Hi, everybody. I'm Doug Tsao, Senior Analyst at H.C. Wainwright. Thank you for joining us. We have with us Outlook Therapeutics, represented by the company's CEO, Bob Jahr. Bob, you've been with the company now, I think it's a couple years. You just hit a very important milestone with the approval of LYTENAVA. Maybe just as a starting point, just provide some perspective on what the company is trying to do with LYTENAVA and the solution or the problem it's trying to solve in ophthalmology.
Great. Thanks for having me here, Doug, and we are very excited here at Outlook Therapeutics with the milestone of the FDA approval of LYTENAVA. Really what the mission has always been is to bring the first ophthalmic FDA-approved bevacizumab to the treatment of wet AMD for the retina community. Really what's important there is bevacizumab is widely known and has been widely used in the treatments of retina and for wet AMD over the past 20 years. However, there's never been a specific ophthalmic version that has been FDA approved all the way from manufacturing, all the way to the patient side, specific for this treatment indication.
Really what we're looking to solve for is we're bringing something that is very familiar, that has great efficacy for patients and affordability, but also now knowing that you have the confidence and consistency of manufacture, safety, efficacy, FDA regulations, quality and consistency of supply, and more importantly, a commitment to the ophthalmology community that we're here to support them and their patients and also grow and build our company from there.
Maybe for people who aren't familiar, because I guess for some people might hear like, okay, so bevacizumab is widely used already. You do provide an approved version or it's used off label. What are the challenges or the limitations of repackaged bevacizumab?
Yeah, that's a great question. I think first and foremost, there's consistency of supply and quality of supply. Which means that it is allowed to be repackaged, which is a repackaged bevacizumab that's actually manufactured for an oncology usage. That's then repackaged into syringes. Those syringes could have different particulates in them, different quality of sustainability, consistency. When they do that, you don't really know what you're getting each time. Luckily, it's effective and it's been something that they have used over years. I think most importantly is that supply chain is not guaranteed. For us, our manufacturing is all here in the U.S. That manufacturing is subject to FDA guidance and approval all the way in, as well as for quality.
That supply chain all the way through the 3PL, through the distributors to the practices is certainly regulated but also guaranteed for us. If there's any disruption in there, we own that. We take care of that. It's not something where they're having to go order and then reorder from somebody else from repackaged. More importantly, our commitment is for every patient every time.
There have been challenges in the past where repackaged providers can pull out of the market. They decide to shift their business models to other areas that allow for compound or repackaging with no prior notice. That can really cause some disruption in the supply chain, but also too more consistently for patients that want the same product every time. I mean, these are important injections that are preserving vision into the back of the eye. I think it's really important if I were a patient or if anybody in my family were, to make sure that they have that quality and that consistency throughout their treatment program.
Bob, with the approval, you obviously got a label. Maybe it'd be just be helpful to just sort of walk out, because this is sort of the unique opportunity in the sense that people are very familiar, have been using repackaged bevacizumab for a long time. They feel comfortable based on that use in terms of the efficacy. What you were looking to accomplish with the labeling and what this will let you do.
Yeah. We're very happy with the label. The label's predominantly based off of our adequately well-controlled trial in NORSE TWO, which was a head-to-head against ranibizumab or Lucentis, and then confirmatory evidence from the NORSE EIGHT. Our trial is specific to wet AMD, and it allows for monthly dosing. Again, everything that we wanted in terms of the clinical trial program is reflected in the label.
That's first and foremost. I also believe, too, what the label does provide us is to get into the practices and explain that we have the first and only ophthalmic version of bevacizumab for wet AMD. We can explain to the physicians and to the offices what exactly that means for them in terms of a benefit. Our label is not head-to-head against compounding or repackage. I think it's really important. The label is specific to against ranibizumab.
In our promotional campaign, we'll be really focusing on the safety and efficacy and the clinical benefit of treating with bevacizumab for wet AMD, number one. I think that's a really important piece of it. The other element to that is with the label is we can actually provide all the full round services at the offices and the practice that patients may need, whether it be hub services, co-pay assistance, payer services, et cetera, because we will be able to commercialize and support that all behind it. That has not been something that repackaged bevacizumab has been able to provide into the market before, which I think is very, very important, and what we hear from the customers is critically important in their offices in today's market.
Bob, I think it's important maybe, you just referenced customers, to talk a little bit about the market structure and what this will sort of allow you as a small company to reach a lot of patients, right? Because as you referenced, millions of off-label bevacizumab injections each year. As a small company, you sort of talked about a relatively limited sales force, what you're going to be able to accomplish.
Yeah. It allows us to be agile in that element. There's 2.2 million injections of repackaged bevacizumab roughly annually. The good news is this is a well-defined market. Wet AMD is well understood. Bevacizumab in the anti-VEGF class is well understood. Anti-VEGF overall as a treatment option for wet AMD is very well understood in this market. What that means is, in terms of our resources, we don't have to deploy out there 18 to 24 months before to shape a market, to explain a new MOA, or to discuss a concern about treatment undiagnosis or untreated patients. It is incredibly well-defined in that regard.
That enable us to focus our resources on what's really the most important part that I believe is coming into the market, making sure the offices and the physicians or practice managers are very comfortable ordering and procuring LYTENAVA, ensuring that we have the hub services so that they fully understand the payer landscape and the patient out-of-pocket cost, and that's where we can really put our support there.
So that helps us really zero in and focus. The other part that we bring into as we've done our research, there are segments. There are some segments of this market that are willing to move very quickly because they're very dissatisfied or uncertain about repackaged bevacizumab, and they want an FDA-approved product. We can really focus on them out of the gate, and then we can grow and scale the organization in Q1 accordingly.
As you know, we're also in a buy and bill environment here, so we're doing all the correct things right now to submit for the HCPCS and the permanent J-code. That permanent J-code will be available in April of 2027. So again, that allows us and our resources as a small company to really go to make sure the first offices that order have a phenomenal experience. We support them very well, and we can build the momentum from there as we move through the first quarter toward that April 1st permanent J-code where we can start growing and scaling for broader offices and utilization because that permanent J-code is always sort of an adoption hurdle for some practices.
Being a small company, I think number one, we know the bev consumers. We know what drives them to use compounded bev, what drives them to maybe choose other agents such as biosimilars or branded. So we can really focus our pre-market and then our go-to-market strategies where we really believe we're going to have the most successful initial impact and scale from there.
Bob, I think you sort of mentioned certain types of customers. I guess I'm just curious, what customers do you think or segments of the market do you anticipate targeting first, or maybe help us understand where you expect to see the most adoption in the early going?
Yeah. First and foremost, there's obviously a clear segment that has reached out and that we're very familiar with that represents roughly a third of the HCP targets. About a third of the targets and just under half of the potential volume where they are not comfortable using repackaged bevacizumab. They might be using it to navigate through the step edit that might be required through different plans. They are ones that have readily identified that as soon as there's an FDA-approved one, they would move first. With that, we also need to layer in there will be a temporary J-code. Roughly between a quarter and a third of offices will order under a temporary J-code because that can delay reimbursement.
We'll continue to segment and target and go to those offices first and foremost in the fourth quarter and really make sure that they're ready to order and that their offices are set up for administration, billing, and reimbursement. As we get into the first quarter in January, we can begin to expand that to the offices that are getting ready more for the permanent J-code, which hopefully will come in April. It really does scale. Most of our forecast does scale after that permanent J-code piece. Really what we'll be focused in on is how do we identify those that want to be a first mover? What are the barriers of them in terms of being a first mover? Is it payer access? Is it ordering? Is it the patient out of pocket?
Make sure we support them and then understand how do we encourage them to order, have a great experience, and then reorder, obviously in this first quarter. That's how we're really thinking about it is we don't need to go out there with a large sales force of 80 key account managers to all the practices out there because we know many of them will not order until they understand fully what the reimbursement and the permanent J-code billing is. Really moving to the ones that have that infrastructure and that tolerance to understand the temporary J-code. We'll of course support them with all the wraparound services such as dating, patient assistance programs, et cetera. That's how we're thinking about going out there in the fourth quarter.
Bob, I guess you mentioned how some practices use bevacizumab as a way sort of as an initial step therapy for patients. I guess how do you envision, do you see changes evolving? Because obviously bevacizumab for many clinicians is sort of used as a bridge to getting patients to longer-acting agents, right, or agents that require less frequent dosing. Maybe just help us understand exactly, we sort of understand that there are a lot of injections each year, but how you anticipate those injections being used in patients.
Yeah. I think it's really important to break down the segmentation of those patients. Roughly just under 30% of the patients with wet AMD are Medicare fee-for-service with a supplemental. These are patients where Medicare is the primary, and then they might have a secondary. Those patients have a very different out-of-pocket structure where there could be a better copay assistance or secondary insurance that they're getting for their supplemental plan or a Medigap plan.
There's that. There's roughly under a third or under 30% that are commercial patients, and we anticipate those will be covered per label until the formularies and until the medical determination is determined in the coming months. They're usually covered per label upon approval. The ones that we're really talking about, to your point, the step edit, I think it's an important one. Medicare Advantage plans do cover quite a few, over 40% or just between 35% and 40% of these patients.
A lot of them do require a step edit, meaning a trial of a repackaged bevacizumab. Some of them require a trial of a repackaged bev or a biosimilar, and then the physician or the physician office has to document that it's not really working before they get to that branded or a longer-acting one, whether it be the Roche product or the Regeneron product. I think it's really important to understand that. The patients or the segment that I was talking about earlier that do that step edit, they want to move their patients through that as quickly as possible. They will try it, they'll try a repackaged bevacizumab, and ideally, they'll try LYTENAVA.
After around three injections, those patients, whether they're prior auth or for whatever reason, they will try to extend to a more extended dosing product that's not monthly. That's quite a bit of the volume. Not as many as the volume in terms of HCPs, but quite a volume of the patient. I think it's really important to understand that because I do believe we should be able to sit within that first step edit, just because they've been covering bevacizumab as the appropriate first step before you get to much more expensive, longer-acting ones.
Part of the segment, they will continue to treat and extend. They will continue to treat monthly. They'll continue to treat on average anywhere between five and seven injections a year before they make that switch to another agent, whether it be a branded or a longer-acting one. There is clear segmentation that we have in the market, and we'll customize our go-to-market approach for each of those. Definitely those ones that tend to want to move because that first step edit and then move quickly to a branded, that is a segment that has clearly identified that they would like to move over to an FDA-approved one immediately.
Bob, you mentioned with the approval that your initial target for pricing was under $500. Obviously you are not giving us specific pricing, but let us just use that as an imprecise estimate. Maybe help us understand what led you to that price.
Sure. I think it is really important. I believe every company has to have a pricing philosophy, and you have to really stick to it. One of the things, there are three areas in the pricing philosophy that we wanted to have here. Number one, it is broad access. I think the success of our launch and our success as a company will be that we want broad payer access. We do not want that to be a hurdle for the practices, number one.
The second piece is you have practice dynamics. These practices make decisions on a number of different dynamics based on what is going on in the marketplace. We did a very thorough assessment of this, considering all the biosimilars coming in, the supportive foundations, the Good Days Foundation, as well as what was going on with the branded. The third leg of that pricing philosophy is patient affordability. I think patient affordability is incredibly important as well, too, particularly in this disease state with these patients.
All these things have to come together for us to really look at our price. Certainly, being $500 below clearly indicates that we have already assessed that. I do not believe we would get broad payer access if we went north of that. I also want to be cognizant of the other dynamics there. We are very close to announcing price, and we will do that, and we will make sure they understand the full dynamics of that. But it is really grounded in our philosophy. We want to make sure, number one, that we can get broad access.
If that means we have to leverage some of that pricing and gross to net for contracting, whether it be at the provider level or at the payer level, we have that leverage for us to do that when the time is right if we want to do it. The other element to this price is, unlike biosimilars, we have our own IP, we will have our own J-code, and we can manage our ASP over the long horizon.
Biosimilars, as you know, other ones come into the market. There is a function where depending upon how they operate for the first couple of quarters and then how the reimbursement changes over time, we can really manage our destiny to provide the payers and the practices a long horizon of those economics, as well as help them manage the patient out-of-pocket, which is really important to us as well. That pricing piece, as we mentioned, as we get close to it is all founded in making sure all of those three levers work and work for the benefit of the patient and the practice and the payers.
Bob, I think it is interesting because your price is well below the other branded agents, but you are ahead of ranibizumab, where that pricing has evolved, which has become incredibly competitive. How do you think about your positioning versus branded Lucentis now, as well as some of the biosimilars? I know there is a lot of spread on the biosimilar Lucentis products.
Sure. I think what is really important is if you look at the overall ranibizumab and Lucentis market, it has not fundamentally changed in terms of patient preference or physician preference over time. You see most biosimilars sort of cannibalize within their own category. Bevacizumab actually is one of the few anti-VEGFs that actually grew last year for different dynamics for patients being treated later.
I think number one, it is really in the foundation of bevacizumab with over 2.2 million and over 40% of the anti-VEGF injections is considered a real backbone. The other part to that is our forecast and our challenge is we do not need to capture all that. Everything we have assumed is that count repackaged Bev will stay in the market. Even at our peak, we anticipate getting a part of that share, over a third of that share.
Everything that we're assuming in our base case scenario is that they stay there and we're competing. This element on biosimilars, I think, we've seen Lucentis and the biosimilars for Lucentis come in high and come in low. When you look at the overall claims data, it hasn't fundamentally changed that dynamic in terms of where they're being utilized in the market. I think that's really important. Same thing, we've seen biosimilars to aflibercept come in and do incredible cannibalization against the innovative of Eylea, right? They haven't really grown the pie of the market. When we look at these in each segment, I think it really comes down to patient or physician preference and making sure they understand the dynamics.
There has to be a dynamic that the practice is willing to adopt in terms of changing this behavior as well as what the payers will allow. I just think sometimes when we get into the biosimilars at a very low price, they're there, but does that mean do they have the clinical story that drives the uptake in demand? Do they also have the practice dynamic story that makes the physician or the practice want to make those switches? We haven't seen that. Even from our lessons in Europe, we've seen aggressive pricing on entrance in ranibizumab. To be honest, we've seen more biosimilars drop out just because the price erodes so quickly, but it doesn't change the overall volume of that particular piece of the anti-VEGF market.
Bob, you just mentioned Europe, and you've been on the market for a little while in Europe. I guess, the early commercial traction's been a little slow. Just maybe offer some perspectives of why you think the U.S. market should be or will be different.
Yeah, I think number one, first and foremost, is we're coming into the U.S. market with understanding better insights, understanding the market dynamics. Europe is, it's widely acknowledged even in traditional bellwether countries like Germany, that there's tremendous pricing pressure and different regulations that are going on there. The key part to that is you have to know your market, number one.
The other part is, as I mentioned, we've done extensive research over the last six months of really getting close and segmenting with the provider community, with the payer community. We've been engaging all year and since we won the appeal in May, weekly with different practices to understand it. I do believe the U.S. is a unique market. In Europe right now, they have a lot of different pricing pressures that are driving those things.
The key part there is if you don't focus on what your customers are really listening to before you get into the market, it can make a challenge. We're only in three countries right now in Europe, so we are being very much more strategic in terms of how we go to it. I think the key lesson is you really need to know where you're going in, is what's going to drive behavior, and really segment and listen to your customers. I think we're doing that. The team is doing a phenomenal job with that right now here in the U.S., and we're very pleasantly pleased with what we're learning and how it's confirming some of our earlier assumptions.
Bob, I think we're almost out of time, but one final question. When you think about the sort of outlook that you have pointed to in terms of the commercial ramp, I guess it'd be helpful to help people understand, how many accounts would you need to penetrate or see adoption because going back to that sort of point about concentration in the market.
Yeah. The amount of accounts, we're doing that work now. I can speak more to HCPs. I think there's, for quick adoption, we'd love to see and penetrate between 25% and a third of the accounts in the early parts of the launch, right? That's really based on those that we know are willing to operate with a temporary J-code. That scales up quite a bit after the permanent J-code comes in in April.
We just know that's a factor of using a buy and bill in the Medicare environment in the U.S. launches, that that's relevant. That penetration, and what I mean by the penetration of that is that, we've got them up and running with their hub services. They've ordered, or they're beginning to order in the late Q4, early Q1. That is what I really want to see. Then as we get into the second or after April into the second half of the year, we want to start penetrating ideally at least over a third to 50% of the overall practices.
So we'll provide some more details on the practice level. Right now we've been looking at the provider level, and that kind of, as you know, it's a very dynamic marketplace in the retina community with different acquisitions and integrations going on. So I want to be accurate when I give that number, but that's how I'm thinking about it today. That's usually based on analogs in terms of buy and bill launches, particularly dealing with this coding and reimbursement dynamic that we work with here in the U.S.
And maybe one final question, just what sort of metrics are you going to be tracking heading into in the early stages of launch?
Yeah, absolutely. That's critical. First, most importantly, it's covered to label. What number of lives have we confirmed the coverage to the FDA approved label? Because that's where we can commercialize and we can really focus our efforts on. As we move into the fourth quarter and the first quarter, the percent of lives that are relevant for wet AMD, what can we confirm on their coverage in terms of particularly a parity or better to compounded bevacizumab or repackaged bevacizumab?
I think that's one of them. The other KPIs are, as I mentioned, we'll be going to a segment of the community. So the segment we're targeting, what percent of that segment are we getting to, and what part of that segment have we converted to ordering? That's another important one is your targets converted over to ordering. Then what part of those have reordered? So those are some of the early KPIs in the early stages is we need to first start with lives covered and access, and with that, how does it go to practices converting and starting to order.
Then more importantly, reorder, and then we grow from there in terms of making sure all the billing and reimbursement is coming through. Those are the early day ones that we'll start looking at. Obviously we have ATUs that we'll be fielding in terms of satisfaction. We want to order and have Outlook Therapeutics as a company be positioned as a partner of choice in these communities. Those are more qualitative ones, but we'll also be fielding that work as well too.
Okay. Bob Jahr, I think we're over time, so thank you very much, and we look forward to hearing from you as we see LYTENAVA's commercialization progress.