In summary, we are making good progress on our strategic initiatives and have a focus plan to drive adoption. We continue to receive excellent feedback in the field and are eager to expand access and get more patients on Oxbryta. And with that, I will now turn the call over to Kim to talk about the exciting developments in our pipeline.

[Kim Smith-Whitley:]

Thank you, DJ, and good afternoon, everyone. I want to pick up on a point Ted made earlier and provide my perspective as a clinician with more than 30 years of experience in this disease. It's well known that sickle cell patients haven't had reliable access to high quality care and their health outcomes have suffered as a result. We also know that sickle cell patients have chronic anemia and hemolysis, which lead to long-term organ damage and eventually death. We have the tools and knowledge to transform the treatment of this disease. However, very real gaps remain. As one of the authors of the National Strategic Plan on sickle cell disease published last year at the National Academies of Sciences, Engineering and Medicine, I can tell you that the needs in the care of sickle cell disease are profound, but not insurmountable. I am optimistic. There is good momentum, in part fueled by innovations like Oxbryta. In addition to educating health professionals on treating sickle cell disease and its underlying cause, one of the key drivers is to gather and publish more real-world evidence. A very important step we took this past quarter was the initiation of two large multicenter registries, RETRO and PROSPECT. These studies will enable a deeper understanding of Oxbryta’s long-term efficacy and safety and provide additional real-world evidence that we believe will support the use of Oxbryta in sickle cell disease patients. RETRO is a retrospective registry, collecting real-world outcomes in up to 300 adults and adolescents at approximately 10 U.S. sites that will capture clinical outcome measures, health resource utilization data, and laboratory measures based on medical records one year pre and post the initiation of Oxbryta therapy. Initial data from the first 20 RETRO patients were presented at the EHA meeting in June. The results were in line with a Phase 3 HOPE study. That's 50% of patients achieving an increase in hemoglobin of greater than 1 gram per deciliter. We anticipate presenting updated results from the RETRO registry at the ASH meeting in December with full results sometime in 2022. PROSPECT, our other registry is prospective pre-enrolling up to 750 patients at approximately 25 U.S. sites that will capture the same measures of RETRO for a period spanning from one year pre and up to five years post the initiation of Oxbryta therapy. We anticipate results from the PROSPECT registry will begin to be presented in 2022. We also continue to see additional real-world evidence generated by the healthcare provider community. At the EHA meeting, Dr. Alan Anderson presented an update to the data he first presented at ASCO, showing in 77 patients treated with Oxbryta, that overall hemoglobin levels increased by an average 2 grams per deciliter with corresponding improvement in markers of hemolysis exceeding results of the HOPE steady. Turning to the pipeline. We're very encouraged by our progress, and we remain on track with our lead programs. Inclacumab, our P-selectin inhibitor for reduction of VOC has the potential to be dosed quarterly as opposed to monthly dosing with a current option. This would be a meaningful improvement for patients and is aligned with typical sickle cell disease practice schedule of quarterly check-ins. We initiated two Phase 3 studies collectively named THRIVE . One aims to reduce VOCs over a 48-week treatment period. The second study aims to reduce 90-day VOC readmission following an initial VOC hospitalization, which tragically occurs in around 50% of patients. Subject to the results of these trials, we plan to file two independent regulatory submissions for separate indications. For GBT601, our next generation hemoglobin polymerization inhibitor, we completed a healthy volunteer study and have expanded into treating people with sickle cell disease to assess the safety, tolerability and PK/PD of 601 over a 14-week period. Our plan is to present data from these Phase 1 studies at the ASH meeting in December. If the data shows hemoglobin modification in the 30% plus range, similar to the preclinical data, we believe 601 could be a best-in-class therapy. And what's really exciting for patients is that this level of efficacy has potential to eliminate all symptoms and long-term organ damage, providing a functional cure and a once daily pill. Outside of our two lead programs, we continue to advance our in-house and in-licensed preclinical programs. With our robust pipeline, we believe we have great potential to transform the treatment of sickle cell disease with multiple complementary treatment options. Turning now to our other R&D-related initiatives. In the United States, we submitted our regulatory applications seeking to expand the Oxbryta label to include children aged 4 to 11. These include a supplemental NDA for the expanded label and a separate NDA for a new pediatric formulation. Our sNDA included data from the Phase 2a HOPE-KIDS 1 study, which was presented in an oral presentation at the EHA meeting in June. The data from 45 children was consistent with the HOPE study, and no new adverse safety signals were detected. We are building additional clinician experience with Oxbryta in the U.S. through a pediatric early access protocol launched in January, which provides Oxbryta to children aged 4 to 11 years old. Based on strong interest, we are upsizing the protocol from 50 to up to 150 patients. As I said earlier, it is vital that we treat sickle cell disease patients more proactively. And I think the potential expansion of Oxbryta to children as young as four years old is a great opportunity to address this need. From the provider perspective, many pediatric practitioners, myself included, are eager to have another treatment option, particularly if it has the potential to mitigate red blood cell sickling and destruction, which could modify the course of the disease and alleviate future serious and life threatening complications. Analog suggest adherence in this age group will likely be high. Similar to the adoption of hydroxyurea, we believe that robust adoption among pediatric healthcare providers could be an important accelerator with adult providers. Turning to Europe. We remain on schedule with the EMA’s review of our marketing application, which we continue to believe could be approved in the first half of 2022. In advance of potential approval, we are building momentum with early access available in France, Germany, and other countries, and we received a promising innovative medicine designation for Oxbryta in the United Kingdom. Outside of Europe, we are also working to make Oxbryta available in the Middle East and Latin America. All together, our label in global expansion plans are intended to give us the opportunity to reach more than 350,000 sickle cell patients around the world over the next several years. And as we make progress against this goal, we will continue to explore strategies to bring our therapies to patients in limited resource geographies, such as Africa and India. And with that, I'll turn it back over to Ted.

[Ted Love:]

Thank you, Kim. I'm really excited about the development we've outlined today and our opportunity to reach more patients. In closing, GBT continues its leadership in sickle cell disease and is well positioned for long-term success. We have a series of important catalysts anticipated over the next 12 months. For example, as Kim outlined, we expect our momentum will be augmented with two potential approvals in the first half of 2022; in the U.S. among children as young as four years old, and in Europe in patients over 12 years of age. Our pipeline is robust and advancing. We look forward to reporting early results on GBT601 later this year. And we're excited to move forward with inclacumab as a potential best-in-class option. As we go forward, GBT’s commitment to supporting the sickle cell community is stronger than ever, as we strive to improve the lives of our patients. Our team is unified in this effort. And I want to thank employees for their passion and dedication which is essential to achieving our goal of transforming sickle cell disease into a well managed condition. With that, we'd like to open the call for questions. Operator?

[Operator:]

Thank you. . Our first question is from Mark Breidenbach with Oppenheimer. Please proceed.

[Mark Breidenbach:]

Hi, guys. Congrats on the quarter and thanks for taking my questions. These might be both kind of directed at Kim. I was hoping you could help us understand a little bit why there's the need for both the sNDA and the NDA for the pediatric label expansions. To what degree are these redundant applications and who would be served sort of by the NDA versus the sNDA? And the second question is just on the sizing of inclacumab trials. Thinking back to the sustained trial of inclacumab, I believe that was only just under 200 patients, and it sounds like you're targeting larger trials for inclacumab, 240 patients for one and I think 280 patients for the other. Can you tell us anything about your powering assumptions? And should we be reading into the differences in trial sizes as maybe an indication of expectations about the relative efficacy of those two antibodies? Thanks for taking the questions.

[Ted Love:]

Thanks, Mark. And Kim, feel free to add on sNDA. But I'll take a stab at the few questions and feel free to add on. So, Mark, first of all, good to hear your voice. Thanks for your question. The reason that there's a sNDA is because the clinical information is actually an update to the approved label. So that's in sNDA. The new formulation has to be a new NDA on its own. So that's why we have an NDA and a sNDA. One is for the clinical. The new NDA is for the new formulation of the pediatric formulation. With regard to the trial size, we don't tend to give out the details of how our studies are powered. But we do stress that we generally have significant power in our studies. We tend to if anything overpower our studies rather than under power them. And you're right. Our study is a little bit larger. I believe the inclacumab study was designed to be just north of 200 subjects. They did have dropouts though. So you may be looking at the final numbers being around 200 patients. I believe they did enroll more than that. I don't remember the exact numbers. But our study is I believe 240 patients. Our study for hospital readmission is actually a different endpoint is powered around hospital readmission, which we expect the control rate to be around 50%. And again, we're well powered to look at even, let's say, a 30% reduction in a 50% rate. But we don't talk too much about the details. But bottom line is we tend to be heavily powered in that sense. So, Kim, feel free to add to that if you’d like.

[Kim Smith-Whitley:]

No, Ted. That was great. Thank you.

[Mark Breidenbach:]

Thank you.

[Operator:]

Our next question is from Alethia Young with Cantor. Please proceed.

[Alethia Young:]

Thanks for taking my question and nice quarter. I guess one is just in light of what’s on this Delta variant and all the dynamics of vaccinations and underserved populations, like how confident are you that you can achieve potential inflection in new scripts? I know it's something that you had talked about. And I just kind of -- it sounds like in the third quarter it’s probably going to be flat. But I just wanted to kind of see if I could get some more granularity on the fourth quarter. And then my other question is just the DTC campaign, like what have you gleaned from now that makes you want to do it now versus maybe initially upfront? Thank you.

[Ted Love:]

Right. Thank you, Alethia. Good to hear your voice. DJ, you may want to talk more specifically. But I would say that with regard to an infection, you're right. We have been hoping that restrictions were going to liberalize and infections are going to greatly diminish. Unfortunately, as you point out with the Delta variant, we've kind of been heading in the wrong direction, profoundly in the wrong direction in some of the states where we have a lot of patients. But the truth is we can't control the COVID environment. We can control what we're doing, so we continue to push on all the things that we can push on both with our organization as well as our educational materials, our patient support. We are very excited about the DTC. The reason that we couldn't do that initially is because everything that we do has to be FDA approved. And it takes some time to get commercials approved. But DJ, please feel free to add more about some of the things that you're doing, particularly the DTC.

[David Johnson:]

Yes. Thanks, Ted. And thanks, Alethia. That's exactly right. DTC campaign is always something that we had in our plan. We started with a very holistic approach that included Web sites that we've had. They've been updated with the new campaign as well, social media and digital advertising. And then always part of that campaign was been to add a more robust commercial as well. But it does take time to produce those. It does take time to get it through the FDA. And we wanted to educate the market a bit on Oxbryta before we started that commercial. So everything's kind of lined up for us now. And Ted’s right. I think this headwind that's kind of not unique to GBT but is unique to the industry, this pandemic, it's what you're doing about it to set yourself up for long-term success going forward. And we're doing a lot. We're doing a lot on the adherence campaigns. We're doing a lot with CoverMyMeds to help physicians process, instruct patients more efficiently. And now, of course, we're activating and educating the patients directly. So we think all of these things help us out for that future growth that we fully expect.

[Alethia Young:]

Okay, great. Thank you.

[Operator:]

Our next question is from Andrew Berens with SVB Leerink. Please proceed.

[Andrew Berens:]

Hi. Thanks. Let me also add my congratulations on the strong sales quarter, guys.

[Ted Love:]

Thank you.

[Andrew Berens:]

Sure. We've been getting some anecdotal feedback from physicians that they're using the drug on patients that fail hydroxyurea, irrespective of the hemoglobin level. So I was wondering if you know what percentage of patients gain the drug are they getting it for reasons other than to increase hemoglobin. And then also what percentage of patients getting Oxbryta are also getting Adakveo? And then lastly, I might have missed it during the prepared comments. But did you update the persistence rate? Are you seeing any increase in patients that return to therapy after stopping it?

[Ted Love:]

DJ will definitely want to add to some of those. But I would say to one of your questions, yes, there are physicians that start patients on Oxbryta for reasons other than hemoglobin. For example, patients can have relatively higher hemoglobin but have leg ulcers that are very difficult to heal. I know, anecdotally, there have been some encouraging findings along that. The label for Oxbryta actually doesn't have a hemoglobin indication, because fundamentally what the drug is intended to do is to treat the underlying base of your disease and prevent that from advancing, including your anemia. So in theory, we probably will want to see the future of this therapy being indicated for children when they're very young, before their hemoglobin drop, but you know they are going to drop and prevent them from dropping. That's really where we want to go long term. But I would say, anecdotally, probably one of the more common reasons to begin it now, even with a relatively higher hemoglobin, is to treat things like ours but also maintain health in patients that are doing well, which we know in the future, they're unlikely to continue to do well. DJ?

[David Johnson:]

Yes, just a couple of additional comments. So a lot of our Oxbryta patients start in our believe it or not, in sickle cell disease, such a devastating disease are actually treatment naïve. They've never been on treatment, which is kind of amazing. So we get patients that have been on previous therapies and failed hydroxyurea or couldn't tolerate it as well as patients that literally have not been on any treatment at all. Interestingly, a little over half of our patients are on Oxbryta alone. But that means that a little under half of our patients are actually in a combination regimen. And that includes hydroxyurea very commonly as our data would support, but also Adakveo as well. And so it fluctuates quarter-to-quarter, but approximately in the low teens, low double digits are on a combination with Adakveo. And we expect that to go up over time as people get more and more experience with the newer products. I will say that persistency rate, what we talked about is that our overall adherence rate has not fluctuated. Q2 has been consistent with other quarters and as well within that range of analogs that we look at. So nothing to report there. And then I think you asked a little bit about restarts, and restarts continue to happen. That's been a really nice phenomenon. We've said in previous quarters, about 20% of patients that discontinue therapy ultimately restart and we have seen that trend continue in Q2 as well.

[Andrew Berens:]

Okay. Thanks for the color. I appreciate it. Congrats again.

[David Johnson:]

Thank you.

[Operator:]

Our next question is from Elemer Piros with ROTH Capital Partners. Please proceed.

[Elemer Piros:]

Yes. Good afternoon, everyone. What I'd like to ask from the team is that we observed that you have beaten Adakveo every quarter since lunch? Do we have an estimation of what is the discrepancy between the number of patients treated with the two drugs?

[Ted Love:]

Hi, Elemer. It's a good question. It's a little bit hard for us to estimate obviously, because we don't have access to Novartis’ data. And it's also a little bit complicated, because when patients began on Adakveo, they actually get a loading dose. So there are two doses on the frontend. So it's a little bit hard for us to estimate accurately. As you know, I personally am very excited that both drugs do very well and patients get access to this cutting-edge therapy. So I think their launches are going well. Certainly compared to COVID, I think we're doing well as well. But looking at their numbers and our numbers is not something that we put a lot of attention on.

[Elemer Piros:]

Okay. They also state, Ted, that they are approved in 44 different countries. How do you compare in that regard?

[Ted Love:]

We’re approved in one country. So it's a pretty easy comparison. We are, as you know, however, not a company that has an infrastructure of the magnitude of Novartis. The truth is, the biggest markets are the United States, Europe, and we've already filed in Europe. There's a significant market in the GCC and I think we have a distributorship relationship there already, and Latin America and we're working on there. So the likely markets we are either already filed in or moving towards application and may not be 40 in the end, but our numbers will be increasing significantly, particularly around the size of the market.

[Elemer Piros:]

And you still beat them with one country versus 44. And one last question is maybe, Jeff, if you could help me out here. So it appears that in this quarter, you had fewer new patients than in the previous two or three quarters. Yet, the revenue is much higher. Is it reconcilable by the fact that you have a building stack of existing patients and/or the adherence is improving to the drug or discontinuation rates are declining?

[Jeff Farrow:]

Yes, that's a great question, Elemer. It really is to the middle point that you highlighted there. It's the growing base of patients that continue to build over time. And as a launch continues, the bulk of the prescriptions and ultimately the bulk of the revenues come from those patients. And so that's where we're seeing a lot of that growth come from. Patients that initiated maybe in Q1 where we only had one or two bottles, we get the benefit of three bottles in the second quarter. So that's typically how that runs.

[Elemer Piros:]

Okay. Thank you so much.

[Operator:]

Our next question is from Ritu Baral with Cowen and Company. Please proceed.

[Ritu Baral:]

Good afternoon, guys. Thanks for taking the questions. I wanted to drill down a little further on those patient restarts. DJ, what was the motivation for these patients to restart? And have you been able to ask them why they quit in the first place? And my follow up was about the EHA Anderson dataset, the one that generated higher hemoglobin increases than the Phase 3 HOPE data. What was it about that patient profile that may have driven the increased hemoglobin response there?

[Ted Love:]

So, DJ, why don't you start and then maybe, Kim, you can follow up on Alan's data.

[David Johnson:]

Sure. Great question on the restart. So we did do some surveys with patients that discontinued and restarted Oxbryta. So the reasons are perhaps what you might expect. Some patients stopped because of early side effects and they decided that they wanted to give it another chance, mainly because there's been a lot more education. We’re really focused on making sure physicians and patients understand that if you get an early GI upset or headache, there's things that can be done, right. There's dose adjustments that are made. And so patients are oftentimes reporting back that they're eager to restart under a protocol that may help them get through and avoid those side effects. So that's been great to hear. There have been just other life factors that people report, things like, hey, I moved; hey, I started on a new job or I lost my job and things like that, which are other reasons patients stopped, but didn't necessarily want to stay, stop and always felt that they would come back to Oxbryta. And so they've now had a chance to stabilize and restart their therapy. So those are the main things we hear back. Kim?

[Kim Smith-Whitley:]

And for the Alan Anderson study, yes, increase in the hemoglobin and the proportion of individuals that achieved 1 gram per deciliter and higher rate was quite impressive. And I think that there may be a couple of factors at play. Given that it's 77 patients, it's still a small sample size, even though it's a nice sample size for a single center. We know that Dr. Anderson does a great job at educating his young people with sickle cell disease before they start Oxbryta, and they may be more inclined to discuss whatever side effects they may have going forward and managing those side effects more proactively. And so there might be an increase in adherence in that group. The other thing is that his individuals that were also on stable doses of hydroxyurea was at a higher proportion going in, and that may have had a small effect as well.

[Ritu Baral:]

Got it. And a very quick housekeeping follow-up question. Given the importance of the sickle cell population in London and that were post Brexit, how should we be thinking about approval in the UK? Is it still covered by EMA or is there a separate MHRA path you have to pursue now? I have no idea anymore.

[Ted Love:]

Yes, that’s a good question, Ritu. Yes, there is a relationship in place between EMA and the UK that will essentially have the approval be driven off of the EMA work, so that will continue. I don't know the timeline for how long that will continue to be the plan. But that's the temporary plan and will fall into that time window.

[Operator:]

Our next question is from Yanan Zhu with Wells Fargo Advisors. Please proceed.

[Yanan Zhu:]

Hi. Good afternoon. Thanks for taking my questions. I have two on the Oxbryta launch and one on 601. For the launch, could you talk about the distribution of new patients in the second quarter in terms of how they distribute over the course of the quarter? And whether there are more patients in the beginning or it's more evenly distributed? And could you provide a little bit color on the July launch trend? My second question on Oxbryta is with regard to vaccination and what can we expect in relationship to launch? I think, as you mentioned, the 40% of patients kind of at least partially vaccinated, that rate is, although not very high, but I think is enough to probably make a difference in the launch trajectory once all of those patients are fully vaccinated in the next quarter. So do you think there are other gating items in addition to vaccination status that might impact whether they're willing to interact with their doctors and get being treated with a new drug? And I have a follow up on 601. Thanks.

[Ted Love:]

Okay. DJ, I think quite a few questions there for you.

[David Johnson:]

Sure. Yes. I'm happy to answer those. So regarding the distribution of new patients over the course of the quarter, it was pretty even. It was pretty consistent throughout the quarter, month-to-month there. July, obviously, we have -- we're not reporting here on Q3, although just to remind you, July has one of those holidays. Of the two holidays in the quarter, one of the major ones is in July. And so as with all the launches I've ever worked on, 4th of July week is always a down week for volume. And we saw that same dynamic around the holiday. So that gives you a little color on July. Vaccination expectations and impact on launch. So yes, it absolutely helps that we saw a significant increase in vaccination rates in the sickle cell population. We're super excited about that. And we think that does and will translate into patients feeling more confident to go in. That said, all the reports going on right now around the Delta variant being infectious to people with vaccinations is going to be a concern for our patients, right. They're still not going to want to be infected because of the CDC guidelines around the impact it can have on sickle cell patients, in particular. So we're monitoring this very closely to determine how our patients are feeling about it. We have seen masking requirements go up over the last 24 to 48 hours in key markets. A third of the new infections I just read today are in two of our major states. Florida and Texas together make up a third of all new infections in the country right now. Those are the number two and number three largest sickle cell states in the country. So these are things we are monitoring very closely. Like I said earlier, we have a lot of initiatives that are rolling out, have already rolled out in the first half of this year, but even more in the second half with the commercial activating patients, empowering patients, and then also with physicians, CoverMyMeds and other tactics that we think will have a very positive impact as patients become vaccinated, but we're going to have to monitor this Delta virus closely, and I think better understand the impact it will have on our patients.

[Yanan Zhu:]

Got it. That makes a lot of sense. Then on 601, since you have now completed the healthy volunteer portion of -- not completed, but I'm wondering from that study, do you have a sense of the hemoglobin modification that you could achieve? And also what is the -- for the sickle cell disease patient part, what is the dosing strategy in relationship to percent hemoglobin modification? Are you trying to achieve a percentage of that even higher than 30% when you designed the doses? Thank you.

[Ted Love:]

Kim, do you want to take that?

[Kim Smith-Whitley:]

Yes. So I think that the first part of -- or actually I'll answer the last part first. So when we are looking at our healthy volunteer study and the information that comes out of the healthy volunteer study will have good safety data. And when you look at the six -- up to six individuals with sickle cell disease, we’ll have good PK/PD data as well as some of these red cell parameters that we hope to share with you at the ASH meeting later this year. I think that it's really too early to say what we would expect about exact dosing. But we're hoping that these preliminary studies will provide more information for that.

[Ted Love:]

The only thing I can add is that the early volunteer data has encouraged us that the dose to get to these target levels of the modification of 30% plus looks like it may be in the 100 to 200 milligrams per day in a sickle cell patient. So, obviously, we need to document that. And as Kim said, that's the exact data that we want to present at ASH. But the early data from human volunteers is supportive of that.

[Operator:]

Our next question is from Jason Gerberry with Bank of America. Please proceed.

[Unidentified Analyst:]

Hi. Thanks for taking the question. This is Perry on the line for Jason. Just a question on the age 4 to 11 age group for Oxbryta and if this patient population is approved, I guess how should we think about this subgroup in terms of ramp in terms of sales? Should we expect to be faster? And I guess in the context of potential increase at adherence in this patient population?

[Ted Love:]

DJ, you want to tackle that?

[David Johnson:]

Sure, happy to comment on that. So, yes, we expect this to ramp nicely in this population. We think it's a really important group of patients for a lot of reasons. Namely, the mechanism of action would support that you want to start Oxbryta as soon as possible to prevent any downstream damage. So really important for the patient's health. This is 17,000 patients in the United States that are between 4 and 11 years old. So it's a large portion of the market. And we've been calling on these customers. So pediatric hematologists are in our target list today, and many of them have used Oxbryta in their kids that are 12 and older. So they have experience. And now they have even longer term safety and efficacy data at the time of the expanded approval. So for all those reasons, we think we'll get ahead of the game. The parents will be seeing the commercial. The parents will be asking for Oxbryta. The parents will be advocating for their children. And on top of that, our data shows that the younger the population, the better the adherence. And in this population, and Kim can probably speak better than I can about it as a pediatric hematologist, the parents are involved in ensuring the kids take the medication. So we would expect adherence to be at the highest level in this population.

[Kim Smith-Whitley:]

DJ, I agree with that.

[Jeff Farrow:]

The one thing I would add, Perry, this is Jeff, is that I think there's quite a bit of excitement about this opportunity as well. We had set up an EAP program for 50 people. We've actually blown through that already and have upped the number to 150. So I think there's quite a bit of excitement both on the pediatric hematology side as well as the patient side.

[Operator:]

Our next question is from Paul Choi with Goldman Sachs. Please proceed.

[Paul Choi:]

Hi, everyone. Good afternoon. And let me also offer my congratulations on the quarter as well. Two for me please. First, I guess with regard to the commercial patients, could you maybe just comment on if there is any sort of dynamic among identified patients who may be waiting for emerging clinical trial options, such as your own for inclacumab or 601, or potentially competing assets and are perhaps differing, getting on the therapy for Oxbryta? And then I have a follow-up question on 601.

[Ted Love:]

Sure. I hope not. If I understood your question, Paul, they would be not joining the ranks of patients taking Oxbryta to wait on a new therapy that might be available in years down the road. That would be tantamount to having high blood pressure today and saying I'm going to wait on the new drugs. Your body is accumulating damage and your risk of premature death is only increasing. And I think our education campaigns are directly centered around that. You don't want to wait on existing therapies. And if you'd thought down the road you were going to get a transplant, it would actually make a lot of sense for you to protect your body today while you're waiting on a transplant. So I think our educational efforts really go after that would not be a strategically wise way to approach waiting on additional therapies.

[Paul Choi:]

Okay. Thanks for that, Ted. And then for my follow-up question regarding 601, I guess now that you are actively enrolling in patients, sickle cell patients here, can you maybe help us think through how you're thinking about the duration of exposure that will be potentially available for these patients that you intend to present at ASH? And just sort of thoughts on how duration of treatment and exposure here might sort of be framed relative to the initial results you presented for Voxelotor? Thank you very much.

[Ted Love:]

Sure, Paul. So, Kim, feel free to add on to this. But the nice thing about our quite voluminous experience with Oxbryta is that we know a lot about the mechanism of hemoglobin polymerization, and 601 works through the same mechanism. So we think we can extrapolate a lot. The other thing that I would emphasize about 601 is that it is likely to have a very long half life, weeks in fact as opposed to days, like Oxbryta. To compensate for that, we will be giving a loading dose. So the loading dose will very quickly get patients to a higher level of modification, and then the daily dose would be essentially there to replace the drug that they metabolize each day. And that's why that would be likely a very low dose. So we think in terms of exposure, just based on Oxbryta, the hemoglobin rise occurs quickly. In the HOPE study, it was within two weeks of being on therapy. And that hemoglobin rise is essentially maintained, as long as the patient's been on therapy. So I think we would anticipate 601 to look very similar to that. But obviously, we'll be getting the data with 601 and presenting it for everyone at ASH. But I think that's what we would expect based on the mechanism. And, Kim, please add or correct to that.

[Kim Smith-Whitley:]

No, Ted. I would agree. And I just want to clarify for Paul's first question. I think that the incentive about pairing Oxbryta with inclacumab, I just want to make sure that we are clear that individuals who would be participating in inclacumab trials should be allowed to be on a stable dose of Oxbryta going in. So I hope that that wouldn't be a disincentive. Operator, are you there? Courtney?

[Ted Love:]

Kim, can you hear us?

[Kim Smith-Whitley:]

I can hear you.

[Ted Love:]

Let me see if I can --

[Steven Immergut:]

We'll try to continue to --

[Ted Love:]

Maybe I should just close.

[Steven Immergut:]

Yes.

[Ted Love:]

Okay. We will close. It looks like we may have a bit of a technical error. I just want to thank everyone for joining our call today. We hope you all stay safe and healthy. And please feel free to reach out to us if you have any additional questions. Thank you, again.