We're ready to get started. Thanks everyone again for joining us this year for the Guggenheim Healthcare Innovation Conference. I'm Vamil Divan, one of the biopharma analysts here at Guggenheim. Next up in this room, we have Idorsia, and very pleased to be joined by Roland Wandeler, recently joined as the new CEO of the company. Great to have you here joining us today. Roland, maybe I'll open up with a couple questions. One, just initially as background for people who maybe don't know the Idorsia story. It's obviously gone through some changes in the recent years as well. Just a little bit of background of the company and where it stands now, and then maybe more importantly, sort of a little bit of your background and what drove you to join the company would be great.
No, Vamil, thank you, and great to be here. If you look at Idorsia is a commercial stage company based in Switzerland, founded in excellence of science and by the same innovators that founded Actelion at the time. If you look at Idorsia today, it is marked by two approved assets that are commercialized and about to be commercialized, a late-stage pipeline, which is very exciting, and an early-stage pipeline, which have a range of best in class and first in class assets. I think the best way to look at Idorsia today is through the lens of four value drivers that we recently communicated to investors.
The first value driver is clearly the continued growth of QUVIVIQ, a therapy for chronic insomnia, which is on track to deliver CHF 200 million of sales this year, and with strong momentum in a market and an area with high unmet need and more potential, a blockbuster asset. The second growth driver is the second approved medicine that we have with TRYVIO and JERAYGO. It's a medicine with a novel pathway in uncontrolled hypertension, where we just recently announced a very smart approach to launch this asset and also build it to blockbuster potential. The third value driver, very exciting, is our lifecycle management opportunities around daridorexant, the molecule that's behind the chronic insomnia drug, where with the recent data that we showed in pediatric insomnia and the breakthrough designation that the FDA granted, there's a high unmet need and an exciting opportunity.
Beyond that, beyond insomnia and sleep, in autism spectrum disorder, some interesting signals that just point to the potential that this has. Then we have three assets in phase III, which are about to come. As I look at the company where we are today, we have these four value drivers, and the focus now is really just about execution. That's why I joined the company, and that's why I'm here, to see that we can actually deliver against that value and continue to grow the company. To the second part, my background, I have to say that I followed the story first of Actelion and now Idorsia very closely. I'm a citizen of Basel, where these companies are based. So with admiration, I looked at and saw what the Clozels, the founders, have built over time.
I saw the growth of these companies, the difficult times of these companies. When I received the call earlier in the year whether I would be open to have conversations, I said yes. I have to say, I was attracted by the excellence of the assets, the quality of assets that we have, the opportunity that's there. Ever since I've been now, I mean, week five in the company, I had an opportunity to speak with physicians, with investors.
I had an opportunity to speak with the team and meet the team, look deeper into the data, and I'm ever more convinced that we have tremendous medicine in our hands that meet an unmet need that is out there at a time where it's important for us as society to get to better treatments in insomnia, get to better treatments in uncontrolled hypertension, and it's in our hands to deliver that value now. Super jazzed, super excited to be here.
Okay, great. Before we dive into the products in more detail, there's one last component of the company I just want to touch on briefly for people maybe less familiar with the story, and that is a special purpose vehicle.
Yeah.
I know you weren't at the company as all this—
Yeah.
restructuring has taken place, but maybe we can just sort of lay out that the SPV, sort of how it ties in, especially with some of the other assets in the company, just to frame the discussion. Then we'll get deeper on the product.
Yeah. A couple of years ago, two aspects came together. One is a slower than anticipated launch of QUVIVIQ, especially in the U.S., with high investments into the launch, but the sales going slower is not untypical in chronic diseases in the U.S., and the need to refinance CHF 800 million of loans at the moment in time. The special purpose vehicle was a very elegant way of sequestering that debt into an asset-backed vehicle that basically provided those funds against the rights for revenues of aprocitentan, cenerimod, selatogrel, through revenues with pay-as-you-can notes, and therefore allow the rest of the company to have an equity story around the QUVIVIQ growth that we continue to have. It's, as I said, a very elegant approach to make sure that the debt isn't an overhang on execution.
It also aligns very nicely the interests of those bondholders with the interests of the shareholders around growth of the company. You may have seen that we last week announced that in partnership, we are providing the funding for the launch of TRYVIO and JERAYGO along these lines, which just shows how it's about the long-term growth of these assets that is there. Now, once the loans have been paid back in that special purpose vehicle, the upside potential comes back to Idorsia, which I think is a second very attractive aspect of it. As said, it allows the rest of the company to focus on growth.
Okay, great. Let's go deeper onto QUVIVIQ, but obviously—
Yeah.
already on the market. Maybe just remind people of the clinical data supporting the product, then the progress you have made so far. We will get to the, I know there is some rescheduling and all that is hopefully going to change things around, but just the progress the company has made to date would be helpful as a frame of reference.
QUVIVIQ, as said, approved for chronic insomnia. It is a dual orexin receptor antagonist, which is a novel approach to treating insomnia. I think it is very important for us to take a step back and perhaps define the way that insomnia is more and more seen by experts, which is, it is not just a disability or a disease in terms of sleep, but it is something that affects you throughout the whole day, is that you do not sleep well and you do not function well during the day. If you think about what old sleep meds did, they are sedating you, so you fall asleep, that is fine. But they have carryover effects into your day, so you are impaired the next day in functioning, together with addictive potential.
What the dual orexin receptor antagonists do is that they, rather than working on the sedation side of sleep, they actually normalize the hyperarousal signal, the awake signal, if you want, and therefore allow you to sleep better, and the next day function better. The data that QUVIVIQ has been showing is exactly that. So we have marked improvement in sleep onset, in sleep duration at night, but also very impressive data in terms of daytime functioning. Allow me just to double-click here on QUVIVIQ versus DORAs, dual orexin receptor antagonists, in general, because DORAs have been on the market for a while. You had a first generation of DORAs that came to the market, and that did normalize that hyperarousal signal, but also carried over into the day.
The way that QUVIVIQ was designed, and it goes back to the excellence in science that Idorsia was built around, is after 25,000 molecules, there was one that was found that allows you to block the orexin receptor when you go to bed, and in the morning when you get up, that receptor is de-blocked again. So it is a half-life that has been optimized to get you the effect that you want during the night for sleep, and it then translates into better functioning during the day, and it does not accumulate in terms of dose. That specific profile for, I look at QUVIVIQ as a next-generation DORA, is the one that is really exciting and is seen in the data that we have.
There's daytime functioning data, and as well, I think very recently, the pediatric data, I'm sure that we will touch on later on, that is facilitated by just the unique profile that this medicine does. If you look at where DORAs stand today, if you look at a market of, like Japan, DORAs account for about 40% of sleep meds today. If you want, in Japan, there was a high focus on making sure you don't just treat sleep insomnia with sedatives. In Europe, in the leading markets, we're somewhere in the mid-teens, in terms of market share, which is exciting. In the U.S., we're at very nascent 2% DORAs, and the majority of patients here in the U.S. are still treated with sedatives.
With the addictive potential that there is, it just points to the immense opportunity, especially at the time where I think as society, we realize more and more how important sleep is for us. With Idorsia, we believe that we have the medicine that is able to actually address that challenge in the best way.
Let's talk about that a little more. In the U.S., obviously, you mentioned the market share has been much lower for the class. What's been the difference in the U.S.? What's been the challenges? Then for QUVIVIQ specifically, I know you recently had the discussion with the DEA on getting the scheduling adjusted. How do you think that may impact the progress going forward?
Yeah. What you have in the U.S., you have high unmet need, and you have a lot of inertia. The sedatives that are on the market, the benzodiazepines and Z-drugs, are generic. From a payer perspective, or the first drugs that you have to go through, they're controlled substances in Schedule IV. The way that QUVIVIQ, all the DORAs were launched at the time were equal, they're just sleep meds, so it has to be Schedule IV. Out of there, we're never really able, on a broad scale, to gain the traction in the U.S. I think there's a couple of things that are now changing. One is, as I said, the high awareness or the higher awareness of how important sleep is, not only during the night, but during the day.
As we are more aware of the impact that poor sleep has on your functioning during the day, on longer term outlook in terms of metabolic disease, dementia, and so on, I think there's an increased awareness. You may have also seen that recently the DEA actually proposed a rescheduling to have the DORAs not as Schedule IV anymore, but as Schedule V. We firmly believe it should be fully descheduled, but it's a step in the right direction. It also shows you, it's just another sleep med. It's a very different mechanism that we have. You have a growing body of evidence that just points to the impact that you have in terms of lower addiction, better daytime functioning.
Just recently, I said the phase II data that we presented on insomnia in pediatric population, 10 - 18-year-olds, with the highest adult dose, very promising results, leading to an FDA breakthrough designation that we will now study in a phase III, just shows you that this is a very different sleep med from the rest that we have. If I look at the U.S. today, very big potential, encouraged by some of the early signals that we see in terms of traction over the last month, which is good. I think we have a better view today of how we invest behind that growth to continue to drive that momentum, because there's no reason why in the U.S. we shouldn't have the same access to novel insomnia medicines like Japan or Europe have today.
Yeah. Okay. That's great. Maybe we can talk, I think one thing we've always found interesting as we've learned the story is the pediatric opportunity, which I think could be very differentiated. Maybe we can just talk about your excitement around that opportunity, and then how do you build that from here?
The excitement comes, one, from the opportunity to have a big impact on health and on patients and families in this country, which I think is huge, and then obviously it's a very attractive opportunity for Idorsia as a company. Just to take a step back, I think all the parents in this room know what one night of poor sleep does to a child. You see the next day how this translates into mood. Imagine children that struggle with sleep night after night and what this does to them.
Having a medicine that we were able to study in 10 - 18-year-olds that showed marked increase in sleep, and improvement during day in that population, which gets them closer to the age-appropriate sleep time that children should have, is big in terms of the impact for these children, how they can function in school, and the impact on the family. It is a big opportunity for us to make a difference, and it obviously translates into a big opportunity commercially as well. in the U.S., there is no approved sleep medicine in this population. There are a lot of symptoms that are treated for this population, and we believe that we are able to bring a medicine that is much more foundational to this population.
I think if anybody has any doubts in terms of the safety profile of our medicine, knowing that it is the same dose that is studied in children, I think will just also help put this into the right context. So we are excited. We are in conversations with the agencies around our phase III program. The breakthrough designation from the FDA reflects, A, the unmet need, and B, obviously the openness from the agency for us to work with them. We look forward to advancing this very swiftly and add this to our label.
Maybe just one more on that, on the pediatric opportunity. What have you shared in terms of what you see as the opportunity patient number-wise, maybe willingness for a pediatric population to be taking something for insomnia?
Yeah. When you look at it and you look at the data, between 8% and 12% of adolescents and children struggle with sleep. The number that is diagnosed with chronic insomnia is a bit lower than that. But what you see is that parents are desperate to find solutions for their children. You see this in treatments for ADHD or so. I think with our medicine and the data that we will be generating in phase III, I think we will be able to provide a very important option to pediatricians and to these families.
Okay. Okay, great. Let's shift gears now, because you did mention just, I think last week, you had the announcement around the blood pressure—
Yeah.
and hypertension side.
Yeah.
Maybe you can just summarize what you guys shared over the last week or two in terms of your strategy and trying to get this product out in the U.S.
Yeah. As you know, hypertension, I think, is the underlying condition that is so much evidence around the impact on morbidity and mortality that we all understand today that having hypertension uncontrolled is a big risk for patients. And you see this reflected in additional innovation that has come to this market. There are a couple of new entrants that will be entering the market and will put a lot of attention on the fact that patients continue to be uncontrolled and there needs to be more therapy for them. That is what I hear back from physicians as well. At the same time, if you look at hypertension medicines, the majority of them is focusing on one mechanism, the RAS mechanism, where there has been a lot of innovation, there are many medicines out there, and where many of the new entrants also enter.
What I find fascinating about the approach that Idorsia is taking is that we're looking at a very different mechanism. We actually bring to market an endothelin receptor antagonist, which is the first in class, and therefore allows you to tackle hypertension with a mechanism that's orthogonal and independent from the RAS system in many ways, and that we know that for some patients is a driving force in their hypertension. It's also a mechanism that doesn't come with some of the challenges on the RAS side. There's no hyperkalemia, there's no hyponatremia. We delivered on that by studying our medicine in patients with chronic kidney disorders down to an eGFR of 15, and we're able to show there that we don't need monitoring and are able to deliver double-digit blood pressure reduction, which is important for these patients.
As we look at the opportunity in this market, knowing that 36 million patients still struggle with uncontrolled hypertension, we know that in the U.S., 4 million of those have chronic kidney disease and will be limited in the medicines that they're able to take. We know that we will be able to offer a medicine that actually fits that need. The part where we're excited and we talked with the bondholders and the SPV that have the first rights—
Yes.
of revenue streams for that asset, we said that we have to make this medicine more broadly available. We will be launching it in the U.S. as TRYVIO and in Europe as JERAYGO. We will be taking a very focused and, I think, capital-efficient way to this launch, because we know that there will be increased attention on hypertension. We know that there's very specific patient populations where our medicine specifically addresses an unmet need, and we know that these patients are enriched in the top hypertension centers in this country. We have a specialist-led launch approach that we defined that will allow us to engage those centers, and in there will allow us to actually build experience with our medicine. As said, double-digit blood pressure reduction that we showed with a safety profile, which I think is very promising for these physicians.
The medicine has been available in a very focused way with very minimal investment, and what we see in those hypertension centers, when a physician starts to prescribe it, they adopt it and use it in more patients. We're excited about this innovation and what it can do.
And maybe just to build on the investment you are going to make behind it now, maybe you can share a little bit more about how you are thinking about the infrastructure, the centers you are going to be targeting.
Yeah. I think the investment approach that we, just perhaps taking a step back, that we shared last week, I think is an exciting one. As briefly mentioned, the SPV gets the first payback originally. What we now discussed with the special purpose vehicle bondholders is that we will co-invest in the launch. They will provide some CHF 72 million of funding. We will provide CHF 48 million, which will be sufficient to bring us to break even in 2029 and on trajectory to being a blockbuster. In return, the Idorsia equity shareholders will be able to participate right away with a 30% from the revenue stream, which I think is very exciting. It is one of the examples that shows you how, I think with the SPV, we were able to align the interest for long-term growth between the bondholders and the equity side.
In terms of launch approach, it will be a specialist-led launch approach. We will be targeting about 5,000 physicians in the U.S., focused on the top 35 hypertension centers. So it is a targeted approach that allows us to be and engage and educate physicians on this new mechanism, knowing that other entrants are obviously raising awareness with thousands of reps around the unsolved problem, which is uncontrolled hypertension today.
Okay. Okay, great. So we only have a few minutes left. I do want to touch on the pipeline behind it, what you touched on in the beginning. Maybe you can just sort of share your high-level kind of levels of excitement on these assets and the pipeline behind.
Yeah, I think that if I think pipeline, I think the most imminent part is the lifecycle management opportunities we talked about. If I look at daridorexant, we see the pediatric indication as a huge potential breakthrough designation, and we recently discussed the signals that we saw in autism spectrum disorder beyond insomnia. This is important. This is not like extending insomnia. We know that those patients benefit on the sleep side, but we saw a signal that they benefit beyond that in daytime functioning. The orexin system, which is a very powerful system, the regulation of that system, we found afterwards actually gives us plausibility from a mechanistic side. We are excited to bring daridorexant actually into the autism spectrum disorder population, and we will be working about that. For me, that is like the most imminent daridorexant lifecycle management.
Beyond that, obviously very excited with lucerastat in Fabry disease, which is in phase III. It is an opportunity to bring an oral medicine that was applicable to the whole population there, and what it could mean in terms of protection of kidney function for these patients. Very excited. We have the readout of two phase IIIs for cenerimod and selatogrel coming up next year, which we are excited about. If I just give you a peek into some of the earlier pipeline, we are working, you can imagine that Idorsia has a deep understanding of the orexin system. It is not only the antagonist side that our research team has been working on, but also the agonist side, and there is a lot of attention there, and we are excited at some point to be able to share a little bit more information there.
Okay. Then maybe just kind of round things out here, just in terms of the company's capital position now.
Yeah.
If you can just share your current status, your runway, and how you are thinking about future financing needs.
Yeah. We have a strong liquidity position today with some CHF 85 million in cash on the balance sheet and CHF 100 million undrawn facility. We are at the moment going through the process of reviewing our opportunities. Key for us is that we want to be disciplined in the way that we deploy capital behind our four growth drivers, the commercial growth from QUVIVIQ, the launch of TRYVIO/JERAYGO, our lifecycle management opportunity with daridorexant, and the pipeline. We are currently going through that, looking at the additional growth that QUVIVIQ will bring next year, the spend for our key studies. Some partnership opportunities you may have seen that we are co-developing or have a co-development agreement for lucerastat with Nxera that we recently announced. As we tally this up, we will be providing more guidance at the beginning of next year.
Okay. Last question for me, just to kind of lay the calendar here for the next 12 months or so, what are the key events we should be watching for from Idorsia in terms of data or other sort of updates?
It will be around continued traction for us to deliver the growth behind QUVIVIQ and obviously launch the early indicators of adoption in the launch of TRYVIO/JERAYGO, as well as those two phase III programs that I mentioned, cenerimod and selatogrel, which will be in the first half of next year. Then our advancement in terms of having the study protocol defined. I think if there is one message I would just like us to take away is, if you look at Idorsia today, there are four clear levers to drive growth, and now it is all about execution and focusing the team on making sure that we can deliver against those four drivers. That is what my focus will be on with the team. I had a chance to meet the team.
I have been excited to see the talent that we have, the commitment that we have, and I look forward to this journey ahead at Idorsia.
Okay. Congrats on the new role. Exciting first five weeks on the job.
Yes. Yeah.
Great to meet you.
More to come.
Here, thanks for sharing all this, and we will keep track of the progress.
Great. Vamil, thank you so much.
Okay.
Thank you.