Earnings Call: H1 2019

Jul 23, 2019

Dear, ladies and gentlemen, welcome to the Eydorsia Conference Call regarding the presentation of the Half Year Financial Results 2019. At our customer's request, this conference will be recorded. As a reminder, all participants will be in a listen only mode. After the presentation, there will be an opportunity to ask questions. May I now hand you over to Andrew White, who will lead you through this conference. Please go ahead. Thank you, Angela. Good morning, good afternoon, everyone, and welcome to our call today. We're here gathered to discuss the first half results published this morning at 7 am Central European Standard Time. With me on the call are our CEO, Jean Claude Clozell our CFO, Andre Mueller and Guy Braunschwein, Head of Global Clinical Development. He is here to discuss with us the data presented at San Antonio on our daridorexant, our dual orexin receptor agonist. Next slide, please. But before we jump in, I need to remind everyone that we will be making forward looking statements and that there are risks and opportunities there in investing in our shares. With that, I hand over to Jean Paul for his introductory remarks. Thank you, Andrew. Good morning or good afternoon to everyone. It's a pleasure to present to you the progress we are making at Eudorzia. The first half of twenty nineteen has been about running our studies and getting ready for the wave of results and news flow approaching soon. As you might imagine, it's a very exciting time. Since the studies are progressing well, we also start the preparation activity for the potential filing of our late stage assets. Looking a little further into the future, Simon Joss, our Chief Commercial Officer, has started hiring his core commercial team, enabling the development of a commercial business plan, something that we look forward to sharing with you as each of the programs read out. But of course, we first need to deliver the results from our ongoing studies. Next slide. The pipeline has made good progress in the first half of twenty nineteen. We initiated our multiple dose efficacy and safety studies with senerimod for lupus and a new compound has started clinical trials in the field of immunology with potential activity in cancer immunotherapy. This is, again, a very exciting development from our drug discovery group. These are great steps forward for our long term future, but it's the late stage assets, which all eyes are on. If you are interested, you can still find the webcast describing our Phase III program on our website. One of the most notable milestones recently was a presentation of the Phase II results with our dual orexin receptor antagonist, ACT-five hundred and forty one thousand four hundred and sixty eight, newly named with the INN daridorexant. After a long period of silence, the field of insomnia starts to wake up. The FDA has just put a black box warning on the Z drugs, and several scientific bodies are warning the public of the risk of addiction with this drug. This is extremely sensitive in the frame of the opioid crisis. Since more detailed clinical results are now publicly available and the guide of the design of the Phase III, I have invited Guy to give you the details and the possibility for Q and A. But before, I will hand over to Andre for a brief overview of our financial situation in order to give as much time as possible to Guy and to your questions. Andre? Thank you, Jean Paul. This was quick. I will be quick as well. So we can start with the next slide and see of the operating results, which is Slide number 6. From left to right, you have the non GAAP operating results, starting with revenues. You see here with EUR 13,000,000, there's no change. This is relating to deferred contracts executed in 2018 with apocitendan with J and J for $10,600,000 and research collaboration with Roche for €2,500,000 Research at €56,000,000 is more or less stable compared to H1 'eighteen, €54,000,000 Development at €151,000,000 is increasing significantly compared to 2018, which was €73,000,000 So it's more than doubled. The reason for it is that clinical development with €108,000,000 has significant viable costs that were incurred in H1 twenty nineteen, euros 84,000,000 compared to €32,000,000 in H1 2018. And you have pharmaceutical development costs for €43,000,000 Here again, the fixed cost base is relatively limited, around EUR 13,000,000 and the variable one with drug substance and drug products for $30,000,000 has also significantly increased. As Jean Paul said, we're advancing our late stage assets. And in order to do so, we incur some significant pharmaceutical and clinical development. SG and A, now it's SG and A with EUR 28,000,000. This is more or less stable compared to last year 2018, H1 2018, which was €25,000,000 Main increase was relating to the commercial operating expenses with, as Jean Paul said, our Chief Commercial Officer, Simon Jones, shaping our strategy for our late stage assets. So with this, we have CHF CHF221,000,000 non GAAP operating results. You have to add €10,000,000 in D and A €8,000,000 in stock based compensation to end up with €239,000,000 U. S. GAAP operating results. Next slide, please. Not much to say going from operating results to the net results. The only point here that I would like to recall is that if you're looking at the financial results, which is almost 0 for non GAAP despite negative interest rate environment. You see a +8 for U. S. GAAP. That's the unrealized gain on the Sonterra shares that we own in connection with the sublicense that we granted to Sonterra on a compound called Vamorolon that we where we have also an option to in license it from a private owned company, a U. S. Private owned company called Reveragem. So €8,000,000 is the mark to market, and it can go up and down depending on the stock price of Centerra quarter after quarter. For the rest, as you see, almost no income tax, no non controlling interest. So we end up with 222 non GAAP net results and €232,000,000 U. S. GAAP net loss. Next slide, we'll show you how we came down with the liquidity. We started the year with €1,200,000,000 going down steadily €108,000,000 on each quarter, Q1, Q2, and the gap at CHF 1,000,000,000 by the end of June 2019. You see the breakdown on this slide between cash and cash equivalents and some deposits. We try to offset the negative interest rate environment in Swiss francs. And keep in mind that this €1,000,000,000 is mainly held in Swiss francs because we want to avoid any currency risk on our liquidity with CHF 827,000,000 out of this CHF 1,000,000,000 and we have CHF 168,000,000 held in U. S. Dollars also to cover our cash needs in U. S. Dollars in the foreseeable future. I have no specific slide on the financial debt because there was no change. We still have the convertible loan with J and J, euros 376,000,000 in the balance sheet, but nominal value of €445,000,000 and the convertible bond that we issued last year in July for €199,000,000 into your balance sheet, but the nominal value of €200,000,000 Next slide, please. Here, you see, in connection with the previous slide on liquidity, see a cash flow quarter after quarter, Q1, Q2. Here, you see the $108,000,000 that we spent in Q1 as well as in Q2, meaning $216,000,000 for H1 2019, mainly with the funds from operation, EUR 235,000,000 which are very close to the €234,000,000 non GAAP OpEx that we were just discussing a few slides ago. And you see also in green the contract revenue, €5,000,000 This is an upfront that we got in Q2 2018. Please refer to the Note 4 of the financial statements in other, that's an optional license and or research collaboration for our T type calcium channel blocker that we want to investigate in epilepsy. The undisclosed potential partner will be able to opt in after the FDA feedback based on the IND that we plan to submit in Q4 2019. So we should know by the end of this year or very early next year whether this partner will opt in. Opt in would consist in €50,000,000 or €57,000,000 upfront opt in milestone, including the €5,000,000 upfront. And as you will see in the Note 4, we would then after it gets regulatory milestone, sales milestone and tiered royalties. Finishing with the next slide, the financial guidance. We maintain the guidance with €530,000,000 non GAAP operating expenses for the full year, which would mean €570,000,000 for the U. S. GAAP. You may be slightly surprised if you compare the EUR230 4,000,000 that we spent in H1. But again, as you know, we are advancing our we are going with full recruitment in our Phase III assets. This should drive additional expenses in the second half of twenty eighteen. With this, I hand over to Guy, who will comment on our dual orexin receptor antagonist, as Alain Rus said previously. Thank you very much, Andre. If we are on Slide 11, you can move straight to Slide 12, which introduce you the name, director Alexandre, as mentioned by Jean Paul, and you see how you can spell this name on that slide. I'm going to summarize for you the data that were presented at the State Congress a month ago. Next slide, Slide 13. Just as a reminder of the definition of chronic insomnia disorder, it's a combination of night and day symptoms as per the DSM-five. Patients have difficulty falling asleep, staying asleep, they also wake up too early. And as a consequence, their daytime functioning is impaired. The definition includes the night and the day symptoms. And this has to come with a certain frequency, at least 3 nights a week and for a chronic period of at least 3 months. We have tools in clinical development that we use to measure the different aspects of the disease, primarily, objectively with polysomnography, where we can measure the latency to persistent sleep, which is the time from the start of the recording of the PSG to the first moment where the patients are sleeping continuously. By that I mean for at least 10 minutes, then we can also measure what we call the WADO, the wake after sleep onset, which is the time spent awake after the sleep has actually started until the light on the end of the recording. And of course, we can also measure the total speed time based on PSG. These are important measures, especially for the U. S. Registration of products. However, there is also a great interest in patient reported outcome instruments measuring sleep parameters using darvikart, where patients are recording their time to fully asleep, their awake time to wake during the night as well as total sleep time And also the daytime functioning of the patients, which can use different instruments, one being called Ithaca, which has been developed by Axelion and Hydorsia. So this is a schematic representation of insomnia. On the next slide, I will just remind what we have discussed before about daridorexant. Of course, there is, as mentioned by Jean Paul, still a need for safe and effective treatment for chronic insomnia. And daridorexant is a targeted molecule. It's a polyphenolceptor antagonist. And as we know, there is accumulating evidence of the role of the orexin system in the regulation of insomnia, sleep wave and the role in intimate disorders. Directorexant is a potent and selective directin receptor antagonist, and it was selected based on the properties of the product with the idea of initiating sleep on-site, maintaining sleep without impairing the next day functionally. And a lot of that is driven by the pharmacokinetic profile of the product, which is shown on the graphical representation with the time on the horizontal axis and the plasma concentration vertically. And we see on day 1 of treatment administration of 25 milligrams, a peak occurring very early and then a sharp decrease over time. And when we look at the pharmacokinetic triglycerides, we see a profile which is very similar, showing that there is no accumulation. So this profile, which we have discussed before, is ideal to for a product designed for treatment of insomnia patients. This product has gone through Phase I studies and through Phase II studies. The Phase II studies were reported at the Sleep Congress in June. And I'm going now to summarize the results for you. But before that, I would like just to show you the design of the Phase II studies. Next slide, Slide 15. We conducted 2 studies in parallel, 1 in adult patients and 1 in the elderly patients. The first one in adult was a parallel group design study, duration of 4 weeks, allowing to look at the effect after a single dose as well as the durability of the effect over a treatment time of 4 weeks. At the end of this 4 week treatment, there was a short washout period allowing to assess whether there would be withdrawal symptoms. In that study, 4 dose levels were tested, 5 milligrams, 10 milligrams, 25 and 50 milligrams. There was also a placebo group as well as an active control arm, zolpidem. And we measure primarily objective on subjectivity parameter, as I mentioned on the slide before. The elderly study was a different design. It was a crossover design, and we just focused on the day 12, 2 nights of treatment. And we know that the dose response can be established as soon as the drug is taken. So a single night or 2 nights are sufficient to show the efficacy. We didn't need to confirm the durability of the effect in elderly, having shown that in the adult population. We also tested 4 dose levels identical to the adult study, 5, 10, 25 and 50 milligrams. There was also a placebo group, and we didn't have in that study an active control group. And again, objective on to the PTC parameters were recorded. On the next slide, we see the schematic of the ADIL study, starting with the screening day screening phase of 14 to 28 days. And during that screening phase, we have a running period where 2 nights were recorded with PSG serving as a baseline. And during these two nights, the patients were taking placebo. The screening period was followed by a double blind treatment period where zoltedam, placebo, daridorexant 5, 10, 25 or 50 milligram administered for 28 days. During the first two nights of administration of double blind treatment, PSG, we have recorded. We did the same as day 14 and 15 as well as day 2829. And as shown on the PSG measurement line, there was also a single blind classical run out phase to look at potential withdrawal effect of industrialization of insomnia in case there would be 1. And all along the period from screening to double blind treatment, a speed that we can't we are feeling every day by patients to collect subjective assessment. The next slide shows Slide 17 shows the patient disposition and the floor patient. We have to screen about 1,000 patients and these patients enter into the study based on their self assessment, self reported history of insomnia, claiming that they are dissatisfied with sleep with significant distress during the day as well according to the DSM-five criteria. And they also claim that they have more than 3 nights per week for more than 3 months, difficulties to fall asleep, long awake during the night and the total sleep time less than 6.5 hours. And insomnia severity index of more than 15. This insomnia severity index is on the scale from 1 to 0 to 28, and 15 is the limit of the moderate severity of insomnia, 15 to 21 is moderate and 21 to 28 is the severe insomnia patients. So we screened all these patients, and then they were given the sleep diary to confirm with self assessment on a daily basis that actually they had insomnia. And from the 1,000 patients, 60% could be could satisfy the criteria and therefore enroll into the PSG run-in phase. And here again, we had very strict criteria to randomize the patient. The patient has to have objective measures, confirmatory measure of chronic insomnia with a latency to persist on sleep to at least 20 minutes, whether of at least 30 minutes and to persist time of less than 7 hours. So in the end, from the 1,000 patients that were screened, 360 could be randomized because they had the confirmation of insomnia based on the sleep diary as well as the polycinopathy. The next slide shows the baseline characteristics and the demographics of the patient. There is no surprise here in terms of the demographics, more female and male as expected. The mean age in this adult population was 45 years. The polymath index was 25, actually between 19 32, and the majority of the patients at occasion. The study was conducted in 38 sites in the 6 countries. They are listed here in sleep Retrieval Centers. On the right hand side of the slide, maybe more interesting to see the baseline characteristic with OASO at 97.5 minutes, which is more than an hour, an hour and 38 minutes. The same for latency to persistent sleep, about an hour and 12 minutes and total sleep time, which is just a little bit above 5 hours. And similar numbers were recorded subjectivity by patients with was of an hour and 20 minutes trying to fully sleep of an hour and the total sleep time of less than about 5 hours and 70 minutes. So we see here that these are relatively severe insomnia patients overall and insomnia severity index is at 21, which is right in the middle of moderate and severe. So probably half of the patients had moderate and half of the patients had severe insomnia. Now it's interesting to look at the study results. And the first one I would like to show is the WASO, which was the primary endpoint. And as you understand, the study was a dose response study, so the results will be shown as the dose response. Next slide, Slide 19. So we see here on this busy slide on the horizontal axis, the different treatment groups, placebo, 5, 10, 25 and 50 milligrams. And there is a cartoon of Dulkidam on the right. And on the vertical axis, we see the change from baseline in mozzol in minutes. And we have two lines, the blue line, which shows the results on day 12 and the red line, which shows the results on 28 on day 28 on day 29. So what we see here is that there is a dose response from placebo to 5, 10, 25 and 15 milligrams. And this dose response is highly significant with a p value of less than 0.001. Similarly, at day 2829, there was also a dose response that was also significant, and we see a nice decrease from placebo to 50 milligrams. What is interesting to note is that the placebo effect was actually more marked at the 28.29, which explains probably why. So those responses are steep day 28, 29. However, the shipment effect is maintained. And also interesting to contrast the results with ZolpiMistm and you can just look at how daridorexant compared with ZolpiMistm on this slide. The second interesting endpoint is the latency to persistent sleep, again measured with polysondography, And this is shown on the next slide, Slide 20, where we see the blue line, and we're using the similar format, the blue line day 12, with again a significant dose response. And the red line, day 2829, also significant with a decrease of the latency to persistent sleep as the dose is increasing. As we discussed before, objective parameters are interesting, but it's also interesting to look at how patients perceive their change. And this is shown on the next slide, where we have using exactly the same format. On the left of the slide, the subjective was and on the right of the slide, the subjective time to falling asleep. As we see, there is also the response for these four parameters. The significance is not always achieved. As we know, the variability is bigger on subjective assessment. And with the size of the study that we had, there was no real hope that all these response curves would be significant. But what is interesting is to see that there is, in general, a nice encoderance between the different parameters, objective and subjective. Maybe the next one is even more interesting. Slide 21 showing sort of summary measure of how patients are sleeping. Slide 22, next slide. And we see here the total fleet time. So of course, we expect total fleet time to increase, and that's why the lines are now increasing, ascending. We see again with the same format on the left, the total sleep time recorded objectively by and on the right, the total sleep time recorded subjectively by the sleep diary by the patients. And we see again very nice dose responses on the redirection from placebo to 15 15 milligrams for all these parameters at day 12 as well as the day of 2829. I cannot just show the efficacy results without briefly talking about the safety. And the safety results are shown on the next slide. It's unusually not very busy. As you see, there are many zeroes and very few numbers on that slide. We had, of course, adverse events during the treatment phase, and you see that a number of patients with adverse events, the majority were medically insignificant. We have just shown here the adverse events leading to treatment discontinuation. There were a few of them and you can read the numbers. What is maybe more interesting is written on the text on the right hand side of the slide that there was no evidence of rebound insomnia and withdrawal symptoms during the short withdrawal period at the end of the treatment period. Also interesting is to look at how patients feel sleepy on the next morning, and this was looked at using the Karolinska Sleepiness Scale as a morning assessment. This is a scale that goes from one very alert to extremely sleepy, 9, and the results are shown on Slide 24. Next slide. You see the different doses on the horizontal axis and the mean value for the Karolinska steepness scale on the vertical axis. The black line shows the baseline data, and it's about between 5 and 6, which is normal, 5 being the point of being neither sleepy nor flat. And what we see on day 12 is that there was not much change between the red the black line and the blue line, whether on placebo or at 5, 10, 25 and 15 milligrams in the same for zolkedidone. We see the similar line for the day 15 or 16 with not much of an effect. And again, day 2829. The change is actually, I think there is 1, it's more in the right direction going below and being low is being more alert. So there is certainly no signal here of being sleepy in the morning as having taken any of these treatments. So these are the results of the adult study that we have shown at the New England Journal of Congress. Now moving on to the elderly study. Slide 25 is summarizing the design. As I mentioned, it's a crossover study. So we have here a Latin square design with 5 sequences corresponding to 5 treatments and 5 periods. There was also a screening period at the beginning with 2 placebo nights initially to serve as a baseline. And then for each treatment period, we had 2 consecutive percent of action items at each dose level, including placebo. So very classical crossover study. We have shown previously years ago with Almirall XAN that this was sufficient to show those response and you will see the results in a minute confirming this. The next slide shows the patient disposition. Again, to give it to randomized 50 patients, we had to screen 149 subjects. And again, that ends on to the trial based on the self reported insomnia according to DSM-five. They completed the CIG diary, and they had to pass a criteria of at least 30 minutes time to follow-up, 30 minutes was off and less than 6.5 hours after the SIG time. And if they do so, 100 of them, then they could go to polycynography to objectively confirm the insomnia. And this was confirmed in 58 patients, which represents 39% of the initially intended population. So again, we have to screen many more patients to be sure that we had a patient that had objective and subjective confirmation insomnia. The next slide shows the demographic and baseline characteristics using a similar format as for the adult population. We see again that there is a domination by the female population. The mean age at this time is 69 as expected for the elderly population, which has to go from 65 to 85. And we see again that the subjects are mainly white subjects. Turning on to the right side of the slide, we see the Wazo, which is quite prolonged, nearly 2 hours of waking during the night and the LPS that continue to persist on sleep of more than an hour, an hour and 15 minutes and to persist time, which is just less than 5 hours. And we see again on the bottom of that table, the Insomnia Civity Index at a scale of 20.5, which is very similar to what we observed in the early population. So we have here again homodelitis severe in insomnia population. Now turning to the study results and starting with the primary endpoint, which is the week after sleep onset. Next slide, Slide 28. We see a very obvious dose response with a p value that is highly significant. And we see from placebo, 5, 10, 25 and 15 milligrams on the horizontal axis, a sharp decrease of the wildcatheter C on the vertical axis. The placebo effect was less marked in this population compared to the adult population and the treatment effect was absolutely obvious at all those levels. In that study, we also showed at San the results was by quarter of the night using the poly tomography. So this poly tomography is recording for 8 hours and everybody, and we can just look at the first two hours and then the full in 2 hours, the Q3 of 2 hours and the last one of 2 hours. And I show on the next slide, Slide 29, the results of the Wazo, the quarter by quarter with the symbols of placebo, the first one, and then the open square daridorexant 5 milligram, the 300 is 10 milligram, the open diamond is 25 milligram of daridorexant and the is 50 milligram of daridorexant and this is a 4 panel of subsequent quarters during the night. What we see is that not only there is a response at each quarter, but it's becoming more and more pronounced as the night is evolving. And this clearly shows that the effect of daridorexant is maintained during the entire NICE period. The next slide, Slide 30, using the same format as FarwaZo is showing the latency to persistent sleep, again, the polytonopathy. We see again a very significant dose response when moving from placebo to 5, 10, 25 and 50 milligrams, and the p value gives you the significant dose response. The placebo effect was more marked than on the wazoo, but the response was still coming up. During the night of treatment, the patient also feel just for tonight the field diary and the results were also presented. So I'm showing you on Slide 31 the results of WASO and Lecanxi's Wazuho and SLEEP on SLEEP. Again, using the same approach on the other hand, the dose of the daridorexant and the time on the vertical axis, we see a decrease in subjective was on the left and the decrease in the subjective time to falling asleep on the right. This is actually maybe better summarized on the next slide, which show the total fleet time subjectively and objectively. Next slide, Slide 33. So we see here placebo, 5, 10, 25 and 13 milligrams of daridorexant on the horizontal axis and the time on the vertical increased totally fine. From and again, we have a very, very nice dose response. This is shown for the total seat time as well as for the subjective seat time recorded by the CDAW. Again, maybe the safety results are shown on the next slide. We see that Slide 33, there are very, very few events. Some notification on the right side, you can read that. It's really very little. We don't to worry on the safety of valedorexant in this population. The next slide, Slide 34, shows using the same approach and in the adult population, the Karolins Class Fitness score assessed in the morning, and we see the baseline with a score that is around 5 as expected. And then there is certainly no increase after this month the next morning if any move of the score is down, which is showing here being more or less. So the conclusion that we can draw from the Phase II, next slide, Slide 35, is that in both the adjunct and elderly patients with chronic insomnia, the redorexant dose definitely improved sleep onset, sleep maintenance and total sleep time. The redorexant was well tolerated and there was no detectable result next morning effect at any dose using the trial class hypnosis score. Based on these results, we selected 3 dose levels, 10, 25 and 50 milligrams of girdorexant to go through the Phase III program. And just in a matter of conclusion, I will show you briefly what the Phase III program is now, Slide 36. So we have currently 2 studies ongoing with 900 patients each, combining in total 1800 patients and both studies include elderly and elderly population. Objective and subjective sleep assessments will be measured. That's in addition to what we have done in the Phase II. We are also going to include the developed I SEEK questionnaire, which is a patient reported outcome instrument that is affecting the impact on patients' functioning during the day. This was not feasible during the Phase II, but we could include this instrument in the Phase III program. The studies will deliver long term efficacy and safety because these two studies are followed by randomized blinded study that will provide up to 12 months treatment. And this will also allow to look at the usual hangover effect and the results in terms and results in between. I must mention also that the Phase III program, which is shown graphically on the bottom of the slide, is completed by a clinical pharmacology program, which is running as we speak, including, for example, the driving performance study, the interaction with drug and alcohol as well as a study on the abuse potential as this should be done with this insomnia or TNF product in general. So we are on track to report 3 months efficacy and safety results in the first half of 2020 and long term mitigation and safety results later in the same year next year. With that said, I will hand over back to Andrew Weiss. Thank you. Thank you, Guy, for all of your elaborations. Next slide, please. So we've come to the end of our prepared remarks. We now have roughly around 20 minutes' time to address questions. Operator, please open the line. Thank you. And we've received the first question. It is from Richard Parkes of Deutsche Bank. Your line is comments. Maybe you are on mute. Let's go to the next question, please. Yes. The next question is from Stefan Snyder of Vontobel. Your line is now open. Please go ahead. Can you hear me? Yes, we can. Thank you. Thanks for my question. I just wanted to have a comment from you, if you may, in respect of comparing your data versus subrexant and lenvorexant, they also showed some data over the past months in respect to efficacy, which is sleep onset and sleep maintenance, but also on safety like somnolence and next day hangover effects and so forth, whether you can put that in perspective versus your data? Yi, please? Yes. This is a difficult question because we don't have head to head with SUBOXONE. So we have just to probably refer to the pharmacokinetic of our product, which has an onset of test concentration and the duration of F5, which is ideal for an indium product. And we know from the CyloriXone story that there was enough of prolongation of the effect the next day to decrease the dose to a level where the efficacy may be debatable. And this is something that we think we're going to avoid. But of course, I can't tell you what how it compares because I don't have a head to head comparison, and I don't think it's my task really to speculate on the competition. The data are available for both products that you mentioned. The data are available publicly, and you can also take our data and make your own opinion. We think we have a product that's differentiated based on the pharmacokinetic and pharmacodynamic profile that we have. And I do not want to speculate more about direct comparison without having a head to head. Okay. Thank you. Next question, please. Thank you. The next question is from Philippa Gardner of Jefferies. Your line is open. Hi, there. I had a question on Slide 24 regarding the Karolinska sleepiness scale. And I was just wondering when we look at the Zolpidem data that seems to be very, very similar to what we're seeing with the riddorexant. And I was just wondering, were you surprised by this? And were you also expecting perhaps a better improvement in terms of how sleepy people feel the next day with the redirects then? Thank you. Right. Actually, no, we don't expect a big difference because we know that ZolpiDEXIM is good at inducing sleep. It's not very good at maintaining it, which means probably that on the next morning, there is not much of an effect. If we're already in the middle of the night, there is not much remaining. Where we expect a big difference, but that was not collected in the Phase 2, is how the patient can function the next day. And that's why we are going to collect that in our Phase 3 program. We expect a very good effect on the next day on the daytime performance, not the next day, but the daytime performance of the subject if they have a very good night. And we but we know that resulted in them, they follow sleep quickly, but they also wake up early. So there is no surprise to us that they were not sleeping in the morning. What I would like to know is whether they can function properly during the day, and this is not the day that is available. Thank you. The next question is from Ram Selvaraju of H. C. Wainwright. Your line is now open. Please go ahead. Hi. This is Edward Marks on for Ram. Thank you for taking the questions. I just have 2 really quick ones. Just wondering with the recent approval of Galafold, if that provides any additional favorable context just from a regulatory perspective regarding Lucerostat? And then if you could just talk about close at clasocetin REACT trial and just provide a recruitment update on that, please? Jean Paul, do you want to take Just to say On Galafold, the way that Galafold got approved give us an indication as to how the regulatory pathway for new drugs in Fabry can be? I think it was a big surprise for us to see Galafold approved because the FDA told us that they need clinical endpoint. And I think that, frankly, we need a clinical endpoint. We need to show benefit. And as a CEO, I do not want to really launch a drug without knowing the clinical benefit. And this is really what we're trying to do for the first time. We are trying to get to see if the patients really feel a change and feel better and has less pain because 70% of people with patients with Fabry have this neuropathic pain, sometimes less severe, sometimes more severe. So our trial is a trial based not only on how the drug works and all the systemic effect of the Fabry disease, but also how people feel and do they have less pain. So I think that we are very pioneer in this respect, and I really hope we can show a benefit to the patients. And the second question was on Krasozantin, an update on the recruitment. Yes. It's moving well. As you know, we have a program in the rest of the world as well as in Japan. And both programs are actually running well. So we have no issue, nothing to report at the moment. I mean the time lines that you can see in clinicaltrials dot gov basically indicate that the Japanese trial should be ready sometime during the summer of next year, while as the global or the Western European the Western trial, so Europe and U. S, should be available in 2021. Excellent. Thank you for the details. I appreciate it. You're welcome. Next question, please. Thank you. We have now a question from Barbara Bla of Credit Suisse. Your line is open. Please go ahead. Hi, thank you for taking my question. I have actually two questions. The first one is, how long do the patients typically stay on drugs, so in insomnia? And do you think will this period decrease with Dora because it is less addictive? And then the second question is Minerva recently presented Phase II data of its Zora, selective orexin antagonist, which could suggest that Zoras has more an effect on VASO and Zoras more on latency to persistent sleep. Could you comment on this? And then do you see a higher need for a new therapy to treat VASO or to treat LPS? Thank you. Yes. Thanks for these difficult questions. The duration of treatment, with current medications, the main one is zolpidem. The limitation is to 1 month, and this is because of the risk associated with longer treatment with drug or with benzodiazepine in general. That's the opposite to what we want to do with our products. We think that insomnia actually by definition, we talk about chronic insomnia, of course, not episodic insomnia. But by definition, it's chronic. And the definition means at least 3 months. Therefore, the treatment that is given for 1 month doesn't really have a place in that indication because the patients are not cured after a month of treatment. In with Zalidexent, what we are planning to do is long term treatment. We don't expect to have a dependence occurring. We don't have we haven't seen so far any signal of this possibility. Of course, more data will come from the Phase III. We haven't seen any withdrawal symptoms after termination of the treatment after a month. And our clinical program is going to address short term and long term efficacy in a blinded fashion. The 2 pivotal studies have a 3 month duration and then there is an extension, which is still blinded as well, where we measure efficacy and safety during long term. So everything is in place to show that the duration of treatment can be longer. And we'll have data for at least a year in our recession program. The second question Centralized and you have the Yes. I'm not commenting on Minhara, but your question is interesting. ORXIN1 receptor antagonist versus dual and whether one is useful for sleep induction and the other one for OEZO. If you look at the dose response that we have with our products, you see that actually, I don't know whether what you said is a speculation or real. Everything is possible. But what you see with our product is that a low load is sufficient to induce sleep. I don't know how much blockage we had at that dose for 1 versus 2. But if we can go back to the slide that maybe can we go back to Slide 30? And then we see a very and it's the same for the adult, but maybe Slide 30 is more accessible. You see that the maximum effect on sleep latency, so inducing sleep, is actually achieved at the 10 milligram dose. And if you compare that with Slide 29, where you see that there is an effect sorry, 528, you see a very different profile where 10 milligram has an effect on wazoo, but if you increase the dose, you get a much larger effect. So I don't know if this fits with a potential story of oresin-one versus dual. It's our belief that we need to block the 2 receptors to have a good effect, and we have seen that with this product on the different parameters. And just to complete, because this was another question, is it what does the need for the clinical need? Is it waso and LPS? And maybe, Jim, you can Jeff, go on, Jean Paul. I think really with all the market analysis that we are starting to do, we really see that the big need is the sleep maintenance, certainly because ZolpiDEX doesn't do anything on sleep maintenance, and therefore, this is a very big medical need. I think also what I would add personally is really, I think the danger of having too fast acting drug. It's like in cardiovascular, you do not want to have antiplatincy, which works too quickly because then you have the risk for hypertension. It's the same with sleeping pills. In elderly, we do not want that an elderly person fall asleep when he's still in his armchair, he's not in his bed, and we do not want to have and we didn't look for having drugs which would work in chronic insomnia. I think this is very specific for chronic insomnia. We do not want to have drugs which works too quickly because they are difficult to manage, and then they will have some restriction by regulatory authorities, which who might ask, for example, to have the drug taken when the patient is already in bed. So I think that with frankly, with daridorexant, sorry, I still have a hard time to say it. With daridorexant, we have the ideal pharmacokinetic, not too fast, but long enough. And I think that, frankly, I have not seen any other drug with such a profile. Okay. Thank you. Thank you, Deborah. Next question, please. Thank you. The next question is from Richard Parkes of Deutsche Bank. Your line is open. Please go ahead. Hi. Can you hear me this time? Yes, we can. All right. Perfect. So yes, I've got a couple of questions. So the first one, you partly answered it with the discussion around the chronic versus acute insomnia. But I noticed that there are additional trials ongoing looking at abuse potential driving performance and respiratory function. So could you just update us on your views on the or your hope for labeling, including expectations for scheduling? I mean, what would be your best case for a label relative to what's out there already? And then second question on deridexant as well. I think you mentioned in the last call plans to partner in Japan. I just wondered if you could update us on how those discussions are going? And then third question, I know Simon is obviously working hard on the commercialization strategy that you'll reveal next year. But I just wondered if you could give us some insight into how your thoughts on that are evolving during the process, if possible. Thanks. Yes. I can take the first question maybe. Of course, we have to do all these studies and they're all ongoing. It's very, very difficult to speculate on the labeling. We do as good as we can. We have large studies. We have this program discussed regularly with regulators. We got a lot of input from them. So everything is there to show the profile of the product, how this profile is going to translate in the labeling. This would be speculation in the future that I cannot do at this stage. It is very clear we are assessing the product, the abuse potential, the driving performance, the impact in COPD patients, in Opioid sleep apnea patients and many other things are being looked at as well. So everything is there. The transition to labeling, I think, would be speculating too much and we'll come back later when we have results of these studies. But coming back to the regulatory, I think that you might have noted the black box for the Z drug. And really, I think that's what is happening today and is that the regulatory authorities still take really more and more conscious of the problem with the drug, and they are really looking for alternative to this drug. And of course, we need to show that we do not have the same type of issues and with the drug. This is what we are trying to do. And let's wait for the results, which are going to come very soon. For the Japan, I think that I can say that things are moving, and we will keep you updated when we will be in a more definitive stage. But it's clear that I would say that many companies are interested in such a drug. In terms of commercial strategy, you mean, I think that what we are doing now is really basically analyzing in really depth. And Simon is building a team around him with specialists. He's building a team around clearly how to profile, how to brand this drug, but also how to have commercial access because we clearly we know that this is something which we have to solve much before the launch. So we have recruited very good specialists on that. So I think that we are now gathering the data. And in the coming months, as soon as we get the results, we are going to define the strategy, and we will keep you updated. But I think we really want to beat this commercial strategy around data because we want to be able to promote these advantages, these differentiation. And without having the data, I think it will be very dangerous to completely define the strategy. Let's wait, and this is also coming soon. Perfect. Thank you very much. Operator, next question please. Thank you. At the moment, there are no further questions. As we haven't received any further questions, I would hand back to you. Thank you very much. So as you can see, a lot of things are moving ahead these days. So we'll keep you posted as to how our advancements are. We are getting ready for this wave of news flow and results coming first half of next year. So please stay posted. Operator, please close down the lines. Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.