Roivant Sciences Ltd

F:87S

Earnings Call Transcript 2023-Q1

[Operator]

Good morning, ladies and gentlemen, thank you for standing by. Welcome to the Roivant’s First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please note that today’s conference is being recorded.

I will now hand the conference over to your speaker host today, Stephanie Lee. Please go ahead.

[Stephanie Lee, Vice President, Special Projects]

Good morning, and thanks for joining today’s call to review Roivant’s financial results for the company’s first quarter ended June 30, 2023. I’m Stephanie Lee with Roivant.

Presenting today, we have Matt Gline, CEO of Roivant and Mayukh Sukhatme, President and Chief Investment Officer for Roivant. For those dialing in via conference call, you can find the slides being presented today as well as the press release announcing these updates on our IR website at www.investors.roivant.com. We’ll also be providing the current slide numbers as we present to help you follow a along.

I’d like to remind you that we’ll be making certain forward-looking statements during today’s presentation. We strongly encourage you to review the information that we filed with the SEC for more information regarding these forward-looking statements and related risks and uncertainties.

And with that, I’ll turn it over to Matt.

[Matthew Gline, Chief Executive Officer]

Thank you, Stephanie, and thank you, everybody, for joining this morning and for listening. It’s only been a short – actually 6 weeks since our last call, as our last call was for the K. So comparatively a little bit tougher updates, but an exciting – certainly an exciting quarter ended June 30 and a lot to talk about today.

I’m going to give just a brief – a brief sort of update on the state of the business as well as an update on the quarter and VTAMA sales. And then actually, what we’re going to spend the bulk of time on today is we’ve been getting more questions about brepocitinib and we’ve actually got some new data there in Crohn’s disease. So we’re going to share that and talk through again a reminder of sort of how we’re thinking about that program as we approach the lupus data in the back half of the year and more beyond.

And so with that, I’m going to get started just starting on Page 5. As an overall reminder, we continue to be pleased with the progress we’ve made in the business. During the 6/30 quarter, we completed our tenth consecutive positive Phase III trial that was the during – during 1 study, the second study of VTAMA which we continue to be proud of that track record, which has now led to 6 FDA-approved products across Roivant and the Sumitomo collaboration.

As of 6/30, we had just under $1.5 billion in cash on the balance sheet. Which, as we’ve guided before, comfortably funds us into the second half of 2025 with a lot of clinical data, both generated recently and even more coming in the near future. And we’re very proud of our pipeline at this point. We have – we think is among the strongest I&I pipelines with by our estimate, over $15 billion in peak sales potential supported by VTAMA, but also a number of critical first and best-in-class programs behind it.

On Slide 6, and it’s funny because this is a relatively, as I said, a quiet moment. But 2022 has been, and I expect will continue to be an extraordinary year for us as a business. As a reminder, up until now, in addition to continued progress on the VTAMA commercial launch, and we’ll come to that in a second.

We’ve generated positive data in now both large randomized controlled studies, Phase III studies in atopic dermatitis for VTAMA, which, as we’ve said before, we’ll support our filing for additional indication there at the beginning of next year an approval hopefully next year as well. And then we’ve also now put out 2 important data sets 1 in January and 1 in June, demonstrating the efficacy and our overall enthusiasm for RVT-3101 antibody, which obviously has gotten a lot of discussion. That program is obviously one of the most important in our pipeline.

Now we are currently underway with our Phase II Crohn's study and in the midst of preparations for our Phase III study in ulcerative colitis, which we will share more detail on in the near future. Still coming for the year are 2 pretty important events. One, which I expect we’ll get some questions on.

I know Immunovant has spoken a lot about recently, is the upcoming single ascending dose and multiple ascending dose data for IMVT-1402, our next-generation ATF antibodies at Immunovant. Obviously, that data, we think, has the potential to show that we have a a best-in-class program there, and we’re really looking forward to putting it out.

There’s a number of other data sets in our FcRn franchise and sort of more broadly in the FcRn field coming in the near future as well. And then as I mentioned, the topic on which we’ll spend the most time this morning is brepocitinib. We had – that’s our dual inhibitor of TYK2 and JAK1 pride event.

That program has its – what would be 1 of 2 registrational studies in SLE, a Phase IIb study reading out in the fourth quarter of this year. And actually just a lot going on generally there as well, and it’s a program that I think is just starting to get some attention, but it’s really sort of earlier on people’s rate are.

So all of that situates on Slide 7 in our late-stage pipeline, which again, we are very excited about in terms of its breadth and in terms of the importance of many of the mechanisms we’re working on. And again, the remaining programs in that pipeline, like namilumab and RVT-2001 that are earlier stage higher SKU opportunities that we’ll share more about as we get data, which will happen sort of starting at the end of this year with 2001 and beyond within milanab.

So with that, I’m just going to go into a brief update on where we are on VTAMA, starting on Slide 9. So look, we continue to be bluntly very excited about the progress that we are making here. We continue to see monthly scripts increase. We continue to see docs enthusiastic. We continue to hear a lot of enthusiasm for our AD data.

We continue to make payer progress, as I’ll talk about in a moment and continue to see improvements in revenue, which is ultimately the bottom line at the moment. So we’re just very pleased with the growth there. We’ve got now over 11,500 unique prescribers who have written over 200,000 scripts, which is pretty extraordinary for just over a year on the market.

It’s a really strong start from our perspective. On Slide 10, I just want to give a sort of payer update. So we’re up to about 130 million lives covered just a tick under 80% of commercial lives, plus 87 million government lives. This is the kind of coverage we dreamed of having maybe 18 months after our launch, this is really exactly where we need to be from a government perspective. We are on formulary with all 3 of the major PBMs.

So we’re in good shape from a major PBM perspective. We have 4 additional national health plan formularies. We have a bunch of progress across some of the regional and smaller plans. We are integrate place and recovery perspective. And the other thing I’ll say is the significant majority of this coverage obviously has no prior off, that’s a little bit of a red herring in dermatology where very few drugs are true prior off, but most importantly, the majority of it is single set through steroid with a very easy process for that step to be achieved.

And so we feel really good about the strength of our coverage, and we think it’s underpinning successful commercial model. You can see a little bit more about that on Slide 11. We did $16.7 million in net revenues for the quarter, which continues to be a solid progression in growth quarter-on-quarter, feel good about that growth and expect to continue to see it to accelerate with both volume and gross net improvements in the future.

Gross to net was a hair better, 26% yield over the last quarter. We had pulled, as we said on the prior call, some of the GTN improvements from this quarter to the June 30 quarter back into the 3/31 quarter with some earlier formulary additions.

So I expect CGTN to progress sort of linearly on the trend line over the course of the year, and I expect to end this fiscal year, call it in the mid- to high 30s from a yield perspective and still believe very comfortably we’ll be on a trajectory to get to that 50% yield that we and others have guided to as we progress.

So the contracting and sort of other payer progression is all sort of moving exactly in the direction we needed to, and we think we’re in a good shape from a GTN perspective, so that’s about it on VTAMA for now. I’m sure we’ll get some more questions.

Look, I think the continued progress there is is exciting to us, and we’re excited about all the feedback we’re getting, we believe script volumes will continue to increase over the course of this year, especially as our now live DTC campaigns begin to have an impact on volumes. And we’re really also looking forward to getting going in AD next year, which is, as you may remember, a about 4x larger market opportunity where we have some truly exciting and highly differentiated data.

So with that, I’m going to turn it over in just a moment to Mayukh, who is going to do a relatively deep dive here on brepocitinib, RDUinhibitor PK2 and JAK1. And I think it’s a program that that has been high on our minds, but a little bit below the line for others just because of everything else going on in our pipeline. But it’s a really exciting program. It’s a very potent agent, which continues to demonstrate strong clinical efficacy.

And one of the many reasons we’re highlighting it today, which may well talk about as we generated some data Pfizer had an ongoing study in Crohn’s disease that’s read out and once again, the agent has shown great promise in another clinical study. We are unlikely, as you know, to progress it in Crohn’s disease. But nonetheless, really excited about the data there and what it means for what we’re going to do in some of these other places.

So with that, let me hand it over to Mayukh to take it away, starting on Slide 13.

[Mayukh Sukhatme, President and Chief Investment Officer]

Yes. Thanks, Matt. Yes – so yes, please turn to Slide 13.

So as Matt said, I want to take the opportunity to talk a little bit about one of, I think, what I consider one of the sleeping giants within our portfolio. To the extent that brepocitinib is going to get some notice for investors, I think it’s mostly through the lens of being a pivotal study catalyst for Roivant by the end of this year. And while that is true, we do have the lupus data later this year. I think the lupus story is just a small part of what we’re trying to build with brepocitinib. And so I want to go through that story of fresh here today, the punch line, from my perspective, is don’t sweat on brepocitinib.

So put simply, brepocitinib is a unique, highly, highly active dual inhibitor of both TYK2 and JAK1 that has already shown spectacular efficacy in a broad range of auto immune diseases. So as Matt said, we’re reporting here for the first time the sixth consecutive positive Phase II study for brepocitinib this time in Crohn’s disease, which is a study that is being run by Pfizer and [indiscernible] expense. And that adds to the string of positive Phase II studies already reported, now covering as you see here on the slide, psoriasis, alopecia, toric arthritis, ulcerative colitis, hidradenitis to pertiva and nacho disease.

And we’ll go through the rest of the material on this slide in greater detail later, but we think that we really have the potential to become the leading oral therapy and loop given the dual inhibition of TYK2 and JAK1 should provide greater efficacy than inhibition of either one alone. That is a large global study that is designed to serve as 1 of 2 registrational studies. And importantly, it is a 52-week study with a 52-week primary endpoint, which is the registrational endpoint that has historically been the most predictive of future studies.

Our ongoing single Phase III study in dermatomyositis, which will serve as the basis of an NDA filing shortly asset data, is coming up, to the extent that it now seems a little far off. I think as we round out the year and are sitting in the first half of 2024, it will come into focus as a near-term catalyst ever. And that’s just the beginning for this program.

So we think that, that unique dual mechanism and high demonstrated efficacy of brepocitinib really creates the pipeline and a product approach where we can own a series of specialty rheumatology indications, each of which has high unmet need and blockbuster revenue potential for brepocitinib, and we’ll show that in the coming slides. And then finally, we have a long IP runway here with protection to at least 2039.

Please turn to Slide 14. So as many of you know, the JAK family consists of 4 IsoPol JAK1, JAK2, JAK3 and TYK2. The JAK family inhibition has proven over the past several years to be an enormously powerful mechanism for treating a wide spectrum of autoimmune disease.

While the field has accumulated approval starting in rheumatology and moving on to a [indiscernible] as you see across the top, the underlying biology often remains complex and stubernly irreducible. Soon here is a simplified schematic detailing a number of key cytokines that have been shown to drive pathobiology of autoimmune disease along with the key JAK isoforms responsible for mediating those signaling pathway.

While early JAK inhibitors were relatively nonselective more recently in the field has trended towards more specific inhibitors with JAK1 having the broadest applicability and therefore, unsurprisingly, the first to be explored. You can see here in the dark blue band across the middle or JAK1 inhibitors such as RINVOQ and the cytokines that are most directly impacted. Notably, selective JAK1 inhibitors are able as a press signaling of IL-6 and interferon gamma, two important cytokines linked to autoimmunity that are not suppressed to selective inhibition.

Now the TYK2 selective inhibitors, such as the TYK2 now coming out of the scene in a particular set of indications. They cover a different set of cytokines, which you can see in the light blue on the right. Key among these are IL-12 and 23. The latter of which drives the differentiation and activation of Th17 cells and downstream IL-17 reduction, a key pathogenic driver of many auto immune diseases.

Now both JAK1 and TYK2 approaches are accumulating a track record of meaningful clinical benefit and commercial success across a range of disease. RINVOQ is already approaching $1 billion from net revenue per quarter, and Sotyktu also projected to be a multibillion-dollar product. But in spite of their many successes, both of these medicines also have their limitations. Sotyktu, for instance, failed outright in both ulcerative colitis and crowns, while RINVOQ has produced lackluster Phase II data in both lupus and NHI.

We see this at least in part connected to the underlying bio. While some disease may be well treatable by selective JAK1 or TYK2 inhibition loan, many others involve multiple inflammatory pathways and may require intervention across multiple orthogonal [indiscernible] to see maximum effect or maybe even to see a meaningful effect at all. The latter is especially true for heterogeneous highly inflammatory diseases, which have high patient burden for clinically meaningful efficacy to date and limited.

So that’s what drove our original high pots at Roivant, that the field in its current state may not be slowly maximizing the power of JAK inhibition that efficacy might be getting left on the table in certain indications with highly specific TYK2 or JAK1 inhibitors. So in our search for the right molecule to prove out this hypothesis, we unsurprisingly ended up partnering with Pfizer, probably the company with the longest history and deepest experience with JAKs in the industry.

In brepocitinib, we found a highly active, safe and well-characterized molecule with a novel mechanism perfectly suited for what we are looking to do. Simultaneous inhibition of both TYK2 and JAK1, which we can uniquely accomplish with brepocitinib creates 2 distinct opportunities to deliver differentiated efficacy. For diseases driven largely by Type 1 interferon signaling that is to say interferon alpha and beta, a dual hit on both sides of the heterodimer shown in the bottom in page, second from the right and schematic on the slide.

May allow for greater suppression and thus potentially greater efficacy as compared to hitting TYK2 or JAK1 alone. And second, diseases with broad cytokine involvement that include, for instance, to IL-6 and B-cell pathways on 1 hand, and IL-12/23 and the IL-17 access on the other may actually be treatable with brepocitinib in a way that would not be possible to either JAK1 or TYK2 inhibition. So that’s the core hypothesis stated in the bottom line. Brepocitinib will deliver best-in-class efficacy in indications mediated by the TYK2 JAK1 diver and in diseases requiring broad cytokine coverage.

Please turn to Slide 15. So what concretely drove our excitement of brepocitinib? So to start, when we looked at a series of standard cytokine inhibition assays, we saw exactly what we hope to see.

So shown here are the results of studies run internally at 5. The left battle looks at type 1 interferon signaling, a key driver across multiple autoimmune diseases and one where both TYK2 and JAK1 inhibition would be expected to have an effect. That’s exactly what you see experimentally with NICE inhibition by the leading pure JAK1 inhibitor and NICE inhibition by the leading 2 inhibitor.

And then importantly, Pfizer’s experimental data showed that brepocitinib is able to suppress type 1 interferon signaling as well as or potentially even better than either RINVOQ or Sotyktu. This is exactly what would have been predicted in the prior slide. We are benefiting from the double hit and thus achieving a greater inhibition of type 1 or brand signal.

On the right, we show 2 other critical cytokine drivers. So on the top right, we see Type 2 interferon, interferon gamma, which is mediated by JAK1 but not by TYK2. So the pattern of inhibition is again, what you’d expect. You see that RINVOQ and brepocitinib, which both inhibit JAK 1 have a relatively higher degree of inhibition of interferon gamma compared to a selective TYK2 specific inhibitor Sotyktu.

And then on the bottom right, you see the opposite performance from the single isoform drugs on a cytokine inhibition assay for IL-12 and 23, both of which are TYK2 and not JAK1 median. Here you see a nice inhibition by the Sotyktu, the TYK2 inhibitor, while the action of RINVOQ is much more modest. Again, that’s exactly what we’d expect based on the schematic we showed in the prior slide. And again, we see that brepocitinib is a very, very unique TYK2 mediated cytokine outperforming to TYK2 in this asset.

The conclusions here, let’s at the bottom. On the left, you can see the brepocitinib should achieve greater type 1 interference suppression and as possible by targeting either TYK2 or JAK1 alone by virtue of the dual hit. And on the right, brepocitinib can reach sufitulate in a single molecule for cytokine suppression profile of both the leading TYK2 agent and the leading JAK1.

Please turn to Slide 16. That cytokine vision experimental data has translated well into a string of Phase II data readouts to date. As you can see, oral brepocitinib has demonstrated an extremely consistent pattern of meaningful clinical efficacy in every single indication tested.

Efficacy results for alopecia, caricarthritis, ulcerative colitis, psoriasis and HS were all statistically significant and consistent with as good or better than any other small molecule inhibitor. The HS data, which I’ll cover later, was a relatively recent readout that occurred subsequent to our taking over the drug from Pfizer.

We’re also excited to be reporting today the induction results of a large global Phase II Crohn study run by Pfizer. So I’ll provide some additional details in the following slide. Finally, we have another major benefit in the clinical package for brepocitinib. We know what we have on safety as well. So we know that stacking both TYK2 inhibition and JAK1 inhibition does not apparently lead to a safety profile that undercuts the efficacy advantages that we hope to show.

Our extensive safety database now consists of over 1,400 patients exposed across 20 different Phase I and Phase II clinical studies for up to 64 weeks. And what we’ve seen is a well-characterized safety profile in line with approved JAK family inhibitors.

Please turn to Slide 17. So we’re pleased to report today the top line results from the induction portion of a Phase II study with repository Crohn’s disease. This is 151 patient global Phase II study. The primary endpoint was the SES CD50 and the key secondary endpoint was the clinical remission rate at week 12, defined as a proportion of patients who achieved a CDAI of less than 150 both endpoints were highly initially significant.

We think that actually the true efficacy might have been understated on the SES-CD50 in the study as there ended up being a slight imbalance in baseline severity between the arms which made it harder to achieve that endpoint for the drug arm.

That imbalance would not have an impact on the secondary end point since the way that, that endpoint is calculated only takes into account patients to start with a baseline CDAI of greater than or equal to 220. The point line here is that this is a trial that I’m sure it wasn’t on any investor’s radar and yet has delivered really strong efficacy.

In fact, that 33.5% placebo-adjusted delta on clinical remission, which is used as a co-primary endpoint in registrational studies and is particularly important for prescribers is, in fact, the highest seen in the late-stage study from any drug oral or biologic to date.

Please turn to Slide 18. So we find ourselves in an enviable position. So we have a highly efficacious molecule that has strong biologic and clinical translation in a variety of large market indications. There are lots of things that we could do with brepocitinib, but our vision with brepocitinib from the start was to really focus on those indications where we could deliver a step function improvement in outcomes for patients, generating maximum impact for patients and maximum return for our investors.

To that end, we ask ourselves what are the disease indications where the unique properties of brepocitinib really shine. For us, that came down to a few simple considerations laid out on the left side of the slide. So in the light blue and moving clockwise, the first where is inhibition of both TYK2 and JAK1 required for maximal efficacy.

Here we look for biologic rationale for dual TYK2 JAK1 inhibition and corresponding clinical validation. Second, in dark flu, which indications have extremely high morbidity and mortality, creating a need for novel therapies that provide a meaningful efficacy benefit. And third, in pink because the indication has few available treatments, including no approved oral therapies.

And finally, of course, we need to be confident that we could run an efficient experiment, minimizing development and regulatory risk. Put those together, and we think that there’s an opportunity for brepocitinib to become a leading treatment option in a series of large and uncoded markets. The next two slides will go into more detail on the [indiscernible]. But remember, that’s just the beginning.

Please turn to Slide 19. Dermatomyositis is a large orphan indication with a very similar profile to indications like PAH and cystic fibrosis where oral small molecules have become $1 billion plus products. Over the past 30 years, dermatomyositis has become much better understood and characterized in the medical community, an increasing disease awareness and diagnosis has led to higher incidents and proven estimates over time.

We’ve done our own analysis with claims data from 2016 to 2020 and estimate that the U.S. adult pavilion sits at 37,000 patients, consistent with recently file estimates as well. So we’re looking at a patient population that is already clearly in the large orphan category. This is not an ultrarare indication. And as awareness and diagnosis of the disease continues to increase we expect the number of patients to grow over time.

For an autoimmune disease of acting this many patients, dermatomyositis presents a strikingly high disease burden. There is high mortality with some estimates of up to 40% at 5 years. The characteristic skin rash is shown on the right, cover large percentages of the body and lead to significant pain in addition to disfigurement. The vast majority of patients also suffer from proximal muscle weakness, which can severely impact daily living activity. Many patients end up meeting walkers or wheelchairs. Finally, a meaningful proportion of patients suffer from intertial lung disease.

In sum, this is a high mortality, highly inflammatory disease which covers multiple organ systems and will evolve into a large commercial market. On top of that, there have been no NCEs approved in the past 60 years, and there are no oral therapies in industry-sponsored late-stage development.

Steroids, ISTs and IVIGs have been used in for many years, with the latter recently gaining formal approval. But again, there is not a single modern drug approved for the indication and the current treatment options present high safety and convenience burdens in addition to limited benefit. IVIG, for instance, requires multi-hour infusions for 3 or more days every month and is associated with side effects, including quite a high rate of thrombotic events.

So we really CDM as one of the major unmet needs in all of autoimmune disease and an opportunity for a modern targeted therapy, particularly in Oral one to enter the market and rapidly become a blockbuster products. And while a number of companies are exploring small proof-of-concept studies, there are very few drugs in late-stage development and no oral therapies in Phase III, other than brepocitinib.

So looking ahead to a product launch of brepo in this market in just 3 years, we think this has the potential to become a material commercial driver for Roivant as we think about the overall sales across our pipeline over the next 5-plus years.

Please turn to Slide 20. We also see this as an indication where the case success for Bret is very high. With no modern medicines approved for DM, the physicians often experiment with various different therapies to add on to corticosterone, as a result, to investigator-initiated studies in an extensive body of case report. There is meaningful clinical validation for JAK1 inhibition in DM. This aligns with the pathobiology of the disease which is driven in large part by type 1 and type 2 interferon signal.

Given no other JAK1 inhibitors are approved or an industry-sponsored development for DM, even if REPO just matched this level of efficacy that was set us up well for clear commercial success but there’s also reason to believe that the addition of TYK2 inhibition can further add to the benefit that brepocitinib will provide, both to enhance potency of type 1 interferon suppression.

As well as through suppression of IL-12 and 23, which are also involved in pathobiology. Please turn to Slide 21. Given the high unmet need in our high competence poor success, we took the bold step of moving directly into a Phase III program that involves a single registrational study.

Our expectation is that this study, if successful, would support an NDA filing for brepocitinib in DM. The single Phase III study is already well underway, tracking to complete enrollment in 2024 with data and a potential NDA filing in 2025. This time line has us clearly positioned to be the first oral to market by potentially several years and likely also ahead of a few biologics and later stage development.

One idiosyncratic consequence of our decision to move directly into Phase III, is it means that our next catalyst in DM won’t be coming until 2025. But that catalyst could be a major inflection point for Roivant a business. with a potential $1 billion-plus product line immediately to fall.

And given this launch would be in an orphan indication with a specialized prescriber base, we would expect the revenue ramp to be significantly steeper than for a volume product like VTAMA. So as you think about modeling P&L over the next 5 years and beyond, we think this is a major first additional value that investors right now may be underappreciated.

Please turn to Slide 22. DM is the first of many orphan indications where we see a similar opportunity for brepocitinib not talk about a few more of those in a bit. But first, I want to talk to the other indication where we have an ongoing pivotal study where we do have a major catalyst coming up later this year, and that’s lupus.

So lupus is a disease that everyone does well in that and is one that’s gotten an increasing amount of attention from industry in recent years. Hundreds of thousands of patients suffer from lupus in the U.S., many with serious and defeating disease.

Only two therapies have approved – been approved in the past 20 years, both injectables and as a sign of how desperate the field is for occupancy, Enlist is doing greater than $1.4 billion in U.S. revenue despite very modest efficacy at between 9% to 14% placebo-adjusted SRI-4 and SEFNELO, which launched recently is projected to be a $1 billion-plus product despite mixed Phase III data. One study didn’t show fiscal consistence while the other showed about 18% placebo-adjusted SRI 4.

Please turn to Slide 23. The limited options reflect an unfortunate reality everyone no Well, lupus is simply a very challenging disease to treat. It’s highly heterogeneous with multiple interconnected inflammatory pathways, acting on T cells, B cells and interferon signaling and multiple impacted organ systems. To date, most attempts to treat me this involve a molecule acting predominantly across 1 of these 3 acts.

Enlist, for example, deplete B cells, while Senal suppresses interferon signal. Both have generated meaningful but ultimately somewhat modest efficacy. And of course, there’s a long history of sale attempts at individual cytokine inhibition, indicating bitocytokine suppression diseases as well.

Through JUUL, TYK2 and JAK1 inhibition, brepocitinib is distinctively optimized to address all 3 axis simultaneously. TYK2 modulate T selected IL-12 and the IL-17 A17-axis to IL-23. The JAK1 arm migrates B-cell activity to IL-6, IL-7 and IL-21 and both are enforced together to maximum suppress pathogenic type in or Ceron signal.

Please turn to Slide 24. Over the past 18 months, we’ve had readouts from 3 JAK inhibitors in lupus, including Phase III data from illumin, a JAK1, 2 inhibitor Phase II data from LINGO, the JAK inhibitor and Phase II data from Sotyktu TYK2 inhibitor. These data provide clinical evidence for the therapeutic relevance of each of JAK1 and TYK2, respectively.

In lupus and as such, increased our confidence in brepocitinib’s positive effect. At the same time, none of these molecules have demonstrated particularly some selling benefit with the high water mark so far being Sotyktu to if you blooded across and roughly the mid-teens placebo-adjusted.

This is what we might expect, given that unlike brepocitinib, none of these molecules directly targets all 3 inflammatory actives and lupus. So we are cautiously optimistic that through dual 62 and JAK1 inhibition brepocitinib can deliver greater efficacy benefit than we’ve seen from these other oral therapies and become the leading oral therapy for patients and physicians.

Please turn to Slide 25. We continue to expect top line results from our ongoing study of brepocitinib in lupus in the fourth quarter of this year. As we’ve stated in previous earnings calls, this is a large global study using the registrational 52 we primary endpoint and as such, it is designed to serve as 1 of the 2 registrational cities. In the event of a positive outcome, we would expect to rapidly initiate a second confirmatory registrational study.

I do want to emphasize that while we’re cautiously optimistic that brepocitinib can deliver data that will position it as the leading oral therapy in lupus, our confidence in the project success here is not as high as in dermatomyositis.

We feel rock solid that we are hitting the pathways that matter, but we, as an industry, have had mixed success in proving out efficacy and regulatory end points such as SRI Lupus is just a challenging indication in that respect. And it was not the core bet that we underwrote when we in-licensed refract.

That bed rather is the opportunity in dermatomyositis in the string of other large orpediations potentially fall and given the 6 successful Phase III placebo-controlled studies we had to date, our enthusiasm about brepocitinib in these other indications will remain irrespective of our results in lupus.

Please turn to Slide 26. Turning now to these other indications. I just want to highlight 2 in addition to dermatomyositis where we have a rapid potential path to market with launches that could follow closely behind DM.

A couple to highlight here are noninfectious guidance or NIU NHS.

Please turn to Slide 27. NIU, like dermatomyositis is a large orphan indication with a very high disease burden with approximately 30,000 cases of legal blindness attributable to NIE each year. Unlike DM, there is one approved targeted therapy, HUMIRA which has generated over $0.5 billion per year in sales despite limited efficacy and almost no indication specific promotions.

The development stages competitive landscape in IU is even more wide open than in DM with no ongoing Phase III studies at this time for any oral or biologic an efficacious oral therapy could easily match HUMIRA’s peak sales in this indication and with sufficiently compelling data, we could potentially do significantly more.

Please turn to Slide 28. As with CM, we also have clinical validation of JAK1 inhibition and NIU. Before filgotinib development was discontinued in the U.S., it has generated Phase II data in NIU suggesting JAK1 inhibition may be more efficacious than TNF alpha suppression by HUMIRA. However, the extent and robustness of clinical validation of JAK1 inhibition in NIU is not quite as great as in DM. And so in this indication, rather than moving straight to Phase III, we are conducting a quick proof of concept to.

This study also ensues dose ranging that would make a potential pivotal study even more efficient. We’re excited to report that this study is now fully enrolled with top line data expected in the first quarter of 2024.

Please turn to Slide 29. HS follows a similar pattern to DM and NIU, a highly debilitating disease with a large orphan prevalence increasing over time through increased diagnosis and awareness. Here too, HUMIRA is the only approved targeted therapy with indication-specific sales of approximately $3 billion per year, again, despite limited efficacy and limited indications to stick promotion.

Please turn to Slide 30. Unlike DM and NIU, HS does have other oral therapies in later-stage development, specifically 2 JAK1 inhibitors. As you can see on this slide, the pace recently generated by brepocitinib is great and placebo-adjusted benefit than that seen from either of these molecules.

Brepocitinib benefit observed in Phase II also surpasses the 42% growth and 16% placebo-adjusted benefit in its Samira Phase III program. Notably, brepocitinib benefit was robust. It caused both TNF naive and TNF refractory patients and was generated despite the study being heavily impacted by COVID-related discontinuation.

In fact, the placebo-adjusted benefit among completers was actually 27%, suggesting an opportunity to potentially demonstrate even greater benefit in Phase III than Phase II. This is further supported by HS pathobiology, which involves not only JAK1 mediated inflammatory pathways, but also the clinically validated IL-23 17 axis which is suppressed by TYK2 inhibition, but not JAK1 inhibition.

Please turn to Slide 31. So I hope I’ve been able to convey in some small part, how excited we are about the potential for brepocitinib. It’s a highly active molecule with a unique mechanism of action and long patent life that sets us up to potentially create the leading oral specialty autoimmune franchise in the pharmaceutical industry. Here on this slide, you see how this pipeline and a product will build in the coming years.

The successful lupus readout later this year clearly tees up a multibillion-dollar commercial opportunity in business alone. But even without lupus, we have a rapid derisk path to $1 billion-plus commercial launch in DM with full enrollment of our pivotal study coming next year, data in 2025 and a potential product launch in 2026. And then there’s a rapid pipeline of other large orphan indications to follow, each with blockbuster potential, a pivotal program in HS and NIU or both could be initiated in 2024. And we have other large orphan indications to follow with potential proof-of-concept studies planned for 2024.

With that, I’d like to thank Ben Zimmer and the rest of the private team for all their work on brepocitinib so far and of course, to our colleagues at Pfizer for both partnering with us on this program, and of course, for all their work in discovering the compound and generating this really rich data set. And I’d also like to thank all the investigators, site personnel and importantly to patients who participate in these trials as well. And with that, I’ll turn it back over to Matt.

[Matthew Gline, Chief Executive Officer]

Thanks, May. Appreciate it. And obviously, thank you for that a deep dive into the program. some questions we’ve added, but I also just want to set people up for the months and frankly, years ahead with it. So looking forward to more there. I’m going to go very quickly through the rest here and then open up for Q&A in just a minute or two.

Starting with – on Slides 34 and 35. While we’re not going to spend any time today on the C18 data, it occurred to me as we were finalizing this presentation, the June 30 quarter was the quarter in which we had generated the 36-week maintenance data that it felt – it felt we were not to at least add to that extraordinary data set. So we’ve had a couple of calls on that topic so far.

The TL1A program is an incredibly exciting opportunity. And we continue to look at the state and find new things to like about it, including the continued improvement into 56 weeks and some of the things that set us up really well for the Phase III program. So more on that to come.

As a reminder, on Slide 36, we are now underway, including first patient dose with our Phase II study in Crohn’s. The goal here is to get, as I’ve said before, dose ranging out of the way prior to beginning Phase III in a way where when we look at all of these time lines and stacking together, we think we still have an opportunity to be effectively first-in-class in Crohn’s disease by going quickly from this study – into a Phase III study in Crohn’s. So we’re very excited about the opportunity for TL1A in Crohn’s in addition to UC and look forward to sharing more data next year when the study concludes.

And then lastly, on the late-stage portfolio on Slide 37. I talked about this a little bit at the beginning. Obviously, we collectively likely to minivans are going to have an opportunity to get back together in the next couple of months to talk about updates on our FcRn franchise.

Most notably, we are expecting imminently within the next – I think unmanned September for the single-ascending dose data in October, November for the multiple sending dose data. Data that we think will validate the best-in-class potential for INVD1402 or our next-generation anti-FcRn.

As a reminder, the hope there is to show that we can continue to suppress IgG to a best-in-class level while also avoiding the impacts on albumin and LDL that have been seen with etokimab. It’s been a busy year for the FcRn field.

And the other thing I’ll point out is that we just recently saw data from a competitor efgartigimod in CIDP, which was really great data that both continue to underpin and validate the SGR mechanism. It’s now worked – basically everywhere, it’s been studied and showed a potential in a new market, including 1 where we have an ongoing Phase IIb study of a relatively similar design to the one that just read out, we’ll have some top line data from that study.

Next year, and then the last thing I wanted to briefly shine a spotlight on to on Slide 38 is just we continue to make progress on our various discovery efforts. I’ve got a slide here on Vanti, which is a rapidly progressing effort that we have to use certain advanced machine learning techniques, specifically on induced proximity and protein degradation.

One note here, we had previously had a number of efforts in this area, including one at Protevance, we’ve now effectively collapsed the protease proximity effort into Vanti and have sold the balance of our Protein shares to our partner SK. And so Van is now the sort of instantiation of our principal bed at Rosendin base proximity and protein degradation, and we are really excited with the early progress there, including some great hiring.

Notably, we’ve now got Michael Bronstein, as anti scientist. He’s one of the – really the lions in the field of molecular modeling using machine learning. And so we’re really excited to have him on board and some other great hires there as well, but we’ll talk more about soon. Real progress coming, and we’ll get back on the phone as we’ve got data to share, but keep an eye on this space as it were.

So I’ll wrap up very quickly on Slide 40 with brief financial update. Financial picture continues to evolve as we expected. Revenues and so on, we’ve talked about cash, most notably good into the second half of 2025, as we had discussed before and continuing to keep an eye on that and on managing it across our portfolio with various opportunities coming soon.

So with that, I will – I’ll stop. Slide 42 is the catalyst map. We’ve talked about some, but not all of these things coming and just an exciting balance to 2022 ahead – sorry 2023 ahead. So I’ll say thank you to, Mayukh, to the team and to everybody, including patients and investigators who help make this quarter what it was.

And I will turn it over to the operator to open the line for Q&A. Thank you, everybody.

[Operator]

[Operator Instructions] Now, first question coming from the line of Brian Chen with JPMorgan. Your line is open.

[Brian Chen, JPMorgan]

Hey, guys, thanks for taking my question this morning and walk through on Brepo. Maybe first on Brepo. Given what we saw from other JAKs in SLE specifically, – how confident are you that Brepo can perform better than Ducros specifically in SLE. Is there anything that you would want to flag from the baseline characteristics in the ongoing Phase II design to ensure that you can show the differentiation and also make sure the placebo rate low. Then I have a follow-up.

[Matthew Gline, Chief Executive Officer]

Yes. Thanks, Brian. And maybe I’ll take one second to that question and then also hand it over to Mayukh, to see if he’s got further comments. Look, I think in terms of the confidence in SLA, and I think you heard Mayukh said, on the one hand, I think there’s a strong biological rationale that hitting both TYK2 and JAK1 should provide a meaningful benefit.

And so I think that’s – that’s an important point. And then I think the second important point is understanding the bar correctly. And I think if you look closely at the Duke data, look, I’m not going to say Duke is not an impressive agent. But really, I think the way to read that data is probably sort of mid-teens blended efficacy. And I think if you look at the 3-milligram dose where they showed something more impressive in that I think there was a pretty significant sort of patient population imbalance that suggests to us that the mid-teens is really the bar to beat.

As far as the baseline characteristics, I think, first of all, as a reminder, this is a study that Pfizer designed and run. We think it’s a pretty well-designed study, and we’ve been watching it closely. There were certain things that we didn’t control. And as Mayukh mentioned, with lupus is a scary indication for trial execution.

But we feel, overall, pretty good. And I think that our study design, for example, was designed to try and flag some more severe baseline criteria, which has historically correlated with success, but we’ll obviously see how that plays out later this fall. Mayukh anything to add to that?

[Mayukh Sukhatme, President and Chief Investment Officer]

No, no. Not really so Matt, I think you nailed all the points or to make.

[Brian Chen, JPMorgan]

And maybe just one more follow-up on Immunovant 1402 data coming up next next month. Just to prep us for the top line coming up. Can you walk us through how we should gauge the profile at top line in terms of one IgG supression compared to etokimab and Far and more importantly, the impact on albumin and LTL, given the potential variability in the LDL assay.

[Matthew Gline, Chief Executive Officer]

Yes thanks, Brian. Great question. Obviously, when we’re getting a lot right now, and I’m sure Immunovant getting a lot too. I think Immunovant spoken a fair amount on this point publicly. I think the – on IgG suppression Look, we believe we have an equivalently potent molecule here, and we’d like to see equivalently deep IgG suppression as a short answer. Remember, comparing apples-to-apples versus as close as we’ve got equivalent time points and things like that.

But in general, I think we’d like to see really the same level of deep energy suppression and certainly, we’d like to feel like we’re going to be able to supress ITG comfortably deeper than efgartigimod can. So that’s on the IgG suppression points. On albumin and LDL, obviously, there’s a lot of speculation and discussion on this point. The facts are that the variability of the albumin assay is about 5% and the variability of the LDL assay is 10-plus percent.

And so I think within first fractionation with relatively small studies, you want to be comfortably within both of those smaller is generally better. And my sense is that if the albumin impact in the SAD is relatively modest, that the LDL will follow and because of the variability in the LDL, it will be easier to see – you’ve got a few weeks of compounding data after multiple injections.

So I’m mostly looking to the albumin in the SAD data. I haven’t seen really any of this yet, so I can’t say what it’s going to look like, but that’s what I’m keeping my eye out for.

[Brian Chen, JPMorgan]

Thanks, Matt. Thanks, Mayukh.

[Operator]

Thank you. [Operator Instructions] And our next question coming from the line of David Risinger with Leerink. Your line is open.

[David Risinger, Leerink]

Good morning. Thanks very much, Matt and team, for all the updates. So I have questions for both Matt and Mayukh. Matt, could you provide an update on the evaluation of potential monetization of assets and also provide an update on the pursuit of new product acquisition opportunities. And then I’ll pause and follow up with a question or 2 for Mayukh.

[Matthew Gline, Chief Executive Officer]

I appreciate it. And I figured we would get some version of that first question. Look, I think we are in a privileged moment in terms of the amount of clinical data we have generated and will generate soon. That data is both deeply informative to our own strategic future and also exciting to potential partners, acquirers and so on. And it’s flattering to be the focus of attention. It’s made me wonder a little bit how exactly public speculation happens. But anyway, flattering.

Look, I think the short answer is on the monetization side, we’re value-oriented, and we’re going to have to make these decisions carefully, knowing that a number of our late-stage programs are really rare opportunities with huge potential. And so we don’t take any decision on them in either direction lately with the dollar sums at hand being very large and the unit for patients being very large.

Certainly, I wouldn’t expect us to make any decisions of substance on this point until we started to get some of the Immunovant data in just because that’s a pretty important strategic catalyst for us as we think through what the future of Roivant could look like across the rest of our portfolio.

On the new opportunity side, I will hand that over to Mayukh actually. But I guess the one thing I’ll say is this has been a phenomenal asset sourcing opportunity environment for us. Obviously, a year ago today, we would not have been talking about PLA. We also wouldn’t have been talking about IMVT-1402.

We hope we’ve proven that we see some pretty interesting and unique things and that we can bring them in. And I’ll say we’ve got things on our racket right now. that are just as exciting to me bluntly is anything in our late-stage portfolio. And I hope we can convert some of those. And the next year, we’ll be talking about them as well. But Mayukh, anything you’d add to that?

[Mayukh Sukhatme, President and Chief Investment Officer]

Not really, Dave. I mean, look, I think that this is – as Matt said, this has got a our sort of normal course of business to be out there looking for new and high-value things. I think that work is ongoing. I feel really good about, as Matt said, things that are rated. Stay tuned.

[David Risinger, Leerink]

And then just a follow-up. So Mayukh, thanks for providing the comprehensive vision for brepocitinib. Could you discuss the decision not to pursue a number of indications despite compelling results, including Crohn’s and then if you could also discuss Sotyktu’s inverse dose response in SLE and whether there are any potential implications for Brepo in SLE or no?

[Matthew Gline, Chief Executive Officer]

Sorry, I missed just the last part of that question, Dave.

[David Risinger, Leerink]

So yes. So on the last part, the slide shows an inverse dose response for Sotyktu-NSLE. So as the dosing went up for Sotyktu, the efficacy went down – just wanted to see if you had any comments on that and whether there may or may not be implications for REPO as a dual agent in SLE as it’s dosed up. And as I understand it, you’re testing 15, 30 and 45-milligram doses.

[Mayukh Sukhatme, President and Chief Investment Officer]

That’s right. Matt, do you want to take the indication question?

[Matthew Gline, Chief Executive Officer]

Yes, sure. I mean, look, I think, Dave, it comes down to – and this was sort of the inherent thesis in REPO as well. I think at the moment that we acquired Replfrom-Pfizer, it was sort of just in the thick of the sort of turning point on JAK inhibitors because of labeling.

And I think our view has been in the face of very compelling data, as you point out, in Crohn’s and a number of these other indications, that the competitive landscape there is such that the JAK labeling may be a disadvantage difficult to develop through. I think if you take Crohn’s, for example, I think that’s an interesting question in the sense that clearly, as we continue to study RINVOQ in IBD pretty aggressively and also the Aster TYK2 have struggled a little bit there.

So I think we’ll get some more data on that later. I think we’ll continue to reevaluate those questions. That said, I’d say the other thing about our view is, I think with the data that, frankly, the TL1A class is putting out in IBD, we’re not sure exactly where Jack will fit in the future treatment paradigm understanding the obvious benefits of being oral.

But anyway, look, I think the affirmative bet we’re making here is that orphan indications where the Jack liabilities won’t be a problem with the unmet need is highest is sort of the place where it makes the most sense for us to pursue for us to pursue REPO.

[Mayukh Sukhatme, President and Chief Investment Officer]

Yes. I mean I think just to add to that. Look, I think we’re always going to be, I think, kind of dynamic in our evaluation and really sort of this sort of comes down to you in a certain sense, an embarrassment of riches in terms of just the clinical data set and the breadth of potential indications we can go after.

I think as Matt said and articulated on the call, our sort of primary thrust as it were is in the orphan indications for which I think we feel like our ability to separate versus other options as great as the competitive intensity is leased, et cetera, and that certain really allows us to kind of have this specialty rheumatology and in that area for ourselves. And so I think we’ve got a lot of different – different options here.

And then I think you conceptualize over the next couple of data sets that we get in both lupus and NIU and the DM coming right at And term you question on Sotyktu. So look, I mean, I think obviously, this is sort of the – the sort of the inherent sort of uncertainty is around just relatively small and point estimates as well as just sort of lupus clinical trial readouts generally.

I think that our own view is that there’s not not really likely – the truth is not an inverted dose response in that Sotyktu study. I think there are reasons to believe that in essence this could be like a little bit of a reflection of just like slight imbalances imbalances between the various doses.

So for example, we think that the 3-milligram BID on the one that produced sort of highest print head more subjects receiving sort of triple combination standard of care baseline compared to other arms and then the 12-milligram once daily arm had higher dropout rates, et cetera.

And ultimately, if you look through sort of Sotyktu just generally, it seems like they’re quite close to saturation at the 3 mgs – there’s not really kind of like a true reason to believe that they’re sort of more juice in there at the higher basis. And then finally, it seems like mid-teens kind of blended across these 3 values – it seems to be consistent with how Bristol themselves seem to be powering a Phase III as well.

[David Risinger, Leerink]

Got it. Thanks very much.

[Matthew Gline, Chief Executive Officer]

Thanks, Dave. I appreciate your questions.

[Operator]

Thank you. And our next question coming from the line of Robyn Karnauskas with Truist Securities. Your line is open.

[Robyn Karnauskas, Truist Securities]

Hi, guys, and thanks, Mauk, for doing all the work for me on lupus and Brepo, a fantastic presentation. A question on capital allocation. First, just on Brepo. When you think about how – whether it’s spend more on these orphan drug indications, can you just remind us of the Pfizer agreement? And how much they – if there’s anything to contribute and then bigger picture, you talked about making capital decisions after seeing at least initially some of the data from 1402.

And you’ve got so many moving parts just this year and next year with many drugs and decisions you’ll have to make. Like can you just walk us through how you’re going to think about that? Would you start thinking about that after sad?And how long would it take you to come up with a game plan for what you’re going to do for Roivant for spend?

[Matthew Gline, Chief Executive Officer]

Yes. On the first question on repo specifically, the answer is the lupus study itself was very heavily subsidized by Pfizer. So our cost there was a fraction of the total study cost. And that obviously made it an attractive setup for us. The rest of the costs associated with other indications are ours to be or Pfizer does not contribute they’re protected from dilution of their 25% stake up to $1 cap, frankly, relatively similar. The mechanism at Telavance with the GLA program.

So in terms of other orphan indications, NIU, DM is all our costs, et cetera. Those are capital allocation isn’t for us the same as any other but SLE, in particular, has been highly subsidized through the end of this current study. If we decided to run another study, that would also be ours to fund.

More generally, I guess I probably – in so far as I said, we wouldn’t think about it until we saw the Immunovant data that was probably an overstate. Obviously, we have spent a lot of time thinking about capital and capital decision-making as we explore the opportunity set, and I agree there’s a lot of moving pieces coming. I think that data will be informative. I think the MAD data will be informative.

I think we’re going to learn other things from the FcRn field including some RA data from J&J, from our home grade study, et cetera, through the balance of this year. I don’t know that there’s going to be like a single tipping point obvious moments where before which we can’t make any decision and after which we can, I think it’s more of taking the facts as we have them and trying to understand in which direction things swing over the coming months.

That said, we have the best version of this problem, I think, in the sense that we just have lots of different options for capitalizing the business going forward. And so I think we’re just – we’re frankly picking on good choices at this point.

[Robyn Karnauskas, Truist Securities]

Okay, great. Thank you.

[Matthew Gline, Chief Executive Officer]

Thanks, Robyn. I appreciate the question.

[Operator]

Thank you. And our next question coming from the line of Louise Chen with Cantor. Your line is open.

[Louise Chen, Cantor]

Hi, thanks for taking my questions here and congratulations on all the progress this quarter. So I wanted to ask you on brepocitinib, one thing people have been asking us is how you think about pricing if the drug is approved? And I know it’s a little bit early, but if you can’t talk about specifics, maybe you could tell us the bookends and how you’re thinking about it and what you might comp it to.

And then on TA the reimbursement work you did on psoriasis, how much can that be leveraged to the atopic dermatitis opportunity so that you can move quickly on uptake on that one? And then one more here on brepocitinib. Can you be a little bit more specific on when this year, we’ll see the data? Is it early, mid, early fourth quarter?

[Matthew Gline, Chief Executive Officer]

Yes. Thanks, Louise. On the 2 repo questions on the timing. I think it’s safe to assume mid- to late fourth quarter is probably the way to think about that. On pricing, I mean, I’ll hand it to Mayukh, but I think my short answer to that question is at this point, there’s a pretty wide breadth of possible indication spaces between SLE and DM and so on. So it’s probably premature, but I’ll hand over to Mayukh.

[Mayukh Sukhatme, President and Chief Investment Officer]

Yes. I think the punchline is we’re thinking about this principally as sort of a, call it, an orphan drug pricing band given the sort of indication set and sort of what makes sense I think that, that is potentially compatible with pricing and leases as well if efficacy data is really strong.

[Matthew Gline, Chief Executive Officer]

And then on the meta access question, I think the short answer is yes, that is a lot of that work can be heavily leveraged, and I would expect to be sort of process with payers to be significantly streamlined given that we’re all on formulary.

Obviously, there is still work to do. It’s not like it’s instantaneous and automatic but I would expect it to be a faster, more straightforward and frankly, much more predictable process where have – look, I think there were some real unknowns about how coverage was going to materialize this prior to our launch. And I think at this point, we are pretty confident that we are going to get comfortably covered with reasonable rebates by the payers. Thanks, Louise.

[Louise Chen, Cantor]

Thank you.

[Operator]

Thank you. And our next question coming from the line of Dennis Ding with Jefferies. Your line is open.

[Dennis Ding, Jefferies]

Hi, good morning. Thanks for taking our questions. I just had one on Immunovant. So on the upcoming 1402 data, can you just remind us the study design and how long is the follow-up for Sat and Madden Interestingly, how often is albumin being measured and as a follow-up, maybe given your comments around the assay variability and that there could be different time points on which albumin is measured and just also appreciating the fact that human reductions can go up and be down at some point and others. And I was just wondering what are some – what’s a good outcome for you guys in SAD and the MAD on the albumin front.

[Matthew Gline, Chief Executive Officer]

Yes. Thanks, Dennis. I appreciate these questions. And obviously, it’s an area of a lot of focus, so it makes sense. Look, I think on study design, there’s a fair amount about this in the minivan corporate deck and in ours as well.

On the SAD study, it’s 6 1402 plus 2 placebo patients. I forget exactly how far that it’s measured, but it’s at least a few weeks. And then on the MAD study, it’s 10 1402 and 2 placebo patients and it’s weekly dosing for 4 weeks and again, with a several week tail at the end. We’ve got pretty frequent data points, I’d say, as a reasonable benchmark if you went and looked at like some of the etokimab data we’ve put out, I’d say like the measurement points are pretty similar.

And so early – in fact, we follow these patients out, sorry, a lot more than a few weeks. And there’s sort of a number of measurements within 10 days and then it starts to get a little bit more spaced out in the SAD study. So again, there’s a fair amount of data in event deck on this point.

In terms of what good looks like on albumin in the Sat in the Mad against the backdrop of smaller is better. I think, again, with a 5% variability in the assay, I think we hope to be comfortably within 5% and I’d say any of the agents, frankly, that show a 5% or less impact on albumin seem to be pretty well set up from an LDL perspective.

So I think it’s Hard to say exactly how things would sort of compound from the SAD study to the MAD study, but in general, I’d say, lowers better within that 5% bar is probably what I’m looking for.

[Dennis Ding, Jefferies]

Got it. Thank you.

[Matthew Gline, Chief Executive Officer]

Thanks, Ding. I appreciate the question.

[Operator]

Thank you. And our next question coming from the line of Karen Jenkins with Goldman Sachs. Your line is open.

[Unidentified Analyst]

Good morning. This is Craig on for Karen. So as you referenced earlier in the call, this can be a pretty tricky indication – so on that, what do you view as the bar to support continued study in the indication?

[Matthew Gline, Chief Executive Officer]

In SLA, you said, yes?

[Unidentified Analyst]

Yes, that’s right.

[Matthew Gline, Chief Executive Officer]

Yes. Look, I think the way we are currently thinking about the program, understanding that it’s kind of a balance of the factors is Duke is the bar to beat given that they have the back cleaner TYK2. This would count as 1 of 2 pivotal studies, we believe, if successful. So the data from here would already make it onto the label. It’s 52-week study. So it should be relatively predictive of a future study as well, given the way that it’s set up.

So I think we have the best possible setup understanding that there has been some complexity in SMA trials before. In terms of the bar, I think it’s a balance of the factors, but I think you’ve heard us say that we think is a mid-teens drug. And you’ve heard us say that we’d like to be better than Sotio.

So I think that gives you sort of some indication for where our head is at, but we’re going to have to look at – there’s multiple multiple endpoints and things like that. So I’d say mid- to high teens sort of – and whatever that trend looks into across the other places to look.

[Unidentified Analyst]

Got it. That’s helpful. And maybe just a quick one. You highlighted for the first time that you’ve achieved payer coverage with government covered lives. I guess how should we think of the, I guess, doctor adoption of these patients following this update? Is it going to be a similar timing as the commercial coverage lives – you’ve kind of highlighted it’s around 6 months in the past?

[Matthew Gline, Chief Executive Officer]

Yes. Look, the truth is that the psoriasis market is sort of 80%-ish commercial anyway. So even though we’ve got a lot of covered lives there. It’s a smaller chunk of the patient population. Index. So I think now that we’ve got coverage, they’re government patients, they’ll sort of accrue over time to better GTN yields and so on.

I think in general, I just expect to see steady improvements in GTN from here on out as we get closer and closer to that 50% bogey over the next 12 months and beyond. And I think the government lives will contribute to that, but I don’t think it’s sort of going to be like there’s some kind of step function specifically associated with the government lives.

[Unidentified Analyst]

Got it. Thank you very much.

[Matthew Gline, Chief Executive Officer]

Thank you.

[Operator]

Thank you. And our next question coming from the line Yaron Werber with Cowen. Your line is open.

[Yaron Werber, Cowen]

Great. Thanks for taking that. I have a couple of questions on brepocitinib brepocitinib. And just remind us, AA, Lupica areata, what are your plans sort of with that indication – and then secondly, for HS, can you file – can you just conduct one pivotal? Is that sort of sufficient? Or do you think you need to?

And then I guess, finally, at what point can you present or as far as you’re going to present the data from the studies. I mean, the studies are positive, obviously, I’m talking about Crohn’s and HS, but just so we can also understand the overall profile safety-wise. I mean there’s obviously a lot of data out there just so we see the full data.

[Matthew Gline, Chief Executive Officer]

Yes. Perfect. Look, I think the first answer is on alopecia, we have no like current plans to progress in alopecia. That’s an interesting indication. Our data looks promising, but our view is sort of the same as for the other slightly larger indications.

So I think not sort of on our near-term road map, but obviously, with the quality of the data we have, we’ll be watching everything. On the other questions, first of all, on HS specifically, look, I think it’s it’s premature. We haven’t sort of discussed it with FDA in detail or anything like that. We don’t have a concrete plant in there.

So I’d probably rather not boxes in on a particular study design. That’s probably what I’d say there. anything else you’d say in terms of the other points or you may be sort of slightly closer than I emptier publication time lines.

[Mayukh Sukhatme, President and Chief Investment Officer]

Yes. So I think not too much more to add. I think that one study in particular still has a maintenance portion to cover on warlook forward to being more at a future medical meeting. And then the HS study actually has been published at this point. So we can [send that to you your own].

[Yaron Werber, Cowen]

Pfizer’s got discretion on the publication of crunch.

[Mayukh Sukhatme, President and Chief Investment Officer]

Yes.

[Matthew Gline, Chief Executive Officer]

Thanks, Yaron. I appreciate it.

[Operator]

Thank you. And our next question coming from the line of Douglas with H.C. Wainwright. Your line is open.

[Matthew Gline, Chief Executive Officer]

Hey, Doug, you might be on mute.

[Douglas Tsao, H.C. Wainwright]

Can you hear me now, Matt? Sorry about that.

[Matthew Gline, Chief Executive Officer]

Yes. Perfect.

[Douglas Tsao, H.C. Wainwright]

Okay. Starting with the TAM, I’m just curious, as you have – you successfully added to the coverage for the product. Do you anticipate making any changes to the sort of co-pay card or the sort of access program, consumer access program as it is now. or do you anticipate waiting until getting approval in AD before making any changes?

[Matthew Gline, Chief Executive Officer]

Yes. Thanks, Doug. It’s a great question. Look, I think for the moment, we have no immediate plans to change the co-pay card. – sort of set up in a way, as I’m sure you appreciate to work well for us as people migrate from uncovered to covered. And unlike some of the other parts that were set up initially, some of our competitor programs or the new topicals have like 10 programs or whatever, where the uncovered side of the card was low in order to attract trips at a time when coverage was spottier.

We always had a slightly higher co-pay on the uncovered side. it was frankly set up to carry us into the AD launch and beyond. We evaluate this stuff constantly. And our focus right now is the high prescribing docs feel really great about the product and what we’re really focused on is taking the back to right 2 scripts a month and turning them into 510 script a month box.

And I think the sort of goal of whatever changes we make would be to sort of keep that process in motion. But the short answer is, I think the copay card actually works reasonably well. To be honest, if there’s something I think we’re sort of working on, it’s – I think at this point, the actual quality of coverage is better than the perception of coverage I think these docs have been burned a fair amount historically on challenging coverage in derm.

And we actually have quite good coverage. It’s easy to obtain many, many of their patients, as you can see from the presentation will be covered. I think many derms frankly, have not like caught up with that reality yet. And so a lot of the educational work we’re doing is just trying to make sure people understand that picture as well as we can possibly help them understand it.

[Douglas Tsao, H.C. Wainwright]

And Matt, you sort of touched on another point, I’m just curious your perspective on how do you – or what’s the plan right now to sort of help accelerate the writing from sort of your low prescribers, right? I mean, because it sounds like your script base is fairly concentrated.

And obviously, to sort of take it to the next level, you’re going to need to increase that debt. What are the things that you’re able to do to get people to go beyond just writing that first initial script? And – and are you aware of what is keeping them from online in just a couple of scripts right now.

[Matthew Gline, Chief Executive Officer]

Yes. Thanks, Doug. Look, it’s a great question. It’s quite literally $1 billion question. So we spend a lot of time thinking about it. I think the short answer is we’ve already taken certain steps. We’ve got now DTC was something we were pretty conservative about up until we got to the sort of good payer coverage position.

So within the last month or we’ve really sort of started to ramp up the DTC campaign, and that should take months more to really fully sort of make it into the script volumes but it’s something that we are watching to drive volumes that way. There’s other things too. There’s one property is these patients don’t go to the doctor very often.

And so frankly, if you were a – if you were a hyperdrive dermatologists, you’ve been waiting for the VTAMA launch for many years, if you were a leading dermatologist is sort of showed up maybe you wrote a few test scripts or you write a few test scripts every month, but you actually haven’t seen very many patients back in your office, who you put on VTAMA a year ago. And so I think one thing that works in our favor is just time. It’s just back sort of seeing repeat visits from patients who they put on earlier in the launch.

And I think that will cause a compounding effect for us. And then we continue to sort of keep our ear to the ground and work on whatever the questions I mentioned, the coverage question is probably one of the most important messaging questions that we’re working on right now is just helping docs understand that which isn’t like other topical, but it’s going to make a difference for their patients, and it’s going to be easy for them to use in a way that some of the other historical launches have been more challenging.

And so I think that’s where a lot of our focus is. I’d say in the dock call that I’ve been closest to, frankly, the number one point is this payer coverage point is just doctor a little gun shy about where things are on the payer side. But we hear other things that we continue to work on.

And in general, I think doctors are familiar with the product, we’re pretty happy to be using it. So we’re just trying to get everybody else to build some experience in muscle memory. Remember, these stocks write steroids in their sleep. So it just takes – it takes some time. But we’d love to see faster.

[Douglas Tsao, H.C. Wainwright]

Okay, great. Thank you so much.

[Matthew Gline, Chief Executive Officer]

Thanks, Doug.

[Operator]

Thank you. And I’m not showing any further questions in the Q&A at this time. I will now turn the call back over to Mr. Matt Glen for any closing remarks.

[Matthew Gline, Chief Executive Officer]

Great. So look, I just want to say thank you to everybody for listening this morning. Thank you to our team for all the work this quarter and beyond. I’m really looking forward to the next couple of months here, and we’re going to have some important opportunities to get back together.

And yes, thanks all, and have a great rest of your summer, and we’ll be back here soon to talk about some more exciting updates. So thank you, operator. Thank you, everyone, for listening, and we’ll talk again soon.

[Operator]

Ladies and gentlemen, that does conclude the conference for today. Thank you for your participation. You may now disconnect.