Good afternoon, ladies and gentlemen, and welcome to the Retrophin Inc. First Quarter Financial Results and Corporate Update Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touch-tone telephone. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr. Chris Cline, Senior Vice President of Investor Relations and Corporate Communications.
Great. Thank you, Bella. Good afternoon, and welcome to Retrophin's First Quarter 2020 Financial Results and Corporate Update Call. Thank you all for taking the time to join us this afternoon. I hope you and your families remain well during this time. Today's call will be led by our Chief Executive Officer, Dr. Eric Dube. Eric will be joined for the prepared remarks by our Chief Medical Officer, Dr. Noah Rosenberg, Peter Heerma, our Chief Commercial Officer, and our Chief Financial Officer, Laura Clague. Dr. Bill Rote, Senior Vice President of Research and Development, will join us for the Q&A session. Before we begin, I'd like to remind everyone that statements made during this call regarding matters that are not historical facts are forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of performance.
They involve known and unknown risks, uncertainties, and assumptions that may cause actual results, performance, and achievements to differ materially from those expressed or implied by the statement. Please see the forward-looking statement disclaimer on the company's press release issued earlier today, as well as the Risk Factors section in our Forms 10-Q and 10-K filed with the SEC. In addition, any forward-looking statements represent our views only as of the date such statements are made, May 11, 2020, and Retrophin specifically disclaims any obligation to update such statements to reflect future information, events, or circumstances. With that, let me now turn the call over to Eric. Eric?
Thank you, Chris, and good afternoon. Our organization demonstrated great execution to start 2020. Prior to the advent of COVID-19, this translated to our strongest momentum and enrollment trends yet for our pivotal DUPLEX and PROTECT studies of sparsentan in FSGS and IgA nephropathy, and notably, to achieving the critical milestone of enrolling the first 190 patients in DUPLEX during the first quarter. It also translated to a strong performance by our commercial organization. In the first quarter of the year, we continued our consistent track record of reaching new patients with our approved products and further demonstrated our ability to deliver therapies to patients in the rare nephrology and hepatology communities. Later in the first quarter, the COVID-19 pandemic spread and disrupted the lives of people around the world. We recognize that these are difficult times for everyone and especially for those families living with rare disease.
While this pandemic has required us to adjust our ways of working, it has not altered our strong operational and financial foundation, and it has not changed our goals. We are continuing to make progress and are focusing on completing enrollment and maintaining high-quality conduct in our two pivotal studies of sparsentan while simultaneously preparing for regulatory submissions. In parallel, we are building upon our existing commercial capabilities in order to support continued organic growth of our approved products and to position us to ultimately be able to maximize sparsentan's potential for patients if approved in the future. Importantly, we have aligned as an organization on the priorities that we believe will allow us to best mitigate the impact of the COVID-19 pandemic as it has evolved to date and continue advancing towards these goals. We will continue to focus on the safety, support, and well-being of our employees.
By safeguarding the health and well-being of our employees as well as providing them support and flexibility during this time, we can continue our work on behalf of patients. Like most companies, we have shifted to a virtual working environment where possible, and for us, this has translated to having nearly all of our employees work remotely from home. I have been very proud of our organization's resilience, ability to adapt, and dedication thus far, which gives me great confidence that we will continue to evolve together and deliver on our mission during this pandemic and beyond. For patients receiving our approved products or participating in our studies, we have implemented heightened procedures to ensure safety, access, and continuity of care during this time. Over the last several years, we have focused on building a supply chain with flexibility and contingency plans for events like this.
I am pleased to report that as a result of these ongoing efforts, the supply of our approved and investigational therapies has been uninterrupted to date. As of today, we have ready access to 12 months or more worth of finished goods for all products, and we are confident in our ability to provide continuous treatment in the pandemic's current state. Our clinical studies of sparsentan have continued despite the challenging conditions. We are working within the recent FDA and EMA guidance regarding COVID-19 in an effort to ensure patient safety, continuous delivery of medication, and maintain quality of data, especially key endpoint data for DUPLEX and PROTECT. Achieving 190 patients enrolled in DUPLEX during the first quarter was a critical milestone that brought us one step closer to realizing our goal for sparsentan to potentially shape the treatment paradigm for FSGS if approved.
I have been pleased with the results from our teams and partners' efforts to expeditiously implement the measures necessary to preserve monitoring and data integrity for our studies in the face of the disruption of the pandemic. As you are well aware, in many cases, access to study centers across clinical trials has been restricted in order to protect both site staff and patients from possible coronavirus exposure and to augment the capacity of the COVID-19 response. This has unsurprisingly resulted in a recent slowdown in screening and enrollment for our ongoing clinical studies. Based upon what we know today, we believe the timelines provided at the beginning of the year are still achievable. However, we do not yet know the full impact of COVID-19, and if an extended slowdown in enrollment were to occur, it could impact our timeline.
We are working closely with clinical sites, physicians, our CROs, and the patient community to learn more each day and support site activity where and when appropriate. We have also been taking steps to be in position to accelerate clinical trial execution when pressures on the healthcare system ease. This will be instrumental as we leverage our existing clinical trial footprint to rebuild our momentum towards completing enrollment in DUPLEX, PROTECT, and RESTORE at the appropriate time. Our commercial business, we are ensuring that our existing patients are receiving the support and access they need during this time. I am proud to report that to date, our total care hub has remained fully operational and has been able to meet the increased needs of our patients during this time. We have also seen new patients initiate treatment.
While it is encouraging that patients continue to be diagnosed and receive the treatment they need during this time, we do anticipate that fewer patient visits during the pandemic could reduce the number of patients initiating treatment in subsequent months. Importantly, through our field-based teams' virtual interactions, we are continuing to engage with healthcare providers so that they have the necessary support and information. We are continuing to monitor this dynamic and the impact it could have on the previously expected growth for our approved product portfolio this year. We certainly recognize the extraordinary challenges that our society, our industry, and especially the rare disease communities are currently facing. We also understand that the unmet needs within these communities will remain beyond this pandemic. This is why our organization will remain resilient as we continue to work through the COVID-19 pandemic and beyond.
Let me now turn the call over to Noah so that he can provide additional detail on the steps we are taking to advance our clinical studies. Noah?
Thank you, Eric, and good afternoon, everyone. As mentioned earlier, we started the year with great momentum in our pivotal DUPLEX and PROTECT studies on sparsentan. Later in the first quarter, the COVID-19 pandemic began to impact global clinical trials and our clinical team's near-term priority shifted to implementing measures to support our sites and patients during this period and to mitigate the impact to these important studies. The broad clinical network we have implemented for these studies in rare disease setting has enabled a level of connectivity with our sites that provides for a deep understanding of the individual site needs as well as visibility into each patient visit so we can provide the right level of support.
We are in close contact with all of our study sites, principal investigators, and CRO partners. Their continuing dedication has served as an important reminder of the significant need for new treatments in FSGS and IgA nephropathy. Their collective insights have helped us develop and institute the following five priorities that we believe will help us best navigate this pandemic. First, patient safety remains paramount. Every decision we make as a clinical team is designed to ensure patient safety. We recognize the increased need for flexibility during this time, and while we've been pleased with the adherence to study plans thus far, we have made sure sites and patients have the support as needed to leverage technologies such as telemedicine and remote monitoring to ensure patient safety. Second is providing continuous drug supply.
We are making extra shipments of blinded clinical supply to sites and have the ability to arrange for shipments directly to patients under control protocols if necessary. Third is protecting the key endpoint and safety data for our studies. The DUPLEX and PROTECT studies are critical to developing potential first approved therapy for FSGS and IgA nephropathy. We are prioritizing monitoring and maintaining the data and lab results that will support a high-quality study readout. To date, we have seen across both sites and patients a motivation to continue with visits, and thus far, we have seen strong efforts to adhere to study plans. Fourth is clear documentation of actions taken as a result of COVID-19.
As many of you are aware, the FDA and EMA have provided guidance to ensure patient safety and data integrity in clinical studies during this time. We are clearly documenting the steps we are taking to adhere to these. Fifth, we are taking steps today that should enable us to regain strong enrollment momentum in our studies once the pandemic-related conditions ease. As many of you will recall, we have a broad clinical footprint with more than 200 sites supporting DUPLEX and PROTECT studies. This has allowed for some regions to continue uninterrupted and continue to randomize patients. Understandably, the global restrictions have resulted in a meaningful slowdown in these activities recently. While we cannot control the length in which there will be restrictions at sites or manage the pandemic, we have been able to continue pre-screening activities to keep identifying trial candidates.
We are implementing practices to leverage our broad clinical footprint to be in position to re-accelerate activity at the appropriate time. I'll now provide a brief update on each of our pivotal sparsentan studies, starting with DUPLEX for FSGS. In early March, we achieved the critical milestone of enrolling the first 190 patients in DUPLEX. As many of you will recall, the DUPLEX study protocol provides for a pre-specified interim analysis to evaluate the proteinuria efficacy endpoint in the first 190 patients after 36 weeks of treatment. Successful achievement of this 36-week proteinuria endpoint is expected to serve as the basis for submission of filings for accelerated approval in the U.S. and Europe. Thus far, we have been pleased with patients following planned site visits and follow-ups despite the pandemic, and we are working within the regulatory framework to preserve the ongoing study conduct.
We continue to believe that a top-line readout in the first quarter of next year is achievable. If the recent slowdown in enrollment were to extend as a result of COVID-19, it could delay the top-line readout. We will update you at the appropriate time if that materializes. Turning to the PROTECT study, our phase III clinical trial in IgA nephropathy. As we mentioned during our last update, there has been a growing body of evidence to support the link between proteinuria reduction and improvements in eGFR, specifically in IgA nephropathy. After applying the latest learnings to our current study design and in consultation with FDA, we are adopting the measurement of eGFR over 110 weeks of treatment as the confirmatory endpoint and increasing the total sample size to 380 patients. We believe this adjustment increases our probability for full approval.
Importantly, the primary endpoint analysis of change of proteinuria after 36 weeks of treatment of the first 280 patients remains unchanged, and our plan to pursue accelerated filings with these data remains unchanged. As Eric mentioned earlier, prior to the initial COVID-19 response, we had seen strong enrollment trends in PROTECT, and we are making good progress toward enrollment of 280 patients to support a 36-week proteinuria analysis. PROTECT continues to enroll patients, and we continue to believe that a top-line readout from the 36-week proteinuria endpoint analysis in the first half of 2022 is achievable. However, if the recent slowdown in enrollment were to be prolonged as a result of COVID-19, it could have an impact on our timelines. We will update you at the appropriate time if that materializes.
Notable for both of these studies, at the end of April, we completed our third scheduled independent data monitoring committee meeting. I am pleased to report that the DMC recommended that both DUPLEX and PROTECT proceed as planned. To summarize, despite the challenges presented by COVID-19, we continue to advance both of our pivotal studies with a clear focus on patient safety, enabling continuous supply, preserving data integrity, and documentation. While we have understandably seen a slowdown in recent enrollment trends, we continue to see new patients come into our studies, and we are confident in the steps being taken to leverage our clinical footprint and position us to regain momentum at the appropriate time. We have an organization diligently working to deliver high-quality data from our studies. We look forward to providing additional updates as we learn more in the coming months.
Let me now turn the call over to Peter. Peter?
Thank you, Noah. Our commercial organization continues to demonstrate an ability to understand the needs of patients with rare disease, formulate and execute a launch plan, and identify new patients. In the first quarter, we saw new patient diagnosis and treatment initiation across all three approved products. This resulted in net product sales of $47.8 million, which is driven by organic growth, as we have not increased prices in nearly five years. Notably, in the first quarter, we saw strong demand for Thiola EC. This is consistent with our earlier research and insights from the community, which indicated that cystinuria patients had an underserved need for additional flexibility in their treatment regimen. As is expected in our business, we experienced higher gross-to-net discounts in the first quarter, driven by the insurance resets in the beginning of the new year.
This shift was in line with our expectations, and we anticipate it will return to normal levels beginning in the second quarter. In the second half of March, we began to see an increase in early requests for refills, as well as some increase in patient compliance, likely in response to the evolving coronavirus pandemic. We estimate that this has contributed to approximately $1.5 million-$2 million of pull-forward revenue that we likely would not have seen during the first quarter in normal circumstances. This could slightly reduce expected revenues in subsequent quarters. During the response to the coronavirus, our teams and partners are working diligently to ensure continued access and support for patients receiving our approved therapies. We have taken steps, including appropriate levels of inventory and flexible shipping options, to maintain continued delivery through the initial onset of the pandemic.
I have been incredibly proud of our team's ability to deliver continuing support for our patients' needs during this unprecedented time. Our sales teams for Thiola and Cholbam have transitioned exclusively to virtual interactions with HCPs. Given that we have relatively small teams and cover broad geographies in the U.S., virtual engagements have been a core part of how we have worked with healthcare providers for many years. This made the transition to relying solely on this method seamless for many of our team members, and we have seen solid engagement with these efforts. As we look ahead, we are closely monitoring our current patient base, how the increasing unemployment rate could change patients' insurance coverage, and how fewer visits with physicians may impact new patient starts.
As it relates to our current patient base, we do not anticipate that the COVID-19 pandemic, as it has evolved to date, will have a meaningful impact for those that are already prescribed our approved products. As mentioned earlier, to date, we have been successfully prioritizing access and delivery of treatments. Our total care hub is currently operating uninterrupted and providing the support that our patients have come to depend on. Regarding patient insurance coverage, we have not seen a change in the payer mix thus far, but we will continue to monitor this dynamic. In terms of identifying new patients, we continued to see strong patient additions across all three products through the month of April. The impact in future months, however, is currently unpredictable, as we anticipate fewer patients will visit their physicians as a result of COVID-19.
We do not yet know the full impact this may have, if any, to our growth potential in 2020. While we are currently navigating uncertain times, our commercial organization continues to demonstrate an ability to work closely together with HCPs and other stakeholders in identifying, treating, and supporting patients living with rare diseases. This continues to give us a high degree of confidence that we will be able to continue reaching patients during the current state of the pandemic, and that we have a robust foundation in nephrology to launch sparsentan if approved. Let me now turn the call over to Laura for the financials. Laura?
Thank you, Peter. During the first quarter, net product sales from our commercial portfolio grew to $47.8 million, a 21% increase over the same period in 2019. We reported a GAAP net income of $0.8 million for the first quarter of 2019. After adjusting for non-cash expenses and income tax, we reported a non-GAAP net loss of $8.5 million. On a GAAP basis, R&D expenses were $30.2 million for the first quarter of 2020. The decrease compared to the same period in 2019 is largely attributable to the discontinuation of the fosmetpantotenate development program. On an adjusted basis, R&D expenses were $27.8 million for the first quarter. Relevant non-cash expenses for the first quarter included $2.4 million of stock-based compensation and amortization. On a GAAP basis, selling, general, and administrative expenses for the first quarter were $33.1 million.
The minimal increase over the same period in 2019 is largely attributable to increased compensation expense and higher professional fees. On an adjusted basis, SG&A expenses for the first quarter were $24 million. Significant non-cash adjustments for the quarter consisted of $9.2 million in stock-based compensation and depreciation and amortization. We incurred approximately $21 million of non-operating cash use during the quarter as a result of a one-time Cholbam sales milestone of $10 million and contingent consideration and debt interest payments. During the quarter, we recorded an income tax benefit of $19 million. This benefit resulted from the CARES Act legislation, which provides for net operating losses to be carried back to preceding taxable years to generate a refund of previously paid income taxes. We anticipate this refund will be distributed to the company in installments during 2020 and 2021.
Importantly, we ended the quarter with a solid financial foundation and $356.5 million of cash and cash equivalents as of March 31st, 2020. While our near-term operating expenses may be difficult to predict as we mitigate the impact of COVID-19 and adjust our ways of working, we will remain disciplined in our use of capital, and we continue to believe that our cash on hand is sufficient to fund our operations beyond the readouts from our phase III studies of sparsentan. Let me now turn the call back to Eric for his closing remarks. Eric?
Thank you, Laura. As we continue to navigate the challenging pandemic presented by COVID-19, we have shifted how we work, but not the why. We continued pursuit of our mission has never been more critical. Rare diseases do not wait for pandemics, and our organization remains steadfast in its dedication to serving our patients and caregivers. We have a strong financial foundation to support our operations, and our goals remain unchanged. We are focused on the continued development of sparsentan to support our goal of delivering the potential first treatment approved for FSGS and IgA nephropathy. We will also work to reach new patients with our approved products while strengthening our commercial capabilities to ultimately maximize sparsentan's potential, if approved.
I am confident that the actions we are taking to mitigate the disruptions caused by this pandemic will protect our employees and patients, best position us to accelerate enrollment quickly when conditions ease, and ultimately deliver high-quality data from the DUPLEX and PROTECT studies. I would like to thank each of our dedicated Retrophin team members. With their continued focus on the priorities outlined today, I am confident that we will continue to deliver the highest level of support for our patients and ultimately emerge from the COVID-19 pandemic as a stronger company. Turn the call back over to Chris for Q&A. Chris?
Thanks, Eric. Can we please open up the line for Q&A?
Sure. Ladies and gentlemen, if you have a question at this time, please press the star and then the number one key on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. Our first question comes from the line of Maury Raycroft with Jefferies. Your line is now open.
Hi, this is Farveen on for Maury. I had a couple of questions. The commercial sales seem to do better than expected. Can you provide any specifics on what proportion was driven by pricing versus volume, and what proportion was driven by Thiola EC versus the prior gen Thiola?
Thank you very much, Farveen, for the question. Peter, why don't I have you take that one?
Very good. Thank you, Eric, and thank you, Maury, for the question. Over the last five years, we have not increased prices, so the growth that you saw in the first quarter was solely by organic growth, like new patients coming into the mix. It's building on top of the strong quarter that we saw on the fourth quarter in 2019, where we saw great new additions of patients, and we continue to see that in the first quarter of 2020 as well. It includes both Thiola EC, as well as Cholbam.
I see. Thank you. For the 190 patients that you have enrolled in the FSGS studies, can you go into specifics of what happens if a patient becomes ill or cannot come for the basic treatment or has to drop out?
Yes, certainly. Noah, would you like to take that?
Sure. Let me first state that we've been following very carefully and closely with the sites, the study conduct, and we're very pleased with the sites' ability to conduct the study and maintain trial integrity. With regard to not being able to come to sites, there are accommodations based on the regulatory guidance. Some of the sites are able to utilize satellite locations. In some cases, patients are using local labs for safety drawing. As I said, we're very pleased with the conduct of the sites. They've done a nice job of continuing to maintain a focus on the priorities I said earlier. In terms of COVID-19, if they develop COVID-19, which obviously we have special protocols within our protocol to address that. Patients can actually develop COVID, potentially go off drug, and then come back on drug as soon as they are feeling better and improve their condition.
Hopefully that addresses your questions.
Okay. Thank you so much.
Your next question comes from the line of Joe Schwartz with SVB Leerink. Your line is now open.
Good afternoon. This is Chris Clark on for Joe. How do you think the degree of proteinuria reduction from sparsentan in IgA nephropathy may compare to FSGS? Can you talk about any insights you have from preclinical or clinical data?
Yes. Thank you. We certainly do have data on FSGS with sparsentan from our phase IIs and not in IgA nephropathy. We've looked at existing databases in other areas. Noah, perhaps you can share a little bit about the potential differences there.
I think that we've clearly got, for the DUPLEX study, the DUET data to rely upon. You can clearly see there's precedent. It's a very similar population in terms of the reduction of proteinuria. We expect something similar along the same lines as what we saw there. With regard to IgAN, there is preclinical data as well as some clinical data showing that the addition of endothelin inhibition on top of angiotensin blockade does provide incremental benefit and additional reduction. It's hard to say exactly what the differences are. I think you would see reductions probably in a similar range in both. I would say overall, one thing we saw in DUET, if you recall, was patients who were above and below on two in terms of the overall UPCR saw similar reduction.
I think that's the data we have, and I think we're fairly confident in that. Thank you very much.
Thank you, Noah. Chris, one thing that I would add on that is just in the disease state itself, FSGS patients are oftentimes exhibiting higher levels of proteinuria. That may or may not play into what ultimately we see. As Noah mentioned, we expect to see a consistent effect because the mechanism of both the disease and the mechanism in which sparsentan works is consistent in both of those, we believe.
Very helpful. Thanks again.
Your next question comes from the line of Michelle Gilson with Canaccord Genuity. Your line is now open.
Hi, guys.
Hi, Michelle.
This is Lina. Hi, this is Lina for Michelle.
Hi, Lina.
Hi. Maybe just on sparsentan one and then a little bit broader on FSGS. The first question is, can you maybe remind us about the tolerability that you saw with sparsentan with regards to 400 versus the 800? I guess how many patients, if the protocol that you are using now for phase III, if you would use that, the down-titration protocol or in phase II, how many patients would you expect to be downtitrated under that protocol in the DUET study?
Thank you, Lina.
The second question.
Oh, yes. Yeah, sorry, your second question.
No, it's okay. I can follow up with that after you answer the first one. Thank you.
Thank you. Yeah, Noah, why don't you address the -
Sure.
- question on tolerability?
Sure. I think, Lina, what you're referring to, it's a great question, is referring to the DUET study design. The way the study was designed, patients were started on 200, 400, or 800. What we saw is patients who were on the 800 had some symptoms consistent with the blood pressure dropping, some lightheadedness, intolerability, and had to drop back to the 400 mg dose. As a result, we weren't really adequately able to test the 400 versus the 800. When we designed the DUET study, we actually designed it with that in mind, and that's why there's a two-week titration step. The patients will start on the lower dose, and then after two weeks, if they tolerate, they'll titrate up to the higher dose.
We expect that a pretty considerable number of patients are going to be able to achieve the 800 mg dose and hopefully stay there. I think that that's as much as I can say. I would say in addition that the 400 mg dose, if you recall from DUET, is an effective dose, and the drug works quite well, whether it's 400 or 800. We would be very pleased with the 400, but we feel comfortable with the current strata titrating up to 800, and we think we have a pretty good chance of showing an effect with the 800 as well.
Got it. Thank you. With the different treatments and kind of different therapies in clinical trials, can you maybe talk a little bit more broadly on FSGS market and kind of where do you see sparsentan sit in that landscape? Thank you.
I'll start and then Noah, certainly feel free to add anything further. We do see that the FSGS patients are quite broad, and in the U.S., there are over 40,000 patients with FSGS and very consistent numbers within Europe. What we see is that these patients and the prevalence is actually growing, likely because of perhaps the conditions that drive the scarring and the injury at the glomerulus. How these patients are currently treated today is with an ACE or an ARB. If we look at the DUET study, over 80%-85% of the patients that went into the DUET study were on an ACE or an ARB.
What we also know from that study, but also from many other studies, is that unfortunately, the currently available treatments, all off-label, do not effectively control the proteinuria to a degree that is going to slow the progression of this disease. We believe that if sparsentan is effective, is safe, and is approved, that it would become the standard of care in the treatment of FSGS. Whether it replaces an ACE or an ARB or patients are first started there and then stepped up quickly to sparsentan to get greater reduction in proteinuria remains to be seen. That's some of the work that Peter and his team are doing to understand how physicians may think about this role. That's largely how we see the role that sparsentan would play. There certainly would be other treatments used.
We know that some of these patients are treated with other classes of therapies, such as steroids. We also hear very consistently from patients and their clinicians that there really is a hope for something that treats the common pathway of this disease and is not going to be immunocompromising. Noah, anything else you'd like to add on the future role?
I think you covered the landscape well, Eric. If I could just add two points. Just to reiterate, number one, there are no approved therapies, as Eric said, for FSGS. I think that's critical. Number two, we are the only compound in phase III at this stage in the game, and we're very proud of that. sparsentan has over 500 patients who've been treated. We've got a large, for this space, safety database to draw off of, and the DUET data is really a great example of that. I think in terms of other therapies that are emerging, really, there aren't many therapies, if at all, that have established the safety yet in this area. Eric alluded, many of them are immunosuppressive. There are concerns with those classes around safety.
Let me first just say, w e are for the patients. We want to make sure there's as many therapies out there as possible. There's no reason that sparsentan, I think, wouldn't be complementary with these therapies that we can see. Again, in the position that we're at, we believe that we're in a good position.
Got it. Thank you. Congrats on the quarter.
Thank you, Lina.
Thank you.
Your next question comes from the line of Christopher Marai with Nomura Instinet. Your line is now open.
Hey, good afternoon. Thanks for taking the questions. Congratulations on the strong performance in the quarter. I know it hasn't been easy. I wanted to ask, with respect to the benefit, the pull-through you're seeing with respect to COVID, how much of that is the bile acid products versus Thiola sales? Then if you could comment, you're seeing or you had highlighted earlier in your comments on enhanced compliance, and I was wondering if you could comment on that. Is that enhanced compliance due to the new Thiola formulation for those who have switched to that formulation, or is it compliance that is more COVID-related? Thank you.
All right. Thank you, Chris. Peter, why don't you take this one?
Yeah, thank you. Thank you, and thanks for the question. The growth, first of all, we saw consistent across all three products. Continued ability to identify new patients for all three product lines. I think that was a driver for the growth. With regards to your second question on compliance, it's an interesting question. I think the concept of compliance and adherence is a broader question, and although it's still early days, we start to see that there is an impact, a proof impact on compliance with the EC. It's too early to comment on specific numbers, but in addition to that, in the second half of March, we also started to see, across all products, an increase of compliance, likely due to COVID-19. I think that speaks to the behavioral component of treatment as well.
In particular, for cystinuria, you can imagine that patients want to stay away from the hospital in these days, that could have an impact on the compliance. An additional element here could be Thiola EC is like a TID treatment, three times a day, and especially that middle treatment with patients being at home or being more at home, have more ability to take that treatment as well. That could also have an increasing effect on compliance. To your question, like the broader compliance factor, we saw an increase likely due to EC, but in addition, in the second half of March, also an increase likely through the COVID situation.
Okay, that's really helpful.
Thank you, Peter. Chris, yeah, sorry. Before you ask your next question, let me just add one more thing.
No, go ahead.
Both Thiola and Cholbam had a pull forward of shipments as might be expected for these drugs in these conditions. We did see more of that with Thiola. That drove some of that, but also that's probably where we saw more of the compliance impact as well. Sorry to interrupt you, Chris. Go ahead.
Oh, yeah. No, that was very helpful. I guess I was curious about the second half of March increase in compliance generally that you saw. Is it your expectation that this will continue through second quarter? Then perhaps given the dynamic you've seen in Q1 and the emerging impact of COVID, how do you look at a benefit or potential impact into quarter? I have a follow-up.
Peter?
Yeah, I think it's too early to say. As I mentioned, the second half of March is really when the pandemic effect started to see. We saw a slight increase in compliance there. How they translate into the second quarter, I think it's too early to say. I think with the EC, I think the EC allows for a greater flexibility of patients, so it could have been expected that there could be a slight increase on compliance there. I think that's what we start to see. The particular aspect of COVID, I think it's too early to call how that translate into the second quarter.
Okay, great. Just with respect to, I guess you guys were going to initiate a pivotal trial in CTX with Chenodal, and I was wondering how that's being impacted? You did initiate that pivotal trial, I'm sorry, and how that may have been impacted. Finally, just with respect to BD, I know you had been looking at many different potential opportunities, and has that slowed down or sped up with respect to COVID? Thank you.
Sure. Thank you, Chris. With regard to the Chenodal CTX study, this is the RESTORE study. We did initiate that trial, similar to the impact of screening and enrollment that we saw with DUPLEX and PROTECT, we also are seeing that with RESTORE. I'd say at this point, it's too early for us to be able to project timelines for that one, but it is an ongoing study. With regard to business development, I would say this is not sped up or slowed down. We continue to remain focused on that as a priority for us. We believe that there still are a number of assets within the rare disease space that would leverage the strengths and the footprint that we have, both for clinical development and for commercial. Stay tuned on that. Our team is continuing to evaluate different assets.
Great. Thank you very much. Congrats on the quarter.
Thank you.
Your next question comes from the line of Tim Lugo with William Blair. Your line is now open.
Thanks for taking the questions and congratulations on managing through a difficult situation. I guess maybe a question for Noah. I think we all understand the slowing down of patients being screened in enrolled in DUPLEX and PROTECT. Also, I think in your comments, you mentioned you had some protocols around if a patient were diagnosed with COVID. I'm just wondering more about the general difficulty in collecting urine and blood samples during the pandemic, and if patients can't come in within the protocol-defined windows, how those patients are managed, and if you're able to maybe employ home nursing visits or how you're just managing through those situations.
Yeah. Great question. Hey, Tim. Great question. With regard to the collection of the urine specimens, I think you're referencing the key endpoint visits. We have a great deal of focus on, say, the week 36 urine collection because that's pivotal. That's a key endpoint for us. We've got trackers that track each patient down to each visit, so we know exactly where those patients' samples are being collected. Working closely with the sites. I will tell you that in many sites, it's still being collected centrally, and that's still occurring. There are some sites where those collections will either be dropped off at a clinical site. Sometimes they'll even meet in the parking lot. There are things like that where the sites are ensuring that they continue to collect that data and get that often.
Frankly, looking across at, again, an aggregated data set that we have, I can say that we are pleased again with the overall conduct in the study. There is room at some point, potentially, for visiting nursing. I think you had mentioned that. We haven't seen a huge need for it at this point, but we are looking at that option and are in the process of contracting a group to do that work for us in case this is prolonged and the sites do require that additional support. I think it's a great question. Hopefully, that answers your question.
Yeah. No, definitely. It sounds like you've been innovative in the approaches. As I guess more people talk about easing and these states, at least domestically, focus on easing. If we fast forward to June, how many sites do you expect to be still impacted, just maybe a rough percentage?
That's a tough question to answer, because it is a dynamic process. I will say this, that we're engaged with every site. We've had no sites drop from the study. The sites are very interested in maintaining, continuing, and driving the study. They understand the value. Site engagement, if you recall, prior to this, is what got us to the 190. That's what drove the momentum. They're engaged and excited. The conversations that I have, typically, Tim, with the PIs, and I talk with a great number of them, as you can imagine, is when can we start to see pre-screening activities? Some are doing it now. Some, they're not ready. When can we start seeing ramping up of screening and randomization? They'll tie it to the opening up of the clinics.
As the clinics start to open up, you'll start to see more and more screening and recruitment because of capacity. Without over-promising, I think talking to a number of these sites, they're quite excited, engaged, and they're paying as close attention as we are to all this and making sure that we can take advantage once things ramp up.
Okay, good. As you mentioned, you are the only FSGS phase III up and running. I guess, can you give me some of the anecdotes you've heard from investigators and maybe their views on immunosuppressive therapies and this indication -
Yeah.
- given that it seems, given a pandemic, I don't know if I'd want to be on immunosuppressants right now.
Yeah, Tim, m aybe I'll take that one, and I'll take it from the conversations that I've had with some of the patient advocacy leaders within the rare renal space, but actually beyond. There's a very consistent heightened awareness around immunosuppression and the risk of infection. I think this is something that the rare disease communities have a heightened awareness anyway, and it's even more so during this pandemic. I think that there is really this question of, is a potential treatment or clinical trial going to put me at greater risk given that many of these patients face, regardless of their treatment, an immunocompromised state? I think that's driving a lot of this, and I suspect that the clinicians are going to be thinking the same way. Noah, anything quickly you want to add?
Yeah, I think just to support what you said, Eric, we've heard that from the PIs on an institutional level as well. What they're saying anecdotally is the studies that are not putting patients at risk are likely to be the first of the volley of studies to get back up and running on the site level as well.
Great to hear. Thanks for the question.
Thank you, Tim.
Your next question comes from the line of Liisa Bayko with JMP Securities. Your line is now open.
Hi, this is Jon Wolleben on for Liisa. Thanks for taking the questions, and congrats on the progress. Just one on the PROTECT study. Could you discuss this new confirmatory endpoint and how this might have evolved or changed over time? What is the meaningful difference between this update and what we were previously expecting?
Yep. Thank you, Jon. I'm going to have Bill take that question.
Certainly. Thanks for the question, Jon. The change is really relatively straightforward. We're essentially removing the post-cessation of therapy measurements. The observation window is four weeks shorter than what was listed before, because that really wasn't the right measurement for sparsentan, and we believe this change de-risks our potential for full approval. We originally designed the study based on robust data from DUET and our knowledge of FSGS, as well as registry data from patients with IgA nephropathy. At that time, the FDA had asked us to look at pre and post because there was precedent with that measurement with other therapies.
Since we started the PROTECT study, we've gained access to a robust trial-level analysis specific for IgA nephropathy trials that's allowed us to demonstrate using modeling that measuring eGFR from 0- 110 weeks while on therapy is really the optimal way to understand sparsentan's effect on outcomes. We shared this with the agency and subsequently made the change to the protocol. It's important for me to point out that this was done based on the modeling from the trial-level analysis. It wasn't done with study data. We're still blinded to the study, and we don't have patients out at this point in PROTECT yet.
Okay, great. Then just on the commercial portfolio, you mentioned that you expect perhaps new patient starts will be a little more difficult, obviously, with the pandemic ongoing. How are you feeling about your previous guidance of mid-single-digit growth for net product sales for the year?
Yeah. Jon, I would say that we started off very strongly for the year in new patient growth and we would have seen a very strong quarter even without some of the pull forward of some of the prescriptions. As Peter mentioned, our April new patient starts were also strong. That said, we need to be very careful in thinking about the duration and severity of the pandemic through the rest of the year. We're cautious. At this point, we believe that it is possible to achieve that mid-single-digit growth, and we'll continue to monitor and report as we see any potential change from that.
Great. Thanks again.
Thank you, Jon.
Your next question comes from the line of Gena Wang with Barclays. Your line is now open.
Thank you for taking my questions, this is David Dai for Gena. Congratulations on the great quarter. I still have one question on the commercial franchise. For the Thiola EC, do you see more patients switching to the EC formulation because of COVID-19, partly because of convenience and whatnot? Can you just help us understand what's the sort of split patients with between the Thiola EC formulation and the original Thiola formulation? Thank you.
Thank you very much, David. Peter, do you want to take those questions?
Yeah, happy to take that question. Thanks for that, Dave. I think in the last quarterly earnings, we reported that about two-thirds of the patients started using Thiola EC, which was very much in line with the research we had done previously. Since then, we continue to see an increase of that number. We don't provide the specifics. If that is more rapidly increased due to COVID, I don't think we see that effect.
That is very helpful. Thank you.
Thank you.
Your next question comes from the line of Do Kim with BMO Capital Markets. Your line is now open.
Hey, good evening, everyone. This is EK on for Do. Congrats on the quarter. I just had a quick question regarding Thiola. In terms of the Q-over- Q decrease in sales, is that primarily due to the GTN offsetting the new patient starts and a little bit of seasonality going on there?
Yep. Peter, would you like to take that one?
Absolutely. I think it's a continuum actually across all three lines. We still see patients that are currently using the IR formulation that move towards the EC. We see also new patients that are being diagnosed and get treatment, that they get Thiola EC. We continue to see patients that used to have Thiola and restart therapy with the EC. Across all three lines, we see that patients are using EC.
I think one of the other things that I would add, just in the first quarter, we do see that overall, the gross-to-net is usually higher in the first quarter versus Q4. As you would imagine that with the volume shift of Thiola to Thiola EC, that there would be a differential potentially with gross-to-net there. I think largely what we see is a pattern that is consistent in quarter one of previous years as patients' insurance reset for the year. I think largely in terms of the market dynamics, as Peter mentioned, but then you also have this unique dynamic of gross-to-net within Q1 versus the prior quarter.
Okay. Thank you for the clarification.
Thanks, EK.
I'm showing no further questions at this time. I would now like to turn the conference back to Chris Cline.
Great. Thank you, Bella. Thank you everybody for joining us today. This concludes our call. I hope you all remain safe and well.
Ladies and gentlemen, this concludes today's conference. Thank you for your participation and have a wonderful day. You may all disconnect.