Pharming Group - H2 2023

Transcript

Operator (participant)

Good day, and thank you for standing by. Welcome to the Pharming Group N.V. Full Year 2023 Results Conference Call and Webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. As a reminder, the company will only take questions from dial-in participants. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 and 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Sijmen de Vries, CEO of Pharming Group N.V. Please go ahead, sir.

Sijmen de Vries (CEO)

Thank you very much, Operator. Welcome, ladies and gentlemen. Good morning, good afternoon, wherever you are, to our conference. Please, next slide. We're very happy to take you to the full year results. You can give me the next slides, because before I do that, I would like to point out two dots: forward-looking statements slides that you now see, where we will be making forward-looking statements that are based upon our current beliefs and expectations, which may, of course, differ from what we expect. Having said that, I would like to now go to the next slide, where you can see my face, and then move on immediately to the next slide. Thank you very much. That's the one.

Yes, we are indeed looking back to 2023 as a very successful year, where by delivering strong growth, we built the foundation for that global rare disease company that we are setting out to build. And we can build that. We can all finance that by, of course, the cash flows that come from the marketing of Ruconest, which delivers considerable positive cash flows that can help us to build that foundation further. So we delivered. We're very pleased that we delivered more than $227 million of revenue, which is a 10% growth versus last year, which exceeded significantly the expected single-digit growth for Ruconest. And we saw that because we had some very good parameters, forward-looking parameters, that were really working. The number of patients increased, the numbers of prescribers increased.

Basically, it means that patients continue to be reliant on Ruconest despite increased therapy options that are available in the market, which, of course, are good for patients. But you can see that Ruconest continues to be that reliable cornerstone. My colleague Stephen Toor will elaborate a little bit further on that, obviously. Now, the next exciting bit, of course, that we could therefore start to execute on was the launch in the United States for Joenja, leniolisib, which product we licensed from Novartis in 2019. We were very proud to actually, almost immediately after FDA approval in April, bring that product to the market and immediately get commercial coverage for that product and bring in more than $18 million of sales during those first 9 months in the market.

In addition to that, Joenja has been filed with a number of regulatory authorities in Europe, Canada, Australia, Israel, and as of 2 days ago, in the United Kingdom. We are awaiting, of course, and we're working with all these regulatory authorities, and we are awaiting the next steps and the necessary approvals in the not-too-distant future. Then, of course, very important, the label of Joenja is for 12 years and older. We have a number of pediatric trials that are ongoing, which are, of course, important. Last but not least, we also have a completed small Japanese clinical trial. So we are preparing for submission to Japanese authorities by the end of this year. My colleague Anurag Relan, our Chief Medical Officer, will talk more about that.

As it is an ultra-rare disease and a very new disease that we only described 10 years ago, we have a very strong focus on patient finding. And again, Dr. Anurag Relan will talk about that later. And then I move to the right-hand side, which, of course, is even more exciting going forward towards the future, because we strongly believe that leniolisib has vast additional potential for further development. And hence, we have basically set out to start a phase 2b study in the second quarter of this year for the subsequent indication, which is significantly larger than APDS in patient numbers, PID with immune dysregulation. And again, Anurag Relan will talk about that in more detail a little bit later in this presentation. And last but not least, we are very, very active.

We continue to be very active to license or acquire clinical stage programs in rare diseases, preferably immunology, hematology, respiratory, and gastroenterology, to further leverage our commercialization structure that we have been building up and are building up as we speak. And then on the bottom of the slide, you see that for the first time in our history, we gave total revenue guidance, and that will be between $280-$295 million, which is driven, of course, by Joenja, but strongly supported by Ruconest during 2024. And then I would like to go to the next slide, please, where you see then a depiction of the pipeline that we have: Ruconest, obviously, in the market, Joenja in the U.S. market, and you see then subsequently under regulatory review by many of the regulatory authorities, and the pediatric program that's ongoing and the Japan program that's ongoing.

And then, of course, the very exciting fact that we are going to do the phase 2A study for leniolisib for the subsequent indication. And last but not least, our very early stage program, the HAE gene therapy that is in early preclinical stage. With that said, I would like to turn over to my colleague Stephen Toor, our Chief Commercial Officer, to take you through the commercial update. Thank you.

Stephen Toor (Chief Commercial Officer)

Thank you, Sijmen. Good morning. Good afternoon, everybody. This is a slide, I think, you'll be largely familiar with. I think the key thing to take away from this is that the key features of Ruconest, so namely the only recombinant C1 treating the root cause of the disease and 97% efficacy in one dose, is what continues to fuel the Ruconest growth and our success over the last nine years. These product features, allied to the excellent work our commercial, medical, and patient services teams deliver for customers and patients and their carers, is also why Ruconest remains a highly relevant part of the conversation in the U.S. HAE community and globally. That's remained the case despite three prophylactic launches over the last few years, leading to generally better controlled patients and the genericization of icatibant.

I fully expect it to remain the case, even in the face of acute competition in the future. That's because HAE patients using Ruconest tend to have generally a more severe course of disease. In that instance, the need for virtually guaranteed and fast efficacy that stops the attack in its tracks is critical. It's typically the patient's only real objective. In most cases, that overriding need for efficacy won't be replaced by a convenience play. So looking at 2023, Ruconest performance was characterized by the continued growth in both prescribers and new patient enrollments. It was also successful despite that market-wide event we saw in Q1 last year related to government-reimbursed patients. Now, we have seen some disruption from that this year, but it's been muted by almost halving of those patients' out-of-pocket costs in the U.S.

Moving into 2024, we've also seen that the strength of our leading indicators has continued into this year, namely new prescribers and continued support from existing prescribers and new patient enrollments. So despite some continued disruption in that government segment, we're still on track for where we expect to be in Q1. Next slide, please. So this is, again, something you're very familiar with. Pharming's been in this space and committed to this community for over 20 years now. It's really that commitment combined with the product itself, Ruconest, our people, and the excellence they deliver, which is why you see on the right-hand side, there our prescriber base continues to grow, and as a result, our patient base continues to grow. It's why, as I said, we remain enthused and confident in the continued growth of Ruconest, both this year and in the years ahead.

Next slide, please. So switching gears now to Joenja. So switching gears to Joenja, we had, as you know, a strong first year. As we close out that first year at the end of this month, I'd just like to reinforce what a great launch the team here at Pharming delivered for us. So the launch preparations, you've heard me say in the past, was first-class. I think I wouldn't underplay what Sijmen said earlier, which is that within one week of approval, we had commercially covered patients with product in hand, which is outstanding. The patient base steadily grew throughout the year. We exited, as you know, at the end of the year with 81 patients on paid Joenja therapy. In that time, importantly, we've seen very few discontinuations, and we have adherence rates close to 90%.

So as we convert that caseload that we'd already identified at launch, our focus going forward remains finding those new patients for this rare disease. And then, given APDS is an autosomal dominant condition, testing their families to uncover additional patients so that they, too, can benefit from the management and treatment with Joenja, which, as you know, is the only indicated product with which you can treat APDS. And then the other important factor to talk about here, in addition to the U.S., is, of course, alongside that launch, we continue to build out our ex-U.S. capabilities in preparation for launches in the European Union, the United Kingdom, Japan, Australia, and other countries in the Asia-Pacific region, and also in the Middle East and here in North America and Canada. So with that, I'd like to pass over now to Dr.

Relan, who's our Chief Medical Officer, for a medical update.

Anurag Relan (CMO)

Thanks, Steve. So what I'm going to do today is talk a little bit about APDS and then provide an update on Joenja, as well as where we see some additional possibilities for applying leniolisib in this second indication. So on this slide, you can see a little bit of information about APDS, which is a rare primary immune deficiency that, as Sijmen said, was only characterized in 2013. We estimate the prevalence of APDS at approximately 1.5 patients per million. And to that end, we have already identified more than 840 patients across the world in key global markets. As with many rare diseases, the signs and symptoms of APDS can vary across patients, even within family members who have the same variant.

This, unfortunately, leads to many potential delays in diagnosis and care and a lot of frustration among clinicians and patients as they try to treat these patients. Fortunately, a simple genetic test can provide a definitive diagnosis of APDS. Until the availability of Joenja in the United States, recently, treatments for APDS have really only been limited to addressing the symptoms of the disease. Again, these symptoms manifest early in childhood because these patients have this genetic condition that they're born with. These treatments do not address the root cause of APDS. Without a specific indicated treatment, this was quite complicated for these patients to manage their condition and physicians to be able to treat them effectively. Next slide.

You can see now, with the launch of Joenja, APDS patients have a choice now, specifically patients who are adult and pediatric patients ages 12 years of age and older. We've been able to demonstrate this by a randomized placebo-controlled study where Joenja met both primary and secondary endpoints with significant efficacy results. We also saw positive benefits in other key secondary parameters as well as exploratory measures. On the safety side, we saw no drug-related serious adverse events or study withdrawals in the Joenja studies. We've also collected quite a bit of data now on long-term use of Joenja from the open-label extension studies. We've provided some of this data, including reductions and discontinuations in immunoglobulin replacement therapy or IVIG. We've also shown reductions in infection rates over time.

We've also seen that the safety is consistent with what we see in the short term. So when these patients are on therapy in the open-label extension study for several years, in many cases, we see the same types of safety profile that we saw in the short term in the randomized control study. We continue to collect this data, including showing sustained benefits in the size of their lymph nodes, the size of their spleen, some of their immune parameters, including their levels of IgM. We presented some of this data at some medical conferences throughout 2023. We expect to continue to present more data from these long-term studies in the coming year. On the next slide, we can see what we're looking at beyond the FDA approval.

So as we mentioned in the press release, we are working closely with CHMP to address remaining outstanding issues. We are now awaiting the CHMP's opinion on the leniolisib MAA. We, in fact, expect that leniolisib will be on the CHMP meeting agenda next week, but we are awaiting CHMP confirmation for this. As Sijmen mentioned also, the Japan clinical study, the enrollment is completed there now. We are finishing the remaining studies to be able to file in Japan, hopefully toward the end of this year, beginning of next year. Just earlier this week, we filed our application for the MAA in the U.K. with the MHRA. We also have several applications already under review in Canada, Australia, and Israel. We expect regulatory action on these throughout the course of 2024. On the pediatric side, we have two studies that are ongoing.

The first is in children ages 4-11. And this study is expected to complete enrollment very soon. And then the other study, which we just started with the first patient dosed in November 2023, is continuing as planned. On top of that, we mentioned that we have a number of patients in expanded access programs across the world, as well as some new patients that are getting access to therapy through named patient programs. And then I'll talk a little bit more in the next couple of slides about some work that we're doing for the second indication. And that progress is on target with the initiation of the development for this second indication. Next slide. So let's talk a little bit about the patient finding because I think this is critical for any rare disease, but also for one of these newer rare diseases such as APDS.

One key pillar of that is medical education. And we're doing a number of activities to support this education. Obviously, we attend numerous conferences and congresses. We present abstracts both on APDS and the seriousness of APDS, as well as some of the emerging data that we have and ongoing data that we have on the use of leniolisib in these patients. And we, of course, publish a number of these results. And we've done that throughout the course of this year. You see a list of some of the conferences that we presented at during 2023. And there'll be a similarly long list for 2024.

Because a simple genetic test can make the diagnosis of APDS quite easy, we have a sponsored no-cost testing program in place with genetic counselors available to help review test results with patients and physicians as well, as well as to provide pretest and posttest guidance. We've also partnered with a number of genetic testing companies to identify patients that have already been tested and diagnosed with APDS, so really reaching out in numerous ways on the genetic testing front. And then, as Steve mentioned, APDS is an autosomal dominant condition. But we're finding through our work is that most family members haven't actually been tested for APDS. And this is due to a number of factors that we're trying to address, one by making genetic testing more widely available, but also education. So we're doing a number of things to work with clinicians and patients to encourage family testing.

We have a program in place now that allows patients to directly request this through Genome Medical if they suspect APDS or if they have a family member that has APDS. Really, the goal here is to remove barriers to testing for patients that may be having APDS. On the next slide, you can see a little bit more about the activities that we're doing on what's called variant of uncertain significance. We previously mentioned that there are more than 1,100 patients that we're aware of in the United States alone that have this category of diagnosis, which is called a VUS. What that means is that they have some symptoms that led them to get a genetic test done, but the genetic test result is inconclusive. It's inconclusive primarily because that genetic variant hasn't been previously seen and hasn't been evaluated, whether it's disease-causing or not.

So we're doing a number of things here to help resolve this frustration for patients and clinicians. The first is we're working with experts, including those at ClinGen, to develop specific criteria for classifying variants. We're also partnering with a number of companies, including Genomenon, to make clearly available what variants are causing disease. We're trying to gather data. And these efforts that I'm mentioning here have already led to a number of patients getting correctly diagnosed with APDS. On top of that, we're really trying to make functional testing more widely available. And we're doing a number of things here to support this type of activity, working with a number of researcher labs to try to make this test more widely available because, ultimately, this is the way to resolve a variant of uncertain significance.

Then it's not only one thing to test patients, but then also to share these results. We're doing that through a number of databases, including the one sponsored by the NIH called ClinVar. Then lastly, we are involved in a project with high-throughput methods that will allow testing nearly all possible variants and creating a variant effect map, including variants that haven't been tested yet or haven't been observed yet. This will allow us to eventually make it possible so that, in the future, there won't be any patient that has this type of diagnosis or has this inconclusive result. Those efforts are continuing on plan. We expect, later this year, to be able to talk more about the results from that project. On the next slide, you can see some of the medical conferences that we presented at over the past year.

These data talk about the seriousness of APDS. And you see the data on mortality that we presented, the data on lymphoma. But they also present data from the ongoing use of leniolisib in the APDS long-term results. We've seen data as well presented on the different manifestations, including manifestations in these patients' gut, in their lungs. And then lastly, we presented just last month new data on the use of our Navigate APDS sponsored genetic testing program and how that is uncovering patients and helping patients get the correct diagnosis.

So as I said earlier, we're going to continue to present at a number of conferences this year, have a number of abstracts, and a number of publications that are coming out where we can really educate the broader physician community, patient community, about APDS, about the seriousness of the condition, as well as the ongoing data that we're collecting. Next slide. Now turning a bit to the next indication that we're pursuing. So obviously, APDS is a primary immune deficiency with immune dysregulation. But there are other immune deficiencies with immune dysregulation. And they often have similar clinical phenotypes or clinical presentations, as you see with APDS. Specifically, what we see is that these patients often get similar problems related to lymphoproliferation or enlarged spleens and livers, excuse me, enlarged spleens and lymph nodes.

But they also have this problem of autoimmunity, where not only is their immune system not functioning properly, it's also attacking the body. And what we're seeing is that there is a number of these PIDs or primary immune deficiencies with immune dysregulation that have a clinical phenotype that is similar to APDS and oftentimes are even managed before the availability of Joenja for APDS in the same way. So there's a strong rationale to see what's going on here. And I think if you see on the next slide, the clinical presentation of these diseases looks very similar to what we've seen with APDS. In fact, when you look at the right, you see all of the same types of things or many of the same types of things that we see with APDS. We also know that these patients have a high unmet need.

And again, the standard of care immunosuppressive therapies, such as sirolimus rapamycin that had been used, have a lot of concerns due to limited efficacy and tolerability. So there's an unmet need here. And we know that these patients, based on work that's already been done in these various genetic disorders, have altered PI3K signaling. And we know that that altered signaling leads to the clinical symptoms that you see on the right. And as such, we think that leniolisib is well-suited to restore that signaling to normal, thereby helping these patients' clinical presentation also. And to that end, on the next slide, what we're doing is advancing this with a clinical trial about using leniolisib in this patient population. Again, the principle is that by reducing this PI3K delta activity, we're trying to rebalance the immune dysregulation and improve their clinical symptoms.

We've been partnered with the NIH on this. We're expecting to start a clinical trial soon. The data suggests that when we look at the patients with specific mutations that have this type of immune dysregulation, the prevalence is approximately five per million, which is a little bit more than what we've seen with APDS and, in fact, three times more than we've seen with APDS. We have been engaged with FDA on this. We've gotten feedback on the clinical trial plans. We are underway now to begin that clinical trial shortly, which you can see on the next slide describing the study design for that. It's a phase 2 proof of concept study, single-arm with 12 patients, where we will ramp patients up, starting at 10 milligrams, then progressing to 30 milligrams and 70 milligrams.

This study will include patients where we know that the genetic defect and you see some of the genetic defects listed there: ALPS, CTLA-4 haploinsufficiency, and PTEN deficiency, among others, where these patients have this altered PI3K delta signaling. We think that leniolisib is appropriately suited to be able to alter and restore that signaling back to normal. The primary objective of the study, of course, is safety and tolerability. We will be looking at PK and PD measures, efficacy measures, similar to the types of measures that we studied in the APDS population. The goal really is to confirm the safety and tolerability and then pick the best dose regimen for a phase 3 study. As I mentioned earlier, we're partnered with the NIH on this. Look for more updates to come soon about the initiation of this study.

With that, I'll turn it over to my colleague, Jeroen, to discuss the financials.

Jeroen Wakkerman (CFO)

Yeah. Thank you very much, Anurag. I'm very happy to take you through the financial highlights. To start off with Q4 2023 versus last year, we had a revenue growth in the quarter of 49%. Ruconest grew by 34% in Q4 and had a record revenue of $73.3 million. You may remember that we were at a growth of 2% year-to-date at the end of Q3. So we're very happy with these Q4 sales results. We saw strong performance in leading key revenue indicators in the US, including new physicians prescribing Ruconest, new patient enrollments, including high-frequency attack patients, and the total number of patients. Joenja revenue grew by 21% versus the previous quarter, Q3 2023. The revenue was $7.9 million.

By year-end, we had, as Steve also said, 92 APDS patients enrolled in the U.S. and 81 patients on therapy on Joenja. The gross profit in the fourth quarter of 2023 increased by $25.8 million compared to the fourth quarter last year. And this growth was driven by higher revenues and partially offset by increased Ruconest production costs and royalty payments on Joenja sales. The operating cost increased by $16 million in the fourth quarter compared to last year. And about half of this, $8.3 million, was directly related to R&D and marketing and sales expenses for leniolisib, respectively, Joenja. And our expansion efforts, driven by preparation for the launch and further commercialization of Joenja, led to a $7.1 million increase in payroll expenses. An operating profit of $1.1 million was realized, in contrast to an operating loss of $10.2 million in the fourth quarter of 2022.

This improvement was primarily driven by the rising gross profit and partially offset by the increase in operating expenses. The net loss was $2.7 million. Our cash position improved and grew from $209 million at the beginning of the year to $215 million at year-end. If I then go to the next slide with the full-year results, our revenues grew by 19%, which was a result of higher Ruconest sales volumes and supported by a price increase, which was below CPI in the U.S. market. The initial sales of Joenja was $18.2 million in 2023, following the launch in April of the same year. The revenues in Europe and the rest of the world increased by 12% to $6.2 million in 2023. The gross profit increased by $32 million or 17%. And this development was broadly in line with revenue growth.

Our other income reflects for this year, well, 2023, the sale of the priority review voucher to Novartis, which was for a pre-agreed price of $21.3 million and is a product of the economic determined by the reduction of our minority stake in BioConnection. And at the time, we recognized a gain of $12.2 million. So that was in 2022. The operating costs increased by $64.5 million, of which $10.4 million is attributed to milestone payments for Joenja following the first commercial sale in the second quarter of last year. An additional $25.7 million of expenses is directly related to R&D expenses and marketing sales expenses for leniolisib/Joenja. And $24.2 million increase was from payroll expenses driven by our expansion efforts in preparation for the launch and the further commercialization of Joenja. And finally, we incurred impairment expenses related to our DSP facility.

That was for an amount of $4.7 million in 2023. So the operating profit decreased from $18.2 million to -$5.4 million. And that was as a result of the increase in operating costs to build our Joenja business. The total net loss in 2023 amounted to $10.1 million compared to a net profit of $13.7 million in the year before. And the decrease was primarily caused by higher operating costs. And in addition, fluctuations in foreign exchange rates adversely impacted the foreign currency results in the statement of income. On the next slide, we give an overview of the revenue in Ruconest over the last years. And obviously, for last year, you see also Joenja. But Ruconest has grown by 10% in 2022. And we saw a record Ruconest revenue since the launch of the product in the US over nine years ago. Leniolisib is driving enhanced growth.

We achieved overall 19% revenue growth in 2023. We're very pleased with these results and with the continued growth of Ruconest from 2021. On the next slide, you see the OpEx in cost category breakdown by quarter. The message is that we continue to invest in Pharming's future growth. I've provided more detail on the growth of the operational cost earlier and specific to Q4. The operating expenses increased by $16 million in the fourth quarter compared to last year and $8 million. So almost half of it was related to leniolisib and Joenja in terms of marketing, sales, and R&D. $7 million was related to payroll expenses to support the growth of the organization. For 2024, we expect quarterly OpEx to be less than the OpEx in Q4 2023. Now moving on the next slide to the cash flow.

As I said before, it increased from $209 million to $215 million. The graph shows the key changes in our cash position. The cash flow from operating activities was negative and offset by the cash from the sale of the earlier mentioned priority review voucher. In addition, there were favorable currency exchange rate fluctuations with a positive impact on the cash. That was amongst others on the cash that we hold in euros. The euro-dollar exchange rate increased throughout the year. Going to the revenue guidance for 2024 on the next slide, we give a revenue guidance of between $280 million and $295 million for 2024. That means a growth between 14% and 20%. We, as in earlier years, expect quarterly fluctuations. Joenja is a significant driver of this revenue growth. But also, we expect continued growth from Ruconest.

The Ruconest growth rate is higher than the guidance that we gave in 2023 because we expect some of the momentum from the second half of 2023 to continue. Last year's guidance was low single digit. We are confident to move that now to low to mid single digit growth for Ruconest. The Joenja assumptions are that we expect continued growth in patients on paid therapy. The pricing in the US is at an annual weighted average cost of $566,000 per year per patient. Now moving on to the outlook for 2024. As I said, total revenue between expected to be between $280 million and $295 million. Joenja in the US, we expect continued growth progress finding additional APDS patients. That is supported by family testing and VUS validation efforts, as mentioned by Anurag, and subsequently converting patients to paid therapy.

For leniolisib outside of the U.S., we expect increasing revenues from commercial availability or through our Named Patient Program and other funded early access programs in key global markets. We expect to complete leniolisib clinical trials to support the regulatory filings for approval in Japan and for the pediatric label expansion in key global markets. We expect progress towards regulatory approvals for leniolisib in Europe, the U.K., Canada, Australia, and Israel. We will initiate and advance a phase 2 clinical trial for leniolisib in PIDs with immune dysregulation linked to PI3K delta signaling to significantly expand the long-term commercial potential of leniolisib. We continue to focus on potential acquisitions and in-licensing of clinical stage opportunities in rare diseases in therapeutic areas like immunology, hematology, respiratory, and gastroenterology. That is to further leverage our commercial infrastructure globally.

Now, with that, I would like to move on to the next slide and open up for Q&A and hand over to the operator. Thank you.

Operator (participant)

Thank you. To ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. We will now go to your first question. One moment, please. And your first question comes from the line of Christian Glennie from Stifel. Please go ahead.

Christian Glennie (Director)

Hi. Good afternoon, guys. Let's start off with Ruconest, I guess, just to get a bit more of a sense for these underlying drivers. Obviously, a very strong fourth quarter. You seem to be guiding for mid single digit growth in 2024 now. Is there a scenario in which it could get north of that and do another sort of 10%? Just trying to get a bit more sense for some of the drivers on Ruconest this year.

Sijmen de Vries (CEO)

Yeah. Thanks, Christian. Very nice question. Yeah. Ruconest indeed has some very strong and Steve was already alluding to it as some very strong underlying indicators in the market, which he says continue into the first quarter. We are, of course, aware of the fact that we are in a market which is faced with a lot of competition around. We continue to be optimistic. Let's say it's year 10, right, at Ruconest in the market. So we can be optimistic by saying that we have the mid low to mid single digit growth. And as and when we see indicating indicators moving towards the north, obviously, we will update guidance during the year. But for now, we would like to stick to that in respect of Ruconest.

Christian Glennie (Director)

A natural follow-up to that. I mean, you touched on this. Stephen touched on this in the remarks around potential new entrants here on oral and convenience next year. Just to get a bit more insight, I guess, in terms of the patient profile here and what the sort of your market intelligence tells you that you aren't going to lose patients effectively to that convenience option.

Sijmen de Vries (CEO)

Yeah. Yeah. I think Anurag and Stephen both. Sorry, Stephen alluded to it already, of course. We see a very different patient profile that are using Ruconest. And basically speaking, when you look at the clinical results of those new acute options, you see that there is a necessity to, A, have multiple doses and, B, still need rescue therapy.

If you look at the Ruconest results, the word rescue therapy doesn't figure there because Ruconest is protein replacement therapy for that missing C1 or not functioning C1 inhibitor protein in patients with hereditary angioedema. Hence why we believe that these products, in fact, serve a different segment of the population that suffers from hereditary angioedema, where we will see we expect, therefore, that these oral acute products if approved, of course, will serve that patient segment that is now currently, of course, using a lot of convenience products as well, such as subcutaneous injections that are, by the way, very stinging and painful and which you have to give repeatedly often to treat one attack. And that the hurdle for those patients to actually step over into an oral would be fairly low.

Whereas I think that patients that rely on Ruconest that are not used to any convenience in therapy but are relying on the reliability of efficacy of Ruconest, that hurdle will be a lot higher. One can never totally exclude, of course, that patients will try it and may be successful. But on the other hand, like we said, we serve a very different patient profile with very higher attack frequencies than we see in all those clinical trials that are being done by those new oncoming competitors. I hope that answers your question. Sorry to be a little bit long-winded here, Christian.

Christian Glennie (Director)

No, no, that's very helpful. Thank you. And then one final one on Joenja. And I get back in the queue, I guess, your guidance implying Ruconest 5% gets to about 240. So Joenja, the balance is somewhere between $40 million and $55 million for this year, if I'm understanding correctly. Therefore, what are your assumptions around the sales and markets that will contribute to that growth and what gets you to the low and high end of that? So is it mostly still U.S. or will there be reasonable contributions from other markets?

Sijmen de Vries (CEO)

I think what we first and foremost is the U.S., obviously. As you heard from Anurag, a lot of and from Stephen, a lot of activities are ongoing to find those patients in the U.S. However, the first numbers of patients that we had, of course, are on drug. We will see inflow, steady inflow in the United States during this year from, for instance, family testing efforts that will be systematically applied as you heard.

The other thing is, of course, there will be small batches of initially small batches of VUSs tested. And that will actually deliver, albeit in the beginning, a limited number of additional patients as well. Whereas by the end of the year, but that's more for 2025, of course, we expect that MAVE experiment where Anurag talked about that combinatorial experiment to deliver the bulk of the VUSs. And as soon as we have a bit more indication of what kind of percentage we actually have on VUSs, we will, of course, update the market there as well. But it's a little bit early days for that at this point in time. Now, that's for the US market. With respect to ex-US, we don't expect any significant sales from the European markets because, obviously, as you know, reimbursement takes a lot of time.

So the European markets sales will only cut in in 2025 and further on, even further on, because some of those markets will take multiple years before you get an approval. So the ex-US sales will mainly come from those early access programs, paid early access programs in some of those markets, and from the named patients that are actually already being served. And that's what you can also expect, of course. For instance, in the Q1 results, you will see that there is some sales reported to ex-US because that's ongoing as we speak. So in other words, the fluctuation in the Joenja numbers, I think, depend on mainly, I think, on the numbers of patients that will come, of course, from the US market. I hope I answered that question, Christian.

Christian Glennie (Director)

Yep. Thank you. Thanks, Sijmen.

Sijmen de Vries (CEO)

Thank you. We will now go to our next question. And your next question comes from the line of Alastair Campbell from Royal Bank of Canada. Please go ahead.

Alistair Campbell (Analyst)

Thanks, everyone. Thanks for taking my questions this morning. I have a couple on Joenja, if that's all right. First of all, obviously, Joenja is launching very well in the US. And you talked about, I think, over 90% adherence rate, which is good. But just in the context of that, just sort of to confirm that what you're actually seeing in real-world use is kind of in line with what you saw in clinical trials in terms of side effect profile and stuff like that. That would be useful to get a sense of that. And then secondly, just thinking about the second indication, the PID with immune dysregulation, obviously, that's going to cover a variety of different genetic causes.

I guess what I'm trying to get for myself is a feeling of the risk around the profile of this program. I mean, basically, is your expectation that all of those genetic dysfunction areas really biologically should respond, or do you think some of them will, or do you think they're all high risk? I'm just trying to get a sense of what the risk profile looks like. I mean, my feeling is that at least some of those should probably come through. But just to get a sense of how you view that would be great. Thank you.

Sijmen de Vries (CEO)

Yeah. I'm happy to hand that over to Anurag, of course, here in this case. Anurag, would you mind asking that question?

Anurag Relan (CMO)

Sure. So maybe we'll start with the second question first about the additional indication in primary immune deficiencies with immune dysregulation. You're right. We're looking at a number of specific genetic variants, genetic mutations that are causing this altered signaling. That already has been described, right? So it's known that patients with ALPS, that patients with CTLA-4, that patients with PTEN deficiency have this abnormal signaling through that pathway. It's also known that they have immune dysregulation as a result of that. Then lastly, they're being treated with immunosuppressive therapies such as rapamycin to modulate that pathway. So we think it's quite logical to try to modulate the pathway with leniolisib in the same way that we did with APDS patients. So I think from our perspective and really, this program came to us through our interactions with the immunology community.

Through all the work that we're doing on APDS, they kept on saying, "Look, there are other patients that they believe could benefit." They listed all of these reasons that I just mentioned to you. It was really on that basis that we partnered again with the NIH, who are leaders in these specifically in these areas of ALPS and CTLA-4 haploinsufficiency, to come up with this clinical trial program because they were so enthusiastic about being able to, one, address the unmet need, but two, to be able to use something that they were very comfortable using for APDS. They had that confidence because they had been treating patients with APDS with leniolisib for several years.

I think that comes to your second or your first question, which was on really the real-world use of leniolisib and how does that compare to what we've seen in the clinical trials. I think what we're seeing is, number one, we're seeing that it continues to be generally safe and well tolerated. So we're seeing nothing new from our pharmacovigilance efforts on the real-world use suggesting a different safety or efficacy profile. But two, I think what we're also hearing is a lot of the other benefits that we didn't even capture in the clinical trial program. And we're going to and we're trying to get all of that data.

In fact, we have a registry underway in the U.S. where we're going to be following APDS patients longitudinally in the hope, actually, to try to capture a lot of the data that we didn't address in the original clinical trial because we weren't aware of all of the possible benefits that these patients experience. So I think that's something else to look forward to as the year continues.

Alistair Campbell (Analyst)

Just a quick follow-up on that. When do you think, in the sense of timing, you might have something from the registry that would be worth sharing with us or obviously with physicians?

Anurag Relan (CMO)

So the registry is just underway. But we are continuing to collect and publish data for the use of expanded access. So these are again, this is essentially compassionate use.

Patients in the U.S. who don't qualify for commercial drug or outside the U.S. who are on therapy, we are collecting that data. We've shared some of that last year. You'll see a lot more of that data from the expanded access program or case reports or case series of patients in the expanded access program. You'll see that at conferences this year. I think the registry, because it's just started, I think that's more likely to be a 25 type of data. But I think that you're going to see through the expanded access program data coming out this year that reinforces what we saw in the clinical trial program and really extends even beyond that.

Alistair Campbell (Analyst)

Brilliant. Thank you.

Operator (participant)

Thank you. We will now go to the next question. Your next question comes from the line of Joe Pantginis from H.C. Wainwright. Please go ahead.

Joe Pantginis (Managing Director)

Hello, gentlemen. Thank you for taking the question. So I have a couple of questions on Joenja. I'm going to start very specific and then just talk more to the broader disease, if you don't mind. So first, Stephen earlier was talking about and of course, you guys have great adherence rates. So I was curious on the other end, what are some of the reasons you see for lack of adherence on the drug?

Sijmen de Vries (CEO)

Thanks, Joe. Anurag, do you have any insights on that that you can share with Joe?

Anurag Relan (CMO)

Yeah. I think it's really just one-off cases, Joe, where in fact, some of the cases where we've seen is these patients are underweight and they need to be put on a lower dose. So that's not possible in the commercial program. So that's one example that comes to the top of my mind. It's not anything we're seeing from a safety point of view that suggests any concern or something that we didn't see in the clinical trial program. So I don't think there's anything substantive here.

Joe Pantginis (Managing Director)

That's very helpful. Thanks. Then I guess, Sijmen, if I heard you correctly earlier, it sounded like you might be disclosing in the future the role or the amount or proportion of VUSs as part of your Joenja revenue profile. First, was that correct? Then second, when do you anticipate I know this is really forward-looking that the VUSs could start to have a real impact on the revenue growth for Joenja?

Sijmen de Vries (CEO)

Yes, Joe. That is indeed forward-looking. Yeah. I said indeed something like that. We're seeing you see that slide from Anurag you saw in the middle there that those individual VUSs are now being evaluated. And that's actually starting and happening as we speak. So the first small batches of those are expected to come through in the very near future, which may give us some early insights in that. Like I said earlier, it's not going to deliver bulks of patients, but it will deliver patients. And the bulk, I think, will be seen following the closure of the MAVE experiment, which is expected, as Anurag was alluding to, by the end of this year. So I think 2025 will be the year where the bulk of the VUS patients will become available for treatment. I think that's a reasonable forward-looking statement for now, Joe.

Joe Pantginis (Managing Director)

Got it. No, that's fair. And my broader question about the disease sort of ties in with your recent data at QuadAI, obviously, very intriguing data with regard to the molecular diagnostics. I guess I would ask Anurag, the role that Joenja could play with regard to multiple statements made in describing the disease where some patients do not have clinical actionability. So I'm just curious, first, can you, for all of us, help define why patients might not be actionable from a clinical standpoint or medical standpoint and if Joenja could have an impact on that?

Anurag Relan (CMO)

Yes. I think it's a good question. It's something we're doing a lot of work on is really educating patients and clinicians about APDS. I think it's a foregone conclusion amongst our team, of course, that this is a serious disease and that there's a significant mortality associated with it, that many of these patients, unfortunately, go on to develop lymphoma. And lymphoma is a key reason for the high mortality in these patients.

The lymphoma that these patients develop is often not easy to treat. And the mortality rates are much higher than you'd see in other lymphomas, for example, or in other patients. So I think there's a lot of education to talk about that. I think it's also important to recognize that these patients do have different clinical manifestations. So some patients, it may be very obvious with a high infection rate. Some patients, infections may not be the most predominant feature, but it could be the lymphadenopathy or the enlarged spleen. So I think it's really educating clinicians also on what to look for in these patients and to be able to monitor these patients. But really, all of these patients, I think, have a serious condition. And they all are potentially eligible for Joenja. So I hope that answers your question.

Joe Pantginis (Managing Director)

It certainly does. And my last question, and thank you for bearing with me, is more towards your continued strengthening balance sheet. And with that said, do you feel that your increased cash helps leverage additional business development discussions? And can you talk to the potential or can you talk to the relative maturity of some of your ongoing discussions in licensed potential assets? Thanks.

Sijmen de Vries (CEO)

Yeah, Joe. Yeah. Thanks. Yeah, of course. It always helps to have a bit more cash at hand in case one wants to pursue an in-licensing opportunity, which, of course, as we said before, is our preferred modus operandi because that's much easier to deal with than mergers and acquisitions. Having said that, I think with the arrival of Alexander Breidenbach, our Chief Business Officer, he's been really proactively working. And we've got a very nice pipeline.

We are in advanced stage of discussions with a couple of possibilities. So we have a nice line of sight, as we call it, for opportunities that we are evaluating. However, as you know, in business development, and I've said this before, it doesn't count until you have a deal. So yes. But we remain very active.

I think what also is what we see is with our commercial success and with the ongoing ability that we are very successful in being able to market against competition in the HAE market and that we basically know how to develop a new market, even in a new disease, we get a lot more visibility now that we are a company that is potentially an interesting partner of choice for those companies that should not go into commercialization because they will become single-product companies. And commercialization is very expensive and very risky. And we basically, therefore, like I said, because we have now got this under our belt, it becomes more and more we see that on the radar screen. And we're getting a lot more inbound than we used to get.

So we continue to be optimistic that we get some opportunity this year to update you on a deal that we have clinched and that we have actually expanded our pipeline.

Joe Pantginis (Managing Director)

Very helpful. Thank you for all the answers, guys

Sijmen de Vries (CEO)

. Pleasure, Joe.

Operator (participant)

Thank you. We will now take your next question. And your next question comes from the line of Hartaj Singh from Oppenheimer. Please go ahead.

Hartaj Singh (Managing Director)

Hey, everyone. This is Fanny for Hartaj. Thanks for the questions. Two questions from our end. So first one for Ruconest. Can we still expect seasonality for Ruconest in first-quarter sales as previous years? Any color on that? And the second one for Joenja, can you provide any color on the duration of the patient's Joenja so far since Joenja was launched around 3 quarters, 9 months, and your estimates on the APDS patient number growth in 2024? Thank you.

Sijmen de Vries (CEO)

Yeah. Could I just hand it over to you, Stephen, those questions? Is that all right?

Stephen Toor (Chief Commercial Officer)

Could you repeat the questions because they weren't completely clear? My end.

Hartaj Singh (Managing Director)

Sure. The first one for Ruconest. So can we still expect seasonality for Ruconest in first-quarter sales as previous years?

Stephen Toor (Chief Commercial Officer)

Yes. So thank you for clarifying. So yeah, I think you can broadly expect to see similar patterns to those which you saw last year because the same types of events are happening in the quarters. So for example, Q1 is the prior authorization season. And as we indicated last year, there is some disruption to government patients. So as I said, we remain on track for what we expect to do this quarter. The leading indicators and the performances where we're expected to be. But you should expect to see the same overall pattern through the year, I imagine, certainly in the first half.

Hartaj Singh (Managing Director)

Thank you.

Stephen Toor (Chief Commercial Officer)

And the second question?

Hartaj Singh (Managing Director)

For Joenja, so can we know some color on the duration of the patients on Joenja so far since it was launched around 3/4, 9 months?

Stephen Toor (Chief Commercial Officer)

The duration of the patients?

Hartaj Singh (Managing Director)

Patients on Joenja. Because I don't know if the physicians prescribe the 30 days for each patient or how long for those patients on the treatment.

Stephen Toor (Chief Commercial Officer)

I've got you now. So as we mentioned earlier, patients are adhering well unless there's either a weight issue or some such. So they're typically being prescribed on a monthly basis and dispensed on a monthly basis. And we see that cadence with patients.

Hartaj Singh (Managing Director)

Thanks. So any estimates projection on the APDS patient numbers growth in 2024, more specifically?

Sijmen de Vries (CEO)

Yes. So like I said before, we said we will continue to get new patients on products in the USA, right? The adherence rate is very high. It's, of course, chronic therapy. We will update—sorry, we will update the numbers of patients towards the future on a quarterly basis, right, when we get these results. Did I answer your question?

Hartaj Singh (Managing Director)

Yeah. Understood. Yeah. Thank you so much.

Sijmen de Vries (CEO)

All right.

Operator (participant)

Thank you. We will now take our final question for today. Your final question comes from the line of Simon Scholes from First Berlin. Please go ahead.

Simon Scholes (Analyst)

Hello. Thanks for taking my question.

Sijmen de Vries (CEO)

HI, Simon

Simon Scholes (Analyst)

So the exclusivity on Ruconest in the U.S. expires in two years' time, a bit more than two years' time. I'm just wondering what kind of impact, if any, you expect that to have on Ruconest.

Sijmen de Vries (CEO)

Yeah. We expect no impact whatsoever on Ruconest in that respect because we believe that there is nobody that actually is working on or has any appetite to develop the transgenic platform to make a biosimilar for this product, given also that it is, of course, a great product, but it has, in the greater context, not a huge commercial it's not a huge commercial opportunity. So therefore, no, is the answer. No effect. No impact.

Simon Scholes (Analyst)

Okay. And I mean, just to follow up from that, I mean, what's your current thinking on the likely timing of the first gene therapy in HAE? I mean, besides your own product, of course.

Sijmen de Vries (CEO)

I think that will be still a lot of years away. Only the first patients are being tested now. Gene therapy is not the quickest development pathway forward, I would say. But maybe you can say something on that, Anurag?

Anurag Relan (CMO)

No. I think that's it, Simon, that there are some initial results in a small number of patients. But I think this will require the typical development path, phase two, phase three, as well as long-term follow-up, which will take several years at the minimum.

Simon Scholes (Analyst)

Okay. Thanks very much.

Sijmen de Vries (CEO)

Thanks, Simon.

Operator (participant)

Thank you. I will now hand the call back for closing remarks.

Sijmen de Vries (CEO)

Thank you very much. Yes, ladies and gentlemen, thank you for attending our full-year conference. Like I said at the beginning, we laid in 2023, because of our very significant 19% growth in revenues, we laid the foundation and the start of a long trajectory of growth which this company is now embarking on. And of course, that's why we guide this year for additional significant growth for the revenues fueled by, of course, the continued growth expectations for Ruconest and the continued growth of Joenja.

We feel very confident about the fact that we have started now all these systematic efforts to find those patients. The VUS patients, the VUS validation efforts were mentioned. The family testing was mentioned. And of course, the increasing availability of leniolisib ex-US, where through our named patient programs and other early access programs, we expect revenues. And of course, the completion of the clinical trials going forward that will support the approval in Japan in the future. This is, of course, not a 2024 story, as we all understand, because the file will only be ready to be submitted by the end of 2024. We look forward to receiving the regulatory feedback from the various regulatory authorities and expect approvals during 2024.

And we are very, very excited, of course, that we can significantly enlarge the potential of leniolisib with that second indication, PID, with immune dysregulation linked to the PI3K delta signaling to which Anurag alluded, which is a significantly larger opportunity going forward and where we believe there's a very, very strong scientific rationale underpinning the. And of course, not something that we'll report in 2024. But we will be very happy to update you, of course, once this trial has started and once this trial, of course, has the results and hopefully brings us to the next stage in development of leniolisib for that second indication. And that is, ladies and gentlemen, not even the beginning because we are looking at additional opportunities to apply leniolisib in adjacent areas. And more of that, more news that will be coming in the future about our efforts in that respect.

Last but not least, as I was alluding to, we have a very interesting line of sight of opportunities to in-license or do M&A activities for clinical stage opportunities in rare diseases where we are feeling most comfortable to deal in immunology, hematology, respirology, and gastroenterology. Thank you again for attending our conference, our full-year 2023 results conference. We look forward to updating you on the next quarter results sometime in May. Thank you very much. Goodbye.

Operator (participant)

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.