Calliditas Therapeutics AB

STO:CALTX

Earnings Call Analysis

TARPEYO Growth and Upcoming FDA Decision

TARPEYO recorded revenues of $26.3 million with 367 new enrollments, contributing to the year's total of around 1,200, alongside 197 new prescribers for Q3. The drug demonstrated a potential to reduce risk by 55% for aggravated kidney conditions. Additionally, setanaxib received Orphan Drug Designation for Alport syndrome trials starting this year. A key upcoming date is December 20 for the FDA's decision on TARPEYO's full approval, with documented evidence indicating it may significantly delay adverse clinical outcomes by a median of 12.8 years and reduce these events by 50% within 10 years. Presentations at international conferences and publications, such as The Lancet, have been favorably met, building strong momentum for TARPEYO.

Revenue Growth and Financial Health

The company reported a growth in net revenues to SEK 294.6 million in the third quarter of 2023, up from SEK 260.1 million in the same period last year, noting that last year's figures included a one-time milestone. A standout product, TARPEYO, achieved net product sales of SEK 283.6 million during the quarter, marking a 130% increase year-over-year, with a total of SEK 728.5 million over nine months. Partner-related revenues, primarily from Kinpeygo royalties, added SEK 11 million. Despite increased revenues, operating expenses also rose to SEK 439.2 million due to boosts in R&D and sales and marketing costs, leading to an operating loss of SEK 159.6 million for the quarter. However, the company reduced cash used in operating activities to SEK 62.5 million down from SEK 124.7 million year-over-year and maintained a strong cash position of SEK 786.9 million, expecting to reach cash flow breakeven.

Investments in Growth, Commercial Uptake, and Momentum

The company is manifesting its commitment to growth by expanding market activities, particularly for TARPEYO in the U.S., commensurate with the publication of Phase III data in The Lancet. By adding resources and enhancing its sales force, now planned to grow to about 70 persons with an emphasis on nephrology expertise, the company expects to solidify its commercial trajectory. Q3 saw a reinforcement of TARPEYO revenue guidance, with the anticipation of robust Q4 performance. This bullish outlook is further fueled by nephrologists' increasing interest in the long-term treatment of IgAN patients, as well as favorable industry discussions and data presentations at medical conferences like ASN.

R&D Costs, Commercialization Challenges in Europe, and Sales Force Dynamics

R&D expenses jumped due to an impairment cost and intensification of clinical activities, although some costs were one-time in nature such as adjustments to the TRANSFORM study. Sales and marketing expenses rose primarily because of increased TARPEYO sales and marketing in the U.S. In Europe, the launch of Kinpeygo by STADA faces hurdles in reimbursement negotiations, which are ongoing. Turnover in the sales force was mentioned, attributed to normal industry rates and restructuring efforts to bolster nephrology expertise. While investments in sales and marketing are expected to maintain pace, large changes are not forecasted for the remainder of the year.

Challenges and Opportunities in Regulatory Approval and Expansion

The FDA's supplemental NDA review is progressing without requests for information beyond Phase III data, with label discussions anticipated soon. European commercialization by STADA shows slow progression due to reimbursement rate negotiations individually with countries, compounded by desires for more long-term data. However, recent reimbursement approval by NICE marks a significant step. In China, regulatory milestones are expected by year-end, with transfer processes ready to enable commercialization by Everest Medicines following approval. Ongoing positive conversations with nephrologists indicate interest in long-term dosing and combination therapies, with potential Phase IV studies in planning to expand treatment paradigms and data dissemination in the near future.

Earnings Call Transcript 2023-Q3

[Operator]

Welcome to Calliditas Q3 report 2023. [Operator Instructions] Now I'll hand the conference over to CEO, Renee Aguiar-Lucander. Please go ahead.

[Renée Aguiar-Lucander, executive]

Thank you, and welcome to this Q3 report. I'm joined here today by Richard Philipson, our Chief Medical Officer; Fredrik Johansson, our Chief Financial Officer; and Andrew Udell, President of North America.

I would like to draw your attention to the disclaimer page, which covers forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended. And I refer you to public filings including those containing risk factors.

So looking a little bit at the Q3 highlights. So during the quarter, we filed a full approval of TARPEYO with the FDA based on our full Phase III data. And also support our partner STADA in filing for standard marketing authorization with EMA. The FDA granted us priority review in August, and our target PDUFA date is December 20. We also saw the publication in The Lancet of our successful Phase III results, which was very well received by the nephrology community. And as we subsequently attended the IIgANN conference in late September in Tokyo, we saw a lot of enthusiasm for the data as well as for the supporting 5 posters and 3 oral presentations, which we shared with the audience there. Rich will give you a brief overview of some selected abstracts later in this call.

On the commercial side, as expected, we saw some summer-related seasonality effects in Q3 with TARPEYO revenues coming in at $26.3 million or SEK 284 million based on 367 new enrollments and 197 new prescribers in the quarter. As expected, we're also seeing some very robust growth in enrollments reflected early in Q4. The combination of the strong Phase III data, the RaDaR publication and other events in the GN space, we believe are all combining to generate a very favorable momentum, which we also had an opportunity to experience at Kidney Week where also we had an opportunity to present additional posters and make oral presentation at.

In terms of some post-period events and pipeline updates, with regards to our pipeline, during Q3, setanaxib was graded and granted ODD in Alport syndrome in both Europe and the U.S. Whilst with regards to events post Q3, we saw the filing with the MHRA with STADA and an approval in Macau for Everest Medicines.

However, the most impactful important event was the recent ASN meeting, the Kidney Week in Philadelphia. We were able to meet with a very large number of practicing nephrologists from across the U.S. We also had to got to listen to a multitude of relevant presentations and poster presentations, and we were able to gain insight into the early and continued formation of clinical practice involving IgAN patients and the experiences of clinicians and patients with TARPEYO. It was a very positive experience with a lot of great insights and positive feedback on the use of TARPEYO in the real-world setting.

There's a real sense of momentum building for the treatment of IgAN patients, and we're excited and energized coming out of an ASN and look forward to continue building on our category leadership position.

With that, I'm going to hand over to our Chief Medical Officer, Richard Philipson, who will take you through some selected information regarding our posters and abstracts.

[Richard Philipson, executive]

Thanks very much, Renee. Next slide. So we're delighted to have had a strong presence at 2 recent global nephrology conferences, the 17th International Symposium on IgA Nephropathy in Tokyo and the American Society of Nephrology Annual Meeting in Philadelphia. Over the 2 conferences, a total of 12 posters and 4 oral presentations were given, in addition to educational satellite symposia, demonstrating our commitment to IgA nephropathy and rare kidney diseases.

I'd like to highlight some of the data and analyses that have been presented at these meetings. Professor Richard Lafayette presented analysis of the NefIgArd Phase III trial at ASN last week. The focus of the presentation was the time to 30% reduction in eGFR or kidney failure, which was a secondary endpoint of the trial. The time to this composite endpoint was significantly delayed with a 55% reduction in the risk of achieving this event in patients treated with Nefecon compared to placebo. It is particularly noteworthy that this outcome was consistent irrespective of baseline UPCR, and overall is supportive of the long-term treatment benefits of Nefecon.

We also presented at ASN a modeled analysis of clinical outcomes of patients in the NefIgArd trial compared with a matched registry cohort receiving supportive care only. We used the NefIgArd 2-year eGFR total slope outcome to calculate a hazard ratio for the clinical outcome of kidney failure, eGFR less than 15 ml per minute or sustained doubling of serum creatinine using the Inker meta-analysis as reference. This analysis showed a predicted median delay to the clinical outcome of 12.8 years when comparing Nefecon with placebo. Approximately 50% fewer patients are predicted to have a clinical outcome within 10 years, again when comparing Nefecon with placebo.

We also presented biomarker analysis confirming previous findings from the Phase IIb NefIgArd trial. As you know, circulating immune complexes containing poorly glycosylated IgA when deposited in the mesangium of the glomerulus, elicit an inflammatory response and drives the decline in kidney function seen in patients with IgA nephropathy.

We have shown in samples taken from 160 patients in the NefIgArd trial that Nefecon significantly reduces levels of circulating immune complexes throughout the treatment period compared to placebo, supporting the disease-modifying effect of the treatment.

In collaboration with Professor Jennifer Dressman of the Goethe University in Frankfurt, we also presented data on the in vitro dissolution profile of Nefecon compared to other budesonide products, specifically Entocort, Budenofalk and Uceris.

Under biorelevant in vitro experimental conditions, we observed that the 4 formulations have distinct release profiles. When using Nefecon as a reference, we demonstrated that the 3 other formulations are statistically dissimilar. Taking into account differences in indications, doses, duration of treatments and dosing conditions in conjunction with the differing dissolution profiles, we conclude that there is no basis to consider the full products to be pharmaceutically or therapeutically interchangeable.

Finally, I'm very proud that we presented preclinical data supporting the potential clinical efficacy of setanaxib in the rare hereditary kidney disease, Alport syndrome. This work was carried out in collaboration with Professor Rachel Lennon of Manchester University, a recognized global leader in Alport syndrome research and treatment. We used a Col4a3 Knockout mouse model of Alport syndrome and showed statistically significant effects of setanaxib when given in conjunction with supportive care, renin-angiotensin system blockade. We saw changes in biochemical outcomes and also histological outcomes such as sclerosis and fibrosis.

We plan to start a Phase II clinical trial in Alport syndrome by the end of this year, and have recently received Orphan Drug Designation in both the U.S. and Europe.

I'll now hand over to Andrew Udell.

[Andrew Udell, executive]

Thanks, Richard. Next slide. As anticipated and seen last year, the third quarter was impacted by summer seasonality, which is caused by vacation and holiday time for both patients and nephrologists, which reduced the volume of patient visits with a disease like IgA nephropathy.

During the quarter, TARPEYO achieved net sales of $26.3 million. We had 367 new enrollments, bringing the 2023 total to approximately 1,200 enrollments. In addition, during this period of accelerated approval, we continue to see new prescribers with almost 200 new prescribers for TARPEYO in Q3. Importantly, we continue to have a very strong conversion rate with 86% of patients enrolled in TARPEYO Touchpoints receiving TARPEYO year-to-date.

Next slide, please. The third quarter contains significant milestones and events for Calliditas, receiving priority review from the FDA puts us on target for December 20 PDUFA. As we've mentioned, it isn't until FDA full approval and label changes that we can commercially promote new information to the prescribing nephrologists.

Until that time, nephrologists learn of the data through peer-to-peer interactions, publications and scientific meetings, which were described by Richard. As you heard, during Q3, the full results from the NefIgArd study were published in The Lancet and the IIgANN Conference took place in Tokyo. I want to reiterate, we have seen during these industry conferences and at advisory boards, the overwhelmingly positive reaction this data has had on nephrologists when introduced to the strong clinical results of TARPEYO.

Next slide, please. We're very excited of the opportunity ahead of us. We're just back from an action-packed ASN where the energy and momentum for IgAN and TARPEYO was palpable. The interactions were productive, insightful and keep us motivated to serve this patient population with a disease-specific treatment for IgA nephropathy like TARPEYO.

During the fourth quarter, as we move towards an anticipated full approval, we're expanding our Calliditas U.S. team in order to support and strengthen our category leadership position. This includes the addition of both internal and external-facing team members in medical affairs, marketing, market access and sales. As we have done since launch during the accelerated approval, we're deliberate in our growth that is directly sized to appropriately support patient and physician demand, increase our reach and maximize the market potential.

So with that, I'll turn it over to Fredrik Johansson for our financial overview.

[Fredrik Johansson, executive]

Thank you, Andy, and good afternoon and good morning, everyone. I will now present to you the financial overview for the third quarter of 2023. And as always, all numbers presented to you are million SEK, unless otherwise stated.

To start with, we reported SEK 294.6 million in net revenues for the quarter. For the same quarter last year, we reported net revenues of SEK 260.1 million. And please note that in the comparison quarter last year, a milestone of SEK 135 million from STADA was included.

TARPEYO net product sales for the quarter amounted to SEK 283.6 million or $26.3 million, which is a reported increase of 130% compared to the same quarter previous year. For the 9 months period, TARPEYO net product sales amounted to SEK 728.5 million or $68.8 million.

In addition, we also recorded SEK 11 million in revenues in the quarter related to partners, primarily from royalties based on Kinpeygo sales in Europe.

Our total operating expenses for the quarter amounted to SEK 439.2 million compared to SEK 292 million for the same quarter last year. The cost for research and development increased by SEK 77 million in the quarter to SEK 179.9 million compared with SEK 102.9 million for the same quarter previous year. Increase in R&D expenses origins primarily from an impairment cost of SEK 32 million and the increased clinical activities for the NOX platform, including the ongoing setanaxib trials in head and neck cancer and PBC.

And we also see some costs for the preparations for the Alport trial. While we changed our trial design of our TRANSFORM study in PBC during the quarter to a Phase IIb only with anticipated read-out mid next year. A shorter study has the potential to significantly reduce the planned R&D cost of the trial for both '24 and '25, but we had some additional costs in this quarter originating from the change of the study of approximately SEK 20 million. We can consider these additional transform cost and the impairment cost previously mentioned to be of onetime nature for this quarter.

The cost for sales and marketing increased by SEK 54.4 million to SEK 170.5 million compared to SEK 116.1 million for the same quarter previous year. The increase is primarily related to the cost for sales and marketing of TARPEYO in the U.S., where the marketing activities has been intensified and the sales force have been increased compared to the corresponding period of the prior year when we had a smaller sales force. The above led to an operating loss of SEK 159.6 million for the quarter compared to SEK 36.2 million for the same quarter last year.

In the third quarter, cash used in operating activities was SEK 62.5 million compared to SEK 124.7 million for the same quarter previous year. This leaves us with a net decrease in cash in the quarter of SEK 72.8 million, and we continue to have a healthy cash position of SEK 786.9 million or approximately $73 million at the end of the quarter, which we believe is sufficient to take us to cash flow breakeven.

That was all for me. And now back to you, Renee.

[Renée Aguiar-Lucander, executive]

Thank you, Fredrik. So just to summarize in terms of some of the key takeaways for this quarter. We're starting to see a much broader impact from the publication of the full Phase III data in The Lancet. And we've also obviously continued to provide supporting data both for the local mode of action and long-term benefits of treatment with TARPEYO. We saw continued revenue growth in Q3, coupled with a lower net cash burn, resulting in a strong cash position. And we confirm our revenue guidance for TARPEYO of SEK 100 million to SEK 120 million for the year of 2023.

I also want to reiterate the strong sense of growing momentum, positive momentum from ASN really focused on this increased awareness partly of longitudinal data related to the progression of IgAN patients, other publicated data coming out of the general GN space, and also just the general sense from nephrology community that there is an increased sense amongst that there is a need to treat this patient population. So with that, we look forward to Q4, our PDUFA date and obviously, the rest of 2023.

With that, we're ready to take any questions.

[Operator]

[Operator Instructions] The first question is from the line of Vamil Divan from Guggenheim Securities.

[Vamil Divan, analyst]

So I have a couple just on the commercial side, if I could. One is, you mentioned that there's been a little bit of a turnover in the sales force. And then you've also sort of mentioned that you're looking to increase your investment here going forward to drive the commercial uptake. So I'm wondering if you can just sort of give us a little bit more details on either of those or what sort of drove maybe some of this turnover?

And then kind of how -- where do you see the added investment making an impact? Is it more in the sort of thought leaders, academic centers? Is it more on the community? I'm also wondering maybe there's -- is there some sort of disconnect between the positive feedback you're getting from the advisory boards and all that you're holding at these medical meetings or maybe it's not yet translating to the community side. So wondering maybe that's in some way tied to what you're looking to do to drive uptake on the community side of things.

[Renée Aguiar-Lucander, executive]

Andy, do you want to start that?

[Andrew Udell, executive]

Sure. So as far as the sales force and our increased investment, I mean, there's typically turnover in sales force. I think the statistic is roughly around 5% per year. So we had some turnover in the summer. And I think we also initiated some of that really in areas where we felt we needed a heavier concentration with greater nephrology background.

As far as the investment and increased investment, we're really -- I'm not going to go into all the details, but I think we -- from a sales force sizing, that's -- the easiest number that people hear and listen to an appropriate support there, we're moving to around a 70-person sales force, okay? But I think it's very important to note that we've been very deliberate as we've said, this is not -- this is in areas where we feel there's an appropriate need and access. And we've done -- and we've added a lot of other individuals for support programs and to reach some of these accounts and larger accounts as well.

And I think you're right as far as the disconnect between the ad boards and these communities. This is the first time where -- we interact with people right now, this is the first time that they're learning about the data. So it's an ad board or if it's at these conferences. So they haven't -- this is their initial reactions to this, and that hasn't translated to, first of all, regulatory -- new regulatory indication and approval yet and to the community. So this will come with time. So it's not a disconnect. It just takes time, which is basically, I guess, would be normal. So I think that, that hopefully answers your questions.

[Operator]

The next question comes from the line of Yigal Nochomovitz.

[Yigal Nochomovitz, analyst]

I just had a question on the assumptions for the guidance. It seems like to get to the lower end of the guidance range, you'll need about a 20% quarter-on-quarter growth for the last quarter. Can you just discuss your assumptions around that? Is it being driven by the reversal of the seasonal weakness, as you mentioned, the reinforcing of the sales force or potentially given the full approval later this quarter?

[Renée Aguiar-Lucander, executive]

Of course. So I think that it is clearly a combination of a couple of things. Obviously, it is the fact that we're kind of adding some resources. We're -- we have been kind of adding towards the end of this -- kind of last quarter towards the sales force as well, which does obviously kind of help in terms of reach and frequency in general. But also, I think it is really this kind of the fact that the data was really published in April. It does take a little while for it to kind of penetrate into the community. And I think we're feeling very comfortable about the range that we've provided. And we're seeing, as I've kind of mentioned, a strong kind of beginning of Q4.

So I think it's a combination of all of these things. And importantly, also supported by, I think, the real important conversations among nephrologists based on this kind of longitudinal data that was both presented at the ASN, there was a poster of Kaiser Permanente that was kind of discussed a lot, the RaDaR studies discussed a lot. I think nephrologists are really kind of taking a hard look at their IgAN patients, and really kind of thinking about treatment rather than providing kind of ACEs and ARBs standard of care, those kind of more supportive care items. So we do think that there is a momentum that is building there. And I think -- so it's a combination of all of those things.

[Yigal Nochomovitz, analyst]

And then with regard to the 197 new prescribers, are you able to assess in the market how many of those -- their choice to add for payout to the treatment paradigm was based on the single Lancet publication recently?

[Renée Aguiar-Lucander, executive]

There really isn't any way for us to know that. There's really no way for us to kind of -- to have a sense of that. And also, I mean, The Lancet publication came out in August. And so I think we would probably expect that the consequences or kind of any change in behavior really would fall kind of now. It takes a little while for them to do that. And I think that it also needs -- I think, again, the whole kind of interaction between nephrologists, there's a lot of peer-to-peer discussion, communication.

There's quite a lot of patients who are now have very good outcomes. You have a lot of good stories from a successful use of TARPEYO by physicians and for that to build and kind of really spread in the community takes a little while. So I wouldn't expect to see the consequences really in this quarter, but more kind of in Q4 and onwards.

[Andrew Udell, executive]

Yes. And certainly not for Q3, those prescribers that you talked about, that's not -- that would be too soon.

[Operator]

The next question comes from the line of Dan Akschuti from Pareto Securities.

[Dan Akschuti, analyst]

One would be on Europe. Could you share some details on why the launch is going very slow there by STADA?

[Renée Aguiar-Lucander, executive]

Yes. So I think that, obviously, in Europe, you do have this kind of added complication of having to kind of negotiate reimbursement rates with individual countries that can really be quite a long process. I also think that there's been kind of a perception at least in Europe about wanting to see kind of maybe more long-term data, prior to kind of engaging in some of that conversation. So that data obviously was available as of March. So I think that those are probably kind of 2 reasons why we're seeing what we're seeing. But we're aware, obviously, of the fact that there are quite a few -- quite a lot -- quite a few kind of negotiations ongoing in parallel at this point in time in order to kind of roll out in more kind of geographic areas in Europe.

[Andrew Udell, executive]

I think we should also add that they just received reimbursement from NICE, which is an important milestone and very recent happening.

[Dan Akschuti, analyst]

Okay. And next follow-up on that would be in Germany specifically. Do you know of any specific challenges there since it is launched since September last year?

[Renée Aguiar-Lucander, executive]

So again, I think the only thing that I can think of, obviously, is the -- the EMA kind of label is slightly different in terms of that it does give a very more kind of a line in the sand in terms of the actual kind of subgroup population. So there is less, I guess, flexibility in terms of potentially prescribing to patients that are around that kind of cut off. So I think that, that might have something to do with it. But otherwise, I don't have any insights specifically. I don't know, Andy, if you have any insights.

[Andrew Udell, executive]

No, I agree. The feedback is it's a very strict interpretation of their label there. They're not displeased with the progress to date. They have about 200 patients in a year and change. So -- but this is, once again, as Renee said, this is due to a conditional label and a strict interpretation of that. So.....

[Dan Akschuti, analyst]

And another question would be that are you expecting further increase in R&D costs? And what was the rationale for the decrease in sales and marketing costs in Q3, what are the reasons for that? And do you expect that to pick up again in Q4?

[Renée Aguiar-Lucander, executive]

We're not expecting increased R&D cost per se. I think that what we're experiencing is just kind of a bit of a lumpy kind of effect in terms of some of these effects that relate to the fact that we're going into kind of ending some of these trials, reading them out and obviously, mainly the redesign, if you like, of the protocol around the TRANSFORM study.

And so we've made no kind of additional plans to invest or to have any kind of additional cost apart from what we've already kind of communicated. So I would actually describe this more to kind of a certain lumpiness in these costs rather than anything that you should ascribe too much to, quite honestly.

[Dan Akschuti, analyst]

Okay. And regarding sales and marketing costs, they decreased this quarter? And do you expect them to increase again in Q4? And why did it go down in Q3?

[Renée Aguiar-Lucander, executive]

I'm sorry, I had a little bit of hard time hearing you. So -- are you referring to marketing costs going down?

[Dan Akschuti, analyst]

Yes, in Q3? And do you expect them to increase again in Q4? And why did you spend less in -- for sales and marketing in Q3 versus Q2?

[Fredrik Johansson, executive]

Yes. I think it's just a coincidence. I'm a bit reluctant to give any guidance for the rest of the year on the sales and marketing side. But I think we -- as Renee said, we don't expect any major increases for the year on the new investments we're planning for.

[Renée Aguiar-Lucander, executive]

So again, I mean, it's -- I don't think anyone should read too much into kind of quarterly kind of changes at this time. We're obviously still kind of in a launch mode, and I think things go a little bit up and down, but I don't think that there is any particular reason for it, really.

[Operator]

The next question comes from the line of Maury Raycroft from Jefferies.

[Maurice Raycroft, analyst]

I was wondering if you can provide more perspective on the ongoing supplemental NDA review. Has FDA requested any additional analyses beyond what has been published in The Lancet, such as any data from your open-label extension study? And if you had label discussions or are you in the process of having label discussions currently?

[Renée Aguiar-Lucander, executive]

So there's been no request for any information outside of the Phase III data set. And in terms of label negotiations, we would expect them to start shortly.

[Maurice Raycroft, analyst]

Got it. Okay. That's helpful. And what are your expectations for the label beyond the UPCR and eGFR changes? I guess, do you expect the hematuria benefit to be in there? And what about disease-modifying language based on the off-treatment profile?

[Renée Aguiar-Lucander, executive]

I think it's very difficult to say at this point in time until we kind of have received comments from the agency once they have fully reviewed the files. I think it's very difficult to say. I think that from our perspective, I think data is pretty straightforward. I think that the -- we see a very pronounced effect, and we see it across the entire study population. I think that in terms of -- I think generally, the FDA, I would say, is generally cautious around disease-modifying language. But we will see kind of how they would look at this in the context of kind of where they are in their kind of exploring of accelerated approvals and full approvals in this indication.

So I think it's very difficult to say, but I think we have an extremely strong data set, very consistent. There's not really much -- just like nothing gray in this. So we would expect it to be a fairly kind of straightforward discussion, but it is always very difficult to know exactly what the agency will allow to be incorporated in the label or not.

[Maurice Raycroft, analyst]

Got it. Makes sense. And last quick question just based on your ASN data. You had the Chinese patient cohort data from the global Phase III. Do you have an understanding as to why the treatment effects were larger despite similar patient baseline characteristics in this patient population? Does it have to do with this patient population just progressing faster on disease? Or -- if you can offer some perspective, that would be helpful.

[Richard Philipson, executive]

Yes. I mean, I think there could be different reasons for that one, as you've just outlined. I mean it is a different patient population, an Asian population. So -- and the rate of disease progression may be faster in that population. Overall, it's a smaller cohort as well. So there's more inherent -- there's more variability in the data set. So there may -- that maybe some contribution to what we're seeing as well.

[Operator]

Next question comes from the line of Arthur He from HC Wainwright.

[Yu He, analyst]

So just a follow-up on the Chinese market. Recently, have you been in discussion with Everest regarding the regulatory time line as well as the initial -- the pricing strategy with the Nefecon in China, which we expect to be launching in the next year.

[Renée Aguiar-Lucander, executive]

So we have not heard anything from them that would indicate that anything is different from the expectations that we've had all the time, which is that there is a decision expected before the end of the year. So that, as far as we're aware, and we're obviously in contact with them on an ongoing basis. That is what still is expected. So we would expect to get a decision from NMPA before the end of the year. So -- and after which, obviously, we would go through the same process that we did in Europe, i.e., we would transfer our market authorization holding, et cetera, to Everest Medicines in order for them to be able to start commercializing.

We've not had any kind of disclosure from Everest at this point in time in terms of any pricing. And so I think that's going to have to be kind of up to them, I think, to disclose once they kind of have the approval in hand.

[Yu He, analyst]

Sounds good. And just a quick one on TARPEYO. So after the sparsentan fail in the eGFR data, did you see during -- in your experience, did you see any patient kind of a switch from sparsentan to Nefecon? Or is there any color you can provide? I appreciate it.

[Renée Aguiar-Lucander, executive]

That's really not kind of data that we have access to. We don't really know which patients are on sparsentan and et cetera. So we wouldn't really know whether there was any switch with regards to that. We wouldn't have access to that information.

[Operator]

The next question comes from the line of Annabel Samimy from Stifel.

[Annabel Samimy, analyst]

I just wanted to know if you had any update on the average duration of treatment. And then also wit regard to all the data that's coming out, published and at medical meetings, how are payers responding to some of this published data in terms of removing any friction points? I know it's pretty well covered, but there's always some friction points. Is it resonating with them? Or are conversations sort of awaiting more formal approval of a new label or a change in practice guidelines. Can you just talk about the work you're doing on that front? And do you need to change practice guidelines to really get full adoption from the nephrologists?

[Renée Aguiar-Lucander, executive]

Andy, do you want to cover the market access piece?

[Andrew Udell, executive]

Sure. Sure. Well, I can give you the duration of treatment and the answer is that we really have no updates. This is not something that's going to change quarter-to-quarter other than as we continue to say, it's being used match of disease progression in most nephrologists. So -- but as far as the payer response, it's a process, right? So we have been getting some meetings already with payers, you try to get as many touch points as you can.

So the first one came with top line data, then the full publication. And then we'll obviously have a new indication. And then followed by that, we're anticipating guidelines to be updated probably early next year, sometime in the first half of next year. So there's no changes of substance today that we really would discuss, but it's a process and I think we're pretty encouraged that in certain areas of management, some of the friction that's created is a direct result of the current label, okay? So I think that, that will change over time over the next 6 to 12 months as the label changes and guidelines change, but there's no set timing.

[Operator]

The next question comes from the line of Rami Katkhuda from LifeSci Capital.

[Rami Katkhuda, analyst]

I guess, in addition to the open-label extension, you previously mentioned the potential for post-marketing studies to evaluate longer-term dosing, combination, approaches, et cetera. I guess any update on that front and whether you still plan to pursue those opportunities?

[Renée Aguiar-Lucander, executive]

No, I think that these are kind of normal discussions, obviously, that we have since we have a product on the market, but we haven't kind of resolved on anything specific yet. But obviously, there are quite a lot of conversations ongoing. And a lot of these are obviously also driven directly by nephrologists. They're keen to kind of use the product. They want to have some more information in terms of kind of various treatment paradigm.

So this is something that's a very kind of constructive and positive kind of conversation that we're having with nephrologists, but we haven't yet kind of firmly agreed on any specifics around that. But we would expect that we will obviously conduct some of those kind of Phase IV studies going forward. But in terms of -- so actually kind of in terms of data that we will kind of more formally release that really is the open-label extension, which we hope to be able to do in the first half of next year.

And then obviously, together with the setanaxib data that will also kind of happen in the first half of next year. So those are the kind of planned data releases for now. But we will keep you updated, obviously, as to when we kind of embark or have kind of all these releases clarified as to any kind of Phase IV trial.

[Operator]

The next question comes from the line of Johan Unnerus from Redeye.

[Johan Unnerus, analyst]

Great. Can you hear me?

[Renée Aguiar-Lucander, executive]

Yes.

[Johan Unnerus, analyst]

Excellent. Just a follow-up to begin with, on the label review in the FDA meeting, is there any reason to not believe that they would align to your study design earlier? There's obviously a more narrow label in the conditional approval than in the study.

[Renée Aguiar-Lucander, executive]

Yes. I mean again, I mean, I think that the data set is very clean and very straightforward. And as we've said, actually, we don't see -- we see a very consistent effect across the entire data set. So from that perspective, we wouldn't expect there to be any basis for limiting the population from that perspective.

[Johan Unnerus, analyst]

Interesting. Yes. And also a follow-up regarding China, should we expect any milestone on the back of this approval?

[Fredrik Johansson, executive]

Yes. We have milestones for China. But as earlier communicated, we don't see them as material in the view of the corporate -- the company's financing.

[Johan Unnerus, analyst]

Okay. And also, if I may, on the profile of your unique subscribers and specialists as of today, would they be sort of normal across-the-board profile? Or would you say that you have tendency to have more larger centers or smaller centers? Or.....

[Renée Aguiar-Lucander, executive]

I don't know, Andy, do you want to take that?

[Andrew Udell, executive]

I think it's generally spread out. There's no real formula for that or give you anything that's of substance as far as differentiations through prescribing.

[Operator]

There are no more questions at this time. So I hand over back to Renee.

[Renée Aguiar-Lucander, executive]

Thank you very much, and thank you all for listening and into this Q3 report, and we look forward to sharing our full year results as well as our Q4 numbers in due time. Thank you.

[Operator]

This concludes today's call. Thank you very much. Have a nice day. You may disconnect your lines.