Lexicon Pharmaceuticals, Inc.
Q1 2017 Earnings Call Transcript
Published:
- Operator:
- Good evening. My name is Jason and I will be your conference operator today. At this time, I would like to welcome everyone to the Lexicon Pharmaceuticals First Quarter 2017 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. I would now like to turn the call over to our host Ms. Kim Lee, Executive Director, Investment Relations and Strategy. Ma’am, you may begin your conference.
- Kim Lee:
- Thank you, operator, and good morning, and welcome to the Lexicon Pharmaceuticals first quarter 2017 financial results and business update conference call. Joining me on today’s call are Lonnel Coats, Lexicon’s President and Chief Executive Officer; Alex Santini, Executive Vice President and Chief Commercial Officer; Dr. Pablo Lapuerta, Executive Vice President and Chief Medical Officer; Dr. Praveen Tyle, Executive Vice President of Research and Development; and Jeff Wade, Executive Vice President of Corporate and Administrative Affairs and Chief Financial Officer. Earlier today Lexicon issued a press release announcing our financial results for the first quarter 2017, which is available on our website at www.lexpharma.com and through our SEC filings. A webcast of the call along with a slide presentation will be accessible in the Investor Relations section of our website. During the call, we will review the information provided in the release, provide an update on our clinical programs, and then use the remainder of our time to answer your questions. Before we begin, let me remind you that we will be making forward-looking statements, including statements relating to the safety and efficacy and the therapeutic and commercial potential of XERMELO. These statements may include characterizations of the results of clinical trials of XERMELO and the market opportunities for XERMELO. This call may also contain forward-looking statements relating to Lexicon’s growth and future operating results, discovery and development of other drug candidates, strategic alliances and intellectual property, as well as other matters that are not historical facts or information. Various risks may cause Lexicon’s actual results to differ materially from those expressed or implied in such forward-looking statements. These risk include uncertainties related to the success of our commercialization efforts for XERMELO, the timing and results of clinical trials and preclinical studies of our other drug candidates, our dependence upon strategic alliances and other third-party relationships, our ability to obtain patent protections for our discoveries, limitations imposed by patents owned or controlled by third parties, and the requirements of substantial funding to conduct our drug development and commercialization activities. For a list and a description of the risk and uncertainties that we face, please see the reports we have filed with the Securities and Exchange Commission. I will now like to turn the call over to our President and CEO, Lonnel Coats.
- Lonnel Coats:
- Thank you, Kim, and let me also take the opportunity and welcome Kim to Lexicon. She's a wonderful addition to our team. This is a very exciting time for those who have worked so hard and so long in the areas of discovery and development seeing the Lexicon now has its first approved commercial product in XERMELO. The first and only oral treatment approved for carcinoid syndrome diarrhea in conjunction with somatostatin analog or SSA therapy in adults inadequately controlled by SSA therapy alone. I've been very pleased with the progress of the launch and we’ll go so far SSA that it is indeed one of the best launches I've had the opportunity to be part of thus far. Just to give you some metrics. XERMELO was approved on February 28th in all XERMELO related websites launch within 30 minutes of the approval. The drug was available the same day it was approved. In fact we received our first prescription within 24 hours of approval. The sales force was deployed, trained on the label and certified in the market and deployed within 72 hours and the drug was commercially available in especially pharmacies within 72 hours. So this is truly a best-in-class readiness for market. We are one of the only companies that has put product in the channel in only a few hours and filled scripts in such a short amount of time. Alex Santini, our Chief Commercial Officer, will provide you with some telling launch metrics shortly, but what I would say is the uptake and demand for XERMELO has exceeded our expectations. We continue to receive early positive feedback from patients and physicians and are saying early adopters at leading institutions at even low decile physicians are ordering XERMELO at a pretty good clip. We believe these leading indicators are reasonably reflective of the speed and depth of XERMELO adoption. We've previously disclosed that we believe payers will put XERMELO through their normal review processes and I can report that that indeed has been the case so far and we have received positive responses from payers. All this and we achieved net XERMELO sales of – over $700,000 after only 4-weeks in the marketplace. That said we are early into this launch as we estimate peak sales for XERMELO at approximately $350 million. The remaining opportunity is significant and we will continue to drive forward, so there should be no let up. One of our goals at Lexicon is to become a fully-integrated commercial stage company with a robust pipeline targeting areas of unmet medical need. I'm extremely proud of our talented team and what we have been able to accomplish through a deeply rooted drug discovery program with a technology platform that has now been validated by XERMELO coming out from this platform and achieving commercial status. We have demonstrated the power of this discovery program and XERMELO is just at the tip of the iceberg. We have created the pipeline of drug candidates beyond XERMELO with blockbuster potential targeting meaningful market opportunities. Sotagliflozin is a prime example of this. As many of you know sotagliflozin was discovered within and developed by Lexicon and not only is it being studied in the largest and most comprehensive Phase III program ever for anti-diabetic agent and type 1 diabetes, but it is also studied by Sanofi in another significantly larger Phase III program and type 2 diabetes. You will hear more about these programs from Dr. Pablo Lapuerta, our Chief Medical Officer, shortly. Now on Slide 4, you can see that 2017 is potentially a transformative year for sotagliflozin program with key efficacy data from secondary endpoints coming out this month from the U.S. inTandem1 study and in the third quarter for European and Israeli inTandem2 study. These results should give us a good indication of the effects of the drug on body weight and blood pressure and hypertensive type 1 patients and will also include pooled results from both studies on time and range as measured by continuous glucose monitoring. Last but not least inTandem3, we’ll readout by mid-year and we are optimistic that it will provide differentiating data on the effectiveness of sotagliflozin on lowering A1c to below 7% with no severe hypoglycemic effects or diabetic ketoacidosis. We have already seen early indications of efficacy from a 24-week dataset from inTandem1 and inTandem2. Each of these studies demonstrated that sotagliflozin has statistically – significantly reduced A1c from baseline versus placebo at both 200 milligram and 400 milligram doses. So we remain confident in the studies outcome. We have also introduced now into the clinic LX2761, which target SGLT1 and is now in Phase I development with data expected later this year. Our other compound on active development is LX9211. It is a novel pre-clinical compound for neuropathic pain that we expect will enter the clinic this year. So we're building beyond XERMELO, our first commercially launched product with a fantastic pipeline coming out organically from Lexicon’s own labs. Now with that being said, I am going to turn the call over to Alex Santini to discuss our commercial business. Alex?
- Alex Santini:
- Thanks, Lonnel, and good evening everyone. I'm very excited to provide you with an update on the XERMELO launch. As Lonnel just mentioned, we achieved net XERMELO sales of $700,000 in the first quarter of launch, which really consisted of 21 selling days given the timing of the launch. I am thrilled with the commercial team's efforts that have supported the increased education and awareness of carcinoid syndrome with patients, their caregivers, physicians and payers. Now our strategic imperatives for XERMELO include continuing to drive awareness of the disease and its burden impact driving rapid adoption, amplifying the patient voice and ensuring that patients and healthcare providers can gain access through XERMELO. Our team has built a solid plan towards our key customers and has executed extremely well against this objectives. As seen on Slide 6, our field force has reached more than 3,000 health care providers and of those providers nearly 270 are top-tier prescribers of which 90% have been detailed. What's impressive is that approximately one third of all enrollments are being generated by the top prescribers. In addition, 19 of the top 20 high volume centers that prescribe SSA therapy have written in XERMELO scripts. Lastly, we are effectively activating physicians and nurses in the lower deciles and they are also prescribing XERMELO at a high rate. We are capturing scripts from a multitude of institutions around the country. On the reimbursement side, we have a very positive formulary position. Thirteen major payers have already been reimbursing for XERMELO even though a decision may not have been rendered yet. That being said, I am excited to announce that our first national formulary decision has been made by Express Scripts. We now also have coverage from CVS, Caremark, OptumRx, Humana, Aetna and UnitedHealthcare where patient claims are being adjudicated and paid for. We expect this kind of success to continue in the future as we should receive decisions from all payers within the first six months of launch. As far our payer mix, we have an accurate Medicare and commercial mix, which appears to align very well without pre-launch assumptions. To ensure access through XERMELO, we had launched the LexCares program, which is a patient centric platform that helps to appropriately remove any adherence hurdles that might be present. Importantly, we want to ensure as Lonnel have mentioned a best-in-class patient experience. Slide 7 depicts how LexCares seamlessly integrate these processes for accessing dispensing of XERMELO, coordinating insurance benefits and financial assistance options, assisting healthcare providers with process support and providing ongoing nursing support for our patients. To date 100% of physicians and patients are using our system and they might say that it’s been extremely effective and we are seeing the positive results. We are getting early starts in large part because we have provided patients with the LexCares suite of tools that help appropriately remove barriers to access. So we have characterized the current state of the XERMELO launch and the reimbursement and access situation, but let's not forget about our patients and their caregivers and the physicians. We continue to receive early positive feedback from all these stakeholders. When we hear amazing success stories from patients and their health care providers that's truly what it's all about. That is why we are here. So what's next? We will continue to keep our finger on the pulse of the market. We are understanding the effectiveness of our field force and we are capturing additional insights like the fact that health care providers, payers and patients are expressing excitement for XERMELO and these stakeholders seeing all drug as positive and that drug is viewed as a good option in patients with comorbidities like renal impairment as an example. Turning to my last slide, Slide 8. You can see that carcinoid syndrome is a substantial market opportunity and patients are inadequately controlled by SSA therapy. While we are off to a great start, we have a lot more work to do. We look forward to updating you on our continued progress. I will now turn the call over to Dr. Lapuerta, who will provide a pipeline update. Pablo?
- Pablo Lapuerta:
- Thank you, Alex. Today, I'm going to focus on our sotagliflozin program, which Lonnel mentioned is being studied in the largest and most comprehensive Phase III program ever for an oral agent in type 1 diabetes to fully understand why we believe sotagliflozin could be a best-in-class therapy for type 1 and type 2 diabetes. It's important to understand unmet need. On Slide 10 you can see that about 75% of patients living with type 1 diabetes in the U.S. are not achieving the ADA target for A1C of 7%. Now half of them have A1C over 8%. These statistics reveal the challenges in managing glucose levels with insulin alone. Patients make tradeoffs between effectively managing their blood glucose while trying to avoid complications like severe hypoglycemia, diabetic ketoacidosis, or DKA, and weight gain. We believe that sotagliflozin’s effect could be far reaching by controlling blood glucose without these complications, but the proof will be in the putting and we expect to get those answers from our Phase III studies inTandem1, 2 and 3 relatively soon. Moving to Slide 11. We are running two pivotal trials in inTandem1 and inTandem2, which are identical studies in terms of the primary endpoint looking at changing A1C on a background of optimized insulin. Most studies have already achieved their primary endpoint. Demonstrating the drop in A1C was statistically significant for both 200 milligrams and 400 milligrams at 24 weeks. Sotagliflozin treated patients continued to show reductions in A1C and those reductions came on top of optimized insulin, which is a very important distinction. On Slide 12, the 0.35% and 0.41% placebo subtracted improvement in A1C is an effect that cannot be obtained by insulin alone. That's a very high bar to overcome. But we are expecting later this month from inTandem1, these additional efficacy data around body weight and blood pressure in patients with type 1 diabetes and hypertension. Later, we will have the same data from inTandem2 together with full continuous glucose monitoring data from both studies. Turning to Slide 13, what gives us confidence in sotagliflozin’s ability to lower blood pressure is the fact that we have conducted several studies already with encouraging data. These data are from the dose ranging study in type 2 diabetes. But dose ranging studies in both type 1 and type 2 diabetes have shown that among patients with a baseline systolic blood pressure greater than 130, the blood pressure reduction seen with 400 milligrams of sotagliflozin or approximately 14 millimeters of mercury placebo-subtracted. That is quite remarkable. So the inTandem1 data expected in May will provide important information on how differentiated sotagliflozin is. We are confident in this program and we expect to file for U.S. and EU approval in the first quarter of 2018. Moving to Slide 14. For type one diabetes, inTandem3 will readout by mid-year and we are optimistic that it will provide differentiating data on the effectiveness of sotagliflozin on the proportionate patients who achieved A1C target below 7% with no server hypoglycemic episodes and no episodes of diabetic ketoacidosis or DKA. We view this as an important measure. It integrates A1C control with the consequences of having either too much insulin or too little insulin. Importantly, we saw benefits in this end point in inTandem1 and 2 as well. So we remain confident about demonstrating these results and inTandem3. One key thing to note about inTandem3 is that while we expect improvements in insulin use for all patients in the study including non-placebo, the study has a two week placebo running rather than the intensive six week optimization effort prior to randomization that was part of the design of inTandem1 and inTandem2. In addition in inTandem3 all types of insulin were allowed. The bottom line is we will help to find this drug in the type 1 patient population by demonstrating efficacy and reducing blood glucose and A1C and the absence of severe hypoglycaemia and DKA, the risks that patient says all the time. To achieve this with an oral agent would be an important advancement for the type 1 community, so look for that data mid year. Now, I would like to turn the call over to Jeff, who will provide financial guidelines.
- Jeff Wade:
- Thank you, Pablo. I'm pleased to provide you with a brief financial update, more financial details can be found in our 10-Q, which will be filed in a few days. Now please refer to you Slide 17 in our presentation. As indicated in our press release today, first quarter of 2017 revenues totaled $18.3 million, which represented a 46% increase from $12.5 million in the prior year period. This increase was primarily due to recognition of revenues received under our collaboration and license agreement with Sanofi, which reflects revenues associated with the performance of our obligations related to type 1 diabetes development activities and in 2017 shared funding of type 2 diabetes development. Revenue for the three months ended March 31, 2017 included approximately $700,000 of net revenues recognized from XERMELO sales in March. As Lonnel and Alex mentioned, we filled the first XERMELO script on March 3rd, so we experienced 21 selling days. As we started recognizing revenues from XERMELO, we had cost of sales of $0.2 million for the first quarter of 2017, which included finite-lived intangible asset amortization. We began capitalizing inventory during the first quarter as we expected to recover related costs through the commercialization of the product. The pre-commercialization inventory of XERMELO is expected to be sold over approximately the next two years. As a result, cost of sales of XERMELO for the next few years will reflect the lower average per unit cost of materials than would otherwise be expected. During the three months ended March 31, 2017, intangible assets relating to XERMELO of $24.7 million were reclassified from indefinite-lived to finite-lived assets following FDA approval and we started to amortizing this asset using the straight line method over its estimated useful life. So in addition to the cost of materials, cost of sales for the three months ended March 31, 2017 included about $100,000 of amortization of this intangible asset. Research and development expenses for the first quarter of 2017 totaled $43.60 million, up 18% from $37 million in the prior year period primarily due to increases in external clinical development cost related to sotagliflozin. In connection with our acquisition of Symphony Icon, we made an initial estimate of the fair value of our liability for the associated base and contingent payments. Changes in this liability based on the development of the programs and the time until those payments are expected to be made are recorded in our consolidated statements of operations. For the three months ended March 31, 2017 and 2016, the fair value of Symphony Icon purchase liability increased by $2.1 million and $1 million respectively. During the first quarter of 2017, we made the final payment in cash and common stock related to the Symphony Icon purchase liability. Selling, general and administrative expenses for the first quarter of 2017 were $14.9 million, which represented a 77% increase from $8.4 million in the prior year period due primarily to increased costs associated with the commercial launch of XERMELO. Income tax benefit for the three months ended March 31, 2017 was $8.7 million. Our valuation allowance of our deferred tax assets decreased by $8.7 million due to the reclassification of intangible assets relating to XERMELO from indefinite-lived to finite-lived assets. This resulted in the related deferred tax liability now being considered a source of taxable income. We recorded an $8.7 million deferred tax benefit with a corresponding reduction in our deferred tax liability in the first quarter of 2017 as a result of this reclassification. Net loss for the first quarter of 2017 was $34.9 million or $0.33 per share compared to a net loss of $34.9 million or $0.34 per share in the prior year period. For the three months ended March 31, 2017 and 2016, our net loss included non-cash stock based compensation expense of $2.2 million and $1.8 million respectively. As of March 31, 2017, we had $259.7 million in cash and investments compared to $346.5 million as of December 31, 2016. Cash used included a final $10.5 million cash payment to Symphony Icon and significant funding for the sotagliflozin Phase III program and type 1 diabetes, which we expect will decrease as the year progresses. Most notably we foresee that our current cash position together with expected revenues will be sufficient to fund operations at least through 2018. On our previous earnings call, we provided 2017 financial guidance. Today, we are reiterating that guidance on all line items. We continue to expect contractual revenues from existing collaboration and license agreements in 2017 to be in the range of $65 million to $75 million. And due to the early nature of our XERMELO launch, our revenue guidance excludes revenues from sales of XERMELO. That said we expect XERMELO’s sales to ramp up over the course of the year and as you would probably expect given the timing of the launch sales will be weighted towards the second half of the year. Turning to our operating expenses, we continue to expect that they will be in the range of $230 million to $260 million. Non-cash expenses are expected to be approximately $12 million of which $8 million is stock-based compensation, $2 million is the increase in fair value of Symphony Icon purchase liability recorded in the first quarter and $2 million is depreciation and amortization. We are reiterating our guidance for R&D expenses of $160 million to $180 million and SG&A expenses of $70 million to $80 million. Lastly, we continue to expect our 2017 net cash used in operations to be in the range of $210 million to $225 million. I will now turn the call back to Lonnel.
- Lonnel Coats:
- Thank you, Jeff. 2017 has the potential to be a game changer and changing the year for Lexicon with several defining moments. We will continue to execute on our launch plan for XERMELO driving uptake momentum, optimizing and maximizing field activities, increasing awareness of the disease and the drugs differentiated profile and continuing the strong relationships we have with all of our stakeholders, patients, physicians, key advocacy groups and payers. Another key priority that we believe will drive our long-term value is advancement of our pipeline. As you can see on Slide 18, we have multiple near-term clinical readouts for sotagliflozin starting from May through third quarter of this year along with advancement of our earlier stage drug candidates later this year and as always, we will keep you apprised on the progress throughout the year. At this time, I will stop here and ask the operator to begin the Q&A session.
- Operator:
- [Operator Instructions] And your first question comes from Yigal Nochomovitz from Citigroup. Yigal Nochomovitz Hi, guys. Thanks for taking the questions. Congrats on the early start of the launch. I just had a few basic questions on the launch. Could you talk about how much of the 700 million was stocking? Could you talk about the number of prescriptions and the net price whether these are 30 or 90 day scripts and what your plans are for unblocking the data to IMS? Thanks. Lonnel Coats So, Yigal, thank you for the question. First as we saw everybody understands and no for the first year we will not make scripts available to IMS for many reasons, but nonetheless I would turn the first part of the question over to Jeff relative to the stock. Jeff Wade So, Yigal, as you may recall we have two specially pharmacies that are distributing this product and they are keeping a relatively small amount of inventory on hand only between two and three weeks of inventory. So in general that well there is some inventory at the SPs that is incorporated within that number, it's mostly related. Lonnel Coats And your question around scripts, the scripts are for 28 days. Yigal Nochomovitz Okay. And then can you comment on the net price or realized price? Jeff Wade So I think as we've said previously, we expect eventually to get down to gross to net that’s in the 10% to 15% range. It will be higher this year and it has been higher so far this year, but we were not getting into these scales beyond that. Yigal Nochomovitz Okay, gotcha. And then I think you mentioned that there were 30 players that were reimbursing. So just to clarify Express, you said it put XERMELO on the formulary in these other one CVS, Caremark, Optum, United, Humana. Are those also on the formulary? Are they just reimbursing them in the interim and then will eventually get on the formulary? Just can you clarify that? Lonnel Coats Alex? Alex Santini Yes I’ll take that. So Express Scripts has placed this on their national list as a preferred branded product so that's quite an accomplishment [indiscernible] 77 million lives. With regard to the other 13 major payors, there's many more than just these 13, but these are the top 13. What we've shown is that they are all adjudicating claims for XERMELO. So XERMELO is being paid for by all of the major payors. We do have a handful of other payors that have enacted policies for XERMELO and have it on their formulary, but as we have reported earlier the majority of these payors will go through their normal review and will start to see those cycles and those approvals now coming through. So we're very, very pleased with where we are from a payor’s standpoint. Yigal Nochomovitz Okay great. And just one question on diabetes for Pablo. Are you planning in addition to the primary endpoint on the composite responder analysis, are we going to see the rates of hypos and DKA separately broken out when you report the topline? Pablo Lapuerta The answer is yes. We’ll provide the safety information consistent with inTandem1 and inTandem2 we provided those numbers for those of studies. Yigal Nochomovitz Okay great. And do you expect given you're not doing the optimized insulin run in what is your expectation for of the placebo rate of events totally with DKA? Pablo Lapuerta The placebo rate of events maybe higher in the 312 or DKA than in 309, 310 because very aggressive treatment with insulin will increase severe hypoglycemia while decreasing DKA. It's one of the reasons we have this end point. That balance is the effects of having too much insulin, too much to little insulin and A1C controller. We think it's an important way to develop our vision for the net benefit of the drug. Yigal Nochomovitz Okay, thank you.
- Operator:
- And your next question comes from Alan Carr from Needham. Alan Carr Hi, thanks for taking my questions. I wonder if you could talk a bit more about the prescribers here. You mentioned that some of the top centers that we’re doing it but some of the others in the lower deciles were too if you could talk about a bit more about that? And then also the latest on your plan discussions with the FDA around submission and that sort of thing for sotagliflozin? Thanks. Pablo Lapuerta Thank you Alan for the question. Let me start with the second question first. We have requested a meeting with the agency that meeting has been granted, that will be as we said – that meeting will be toward the end of the second quarter. We have every intent to provide the FDA with the data that we have and we have every intent to come out of that meeting moving forward with following as is our intent. As for your first question, I'll turn that one back over to Alex. Alex Santini So with regard to our top tier clinicians as well as our lower decile docs we're very, very pleased to see that we have scripts coming through from both our top, middle and lower tier decile clinicians. And the lower decile clinicians many of them may write one or two scripts in the course of a year and we're activating quite a few of those as early adapters, and we're doing that with both personal and non-personal promotion. So again I think we're very, very pleased with the number of scripts that are coming through on our low decile clinicians. Pablo Lapuerta Can you talk a bit more about the prescriber base and that sort of thing its scale and how you are targeting them? Alex Santini Well we have here on Slide 6, there’s approximately 3,000 clinicians that are in our in our sweet spot and we are focused and targeting those clinicians right out of the gate. Of those there's 270 that we would define as our key influencers in the marketplace, the movers and shakers, the folks that really are the leaders in carcinoid disease in carcinoid syndrome. And you can see here on the slide 90% of those clinicians have been detailed and a third of the enrolments that we have received thus far are coming from those top prescribers So again we're very, very pleased that many of those have become early adapters and have written scripts already. Alan Carr Okay. And then just the last one for Jeff you all are responsible for sharing some of the R&D costs with Sanofi around that the Type two program. Can you give us a sense of where you stand on that in terms of the burn through the amount that was shared between the two. Alex Santini Sure we have an aggregate what we're sharing a proportion of the cost of the development program in Type 2 diabetes up to a maximum of $100 million in aggregate. And we incurred a fair amount of that cost last year, the bulk of the cost will be this year and then we have the remainder that we expect next year. So this year is the heaviest proportion of our costs in terms of our contribution that's included in all of our expense numbers we've incurred meaningful expenses in the first quarter and we will be incurring those expenses over the course of this year. By the end of this year there will be a relatively limited portion of that $100 million left to be incurred. Alan Carr Great. Thanks very much and congratulations on the launch. Alex Santini Thank you.
- Operator:
- Your next question comes from Chris Shibutani from Cowen. Chris Shibutani Yes, thanks very much. Just trying to make sure I understand on inTandem3 the population and key criteria for the study. This was a global study can you give us the rough breakdown what the U.S. versus OUS is as well? And then as far as efficacy and points you have discussed in the past the notion of time and range. Today you highlighted some blood pressure data that we should anticipate when can we learn more about time and ranges component helping us understand the profile? Thank you. Lonnel Coats So Chris I'll speak to time and range. We’re going to do – the time and range data will be –it will be pooled analysis that would – we would disclose, I believe the later part – the early part of the summer, I believe is our timeline. Pablo Lapuerta In the third quarter in connect with inTandem2 study. Lonnel Coats We’ll be in connection with inTandems so that will pooled analysis and we will present that at that time because we think that analysis that data is extremely important and therefore we will extract it out that way. Relative to the other two questions I’ll turn it back over to Dr. Lapuerta. Pablo Lapuerta I don't have a exact or proportion of U.S. to ex-U.S. sites, but I would say the majority are ex-U.S. We’re recruiting in Western Europe, Eastern Europe and Latin America in addition to U.S. Lonnel Coats And it was there another part of the question that you wanted? Chris Shibutani Blood pressure. Lonnel Coats So what about the blood pressure did you wanted me to answer? Chris Shibutani I think you provide us a sense when I just wanted to confirm when the timing of what we'll learn. Lonnel Coats Yet so we’ll learn about blood pressure data from inTandem1 in the month of May. Chris Shibutani Okay great. And then to quickly follow-up U.S. regulatory update is appreciated I believe Europe you had talked about 2018, as well as should we be thinking about similar part of 2018 similar part of 2018 for that? Lonnel Coats Yes, yes, sort of Chris we're always trying to move as fast as we can, but we expect to be able to fall both in U.S. and Europe by the first quarter of 2018. One may come before the other if we can move even faster, but right now our plan is to file them in the first quarter of next year. Chris Shibutani Great. And progress for Europe is for XERMELO as well? Lonnel Coats XERMELO I moving pretty well in Europe with our partner Ipsen. I will try not to give too much insight other than what they give. But we have every expectation to have an approval in Europe later this year and be in markets soon thereafter.
- Operator:
- Thank you. Your next question comes from Liana Moussatos if Wedbush Securities. Liana Moussatos Congratulations on your great progress. My questions have been answered. Thank you. Lonnel Coats Thank you Liana.
- Operator:
- [Operator Instructions] And your next question comes from Jessica Fye of JP Morgan. Jessica Fye Hi guys thanks for taking my question. On XERMELO was there any revenue from the first quarter that was deferred revenue not yet recognized in 1Q. And then also just another one on numbers, can you remind me what is or is not on your guidance related to any milestone sort of your approval and/or first EU sale. And then just follow-up on Chris's question earlier, is the reason that you're giving us the pooled CGM data in 3Q as opposed to sooner because there just aren't that many patients with CGM data on each study so you want to pool it? And then the May update that we're getting for inTandem1 is at a medical meeting? And if it is what is it and if not should we also expect any data at ADA? And that 3Q. timing for inTande2 in the pooled analysis does that mean [indiscernible]? Lonnel Coats Jessica you're always sharp. I would say that the pooled analysis you're correct, because we move very quickly with 309 and 310, these were sub-studies in both of those and we wrote fairly quickly. So what we decided to do was to pull analysis from both studies and then be able to present that later in the year. And as for the ADA, we do plan to have a presentation at ADA, but I'll turn it over Dr. Lapuerta to today answer all the rest your questions around ADA, what we're planning to do there, as well as your additional questions around the data. Pablo Lapuerta At ADA we’ve planned to have a flash with studies from our dose range – results from our dose ranging study, our Juvenile Diabetes Research Foundation, collaboration that’s for Study 204. And then in inTandem1 and inTandem2. We look forward to a good update at ADA with information on our program and Type 1 diabetes. As far as EASD, the EASD does not have late breaking clinical trials, and so having the data available this summer does not mean that will be presenting it at EASD. But important data would be made available in a very high-level summary form publicly anyway. Jessica Fye Okay, got it. Lonnel Coats As for your questions on the first quarter and for accounting I’ll turn it over to Jeff. Jeff Wade So Jessi, yes we do have deferred revenue in the first quarter. Less than $1 million in total. But we have some deferred revenue for from XERMELO in the first quarter we also are Expecting to have some milestone payments from Ipsen relating to approval during the course of 2017. So that is included with our collaboration and license agreement financial guidance. Jessica Fye Okay. And how much is it from Ipsen that’s included in the guidance? Jeff Wade I don’t think we’ve disclosed the exact amount of that. Jessica Fye Okay. And just a follow-up on an earlier question with respect to the 1,400 patient safety study, the geographic breakdown you said a majority are going to be ex-U.S. kind of what percentage ballpark, interesting about that is early to the kind of pumped usage in the U.S. versus outside of the U.S. Jeff Wade Yes no I don’t have an exact percentage for you in inTandem3. One thing to note is that we do expect generally less pump use than we had in inTandem1 because it’s being ex-U.S. But also we allow the patients on premixed insulins. So some patients still are receiving these mixtures of some of the 1730 [ph] and PH regular. And that also means that the pump use will be lower. Jessica Fye Okay, got it thank you. Lonnel Coats Thank you Jessica.
- Operator:
- [Operator Instructions] And your next question comes from Stephen Willey of Stifel. Stephen Willey Yes hi guys, thanks for taking the questions and congratulations on the progress. I’m just wondering if you would be willing to provide a little bit of color around the number of patients who are on an adjudicated XERMELO script I guess at the end of the quarter versus those that have been given the free two-week drug supply via the QuickStart program? Jeff Wade Great question Stephen. We’re not giving guidance around that yet, but I would say stay tuned as we get more time under our belt. But I will tell you the majority of the prescriptions are commercial prescriptions. Stephen Willey Okay. And then with respect to the end of 2Q meeting that you’ve been granted with FDA, is it fair to assume that you are going to have all the CGM and inTandem3 data available for that meeting with the agency? Jeff Wade No we would not have that data and time for that meeting, but we will have a complete assessment of all of our efficacy and our safety data on the two pivotal studies. Stephen Willey Okay, so I guess just given the importance of the CGM data both from a patient physician perspective, I guess why schedule the meeting ahead of having that data available to discuss with the agency? Lonnel Coats Well what we’ll be discussing with the agency as to primary end point, right. And that also could be important. And also making sure with the agency is there any else we will need to get ready for our filing. That’s the primary nature of that meeting. We’ll have many other opportunities to engage the agency particularly as we have our Phase 3, end of Phase 3 meeting with them, which will be different from what we’re having right now. And we will have other opportunities beyond that to engage with them. But right now it’s really to lay out the case and make sure we have everything likely unloaded to prepare for our filing. Because from the time we have that meeting until the first quarter is very little time to get ready to file. So we want to make sure we have everything lined up before them. Stephen Willey Understood. And then just lastly, I think there’s been a competitive dual inhibitor announced by a big pharma and I think they are kind of advertising it as part of their NASH portfolio and I think maybe you are looking at it as a weight loss drug. So just curious if there’s kind of any additional freedom to operate on the Sanofi side under the sotagliflozin collaboration outside of diabetes. Thanks. Lonnel Coats I’ll just say imitation is the greatest form of flattering. But no – we continue to do work to figure out what additional things we want to do. Right now our focus in alliance is getting our Phase III programs fully up and loaded for type 2 diabetes. And getting right at the fall in Europe and U.S. for Type 1. We always will have life cycle management discussions and we think we have appropriate opportunities to do that beyond work we’re doing right now as priorities. Stephen Willey All right thanks for taking my questions. Lonnel Coats You’re very welcome. Operator And we currently have no further questions in queue at this time.
- Lonnel Coats:
- Well with that I’ll just close it up by saying that I’m very proud of our team, pleased with our readiness and execution. Just totally excited to provide a much needed new first-in-line, first class, I should say first class therapy for carcinoid syndrome diarrhea patients. We look forward to keeping you informed as we have make progress and have new developments. In the mean time we will be participating in the Bank of America Merrill Lynch Health Care Conference in Las Vegas, May 18. Hope to see many of you there. And we’ll engage more at that time. With that I’ll say thank you and have a good evening.
- Operator:
- Ladies and gentlemen this does conclude today’s conference call. You may now disconnect.
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