Greetings, welcome to the Menlo Therapeutics and Foamix post-merger conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Michael Wood, of LifeSci Advisors. Thank you, Michael. You may now begin.
Thanks. Good morning, everyone, and thank you for joining us this morning. Before we begin the formal remarks, I remind you that some of the information in the news release and the conference call contain forward-looking statements that involve risks, uncertainties, and assumptions that are difficult to predict. Words that express and reflect optimism, satisfaction with current progress, prospects or projections, as well as words such as believe, intend, expect, plan, anticipate, and similar variations identify forward-looking statements, but their absence does not necessarily mean that a statement is not forward-looking. Such forward-looking statements are not a guarantee of performance, and the company's actual results could differ materially from those contained in such statements. Several factors that could cause or contribute to such differences are described in detail in the Menlo Therapeutics and Foamix filings with the SEC.
These statements speak only as of today's press release and conference call, and the company undertakes no obligation to publicly update any forward-looking statements or supply new information regarding the circumstances after the date of this call. At this time, I'd like to turn the call over to David Domzalski, Chief Executive Officer of Menlo Therapeutics. David, please go ahead.
Thanks, Mike. Good morning, everyone. Welcome to our conference call. This is our first investor call since we announced the closing of the merger transaction involving Menlo Therapeutics and Foamix. Purpose of this call today will be to give you an update on the immediate priorities for the combined company. I want to discuss the progress we have made with the AMZEEQ launch. The early indications are that it is going quite well. I will give you an update on our pipeline. I will refer you to the press release we issued on Monday, March ninth, which deals with the consummation of the merger, as well as the year-end financial results for Foamix and for Menlo, which were recently filed on Form 10-K. We filed our Foamix subsidiary 10-K this morning. Menlo filed its 10-K on March 3rd.
Joining me on the call this morning are several Menlo officers. Dr. Iain Stuart, our Chief Scientific Officer, Matt Wiley, our Chief Commercial Officer, and Alon Hadar, our Chief Financial Officer, all of which who will be available to answer questions during the Q&A session. Let me start off by saying how thrilled we all are to have closed this merger. This is a transformational deal that has created a scaled dermatology company with the potential to become a market leader in therapeutic dermatology. We now have a broader portfolio that includes an approved product as well as attractive late-stage dermatology assets. I've discussed the rationale behind this transaction previously, but I think it would be worthwhile to reiterate the main drivers here.
First, our combined company is expected to drive greater future earnings momentum with the potential for two additional product launches over the next 20 months, in addition to AMZEEQ that we just launched this January. We believe that each of these products has the potential to contribute significant annual revenue independently. Second, assuming that the clinical results for the prurigo nodularis trials are positive, we see clear operational synergies in this merger with the opportunity to leverage our commercial infrastructure across multiple product launches. There is greater than an 80% overlap within our sales force alignment for healthcare providers treating acne, rosacea, and prurigo nodularis. Third, we expect significant cost synergies and an improved balance sheet with extended cash runway.
The pro forma total cash for the two companies was $150 million as of December 31st of this past year. We anticipate savings of over $50 million for the combined company beginning in 2021 through elimination of duplicate functions and infrastructure. Very importantly, this merger now positions us to take a leadership position in the dermatology sector. As we consider the derm landscape, subscale companies with limited product offerings and pipeline have struggled, the sector will likely face increased consolidation. Following the merger, we now have one differentiated commercial stage product in acne, again, the opportunity to launch two additional drugs potentially later this year and next year, therefore creating increased operational leverage for the company. There are further details of the transaction outlined in the press release we issued on Monday. We are, of course, planning for success.
However, one item I wanted to highlight is that Foamix shareholders, in addition to receiving shares of Menlo, received contingent stock rights that potentially allow them to receive additional shares of Menlo common stock if the results of the phase III trials of serlopitant for the treatment of pruritus associated with PN are not successful. These terms are more fully described in the company's joint proxy statement perspectives on Form S-4. One of our immediate priorities is to complete the integration of the two companies. Our combined company is being managed by Foamix's former management team, and I will remain as the CEO as well as a member of the board of directors of the combined company. Menlo's headquarters now will be Bridgewater, New Jersey, and we anticipate that operations at the Menlo facility in California will close by the end of the year.
Steve Basta, Menlo's former CEO, will remain on the new company's board. Select colleagues from pre-closing Menlo will remain with the company through various timelines and milestones for the balance of 2020. These will predominantly be in clinical operations, regulatory affairs, and CMC to help facilitate, one, the phase III studies for serlopitant. Two, the ongoing long-term safety study for serlopitant, which should be completed by mid-year. Three, the NDA submission, should the phase III studies be successful. Let me switch gears now and talk about the ongoing launch of AMZEEQ. I have to say, we are very pleased with the early progress we have seen. Our sales team, comprised of 51 representatives, was trained and certified at our launch meeting held the first full week of January, and began selling on January 13th. Through February, the team has made nearly 16,000 calls, averaging over nine calls per day.
Our total prescription volume through February has eclipsed 11,000 prescriptions, and we have been able to achieve that in just seven weeks post-launch, underscoring the positive early signs of physician and market interest. We made good progress on our market access strategy, securing a contract with Express Scripts in January for preferred status with no restrictions. To date, approximately 44% of commercial lives, which equates to about 80 million lives, have listed AMZEEQ as covered or better, which again, was aided in part by our pricing strategy. We continue to have good dialogue with the major payers and remain optimistic we can achieve broad access for patients over the coming months. In February, we also hosted a national satellite broadcast where we simultaneously educated almost 350 healthcare providers on the clinical AMZEEQ story. We have also trained about 40 speakers so far to educate other healthcare providers about AMZEEQ.
Since launching, we have had significant publication and promotional presence at key dermatology congresses. The AAD conference scheduled for the end of this month in Denver was unfortunately canceled due to the coronavirus outbreak. The team has developed a comprehensive medical communication and promotional plan supporting our products at the key remaining congresses and conventions for the rest of the year. Just a quick word about the coronavirus relative to our business. We have been in close contact with our primary suppliers, including our API and contract manufacturer, ASM in Switzerland, and our packaging facility in New Jersey. They have not been affected by the outbreak to our knowledge, and we have more than sufficient amount of product in the trade and safety stock of raw materials at ASM to support the current demand for our product.
We do not foresee any interruptions to our supply chain at this time. We are, of course, also being diligent in our own safety precautions, including by discontinuing unnecessary travel. None of our colleagues in New Jersey, California, or Israel have been affected by the virus. Going back to AMZEEQ, these early results and efforts are certainly encouraging. We continue to execute our strategic plan. We look forward to providing additional performance metrics to you in our first quarter earnings call in May. Let's turn now to the pipeline. I'll begin with serlopitant, which we are developing for pruritus associated with prurigo nodularis, also known as PN. We are conducting two phase III clinical trials, one in the U.S. and one in Europe.
Enrollment was complete in both these trials in October of last year, with 285 patients and 295 patients respectively enrolled in the U.S. and Europe trials. These trials are intended to evaluate if treatment with serlopitant administered at 5 milligrams once daily for 10 weeks can reduce pruritus associated with PN compared with placebo. The primary efficacy analysis for both trials is a four-point responder rate in the Worst Itch Numeric Rating Scale at 10 weeks. Results are expected in the relatively near future, either at the end of this month or in early April. If successful, our plan is to submit an NDA for serlopitant in this indication in the second half of this year. We look forward to announcing top-line results as soon as they're available.
By the way, these are the two trials that will determine whether Foamix shareholders would get additional shares of Menlo common stock through the contingent stock rights. In parallel with these two phase III clinical trials, there is also an open label long-term safety trial in which patients are receiving daily treatment doses of 5 milligrams serlopitant for one year. To date, 90% of patients in the pivotal studies have elected to enroll into the 52-week long-term open label study. Prurigo nodularis is a severely pruritic chronic skin disorder affecting primarily older adults and is characterized by multiple firm itchy nodules typically found on a patient's arms, legs, and trunk. We estimate that there could be as many as 1 million people with this condition in the U.S., of which approximately 200,000-250,000 are treated.
No current treatment has been approved in the U.S. or E.U., and symptoms are commonly managed with various agents such as steroids, calcineurin inhibitors, antihistamine, cyclosporine, methotrexate, and others, but all with limited effectiveness. serlopitant is a highly potent oral small molecule NK1 receptor antagonist. The mechanistic rationale for pursuing this indication is that prevention of substance P binding to the NK1 receptor is advantageous in reducing both itch-related nerve signaling Neurosensitization to itch that develops as a result of an unchecked itch scratch reflex. The impact of serlopitant on mitigating these phenomena has already been observed in our earlier phase II study in PN. The product has been granted breakthrough therapy designation for pruritus associated with PN, which reflects a significant unmet need for treatment in this indication.
Given the high disease burden of PN and the lack of existing treatments, the market is immediately accessible and attractive for the first drug to be approved in this condition. Of important note, over 80% of patients seeking treatment for PN are covered with our existing sales force currently supporting the launch of AMZEEQ. Now to FMX103, which is our 1.5% minocycline foam for the treatment of moderate to severe papulopustular rosacea. In October of last year, we announced that the FDA accepted the NDA we had filed earlier in the year and set a target PDUFA action date of June 2nd of this year. The NDA includes what we believe to be a very strong clinical package, both of our phase III clinical trials that support the application at each of their co-primary endpoints, demonstrating a statistically significant reduction in inflammatory lesion counts and IGA treatment success.
Also included in the NDA are the results from the 40-week open label safety extension. We continue to work with the FDA through the review process and look forward to making an announcement at or around the PDUFA date. We're developing a pipeline of other innovative product candidates to enhance our minocycline platform. The most advanced of which is FCD105 for the treatment of moderate to severe acne. FCD105 is our first follow-on product behind AMZEEQ and FMX103, leveraging a molecule-stabilizing technology. It is a topical combination foam which comprises minocycline at a 3% concentration and adapalene at a 0.3% concentration. adapalene, as you may know, is one of the most widely used topical retinoids to treat comedonal acne. We believe that if approved, our combination foam product of minocycline and adapalene could provide a novel therapy to potentially address unmet needs of patients and healthcare providers.
This past November, we announced completion of enrollment in our phase II clinical study to evaluate the efficacy and safety of FCD105. We are expecting top-line data from this trial in the second quarter of this year. Pending a successful development program, we intend to file an NDA for FCD105 under the 505(b)(2) regulatory pathway, which is the same regulatory pathway we have pursued for AMZEEQ and are pursuing for FMX103. Let's turn briefly to the financials. As I said, the combined pro forma cash position was $150 million as of December 31st, 2019. Based on our current operating plan, this is expected to cover operational expenses and capital expenditure into the second quarter of 2021.
Our priorities for spend will be to continue to support the AMZEEQ launch, completion of the phase II program for serlopitant, as well as funding the pre-launch and, assuming approval, launch activities for FMX103. Before I close, let me quickly go through our anticipated news flow as we expect to have a very busy calendar this year. The next major milestone will be the serlopitant phase III data in PN in late March or early April, followed by the phase II data readout for FCD-105 in the second quarter of this year, and our PDUFA date, again, for FMX103 is set for June 2nd of this year. In the second half of the year, we anticipate the potential FMX103 launch in rosacea in the fourth quarter of 2020, as well as the potential NDA filing for serlopitant. That concludes my prepared remarks.
We are now ready to open the call for any questions. I'll turn it over to the operator. Thanks.
Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star then one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Thank you. Your first question comes from Louise Chen from Cantor. Please go ahead.
Hi. Thanks for taking my questions here. My first question for you is, people often compare the launch trajectory of AMZEEQ to that of Seysara. Is that a good way to look at things, or are orals and topicals not fully comparable? Second thing is, can you comment on the gross to net that you have for AMZEEQ versus that of your competitors, even if it's just broadly and not specific numbers? On prurigo nodularis, what is the opportunity here, and is this a chronic treatment? Thank you.
Thanks, Louise. First of all, regarding the question on Seysara as a surrogate. We've obviously have talked about Seysara in the past. As you know, that drug was launched literally the same time as we're launching AMZEEQ last year, it launched in January of 2019. Had significant prescription volume, somewhere in the range of 240,000 or so prescriptions, I believe. Obviously from a pure demand perspective, there was quite a bit of volume. One of the reasons we always talked about that is it really showed what our view was that there's a lot of demand for new products, new innovative products into the category. Patients and healthcare providers are looking for new options. This is a, say, Seysara is a new oral antibiotic that was launched last year.
Again, from our perspective, we viewed it as a positive signal that patients and healthcare providers were open to new products and new antibiotics. We are obviously pleased with the initial uptake for AMZEEQ relative to, say, Seysara. I know sometimes people look at the prescription trends, and through the first seven or eight weeks, we're tracking fairly closely, literally on top of the prescription lines that they had. I do provide a lot of caution, though. There are certainly differences in the fill rates and refill rates for oral therapies, systemic therapies versus topicals. As you know, for oral therapies, their unit is a bottle of 30. It's a very linear transition from a new prescription to a refill prescription. In topicals, we have a 30-gram canister, and there's variability around that.
It could be 30 days of product in a canister, it could be a little more, it could be a little less. I'm cautious about trying to mirror or match the prescription trends of a topical versus any oral therapy. I've said if we actually had a launch for a full year that was half the prescription volume as say, Seysara did, we have ourselves a pretty good launch. Again, I'll just come back to saying that we're very pleased with the initial uptake. The prescription trends look quite promising. Again, I'll caution everybody to try to marry it up against oral therapies. Regarding the gross to nets, it's difficult for us to compare gross to nets of other products. Some of which, some of the leading products are not even published that are out there because they're from private companies.
What we have said is that we'll look to provide more color on this in terms of what net revenue will look like as we move to the second half of the year. The first few quarters of this year, obviously, we're spending our time getting our product on contract with various managed care companies. We're off to a good start. As I highlighted, we were quite pleased to get our product on contract with ESI, Express Scripts on their national plan in a Tier 2 preferred formulary status with no restrictions. That was not expected. We obviously were quite pleased with that. Our focus, as you know, for the first two quarters or so, is to again, get under contract. Our objective is to have most of the contracts wrapped up by the end of the second quarter, early in the third quarter.
We would anticipate that our gross net will improve as we move to the second half of the year, certainly as we get into 2021 and beyond, especially when you think of all the synergies that we have in launching multiple products. Lastly, when it comes to prurigo nodularis and the opportunity, we view that there's obviously significant unmet need. As we mapped out before, there's 250,000 patients seeking treatments. We know each year, 200,000 or so are walking away with some type of prescription. They seem to be dissatisfied. They're looking for something that will address the itch associated with PN. This is about the worst itch that could be imaginable. It's a debilitating condition.
We're quite enthused about the prospects, if we're successful in the phase III program with serlopitant for pruritus associated with prurigo nodularis, that this would be the first product ever approved in the U.S. or otherwise to address this condition. We think leveraging our commercial infrastructure, which we'll already have established relationships with the derm community, would allow for us to get a rapid uptake of this product, generate significant revenue, and obviously meaningful earnings when you layer it on top of us launching AMZEEQ and also the prospects of launching FMX103 for rosacea. Hopefully that addresses your question.
Yes. Thank you.
You got it.
Thank you. Your next question comes from Ken Cacciatore from Cowen and Co. Please go ahead.
Hey, good morning, guys. Dave and team, you're doing a fantastic job, I think beating all reasonable expectations. I wanted to ask about coverage, which you did surprise us by where you got so quickly. You're talking about maybe wrapping up the coverage by Q2 or Q3. Can you just talk about what you think you'll be ending the year at? Is 80% a reasonable target, and is that what you would consider full coverage if you received it? On prurigo nodularis, a similar type of question. I don't know if Menlo ever spoke about actual sales potential, just not understanding what you could get for pricing of this product in the market. Understanding the opportunity in terms of the need, but seeing if you could help frame if there was ever any thoughts on what the size could be.
Is this something, a product that could be used in combination with the other treatments that are unapproved but clearly are being used? Just how the treatment paradigm would play out if we're successful. Lastly, on 103, just wondering about pricing there. Is it going to be similar to AMZEEQ or different? I believe in the past you talked about a $200-$250 net pricing for AMZEEQ. Just wondering if you'd give similar commentary, or do you rather not try to frame where the pricing is settling out? Thank you.
Sure, Ken. I'll take a couple of these and work my way, actually from your last question, and work my way back to the beginning, and then I'll ask Matt to talk, our Chief Commercial Officer, about coverage by the end of the year for AMZEEQ, and perhaps Iain may offer some additional color on the prurigo nodularis product. First of all, regarding FMX103, assuming the product was approved, we would anticipate it to have the same price as what we have for AMZEEQ. What we have heard from the payers is the anticipation that the net price to plan, what they're willing to pay for a unit, is going to be somewhere between $200 and $400 per unit. It's a bit early to determine whether or not that would be the case for FMX103, but our anticipation would be it would be in that range.
We're having very good dialogue with the payers right now for AMZEEQ. In those discussions, we're talking with the payers about how we have another product coming right behind it for rosacea. The anticipation and the expectation from us would be that it would be a quicker uptake for the plans with FMX103, assuming it was approved, because we will have already completed the contract process for AMZEEQ. In that sense, this would be viewed almost as a line extension. It's not quite as quick as, okay, we're approved, flip the switch. The payers are aware that we have another product that could potentially be approved by mid-year. It is the same product, it's just a different concentration with a distinct indication. Hopefully that provides some color there.
On the pruritus for prurigo nodularis opportunity, we view this as being a product that could generate significant revenue and earnings for the company. As I've shared before, there's significant unmet needs here. The drug's been granted breakthrough therapy by the FDA. If it gets through the phase III program and is approved, again, we believe it would be the first product ever approved for this indication. I view serlopitant for PN in the same vein as AMZEEQ and FMX103. I believe each of these products can generate significant revenue, certainly well north of $100 million for each product. I've seen multiple estimates that are north of $200 million, and I would not say that that is a reach. Our expectation is each of these products, AMZEEQ, FMX103, and serlopitant for PN, if approved, can generate significant revenue.
Obviously, again, if it's leveraged under the same infrastructure, basically the same target audience, that equates to meaningful earnings for this company. From a pricing perspective, it's a bit early in the game. We know there's been some research that has been done. When we look at prurigo nodularis, although it's not an orphan indication, we view it as more orphan-like. I think from that, there's some flexibility there. Ultimately, we're going to continue to do research with the payer base to get a sense for what that could be. Would not anticipate it would be the same pricing arena as what we have for AMZEEQ and 103. I think there's probably more flexibility around that, but it's a little early in the game. Ultimately, our objective is to ensure patients get access to the drug. No different than AMZEEQ and FMX103.
We want to make sure patients get access to our products. Physicians can prescribe these products without a lot of burden, while in the same vein, our efforts are to work towards a reasonable gross to net for our portfolio. Regarding combination therapy, obviously we're studying this as a standalone product. We know that there are other products in development for the condition. They are quite a bit behind us. There are biologics that are out there that are in development, as well as other therapies. Not sure what physicians will do in terms of trying to use serlopitant with other therapies. All we know is that we're just studying it as a monotherapy. I don't know, Iain, if you have any additional comment.
Yeah. Hi, Ken. Just following on from Dave's comment there about concomitant use. Yeah, we're not too sure exactly how this would be used concomitantly. What I can say is that, as Dave said during the prepared remarks, is that we have a 52-week open label safety extension running right now for you to report in the mid-year. As part of that protocol, concomitant use is allowed. Clearly, that's information we'll be collecting and safety we'll be evaluating over the treatment period. Once that reports, then we will obviously communicate that.
Matt, you want to talk about the coverage for AMZEEQ by the end of the year, expectations and thoughts around that?
Sure. Good morning, Ken. As we've said before, our ambition is really to have broad coverage for patients. The way that we're targeting the payers is predicated on covered lives, of course, but also branded prescription volume. We see that 90% of the branded prescription volume are really contained in about six or seven of the top payers. Most notable of those are Express Scripts, CVS Caremark, UnitedHealth, Optum. We're in conversations with all of the top payers at this point. We feel good about our progress. We've gotten some good feedback on the utility of our product, the uniqueness of it, we're continuing to work towards that goal.
Yeah, if you think about it, Ken, if 90% of prescriptions are covered under, call it a half a dozen or so major plans, our objective is to have that under contract as soon as possible. We're targeting end of the second quarter into the early part of the third quarter, certainly by the end of the year, we would expect that we would be at that range.
Great. Thanks so much.
You got it.
Thank you. Your next question comes from David Amsellem from Piper Sandler. Please go ahead.
Thanks. Had a couple questions. Wanted to talk about the 1.5% concentration for rosacea, and the question here is how we should think about comparators and where you're going to take the most share. Should we think about 103 as grabbing share from ORACEA, in other words, oral doxycycline? Or should we also think about potentially the product grabbing share from some of the agents that are particularly effective for redness, such as Mirvaso? How should we think about where you're going to pull share and patients from in rosacea? Secondly, I don't know if you addressed this, so I apologize. With serlopitant, there was a positive phase II study for pruritus associated with psoriasis. To the extent that you have positive phase III data in prurigo nodularis, do you then go forward with a phase III program in pruritus associated with psoriasis?
How should we think about that? Thanks.
Thanks, David. I'll start with your last question on serlopitant for pruritus associated with psoriasis. Obviously, positive phase II data came from a trial that was done previously in this indication. Our focus, obviously, for the immediate term is on the phase III program for serlopitant for pruritus and PN. Assuming that is successful, that obviously creates lots of opportunities for us with the molecule. Looking at it for other potential indications, we obviously know that there's a phase II study, again, that was positive for psoriasis, and we'll certainly look at that as a potential place for us to go to as we move through 2020, but really into 2021 and beyond.
For this year, the focus is, as outlined in my opening remarks, will be on the PN program for serlopitant, obviously, the launch of AMZEEQ, and what we would hope to be an approval and launch for FMX103. I want our company to be very focused and very targeted in our efforts and our spend. Again, part of the thesis of combining Foamix and Menlo is synergies and accelerating revenue ramps and increasing earnings potential as a combined company versus each as a standalone. I think the more successful we are at that, the more opportunities we have then to explore other indications and other development programs. Certainly, serlopitant for pruritus and psoriasis is there. We obviously have other programs from the Foamix standalone organization that we can look to continue to develop. I don't want to, as they say, get ahead of the skis.
We want to make sure we're focused. Our efforts in the immediate term is on the launch of AMZEEQ, executing there, getting through the review process, and hopefully launching FMX103, and obviously progressing serlopitant in PN. Coming back to FMX103, I've often said that this is a real opportunity for the company. Foamix, as a standalone, most of the focus historically has always been on AMZEEQ and the acne marketplace. The acne marketplace is a big market. It's $5 billion. As I've shared before, it's more of a share battle. There are other products that are in the category. It's a $5 billion market. You get a 10 share, you've got yourself a pretty decent size book of business. Again, we're quite pleased with the initial uptake for AMZEEQ.
Rosacea, although it's a smaller marketplace, $1.2 billion-$1.5 billion as we currently see it, there are much fewer competitors that are out there and even fewer products that are in development. As we say, there's less mind share to compete against. The most commonly used products in the category, the most widely used product is actually metronidazole. There's over 1 million prescriptions a year generated or written for metronidazole. It has reasonable levels of effectiveness, but we believe there's certainly the potential for better products out there. ORACEA, as you did mention, oral doxycycline, is a widely used product. We view based on the safety and efficacy results that we've seen for FMX103, that we'd have the ability to take share from both the oral antibiotics. It's the same thesis as in acne.
If you have a product that has efficacy that's acceptable with the safety of a topical, is there a reason to have an oral antibiotic prescribed, especially in today's environment? It's the same thesis we applied for AMZEEQ in acne, where we would apply for FMX103 in rosacea. That being said, again, because it's a topical therapy, we believe we have the ability to compete effectively against other topicals that are currently out there. Again, metronidazole, ivermectin, the brand name Soolantra. We like our chances with our product FMX103, if approved, against those particular agents. Additionally, you had mentioned products such as Mirvaso and RHOFADE. These are products that are indicated just for erythema, the redness that's associated with patients that have rosacea. It's very common.
Most patients that present with rosacea have redness that is associated with it, That's one of the issues and one of the challenges of this condition, That you're looking for agents to address it. What we have seen with the data for FMX103 in one of our secondary endpoints is that our product, FMX103, was quite successful in reducing erythema. It's obviously not a primary endpoint. It was a secondary endpoint that we talked about. Of over 1,000 patients that were prescribed active product FMX103, we saw that at baseline, about 5% or 6% of patients of that 1,000 or so had either no erythema or mild erythema. The majority had moderate erythema or greater. At the end of 12 weeks, we saw that between our two studies, approximately 45% of the patients that were given FMX103 had either no erythema or mild erythema.
That's quite a significant reduction of erythema. When we look at FMX103, we're quite pleased in the results of the drug and obviously clearing lesions, but we were also quite pleased in what we saw in its reduction of erythema. We like our chances in that category.
Thank you.
Yeah. Dave.
Thank you. Your next question comes from Jason Gerberry from Bank of America. Please go ahead.
Hey, good morning. Thanks for taking my questions. Dave, I just want to come back to the PN discussion, which the revenue ranges that we've kind of talked about or that you talked about. It seems like it's very driven by TAM and pricing. Sort of the key questions in our mind as we try to model this indication seem to be, well, what percentage of this 200,000 patients are truly underserved with the existing option steroid and seemingly a generic antihistamine option? Then as we think about the upcoming phase III, from a data perspective, what do you need to establish in terms of a treatment effect size to be competitive against the existing treatment options? Maybe what you'd expect from the competitive pipeline.
Is an effect size that's in the same ballpark as phase II sort of a good place to be thinking about what might be a clinically meaningful benefit that you can work with? Thanks.
I'll offer some initial thoughts on the treatment effect and from a clinical perspective, what makes sense, and then perhaps Iain can offer some additional color, and Matt can talk more about the market opportunity. I think a good way to think about it, Jason, is that patients that are enrolled in this study have to have significant itch. Using a worst numeric rating scale, they have to have a score of seven or higher. It's a rating scale from zero to 10, 11-point scale, zero meaning no itch, 10 being the worst itch imaginable. These patients have to have a score of at least a seven or higher. That's significant itch. They're very itchy patients. Obviously, it's directly tied to the condition of prurigo nodularis. To be successful, to be deemed a success, they have to have a four-point reduction.
That is a meaningful improvement for patients. Obviously, we're not looking for a cure here. We're looking to try to reduce these symptoms as much as possible. When you have this condition, the impact on one's daily life is dramatic. It's sleep deprivation, significant psychosocial implications, depression that comes along with this. It's tough for these patients to function in a work environment, et cetera. If you can take their score from a seven to a four or better, or an eight to or excuse me, a seven to a three or an eight to a four better, that is meaningful reduction. Dermatologists, who are the primary caregivers, certainly would recognize this. Hopefully that provides some color. I'll turn over to Iain to perhaps add a little bit more.
Yeah. Hey, Jason. Just on the scale itself, this four-point improvement is also recognized by FDA as a validated instrument and as clinically meaningful. Actually, our European colleagues, they actually work to a three-point scale. We actually work to a more robust, a more meaningful resolution of disease. I think if you look at our phase II results, we have 47% who are viewed as a treatment success. We're nearly at the point of one in two patients having clinically meaningful resolution of their itch, which is quite substantial. As it compares to other products in development just now, it's difficult to say. We haven't obviously done any comparator studies, but we believe those results to be quite robust and that they're replicated in phase III are quite promising.
Yeah. Jason, to your question about the unmet need and market opportunity. We spent a lot of time, obviously, in diligence on this exact question. We did some research that suggests that physicians do see a high unmet need in this patient population. Remember, first-line options for these patients, topical corticosteroids, oral antihistamines, some topical antibiotics. Roughly half to maybe two-thirds of these patients move to a second line, which would be light therapy or intralesional corticosteroid injections. When we ask the physicians what percentage of patients have greater than 20 nodules, roughly 40% of their PN patients present that way. Roughly 60% present with greater than 10 nodules. Obviously, the more nodules, the more severe the patient population, the itchier they are. We believe that there's a significant unmet need.
Certainly, when we asked preference for serlopitant, although we're not going to share those numbers with you, there's a high preference.
Got it. Thank you.
Thank you. Your next question comes from Patrick Dolezal from LifeSci Capital. Please go ahead.
Hi team, this is Valentina on for Patrick. Thanks for taking our questions and congrats on the continued progress. Maybe just two from us. With the FMX103 PDUFA date right around the corner, what are the right launch surrogates that we should be considering in the rosacea space? As a follow-on, could you walk us through any meaningful changes that have been made in terms of trial design or inclusion/exclusion criteria from the phase II PN study to the pivotal program? That's all from us. Thanks.
Thanks, Valentina. Matt, why don't you take the first one?
Sure. As you think about the market opportunity, I think what we've said in previous presentations, there are multiple surrogates that we've presented. The most recent of which, I think Soolantra is a fairly good example of what great looks like. I think that that should give you some understanding of what the market size is. I'll go back to one of the earlier questions regarding the demand and perhaps the displacement of competitors in this space. Not dissimilar to what we saw with AMZEEQ or FMX101 when we did our demand study. This is a very disruptive product to the market. We see broader displacement of products across the board, including the vasoconstrictors. There is not a nice neat surrogate necessarily for that phenomenon. Hopefully that gives you some additional insight into how to think about it.
Yeah. Just to follow up on Matt's comments. We view it, when we looked at the demand study for rosacea, same as we saw for AMZEEQ, is that, if the sentiment is that the product could be disruptive to the market, we view that that's a very good thing. That it's not just being niched for one particular agent to potentially replace. If we're seeing FMX103 with the same type of general outlook and being disruptive to the category, that means we have the potential to get broad utilization. That's what we're obviously hoping for and the initial sentiments we were quite pleased with. Iain, some comments on the phase II versus phase III for PN.
Sure, yeah. Hey, Valentina. Just differences between phase II and phase III. Obviously, there's refinements like any protocol, there's a couple of key areas that we feel, certainly we believe would contribute potentially to improving probability of success. Just to remind, phase II study was the planned enrollment was 140 patients on a one-to-one. It was actually 127 that were ultimately enrolled. Just to remind you on the phase III studies, as 280 patients would be enrolled, practically double, again, on a one-to-one. We have approximately 50 sites in the U.S. and 50 sites across Germany, Poland and Austria. I'm going to come on to where the 280 came from in a minute. Looking at the PN study in phase II.
Looking at the treatment curves or response curves, we've actually increased the treatment period from eight weeks, where the primary endpoint was based for phase II, to 10 weeks in phase III. That's just a reflection of the perception that there's the potential for further development of efficacy beyond eight weeks. There's an extra two weeks that have been added on in respect to therapy. Respect to inclusion/exclusion criteria, really looking across the entire phase II program that Menlo has completed to date, not just the PN study. There was certainly some clear indications that any patients who co-present with an inflammatory skin condition of varying severities, has the potential to do less well with serlopitant than if they didn't have this, such as atopic dermatitis, psoriasis, et cetera.
One of the key exclusion criteria as relate to that particular point in phase III is that we're excluding patients that have any active pruritic disease within six months of baseline. That's quite a tough exclusion criteria to ensure that patients that come into the study do not have these underlying conditions that could potentially be confounding. The itch that they're experiencing is directly related to the PN lesions. Other inclusion criteria relating to the severity and consistency of the itch of patients coming into the trial. In the phase II, I remember the primary endpoint there was a visual analog scale, very similar to the NRS scale. They had to have a score of 70, i.e., it's like seven points on the NRS scale, within 72 hours of baseline.
In the phase III, they have to have at least a 6.5 weekly average W-NRS score for each of the two weeks coming into the baseline visit. What does that mean? If their average was eight and if you like, baseline minus two weeks and a six baseline minus one week, they would actually be excluded from participation in the trial. We're trying to ensure that we're focusing very much on consistently high, consistently replicating itch related directly to the PN. One last thing on the sample size. If we were just to take the phase II results as they were, just to remind you, it was 25.6 treatment effect on placebo, percent placebo, and 46.5% for serlopitant. If we were to do a sample size calculation there, that would suggest a sample size of 200 on a 1-to-1 at 90% power and an alpha of 5%.
On a more robust potential outcome of 21% and 39%, i.e., an 18% treatment effect delta.
Comes to the 280 on a one-to-one. It's a more robust, more rigorous scenario that the sample for phase III has been based upon. I think those are probably the headline differences between the phase II and phase III.
Great. Thanks a lot.
Thank you. Your next question comes from Oren Livnat from H.C. Wainwright. Please go ahead.
Thank you. As an analyst coming from the Menlo side originally, I'm going to return to AMZEEQ, if you don't mind. It's clear you guys want to give us a little more color later into the launch on these gross to nets and net values per script. I'm just hoping to not get out over my skis with revenue projections, and I'm wondering if you can give us any color in this impressive early prescription launch, if we should maybe very conservatively assume that some material portion of those maybe aren't coming through ESI and maybe are, I don't know, free or highly subsidized with co-pay assistance, just so we can get into a ballpark at least of potential revenue recognition on this early nice prescription launch. I have a follow-up question on serlopitant. Thanks.
Yeah, no, Oren, it's certainly fair questions. As I said, we've got about 80 million lives that have access to the drug right now. That means that they have their insurance, that they're covered. It's call 44%, and that obviously continues to be fluid, and we anticipate we'll get more lives covered with each successive month as we move through the next quarter or so. I wouldn't say it's an exact science that 44% of the scripts are covered and the remaining 56% are not covered and we're buying it down. Obviously for where we are not covered, we're going to absorb those costs and we're going to buy that down while we continue to get our product on contract. That's intentional. We obviously want to ensure that patients get access to the drug, physicians can prescribe without any burden.
We're going to use what we refer to as synthetic access initiatives to offset where we're not yet on formulary. The aim is by the time we get these contracts wrapped up, that we would shut off the synthetic access programs or in essence, buying down the prescription. Our goal is to try to do that by the time we get to the back end of the second quarter, early part of the third quarter. Hence why at this stage we're not providing any guidance on net revenue or gross to net number because we want to get through that process. What I can share is that our intent, unlike other companies, is we're not going to let continue to run these synthetic access programs in perpetuity, because we believe that that does erode significantly into your gross to net.
Our approach, our strategy, is to collaborate and partner with the payers. We believe that's serving us well. You could take a look at what estimates are that are out there. We feel good about our ability to obviously hit some of the estimates that are out there. Again, we're going to be cautious about providing any further guidance on net revenue and gross net number until we get through another quarter or two.
Okay. I guess just then to follow up on that, it's not a one-to-one obviously match of real world prescriptions to match your coverage, obviously. If we were to assume that it's reflective and that some meaningful portion of prescriptions are going through paid ESI, for example, that would not be too aggressive.
Yeah, I think that's fair. We're obviously very pleased in the contract with ESI. Obviously we're getting a reasonable percentage of prescriptions that are going through that are covered. Obviously there is still a significant amount yet that is not yet covered. Our objective is to shrink that number with each month as we get through this quarter and through the second quarter and try to have the majority of these contracts, again, tied up by the end of the second quarter, early part of third quarter. So far we seem to be on pace. I'm pleased with how we're tracking. I'm pleased with the negotiation process with the payers.
We actually have some payers that have come to the table that are looking to potentially add AMZEEQ on its formulary list that we did not even model into it when we did our own internal modeling. I think again, that goes to first, that we believe we've got a product that's differentiated and seems to be well received from a clinical perspective and can be differentiated, but also goes to our overall pricing approach.
All right, great. Just quickly on serlopitant, assuming that's positive on both trials, can you remind us, are there any gating factors besides sort of mid-year safety study wrapping up that would determine when this NDA is filed? Are you confident in our priority review?
Assuming that the phase III studies are successful, the primary gating item would be the completion of the long-term safety extension, which we anticipate would wrap up around the middle of the year or so. Beyond that, obviously we're working on the other components, CMC, non-clinical, et cetera. All that work's being done in parallel. Again, our intent would be to file the NDA by the end of the year. Regarding priority review, obviously the drug's been granted breakthrough therapy designation. We would know whether or not definitively we would have that after we file the NDA and upon acceptance of the NDA. We're certainly hopeful for that, but I'm always cautious about guaranteeing anything until we hear it specifically from the FDA. We believe there's a reasonable chance for that. Until we actually go ahead and submit the NDA, we won't know.
Obviously, if it comes back as a priority review is granted, that would be a six-month review process. If not, it would be a normal 10-month review. When we look at your guidance, assuming we file the NDA for serlopitant by the end of the year, that would put a potential approval and launch, as we said, second half of next year. Giving us some flexibility to pull it up if we get a priority review. Otherwise, it'd be towards the back end of next year if it went through a standard review.
All right, thanks. Appreciate the help.
You're welcome.
Thank you. There are no further questions at this time. I'll now hand back to management for closing remarks.
Thank you, operator, and thanks to everyone for taking time out of your busy schedules to join the call today. Very much appreciate the robust question answer session, and I look forward to keeping you updated on the progress of our business. Likely the next update will be the results of the phase III program for serlopitant and PN, so we'll keep you posted. Thanks again. Enjoy the rest of your week.