Good evening. Welcome to the Vertex Second Quarter 2020 Financial Results Conference Call. This is Michael Partridge, Senior Vice President of Investor Relations for Vertex. Making prepared remarks on the call tonight, we have Doctor Reshma Kewalramani, Vertex's CEO and president, Stuart Arbuckle, chief commercial officer, and Charlie Wagner. Chief Financial Officer.
We call is being recorded and a replay will be available on our website. We will make forward looking statements on this call that are subject to the risks and uncertainties discussed in detail in today's press release and our filings with the Securities And Exchange Commission. These statements, including, without limitation, those regarding Vertex's marketed CF medicines, our pipeline and Vertex's future financial performance are based on management's current assumptions. Actual outcomes and events could differ materially. I would also note that all of the financial results and guidance that we will review on this call this evening are non GAAP.
I will now turn the call over to Doctor. Reshma KEwal Rahmani.
Thanks, Michael. 2020 continues to be a year of remarkable progress for Vertex across all aspects of our business. As measured by the continued strong performance combination regimen in Europe. Completion of a landmark reimbursement agreement to expand access to the triple combination for patients in England. And the advancement of our late preclinical and clinical stage pipeline programs.
Most notably, our proof of concept data for CTX001 that underscores the curative potential of this therapy in both beta thalassemia and sickle cell disease. I'm especially proud that the Vertex team has been able to accomplish all of this despite the challenges presented by the COVID 19 pandemic and want to acknowledge the resilience and commitment of all of our employees to continue to deliver on our goals for patients. Turning first to our CF medicines Today, the vast majority of our eligible provides by addressing the underlying cause of disease. The rate of uptake for tricasta and the speed at which we have obtained broad reimbursement speak to the appreciation of the therapeutic profile of this medicine, which we believe will be the foundation of CF therapy for many years to come. Outside the U S, in June, we received a positive CHMP opinion for the triple combination regimen.
Which, if approved, will be known in Europe as CAPTrio. This positions us for an earlier than expected approval in Europe in the coming months. Which would provide up to 10,000 new patients with the first medicine to treat the underlying cause of their disease. Following the anticipated approval later this year in Europe, we plan to seek a potential expansion of the CAPTria label to include patients with 1 F508DA mutation and a residual function or gating mutation based on the positive phase 3 data reported earlier this month that showed Cap Trio as significant additional benefit in these patients. We are also pleased that we were recently able to expand our reimbursement agreement with NHS England to include Cactrio.
Allowing thousands of patients in England to begin receiving this medicine once European Commission approval occurs. This is truly a landmark achievement for patients and builds on our other innovative reimbursement agreements, such as those in Ireland and Denmark, that include CAPTrio as well as our other medicines. Reaching these agreements in advance of regulatory approval is uncommon. And reflects a shared belief in the value and benefit of our medicines in treating the underlying cause of cystic fibrosis. Based on our year to date performance, driven primarily by Tricastor, we are again revising upward our 2020 revenue guidance.
But Stewart and Charlie will discuss in more detail in a moment. Beyond 2020, we retained clear line of sight to reaching our long standing goal of bringing the triple combination to 90 percent of all CF patients worldwide as we obtain additional regulatory approvals including approvals to treat younger patients and reimbursement agreements globally. Turning to our programs beyond CF where we are advancing a differentiated and broad pipeline of small molecule, cell, and genetic therapies for a range of serious diseases. Despite the challenges of the COVID 19 pandemic, we have now been able to reinitiate enrollment and dosing in all of our clinical trials. And we've also been able to initiate new clinical studies during this period.
Let me go into more detail on a few of these programs. In our CRISPR Cas9 gene editing program with CTX001, we and our partner CRISPR Therapeutics, announced new clinical data at the EHA meeting last month that highlighted the curative potential of gene editing in 2 serious diseases, betathalassemia, and sickle cell disease. A total of 7 patients had been treated with CTX001 as of the meeting, and all of these patients had successfully engrafted, which is an important yet early sign of their potential response to treatment. Of note, we have now resumed conditioning and dosing in both studies of CTX001 and have dosed additional patients across the program in recent weeks. This program continues to gain momentum as we enroll and treat even more patients and we expect to report additional data later in 2020.
In AAT, we have now re initiated enrollment in the phase 2 study of VX-eight fourteen at all sites that have indicated the ability to resume clinical trials. This means that some, but not all clinical trial sites have been reopened, and our screening and enrolling patients in VX 864. Ultimately, the pace of enrollment will dictate the timing for data readouts from VX 814 and VX 864. We now expect data from the VX-eight fourteen study toward the end of 2020 or q12021. In the next several months, we will have a much clearer picture of enrollment dynamics for these studies and when to expect data for each molecule.
Our goal is to evaluate data from each phase 2 study and to pick the best molecule to advance into late stage development. This is consistent with that we can simultaneously advance through proof of concept and pick the best molecule then for further development just as we did in CF. II study of VX-one hundred and forty seven, evaluating the reduction of proteinuria over 13 weeks. We expect to obtain data from this study in 2021. And with our cell therapy for type 1 diabetes, we're tracking for an IND submission in late 2020.
To support initiation of our first study The advancement of key IND enabling activities and the generation of preclinical data to support the IND package in type 1 diabetes were key priorities in the first half of the year and have remained on track through the COVID 19 pandemic. With that summary of the business and review of the
I am pleased to review with you this evening, our continued strong commercial performance. Tricaster revenues for the second quarter were $918,000,000, reflecting very rapid uptake in the at payers and feedback from patients and CF centers has been highly positive, consistent with the strong benefit risk profile for this medicine. Our TRICAFTA revenues to date in 2020 have also benefited from very strong persistence and compliance trends and from increased patient inventory levels as a result of early refills amidst the COVID 19 pandemic. I am proud of the teams that have worked tirelessly to execute such a phenomenal launch, which has exceeded even our own expectations. And I am thankful for the commitment of the CF community to working with us to help get so many patients onto TRICAFTA since its approval in October last year.
We now have the opportunity This approval, which is anticipated to come in the next few months will allow up to 10,000 new patients with a minimal function mutation to be treated with a medicine for the underlying cause of their disease for the first time. Further accelerating our ability to bring this medicine to patients is the recent expansion of our agreement with England to include immediate reimbursement of CAPTrio for patients ages twelve and older upon EC approval. As well as reimbursement for all future label expansions for KALYDECO, ORKAMBI and CAPTrio. This unique agreement provides the CF patient community in England with certainty that they will be among the 1st in Europe to receive our CF medicines. We are very pleased with this expanded agreement which is a reflection of the importance and value of treating the underlying cause of CF with our medicines.
We would like to thank NHS England and the CF patient community for their commitment to working collaboratively with us towards this agreement over recent months. And we are working with the other developed nations in the UK to finalize equivalent agreements as soon as possible. As a result of our strong start to 2020, and I will offer the following perspective regarding launch dynamics in the U. S. And how we view the anticipated CAPTrio launch in the EU.
First, we are 9 months into the TRICAFTA launch in the U. S, and the vast majority of all eligible patients have now begun treatment. Second, the compliance and persistence rates and patient inventory levels we have seen to date with the launch are high, and we expect them to in global pandemic. This may significantly impact patient's ability to see their physicians for treatment initiation visits, and to conduct important laboratory SQ to launch virtually. As in the US, we ultimately expect to treat the vast majority of eligible patients in Europe.
However, the exact trajectory of the launch in Europe is uncertain. All of these factors and their potential impact on future quarters are reflected in our revised we expect CF revenue growth beyond 2020. This growth will be driven primarily by additional approvals and reimbursement agreements for CAF Trio outside the U. S, and by expanding the TRICAFTA and CAPTRillo labels to treat younger patients. As markers of continued progress to reach more patients with our medicines our regulatory submissions for the triple combination are complete in Australia and Switzerland.
And following potential EU approval of CAPTrio later this year, we plan to begin discussions in countries where we are not yet reimbursed with the goal of providing access submit a supplemental new drug application for TRICAFTA in the U. S. In the fourth quarter of 2020 for children ages six to eleven years of age with one 508del mutation. If approved, some 1500 new patients in the US would be eligible for a medicine to treat the cause of their CF beginning in 2021. We expect this submission would be followed rapidly by similar label expansion efforts outside the U S, and by additional phase of significant near term and long term revenue growth as we bring TRICAFTA and CAPTrio to more patients globally in the coming months and years.
I am pleased with the significant commercial progress we've
Thanks, Stewart. Our financial performance for the second quarter was exceptional, highlighted by continued significant growth in CF Product Revenues following the launch of Tri Capta. 2nd quarter total CF product revenues were 1,520,000,000, a 62% increase compared to 2019, bringing our year to date revenues to just over 3,000,000,000 Our second quarter revenues included $1,210,000,000 in revenues in the U. S. And $314,000,000 in revenues outside the U.
S. Revenues from outside the US in the 2nd quarter grew 31% over the prior year, driven by strong patient uptake of ORKAMBI and SYMKEVI following the completion of multiple reimbursement agreements in late 2019. Both in the US and in countries outside the US, where our medicines are reimbursed, the vast majority of eligible and D and SG and A expenses were $467,000,000 compared to $394,000,000 for the second quarter of 2019, bringing our year to date expenses to $945,000,000. As we've said previously, our 2020 expenses reflect greater investment to support the use of our CF medicines globally and the expansion of our pipeline into new diseases. The significant growth in revenue combined with more moderate growth in spending resulted in year to date operating margin of 58% and year to date operating income of 1,750,000,000 an increase of 122% compared to operating income in the first half of twenty nineteen.
Year to date net income for 2020 was $1,360,000,000 compared to $623,000,000 for the first half total CF product revenues to a range of 5.7 45% growth over 2019. Our guidance reflects the strong launch of TRIC hapta to date in the U. S. The performance of our other CF medicines globally and the anticipated approval and uptake of CAPTrio in Europe, specifically in England, Ireland, Denmark, and Germany. Even with the exceptional midyear results, It's important to reiterate a few of the moderating factors that Stewart mentioned in his remarks.
First, the persistence and compliance trends to date or TRIC hapta are strong, and in fact, they're among the strongest and best we've seen for any of our medicines at this stage of the launch. However, we are still less than a year into the launch and as such, we expect these metrics to reach a steady state during the second half of the year. 2nd, as we previously noted, we saw a benefit from patients refilling their tricapha prescriptions early as the COVID 19 pandemic emerged. This resulted in patients having a higher amount of TRICAP to on hand at the end of both the first and second quarters. Our guidance assumes that this increased And finally, I would also note that while we've incorporated some incremental European revenues for CAPTrio into our revised 2020 revenue guidance, The actual rate and level of uptake that we will see in 2020 in Europe is unpredictable given the ongoing pandemic and the fact that we are conducting a virtual launch.
Our OpEx and tax guidance remains unchanged. I would note that we have recognized some saving on expenses as a result of the COVID 19 pandemic travel costs, for example. However, we have also actively rebalanced our spending by making incremental investments in certain programs and in technology infrastructure to support both the remote operation of certain clinical trials and work from home capabilities for our global workforce. With our strong revenue and profitability, we finished the 2nd quarter with $5,500,000,000 in cash. And as in recent years, our top priority for capital allocation is to reinvest in our own internal R and D engine and to invest in external innovation to accelerate the creation of future medicines for the disease areas in which we are interested.
Now back to Reshma for a few concluding remarks.
Thanks, Charlie. The first half of twenty twenty was a trying period for people, societies, and businesses across the world as we grappled with the widespread impact of the COVID 19 pandemic. As a global business with thousands of employees, Vertex shared in these challenges, yet despite the significant changes in how we work interact and operate our business, Vertex continues to thrive, and our people continue to rise to the occasion with courage and determination. As I said earlier this year, the future of Vertex remains brighter than ever. And this remains true today, as we enter the second half of the year with continued strong commercial execution, increasing momentum across our pipeline with our Type 1 diabetes program approaching the clinic and multiple upcoming data readouts in the next 6 to 12 months.
And the financial strength to support both internal innovation and business development to discover and develop new medicines for patients and to support our long term growth. I look forward to updating you as the year progresses. Thank you.
Thank If your question has been answered or you wish to remove yourself from the queue, please press the pound key. Please stand by while we compile the Q And A roster. And our first question comes from the line of Cory Kasimov with JPMorgan.
Hey, good afternoon guys. Thank you for taking my question. I wanted to ask about the AAT program now that the, the phase 2 86 four study has initiated. Are there any key differences between this and and the 814 study that's ongoing on CT dot gov? It looks like 864 is 40 patients versus 50 patients for 814.
So wondering if there's any specific rationale behind that and any other, potential differences between the 2 trials. Thanks a lot.
Yes. Hey Cory, it's Reshma. In essence, the 81 4 study, which is a study of about 28 days with a 1 month safety follow-up, a few different doses in a placebo group, is similar. It's not exactly the same as our VX 864 study. Again, a few different doses of placebo group 28 days of treatment and another 1 month of safety follow.
You can think of them as very similar.
Okay. Great. Thank you.
And our next question comes from the line of Salveen Richter with Goldman Sachs.
Good afternoon. Thanks for taking my questions. On guidance for the CF franchise, how are you factoring in the positive PHMP decision with regard to countries coming on board in the second half? And How are you applying for England? And then with regard to the pipeline, where do we stand with progress of the, DMD DM1 gene editing program?
Hey, Salveen. This is Reshma. Let me ask, Charlie to take the first question about guidance and how we're thinking about CHMP. And, of course, there still is a step of European Commission approval, and I'll come back and tackle, DMD and DN1.
Sure. Thanks, Sabine. As we mentioned on the call, we have factored into our revised guidance and assumption of incremental revenues from approval in Europe. But as Reshma points out, we do not have the approval yet. And so the exact timing of that is not perfectly clear.
We also highlighted that it will be a virtual launch of everybody working on and the potential for the ongoing pandemic to have an impact on the rate of uptake. That said, we we feel very good about, including it in the guidance, and, and that factored into the number we gave today.
And with regard to the DMD and DM1 programs, you'll remember, of course, last year around the summertime, we acquired Exponics, and that's where, we got the DMD and DM1 programs from. And then a few months after that, we acquired Sema, and that's, where we're working on the type 1 diabetes program with. With regard to where we are with DMD. We're in late preclinical development. We have had our conversations with the FDA We understand what they are looking for in terms of preclinical safety and clinical preclinical pharmacology.
And we have a very good sense of what the IND, package needs to look like. We are working through all of that. And I anticipate in the coming months, oh, we're gonna be able to give you further updates. So, I mean, I'll just also, just let you know that we're thinking very, very diligently working hard, things like process development and analytical development you've seen in the landscape that there is a real importance around dose and around getting the analytical development, to make sure that you are very clear about what the dose is right. And so we're investing a good amount of our time and effort to make sure that we get all of that right as we make progress towards the clinic.
Great. Thank you.
Thank you. And our next question comes from the line of Phil Nadeau. With Cowen and Company.
Good afternoon. Thanks for taking my questions and congratulations on the quarter. A couple of commercial ones and one brief follow-up on AAT. Commercial, in Europe, Stuart, you mentioned that there would be 10,000 patients will be on label for TRIC after when it's approved. Could you give us a sense of how many of those patients will have reimbursement at the time of approval?
And then second in the U. S, can you give us a sense as to the level of inventory that is being held by patients currently?
Sure, Phil. Thanks for the question. So yes, as you mentioned, with the, label to include the FMS patients, that's about 10,000 patients up to 10,000 patients across Europe who will be eligible for a CFTR modulator for the first time. Those patients are rough split, not exactly, but roughly split as per the existing patient populations. And so, the largest countries are the UK, and Germany, places like France, Italy, Spain, follow that.
That's where the vast majority of patients are. And so obviously, the agreement in the UK is, in England or subsequently, in the other devolved nations is excellent because that's the single biggest patient population, then Germany obviously is a country where you get immediate access post the, EC approval, other countries like France, Italy, Spain, etcetera. We will have to begin the reimburse negotiations there. So that's how that, kind of patient population splits out. Overall.
In terms of patient inventory, we didn't see any incremental bill from patients in the second quarter. It really was a a carryover of the inventory bill that patients have made when the pandemic first hit in the sort of first quarter and towards the end of the first quarter here in the in the U. S. And so we have not seen a drawdown on that inventory. We did not see an increase in that patient inventory in the second quarter.
That's very helpful. And a brief follow-up to Cory's question on AAT.
What's your way
of thinking on the next step? Once you get the proof of concept data from the 1st 2 candidates,
could you move right into a pivotal study, or would
it be more likely that there'll be an interim trial to further flush out their profiles?
I had a little bit of a hard time hearing you, but I think it's about what is the next step once we have proof of concept gator for VX 814, and can we go into pivotal development after that? So, yes, I do anticipate that once we have the proof of concept data and we have a sense for dose and we get a look at the safety in patients with alpha-one antitrypsin deficiency, we will be moving into pivotal development. Of course, we have, 2 programs, VX 814 and VX 86864. 814 is in the lead. And depending on exactly what the timing of each of those programs are, etcetera, we're we're gonna have make some decisions.
But, yes, I do anticipate after we are at a point of having POC, we would move right into phase 3 pivotal development.
That's really helpful. Thank you.
Our next question comes from the line of Michael Yee with Jefferies.
Hi, thank you. Congrats on a great quarter. Two pipeline questions, one on AAT. Obviously everyone's focused on functional AAT. I think we all know that and we look forward to that.
Is there anything in your secondary endpoints or any other biomarkers you would look at to help support the overall totality of what's going on you know, there's outstanding questions around trafficking to the lungs, etcetera, etcetera. So I think that's an interesting thing if there were any biomarkers to help support what's going on. And then my second question actually is on 147 for FSGS. You made some great comments, Rushman. I know you are an expert in renal.
Disease. So, I guess my question is, are you confident that a strong reduction of proteinuria can happen in a short amount of time or what amount of time do you need based on that mechanism to show that in in a phase 2. Thank you so much.
Yeah. Yeah. Sure thing. Let me park it out into the questions around AATD and then I'll get to FSGS and Protonarium. So on the AATD program, be it for VX 814 or for VX 864.
It is really about looking at the antigenic AAT levels. And at the functional serum AAT levels. And if you ask me, well, what exactly are we looking for? What's the breadth of that we can glean from the proof of concept studies. Besides those 2 things, the other 2 that I would point you to is safety.
We can't minimize that. This is the first time that this medicine has been put into patients with this disease. And the last part is the PKPD relationship and the, ex relationship between the doses and the achievement of the exposure that we are seeking. So those are really the key elements that, we will be able to glean when the study is complete. With regard to FSGS, so, you know, proteinuria is something that we in the renal community have talked about for a long, long time.
There have been multiple workshops between, nephrologists, academia, regulatory agencies, etcetera, to think about the relationship of proteinuria, and outcomes like time to ESRD, as well as all of the questions you must be imagining with regard to onset of proteinuria, the duration of, reduction in proteinary, etcetera. And if I just sort of, make a long story short, The reason you see our proof of concept phase 2 study be of 12 weeks duration is that I think it's gonna take about that amount of time to start to see a reduction. And and that sort of explains, the duration of the study.
Yep. Thank you.
Thank you. And our next question comes from the line of Alethia Young with Centaur.
Hey, guys. Thanks for taking my congrats question and congrats on the quarter. So I just want to talk a little bit about, CTX001. And of course, there are a lot medicines now in sickle cell and beta thal and just how you think about positioning of a potential one and done versus, you know, like the global blood and the audio system Novartis of the world. Thanks.
Yeah. This is Reshma. What I that question. I'll see, you know, I can't tell you, how, excited I am with the CTX001 program that we're conducting in conjunction with CRISPR Therapeutics? This is, now a program that has achieved proof of concept in beta thalassemia.
Right? We've dosed the first two patients. We've talked about the fact that they have engrafted. We've talked about the hemoglobin levels in these two patients. And it's, well, well north of 11 grams per deciliter.
The first patient is at 14.2. The second patient is at 12.5 grams per deciliter at 5 months. The patients are going from the 1st patient, 34 units of blood transfused fusions in the follow-up that we have observed. And while it is still a limited number of patients and a limited, duration, patient number 1 is now out 15 months. So we are really getting out there.
We're past that 1 year point. And we've also shared the data with the regard to the first sickle cell patient who's also had hemoglobin F, well north of 40% and, has had no VOCs. So I think that there is a big difference between transforming a disease and treating a disease. There was a big difference between having no VOCs, no transfusions, and having to manage some amount of chronic disease. And I think that there's a great importance in having a therapy that is one time and then a person's life is restored.
So I see enormous promise in in this particular program.
And our next question comes from the line of Geoff Meacham with Bank of America.
Hey guys. Thanks so much for the question and congrats another good quarter in CF. So I had a commercial question and a pipeline 1. Stewart, can you talk about the, for the quarter, the TRICAFSA sales, the patients coming from switching versus new hetman patients. And Maybe just I know maybe you don't want good specifics, but how close are you to the 90% penetration that you've seen with other CF products?
And then, Puresh.
I didn't see a lot
of detail on the plans for the remaining 10% of CF patients. I know you guys are committed to 100%, but maybe just remind us of what the status is of The programs, for example, for premature stop, etcetera. Thank you.
Hey, Jeff. Stewart here. So thanks for the question. In terms of, the source of, tricaster, prescriptions, when we say it's the vast majority of patients and it's the vast majority of patients across all segments, we mean just that. There really is not very much difference between the uptake in those who were naive to a CFTR modulator before TRIC haptor was approved and those who were on either KALYDECO or ORKAMBI, or SYMDEKO.
So the the level of uptake has been pretty pretty universal. And we are very much at the flat part of the, the launch curve, but there are still patients who are being initiated But we are very much at the flat part of the launch curve now, which is why as, as Charlie alluded to in talking about the guidance, it really is much more about the trends in persistence and compliance. And for the pipeline question, I'll hand that over to Reshma.
Yeah. You're very right about the, commitment to, get to all patients. And what I'll tell you is, and just to remind everyone, for the last 10% the underlying pathophysiology and the problem we have is that those patients make no protein either because of premature or stop co down, they just don't make any protein. And in so far as no protein is made, CFTR modulators cannot be helpful for these patients. So one way or another and you click asset therapy is going to be needed.
And we have programs in this area, and I see good progress with our partnership with Moderna in working on an MRNA approach to this last 10%. So more to come, The other point that we've made in the past and is is worth, repeating is there's also an important delivery, consideration here. Belong has a very large surface area. And, of course, we're talking about trying to get delivery into a lung that has a large surface area, but is also very inflamed, and, full of mucus. So the delivery problem cannot be underestimated, but We have made good progress with our partners, at Moderna, and I am optimistic about, our ability to get there for our last 10% of patients.
Okay. Thank you.
Thank you. Our next question comes from the line of Evan Seagerman with Credit Suisse.
Hi, guys. Thank you so much for taking my question and congrats again on another fantastic quarter. So, for 2, so you think you're pretty cautious about the upcoming potential launch of Cextrillo in Europe, starting the pandemic the pandemic is arguably more of an issue here in the US at the moment. So how were you able to overcome some of these commercialization issues domestically is there anything to think that you won't have some more traction in Europe? And I understand kind of the, ins and outs of the reimbursement experience to say, for example, in Germany, Thank you.
Hey, Evan, thanks for the question. So I think your question you were breaking up a little bit was why are we concerned about the launch trajectory in Europe, when the the pandemic is kind of more of an issue in the now. And really, I would say 2 things. The first one is that you'll remember we got the approval for, like, after in October of last year. And as you'll remember from our our q 4 and q 1 calls, we had seen very, very rapid uptake, in the 1st few months of of the the, post the approval when really the the pandemic had not really been as big of a deal here in the US as it already had been, in Asia and obviously in Europe.
And so we are launching, I think, into a very different situation where the pandemic is still a very, very dynamic issue. And we're seeing openings and relockdowns and things like that. So, it is a very different situation, I think, that we are launching into when we get the approval by the European Commission. The second thing that makes it different is that, you know, like, most businesses the vast majority of our employees are working from home. Certainly, the commercial organization, is all working from home.
And so we will be launching this medicine virtually, which is a first for us, as a company. The last thing I would say, which is linked to the pandemic is about patients and physicians and their ability to, to get together and see each other as a result of the, of the pandemic. And so that's a dynamic which we have to take into consideration. And and it's, as we said in our prepared remarks, it's just uncertain how all that is going to play out. So I do think the situation we're launching into in Europe is very different to the situation we were fortunate enough to be able to launch into here in the US.
Alright. Thank you so much for that. Appreciate it.
Thank you. Our next question comes from the line of Robin Karnauskas with SunTrust.
Hi, guys. Thank you so much, and congratulations on all the progress in this environment. I just wanted to ask a little bit about more about European dynamics. And what were the lessons you learned just on the launch itself in the United States with Tricasta? And basically what could be some positive read to CAFrio for the launch in Europe, just regarding compliance and and uptake because I think you just addressed the question around, COVID.
So it's really more about, you know, do you think that this is more like KALYDECO launch versus ORKAMBI And what are some positive reads that we might see, when approved? Thank you.
Yes. Hey, Robin, it's Stuart here. Thanks for the question. In terms of the, you know, positives we can take from the US experience, obviously there, there's many of them because the launch has been such a terrific success. And so I think some of the positives would be, obviously, there's very high levels of awareness within the CF community of the triple combination red and it's very positive benefit risk profile.
Secondly, that that positive benefit risk profile has played out in real world exactly as we saw it play out in our our pivotal and indeed earlier studies that the the efficacy is very, very strong and the overall benefit risk profile is is really, really positive. So those are definitely, positives that's resulted in in high levels of persistence and compliance. So I think those are all, very positive read throughs. The big uncertainty as I say is, we are launching this into a very, very different, situation environment than we were launching back in October of 2019, which in many ways seems a lifetime away, both in terms of the patients and physicians and their ability to get together and and our ability to launch in a virtual world is just, unproven. So that's clearly, very different.
We're thrilled to have got, a reimbursement agreement in place in England in advance of the approval. That's clearly positive. And one of the positives here in the US is that we got very rapid public and private, reimbursement. Obviously, though there are a number of countries in Europe where we don't yet have reimbursement agreements in place, and we're gonna have to begin that process. And that process is likely to take a bit longer in Europe than it did here in US.
So there's definitely many positives. But there are a number of things which are going to be different, which leads us to believe that the exact trajectory of the launch is difficult to call. Having said that, I will leave you with this final thought just as we have done in the U S. We are confident that over time, the vast, vast majority of patients will be initiated, on CAPTREO over time.
Alright. Thank you.
Thank you. Our next question comes from the line of Mohit Bansal with Citi.
Great. Thanks for taking my question and congratulations from my end as well on the progress. My question is regarding the AAT and functionality. Given that this is these patients have a mutation, So even when you correct the, the, the misfolding, the protein which gets deleted is still going to be C AAD and there's literature out there suggesting that the functionality of Z80 may not be as good as, wild type AAT. So to that end, do you think it could be an issue?
And how exactly you are managing the functional AD levels? Thank you.
Sure, Mohit. This is Reshma. So just to make sure that we're all, grounded on the pathophysiology here, when you have alpha 1 antitryps and deficiency, when you have that disease, you're right. This is a genetic mutation, it's a mutation of the SERPNA 1 gene. And that mutation leads to a misfolded protein.
The way our small molecule correctors work is they properly fold that misfolded protein. And in doing so, alleviate the congestion in the liver, So that's how the liver part of this disease can be addressed with our approach. And because you have the corrected AAT protein now in the blood, that can go to the lung and do its job, which is to protect the lung from auto digestion. Right? So the small molecule approach allows you to correct both the liver disease and the lung disease.
The point that you're raising about how functional is this corrected AAT, people call it the competence of the molecule. And we have assessed that free clinically in our models and the competence is high. And we have assays, you can think of it as an eliza ad but we have assays that we can assess the functionality of the protein in neutralizing the neutrophil elastase and, that looks good. So that's the reason we've entered into phase 2 proof of concept development, and that's why in phase 2, we are measuring not only antigenic level, but also functional level. So we don't have a direct readout.
Great. That's helpful. Thank you very much.
Thank you. And our next question comes from the line of Jeffrey Porges with SVB Leerink.
Thank you very much. Stuart, I just want to follow-up on the agreement that you have in place in England. Could you first give us a sense of what proportion of the 10,000 patients, that you mentioned, the incremental patient numbers are in England. And secondly, in that agreement is similar to the Irish agreement, with a cap on the total, potential spend for the the government for the NHS in England, or is it purely volume dependent? Thanks.
Yeah, Jeff. Thanks for the question. So, yeah, the agreement in, England, obviously, we're we're thrilled to have reached that agreement the, ratio of patients in the UK that are, and that is roughly the same as you would see, for the other mutations. And so you can broadly think but it's proportional to the the population size of the UK versus, others when you look at the CF population. In terms of the exact terms of the agreement.
I can't talk about the exact terms of the agreement. It is a similar, to others that it does include access to our existing medications including CAPTREO once approved. And, additional indications for those approved medicines. So that would include, going down into the age groups and it does include a, a cap on turbo expenditure to give some certainty to the, UK Government. And in this case, NHS England specifically.
Thank you. And our next question comes from the line of Gina Wayne with Barclays.
Thank you for taking my questions and also would like to add my congratulations on a very strong quarter. So I have two questions. The first one is regarding the revenue, quarter revenue. If assuming no refill rate that would translate to roughly 12,000 patients, So my question is, can you share the percentage of the patient that was refilled and also what is the discontinuation rate And the second question is regarding the beta thalassemia sickle cell. What would be your plan for registration trial?
Specifically what you could learn from Bluebird's experience.
Yeah, Jim, I'm not sure I entirely heard all of your questions. I think you were asking about the percentage of patients, that are on the maintenance of stayed on the the medicine if I'm hearing you right. So,
in the US the refill rate so you like, you know, the, prescription, yes, the refill rate.
Yeah. Assistance rate. So, yeah, there's there's approximately 18,000 patients in the U. S. Who were eligible to try capture on on its approval with the very broad F any label.
Of those, the vast majority of those have initiated therapy and the persistence rates, as we call it, the number of patients who've stayed on the medicine, I. E. The the opposite of those have discontinued. The persistence rates are very, very high. Some of the highest we've seen for any of our medicines at this time, in the launch.
And so whilst we're not getting into the exact specifics of of what that is, you can imagine that they are they are very, very high. Obviously, the discontinuation rate only increases over time, right? There aren't, doesn't go the other way. But it's very, very high. And I think that's not surprising given the benefit risk profile we saw of this medicine in our pivotal trials.
And on beta thalum sickle cell, the question there, I'll hand that over to Reshma.
Gina, with regard to the, beta thalum trial and, what do we need to show in terms of, the phase, 3 pivotal trial I think the the trials that you see that we designed, are right for the job in terms of the endpoints, I think, very clearly in beta thalassemia transfusion independence is key and in sickle cell. It's all about the reduction of VOCs obviously build metrics on which, CTX001 has performed very well. Early stages few patients on all of those caveats, but but I think that the studies that we've designed, are the right ones, and I think those are the endpoints to watch
Thank you.
Thank you And our next question comes from the line of Matthew Harrison with Morgan Stanley.
Great. Good afternoon. Thanks for taking my questions. 2 for me. 1, Stuart, can you just comment on the residual patients on Endecco and ORKAMBI?
Is that mainly, age groups which are not proof for tricaf yet, or have you noticed any groups that are staying on that drug that that may surprise you? And then I guess the the second question is just related to AAT. I was hoping you could comment on if you think the phase 3 program or the regulatory strategy would look different if you observed, carrier levels of the protein versus a level simu similar to
to what replacement therapy has. Thanks.
Yeah, Matt. Thanks for the question. So, the vast majority of patients who are Arnold can be SYMDEKO or collide go who are eligible for TRICAPT there, just as for the other patient groups are transitioning or have transitioned to TRICAPTIPTAR. So what you see in the performance of the business is that, the patients who are remaining on that, either those who are less than 12. So the younger age groups where we continue to expand our indications there and So we continue to initiate new patients here in the U S.
And as Charlie referenced in his remarks, growth that we've seen outside the U S. Where following the reimbursement agreements we put in place, patients have been or countries have been launching Cindigo, and in some cases, or SYMKEVI, I should say, outside the US and or Kandi. So that's what's driving the, existing KALYDECO ORKAMBI and and, SYMDEB Business. It's either younger age groups or, or outside of the US. And AAT, I think that'll be Reshma.
Thanks, Stewart. All right. On the question of AAT and what are we thinking about in terms of our phase 3 plan? Let me just take one step back and just, link what we're doing in phase 2 to phase 3 and and give you a sense of how that, strings together. So in phase 2, we're obviously looking at safety And, we're looking at the functional AAT levels and the serum antigenic, AAT levels.
And what we're trying to do there is to get a, the best, estimation of dose, right, via studying a number of different doses versus placebo, we're going to evaluate the dose exposure relationship and select the right dose. Assuming that we are in a position to move forward to phase 3 based on these phase 2 results, which obviously we haven't seen, but assuming that that is, the next step. What we're gonna do in phase 3 is, evaluate a few different measures. And as I've said before, we haven't had our meeting with the FDA yet. We haven't had that end of phase 2 meeting So this is a conceptual framework, but, obviously, we need to go through those meetings and come out the other end with an agreement with the agency.
But the framework would be that we would indeed be looking at antigenic levels. We would be look looking at serum functional levels. We are planning to have an assessment of clearance of the liver from these polymers. And remember, again, with the small molecule approach, we have this opportunity to treat both the liver and the lung. So we plan to do that.
And, we are going to have that be a package. We need to go through the discussions with the agency. We need to, confirm that that package would be acceptable. And as I said, a number of times previously, the, the companies that make augmentation therapy about 5 of them have, gotten their approvals in the U. S.
Based on levels of AAT. And so we need to go through that. Separately, we are very interested in, and I sure, others might be interested in, understanding the impact of our small molecule, correctors on lung function measured by imaging or something like a pulmonary function test. And those are all considerations that we, continue to talk and think about. But the framework for our package really is functional AAT levels, antigenic, AAT levels and, the, the clearance of, the polymers from the liver.
Operator, this is Michael. We have just a
few minutes left. We'll take 2 more questions.
Certainly. Our next question comes from the line of Brian Abrahams with RBC Capital Markets.
There. Thank you for taking my questions and my congratulations as well on the quarter. A couple on AAT also. Can you talk about the importance of smoother AAT or functional AAT levels that a corrected like 814 could confer versus the high peak to trough from an exogenous augmentation, that and really the ways to assess the potential benefits of this. And then thinking longer term, you laid out sort of a schematic for what a pivotal could look like.
I'm also curious, your level of interest in exploring combinations, with complimentary mechanisms either internally or externally to potentially optimize outcomes. Have you done preclinical work along those lines? And where might heterozygous patients population fit into the future development plan? Thanks.
Okay. There's a there's a lot packed into that question, but let me maybe try to tackle a little bit about, where we are in terms of, how we think about augmentation therapy or exogenous, what is basically protein replacement versus our approach with the with the small molecule. A a couple of what what I think are basic, but it's it's often hard, to keep all of these things in mind, and and it's important. So let me start there. One critical element to point out with regard to exogenous augmentation therapy is that the only effect it could have is on the lung.
And the reason I say that is because exogenous therapy is doing nothing for the production of misfolded protein, which gets, stuck in the liver, if you will, and that is what causes fibrosis and could lead to cirrhosis. So one big concept about exogenous therapy is that the only possible, organ that he could help is is the lung, very different than the small molecule approach. The second is you raise a good point around the PK and the peak to trough. The way augmentation therapy works is you go to a center and once a week, you get an infusion of, this protein therapeutic. And during the course of that week, you have the the augmentation that you received.
Let's say you went to the center on a Friday. So from Friday, Friday, what you have is what you received. And in that intervening period, you don't have any more AAT. This is very important because in you and me, in people who don't have alpha 1 antitrypsin deficiency, what happens is that AAT production changes in accordance to what your body needs. So for example, in times of stress, inflammation, infection, your body produces multiple more AAT in order to have the AAT medicine do its job, which is the, need to, prevent auto digestion.
None of that can happen when you go into center for once a week therapy. So there there are many other differences we could talk about, but maybe the 3 for today is that the small molecule approach allows you to treat both lung and liver it has this ability to, change, depending on what the needs of the body are. You can think of it as being under control of its own promoter. And the third, point is around the, the, fact that the augmentation therapy is just those once a weekend, it has its decay over that week, and that is not how, AAT works in the body. I hope that helps.
Thanks so much.
Thank you. Your last question comes from the line of Paul Matteis with Stifel.
Great. Thanks so much for fitting me in. I'll continue the trend with, with 2 AAT questions. One, I was curious based on genetic data or natural history data, what range of AAT production do you think you'd need to increase a ZZ mutant patient to in order to clinically derisk the next study? And then second, I was wondering if you could just comment now that you're going to phase 2 with 864, some of the product differences as it relates to pharmacokinetic and potency?
And I guess, are you confident that that is a molecule that, that should be materially more potent? Thanks so much.
Okay. We'll, we've had a lot of AAT questions, so I guess it's fitting for our last question to be about AAT. You know, I think the question behind your question is what are we really looking for in phase 2? And, a little bit of that is around what levels are we looking at and how does 814 compare to 864. Right?
So let me just tell you what we're really looking for in terms of the proof of concept study. Remember that this is a molecule and this is a target that we have not studied before. No one has done what we're doing. We are the first one there, and we are going to learn about the translation to patients with a ATD with this trial. When we were doing CF, we'd obviously already gone through the translation from the bench to the bedside with KALYDECO and ORKAMBIEN SIM by the time Tritafter came along.
And now this is like our translation to AATD to KALYDECO. So here's what we're looking for from that group of concept study. 1st, safety. 2nd, we're looking for the relationship between PKPD and dose exposure to ensure that we get to the exposure levels that we need to get to. And third, I'm looking for a movement upward in AAT levels, both antigenic and in, functional AAT levels.
Because what that will tell us is that we have met proof of concept. Right? We have put the drug into patients with this disease and what we see is good safety exposure that we're looking for and movement up. Then we know once we know we've cracked the biology and and I'm not saying it's easy, but between cracking the biology and pouring on the chemistry, pouring on the chemistry is easier. And so once we have that proof of concept, then we can, think about taking those next steps.
So that's what I'm really looking for from that phase 2 study.
Okay. Thank you all for joining us. We appreciate you tuning in. The Investor Relations team is available tonight if you have additional questions. Stay safe, and have a good evening.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating, and you may now disconnect.