Good noon, everyone. I'm Nick LaRusso. I'm an analyst here at TD Cowen. Thanks very much for joining us at the 46th Annual TD Cowen Healthcare Conference. With me, I'm pleased to be joined by the Kiniksa Pharmaceuticals management team. We have Ross Moat, the COO, Sanj Patel, the Chairman and CEO, and John Paolini, the CMO. Thank you guys very much for joining me.
Happy to be here.
That's great. Before we dive in, for anyone that does have questions, feel free to raise your hand. We'll be happy to take them. To start off, we have to start with ARCALYST. Can we first start by you guys telling us what the greatest driver of growth was for 2025? You reported earnings last week, which was really great, but what was the greatest driver of growth last year?
Maybe I'll start with, first of all, thank you, Nick, for having us here today, and Cowen also for the invitation. Very happy to be here, obviously talk about the continued success with ARCALYST as well as the clinical portfolio behind that. As far as ARCALYST is concerned and now the continued growth and revenue growth we've seen since the launch in April 2020, it's really about continuing the expansion of the IL-1 alpha and beta inhibition. That's been obviously a lot of work, but obviously very rewarding so far. Ross will talk a little bit more about some of the main drivers behind that, but it's obviously multifactorial. Ross.
Yeah, thank you, Nick. Thank you for the question. Yeah, we're pleased with the growth that we had in 2025. As you know, we ended with $677.6 million as cumulative net revenue throughout the year, which is 62% year-over-year growth. I think the, you know, the most important thing for us is that while we're happy with where we are at this stage in the commercialization, almost five years out from our original launch in Q2 of 2021, we have such opportunity left to help more and more patients that are suffering from recurrent pericarditis.
There were a lot of drivers throughout 2025, including just patient adds and helping more patients, turning on more and more prescribers, as well as those prescribers, you know, to an accelerated level, becoming repeat prescribers, prescribing for two or more patients. Also the duration of therapy, the fact that the physicians are now, you know, more likely to see this as a chronic multi-year disease, based upon our education and the latest understanding of this disease, and compliance and underpinned by, you know, good commercial fundamentals such as good payer approval rates. All of those things combined have been, you know, key parts of the growth that we've seen in 2025.
We were happy to guide towards $920 million for cumulative net revenue for 2026, meaning that we expect further growth throughout this year.
Nick, before we go on, I actually noticed that there's no slideshow. I will say we will be making forward-looking statements today that are subject to risks and uncertainties. Please refer to the SEC filings for those.
Always have to say that.
Yeah.
You always gotta add that in there.
I didn't see the slide set behind you, so there's.
Yeah. We don't add those in. You mentioned the 2026 your guidance, which was great. What's the difference with drivers from 2025 to 2026? What's gonna lead to the greatest growth in 2026? Is it prescribers? Is it more patients? Is it duration? It seems like the duration, you're approaching three years now. If you can give a little bit more clarity on that, all three.
Maybe I'll just start with a general statement then, Ross, so feel free to go in through. I think it is all three.
Yeah.
It's obviously doing much of the same, but actually doing it better.
Mm-hmm.
Continuing to do that. A lot of lessons learned. You know, we have said that we are continuing to employ more digital marketing efforts.
Mm-hmm.
Within our campaign, as well as looking at AI initiatives to help continue that expansion and that adoption. We're doing that. It continues to be, as you say, the blocking and tackling as well. Continuing with our sales force, who have done a tremendous job so far, in continuing to educate patients and find those prescribers, repeat prescribers. Obviously, the rest of it is very important as well, as far as duration is concerned, and obviously compliance remains high. Continuing our efforts with the payers, which again, payer approvals remain very high. It's something where you just cannot get complacent, you know. Certainly, we see a nice growth moving forward. We're only 18% penetrated into that multiple recurrence target market. There's a lot more for us to do.
In addition to the 14,000 with multiple recurrences, we're also focused on the 26,000 which are on their first recurrence. That's an effort that we continue. We talk about the 18% penetration, but there is more for us to penetrate into. Again, not taking your foot off the gas, never getting complacent, and just hammering on.
Yeah, that's exactly right, Sanj. The 18%, just to be clear, is 18% of the two-plus recurrence group, not taking into account those patients earlier on in their disease course suffering just from the first recurrence, that additional 26,000 patient group. We have seen, you know, growing utilization in that first recurrence group, and particularly as physicians get more and more comfortable with how to prescribe ARCALYST, and they see the impact that it has upon their patient community. We've now got around 20% of all the enrollments that come in for ARCALYST are for patients that are on their first recurrence of the disease. We think that bodes very well for the future.
The opportunity to go more and more and more this year is certainly there for us to help many more patients suffering from this disease. As you mentioned, around the duration of treatment and the duration of the disease, the duration of treatment now, the average duration of treatment for ARCALYST is approaching three years. If you compare and contrast that against what we know about the natural history of this disease is that the median in the natural history for patients that have two or more recurrences is around three years. Of note, that's the median, not the average.
In that dataset, which goes through to eight years, time period, there's still one-third of the patients that are suffering from recurrent pericarditis at five years of treatment, and around a quarter of all the patients are still suffering at eight years when that data set in particular finishes. We don't know exactly what the average is certainly within that data set. There are other data sets that, you know, kind of allude to longer duration of natural history of the disease. But the fact that the treatment of ARCALYST on average is approaching three years, the median duration of two or more recurrence patients is around three years. We'll see how that continues to evolve over time. The fact patients are staying on for that amount of time speaks to a couple of things.
One, that physicians are understanding that this is a multi-year chronic disease, and the way in which you treat this disease today is very different to what it was in the past, when people were treating episodically and for as shorter time periods as possible, particularly with the utilization of corticosteroids. Now people are seeing it as treating throughout the disease, not just to improve the symptomology of the disease, when patients are in flare, but ultimately to prevent flares from happening in these patients throughout the course of the natural history of the disease. We think those things kind of bode really well for the future. Ultimately, ARCALYST was designed to be used as a long-term chronic condition, a chronic treatment for a chronic condition, in these patients.
Yeah, that's really helpful. Before we dive into the penetration that you guys have or the first recurrent setting, I just wanna ask, 'cause you mentioned on the call, on the earnings call about Q1 expectations. If you guys can just reiterate them and what like headwinds or tailwinds you expect in Q1 that's typical for Q1 and why you didn't see that last year, I think that would be very helpful for some folks.
Yeah, I'm happy to start. I can outline that. Yeah, what we mentioned on our earnings call is the more of a reminder that, you know.
Mm-hmm
in Q1, generally you see industry-wide or specialty industry-wide, some headwinds, around a couple of things. One is, payer plan changes.
Mm-hmm.
A lot of people change their plan or through their employer change their plan at the start of the year. For patients that have a change in plan, often there's a new approval that needs to go into place. Sometimes you have to bridge patients on free goods while you get the new approval in place and switch back to commercial therapy. That provides a level of headwinds every year. Also, there's the co-pay resets for all patients. Meaning that we have to buy down those co-pays, you know, more so at the beginning of the year than we do the rest of the year, particularly with the advent of accumulators and maximizers.
That impacts the gross to net in Q1 historically, as you kind of just buy down more patients' co-pays to keep them onto therapy. Again, that's all part of kind of the seasonal headwinds in the industry that you see at the beginning of each really Q1. As a reminder, last year was a little bit of a unique Q1 for us because of the IRA changes associated with Medicare Part D patients and the federal changes that came into place from January 1 of last year, meaning that they capped and improved the affordability by capping the co-pays for Medicare Part D patients.
Last year was $2,000, this year it's $2,100, which can be spread throughout the entirety of the year on equal payments as well for patients if they enrolled in the MP3. What that meant last year is that there were a lot of bolus of patients that switched from free goods to commercial therapy last year, along with those IRA changes. As we said at the time, and kind of reiterated on our earnings call this year, is that that was a one-time bolus of patients last year, meaning that we don't know what the impact will be this year, but that was a kind of a one-time federal change that happened last year.
This year, you know, we're focusing on continuing to execute and help as many patients as possible.
Yeah. That's very helpful. You guys announced that you've now reached greater than 4,150 unique prescribers, but have previously noted that there is anywhere from 20,000-30,000 prescribers that treat recurrent pericarditis. What's the plan to reach those additional prescribers? Also on top of this, what's the plan to increase the depth of prescribing since 50% of your prescriptions came from repeat prescribers?
Yeah. Thank you, Nick. It's a couple of things. I think firstly on the breadth of prescribing. The number, as you said, has been growing very nicely quarter on quarter, ended last year more than 4,150 total prescribers. Now, clearly there's a lot of room left for further growth. You know, one thing about this disease space is that generally speaking, it's not looked after by a small number of centers of excellence, unlike in some rare diseases where patients are highly concentrated and congregated with a small number of physicians. This is a disease space that while there are, you know, actually a growing number of centers of excellence, but is thus slightly more nascent, you know, patients are widely spread throughout the U.S.
The opportunity to get into, as you said, 25,000-30,000 people that see a recurrent pericarditis patients in a given year, clearly that shows there's a lot of work still to do. The way in which we do that is obviously focus on execution from our sales team. We've got a fantastic field sales team, and, you know, continuing to execute and educate and create awareness of ARCALYST and the change in paradigm that we now have with the availability of ARCALYST is incredibly important. As it is through our medical affairs team, who also continue to educate and disseminate data among the physician community. There's a lot of levers that go into creating the breadth of prescribing, as long as...
As well as what Sanj said earlier, which is, you know, for us, you know, investing in AI and machine learning and digital marketing and the things that we can do to really effectively get out to healthcare professionals and switch on, you know, one by one, more and more physicians throughout the year. The depth of prescribing is also important. We really have a dual strategy around the breadth and the depth.
Again, there are many things that can help with the depth of prescribing, but one of the biggest things being that when a physician prescribes ARCALYST, knowing how to prescribe it, going through it the first time, knowing how to get the PA submitted and seeing their patient getting onto therapy, and knowing that through the clinical trial work, that we're, that we've done and has been very well published, this is a highly efficacious, well-tolerated treatment.
That seeing that play through into the real-world setting is, you know, a fantastic way of physicians really seeing the impact it has upon their patients and that encouraging them to look for the second patient and the third and the fourth, and to help with this, you know, new treatment paradigm. Another thing, you know, that's helping as well or is important to the landscape is the publication of the ACC Concise Clinical Guidance last year, in the second half of last year, which really ratified what we've been saying since the beginning of the launch of ARCALYST five years ago, which is after the utilization of NSAIDs and colchicine, which are often used for the almost universally used for the first pericarditis episode.
When patients continue to flare and they become recurrent pericarditis, often a new treatment modality is required. These are particularly for patients that have, you know, risk factors of severe or significant effusion or tamponade or constriction or other risk factors around them that could mean that these could be a longer disease or more severe disease in patients to opt for interleukin-one alpha and beta inhibition as a key drivers of those cytokines are key drivers of the disease. More and more people are opting for ARCALYST rather than historically going to corticosteroids.
While we've been promoting it like that after NSAIDs and colchicine and prior to corticosteroids, the fact that more publications have been coming out since our launch really emphasizing the same thing, and then most recently being ratified in the ACC Concise Clinical Guidance, is another way of getting information disseminated to physicians of the new way of how to treat this disease.
Mm-hmm. It's helpful. Thinking about penetration now, where you guys are at 18%. What's the peak there? I mean, I know I've asked this before, you guys can't say it, what's a reasonable peak penetration of recurrent pericarditis? I mean, ARCALYST leads to such a profound effect compared to what's on the market, even though nothing else is really approved except for ARCALYST. Could you get to 100%? I mean, I know it's hard to get to 100%, a lot of people here would probably be happy about it. What do you think is a reasonable peak?
Reasonable is not in our vocabulary. I, you know, we're a group-
Trying to ask it.
that never gets complacent, that always, in some ways, wants more to create more value.
Mm-hmm.
-obviously for patients and for shareholders. For us, we obviously believe there's still tremendous opportunity ahead of us. You can see that by the 18% penetration into just the multiple recurrence population.
Mm-hmm.
There is this first-time recurrence beyond that, which is around 26,000. For us, our job is to reach as many physicians and patients as possible, especially repeat prescribers, and get to those patients. We know there's more opportunity ahead of us. We know we've got the right team to get as much of that as possible. All I can say is that we are incredibly hungry to do much more, and let's just leave it at that.
It's good. It's perfect. You mentioned that first recurrence, right? I'm gonna ask about it now. What have you seen from the patients that have been treated in the first recurrence setting? Is there anything about, like, their baseline characteristics, anything that's driving that use in those patients that maybe a physician has seen to decide to pick that patient for their first recurrence setting?
Sure. Maybe there are kind of two parts to that answer, or even to your question. One part is for the patients that are already on ARCALYST, what do those first recurrence patients, you know, look like? I'll leave that to Ross to address. What I can address, at least from a clinical perspective, is, you know, what is the thought process around when is the appropriate time or the best time to engage a patient with IL-1 pathway inhibition. You know, historically, you know, clinicians have focused on the most severe. It's usually the way that you enter, you know, a treatment paradigm is to focus on the most severe patients first.
As clinicians see that those most severe patients get better, they get comfortable with those patients and start thinking, "Well, this is really working well. How do I, you know, reach more patients?" The other part of it is that, of course, for every patient who's presenting, who presented with their second recurrence, they had presented at one point with their first recurrence. That begs the question, you know, what's really the best thing for patients is if you could figure out who that patient is when they present with their diagnosis of recurrent pericarditis, you know, at the time of their first recurrence. If you could figure that out, why not try to engage that patient earlier? I mean, that is one of those diagnostic challenges.
What there is in the literature is that. It's kind of a growing body of literature, is that although it's not exactly precise, there are things that you can look at in the patient profile that will help you understand. I think Ross even touched upon this a little bit. There are things you can look at in the patient profile that will tell you that this is the kind of patient who's going to have more severe disease. This is the kind of patient who's going to have longer disease. If that's the case, as you look at, you know, the, the classical guidance, usually it's, well, you know, patients in their incident episode are treated with NSAIDs and colchicine. They come back, you try it again.
You know, you really have to ask yourself the question as a clinician, well, how is this patient going to do? If you see those risk factors, what the literature points to is that these patients will probably not do terribly well on NSAIDs and colchicine. You know, and some of those risk factors may be related to the severity of the pain, the severity of the C-reactive protein elevation or any of the inflammatory markers, the presence of a pericardial effusion, meaning that the more fluid there is, the worse that is. It could also be, you know, worse findings on the MRI scan. There are a number of other, even clinical presentation factors that go into this, and some centers have even put together risk scores.
It's not so much about the duration of the disease, but rather the likelihood that these patients are going to be able to achieve drug-free remission at various points in time, one, three, five years. If you know that this patient has little likelihood of being of achieving remission at three years, you have to ask yourself, why would you treat someone with a three-month or six-month course of orals? That's really, I think, the tipping point. We actually showed a little bit of data at the European Society of Cardiology meetings last year, where, you know, we looked at event rates in patients who were treated with ARCALYST regardless of line of therapy.
It turns out that for all patients, regardless of line of therapy, whether it's third line, second line, or even first-line therapy, what we saw was, you know, a marked reduction in event rates to the order of, you know, 99+% reduction in events as long as they were, you know, remaining on drug. So I think that points to the identification of patients and the ultimate treatment paradigm for how they could be managed. Ross, I don't know if you wanted to comment on, you know, what you're seeing in terms of the patients on ARCALYST in the marketplace.
Well, I think that's nicely described around the risk stratification and kind of just general risk scoring of patients of albeit very nascent and embryonic, but, you know, at least provides some type of guidance to physicians how to think about patients that might have more severe disease or longer duration of disease. The reality is also that ARCALYST is approved for recurrent pericarditis overall. The label is utterly agnostic of the number of flares a patient should have suffered. Really, physicians have a choice. All patients, almost universally, are prescribed NSAIDs and colchicine for their first, you know, index episode of pericarditis.
When patients continue to flare and they become a recurrent pericarditis patient, there's a choice to be made of either, you know, prescribing again with the drugs combination that has already failed in these patients, and you prescribe again and maybe for a longer duration and, do that again and risk a patient suffering from a flare, probably unnecessarily, or do you opt for a targeted immunomodulator that really targets the two key cytokines of interleukin-1 alpha and beta, which are the drivers of the disease, and treat with the only approved therapeutic that's out there for recurrent pericarditis. That's a conscious decision, and I think what we're seeing is more and more patients opting towards ARCALYST. More and more physicians, I should say, sorry, opting towards ARCALYST.
Yep. That's all very helpful and makes a lot of sense to me. With less than 10 minutes left, we have to move to the pipeline. We have to move to 387, which has the Phase II data coming up in the second half of the year. Can you just set some expectations for that? Remind people that... I'll remind people it's a 24-week trial, so it's not just going to be a short data set. It's a relatively decent duration. What are your expectations for that? What are you looking for to support the movement into the Phase III?
Maybe I'll start. First of all, we are very excited about the ongoing phase II, phase III study. We're currently in the dose-focusing portion of the phase II study. We've said we'll have data in the second half of this year. I think ultimately, obviously, we're looking for a very safe and efficacious drug. I think it's very important to have an additional treatment option out there for patients while still maximizing on the ARCALYST opportunity and therefore getting KPL-387 to launch as fast as possible. Ultimately, the data will be what the data will be, and obviously, our plan is to move into phase III. We've outlined the development path so far. You know, we believe that's the development path that will hopefully get us to approval.
There aren't any additional studies that we've described other than the phase II additional treatment option study for monotherapy to KPL-387, but that's not really a core part of the registrational path. I suppose we'll see what happens in the second half of the year. We haven't really elucidated exactly what data we'll put out there yet. Obviously hoping for success and looking forward to getting another treatment option out there for patients. John, anything to add?
No. I mean, that was, that was nicely said. Maybe just to remind people that the target profile of KPL-387 is once-monthly dosing. In that sense, you know, what we're very excited about is that the phase I data showed that the 300 milligrams subcutaneous dose of KPL-387 in healthy volunteers, you know, sat above the target of serum concentration for over 57 days. That supports, you know, examination of the drug in phase II clinical trials, where what we're testing is basically monthly or biweekly dosing, and we have two different dose levels.
The overall purpose of the study with this forearm dose-focusing paradigm, as Sanj mentioned, is really to understand how all of the totality of the data leads to the construction of the PK/PD model and the identification of the ultimate, you know, of the dose that we're gonna carry forward into the phase III program, of course, data-driven. All of that evidence, nicely said, that is a 24-week trial. There's a richness of data that will come from that, both in terms of efficacy and safety, to set the stage for what we hope is to come.
Just a reminder, obviously, as you know, ARCALYST is a weekly injection that does require reconstitution. KPL-387 is a liquid formulation, so in addition to being monthly-.
Mm-hmm
...there is the potential for a use with an auto-injector. That's another important potential addition for patients.
Yeah. Yeah, that's helpful. How soon after this phase II data could you initiate a phase III trial? What's the time to recruitment, time to data? The RHAPSODY trial was pretty quickly to enroll. Anything that you can provide there, because I know you've guided to launching in 2023.
Yeah. Well, the good news is it's largely the same team, obviously...
Yeah
...both on the leadership side as well as the expertise we have within our clinical group. You know, we'll obviously use RHAPSODY and the development plan there, and sort of leverage a lot of the relationships that you have with the investigators. We plan to go as fast as humanly possible. Our motto is every second counts, so you can tell, obviously, we really live by that. At the same time, data integrity, quality, compliance are very important to us as well. We'll just go as fast as possible, but we're certainly hoping for the best, and I think it's a very exciting program overall.
For this trial, the phase II, you've noted before it's enrolling ex-U.S. Right now, ARCALYST is not approved ex-U.S. Is there a potential opportunity ex-U.S. for an IL-1 targeted treatment? What is that opportunity?
I mean, we're always looking for incremental value and creating more value. Obviously, Ross and I have been a very global approach. We've launched many drugs in Europe. We look at every single asset we have individually, and we'll continue to look at, you know, the pros and cons of doing something like that. Obviously, to date, we have focused on the U.S.
Mm-hmm.
I think that's been the right decision. We'll continue to evaluate that as far as not just ARCALYST, but other products that we have in our portfolio. We've definitely got a global orientation in our, in our mindset. At the same time, you know, value creation, really doing what's right, thinking about our resources and capital allocation is something we spend a lot of time thinking about and making sure that we get the right overall, make the right investment choices.
Yep, that's helpful. I'll ask about this after, moving to 1161, you guys have been pretty quiet besides saying that it's every three-month dosing. If you want to release what the indication is here at the TD Cowen conference, feel free to do so. If not, that's fine, I guess. How are you thinking about potential indication expansion for this?
It's funny you say quiet 'cause my wife would never ever describe me as being quiet. I think, you know, we may have been quiet on that. We've certainly been thoughtful.
Yeah.
Clearly, we've developed a lot of muscle memory, both in the RP space as well as broader ICI, and it's not lost on us that, you know, IL-1 alpha and beta inhibition does have applications for other indications. You know, we have got some ongoing work with cardiac sarcoidosis using ARCALYST. We're obviously watching the landscape as far as what other people do, so there are other diseases, but at this point, we have not elucidated what the indication will be. Suffice to say we're being very thoughtful, even though quiet.
Yeah. Yeah. I assume so. I mean, I would hope you're gonna be thoughtful about it. For the phase I that I'm assuming either initiating towards the end of this year or early next year because you guys are gonna have the IND filing this year, is that gonna be a healthy volunteer trial? Because you already have the IL-1 mechanism proven with the safety, especially with 387, given its IL-1 receptor, could you move into patients directly?
Yeah. At this point, what we've said is we'll be in a phase I study. We haven't actually clarified whether that's gonna be healthy volunteers or patients. The plan is... You know, obviously we've got the experience, what we did with ARCALYST as well as other products. We'll be in the phase I this year is the plan.
See, you guys do stay quiet. Try to pull it. With that, we're not close to time yet, but you guys are a profitable company. You're generating cash. What is the plan for this cash flow? Is it to focus on the expansions for KPL-1161, for KPL-387? Is it to bring in potentially another asset? How are you guys thinking about that?
Thoughtfully. We obviously think very carefully about. Clearly, we've shown we know how to commercialize products, and ARCALYST has done very well, and we believe there's an awful lot of room to grow. Obviously, there's a lot of momentum now behind KPL-387 and KPL-1161. Both KPL-387 getting through that phase II, phase III study, and then obviously getting into phase I with KPL-1161. You know, the company was built on business development, so we constantly look at assets, but the bar for us is incredibly high.
The good news about, you know, Kiniksa, which is all good news by the way, is that we don't have to do anything outside of our current portfolio, but we do look, and we consistently look, and long as there's value to be had there and we feel that we can, you know, really bring that value into the company, we will do it. A lot of it's depending on capital allocation decisions, and a lot of it's depending on how much value it will create. We've shown that we can divest programs. We divested Vixarelimab, as you know, for a very large upfront money. We know how to be very pragmatic and mindful in terms of the value, but we are very good stewards of the capital.
We've shown we know how to be economically responsible, and we'll continue to do that. Ultimately, our plan is to continue to execute, build a lot of value, both through the commercialization of ARCALYST and the portfolio, and continue to look at other value-creating opportunities.
Yep. That's helpful. We like to end all of these with just asking, all three of your views, what is the most underappreciated aspect of the Kiniksa story by investors?
I think 387's now people are starting to pay attention to 387. I think that historically has been one. I think obviously the potential for 1161, I'm sure a lot of that is because we have not yet elucidated what the indications are. I think that's there. I think the fact that the growth we've seen in ARCALYST is tremendous, the future growth is still there. This team has shown for the last 10 years it knows how to be you know, how to execute and bring value. If you remember, we started with a blank piece of paper just 10 years ago. For us, this is just the beginning. We are incredibly hungry, as I said, to create more value. You know, it'll come over time.
Anything to add, Ross?
I don't think I can add to that, no.
I think we have to end it there. Thank you very much, all three of you, and thank you everyone for coming to listen to the Kiniksa story.