Calliditas Therapeutics AB

STO:CALTX

Earnings Call Transcript 2022-Q3

[Operator]

Welcome to Calliditas Therapeutics Quarter 3 Presentation 2022.

[Operator Instructions]

I will now hand over the word to CEO, Renee Aguiar-Lucander, please begin the meeting.

[Renée Aguiar-Lucander, executive]

Thank you very much, and welcome, everybody, to the Q3 report. With me on today's call, I have Fredrik Johansson, our Chief Financial Officer; Richard Philipson, Chief Medical Officer; and Mr. Andrew Udell, President of North America. So if you go to Page 2, please. I'd like to draw your attention to the disclaimer page related to forward-looking statements and refer you to the company's reports and other filings including those filings which contain risk factors and other relevant information.

So if we turn to Page 3, please. So some of the Q3 highlights. So in this quarter, Calliditas has achieved another major milestone as we received formal conditional approval of Kinpeygo in Europe. Subsequent to achieving this, we immediately started the transfer process of our market authorization to our commercial partner in Europe, STADA in order to enable a Swiss commercial launch in Europe.

During this quarter, we also received milestone payments amounting to EUR 12.5 million from STADA as we have previously announced. The results from the Q3 commercial activity of TARPEYO resulted in $12.1 million of net sales for the quarter which reflects the consistent build of our commercial launch plan, and we're very encouraged by the strong level of interest engagement that we're seeing, especially since the publication of our Part A data, which both Richard will cover later in the presentation, and Andy will take you through some more color with regards to our commercial activities also later in the presentation.

Based on the visibility we have today in our pipeline of our exits and revenues, we expect to have revenues in the range of $35 million to $40 million for this year. This is in line with our internal plans, and we expect strong continued growth based on recently published data, the importance of which really should not be underestimated as well as additional data expected in the first half of next year. With regard to core activities, we've experienced a lag in site recruitment rates, which seem mainly to be due to continued backlog pertaining to COVID-19 and the reduction of staff levels of clinics and hospitals, we still really do not seem to kind of be back at the level that they were prior to the pandemic.

This has created an impact on our recruitment levels. And so we do expect the head and neck cancer data we pushed into first half of next year and the interim analysis also to be pushed in to be conducted in the first half of 2024.

If we turn the page, please. So looking at post-period events. So regarding events which took place post the period of Q3. I've already mentioned that there was a publication clinical data in October. Something which we've been very aware of, obviously, that physicians have been waiting eagerly for, and some of you might have had a chance to listen to Dr. Barratt or Dr. Lafayette discussing this recently.

In early November of this year, it was the Kidney Week ASN, which is the largest kidney congress held annually, held in the U.S., it was well attended, and we had a commercial TARPEYO-focused booth as well as the medical affairs booth there with a live presentation dedicated to pathophysiology, the gut-kidney connection was presented by Dr. Rappel and Dr. Wadhwani presented novel approach of TARPEYO in light of the recently published data. There was also a biomarker presentation related --- biomarker-related poster from the NeflgArd study. It was a very positive experience, apart from obviously the very nice thing of seeing everybody in person again.

I had the opportunity to interact with a large number of nephrologists who provided insights into their practice and treatment paradigm. Feedback from the part A data was all extremely valuable input. And so with that, I suggest that I hand over to our CMO, Richard Philipson, who will take you through a brief overview of the data in question. Richard?

[Richard Philipson, executive]

Thank you, Renee. I'm now on Page 6. So I'd like to start by saying how delighted we are that the results of Part A of the NeflgArd trial were published online by Kidney International on the 19th of October. I'd also like to extend my thanks and congratulations to all of the authors involved in producing this important publication that we believe will be a valuable resource for researchers and practicing positions in IgA nephropathy. I will provide a summary of the key outcomes presented in the publication. But first, we'll start with a description of the trial design. Next page.

The NeflgArd study, which formed the basis for FDA's accelerated approval of TARPEYO comprises 2 parts, Part A and Part B. Patients with biopsy-proven IgA nephropathy, proteinuria of greater than 1 gram per day and eGFR of 35 to 90 ml per minute and with well controlled blood pressure whilst on optimized RAS inhibition were enrolled into Part A of the study and randomized to receive TARPEYO at a dose of 16 milligrams per day or placebo for a 9-month treatment period.

The primary endpoint was assessed at the end of the 9-month treatment period. Treatment was discontinued and patients were then observed for 3 months. Patients then entered Part B of the study, which is a 12-month period of observation without study treatment. A total of 200 patients were enrolled in Part A for the primary analysis of that part of the study with the primary endpoint being change from baseline in proteinuria. A key secondary endpoint was changed from baseline in eGFR. This part of the study read out with positive results in November 2020.

The patient population for the Part A analysis had a median age of 44 years approximately 67% were male and approximately 86% were white. Our pressure control on enrollment was excellent and baseline UPCR and eGFR reflected the high-risk population enrolled into the study. I'll say a little bit more about Part B later in this presentation.

Next slide. With respect to the key outcomes of Part A of NeflgArd, TARPEYO demonstrated a statistically significant and a clinically meaningful reduction in proteinuria at 9 months with stabilization of eGFR. Specifically, there was a 34% reduction in UPCR for TARPEYO treated patients versus a 5% reduction in placebo-treated patients. The difference was highly statistically significant. Patients receiving treatment with TARPEYO showed a minimal loss of eGFR of 0.17 ml per minute over the 9 months compared to a loss of just over 4 ml per minute in placebo-treated patients. The majority of adverse reactions were mild and moderate in severity. The most frequently reported adverse reactions are hypertension, peripheral edema, muscle spasms, acne, dermatitis, weight increased, dyspnea, face edema, dyspepsia, fatigue and hirsutism. It's worth noting that there were no reports of severe infections requiring hospitalization.

Next slide. When we look at the profile of proteinuria change over time, it's apparent that the effect of TARPEYO was gradual and cumulative with the benefit of treatment on proteinuria emerging over the first few months of treatment. Proteinuria continues to improve through to 9 months when treatment was discontinued. And importantly, a further improvement in proteinuria was seen at the 12-month visit when patients have been off treatment for 3 months. At 12 months, there was a 52% reduction in proteinuria versus baseline or 48% when corrected for placebo. We also noted that proteinuria reduction was consistent across all baseline subgroups, including baseline proteinuria and baseline eGFR.

Next slide. Turning to the profile of eGFR change over time. We saw early separation of the eGFR curves with an initial modest increase in eGFR in patients treated with TARPEYO. The separation of the eGFR curves was maintained throughout the treatment period. And again, importantly, it was also maintained at the 12-month visit when patients have been off treatment for 3 months.

Next slide. When we look at subgroups of patients with higher levels of baseline proteinuria, we are at particularly high risk of disease progression, we found that there was a more pronounced treatment benefit on eGFR. Here, we see presented the eGFR trajectory for a subgroup of patients with baseline UPCR greater than or equal to 1.5 gram per gram. It's worth noting the particularly rapid decline of eGFR in patients receiving placebo, with a loss from baseline of over 8 ml per minute at 9 months. In comparison TARPEYO treated patients had essentially stable eGFR with a loss of less than 1 ml per minute over the 9-month period. The eGFR trajectory for the 2 treatment groups clearly diverged and the separation between the 2 groups was maintained at 12 months.

Next slide. As already described, Part B of NeflgArd is a post-approval observational off-treatment follow-up to confirm the long-term renal benefit of the observed proteinuria reduction. The final analysis will be performed on approximately 360 patients, which includes the 200 patients that comprise the Part A analysis population. The primary endpoint will evaluate kidney function through eGFR change measured over the 2-year period. Completion of enrollment of these 360 patients was achieved in January 2021, and we expect the final readout in the first half of 2023.

Next slide. Finally, I will briefly mention the open label extension to the NeflgArd trial. This open-label extension or OLE is open to all patients who complete the 2-year NeflgArd trial, but it is optional. Eligibility requirements for entry into the open-label extension are broadly similar to the pivotal trial. In particular, the proteinuria requirement is the same but there's a slightly lower eGFR limited 30 ml per minute. By the end of quarter 3, approximately 180 patients adopted to enter screening for the OLE and the screen failure rate had been approximately 41%. The most common reason for screen failure is proteinuria level below the required minimum of 1 gram per 24 hours, which represents 61% of all screen failures.

As the pivotal NeflgArd trial remains blinded, we can't draw any conclusion from this observation apart from the fact that low levels of both proteinuria and eGFR are the main reasons for screen failure. We look forward to unblinding the NeflgArd study once it is completed, which will provide us with further insights into these observations. I'll now hand over to Andy for the commercial update.

[Andrew Udell, executive]

Thanks, Richard. Please go to Slide 15. The third quarter was another quarter of solid growth as we continue to build on our success from the first half of the year. Quarterly net sales of more than $12 million brings us to more than $20 million net sales dollars of net sales in the first 8 months of promotion. As announced after last quarter, we began expansion efforts in July. This growth included the addition of 20 sales territories, which gives us a total of 60 sales executives, expanding our reach and call frequency to our target audience. We are impressed with the caliber of talent we continue to attract, most of which coming to us with rare disease and nephrology experience.

While the onboarding and training took place during the quarter, we anticipate to begin to feel the impact of the additional educators in the fourth quarter. September enrollments were strong after the anticipated slower July and August summer holiday period with a quarter total of enrollments of 281 and prescriber receptivity remains positive as we grew our prescriber base to 480 unique prescribers since launch, and this total includes addition of 166 new prescribers during the third quarter. In addition, we continue to see the average enrollments per prescriber growth.

We anticipate this rate will continue to grow as many physicians now have patients on therapy for several months and are experiencing positive results as was demonstrated in our clinical trials. As it relates to market access, we've reached our target of over 90% of U.S. lives having coverage for TARPEYO, which is impressive for a specialty company. The payer mix has reached a steady state without much change from last quarter. We have less than 25% of our business coming from government-insured patients and the remaining being either private commercial insurance or cash-paying customers.

During the quarter, we added resources to our TARPEYO Touchpoints dedicated team in order to maintain the high service levels for increasing patient population. Our reach and promotional programs remain effective with awareness of TARPEYO growing to over 80% of nephrologists and market research surveys. The final highlight of the third quarter was IgA Nephropathy Foundation Spark Patient summit meeting. The interactions with the advocacy group leaders and patients continues to motivate and provide encouragement to our team and the potential this market represents.

Next slide, please. These last several weeks post Q3 have been encouraging. The receptivity and reaction to the NeflgArd publication and information Richard reviewed with you has been nothing short of extremely positive from the nephrology community. This was demonstrated with inbound notifications upon publication as well as in person during the Annual Meeting of the American Society of Nephrology that Renee had mentioned earlier. The in-person ASM meeting was a great opportunity for us to reach, educate and interact with our target audience.

The traffic at our booth and attending our sponsored educational events was impressive. The nephrology market is clearly eager to learn more and more about IgA nephropathy and how TARPEYO best fits with their patients. As our first patients are nearing the 9-month mark, we are hearing of more and more TARPEYO patient success stories. We anticipate these successes, coupled with further nephrologists and patient experience will result in continued growth of TARPEYO over the next several months as we eagerly anticipate the results of Part B of the NeflgArd trial in the first half of 2023. I'll now turn it over to Fredrik to provide you the financial overview.

[Fredrik Johansson, executive]

Thank you, Andy. Let's continue to Slide 17. So good afternoon and good morning, everyone. I will now present to you the financial overview for the first 9 months of 2022, and all numbers presented to you are in MSEK, as always, unless otherwise stated. To start with, we achieved SEK 373.8 million in net revenues for the 9-month period. For the same period last year, we reported revenues of SEK 198.2 million. This is the third quarter, we report net product sales following the TARPEYO FDA accelerated approval in December last year with the start of sales in January earlier this year. Out of the SEK 373.8 million in net revenue, TARPEYO net product sales, 9-month period amounted to SEK 205 million or $20.7 million, where of SEK 123.4 million or $12.1 million came in the third quarter, an increase of 94% compared to the second quarter and was in line with our internal expectations.

In addition, we recorded SEK 163.8 million for the 9-month period in revenues related to out licensing transactions, where we in the third quarter recorded SEK 135 million in revenue from STADA for the conditional approval and launch in EU. As you remember, we also received upfront fee in the first quarter from Everest of SEK 28.8 million, which was equivalent to USD 3 million for the extension of the Everest license contract to South Korea.

Our total operating expenses for the 9-month period amounted to SEK 821 million compared to SEK 500.5 million for the same period last year. In the third quarter, our total operating expenses was SEK 292.2 million compared to the second quarter this year, our OpEx had increased by around SEK 20 million quarter-to-quarter, which is mainly attributable to the current FX headwind, we still see due to weaker SEK against U.S. dollar and Euro. After the total operating expenses for the 9 months, marketing and selling expenses increased by SEK 214.3 million to SEK 323.3 million compared to SEK 109 million for the same period last year. The increase in marketing and selling expenses originates from us having a full commercial team in place from the start of Q1 this year.

Cost for research and development increased by SEK 55.3 million to SEK 312.5 million compared to SEK 257.2 million for the same period previous year. Increase in R&D expenses originates primarily from the ongoing operations for the setanaxib trial. Our operating loss amounted to SEK 454.4 million for the 9-month period compared to an operating loss of SEK 302.3 million for the same period last year. For the third quarter alone, we had an operating loss of SEK 36.2 million compared to an operating loss of SEK 209.8 million for the second quarter. The cash flow used in operating activities for the 9 months amounted to SEK 541.4 million compared to SEK 300.3 million for the same period previous year. For the third quarter, the cash flow used in operating activities amounted to SEK 124.7 million compared to SEK 225.2 million for the second quarter. This is an improvement of almost SEK 100 million between the quarters, and it was mainly driven by the increased net sales of TARPEYO.

As of September 13, we reported a strong cash position of SEK 736.2 million, down from SEK 846.8 million from the second quarter. In addition to our cash at the end of September, there is SEK 25 million unused in the Kreos credit facility, and we expect approximately SEK 160 million in cash payments from milestones from STADA and Everest in the fourth quarter, where the STADA milestones were recognized as revenue in the third quarter. The progress of the commercial loans after pay in the third quarter continued to support our view that based on our current operational plan and our current cash position, we believe that we have sufficient funds for our planned operations and capital expenditures until we become cash flow positive on a monthly basis, which is currently projected for the first half of 2023 subject to continued successful commercialization of TARPEYO.

Next slide, please. Just let me give a quick summary of the financial key takeaways. On the revenue side, it was very encouraging that we saw TARPEYO net sales of SEK 123.4 million, the $12.1 million to growth of 94% from Q2 was very encouraging. It's also encouraging that we managed to see the milestones of SEK 135 million from STADA recognized in Q3. The SEK 20 million increase in the operating expense between the Q2 to Q3 was mainly FX driven due to a weak SEK. Cash used in operating expenses significantly improved from Q2 to Q3, mainly driven by an increased net sales of TARPEYO. And we think that we are well funded with a cash position of SEK 736.2 million. And please be aware of that approximately SEK 110 million of the STADA milestones that was recognized in revenue in Q3 are due for payment in Q4 and hence was not included in September cash position.

I think this was all for me. Thank you, and now back to you, Renee.

[Renée Aguiar-Lucander, executive]

Thank you, Fredrik. So if you turn the page to Page 19. These are just some key takeaways which we've already now have gone through. So basically, we are very pleased with our results and progress during Q3 in this very first year after achieving approval of TARPEYO. The fact that we've achieved over $35 million of revenues to date with product sales representing over SEK 20 million makes us very encouraged about the future. We continue to penetrate the nephrology prescriber base. And as Andy mentioned, we are starting to now hear very positive patient experiences from the field. I'm confident that we have the right team in place, ensuring that we will continue to execute on our plan. And as Fredrik mentioned, in Q3, we do see lower net cash burn compared to Q2 when taking -- also when just taking product sales into account, which we expect to continue in Q4 and onwards, making us set for a very stable financial position. So with that, we're happy to take any questions that there might be operator.

[Operator]

[Operator Instructions]

And our first question comes from Jon Berggren from Kepler Cheuvreux.

[Jon Berggren, analyst]

So I was wondering, I mean, in the report, you mentioned 730 patients enrolled from January to the end of Q3. So I'm wondering how many of these 730 patients were actually on treatment at the end of Q3.

[Renée Aguiar-Lucander, executive]

So I think that at this point in time, we're not really separating this out. And the reason for doing that is that it's a multifactorial process from actually kind of going from enrollment down to kind of receiving revenues, and this is mainly due to the fairly complex health care system in the U.S., which really requires a fairly extensive process for all specialty products to really kind of go through verification, et cetera, in order for shipping to take place.

But obviously, we provided some of those metrics as Andy has gone through, but it does become kind of not very helpful at this early stage to provide this, once we're actually in a more kind of stable state I think this is a number that we'll be happy to report on.

[Jon Berggren, analyst]

And just another question then on R&D costs. I was wondering if you could provide a split on how much you're spending on Nefecon relative to your Setanaxib programs?

[Andrew Udell, executive]

Yes. Sure. We are not separating this in our report. But since we are sort of on the last mile of the Nefecon studies, we are, of course, spending less R&D costs on the Nefecon program and with 2 Setanaxib programs ongoing and fully running. The majority of the R&D costs are going towards the Setanaxib.

[Operator]

The next question comes from Yigal Nochomovitz from Citigroup.

[Unknown Analyst]

This is [ Ashik Mubarak ] on for Yigal. I just wanted to ask about the timing of your NRDL listing in China by Everest, and if that's even part of the commercial strategy? And if so, maybe what would you expect in terms of pricing discounts in China? And maybe what has Everest publicly said about the launch in China, if anything?

[Renée Aguiar-Lucander, executive]

Sure. So obviously, as they're kind of -- as Everest has become closer and closer to filing in China, they've obviously spent some more time also doing more market research, et cetera. So this is also why we have -- they've shared with us in terms of their estimate now kind of biopsy-proven patients in China that, that number is somewhere kind of estimated to be around 5 million, which is obviously significantly higher than what we had been aware of previously.

In terms of the actual pricing, et cetera, we have not -- we don't have any access to that at this point in time. So actually, I can't share anything with regards to that with you at this time. My assumption is that Everest is still working on those -- on that. In terms of the filing, obviously, the target has always been for them to file and get an acceptance first half. And so obviously, now it's in this Q4 period is what we would expect. And obviously, if the filing is accepted, then the indications that we've received from Everest is because they have breakthrough designation that they would expect a review period of no more than 12 months. So that would put a potential approval towards the second half of next year.

So I think this is -- it is very exciting. I think as we mentioned before, obviously, this is a -- it's a strong contributing factor, quite common for younger people in China to actually have IgA nephropathy as a reason for their dialysis. And I think that it would be super exciting to actually have a drug available there as well to address this fairly large patient population. But I think we're going to have to -- we'll share with you once we hear something from our partner in terms of what their plans are with regards to other metrics of their commercialization.

[Unknown Analyst]

Okay. Totally understandable. Maybe one more on the launch in Europe. I know you're not being this specific necessarily on timing. But I guess, generally, can you give us any color on how far away the actual launch is, maybe year-end a reasonable assumption or is that more of a 2023 thing?

[Renée Aguiar-Lucander, executive]

No, they have actually -- so STADA has launched. They've launched the product. They've launched it in Germany. So it is now available in Germany. It is one of the few countries in Europe where you're actually able to launch kind of immediately, more or less immediately after approval. The other kind of countries in Europe require kind of a negotiation with regards to pricing and market access, et cetera. So we would expect STADA to roll out the product in other European geographies or in other European countries as those kind of negotiations progress. But the product has been launched. It was launched in late September, early October if I am not mistaken in Germany.

[Unknown Analyst]

Okay. Okay. Got it. So I assume we'll see some revenues flowing in this quarter from that. And then last question for me, just in terms of the U.S. launch. I guess, in order to hit the midpoint of your sort of guided range. It seems like you might see a little bit of deceleration in the fourth quarter in terms of U.S. sales. So I'm wondering what's behind your fourth quarter assumptions. Is there -- was there a component of inventory stocking that may drive a little bit of a slowdown in the fourth quarter?

[Renée Aguiar-Lucander, executive]

No. There's no kind of inventory stocking component. And I'm not sure that we are expecting any deceleration in Q4. I think it's more a metric in terms of the time it takes just to kind of from enrollment to revenue generation. But Andy, maybe you want to take this?

[Andrew Udell, executive]

Yes. No, I would agree with your assessment that it's not at all a deceleration. I think we're looking to continue the growth and that target would mean a very healthy fourth quarter.

[Operator]

The next question comes from Dan Akschuti from Pareto Securities.

[Dan Akschuti, analyst]

Congrats on the great numbers. One question on the unique prescribers. So how many in percentage are there left in the U.S.? Is it that you're around that 20% of the available prescribers currently or no?

[Renée Aguiar-Lucander, executive]

I'm sorry, can you repeat that, sorry?

[Dan Akschuti, analyst]

So the unique prescribers that you have reached thus far, how much in relative, like how much in percentage does that represent of the prescribers available in the U.S.?

[Renée Aguiar-Lucander, executive]

I see. Sorry. So Andy, do you want to take that? I mean, in terms of our target of 3,500 or 3,700.

[Andrew Udell, executive]

Yes. Yes. I mean it's not even 10%. It's a little bit more than -- I'm sorry, than 10% of probably what we would anticipate a peak of prescribers, but this is -- not every prescriber is equal. In other words, as far as they're prescribing their patient load, et cetera. So we're very pleased with the amount of prescribers that we've already -- that have already initiated patients on TARPEYO.

[Dan Akschuti, analyst]

Okay. And a follow-up on that. Could you give us some color on the incentive model for the sales force? And when we can expect that 20 additional FTEs are fully trained, is that already now in end of Q3? And what are the lessons learned maybe from the -- lessons learned from the first quarter? And do you have any plans that you could share in that could increase the efficiency of your sales force?

[Andrew Udell, executive]

So good questions. The answer is they were all trained, they're in the field. So they're fully compliant and trained and that took place during Q3. And so the timing, I think we think we're going to -- while some we feel impacts quicker than others. A lot of that is due to relationships and when they're -- they've been in the space prior. And the fortunate part for us is that the vast majority of the 20 new sales executives come with experience in this market. So we're very pleased with that.

As far as lessons learned, this is a process that takes continued education and repeat calls. Some are quicker uptake than others, and they like to see the data, and we're pleased with the fact that now we have a publication that provides this data so that they want to see the peer-reviewed journal indicating exactly the results or further than what we can "promote" for the reps, that's also beneficial.

So I think there's a lot of positive momentum coming out of Q3 that we've seen at the very beginning of Q4. And I think the impact of the increased reach and frequency, coupled with the data will be exciting. Plus I think the last piece of it, it really is the successes we started to hear. I think there are prescribers that you could understand, they put a patient or 2 on the product. They want to wait a few months to see the success and once you build on that and if you see a success with some patients, you're going to want to expand your usage. So we're starting to get to that point now.

[Dan Akschuti, analyst]

Okay. And the last follow-up, considering the -- that there's still a lot of prescribers out there left. Do you see a possibility that you would increase the sales force next year additionally?

[Andrew Udell, executive]

Do I see that possibility. We don't close off the possibility to anything. It's not the plan. It really isn't the plan right now, but there's a way that you assess that and you look and you see are we reaching enough people with the right frequency. So we're constantly looking at this information and it is not in the plans today to expand further.

[Operator]

The next question comes from Jacob Mekhael from Kempen.

[Jacob Mekhael, analyst]

I'm just curious if there are any factors that can predict why the approval process may take longer for some patients compared to others? And maybe if you can provide any color on the challenges that patients experience in the process to get approval?

[Renée Aguiar-Lucander, executive]

Sure. Andy, do you want to start?

[Andrew Udell, executive]

Sure. Sure. So as you know, in the states, there's thousands of different plans, and they have different policies that they go through. So that can make -- that's one factor right there that can make the approval process take different amounts of time for different patients. But every time there's an approval for every specialty product, you have to remember, there's several players involved. So you have the physician, you have the patient and you have the payer, okay? And so some payers require different levels of evidence or information. So that can take time. Sometimes it requires the physician to provide this information. That could take time, and some of the offices are more equipped than others to handle providing this level of evidence.

And then there's also parts of that, which is contacting the patient, you want to coordinate the shipment date and exactly when they're going to receive it to make sure that they're there to receive their medication. So there's a lot of different factors that can add up and cause differences. We've been very pleased to date with those that are receiving their medication that it's under 30 days. I think if you look at industry standards, I feel pretty good at where it currently sits.

But as I've indicated in prior quarters, we're not going to be satisfied with that, and we're always looking for ways to make it more efficient, quicker so that when the prescription is and the patient is enrolled, that we can get them the medication as quickly as possible.

[Renée Aguiar-Lucander, executive]

And I would say that one of the things that we have kind of heard as well as experienced from nephrologists is obviously that they are not necessarily -- they don't have huge amounts of specialty products that are being approved over the last kind of 10 years. And so for some of these kind of offices and with some nephrologists having to deal with administration related to any specialty product is something different and relatively new. And so this is something where, again, we have made sure that we are -- made sure that we have enough resources in kind of the TARPEYO Touchpoints and the hub to really try and make this as easy as possible for them.

But I do think that this is a little bit of a novelty. And obviously, this is something that they're going to have to deal with, with any product that kind of comes to market here. So -- but that is something where we have specifically in terms of lessons learned and some of the things is that we -- that is something that we've listened to, taken on board, and actually, again, we're trying to be as helpful as possible in this process because it's unfortunately just a structural issue with regards to kind of U.S. health care.

[Operator]

The next question comes from Rami Katkhuda from LifeSci Capital.

[Oliver McCammon, analyst]

This is Oliver from LifeSci on for Rami. Congrats on the update. I just have 2 questions today. So first, while the launch is still early, have you identified any trends in the patients receiving TARPEYO? And second is the expanded sales force fully deployed and what proportion of nephrologists treating IgAN?

[Renée Aguiar-Lucander, executive]

So Andy, do you want to take those?

[Andrew Udell, executive]

Sure. As far as the specific patients, it's too early to give you a trend. You have to remember that there's one product that's actually indicated now. And so this is where their usage has been pretty broad, meaning patients are coming to us, both first diagnosed as well as those that have been diagnosed several years earlier. We have some that are more severe than others and some that have less. So I can't really give you too much color, unfortunately, on the trends in the patients. I know we are seeing more patients per prescriber and that kind of stuff will typically increase over time as comfort levels.

Some people want to start with their most severe patients and then they'll move to more -- to less severe probably as they get more and more comfortable. As far as the expansion of sales force and reach, I think was the question, that is typically there's a lot of factors that go into that, obviously, geography, et cetera. But we typically have formulas that we use when you're looking at a specialty sales force as far as the number of calls they can make in a day and the number of different unique prescribers and how much you want their frequency. You want a higher frequency from -- for some prescribers versus others. So there's no exact number that I'm really going to discuss now, but we feel that the expanded 20 provides us really, really strong reach and the appropriate frequency that we're going to need.

[Operator]

The next question comes from Annabel Samimy from Stifel.

[Annabel Samimy, analyst]

I just wanted to ask about the data that you presented at ASN as well as the publications. You mentioned that there was very enthusiastic feedback from the physicians. I guess can you -- if you can get a little bit more granular in terms of how they responded to that. Does that -- do they express any motivation to keep patients on treatment longer, keep it intermittent based on what their -- these observations are? And have any of the drugs that they've used to date shown this kind of continued benefit post removal of treatment that they would start to think about how to use this drug differently?

And then I guess, as a carry-on to that, does this give you any further what does this potentially mean for Part B just to give you further comfort that the Part B is going to read out positively? Or I guess, what kind of extrapolations can you make?

[Renée Aguiar-Lucander, executive]

Okay. Why don't I start, and I'll hand over to Richard. So I think that, obviously, what we heard at ASN and I think in other interactions, the key here is obviously that in all CKD, not just in IgA nephropathy, but the experience from the treating physician as well as this comes through in a lot of the larger analytical papers that have been published, et cetera, is that a kind of a durable kind of significant and durable kind of proteinuria reduction is something that physicians really assume will lead to a benefit for their patients. And that's really how they've been treating this patient population for a long time.

So I think that the -- this differentiated profile and to answer your question, I mean, at least we have not met anyone so far. I have not met anyone anyway so far that can show to any other drug that shows this particular profile in terms of that, you get the significant continued benefit when you actually withdraw the drug. So I think the benefits are, obviously, they look at a benefit in term -- early benefit, in terms of eGFR it is obviously very good. Most drugs actually have a negative impact on eGFR to start with. So that was kind of a positive effect that the continued kind of proteinuria reduction, I think, is seen as very intriguing and very interesting by physicians. And the fact that it's kind of that significant and durable. And obviously, this is what we ultimately have to wait for Part B to see how long of this kind of durability we have.

But I think those are really the things that they find is extremely interesting. And I think the last part is obviously the eGFR stabilization really from an immediate perspective in these patients at risk of rapid progression is obviously also something that they find very important because these patients, obviously, at the end of the day, it is all about trying to preserve kidney function in all of these patients. And proteinuria is obviously a big look at that, is a forerunner to that kind of effect, obviously. But before we go into Part B, maybe I'll hand over to Richard to reflect on what interactions you may have had with physicians.

[Richard Philipson, executive]

Well, I think it's very similar. I mean, I echo your comment. I think the profile of effects that we see are intriguing and differentiated and in particular, the cumulative improvement in proteinuria that we see during the treatment period. And as Renee has already said, I mean, I think a particularly important observation is the continued improvement in proteinuria after patients have discontinued treatment.

And that's also reflected in data that I showed, which also confirms the maintenance of separation of the eGFR curves after discontinuation of treatment. So I think there's a great deal of positive reflections on that from the physician community. And I think that certainly, obviously, we're not going to provide a prediction of exactly what will happen in Part B, but I mean it certainly makes us comfortable that the study is well designed that we're seeing the appropriate relevant treatment effects in terms of improvements in proteinuria. We've already seen that translate through to stabilization of eGFR, and we're very encouraged about what that means in terms of the final analysis for Part B.

[Renée Aguiar-Lucander, executive]

I would just add the final piece there is obviously just the -- in terms of -- the only thing that we can do is really kind of then look at what the screening criteria, what we're seeing in the open-label extension. What we've kind of shown is obviously that, of course, there is a significant portion of patients, obviously, who have proteinuria below 1 gram where obviously, the entire population did have proteinuria above 1 gram at the inclusion of the start of the study. It is speculation, obviously, because it's still blinded, but I still think that it's a very interesting observation, but that is obviously what we're seeing after 2 years in a fairly significant number of the patients.

[Operator]

And the next question comes from Maury Raycroft from Jefferies.

[Maurice Raycroft, analyst]

Congrats on the quarter and progress. You mentioned 180 patients went into screening for the open-label extension, and there was a 41% failure rate there. Can you clarify if all of those patients do not qualify because of the low UPCR less than 1 gram? Or what are the other reasons for screen failure? And can you remind what are some of the measures you're collecting and objectives for the open label extension study?

[Renée Aguiar-Lucander, executive]

Sure. I'll let Richard take the second part of that study, I mean that question. In terms of the -- in terms of the screen failure, so basically, what we've said is that out of the 180 patients who are screened, 106 are enrolled. And so the remainder screen failed. And so for those patients, the largest -- the biggest reason for screen failure really over 60% was the fact that they did not qualify in proteinuria, so they had proteinuria of have less than 1 gram. The second most significant reason was that they had too low of an eGFR. So the eGFR was below the 30 milliliters per minute. And then there is a range of other kind of reasons. But those were the 2 kind of most significant reasons for screen failure. So Richard, do you want to take the second part?

[Richard Philipson, executive]

Yes. So in terms of your other points, so for this study, the data collected will be similar to the data that we collected in the pivotal study. So we'll be evaluating the effects of treatment on UPCR and eGFR over the 9-month treatment period as well as other outcomes, obviously, safety and tolerability will be collected, so safety data will be collected.

[Maurice Raycroft, analyst]

Got it. That's helpful and makes sense. And I had another question to you, just for the Phase III Part B off-treatment data. Is there a bar for what proportion of patients you get into a complete remission or for a certain amount of durability that you need in order to make claims around that and add that to your label? Or if you can just talk about what additional changes to a label you could make based off of the Part B data?

[Renée Aguiar-Lucander, executive]

So I guess that the most -- the most obvious, I guess, obviously, in terms of Part B really would be the impact on eGFR, right? So obviously, in terms of what we have to date really is kind of just the impact on proteinuria, which, as we all know, is a surrogate. So I think this is really kind of considered more of a hard endpoint than proteinuria reduction generally by the regulators. And so I think that, that data is obviously going to be critical in terms of disease modification, for example, right?

So I mean, what is -- what are you going to be able to say exactly when the disease modification, it's difficult to kind of have a view on here. But I think that, that's obviously kind of a one avenue. I think that another avenue is, as you say, in terms of, if you can -- if we can show -- have some views at least on the durability of response and the kind of the consequences of that on eGFR is obviously also going to be something, I think, that everyone is going to be very interested in.

I think that how long will this affect lasts? Because obviously, this is this more unique focus on the kind of treating the origin of the disease. And so I think there's a lot of interest around that. I do think that physicians, in general, are very positively implying towards increasing that kind of proteinuria reduction over time, which is what we've seen and obviously also then kind of the durability of it. But I think in terms of what we can see in the label, as always, I think that's going to be ultimately a negotiation with the regulators, which is always very difficult to kind of have a view on at this point in time. But I think those are kind of the type of areas that we will obviously be discussing with them.

[Operator]

The next question comes from Johan Unnerus from Redeye.

[Johan Unnerus, analyst]

Partly in follow-ups. In the patients that were in the extension there, OLE group, some 74 did not follow up. And earlier, you clarified that 61% or about 45-ish did not continue due to those proteinuria levels. The other 29-ish, can you say anything to what extent the group that had too low eGFR represents in this group?

[Renée Aguiar-Lucander, executive]

Well, I mean, again, as I said, because it's blinded it is kind of -- this is speculation because we won't be able to unblind this trial until the completion of the Phase III program as a whole. But one could obviously speculate and assume that there are some patients who would have been in this trial for 2 years who would have entered into the trial with a fairly low eGFR and may, therefore, over the 2-year period be in a situation where their eGFR is below 30. And if it was below 30, they would not be included in the open-label extension.

And as we've seen, there obviously are patients at risk of kind of rapid progression, has had quite a significant decline in their eGFR. So that, I think -- but again, that would be speculation.

[Johan Unnerus, analyst]

Yes. So we don't -- at this stage, we can't say if it's 5 or 10 or whatever. It's the second largest group.

[Renée Aguiar-Lucander, executive]

Yes.

[Johan Unnerus, analyst]

Anyway, yes. And also, you have, of course, now a fair amount of patients that have been treated more than 25 months. Is there any indication of the second growth for any of these patients? Or is this also sort of blinded?

[Renée Aguiar-Lucander, executive]

So is it -- okay, I'm not sure what that means, so all patients obviously have been treated for 9 months and are then observed after that period of time. And so obviously, are you referring to -- so obviously, for those patients who go into...

[Johan Unnerus, analyst]

Yes, I'm thinking about the group that has completed these 24 months and there must be a fair amount of patients that have done that.

[Renée Aguiar-Lucander, executive]

Yes. exactly. Yes. Exactly. And those are -- that's what we refer to as the patients who have exited that study, out of those who have finished the trial of 2 years, that's what we're saying, 180 have screened for the open-label extension, and 106 as of the end of Q3 were enrolled into that study, and are therefore receiving an additional or their first kind of treatment of 9 months. So obviously, it's not enough -- we do not know whether this is patients who are retreated or whether these are patients who are in the placebo group and therefore, are getting their first treatment. That is something that we don't know since the trial is blinded. But 106 of them are as of now enrolled in that open-label extension.

[Johan Unnerus, analyst]

Of course, the patients themselves will, of course, if they have the second one. Yes. No, I think that was all for me and congratulations on good results. And I think as earlier answers were alluded to, it's a bit early on the dynamics between unique prescribers and number of patients and it was also very useful to get a feel for the dynamics between prescribers and sales and the time that takes at this stage in a way.

[Renée Aguiar-Lucander, executive]

Well, thank you very much. So with that, thank you very much to everybody who's participated, and we look forward to sharing our Q4 report with you in February. Thank you very much.