Good day, and welcome to the Travere Therapeutics fourth quarter and full year 2022 financial results and corporate update. Today's conference call is being recorded. At this time, I would like to turn the conference call over to the Vice President of Investor Relations, Naomi Eichenbaum. Please go ahead, Naomi. Thank you.
Thank you, Rachel. Good afternoon, welcome to Travere Therapeutics fourth quarter and full year 2022 financial results and corporate update call. Thank you all for joining us. Today's call will be led by our Chief Executive Officer, Dr. Eric Dube. Eric will be joined in the prepared remarks by Dr. Jula Inrig, our Chief Medical Officer, Peter Heerma, our Chief Commercial Officer, and Chris Cline, our Chief Financial Officer. Dr. Bill Rote, Senior Vice President of Research and Development, will join us for the Q&A session. Before we begin, I would 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 statements. Please see the forward-looking statements disclaimers on the company's press release issued earlier today, as well as the Risk Factors section in our forms 10-Q and 10-K with the SEC. Any forward-looking statements represent our views as of only the date such statements are made, February 23rd, 2023, and Travere specifically disclaims any obligation to update such statements to reflect future information, events, or circumstances. During today's call, we'll be covering certain financial results for the quarter and for the year ended December 31st, 2022, including certain non-GAAP financial results.
Please refer to the company's press release issued earlier today again, among other things, a reconciliation of the differences between the non-GAAP financial results and the most direct comparable GAAP financial results. You can access the press release on our website at travere.com. With that, let me turn the call over to Eric. Eric?
Thank you, Naomi, and good afternoon, everyone. 2022 was a year of many achievements that have further strengthened our position as a leader in the rare disease community. This is founded in our mission to identify, develop, and deliver life-changing therapies to people living with rare disease. Throughout last year, we advanced our pipeline, prepared our organization for launch, and continued to reach the patients that currently rely on our approved medicines. Perhaps most importantly, our work culminated in the recent accelerated approval of FILSPARI for the reduction of proteinuria in adults with primary IgA Nephropathy or IgAN at risk of rapid disease progression. FILSPARI is the first and only non-immunosuppressive medicine approved for IgAN, which has demonstrated a threefold superior proteinuria reduction compared to a standard of care irbesartan.
As you heard us talk about on our recent approval call, we have high aspirations for FILSPARI, as we believe it will become the foundational treatment option for IgAN patients who are at risk of rapid progression. Importantly, we have the deep market insights, the product profile, the team, and the strategy to achieve that goal. If we are successful, we will be able to positively impact many patients in the U.S. with this important new medicine. We are only a few days into the launch in the U.S., but we're encouraged by the initial engagement with physicians, patients, and payers, and Peter will go into it a bit more detail shortly. We still have more exciting milestones to come with FILSPARI in 2023.
Beyond setting the launch trajectory in the U.S., we are anticipating a review decision from the EMA in the second half of 2023 for the conditional marketing authorization application for sparsentan in the treatment of IgAN in Europe. We will continue to work closely with our partner CSL Vifor throughout the review process. We also look forward to the two-year data from the ongoing PROTECT study. As a reminder, the interim results from the study supported the accelerated approval of FILSPARI last week. As such, we are awaiting with anticipation the two-year data set, which is planned for the fourth quarter of this year.
Based upon the interim results, we believe the preliminary eGFR data available at the time of the interim analysis were indicative of a potentially clinically meaningful treatment effect after two years of treatment, and that we'll be able to utilize those data for a traditional approval submission in 2024. From sparsentan, we expect to have top-line data from the two-year endpoint in the ongoing DUPLEX study in FSGS during the second quarter of this year. If o the results from DUPLEX are supportive of an FSGS regulatory submission, we would anticipate being in a position to submit an sNDA in the second half of this year, and would also target submitting together with CSL Vifor a subsequent variation to our European CMA application by end of year.
This would represent an incredible opportunity for us to help patients with FSGS, one of the leading causes of kidney failure due to glomerular disease. Beyond sparsentan, we continue to advance our novel pegtibatinase program for classical homocystinuria or HCU. Later this year, we anticipate being in position to provide additional data from the ongoing COMPOSE study, as well as plans for a potential phase III program after we complete our regulatory engagements. 2022 was a remarkable year for Travere, and I am proud of our organization's accomplishments and perseverance to ultimately get us to our first approval from our pipeline of therapies targeting rare diseases. We have started off 2023 with a key milestone that has been years in the making, and we have much more to come as we continue working towards our mission of delivering life-changing therapies to people living with rare disease.
Let me now turn the call over to Jula for a clinical update. Jula?
Thank you, Eric. Good afternoon, everyone. As Eric stated, 2023 promises to be an exciting year for Travere, the rare kidney community, and the patients and families impacted by IgAN. We could not be more pleased with the recent accelerated approval of FILSPARI. This milestone has created momentum in the IgAN community and set the stage for many exciting developments to come. It is important to remember that IgAN is the most prevalent primary glomerulonephritis worldwide. It is often uncontrolled. As a result, it is a major cause of kidney failure. In fact, high-risk people living with IgAN face a median time to kidney failure of approximately 11 years. Along the way, many face pain and debilitating fatigue, depression and anxiety, and challenges with keeping up with everyday work life.
Patients and their nephrologists are desperately seeking new treatments that can effectively reduce proteinuria and be utilized long term with less concern for limiting side effects. Right now, that's limited to ACE inhibitors or angiotensin receptor blockers, which more than 50% of patients don't respond adequately to, and SGLT2 inhibitors, which are less effective at reducing proteinuria. Steroids are also available, but are generally reserved for more severe IgAN patients because of their challenging safety and tolerability profile. FILSPARI is the only once-daily oral non-immunosuppressive medication approved for the reduction of proteinuria in IgAN. As the first of its kind dual endothelin angiotensin receptor antagonist, FILSPARI targets two causal pathways critical to IgAN disease progression. In the PROTECT study, we observed a rapid, sustained, and three times greater reduction in proteinuria compared to irbesartan while showing a consistent and tolerable safety profile similar to irbesartan.
We are thankful for the FDA's accelerated approval of FILSPARI and are proud of the label we have received, which highlights the strongest clinical data demonstrated in a head-to-head phase III study in IgAN to date. I encourage you to review the entire label at filspari.com to further understand the clinical performance, safety profile, and the REMS process. A point worth noting is that both the liver and pregnancy REMS monitoring can be obtained with a single blood draw. Since high-risk patients typically undergo monthly medical visits and labs, we expect that integrating REMS monitoring into their current course of care will be seamless and serve as an effective tool for physicians monitoring their patients.
Overall, we believe this label will provide nephrologists with the confidence needed to prescribe FILSPARI for their IgAN patients at risk of rapid disease progression and that this is just the beginning for realizing FILSPARI's potential. Later this year, we're expecting top-line data from the confirmatory portion of the PROTECT study. If these data demonstrate a clinically meaningful benefit on eGFR after two years of treatment, this will further solidify FILSPARI's potential as a new treatment standard. Achieving this would enable us to submit for a traditional approval with the expectation of a label that would be more representative of the total population studied in PROTECT and reflect the long-term benefits of FILSPARI. Beyond IgAN, we're nearing the top-line results from the DUPLEX study of sparsentan and FSGS. The DUPLEX study is progressing according to plan, and we're pleased with the continued conduct and efforts to get to database lock.
If the two-year data progresses in a favorable manner, we expect to submit an sNDA for sparsentan to gain an indication for FSGS and be added to the FILSPARI label. We would also look to submit a variation to our CMA application, if approved for IgAN in Europe. This could be paramount for people living with FSGS, as many are facing an even faster progression to kidney failure and fewer effective and safe treatment options. Beyond sparsentan, we continue to advance our pegtibatinase program in classical homocystinuria. During the fourth quarter, we completed enrollment activities in the sixth and final cohort of the ongoing phase 1/2 COMPOSE study. As a reminder, pegtibatinase demonstrated dose-dependent reductions in total homocysteine during 12 weeks of treatment in COMPOSE.
In the 1.5 milligrams per kilogram twice-weekly dose cohort, treatment with pegtibatinase resulted in rapid and sustained reductions in total homocysteine of approximately 55%, resulting in maintenance of total homocysteine below a clinically meaningful threshold of 100 micromoles from week two through week 12 of treatment. Our sixth cohort is evaluating one additional higher dose and also a lyophilized formulation that, if effective, could be utilized in a potential pivotal program and the commercial setting, if approved. We remain on track for additional data from COMPOSE later this year. These data will be helpful for completing our engagements with regulators and potentially initiating a phase III study in the second half of this year. On the development program, we received Fast Track designation for our KINEDAL development program in 2022.
As many of you may recall, KINEDAL is currently approved for the treatment of radiolucent gallstones. It has been recognized as the standard of care for cerebrotendinous xanthomatosis, or CTX, for many years. Our ongoing phase III RESTORE study is designed to provide a data set that will allow us to submit an sNDA to have the label amended to reflect what we believe is the true use of the product. We believe this could significantly aid patient identification and help people living with CTX gain earlier access to a greatly needed treatment option. We know that if CTX is identified and treated early, oftentimes patients can go on to live a relatively normal life. We expect to have data from the phase III study in-house this year. To subsequently submit an sNDA if the data are supportive.
With that, I'll turn the call over to Peter for the commercial update, including additional color on the FILSPARI launch. Peter?
Thank you, Jula. This has already been an exciting week for us. As I mentioned on the call last Friday, we built our FILSPARI launch team upon our proven commercial infrastructure, which has delivered consistent results over the past 8 years. We further strengthened our execution capabilities and now have a dedicated launch team with the specific experience and expertise to be successful with FILSPARI. I mentioned that this tam was ready to execute with a sense of urgency, and I'm pleased to report that our team has been executing very well since approval Friday afternoon. Within one day, our materials were finalized consistent to the label and the FILSPARI REMS and Travere TotalCare websites were live and operational.
Even though Monday was a public holiday, our commercial field teams were excited to finish their training and get out into the field, engaging with their customers, both nephrologists as well as payers. All these extensive planning and execution efforts led to the first FILSPARI prescription beng written within eight b usiness hours of approval. We anticipate this positive momentum to continue to build. T o provide you a bit more context on our initial days of FILSPARI commercialization, our experienced commercial field team of more than 80 seasoned professionals is engaging in productive conversations with nephrologists and payers, focusing on the burden of disease and IgAN, the challenges with current standard of care, and how FILSPARI's profile could potentially address these shortcomings in the addressable IgAN population of adult patients at risk of rapid progression.
The receptivity and initial interest from the nephrology community is in line with our expectations, amplifying that patients have been waiting for a product like FILSPARI. Prior to approval, nephrologists have consistently expressed that they need more efficacious treatment options that allow for long-term use in treating their IgAN patients who are at risk of rapid progression without the tolerability issues of immunosuppressive agents. We believe FILSPARI is well-positioned to fill that need. It blocks angiotensin, consistent with what nephrologists have been doing over the past 30 years. It builds upon a common belief and routine, but it adds the missing component of antagonizing the endothelin A receptor. We know that endothelin and angiotensin stimulate each other and act in tandem to amplify damage to the filtration barrier in the kidney, resulting in increased proteinuria levels.
Integrally blocking endothelin and angiotensin with FILSPARI has allowed for the superior efficacy relative to irbesartan, as observed in the interim readout of the landmark PROTECT trial. Based on FILSPARI's novel mode of action and robust efficacy and safety data, we are convinced that FILSPARI has the potential to become the foundational treatment option for the roughly 30,000-50,000 IgAN patients addressable under the current indication. It is our goal to make FILSPARI the cornerstone therapy for these patients within the evolving IgAN treatment paradigm. Last week, I mentioned on the approval call that we have learned from recent product launches in rare nephrology and that we know that nephrologists are largely mechanism and data-driven.
Therefore, our initial focus is to educate nephrologists on the FILSPARI profile, both the efficacy and safety findings as outlined in the label to give them a solid understanding how FILSPARI may help their rapidly progressing IgAN patients. Another launch dynamic that we will be navigating is the process of getting to payer coverage. Here, I believe we are also off to a solid start. Prior to approval, we had already conducted scientific pre-approval engagement with payers covering over 150 million lives, and we are building upon those initial conversations now. This week, we have already interacted with several national payers, and these interactions have reinforced that payers are generally well aware of the burden of IgAN and appreciate the importance of proteinuria reduction in relation to disease progression.
Last week, I also referenced that we plan for an exquisite first FILSPARI experience for patients and physicians. We have established Travere TotalCare to help patients by offering personalized education, support in the reimbursement process, and copay assistance for eligible patients. Travere TotalCare also assists patients and physicians with their REMS enrollment, which is typically a simple procedure. During this process, physicians will review the prescriber guide and acknowledge their understanding of the label. They will be prepared to prescribe FILSPARI. It is also worth emphasizing that our REMS monitoring can integrate seamlessly with the established REMS processes nephrologists currently use for other therapies.
From a logistical standpoint, we remain on track for FILSPARI to be shipped to our specialty pharmacies next week. In summary, our launch execution has started according to plan and we are well-positioned to deliver on our powerful purpose, bring FILSPARI to patients who need it most. Turning to the performance of our in-line product portfolio in the fourth quarter of 2022, I continue to be very pleased with the execution of our commercial organization. For THIOLA, we continue to see solid demand as we have further supported the identification and treatment of cystinuria patients. This is a testament to our organization's patient-inspired way of operating and our established capabilities in the rare kidney space. We are pleased with the meaningful THIOLA performance within the evolving competitive landscape.
As we have talked about historically, we are seeing the impact of generic dynamics that affect net sales of THIOLA, we expect that this could materialize further this year. Our bile acid portfolio continued to deliver solid growth in the fourth quarter. The Cholbam team has a long-standing reputation of performance and dedication to educating pediatric geneticists and hepatologists. These efforts have been key to Cholbam's continued growth. Our team's capability to help physicians in patient identification of these ultra-rare conditions is fundamental. This expertise provides a solid foundation to build upon as we prepare for a potential future CTX indication for KINEDAL and as we progress with the pegtibatinase development program. In 2023, we expect to return to year-over-year growth in net product sales.
While we expect further pressure on Vyola, we anticipate that this will be offset by expected growth of our bio acid portfolio in the FILSPARI launch performance. As a reminder, we anticipate that FILSPARI's performance will be in line with recent rare nephrology benchmarks in the first six to nine months. Once we gain meaningful FILSPARI payer coverage and prescribers gain their initial experiences and observe the same consistent proteinuria reduction as observed in the PROTECT trial, we anticipate accelerated adoption towards the end of the year. Beyond the first year, we are well-positioned for ongoing growth of FILSPARI, which is exemplified by our ability to execute, as demonstrated with our commercial performance in 2022.
This, together with the high unmet need in IgAN, the robust profile of FILSPARI, and our meaningful timing advantage before additional therapies may potentially be approved, gives us confidence that we will succeed in our strategic objective to make FILSPARI the foundational treatment for rapidly progressing IgAN patients. Let me now turn the call over for Chris for the financial update. Chris?
Thank you, Peter. Good afternoon, everyone. With the continued execution of our commercial organization and the focus on our key priorities throughout the business, we ended 2022 in a strong financial position. For the fourth quarter of 2022, net product sales were $52.3 million compared to $54.6 million for the same period in 2021. For the full year 2022, net product sales were $200.5 million, compared to $210.8 million for the same period in 2021. The difference is largely attributable to a decrease in THIOLA sales, partially offset by an increase in sales for the company's bile acid products.
Research and development expenses for the fourth quarter of 2022 were $60.2 million, compared to $62.2 million for the same period in 2021. For the full year of 2022, R&D expenses were $235.8 million, compared to $210.3 million for the same period in 2021. The difference is largely attributable to the continued advancement of the company's sparsentan and pegtibatinase clinical programs, including clinical trial expenses, manufacturing, and increased headcount. On a non-GAAP adjusted basis, R&D expenses were $54.2 million for the fourth quarter of 2022, compared to $57.7 million for the same period in 2021.
Selling, general, and administrative expenses for the fourth quarter of 2022 were $62.9 million, compared to $42.1 million for the same period in 2021. For the full year 2022, SG&A expenses were $220.2 million, compared to $149.9 million from the same period in 2021. The difference is largely attributable to the commercial launch preparations for FILSPARI, including having the full sales team on board and ready to launch this week. On a non-GAAP adjusted basis, SG&A expenses were $50.2 million for the fourth quarter of 2022, compared to $30.9 million for the same period in 2021.
Total other income net for the fourth quarter of 2022 was $1.1 million, compared to total other expense net of $4.4 million for the same period in 2021. The difference is largely attributable to increased interest income and lower interest expense during the period. Net loss for the fourth quarter of 2022 was $65.8 million, or $1.03 per basic share, compared to a net loss of $51.6 million or $0.84 per basic share for the same period in 2021. For the full year 2022, net loss was $278.5 million compared to $180.1 million for the same period in 2021.
On a non-GAAP adjusted basis, net loss for the fourth quarter of 2022 was $49.1 million, or $0.76 per basic share, compared to a net loss of $37.6 million or $0.61 per basic share for the same period in 2021. As of December 31, 2022, the company had cash equivalents, and marketable securities of $450.2 million. As we look to the year ahead, we anticipate that our operating expenses will continue to increase and may be variable quarter to quarter as we advance our programs. For SG&A, this is primarily driven by having a full year of the expanded sales team in place and their associated launch investments to position FILSPARI for success.
For R&D, it is primarily driven by the continuation of both the PROTECT and DUPLEX studies with sparsentan, as well as our work to evaluate sparsentan in combination with SGLT2 inhibitors and preparing pegtibatinase for a potential pivotal program, including building supply. We anticipate that we can manage our balance sheet to support our operations well into 2024. This takes into account potential further competitive dynamics for THIOLA, investing in launches for both IgAN and potentially FSGS, advancing pegtibatinase, as well as milestone payments related to achievements for the programs. We enter the new year with a strong financial position to support this exciting period of launch execution and the continued advancement of our pipeline to a number of key milestones in 2023. I'll now turn it back over to Eric for his closing comments. Eric?
Thank you, Chris. I want to express my gratitude to the rare disease community, the patients, their families, and the Travere team for their hard work and dedication that has led us to this successful moment, the launch of FILSPARI. The strong reception by physicians, patients, and payers, even in these early days, demonstrates the value of FILSPARI in addressing the unmet needs of those in the rare kidney community. We are committed to improving the lives of patients. To do so are focused on the advancement of our pipeline. In this regard, we still have a number of exciting milestones to come, including the potential approval of sparsentan for IgAN in Europe in the second half of this year and the 2-year data from the PROTECT trial in IgAN in the fourth quarter.
We also anticipate top-line data from the two-year endpoints in the DUPLEX study of sparsentan in FSGS in the second quarter of this year, which could lead to an important new indication for sparsentan. Finally, we expect to be able to share more this year on our novel pegtibatinase program as we prepare for a potential phase three program. Our years of hard work have set us up for an incredibly bright 2023. I am confident our talented team will deliver strong results for our patients and for the rare disease community. Let me now turn the call over to Naomi for Q&A. Naomi?
Thanks, Eric. Rachel, can we please go ahead and open the lines for Q&A?
Thank you. If you would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Please limit yourself to 1 question and 1 follow-up question, and then reenter the queue if you would like to ask additional questions. We will take our first question from the line of Greg Harrison with Bank of America. Greg Harrison, your line is now open. Hey, guys. Good afternoon, and thanks for taking the question. Maybe just to start off, could you walk me through the process, from a patient's perspective of, you know, getting the script, enrolling in the REMS program and then the monthly maintenance, you know, testing for the REMS?
Yeah. Greg, thank you very much for the question. Jula, maybe, we'll turn to you first, and you can walk through how this fits within how these patients are treated. Peter, you can walk through what the process is for prescription and receiving FILSPARI.
Certainly. Thanks, Greg, for the question. Realize that patients who are at risk for progression are going to see their nephrologist more frequently, particularly as you have a change in their treatment algorithm. They may see them every month with labs. As a patient's going to go see their nephrologist, they're going to discuss their overall risk of progression, having significant proteinuria as well as their eGFR decline. The nephrologist is going to sign up for the REMS. This process for signing up for the REMS is relatively simple. From both the physician perspective as well as the patient, they need to be educated. That's a significant proportion of the REMS. That means reading the label, reading the prescriber and pharmacy guide, and then signing up.
Signing up means filling out your contact details and then signing a statement that says you're gonna monitor your patient appropriately. That's the same process for a patient. They give their contact details, state that they've been informed about the overall risk benefits and that they're gonna follow the process. For a patient, what that means is that they're gonna get their labs every month, and then they're gonna get the therapy through the specialty pharmacy. Just I'll add one additional detail, is we have just a couple of specialty pharmacies, and they're gonna go through the similar process. Read the label, be informed, read the prescriber pharmacy guide, and then give their contact details and then attest that they're gonna follow this process.
Yeah, let me build on what Jula said, and thanks, Greg, for that question. Before giving you a little more details on the mechanisms of the Travere TotalCare patient services, I think it's good to realize the high unmet need for these patients, and that's the reason why we have accelerated approval in the first place. You have to realize this is a younger patient population and it's often diagnosed in their late teens or early 20s. Half of those patients progress to kidney failure within 11 years, as Jula mentioned in the pre remarks. That means that a lot of those patients will end up in dialysis in the midst of their productive lives.
When we talk about the REMS and the early responses we have seen so far, and this is still early days, I mean, it's day four of promoting FILSPARI. Early responses from nephrologists confirm that they don't have alternative treatment options today for these patients, as they have PHils, ACE and ARBs, and steroids is often not an option. Once nephrologists understand the efficacy and safety profile of FILSPARI, they appreciate the simple procedure of the REMS enrollment, and they focus back to the clinical value that FILSPARI may have for their patients. I think you have talked already about like what the physician as well as the specialty pharmacist will be doing.
I will also say that within, Travere TotalCare, we provide the services to make this process as convenient as possible for both physicians, the specialty pharmacist and especially the patients.
Great. That's really helpful. Then could you remind us how many IgAN patients are treated by community nephrologists and how this has influenced your launch strategy?
Maybe to take that question, the vast majority of those patients are being treated by the community nephrologists. We have planned for that as well. That's why I mentioned in the call last week that we will be consistently calling on about 6,000 nephrologists to cover about 85% of the patient potential.
Great. Thanks again for taking the question.
Thanks, Greg.
We will take our next question from the line of Maury Raycroft from Jefferies. Maury Raycroft, your line is now open.
Hi. Thank you. Thanks for taking the question. When you did your most recent market research at the end of last year and asked about intent to prescribe in six months or one year of launch, I'm wondering if you tested key aspects of the label in your market research?
Thanks, Maury, for that great question. Peter, would you like to take that?
Yeah, absolutely. Thank Maury for that question. We have done consistent market research, and that's also been validated by external research, for example, by syndicated market research. It was quite surprising to me like that the intent to prescribe did not change after we announced the liver monitoring REMS. The intent to prescribe remained 90%. We just did, I just saw a result actually this week of the latest profile, the label. Again, that intent to prescribe came in at 88%. Very consistent at around 90% prescription in the 1st year and about 70% intent to prescribe in the 1st six months. There didn't really meaningful change.
Got it. Peter, you highlighted some of the plans around doctor education efforts. Can you talk about where the most challenging learning curves will be and how will you message around eGFR to doctors?
Yeah, absolutely. I mean, it's early days. As I mentioned, it's day four. What we see so far, what I'm hearing from our field reps is there is great excitement for the promise of FILSPARI. In fact, I got a text yesterday from one of our KAMs saying, who has been in the field for 30 years, saying that he has never seen this level of excitement among nephrologists. I think that there is a certain level of excitement to learn about the profile of FILSPARI. Proteinuria is often the marker that physicians are measuring on a monthly basis, and also how they monitor progression of disease and how they change the treatment plan. The conversation on eGFR has not come up yet in many of those conversations.
They understand it's an ongoing trial, and they're excited to learn more about the FILSPARI profile over time.
Got it. Makes sense. Thanks for taking my question.
Thanks, Maury.
Our next question comes from the line of Joseph Schwartz with SVB Securities. Joseph Schwartz, your line is open..
Great. Thanks so much. I have a question on IgA nephropathy and then FSGS. How do you expect the rate of FILSPARI uptake to differ, if at all, amongst patients treated at academics versus community nephrology centers? Beyond those segments, are there any other particular physician demographics that you expect to be earlier or later adopters?
Joe, thank you very much for the great question. Peter, I'll pass that over to you.
Very timely question, Joe, because this was also part of the market research that I was just referencing, so I saw that yesterday. Very interesting. The utilization, the intended utilization for FILSPARI is basically similar across community nephrologists as it is in academic nephrologists. We will see how that materialize over time, but the intent to prescribe is quite similar among those two specialty categories.
Thanks, Peter. Maybe if I could just add, Joe, one of the things that we are reflecting in our launch plans, and Peter's team has done a fantastic job, is really helping to understand not just those 6,000 for targeting, but also to segment to make sure that we recognize who are those physicians that have, through their behavior, adopted recent innovation more quickly, those sort of early adopters versus late adopters. You know, our team is making sure that we're very much focusing our efforts in the first part of launch on those clinicians that we would see as early adopters. Very similar to many other launches.
I think, you know, it's not just about academic versus community, but it's also, you know, number of patients and, you know, as I say, behavior such as, you know, adoption of recent rare renal launches.
Yeah. If I may build on that, Eric, I just mentioned that we would be consistently calling on about 6,000 nephrologists. Maybe to give you a little more context how we got to those 6,000. It's really based on three different segmentation and targeting assessments that we did. One was based on patient volume, one was based on behavior, in particular on new product utilization to really get to those innovators and early adopters. The third one is on influence on the nephrology community. We have a very clear way to target and segment those physicians that we see as most valuable in the prescription process to get to that broad patient population.
Very interesting. Thank you. Then for the FSGS data next quarter, how should we be thinking about the bar for success in terms of eGFR difference? What is the overlap between what's clinically meaningful and the bar for approval? How does that look? Do you have any specific guidance from the FDA that says what you need to achieve there in order to be able to file for approval? Thanks.
Sure. Thank you, Joe, for the question. I'll turn, Jula, first to you on the clinical relevance of an eGFR treatment effect and, you know, where we would see success. Then Bill, you can share insights and expectations from a regulatory perspective.
Certainly. Thanks for the question. I think it's important to note that we saw a clinically meaningful and significant reduction in proteinuria in FSGS that should translate into a significant treatment effect on eGFR. If you look historically at other trials, looking at a difference in eGFR slope, most of them, I mean, if you look at the SGLT2 inhibitor data, the difference in slope that's clinically meaningful for showing a long-term kidney protection is anywhere in the range from 0.75-1 mils per minute difference. We powered the trial appropriately to show both a clinically meaningful and a statistically significant difference based on the proteinuria reduction that we've seen to date.
I think-
Very well. Thanks for taking my questions.
Yeah.
Sorry. Bill.
From a regulatory perspective. Yeah, this is Bill. From a regulatory perspective, it lines up pretty closely with what is clinically meaningful. We've seen tolvaptan was approved with a 0.75 difference. The agency's clearly recognizing what Jula's talking about. You know, with a therapy that's treated for years, you know, a consistent therapy, a small difference in mils per minute has a very large impact on time to progression. If you're looking at time for time to renal replacement or need for dialysis, the impact's really quite significant even with small differences in eGFR slopes. Thanks again.
Thanks, Joe.
We will take the next question from the line of Tim Lugo from William Blair. Tim Lugo, your line is now open.
Hey, guys. This is Lachlan. It's Tim. Thanks for taking the questions. First I guess maybe for Chris, I was just wondering if we should expect any stocking dynamics in, you know, in the next month, I guess, or, you know, is there not much stocking at the specialty pharmacies? Second one quickly, just we noticed that there's a late breaker at WCN. Can you give any color on, you know, what will be presented there? Or will new data that's not in the label be presented in that presentation?
All right. Chris, why don't you take that, and Jula cn cover WCN?
Sure. Thanks for the question, Lachlan. With our distribution model, you really shouldn't expect to have any kind of meaningful stocking. Really, when we get to stable state here, it would you know, we expect it to be somewhere in the range of one w eek or two weeks at most. Not much of a dynamic there to work through. At the beginning, there will be a little bit, but not really much at stable state.
Yeah. Thanks. We're really excited to be able to present our data at WCN. Next month, you can expect to see additional efficacy data as well as our safety data. We will not be releasing our eGFR data as we have agreement with the FDA that we won't release that until we complete the clinical trial. We're really excited to be able to present that and to the nephrology community.
Great. Thanks.
Thanks, Lachlan.
We will take the next question from the line of Do Kim with Piper Sandler. Do Kim, your line is now open.
Hi. Thank you. Thanks for taking my questions. Question on the phase III DUPLEX study in FSGS. When we look at or think about the eGFR slope, the 108-week data readout, could we use the DUET extension study and the slope that was calculated for there as a good estimate? When you calculate the slope of the eGFR curve, what time points do you look at? I know for DUET, you were looking starting at day 42 to week 108. Just wanted to know where the starting point is.
Thanks for the questions. I'd say, you know, we certainly do feel that there is a parallel between what we have seen in DUET and what we expect to see in how we designed DUPLEX. Jewel, I'll turn the question to you on. Oh, sorry, I'm getting a little feedback. I'll turn the question to you on how we might expect to see the slopes for sparsentan, but also perhaps natural history, given that we didn't have long-term follow-up of our active comparator in that trial.
I think the long-term data that we've received from DUET shows kidney preservation compared to what we would expect to see in long-term for patients who are at high risk of progression with primary FSGS. I would say historically, those patients can progress more at a rate of greater than 5 mils per minute, more like 7, 8, 9, 10 mils per minute per year, and we saw less than that in our long-term eGFR data that we presented last year at ASN. In particular, in patients who achieve complete remission, we saw significant preservation in those patients with regards to long-term eGFR slope. I don't know if there's any additional granularity you'd like me to provide around that.
Just wanted to see how the slope is calculated. Do you look at the slope of the curve from the beginning of the study out to 108 weeks? I know it's not a difference of a moment in time at week 108, but just the overall slope of the curve.
You do look at the total data from the very beginning all the way to the study end, and that's what's so great about looking at a slope. You use every single data point for all patients to look at the trajectory of the curve. We will look at both total slope, which is from the very beginning all the way to the end and weighs all the data equally, as well as chronic slope, which looks more at after six weeks to the study end to minimize the effect of the acute hemodynamic effect.
Great. That's helpful. A quick question for Chris. How will you account for the FILSPARI royalty to Ligand in the income statement?
Thanks, though, for the question. We'll, we'll be updating that when we report 1Q. We're finalizing that now, but we'll make sure that it's clear out to you guys and being able to view the financial statements as to how exactly, we're paying that.
Okay. Thank you.
Thanks, Joe.
We will take the next question from the line of Liisa Bayko with Evercore ISI. Liisa Bayko, your line is now open.
Hi. I think most of my question's been answered, but I guess I would just ask, what's your level of confidence for a good outcome in the upcoming FSGS final data? Maybe you can just explain, you know, explain that level of confidence. Are you highly confident, kind of hopeful but moderate, you know, not so confident? Just curious on how you're thinking about it. We're getting a ton of questions on FSGS these days. Thanks a lot.
Sure. Yeah. Liisa, thank you very much for the question. We certainly are excited about this upcoming data readout next quarter. I would say that, you know, we remain confident in the outcome, and that's largely because the way that we designed the trial was based on showing a robust and statistically significant superiority on proteinuria that then would predict out to eGFR. Certainly as we've looked at the way that the trial is conducted, the number of patients that we've retained in the trial, all of those things that we look at to ensure that the study is being conducted as we had hoped is there.
I'll turn it over to Jewel and maybe Bill, if you have any further thoughts on why we remain confident and really, you know, what does good look like coming out of the two -year results?
Yeah. I'll just continue on with what Eric was saying. We saw a clinically stable and statistically significant separation and reduction in proteinuria with sparsentan versus irbesartan. I would say importantly, when we met with the FDA, they said the study's design can support traditional approval. That's also what gives us the confidence that we will be able to achieve what we have set out. We powered the study appropriately. As Eric said, we continue to have a significant number of patients to be able to achieve our endpoint, and we had a separation of proteinuria to show the treatment effect on eGFR. We'll also be going under. Maybe I'll turn this to Bill to talk about looking at an sNDA versus accelerated approval. It's a very different situation. Bill, do you wanna add color around that?
Sure. I think that, you know, when you're in the position, as the agency on accelerated approval, they've demonstrated that they approach it very deliberately and somewhat conservatively because you have a partial dataset both for safety and for efficacy. At the end of a study, it's a much more traditional approval. That's helpful in that we aren't asking them at that point to take regulatory risk, and their ability to be more flexible is there in looking at the totality of the data. I think the other additional element is last Friday's approval of FILSPARI means that we're now looking at an additional indication to a drug that's already approved. Both safe and efficacious. I think that puts it in a different frame from a regulatory standpoint when compared with an interim analysis under Subpart H accelerated approval.
That's a really good point. Thanks for mentioning that.
Thanks, Liisa.
We will take the next question from the line of Carter Gould with Barclays. Carter Gould, your line is now open.
Great. Good afternoon. Thanks for taking the questions. I guess the first half is on the top line FSGS data in 2Q. I guess how much data is gonna be in that top line release? Are we gonna see enough data that we can assess the clinical significance of that, or are you gonna prioritize saving that data for a medical meeting? I guess maybe alongside that, Peter, when Peter and Jula, when you think about that data coming out, to what extent do you think nephrologists may read through from potentially positive eGFR data and FSGS to IgAN and potentially pulling forward some of the demand in that launch? Thank you.
Carter, thanks for the questions. Jula, why don't you take the top line, what the team is thinking and any potential read-through, and then Peter, you can add your thoughts.
Well, it's a great question. I mean, we'll have a trial that's completed, so we're not limited with regards to keeping data. However, it's a balance because we do want to have a very high-tiered publication and presentation at an important meeting. But we will be able to release the eGFR data, you know, our total. Whether we give you all the curves and all the additional data, we're gonna have to make that decision probably pretty soon. But at least enough to give you confidence about the results of the trial. With regards to the nephrologist and the read-through, I would point through to the SGLT2 inhibitor data, where we don't necessarily see the same magnitude and treatment effect in one disease versus the other with regards to the endpoint of 40% decline in eGFR kidney failure, dialysis and transplant.
Each disease is quite different, even though the drug you might think should work across the board, with regards to one or the other, it may not for a number of different reasons, whether it's the underlying disease, the heterogeneity, the patient population studied, and other things. I wouldn't say that there's necessarily gonna be carry-through from one or the other depending on the magnitude of the treatment effect or, you know, what we see there. Peter, do you wanna make other comments around that?
No. Let me echo what you said. I think it's right. Those patient profiles are quite different. The way I think about it, Carter, is really excitement that we have that continuous data stream and have something continuously to talk about with the physician, and I think it only built the excitement for FILSPARI. It is in that aspect, it's almost like a continuing launch with new data, and new approvals coming in the next year.
Thank you. Congrats again.
We will take the next question from the line of Mohit Bansal with Wells Fargo. Mohit Bansal, your line is now open.
Thanks for taking our question. This is Adam on for Mohit. Is it fair to say that EU prescribing information for FILSPARI could have less specificity on UPCR and class effects compared to the FDA label considering past methodology approvals? Separately, could the EU prescriber base be better equipped to do any monitoring that they would conduct due to a greater share of docs practicing in academic centers?
Adam, thanks so much for the question. Let me clarify the first question around the label. Are you asking just the level of detail and data that we have on UPCR in our label compared to others? I wanna make sure that I answer the right question.
No, I'm asking for the approval in Europe that, you know, when you would ultimately, you know, get approved in that geography, ultimately, you know, whether it have the same specificity on, you know, what UPCR ranges of patients you treat as well as, you know, some of the safety detail essentially could be heavier in the U.S. label relative to what past Europe labels have looked like.
Okay. Got it. Thank you. Bill, maybe we can turn that to you. I mean, certainly we won't be able to speak to specifics on the European label given that we're still in that process. Bill, maybe you can give some thoughts on how the labeling may vary across regions.
Yeah. No, thanks for the question. You're right, Eric. It's a speculative answer because we're in process with the review with EMA. You know, it's important to realize they're looking at the same dataset. The filing for one doesn't contain different data from the filing for the US FDA NDA. They do have differences in how they present data, how they treat data. For example, there isn't such a thing as a REMS in Europe. They treat risks in a different fashion. I think it's, you know, we don't have indication at this point in the review of any great differences between the agencies, it's too early to really be definitive on anything. We look forward to that updating you on that in the future.
Peter, do you wanna take, any thoughts on the any difference in practice based on patients being seen more predominantly in academic centers in Europe and how that might play out?
Yeah. Having had the experience to be in Europe as a European, I think that it's generally right. I mean, it depends country by country. I think preventative care, I think generally is more established in Europe. I think overall you see higher eGFR levels for patients that are being referred to nephrologists. I think that is generally right, Eric, but it depends very much market to market.
We will take the next question from the line of Laura Chicco with Wedbush Securities. Laura Chicco, your line is now open.
Thanks very much for taking the question. I've got two. One first on the clinical. I guess, you know, our own market research has shown about 20%-25% of IgAN patients are now receiving SGLT2 inhibitors. I'm not sure if Julie or Peter could comment. Of the patients that are on an SGLT2 inhibitor, what proportion of those remain over 1 gram on proteinuria?
All right, who'd like to take that question? Peter?
Yeah. I'm happy to kick that off. Laura, I think your market research findings are quite consistent to what we have found as well. I think one of the important things to mention is what Julie mentioned on the call earlier as well. SGLT2 has the outcome data, but does not have the profound proteinuria reducing effect as FILSPARI. The nephrologist I have been speaking to, as well as what we saw in market research, they're very excited about the complementary mechanism of FILSPARI versus SGLT2. They're excited about the novel and non-immune suppressive combination approach that they may have now. Additionally, I think also, and Julie can talk more about it, is the complementary profile of SGLT2 with regards to sodium excretion and the diuretic effect.
Julie as nephrologist probably can speak in more detail about that.
Yeah. I would agree with that. Nephrologists are excited to use them in combination as the most interesting combination that they're interested in using together is SGLT2 inhibitors plus sparsentan due to the complementary mechanism of action of SGLT2s. We don't know how they're kidney protective exactly, but you do have the tubuloglomerular feedback that helps to enhance sodium excretion. We know that sparsentan has a direct benefit on the glomerulus, the podocyte, the tubular interstitium to have that kidney protection reducing proteinuria. The magnitude of proteinuria is significantly greater with sparsentan. I mean, all the proteinuria data that we have with SGLT2s, other than anecdotally when you talk to nephrologists of where they get their patients, all the trials were done in patients with low levels of proteinuria, less than 1 gram.
I mean, if you look at the DAPA-CKD or EMPA-KIDNEY, you know, they were relatively low level. They tend to be used in kind of later stage in general. We don't have the more high-risk patient profile to tell you know, what proportion get under a gram. I think the vast majority, they're gonna need combination therapy to really get them to where we want the less than a gram and even further, the complete remission patient, where you can get them under 0.3 grams to get them to that really lower risk patient profile.
Okay. This is helpful.
It might be worth you talking through this. Oh, sorry, Laura. It might be worth, Julie, just speaking to some of the data that we would expect to have next year from that, from the studies that we have, because I think it, Laura, it would be useful to be able to see those data from, in a clinical setting, in the trials that we are doing.
Yeah. I think, Laura, we already do have a drug-drug interaction that shows that we can safely combine. Additionally, we're going to have two t ypes of combination studies, one where you've got patients on sparsentan and you add an SGLT2 inhibitor, and the other the opposite direction, where patients are on an SGLT2 inhibitor and we add sparsentan. We'll have safety data, and we'll have proteinuria and efficacy and then eGFR data, and we'll have information on that next year.
Well, certainly looking forward to that. Maybe one follow-up question on the financial. Chris, I heard you mention cash runway well into 2024, I believe I heard correctly. Could you talk a little bit more about the flexibility on the balance sheet for extending runway? I know there is a milestone payment due to Ligand and Bristol, but any other inbound milestones that we should be considering in terms of our modeling? Thanks.
Thanks for that question, Laura. When I think about the balance sheet and, you know, specifically to the milestones, we have some that would be coming in potentially for things like regulatory approvals in Europe. Also we will have some coming out for, you know, things like pegtibatinase advancing, right? There may be a net effect to those. When I think about the balance sheet overall and we look at cash burn, there certainly is flexibility. There's a number of things that go into our estimate there, and we've commented in the past where we take a conservative approach, right? We're taking into account the potential for further generic erosion for THIOLA. We're taking into account all the investments needed for positioning FILSPARI appropriately for IgAN and FSGS launch, et cetera.
There certainly is some flexibility in that, but we're trying to give you guys a good view as to what we expect to use for operations going forward.
Thanks very much, guys.
Thank you, Laura.
We will take the next question from the line of Alex Thompson from Stifel. Alex Thompson, your line is now open.
Great. Thanks for taking my question. Just maybe a quick follow-up on, you know, SGLT2 inhibitors. I guess at this stage in the launch and based on some of your initial conversations with payers, what has been the receptivity with covering FILSPARI on top of SGLT2s prior to some of this clinical data you're gonna generate next year? Thanks.
Alex, thanks for the great question. Peter, would you like to take that?
I think, Alex, thanks for that. It's early days to comment on that, but I think we have had quite some pre-approval conversations with payers. What I took away from that is that payers are not anticipating to have, like, a step-through with SGLT2. SGLT2 has a broad label. It's both for diabetic and non-diabetic CKD, and it's kind of like off the radar for IgA nephropathy particularly. We don't anticipate that to be a roadblock for reimbursement for FILSPARI.
Great. Thanks. Maybe a quick follow-up on sort of the base commercial business outside of FILSPARI. I guess with potential expansion of the Chenodal label, you know, how should we think about sort of the trajectory of that base commercial business over time? Is that a meaningful uptick in the potential opportunity? How are you thinking about that over the next few years? Thanks.
Sure. Peter?
We're certainly excited about that extension, in particular as I think there may be more adult patients with CKD except that we will have an opportunity to reach by educating the physicians. We haven't given any guidance what the upside potential is, and we may be in a better position once we see the data of the trial.
Great. Thank you.
Thanks, Alex.
We will take the next question from the line of Ed Arce with H.C. Wainwright. Ed Arce, your line is now open.
Hi. Great, thanks for taking my questions. Some have already been asked, but I did wanna follow up on a point made earlier, and that is on the upcoming readout next quarter, the two year eGFR, excuse me. Just wanted to make sure I understood correctly the primary endpoint here, whether it was total slope or the other slope I think you mentioned started after the first six weeks. Both of those include interval data points throughout the period, and I'm just wondering what those intervals are as well? Thanks.
Sure. Jula, would you like to take that?
Yes. We'll be looking at both. We have agreement with the regulatory agencies on looking at the chronic slope as well as total slope, and that's an endpoint from the beginning of the study to week 108.
What are the measurement intervals throughout the period?
Are you asking when patients get labs? Is that what you're asking?
Yes.
I just wanna clarify.
Yeah.
Okay. Patients get labs at the beginning, and then there's a subsequent lab at, I believe it's two, four, and then eight weeks, and then it's every three months thereafter.
Okay. That's helpful. Just maybe just one last one. I know this has been discussed before, but just wondering as you start this launch, and have some patients switch from their current therapy onto Filspari, do you have a sense for the proportion of patients today that visit their nephrologist on a monthly basis as a routine?
Ed, thank you. Thank you for the question. We certainly have looked into the patient journey and how frequently these patients are visiting. Peter, would you like to share a bit of that work?
Absolutely, Ed, thank you for that question. I think there is, especially when you talk about rapidly progressing patients, those patients are being seen by the nephrologist at least quarterly, it's not uncommon to see those patients actually on a monthly base. If the heart of your question is, like, with what does that mean from a REMS perspective, it is good to realize that for the REMS program, those patients don't need to be seen by the nephrology on a monthly base. They do the lab testing on a monthly base, the physician will see the results, there is not an obligation for those patients to see their nephrologist every month, even though it is quite common for quite some patients to see their nephrologist that often.
Got it. Thank you for clarifying that.
Thanks, Ed.
This concludes today's question-and-answer session. I will turn the call back to Naomi Eichenbaum.
Thank you, everyone, for joining us for our fourth quarter and full year 2022 financial results and corporate update call. We look forward to the exciting year ahead and providing updates on our progress along the way. Have a great rest of your day. Thank you for joining.