Earnings Call: H2 2020

Feb 4, 2021

Dear, ladies and gentlemen, welcome to the Eudorsia Conference Call. At our customers' request, this conference will be recorded. As a reminder, all participants will be in a listen only mode. May I now hand you over to Andrew Rice, who will lead you through this conference. Please go ahead. Good morning, good afternoon, everyone, and welcome to today's conference callwebcast. My name is Andrew Weiss. I'm the Head of Investor Relations and Corporate Communications here at Hydrosion. We are here to discuss our full year 2020 results performance as well as give you an outlook on 2021. With me on the call are our CEO, Jean Paul Fazel and our CFO, Andre Muller. They'll be presenting in the first part of this session. For the Q and A, we will also have our Chief Commercial Officer, Simon Jones join us. So let's dive right in. Next slide. As customary, I need to remind everybody that we will be making forward looking statements. We have therefore been adequately warned about the risks and benefits of investing in Eydorsia. Next slide. We're now on Slide 3. Jean Paul, the floor is all yours. Thank you, Andrew. So good morning and good afternoon to everyone. 2020 has been a very bizarre and quite a dangerous one if we think about this terrible epidemic. But despite this very difficult and tough conditions, Agrosia has done extremely well, and I have to say, Much better than many would have expected than that personally I would have expected. It's very rare, as you will see, to have met nearly all our goals and fulfill All what we were expecting for 2020. So next slide. Just Let's have a look at the highlights. Clearly, in 2020, we have announced positive pivotal results For daridorexant in insomnia. And we have been able, at the beginning of this year, to file This NDA, which has been submitted to the FDA. We have been able in 2020 to obtain very positive results For the 2 registration studies, which are Required for the clozozantin approval in Japan. What we have done also in 2020 is to strengthen our liquidity, and we have been able to raise 865,000,000. What we have also done in 20 20 was to establish our U. S. Commercial operations under the leadership of Simon Jones. And also, just we happen to know, very recently, we have won the case Against the previous Axovant shareholders who were requesting The payment of the milestones after the G and G acquisitions. Next slide. What makes really the engine of any biotech company is, of course, the pipeline. And This slide summarize our pipeline, which is comprising 12 products Without mentioning the T channel calcium blocker, which is now Been licensed which has been licensed to Neurocrine and which is in Phase II of clinical development for rare form of epilepsy. But as you can see, our pipeline from daridorexant already submitted to 4 And 3 additional Phase III programs. And clearly, now with selatogrel, which is very soon Which is going to start the Phase III very soon. And of course, scenario mode where we are waiting the results before starting the final pivotal trial. You see that this pipeline is very rich, is also not only Having late phase product, but also Phase II products and early project, and we have been able to start New clinical developments of some very new innovative drugs. But we will today focus On the later phase program, which are going to bring new products to the market within the next The 3 years for Agostia. Next slide. So daridorexant for insomnia. Daridorexant is quite a unique product Because as anorexin receptor antagonist with short half life, we have been able to show That this drug could improve the sleep, but also could improve data and functioning. And this improvement of data and functioning Has been measured using a validated instrument developed in collaboration with the FDA. So as I mentioned, the NDA has been submitted in January of this year, and we are going very soon in the coming months To submit the market authorization for the AU, And we are planning to be able to launch daridorexant in the U. S. In Q2 of 2022 and hopefully in Europe for the end of 2022. Next slide. So clazodentan has done also extremely well. As you know, this on the tailing receptor antagonist, it's a selective ETA receptor antagonist, As been able to show in the 2 pivotal study, pivotal trial study in Japan, has been able to show That it could prevent the cerebral ischemia Sorry, it could prevent the vasospasm and its clinical consequences following cerebral ischemia post Subactinoidal hemorrhage. So the 2 studies, one was in patients treated with surgery or clipping and one With patient with coiling, so without surgery, both studies showed nearly the same very strong effect And the prevention of not only the vasospasm, but its clinical consequences. So the we are planning in the coming months to file classes and 10 in Japan. And we are also pursuing in Europe and in U. S. Another study, Which will be required for the filing in U. S. And in Europe. This study is called REACT, And we are halfway through the recruitment. This study is the one from all our program, which is suffering most Of this COVID crisis because all the patients are treated within intensive care and a lot of Intensive Care units are extremely busy with the COVID crisis and situation. But we hope To be able to finish, maybe this year or first half of next year, finish the recruitment within React. Next slide. So Lucerastat. Lucerastat is An oral drug, which is distributing extremely well within the whole body, it can penetrate the tissue, and it can Particularly, penetrate the TNS, central nervous system, and prevent the buildup of lipids within this central nervous system. And as you know, within Fabry, There is an accumulation of some of these lipids, and this accumulation within the nerves, In particular, it's producing neuropathic pain. A lot of also consequences of the Fabry disease is the accumulation of this lipid within the heart, within the kidney, within the gastrointestinal systems. So by having a drug which distributes everywhere in the body, we think we have a drug which are going which is going to have a major Clinical effect on the disease and on its symptoms. And the main symptoms, which is the primary endpoint of the study, Which is now going on and where we have finished the recruitment and we have the results in the second half of this year, This study called MODIFIED is evaluating neuropathic pain with a patient's reported outcome evaluating the complaints about the pain from the patients. Next slide. So aprocitetentan is an oral oncetaline receptor antagonist, And we are evaluating its effects in patients which are non responsive To the most of the generic anti patentive drugs. So the patients Who cannot be controlled with existing anti patent safe drugs are Included in the study called PRECISION. And once we have shown that these patients are true resistant Hypotensive patients, we are testing on them apocitantan at 2 doses, And we are also evaluating the long term effect on blood pressure of apacitantan during 8 months chronic treatment. At the end of this end month, we are doing a randomized withdrawal to be able to show that the drug is still very effective after 9 months of treatment. So the study is going extremely well. We are finishing the screening and the inclusion in the Of the patients will be done in the coming months and the results are expected in the first half of twenty twenty two. We already had, I think, 5 review of the safety committee. So the safety, which is very important This very severe patient is extremely seems to be posing no problems, and we are very optimistic that This drug is going to fulfill a very high medical need. As you know, a lot of patients because of diabetes, Because of genetic background, because of obesity In the U. S, there is an increasing number of patients which are not controlled for their blood pressure, and the new drug Effective in these patients is going to be very important. As you know, Janssen will have the rights, Commercial rights about this drug, and we will get royalties. Next slide. Selatograde. Selatograde is also, I would think, a revolution in cardiology because It's a self injected device, where you can the patient in case Of a recurring myocardial infection. So these are patients who already got a myocardial infection. And once they have another pain And therefore, they are at risk of a second myocardial infection. They can inject themselves With the selatogrel and then be protected for 4 hours, which gives them the time to call an ambulance And to go to the hospital where they will be treated, the drug is not long active. So once they are within the hospital, Every intervention, every treatment can be done without the risk of an interaction with the Celatogram. I think it's very important and we have seen that in the time of COVID, for example, ambulances delay It's a huge problem. In New York, patients have to wait sometimes 3, 4 hours to get an ambulance to be hospitalized And such a drug will be extremely useful and will be extremely useful. The clinical program Phase III is going to be initiated Within, I would say, the first patient of this program are going to be treated is the second half of this year, But we are already contacting the centers and preparing for this Phase 3 program, which has an SPA, which means that we have agreed with the FDA of the program and its endpoints. Next slide. Seneremod. So Seneremod is the 3rd generation sphingosine 1 phosphate receptor modulator. This drug has been selected not only because of the selectivity, its potency, Because of a very specific interaction with the S1P1 receptor, which leads to really a Very good safety profile. And I think that with this drug scenario mode, we'll be able to show That we are avoiding some side effects of the 1st generation or 2nd generation S1P1 receptor. It received a fast track designation from the FDA. And the study the first pivotal study CallCare, which is also a dose response, but which has a clinical endpoint And therefore, can be used if it's positive as a pivotal trial. This CARE study We'll have his recruitment completed by the end of February, and we will get this We get the results before the end of the year of 2021, and we are planning To have basically a discussion before the end of the year with the FDA in order to start in 2022 The second pivotal trial. Next slide. So as you see, we are at an inflection point. Aydorsia is really because of this fantastic 2020 year, We are in a very good situation. We are going to see many, many important milestones crucial for the company. In 2021, You have seen that we have filed daridorexant in FDA soon with the EMEA. Clazosantan will be filed also soon in Japan. Selatoguel Phase III will be initiated. Lucerastat results Phase III results, final Phase III results We'll be available second half of this year and Cenarimod also Cenarimod results we know will be available before the end of 2021. But not only but also in 2022, We are going to have crucial results, crucial milestone, hopefully with the approval And the launch of daridorexant, of course, in the U. S, but also with the results of afrocitantan, Also, the launch of clazosentan in Japan and the results of clazosentan In the sorry, in Krasusenthan in Japan, the launch in Japan. Sorry. Andrew, I don't see the slide anymore. Yes. I seem to have a network problem. I don't have the slides up on the screen anymore. Okay. So I just can't go to Slide 13, but it doesn't really I don't know It's the building of the commercial organization. Yes, it's a building. But do people see I don't know if the people now No, see it. They will see good. So just what is also important is the buildup of the commercial organization. Simon Joss, within 2020, has been able to gather a team of very experienced people And also, not only in the central position In Asheville, in Switzerland, but also, we have the team complete the U. S. Team complete to be ready To launch in 2022, daridorexant and with Patito as the President of U. S, we have the complete team Now and most of the pre launch and the preparation of the launch operations is ongoing now in the U. S. We have been also within 2020 to engage with key partners such as Syneos for The medical representative, Omnicom for the branding, advertising And rather than also for the public of the PR activities. So what's finally, next slide. What is, of course, has been extremely important Is the raising of cash, and you will hear what is our financial situation And also, how our financial means have been evolving in 2020. So Andre, please, can you that's your turn. Yes. Thank you, Jean Paul, and good afternoon or Good morning to everyone. Thank you for your continuous support. Maybe before jumping to This slide giving you some color on the full year numbers published this morning. I would say that 2020 numbers were globally in line, Even if slightly below our guidance updated last October. So I would say the full year 2020 was almost Uneventful until the 1st February and the adjustment of the arbitral tribunal regarding the acts of an litigation. And I'll call it intuition or precaution. I ask my team to draft 3 versions of financial statements. First one, if no final award would have been granted before publication. 2nd, worst case scenario, Where the claim would have been granted to the claimant. And the third one, which is published this morning, the scenarios that eventually materialized where the claim was dismissed. So now we can move to Slide 15, U. S. GAAP net results. As usual, we start with this waterfall showing how U. S. Net results came about. First, on your left hand side, you see EUR 72,000,000 revenue. This includes mainly The license and R and D collaboration we entered into with Neurcreens for the calcium T channel blocker, So EUR 50,000,000. We had also EUR 11,000,000 deferred revenue from the collaboration with Janssen Janssen, regarding Aprocitrantan. And the remaining EUR 11,000,000 was Roche, €6,000,000 with your research collaboration, Mosheeda with Zalido XANT in Japan And some Phera, €2,000,000 for the assignment of the option to license Vamorolon. Then you see and we'll come back to the EUR 444,000,000 non GAAP operating Expenses leading to a non GAAP operating results of minus EUR 372,000,000 with D and A of EUR 19,000,000, stock based compensation of EUR 19,000,000. The U. S. GAAP operating results amounted to EUR 411,000,000. There is a quite unusual amount below EBIT of EUR 30 €5,000,000 which led to the €445,000,000 GAAP net result. The reason for this €35,000,000 It's mainly due to the financial results with U. S. GAAP of net Financial loss of €39,000,000 and non financial non GAAP financial expense of €18,000,000 So the €18,000,000 were mainly relating to the foreign exchange loss that we have on our U. S. The deposits and the reconciliation between non GAAP and U. S. GAAP Relating to the accretion expense on the H and J convertible bonds, EUR 8,000,000 And a relatively significant amount, EUR 30,000,000 On the loss of the mark to market on the 1,700,000 shares of Centerra That we hold. Of course, we did not pay for these shares. We get them From the different deals that we entered into with Santerra and some most Some of the shares or most of the shares are blocked until the results of Vamorolon. But of course, in U. S. GAAP, You value these shares at the market price. So now we can move to Slide 16, non GAAP operating expenses. The non GAAP R and D expenses amounted to EUR 355,000,000 compared to EUR 412,000,000 in 2019, so a significant decrease in R and D. Here, you can see how these R and D expenses Broke down. Research, slightly below at 107,000,000 With biology, chemistry, pharmacology and preclinical activities, you see a development If you exclude the €9,000,000 and the inventory builds that are also included In R and D, but development was really impacted by COVID-nineteen And the delay in some of the clinical trials, and you see that we went We had EUR 212,000,000 compared to almost EUR 300,000,000 in the previous year. The EUR 9,000,000 So you may recall that we acquired some of the Axovant claims from non claimants Less than 1 third of their face value in June 2020, so €9,000,000 And we started to build in drug substance and drug products. We started to build inventory In preparation of the launch that is expected in 2022. And as you know, as long as the drug is not approved, You can't book it as an inventory, so it hits your P and L in the R and D line. And this was €26,000,000 For the SG and A, as anticipated, we had an increase Out of the €90,000,000 you see here, you have 63,000,000 in G and A and 27,000,000 in selling. So 444,000,000 Less than the previous year, EUR 470,000,000 less than what we expected. Even if we move to the next slide, which is Slide 17, You see on a quarterly basis that we spent much more in Q4 with EUR 140 2,000,000. And you really see the impact of COVID in Q2 because if you exclude the 9,000,000 milestone In Q2, you see that we spent as less, I would Save and EUR77 million. So a catch up in Q4 as we expected, which also gives you a clear fit on what will happen and will even increase in 2021, but we'll come back to see guidance a little later. So if we move now to Slide 18, The cash flow. We started we entered the year 20 20 with €739,000,000 liquidity. As we discussed, we spent 444,000,000 non GAAP operating expenses. We cashed in Milestone, €61,000,000 So that's the cash part of the milestone, not all recognized in the P and L, But in the year 61, you have, of course, the CHF 50,000,000 of Neurocrine. You had CHF 9,000,000 equivalent CHF With Mosheeda, and you had also €2,000,000 from Roche in connection, and we see a research collaboration. Limited CapEx, €9,000,000 other means working capital requirements increasing by Diminishing by €10,000,000 And as Jean Paul already alluded, €8 43,000,000 cash raise, the net amount of the 2 equity raise made in 2020. So we end up with a really round number, easy to recall, €1,200,000,000 liquidity. And the next slide, so Slide 19 This is a breakdown of this liquidity. On the left hand side, you can see the cash deposit That's aimed to decrease the negative yield on Swiss deposits and also benefit from the U. S. Yield curve On our U. S. Deposits, right side, you see in terms of the breakdown between the main currencies, Mainly CHF 927,000,000 and CHF 268 1,000,000 Which are aimed to cover our foreseeable expenses, which are denominated in U. S. Dollar. Of course, with U. S. Organization, as it will grow In order to properly prepare for the launch of daridorexant, but also for Expenses in U. S. Denominated in U. S. Dollars and namely and primarily for clinical trends. Now we can move to Slide 20 and the guidance. Before going into your numbers, I must say, I'm really happy to mention that the guidance excludes, as usual, the unforeseen events. But I'm more than happy that we could remove the language around any potential payments in connection with the Axovant arbitration. This is behind us, as you as we already mentioned, because the final award From the arbitral tribunal, we moved a serious domiclaces ward above our head. The claim alleging a change of control with the acquisition of Actelior by J and J and the concurrent demerger of Hydorsia from Actelior That would have led to an immediate payment of outstanding milestone for clazosantan, This claim was dismissed. So the total amount would have been quite substantial, close to €100,000,000 If you include also the late payment statutory interest on the late payment. And frankly, this EUR 100,000,000 Will be better used to fund 2021. So you see the non GAAP OpEx Of EUR 640,000,000, I will start with the easiest one, EUR 5,000,000 milestone Because of the very positive results of clavrozentan in Japan, We will file in the dossier with the relevant authorities in Japan. And to this extent, we'll pay this €5,000,000 Milestone to Roche. We will continue to build an inventory, but as long as the drug is not approved, It's the P and L for around €35,000,000 Mainly with daridorexant, but also for clazosantan in Japan, And which means that we will have around 600 functional operating expenses, of which €370,000,000 with R and D expenses. So we will Actually, on R and D, spend a little more than what we spent in 2020. The reason for it is not so much on the fixed cost base. Even with this broad portfolio, We will need to increase our headcount in R and D and in clinical, pharmaceutical, mainly Pharmacovigilance, drug safety, but more importantly, we will also increase The cost for study costs. In late stage, the line share is, of course, for the late stage. Here, daridorexant will go down. We because of some delay with the REACT trial We search as Ozentan and also Lucerne that even if the enrollment is now well on track, as Jean Paul mentioned, We will more or less spend what we had in 2020. Our profit and ton is more or less the same, But the main driver for the increase will be selatogrel, which is integrated drug device Developing with Antares in the U. S. And a scenario note Where we should get the results of the Phase 2b by the end of this year 2021. And of course, as you've seen, we have a richer pipeline with Phase I and Phase II assets. That's the advantage also For having a very productive drug discovery engine, and we also plan to spend a little more on Phase 1 and Phase 2 Phase 2 assets and among others, the single rector antagonist that we want to investigate in binge eating disorders. So that's the reason for increase Of R and D expenses. And of course, the most significant increase It's in SG and A. And for this, of course, it's all about In preparation for the launch of daridorexan in the U. S. And tazuzentan in Japan, There's a significant amount, around €90,000,000 really only product related External spend, and as you can imagine, mainly with Dalidorexant. The rest is, of course, to gear up The commercial organization is marketing, selling, access, medical affairs, supply chain, and G and A will increase Both in the affiliates with the support functions, but also at headquarter, notably With IT assistance because we need to be ready for launching these headlines. So this gives you the reason for the €640,000,000 non GAAP operating expenses. On top, we plan for roughly €20,000,000 D and A, slightly higher stock based compensation with €25,000,000 Those of the larger organization, not only in Switzerland, but mainly in the U. S. And in Japan. So U. S. GAAP OpEx should be around EUR 685,000,000 Let's move now to the next slide, so which is Slide 20 2021, sorry. We do not guide on revenues. I say, it depends primarily on existing collaboration, Let's decide the new ones, I mean, the out licensing deals that by estimates are not predictable. Looking ahead to 2021, we could have various sources of revenue. With Mosheeda, next milestone is the 1st patient enrolled in the Japanese Phase III trial With Roche regarding the R and D collaboration, which was actually extended until end of 2021, With VUMPERA, depending on the clinical results of VUMORLON in DMD, which are expected by the end of H1 2022. And of course, Panethimod. As you know, Panethimod It was developed by the Acadian teams almost to the end and taken over by the Janssen team. And now, of course, Belongs to J and J according to the demerger. But with the NDA and MAA submitted in the U. S. And in the U. S. And in Europe by Janssen in March 2022, we can reasonably expect the PDUFA for podanzibar in MS This spring. And with this revenue sharing agreement in place, I. E, Granting us 8% of the annual net sales, this is very likely to become Eudor's first Recurring revenue stream. And which brings me to the next slide, Slide 2022, Which is actually my last slide. I don't care revenue model moving forward will be actually a dual. On the one side, you see it on the left hand side, we'll have revenues coming from net sales From our own products developed in house and that we will commercialize with our marketing and selling organization. And it means that our commercial organization will market GP products using when needed partners, e. G. Syneos in the U. S. Or Moschida in Japan, orphan drug products Like clazosantan and hopefully lucerastat and also specialty products like cenerimod and selatogel. So we will hopefully, in different ways, launch these products and get a very diverse source of revenues. Eudorzia is not a single asset company by far. And on the other side, and you have it on the right hand side, We count also on milestone and royalty stream coming from Parekhimod, we just alluded to it. Hopefully, also tiered royalty between 20% 35% on apositenta with J and J. And hopefully beginning of 2022, we'll get the results of the FK3. And regulatory and sales milestone As well as royalty on our T channel type calcium channel blocker from Neurklin if, of course, The studies are positive. So with this, I hand over I'll now hand over to Jean Paul. Jean Paul, floor is yours. So thank you. So As a summary, I just wanted to say that this and thank you, Andre, first. But clearly, the year 20 2020 has been key as prepared for a very exciting 2021. I know I am going to repeat, but First of all, this strong balance sheet is really helping us a lot because we have to do A lot in 2021. So not only we have filed and we should file daridorexant and clazosentan this year, but we are starting the Selatogrel Phase III, and we will wait For the result of Lucerastat and Cenerimod, and if these two drugs makes it, then basically, it would mean that we would have 6 Phase III assets within Hydrosia in 2021. So you see that This strong balance sheet was very important. We are in good shape, and I hope that now this presentation has given you A reason to believe even more in the future success of IGOR SIA. So with our prepared remarks and opens the door for the Q and A where Simon Jones is going to join us. Before I open the lines With the operator, I also want to remind that it's possible to reach me via email, andrew. Weisidorceda.com, if you prefer to Send your questions through like this. Operator, please open the lines. Ladies and gentlemen, we will now begin our question and answer And the first question is from James Gordon, JPMorgan. Your line is now open. Please go ahead. Hello. Thanks for taking the questions. James Gordon from JPMorgan. A couple of questions, please. What was just in the release this morning, there was a comment about Recruitment in the CARE study for senera and the MODIFY study for the sarostat, how it's been impacted by COVID, but then you've made some adjustments in consultation with health authorities So you adapted the enrollment. So the first question was, what were those changes? How have you changed the enrollment? The second question, your service that looks like A big readout for this year, Phase 3 data. I'm not aware that we've got data on this particular endpoint previously, the neuropathic pain primary. So just how are you thinking about the risk profile there and other, even if you haven't already got data on neuropathic pain, is there other things you've seen before that makes you encouraged? And then just the 3rd and final question to redirect that, I think we know where we are in terms of Western and Japan plan. But what about China? When does that get that Flushed out. And then what will you consider doing yourself in China versus letting a third party ever go? Okay. James, thank you for all those questions. I think the comment on the trial design and Lucerostat, the end point, Jean Paul, and then we can refer the diary to Simon. But maybe there is about the recruitment of also of scenario mode. This was another question. So I take that. Yes. So I think that first, for Lucerastat, we have finished the recruitment. We didn't change The number, in fact, because we had discussion with the FDA during the year To slightly modify the endpoint and in fact, to really be able To get a more precise evaluation of the pain, especially with time. So we We got an agreement with the FDA, and this would have allowed to, in fact, Increase the number of patients needed in Luceratat study, but we have been able in the last coming months To recruit a very big number, in fact, I think we are going to have more patients that what we anticipated. And therefore, we really have tried to optimize our chances And we will have with the pain for the pain, Piero, we'll have more patients than What we anticipated and now you asked me, of course, we don't know, we have never shown an effect on pain. What tells us what is giving us some optimism and of course, it's a blinded study. The fact is that I think nearly 100% of the patients who had been offered to go into The open label study have decided to go into the open label study, which shows that at least they are Patients like the drug at least, but also what has also give us some I think Some help with some anecdote from the first Phase 2 and some patients so Seem to have benefited, but of course, it was not it was it's just anecdotes. So really, For Lucerastat, I think we need to wait until the last moment to really know if this drug works on pain. So that's for scenario mode, we have decided and in fact, we will have enough patients To really not modify our program, we had just discussed with the FDA What they really needed to see. And in fact, the main change in the program of Senerebrod is the fact that after the 6 months, which is the primary endpoint, we are going to follow the patient for 1 year. And this is in the fast track situation. It is really to be able to have more patient long term Evaluation in order, in fact, to do a smaller phase, second Phase 3 and to be able to register with enough long term data So that the FDA agreed and we are continuing to treat the patients after having evaluated the primary endpoint for safety reasons. That's for scenario mode. And so we will get the results, And hopefully, it will be very interesting to see if we have a lupus drug. So for daridorexant In the yes, we are going to file in Europe and in the U. S. And in China, we have done the first evaluation and maybe Simon can Give his a little bit his opinion. Sure. Hi, James. Yes, we're looking at China very carefully actually. I think Clazo and Lucy, With the recent changes of the regulatory process and the potential to sort of file off the back of foreign approvals, is this something that We're looking at and certainly with clavasentan and subdirect with hemorrhage that is quite common as it is in Japan. So to read the Rexant, in some year, it looks to be a very, very big market in China. I think we're looking at like 140,000,000 people. And even if you simply look at the number of people that are in the outpatients in the large hospitals, there's 26,000,000, which is More than we've got in the U. S. So it's a big market. Benzodiazepines are the standard of care, so there's a big opportunity there. We haven't yet decided and The degree to which we'll go ourselves and use a partner, which is something that we're working through, but we are looking at China carefully and see a big opportunity there. Thank you all. Thank you, Simon. Operator, next question please. The next question is from Rajan Sharma, Deutsche Bank. Your line is now open. Please go ahead. Hi, thanks for the question. Firstly, just on selapsibirl, and I was wondering if You're able to kind of further disclose any detail on the design of the Phase 3. Just specifically, how you can ensure recruitment of the correct Patient population, given the strategy for administration, also how you can ensure correct use of the device. And then Secondly, just on daridorexant and if you could just expand on your pre launch strategy for that one And maybe any observations from the competitive DaVigo launch in the U. S. And any feedback on that launch that may inform your plans for TeriDarexant? Yes. So I think that I will take the clinical development of selatogrel and Simon, we have a great answer about DABE Go and the pre launch. So just for selategram, it's a very Question. In fact, you are hitting a very endpoint. We have an SPA. So the endpoint is really basically, I don't want to go in detail, but it's basically, do the patient how many patients who took our Drugs, selatlgrade compared to placebo, are dead, got a severe myocardial infection, a small myocardial infection or nothing So we looked at what are the consequences of this second pain and this second crisis. And of course, also we are looking at the long I would say long term, so semi long term after 1 month 3 months, that's So secondary endpoint, but can we prevent with selatogai, can we prevent the occurrence of heart failure? This would have a major, of course, impact, economical impact because, ancillary for the life of the patients. And if you could, by giving one drug in one day, prevent the long term consequences, that's a huge economical impact. So the question as you are asking is, how do we go for the right patients? The right patient is not difficult. Myocardial infarction, the diagnostic of myocardial infection today is quite simple. So they must have a myocardial infarction plus A second risk factor can be diabetes, it can be renal failure. All what is increasing markedly is a chances To get a sum of myocardial information, so we want to have a number of events sufficient to be able A little bit like you see with the vaccine to be able to take a conclusion. And of course, we will have many more events than what is done with the 2 day vaccine, But it's the same principle. I think we need about 500 events, and we count that maybe 2 third of the events will not be Because the patient diagnosed himself is pain, so and we know that maybe 2 Or maybe 3 times over 4, the pain will not be a myocardial infarction. But one over 4 times, it will be a myocardial infarction. So The patients are high risk patients. They need also to be able to remember that they have an injector, we're not going to treat patients with asthma unless, and this is also what is done, There is somebody next to this patient, somebody a caretaker, which can guarantee that in case of a Very secondary fraction, this patient can inject himself with the help of the caretaker. So there will be Within the study, a sort of test that before entering into the trial, every patient Should show that he can inject himself. It would be with a placebo, of course, but he will use the O2 injector, and he has to demonstrate that he can Really inject himself, he's not afraid of the pain and he doesn't have a psychological problem, which would prevent him to inject himself. So that's Way we guarantee that we are taking the right patient population. Maybe go to direct Yes, Simon? Yes, sure. Let me start with DaVigo. I think the DaVigo launch has been at least seen through our eyes disappointing. They've got in the 1st 6 months, 6,000 prescriptions. And if you compare that to suvorexant at the same time point, they had 28,000. The degree to which that is the profile of the product due to the long half life, whether it's launching in COVID All the priority is receiving in a portfolio company is hard to tell and obviously you would need to address that to Eastside, but I certainly think it's been a Disappointing launch. In terms of our own activity, we are now rapidly sort of building and moving forward with our preparations for launch. We will build and own what I would call the core commercial capabilities ourselves of pricing, access, marketing, Medical Affairs and Supply Chain, but obviously, as you know, we're partnering with Syneos to build the U. S. Sales force. So we'll control the strategic elements of that and we'll work with Syneos as a partner to get to their primary care market where there's about 60% Of the volume. We see this as a very strong consumer play. I mean, it's obviously a prescription product, needless to say. But nonetheless, we believe that Subating consumers and being very focused on consumer channels, digital channels is going to be very important for the launch, and we're very focused on that and building that as we speak. And finally, obviously, over the course of the next several months and during the course of the year, we'll be engaging with the medical community and critically with the payer organizations to make sure that we're prepared for the launch when we turn into that in Q2 of next year. Thank you, Simon. Thank you Raj for the question. Operator, next question please. The next question is from Gregg Stefanovich, Goldman Sachs. Your line is now open. Please go ahead. Great. Good morning, good afternoon, and thanks for taking my questions. I have 2, please. Perhaps the first, more strategic for JP. Jean Paul, when you look at the pipeline, it's quite diverse. And so from a strategic perspective, if you could help us Get a view as to how you're thinking about which assets that you're developing are perhaps more appropriate For eidorzea to commercialize on its own versus potentially out licensing opportunities or partnership opportunities? So that's my first question. And then my second question with key readouts in the second half of this year for Lucerastat and cinerimod, Could you give us a sense of what that threshold for success might look like in those trials? What would you consider to be a Successful outcome in terms of some of the metrics that we should be looking at? Thank you very much. Yes. So let's Discuss about the strategy. The strategy is very clear. We have an incredible drug with daridorexant. To have a drug which can make you sleep better, can you really improve your day performance? It's which drug improve Your day performance, everybody dreams of having the possibility to improve how you feel, how you what is your mood during the day, So we have an incredible drug. And this drug, by its own, with a 15 years I think, with a 15 years long patent life is sufficient to ensure a very big success for hydorsia, We should lead us to profitability alone with this drug. I think this is really justifying To set up the commercial organization, and we have decided to really not share, except it may be We do it in Japan, maybe in some countries, but in the main countries, we really we want to launch it and Keep the most of the value of this drug. So that's the key for Aydorsia. But on top of it, We have the chance to get hospitalized and orphan drug type of drugs, which are going to increase our margin And which are going to not once we have a commercial organization already in place, We are of course don't need to set up another organization. So all the revenues will come with increased market beer margin And not mentioning the addition as a 3rd wave of revenues of the milestones and the YLTs Of the of which we'll get from Aprosit and from also PONECI mode, of course. So you see, we have these 3 and in fact, the strategy is going to be simply, In fact, to reinvest the fantastic revenue, I think it's going to be massive. These revenues, we will have to have Other drugs to ensure the growth because we will be a very big revenue. And I can tell you, You will ask at one stage to say what's next after deridorexant. One day, people will ask what's next because it will be very big And this is should really ensure the growth of the company for the many years to come. So I think that's for the strategy. The other question was? The other question was what looks good For Yes, sorry. Sorry for And lucerastat. Thank you. Yes. Sorry, I think that for lucerastat, If we have a clinical effect, if we have a significant effect, that means I think that I don't know by heart, but we have Very meaningful this has been statistically calculated. We have a meaningful clinically meaningful Improvement of the PRO. The PRO was designed with the FDA. So it was approved with the FDA. The FDA worked with us To define inpatient with Fabry, which type of question we should ask about this And we have agreed of a level of improvement, of course, which would make sense. I cannot give you by heart because it's a scale. But if we have a significant if we have a statistically significant effect, it will be clinically relevant. Of course, all the secondary endpoints being effect on gastrointestinal syndromes, effect on the renal function, Effect on cardiac functions, all these elements are evaluated and the beauty, Of course, it's COVID has sometimes some advantages of the sale because we have been delayed by COVID for this study, But all the patients were continuously treated by Lucerastat. Therefore, we will have an incredible the biggest study ever In Fabry, with more than 100 patients, sometimes follow for 2 to 3 years. So it's going to be a mine, a gold mine, If the study is positive of long term evaluation, which has never been done, never been seen, And I think it's not tomorrow that you will see such a study. So this is why we are so excited to have finished the recruitment of more than 100 Patient with Fabry. For scenario mode, we are not only having we want to see It's not on the efficacy, it's the safety also, which is going to be very important. We think That we have a very effective drug, but we want to look at the safety and we want to really know what is the optimal dose. And that's going to be of you. I think that it's difficult to compare One study to the other. So I will not say that with our study, we are going to know if we have a better drug than Ben Laster, but we are going to get a really clear view if the drug is effective and safe. Thank you, Jean Paul. Thank you, Greg. I hope that answers your question. Operator, next question please. The next question is from Joel Wolfram, Credit Suisse. Your line is now open. Please go ahead. Sorry, we seem to have a glitch. Let's try again. All right. Please go ahead. I'd like to ask a little bit about the timing of how these expenses are coming in, particularly as we're moving into The extra expense on SG and A. So I wonder if you can just help us, as we go through this year and how we sort of exit the end of the year. And if you can also give us some idea if you've got any on the launch costs as we begin to model 2022. Clearly, the expenses that we need to model for 2021 are a little bit higher than people have been looking for. And I just wonder whether we should carry that on and really look for a stonking great launch cost just to make sure that DARAdexant gets a fantastic send off into the U. S? Yes, Andre, I think that one's for you. Yes. Thanks, Paul. It's a very good question, Nacho. The operating expenses, especially in SG and A, will increase over time over the next quarter. So that's very clear. So second half will be more heavy than first half. 2022, even for us, it's difficult to predict not so much the expenses That we could have in SG and A, at least in the U. S. And Japan for Sorry, Derek and then Klazo, but maybe in other countries, depending on the strategy in Europe, in China, As asked by James previously. But the point in 2022, yes, we can reasonably expect But the SG and A will go up, just also because we have the medical reps with our seniors in the U. S. But of course, what we need what we will also have It's growing revenues and starting with Dari Doris and then Claso Bentall. Here, we need We have more visibility also on C and A label, interacting much more with payers in order to better assess What could be the speed of uptake for the drugs and mainly daridorexant in the U. S. So You have to wait for 2022, but increase spend, but also increase the revenues. We're not launching a daridoxant for daridoxant not to be a blockbuster. And can I then just follow-up on Jaradexant, looking at the other similar new launches in that market, To what extent do you think that this is a market where you have to spend a lot of time giving away free product To start with, so that the GPs are happy with it, I know that the prescription numbers are light for some of these other products, but Is that because of very heavy sampling? Simon, I think that one's for you. Sure. Thanks, Joe. I think sampling will be important because one thing we know in this category is that the way that the patient responds is going to Critical for the long term success and growth of the product. So we do expect a sample. I don't think that we can At all, look at suvorexant or lenvorexant as benchmarks because they really the problem they had was that the products didn't deliver against the promise. So with suvarexant, actually, as I said earlier, 28,000 scripts in 6 months, they got off to a good start, but then it just went flat Because patients weren't getting the benefit of the product that they were expecting, principally because the FDA, when they got the approval, they had to go down to a dose That wasn't even studied in the Phase 3 program as their start dose, so which didn't differentiate from placebo in Phase 2. So patients were starting on a low dose Because of the AE profile at the higher doses and just didn't get the feeling. So we're absolutely clear that patients are going to need to have a good And we're very focused on both sampling, but also the way that we communicate expectations with patients that they experience Good first sort of few days and week of the redorexant. And in that context, the 50 milligram, we believe is also going to be critical to ensure that does happen. Thank you, Patrick. Thank you, Joe. Operator, do we still have questions left? Yes, we have one more question from Thibault Boutharat, Morgan Stanley, your line is now open. Please go ahead. Thank you for taking my questions. A couple. The first one on the launch of So, David O'Rourkeson in the U. S. Market, our conversations with field specialists in the U. S. Indicate that They were facing quite a lot of prior authorization barriers to prescriptions for the Dora class. So just if you could comment on that and how you expect to overcome this, in particular since you I think you said you are targeting marketing to primary care physicians. That's my first question. And second question, I mean, it's about Punezimod. I know you obviously out licensed the drug to G and G. But When I look at consensus expectation for the Bristol drug, for example, Zetosia, Ozanimod, I mean, I see consensus at $2,500,000,000 peak. It looks like there's at least $500,000,000 for MS. And it looks like expectations for the G and G drug, I mean, for Polisimod is not there. And when I look at Polisimod, obviously, I mean, you had good efficacy data against an active comparator. Safety profile looks good. So just if you could comment on what consensus is only thinking? Thank you very much. Thank you, Thibault. I think we'll kick it off with Simon on the launch of Darry and prior auth and step edits and Priority and payment, I guess, would be all in that same category of questions? Yes, certainly. So thanks for the question. I think what going back to suvorexant's profile, what's happened in the U. S. Is that when you launch a new primary care drug, it's very common as you well know that you have Step edits if you're launching into generic markets. It's very common that branded products are Tier 3 copay. And I think that in itself isn't Certainly a problem if the product delivers. We know that suvorexant has 90% access, but obviously there's 2 thirds of that go through a step edit. Patients and doctors will go through the step edit relatively easily because most of them have been cycling through benzos, Zs, and trazodone Over the last few years, so the step edit requirement can be met relatively easily. Then you come to Tier 3 co pay. And if you then go to a Tier 3 Co pay, you're asked to pay $30,000,000 $50 maybe. And that's okay if the product works. But if the product doesn't work, then the patient will walk away from it rather quickly. So we don't necessarily clearly, access in the U. S. In the generic market is something that we're very thoughtful about. But it's not solely an issue of access. It's actually about the profile of the product and whether it delivers. And we believe that step edit won't be a barrier. We also believe that if the product works as well as we expect and we've seen in our clinical program, then patients will pay $30, dollars 50 for a Tier 3 copay, and our research does support that. And just to go back on your very good question about Ponisimo, I think that what we have done and what we believe and with our clinical, Guy Broenstein, our Head of Clinical development, it's really and everybody believe that in Agrosia and in Actelion. What is very important is to show the benefit of any drug to the patient. And really, if they can show Subjective improvement, if the patient feels better, it's going to be very important. This has been our strategy for daridorexant. This has been the strategy also for ponezimod because not only we wanted to show with ponezimod that we have the same Relapse rate like other drugs or decrease of relapse rate like the other drug, but that we could Change the main symptoms of multiple sclerosis, which is fatigue, 50% or 60% Or maybe even more than 60% of the patients with MS suffer from fatigue. And we have been I think the result and it's public, Johnson and Johnson has been able to say that the study was polidimod was better than Aubagio on fatigue. So I think this is going to be very important, and I cannot speak about numbers, and this is questions to Johnson. But I think that In like we do for Lucerne Stad, like we do also for scenario mode, because I didn't mention, but we have a PRO For pain and fatigue into scenario mode, we want to show that the patient feels better. And I can tell you, If the patient sleep better, he's going to continue to take the drug. If he feels better, he's going to want to get Ponezimod, if he's less tired, he will like to stick with Ponezimod. And if he has less pain, We choose first line Lucerastat in Fabry disease. And I think that this is really in contrast With a lot of people like BMS, we have chosen as a comparator no, it was not BMS, but it was at this time receptors, but The comparator was a drug which is nearly not used anymore, which is interferon. It's very rarely used in MS. And they have choose a relapse as a rate as an endpoint, while we are really looking not only at the relapse, but how people feel and that can make a huge difference. Great job, Paul. Thank you very much. Thank you, Thibault. So before we close down the call, I actually did get one question coming in from an investor through the email Concerning strategic positioning of dairy directant going forward and other indications, Jean Paul, what do you think about how we're going to develop dairy directant In the future over time. Yes, I think the strategy of daridorexant was to get the umbrella of All type of insomnia in a way. So people were asking us why you don't go to insomnia into Depression, insomnia into neuropsychiatry or whatever. And of course, when you discuss with the FDA of such an approach, they will tell you what is different into insomnia of depression versus Other type of insomnia and show us then if you want to have an indication, you really have to show an effect on depression in addition that The effect of insomnia. So why we agreed with the FDA, so let's go to insomnia. And then What is more important is in Phase 4, since we will have the big indications, the largest indication that I think we can have, which is In some, yes, basically. Then we can start to look at the benefits into subclass, but I don't think we will need to get the label Change, but we can really demonstrate the benefit, maybe having it included in some subpart of the label, Certainly not in the indication, and we can look at some class of patient being depression, patient with insomnia and depression, patient With insomnia and sleep apnea, patient, of course, we think Xiaopo, you're muted. We can't hear you anymore. I believe we lost the line. I can try to get him back in. Okay. Well, I think that concludes our comments anyway. So I think we've come to well, we're 20 after 3, so we will exceed our time. So thank you very much for your interest in Eidorsia. We've come through all the questions that were going to be asked today. So next timed release is going to be the Q1 2021 results on the 22nd April. So that leaves you with just stay tuned, expect more. We will be progressing through 2021 with this very exciting story. Operator, close down the lines, please. Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect now.