Welcome to the Phathom Pharmaceuticals FDA approval conference call. At this time, all participants are in a listen-only mode. After the presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's call is being recorded. With that, I would like to turn the conference call over to Eric Sciorilli, Head of Investor Relations. Please go ahead.
Thank you, operator. Hello, everyone, and thank you all for joining us this morning to discuss our recent FDA approvals. Just a couple of logistical items before we get started. A recording of today's webcast and presentation can be found under the Events and Presentation section of our corporate website. Also, before we begin, let me remind you that we will be making a number of forward-looking statements throughout today's presentation. These forward-looking statements involve risks and uncertainties, many of which are beyond Phathom's control. Actual results can materially differ from the forward-looking statements, and any such risks can materially adversely affect the business, the results of operations, and trading prices for Phathom's common stock.
For a detailed description of applicable risks and uncertainties, we encourage you to review the company's 10-K for the year ended December 31, 2022, filed with the SEC, as well as the company's subsequent SEC filings. With that, I will now turn the conference over to Terrie Curran, Phathom's President and CEO, to kick us off. Terrie?
Thank you, Eric, and thank you again to all those joining us today. Here with me for our prepared remarks is Martin Gilligan, our Chief Commercial Officer. I will lead off the presentation with an introduction, followed by an overview of the disease states and labels of our two recently approved indications. Martin will then take you through our commercial strategy and how we will execute our launch plans. At the conclusion of our prepared remarks, our Chief Operating Officer, Azmi Nabulsi, the Chief Financial Officer, Molly Henderson, will join us to field the question and answer portion of today's call. With that, let me officially begin by saying that we are thrilled to now have FDA approval of vonoprazan, which we will now refer to by its brand name, VOQUEZNA.
VOQUEZNA is the first ever innovative acid suppressant to demonstrate superiority compared to a proton pump inhibitor or PPI, across multiple indications. VOQUEZNA is a potassium competitive acid blocker or P-CAB, now approved in the U.S. for the healing and maintenance of healing, all grades of erosive GERD or erosive esophagitis, and relief of associated heartburn in adults. This achievement marks a huge milestone for both Phathom and for patients with erosive GERD. Phathom was founded four years ago to develop an asset that demonstrated clinical and commercial success outside the U.S. Since then, we've conducted three U.S. registrational trials in H. pylori or HP, erosive GERD, and non-erosive GERD, or non-erosive reflux disease, all of which met their primary endpoint. Our focus and excitement now shift to introducing VOQUEZNA to the U.S. market and its over 20 million patients treated annually for acid-related disorders.
VOQUEZNA represents a novel mechanism of action that demonstrates pharmacokinetic and pharmacodynamic, or PK/PD, advantages compared to the standard of care for acid suppressants, PPIs. Back in September 2021, we announced the results from our VONO-103 study, which evaluated the PK/PD profile of VOQUEZNA in comparison to the PPI lansoprazole. In both primary endpoints, VOQUEZNA demonstrated significantly greater acid suppression. We believe this was driven by its mechanistic differences compared to PPIs, including a longer half-life, slow dissociation rate, and stability in acid. Ultimately, these results helped define VOQUEZNA's rapid, potent, and durable acid suppression profile, the foundation on which VOQUEZNA is built. Shifting towards our strategy, we believe there is tremendous growth opportunity building off the rapid, potent, and durable acid suppression profile.
Here, you will see our focus was to develop VOQUEZNA as a treatment for three distinct acid-related indications: HP, erosive GERD, and non-erosive GERD. Following the structure of the slide, each indication represents an addressable market that significantly expands the population of patients who could benefit from VOQUEZNA. Our first step towards executing on this strategy was receiving approval for VOQUEZNA Triple Pak and Dual Pak for the treatment of H. pylori in adults. Now, with the FDA's approval in erosive GERD, we're excited to have accomplished another key element of our strategic vision. Non-erosive GERD, if approved, will be another significant step. As we grow the brand across these indications, we are oriented on our goal of displacing PPIs and becoming the number one prescribed acid suppressant.... Together, these indications represent large populations with a high degree of unmet medical need.
Based upon our projections, we believe VOQUEZNA has the potential to reach annual peak revenues of greater than $3 billion. Focusing on, for a moment, H. pylori, the path is now clear for a U.S. commercial launch. Helicobacter pylori itself is a widespread bacterial pathogen, which in recent decades has seen eradication rates drop below 80%, in part due to antibiotic resistance, inadequate acid suppression, and complex treatment regimens. The VOQUEZNA Triple Pak and the VOQUEZNA Dual Pak will now offer physicians and patients two new therapeutic options, with demonstrated superior eradication rates compared to PPI-based lansoprazole triple therapy. We are ready to bring these products to market as first-line treatment options for patients with H. pylori. Our launch of VOQUEZNA for erosive GERD begins today, simultaneously with our launch of the HP packs.
This news marks the first major innovation to the U.S. acid suppressant market in over 30 years and demonstrates our commitment to changing the GI treatment landscape for patients and healthcare providers. The team here at Phathom have worked tremendously hard to reach this milestone, and I'm extremely proud of our efforts. But we will not take our foot off the gas. As our enthusiasm grows and we kick off our combined U.S. launch, we look forward to having this new first-in-class therapeutic option available to physicians and patients next month. I will now provide some additional color on the attractive market dynamics and strong approved label that validates our excitement for the erosive GERD opportunity. The GERD market in the U.S. is incredibly large and driven predominantly by prescription volume.
Despite the abundance of OTC options that exist, data shows that 85% of PPI volume is still driven by prescriptions. This translates to about 110 million scripts written and filled annually across all indications, a figure that has remained steady over the last 5 years. Pair that with the total addressable erosive GERD market of approximately 7 million diagnosed and treated patients each year, and you'll start to see that this large market take shape. As I mentioned earlier, PPIs have been the standard of care for decades, with no alternatives for millions of patients lacking symptom relief. Their dissatisfaction is legitimate, but what solution can a physician offer? What we hear from the market is that switching between PPIs is common, and claims data backs up this sentiment.
In fact, a recent medical claim analysis showed about 35% of erosive GERD patients treated with a prescription PPI switched to a different PPI after only 3 months' treatment. Overall, erosive GERD is a market ripe for a new treatment option. Enter VOQUEZNA, with its labeled superiority claims compared to the PPI lansoprazole. Now, turning to an overview of VOQUEZNA's prescribing information from the label. I'd like to bring your attention to the indications listed at the top of this table, which include clear references to usage in all grades of erosive GERD, as well as the possible use of VOQUEZNA tablets for the treatment of H. pylori. As it relates to administration, note that the recommended dose for the 8-week healing phase is 20 milligrams, and the recommended dose for the maintenance phase, which can last up to 6 months, is 10 milligrams.
Both doses are recommended to be taken once daily, with instructions stating the tablets can be taken with or without food, which is a differentiator for VOQUEZNA versus PPIs. For full prescribing information beyond these highlights, please visit voquezna.com. I would like to emphasize how pleased we are with the label. This screenshot on this page is from the clinical efficacy section. You can see there is a significant amount of trial data included, and I'd like to focus your attention to the multiple superiority claims references, including across the healing and maintenance of healing portions of the label. These claims establish VOQUEZNA as the only acid suppressant with a label that references superiority versus a PPI, and they provide the foundation for the strong promotional messages that our commercial team will be leveraging today. Touching upon safety, VOQUEZNA has demonstrated a well-tolerated safety profile.
I began today mentioning the success of vonoprazan in other countries where it is already approved. Through clinical trials, commercial use, and post-marketing studies in those other countries, tens of millions of patients have already had experience with vonoprazan. As with the prescribing information, for full safety information, please visit voquezna.com. Today marks the successful culmination of years of hard work and dedication by the Phathom team, our clinical and manufacturing partners, and all of the patients and physicians who have taken part in clinical trials and market research. With approval for erosive GERD, Phathom has achieved another important milestone, signaling the start of our commercial chapter.
Each of the factors you see here, the large market with high dissatisfaction, the first new MOA in 30 years, the differentiated profile with superiority claims versus the PPI, and the strong interest by physicians, serve as cornerstones validating blockbuster potential. There's a lot to be excited about when it comes to VOQUEZNA's power to help heal erosive GERD. I'll now pass it over to Martin Gilligan, our Chief Commercial Officer, who will walk you through how we're going to translate this blockbuster potential into reality and help patients experience the benefits of VOQUEZNA. Martin?
Hello, everyone. Let me start by repeating how excited we are to launch VOQUEZNA. Everyone at Phathom is eager to get started, and I'll share with you today components of our launch strategy. As Terrie mentioned, our overarching strategy is to displace PPIs, which begins with the mechanistic differences, the rapid, potent, and durable acid suppression profile. These three pillars are the foundation of the strategy. Rapid, by increasing pH within 2-3 hours, potent acid suppression achieved on day one, and durable acid suppression that lasts 24 hours. Once GIs and PCPs hear this mechanistic summary, their interest level increases, immediately recognizing this class is new and different. They want to understand more. It's the cornerstone of the brand story that we will begin to be, deliver in promotion.
After decades of no new mechanism introduced in the category, VOQUEZNA's approval marks not only an introduction of a new class, but also the first product to have superiority claims versus a PPI included in its label. Terrie highlighted our strong and comprehensive label. We couldn't be more pleased to see the extent of the endpoints included, which provide support for how we promote VOQUEZNA. This slide is an example of the messages and material reflective of the label that we will begin to use in pre-promotion immediately. No waiting, we go live today. 93% healing, superior healing rates in patients with moderate to severe disease at week two. This data sets the stage of how the unique mechanism is relevant to the clinical differentiation.
Looking more closely at the promotional claims, the durability of healing is seen through the superior maintenance of healing data generated in our clinical program. Remember, patients take PPIs chronically, so being able to promote that our pivotal clinical trial demonstrated superiority in patients with all grades of severity, including those with moderate to severe erosive GERD, is both a differentiator and, we believe, a driver to prescribe. It's at this point where we see physicians understand the full picture of rapid, potent, and durable acid suppression, and they tell us that they can think of patients who are appropriate candidates for VOQUEZNA across all levels of severity. Similarly, in H. pylori.
pylori, our reps will be promoting that VOQUEZNA-based treatment regimens demonstrated superior eradication rates in all patients, and sharing that the efficacy had more than 2 times the eradication rate versus triple therapy with the PPI lansoprazole in the difficult-to-treat clarithromycin-resistant patients. Again, this slide is a snapshot of data and messages that we will begin to use today. What we believe strengthens the physician's enthusiasm to prescribe is the consistency of the data across indications. Now, the inclusion of superiority claims in our label for both H. pylori and erosive GERD indications sets VOQUEZNA apart from PPIs. So with a strong label and promotional claims, how do we approach the market? I'll now share how we execute the strategy. First, establish VOQUEZNA as the treatment of choice among physicians. Second, activate patients to request VOQUEZNA. And third, secure a place in therapy among PPI-experienced patients with the payer.
Now I'll go deeper and look at how we engage each customer segment. Let's first cover our targeting. While there are a large number of writers in the U.S. that prescribe PPIs, we know that approximately 52,000 providers are identified as high-volume, erosive GERD prescribers. What you see here is that GIs make up 18% of the 52,000 targets. It's not surprising that these GIs comprise more than one quarter of the overall volume, as they see a significant amount of erosive GERD patients. What's interesting to many is that primary care is a key player in long-term patient management, both as initiators of therapy and the decision-makers in this high-switch market that Terrie described. This group represents 60% of the targets, and their volume puts a segment of the PCPs at the highest level of prescribers.
It's the importance of GIs and volume of primary care that primarily drove the sizing of our 320-person sales force. I do want to note two additional points. First, APPs, it's a term used for nurse practitioners and physician assistants, are growing in their accountability of diagnosing and managing erosive GERD, and they prescribe high volumes of PPIs in both GI and primary care practices. Collectively, they represent 17% of the call plan. Finally, what makes this market both unique and very large is that on average, these targets represent approximately 1,200 TRXs per year. If you think about that, each month, each of these providers writes a PPI or is the source of a refill for 100 patients. It's a significant volume and a significant opportunity for VOQUEZNA.
Earlier, I mentioned how excited the Phathom team is about the approval of VOQUEZNA and erosive GERD and H. pylori. So you won't be surprised to hear our team is ready to launch. From previous meetings, many of you have heard me share that we have an MSL team in place for the past two years, and they have been actively engaged with the medical community. Now we are in the process of onboarding the sales force. By the end of this month, the first group of reps will be calling on physicians, with the full sales force rolling into place through January. These will be the only reps who have promoted erosive GERD in close to a decade, which gives them the opportunity to fully own the category as there is no company or brand competing for prescriptions. But our promotion goes beyond the 320 reps.
As Terrie shared earlier, our promotional campaign and messages are focused on the power to heal, and we are launching that campaign immediately. Our 52,000 targets will be hearing the VOQUEZNA story through expansive virtual and in-person education. Some of this will be delivered via our speaker bureau, where we plan to have over 200 speakers execute high-quality educational programs in 2024. In addition, we are leveraging robust technology and data so that 90% of our targets will receive digital messaging more than 50 times per month. So as you can imagine, where physicians search on the web and interact in digital social spaces, VOQUEZNA will be promoted. Lastly, on physician promotion, our presence at GI and PCP medical meetings becomes even stronger in 2024.
For example, at the end of October, we had a powerful presence at ACG, which is the American College of Gastroenterology. The most common feedback was, "I have patients in mind. When can I get it?" Well, now we can tell them it will be available to patients starting in December. Turning to DTC, our efforts will ramp up once product is available in pharmacy in December. Some of you have heard me speak of our consumer approach. Erosive GERD is a patient-driven, high-switch market with a high level of dissatisfaction. As I referenced on the last slide, there is no branded competition. By using technology to our advantage, we can reach erosive GERD patients on their laptop, phones, social sites, and where they search for GERD-related information, all with compelling data and a message to contact their physician regarding VOQUEZNA.
To ensure the action is immediate, we have partnered with a leading telehealth provider. For any patient who does not have a physician or is in need of an immediate consult, they can click through on VOQUEZNA.com to a third-party site to make an appointment with an independent physician, who can evaluate their condition and make appropriate prescribing decisions. I previously referenced that this is a patient-driven market. As we look at the market opportunity, we see DTC as a key component, and an overwhelming percentage of patients tell us they intend to ask their physician for a prescription. Now, up to this point, I've been focused on promotion. As we think about the payer, we feel good about our access outlook. We've shared in the past that we have an experienced account team working with the payers.
Given our success with H. pylori packs of 65% commercial coverage, we intend to carry the same payer strategy going forward. Starting with price, VOQUEZNA WAC is $650 for a 30-count bottle for both the 10- and 20-milligram strengths. Given demonstrated superiority versus standard of care, coupled with a discount for placement, our base assumption is one step through a PPI. While our label supports first-line use, we know the segment of most interest to payers is in PPI-experienced patients. Now, if you recall, this is a high-switch market with 35% of PPI patients moving to a different PPI after 90 days of therapy, so the step should not be a barrier.
As we look further out, it's our expectation that the VOQUEZNA bottle coverage will be regardless of indication, which means our erosive GERD effort will set the market access foundation for the potential non-erosive GERD approval. From the patient's perspective, VOQUEZNA will be available at all retail pharmacies. We also know that VOQUEZNA prescriptions will be captured by IQVIA and Symphony as part of their retail data collection. When the commercial patient with coverage gets to the retail counter, they will have the option to use a $25 copay assistance. Now, to set expectations, coverage for erosive GERD or the bottle will build during Q1 and strengthen even more in Q2. To aid those commercial patients who do not yet have coverage, we are partnering with Blink Rx.
If the physician sends the prescription to Blink Rx and the patient does not have coverage yet, the patient will be offered a VOQUEZNA price via Blink Rx that is in the range of most common commercial plan copays. It is our expectation that these non-covered scripts will not be captured by IQVIA or Symphony. Most importantly, the goal of our patient support is to limit the patient's financial burden and for the physician's objective of the patient prescribe VOQUEZNA to get VOQUEZNA. And we believe we have put together a good support plan to deliver on that goal. Lastly, I started by saying that Phathom is excited to bring VOQUEZNA to patients and physicians, and I hope I've conveyed that passion we have to help the millions of patients suffering from erosive GERD and H.
We're a commercial team with years of industry experience across sales, marketing, and market access, across GI and primary care, and from markets where payer access has been critical. Our commercial leadership alone has done over 40 launches, and we have learned from each one. We believe we have a great solution for patients, options for access, and are set up with data and analytics to ensure we can track our performance. We are fully prepared and ready to start. Terrie?
Thank you, Martin. With a robust commercial strategy and differentiated label, we are confident in the potential blockbuster opportunity that lies ahead. With products soon to be in the market, we know all eyes will be focused on the progress of our launch. So I wanted to spend some time sharing what can be expected in the near term. As product becomes available in December, our focus will be onboarding the sales reps and launching promotional campaigns. In 2023, we expect very minimal revenues. This is also when we expect our gross to net to be highest for the brand, with rates upward of 75%, while commercial coverage is limited. In the first quarter of 2024, we expect the full sales force to be in the field, and by this point, physicians and patients will have heard or seen the VOQUEZNA promotion multiple times.
GTN expectations will remain similar in the first quarter of 2024, and our path towards gaining commercial access will be aided by the start of formulary reviews for erosive GERD. The second quarter is when we believe commercial access will begin to materialize, leading the way to an uptick in prescription volume and therefore revenues. As the erosive GERD launch continues to build in the second half of 2024, we'll also be eagerly awaiting the FDA's action on our non-erosive GERD daily dosing NDA. If approved, this indication will significantly broaden the addressable population, further accelerating VOQUEZNA's uptake. Finally, another strategic step for 2024 will be the initiation of our phase 3 non-erosive GERD as-needed trial. Next year is sure to be a momentous year for Phathom. In closing, I'll echo Martin by saying we are ready and we're excited.
With three approved products and a pipeline focused on expanding the VOQUEZNA's availability to patients, there is much to look forward to at Phathom. Today marks a shift towards executing on our commercial launch strategy, and I'm confident in our team's ability to deliver on this next chapter. The launch of VOQUEZNA reinforces our commitment to changing the GI treatment landscape, and we look forward to having VOQUEZNA available for the millions of patients in need of a better option. Thank you for joining us today. We appreciate your continued interest and support. I will now turn the call over to the moderator to facilitate question and answer session. Moderator?
Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. The first question comes from the line of Yatin Suneja from Guggenheim. Yatin, please go ahead.
Thank you. Guys, congratulations on all the approval and very, very good label. So a couple questions for me. First is, and that's the number one question we generally also get, is can you actually compare and contrast the market dynamics in Japan versus the U.S.? Obviously, the product was very successful or is successful in Japan. Just trying to understand why, how is the U.S. market similar or different, if you can talk about? The second one is, Terrie, you did talk about the launch ramp a little bit, but just trying to get a sense of like, what would be, like, how will we figure out that there is an inflection in the ramp as we go into 2024? Is it more to do with the payer coverage coming up front and the gross net going down?
Just curious on that dynamic as well. Thank you.
Yeah. So this is Martin, and I'll take the first question, which is about comparison to Japan. And if I surely, if Terri thinks of anything else, please chime in. But I think what we find similar, that we've heard from the team at Takeda, is that there was a high unmet need in the marketplace with a lot of switching, just like we see in the U.S. And generics, it was genericized market. At the time they launched, Nexium was the only branded product. And then I should note is that they are now the market leader in Japan, both from a revenue as well as a volume perspective. I think they have a 34%-35% market share in Japan. So their growth and their performance has been tremendous.
Much like the U.S., a branded premium price, again, genericized market, and they entered with a brand, a branded price premium. And then much as you heard Terri say, you know, the power to heal, they also took a very strong positioning in the marketplace. And you know, we're taking that same approach. For me, that comes to mind, the two major differences are, one, obviously the payer landscape. It's a very, very much a government-driven reimbursement scenario, where, as we all know, that here in the U.S., there's multiple payers. And then we have superiority in our label. They had no superiority in the label, which we think gives us an additional advantage. So that's my commentary on Japan. Terri, do you have anything else to add on that?...
And then, Jan, I believe your second question was about the ramp. So-
Yeah, about the ramp, yeah, and the reimbursement and the gating factor to getting the gross to net. Or actually maybe talk about the gross to net once you have reimbursement in place. Thanks.
Yeah, I'll just respond, and then I'll hand it over to Molly regarding specifically the GTN. But clearly, you know, what are gonna be the drivers? When we access, meaning people access, getting in and seeing the physicians and generating the prescriptions, and we believe physicians are ready and eager to hear about VOQUEZNA and prescribe VOQUEZNA. And then I think, as you mentioned, access is gonna be key. And as I said in my earlier comments, you know, it will roll in. You know, we'll start seeing some access in Q1, but we'll really see that inflection point going into Q2 and Q3. Molly, do you wanna comment on the GTN?
Sure, yes. Terrie mentioned in her prepared remarks, we expect the first couple of quarters to be hovering around that 75% range as we get access under our belts, as Martin described. And then from a steady state perspective, I think it's safe to assume in the range of 50%-65% as we ramp up access and as well as in addition to the non-erosive indication next year.
One moment for your next question. The next question comes from the line of Paul Choi of Goldman Sachs. Paul, please go ahead.
Hi. Thank you. Good morning, and let me add my congratulations on the approvals as well. A couple from us. Martin, can you maybe just, you know, talk about what your initial thoughts are on early sampling and just sort of availability as you build brand awareness over the next couple of quarters, and how, you know, how you see that transitioning from patient co-payment assistance and coupons and things like that to the pace of commercial coverage? That's question one. And then question two is, you talked a lot about your speaker program over the course of 2024, which makes a lot of sense.
I'm just curious if you're gonna sponsor any investigator studies to sort of gather real-world experience to further promote clinical experience and familiarity.
Okay. All right. Thanks, Paul. And thanks for the questions. I'll take the first two and then start on the third question and then hand it off to Azmi to finish up. So in terms of early sampling, we will be providing samples in the office of the bottle or the individual tablets. We will not be providing samples for H. pylori packs, but the samples will be very much limited and targeted, meaning we're not gonna be flooding the market with samples to replace prescriptions. It'll be very much targeted in terms of, one, who are we calling on, and then the volume of patients that they actually see. So that's how we'll handle the sampling.
Then I think what you were getting to in the next part of your question was overall prescriptions and assistance. So, as I mentioned in my comments, that we are partnering with Blink Rx. If a physician sends a prescription there, and our sales force will be making them very much aware of Blink Rx, they'll provide for anyone who does not... A commercial patient who does not yet have coverage, they will offer VOQUEZNA at a price which is much lower than the WAC. And then at that point, what will happen is once that patient does move to commercial coverage and it's picked up, they will then be funneled to a retail channel.
I think what you can anticipate is, you know, as you tying in the GTN, as we move on through the launch through 2024, while we'll still always have Blink Rx as an option, we won't be relying on it as we might be in Q1. Then I think, Paul, your last question was about the speaker programs. So the speaker programs, as you mentioned, will roll out in 2024, and we will be starting some at the end of this calendar year to introduce the brand to prescribers, and you followed that up regarding investigator studies, and I'll pass that off to Azmi.
Yeah, Paul, it's Azmi Nabulsi, CEO. So yes, we will be sponsoring investigator studies. We already have a few proposals coming in, so we would work internally and with the investigators with these proposals to sponsor a number of them starting next year and beyond that. In addition, we have CME program that we sponsor. Our CME programs for even last year and this year have been very highly attended real-time and also post-conferences. So we're very pleased to the attention we're getting and the awareness and the interest in scientifically as well as educationally.
Great. If I could just slip in one quick one. The $650 WAC pricing for the bottles, is that specific for the EE GERD indication, or does that pricing also apply now to H. pylori?
The H. pylori pack price remains what it was, so there's no change there. The $650 is related to the bottle. Now, what I should note, and you probably saw this on Terrie's slide, is the bottle has an indication for H. pylori as well, so erosive GERD as well as H. pylori. So a physician could choose, if they wanted to, to prescribe the bottle for that, but the $650 is specific to the bottle, and for both strengths, both the 10 and the 20.
Okay, great. Thank you very much.
One moment for your next question. Your next question comes from the line of Joseph Stringer of Needham and Company. Joseph, please go ahead.
Hi, thanks for taking our questions. Two from us. How should we think about the levels or, or buckets of addressable erosive GERD patients? What types of patients do you consider the low-hanging fruit? Is it sort of the more severe class C and D patients, for example? And how do you see the cadence of the, of VOQUEZNA penetrating those various segments of patients? Second question is, based on your market research and discussion with KOLs and physicians, just curious, what, what's the biggest pushback from docs, from a per-physician perspective, that are potentially hesitant to prescribe VOQUEZNA for erosive GERD? For example, is it, is it mostly price reimbursement or treatment guideline-based? And what's the company's strategy to, to get some of those physicians on board with, prescribing the drug?
Okay, sure. Hey, Joey. So first of all, the addressable. So I think we could look at it in two ways. One would be, and I think you referenced this, is the severity. I've done a number of launches, and as you heard me say, the commercial team has, and none of us have ever launched a product where out of the gate, you don't get the most severe patients. I mean, that's just natural for any physician. But what we don't see happening is that, the market will be divided up by severity. What we understand from speaking to physicians in the academic community is that, you know, it's really treated empirically.
They're not making decisions based on grade of severity, and then also given the fact that we have, and maybe most importantly, healing in the maintenance, excuse me, superiority in the healing of maintenance, really does set us apart. So we don't think severity will be it. I think the addressable market will really be the PPI-experienced patients. As was commented by Terrie, there's a claims analysis that was done that 35% of patients who start on a PPI after 90 days switch to another PPI, and we also see that in other data sources as well, as well. So that's why we believe that where physicians are thinking, and this ties into your next piece, is the same thing that payers are thinking.
There will be a PPI-experienced patient, and so that's what we hear back from physicians. We don't get, as I think you might have said, pushback or anything regarding the profile, the patient type. The most common question is, well, is it gonna be reimbursed? Can I get it? And so that is something that, you know, we are obviously working on, and that is, as I mentioned, one, positioning ourself with the payer, although we have a broad label, is one step through a PPI, and then in the meantime, providing support to get those patients on drug.
Great. Thank you so much for taking my questions.
One moment for the next question. The next question comes from the line of Umar Rafat of Evercore. Umar, please go ahead.
Hi, guys. Thanks for taking my question, and congratulations. First, maybe just to follow up on this, exact criteria for the types of patients that could jump on therapy. I know you mentioned PPI-experienced, but would the pairs not push you towards truly PPI refractory, and PPI refractory as defined by the absolute highest dose multiple times a day? That's one. And number two, the bucket that I did define PPI refractory, having taken the absolute highest dose multiple times a day, how many patients is that truly in the erosive esophagitis setting? And then finally, as you think about your TRX ramp in the absence of having a bridge program where the drug is free for the patient, to what extent do you think that affects the TRX curve or not early into launch? Thank you very much.
So Umar, I'll try and address both of these. In terms of the criteria, clearly, what we hear is, I'm repeating myself, I know, is one step through a PPI. I think the assumption there is that the patient will have failed that PPI. It's a very symptom-driven market, and so they will have moved on for that reason. What we're not hearing anything at all regarding double dosing, increased dosing of PPIs beforehand, adding on to the PPI beforehand. I think part of your question was how many patients are actually doing that? I can't tell you that I know that information offhand. If I go back and find it, we'll follow up.
But really, where we've narrowed in, in consultation with payers and in our discussions to date is the patients who've been on, experienced, failed the PPI. The next thing is the next question I think you had was about the TRX ramp. So, what we've built into our forecasting models is really the full revenue coverage into our ramp, and we've not built in so much so the patients who might be funneling through, getting products through Blink, who are not yet covered. We'll certainly be very glad to see those, but in terms of our revenue curves, we've not built those in. I hope I've answered the questions.
Thank you very much.
One moment for your last question. The last question comes from the line of Chase Knickerbocker of Craig-Hallum. Chase, please go ahead.
Hey, congrats, everyone. Just wanna add mine to the chorus there. Maybe to start, I wanna dig in a little bit on the strategy when it comes to contracting.
... How do you weigh the importance of getting, you know, on a preferred brand tier, a fixed dollar amount copay, you know, versus maximizing gross-to-net margin? And I mean, obviously, this is going to be more important where you can't buy down those copays in your Medicare Advantage formularies and Medicare formularies.
Yeah, Chase, I'm not sure I fully understand the question, so let me just repeat back. I think I heard you, you mentioned preferred brand and a $50 copay. Is that what you said?
Just fixed dollar amount copay, generally.
Oh, oh, just on, yeah.
How important is it to get there?
Yeah. So, let me provide some clarity. So what we're anticipating is, in most instances, will probably be a non-preferred brand, which makes sense when we're saying that we would be following a PPI. So, it would be a non-preferred position, and then we would be negotiating or having the contract with the payer for a rebate amount, off of that $650, that would be attractive to them, allows them to manage the category, but also provides value to them as well and makes sure patient gets the drug. And then we believe, what we built in is the $25 copay in working in all of our pricing work, both with physicians and patients and even payers. That's where we landed on the, pay as low as $25 copay assistance. I'm not sure.
Did I answer your question?
Yeah, and just maybe put just a finer point on it for, you know, where you can't necessarily buy down that copay, is it going to be a coinsurance? Is that the expectation?
Yeah, you know, I can't, I can't comment on each patient's individual plans, and how that would be managed at a patient level. Everyone has, everyone has different, different plans and plans within plans.
Got it. And then maybe just on awareness. I mean, if we were to take kind of a survey of GIs nationally, maybe we can just focus on the GI population right now. You know, what would you say, I guess, the percent awareness of VOQUEZNA coming to market is, and then kind of within there, what's the familiarity of the clinical profile?
It's a really good question. So I think it might depend upon how you're asking the question. So overall, I would say with gastroenterologists, we would expect it to be greater than 30%. But, is it... You know, we've just introduced the VOQUEZNA brand name, so it could be teed up as VOQUEZNA, vonoprazan, a P-CAB, a new acid suppressant coming. And I do know that after leaving ACG, as I, as I commented earlier, there's a, a lot of enthusiastic questions about, product coming to market.
Great. Maybe just last for me. If we peel back Japan just a little bit more, do you have an idea of what the general split of usage is between indications in Japan? And we can just focus on the ones that you guys, you know, plan to be indicated for in the U.S. And, and I guess, how do you expect, you know, usage in these indications to differ from, you know, what you see U.S. versus Japan, or what we're going to see?
Yeah. So the market— Well, let me just for everyone on the line, let me just make sure I caveat that, in Japan, it's called Takecab, and it's a Takeda product, it's not ours, so we don't have any internal data. And, IQVIA does not provide data in Japan by indication. But obviously, we speak to the Takeda team, and so our sense is, first of all, they have multiple indications, such as, you know, with aspirin or to prevent ulcers due to aspirin, duodenal ulcers, gastric ulcers. They have the combination with NSAIDs. They have a lot of different indications, but what's really driving their market is GERD. So, I would say more, probably about 60%-70% of their business is made up of GERD. Then you add in H.
pylori and then the other indications.
Any sense in there on erosive or non-erosive?
Yeah, so they do not have a non-erosive indication. My sense is, and, my impression is that it might be split, but again, there's no data to support that. Yeah, I think it, treatment is very different in Japan in terms of how they approach it, and I think an endoscopy is done much later in the process than is done here in the U.S.
Great, helpful color. Congrats again.
Thank you.
As a reminder to ask a question, please press star one one on your telephone and then wait for your names to be called. One moment for another question. The next question comes from the line of Sean Kim of Jones Trading. Sean, please go ahead.
Yeah, hi. Congratulations on the approval, and thank you for taking the questions. So I guess just one quick follow-up on the gross to net. So for the steady-state question that you mentioned earlier in the call, are you kind of assuming incorporation of the non-erosive GERD as well? And also, should I have some similar gross to net dynamics for H. pylori?
Yeah. So, so, yeah, absolutely. Hi, Sean. I'll take that. So yeah, what I referenced in the Q&A section was a 50%-65% gross to net on a steady state. Terry had referenced the 75% at the outset of the launch. But now just addressing the 50%-65%, that is all inclusive of all indications, including H. pylori and non-erosive. So as you look at your modeling, I think it's safe to assume with the advent of NERD in the middle of next year, that we could be in that range of 50%-65% throughout 2020, the latter part of 2024 and into 2025.
Okay, great. Thank you. And I've just got a couple more questions. So about the direct-to-consumer marketing, do you have a sense of the potential budget that you might have for those marketing efforts, and also more broadly, what should we expect in terms of the overall expenses in 2024? And another question that I had was, you mentioned about a lot of churning in patients going through different prescriptions and PPIs. Can you give us a sense of how much churning that you're expecting from famotidine? I think you mentioned about 35% for PPI patients switching to another PPI. Just curious, you know, if you had any sense of potential churning with famotidine. Thank you.
Sure. I'll start with Martin with the continuation of the expense side of things, then turn it over for the churn. As it relates to 2024 expense, what we've indicated is that, as Martin has mentioned, the 320 sales force approximates about an all-in cost of $350 per rep. That gets you an idea of the incremental spend for 2024, in addition to what we already have for 2023. On the DTC side, we've signaled that we wouldn't expect to spend a significant amount on DTC until we have non-erosive under our belt, so we're expecting that to be later in 2024.
So from a modeling perspective, we would assume that you could build in some modest ramp for DTC in 2024, and then to a greater degree, in 2025. And Martin, maybe I'll turn it over to you to answer the churning question.
So Sean, your question regarding direct-to-consumer, I'll touch base on that as well before I go to the churning. So how are we gonna spend our money? So, as I mentioned earlier, there's no competition in this marketplace, and using artificial intelligence and all of the data that's out there, we can really hyper target those patients or people that we believe have erosive GERD. And it, it's a matter of using billions of data points to identify them. So we can be really efficient in our spend through digital channels and social channels. And then to your second part, in terms of churning.
So I think maybe a better way to address it is, one, the short answer is, I can't say for certain what that will be, but what we do know is we have superiority versus PPIs, and we'll be obviously through reimbursement channels, receiving patients who've experienced PPIs. And what we know, with given the superiority, we've modeled in about 160 days on an annual basis of therapy. Now keep in mind, this is a chronic medication, and I believe 160 days is a pretty good number of days for a chronic therapy. So that's just the way we're looking at it.
Okay. Very helpful. Thank you very much.
You're welcome.
As there are no questions, thank you for your participation in today's conference. This does conclude the program. You may now disconnect.