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President and COO, Mike Benkowitz. So Mike, thank you very much for joining us. And maybe just to kick things off, obviously been really strong on the commercial execution over the past couple of years with the launch in PH-ILD. And now we have some pipeline updates this year. Maybe if you want to just give us a brief state of the business and kind of what investors should expect over the coming year, and then we can kind of dive into the specifics.
Sure. So Joe, first of all, thanks for hosting. Thanks for having us. We're very happy to be here, and good to see an almost full house out there. So thank you all for attending.
Before I get to your question, so my lawyers don't get mad at me, let me remind everybody, I may take some forward-looking statements, and you guys can check our public filings to see all the risks associated with that.
So I think as we look out into 2025 and really over the next few years, I think it's really kind of multifactorial. One, it's continued the commercial execution that I think our commercial teams have been really just doing a brilliant job with the last couple of years. And so we really see no reason for that not to be able to continue as we move into the next 2 years with our -- what we call our foundation business or our existing commercial products.
And then we're really excited about some near-term data readouts. We have the 2 TETON trials, studying Tyvaso in idiopathic pulmonary fibrosis. So the TETON 2 trial will actually read out first. And so that's our rest of world trial, and that will read out second half of this year. And then our TETON 1 trial, which is the U.S. and Canada, will read out the first half of next year. So both trials are fully enrolled. There's a 52-week follow-up, so we're just waiting for that to play out and really excited about the potential of both of those trials and a new indication for Tyvaso.
And then on the PAH side of things, we have our ralinepag ADVANCE OUTCOMES study, which will finish enrolling by the middle of this year, and then we'll accrue that by the end of the year and report top line results first half of next year. So that's another we think significant expansion opportunity for us in pulmonary arterial hypertension. And then lastly, I think the thing that we announced at the end of January or early February is that the FDA cleared our IND for our xeno-kidney, what we call our UKidney product. So we're eager to get that trial up and running later this year and hopefully start to make a dent in our quest to create an unlimited supply of transplant of organs.
Great. Awesome. Well, maybe we'll start with PH-ILD first. Maybe so far, how has the launch been going? How penetrated into the PH-ILD market? Do you think Tyvaso is at this point? And kind of what are the key factors going forward to break that more?
Yes. I think the launch into PH-ILD has been going really well thus far. We're about 3 -- I guess, 3 years in now at this point, or 4 years, I guess, almost 4 years at this point, I should say. So I think that's going really well. I'd say in terms of active patients, our penetration is in the mid-teens percentage-wise. That's off of a kind of estimated base 30,000 PH-ILD patients in the U.S. I mean some would say that it's larger than that, but probably not smaller than that. So if you just kind of take that as your base, we're in kind of that mid-teens percentage in terms of active patients, probably higher than that, definitely higher than that if you consider patients that have started and discontinued therapy for various reasons, transplant or what have you.
So I think overall, I think the launch has gone well. I think a couple of things that maybe we underestimated when we first went into this space was just getting the physicians to change their behavior, their thinking around the disease, screening for the disease, diagnosing the disease in certain cases, referring to pulmonary hypertension centers. And so I think a lot of our efforts have really been around education of these physicians about the severity of the disease and then obviously, there's now a treatment on how to start on Tyvaso.
And so we did a sales force expansion at the beginning of last year to really try and redouble our efforts on that front. And that's gone very well. We've really gotten some more traction in that PH-ILD treating community. We grew our total Tyvaso prescriber base by about 15% last year, over half of those new prescribers were ILD triggers, which is really good. So they're starting to write. They're starting to treat. And so we're getting that prescribing breadth. And then I think we still have opportunities to expand that breadth and then also drive that depth within those prescribers, which I think will unlock more patients for Tyvaso.
Great. And so we haven't seen the full impact yet from that sales force expansion? Or kind of how should we expect that? And do you think the sales force is rightsized now for PAH and PH-ILD specifically?
Well, I think the impact -- I think we'll continue to see impact over time. I kind of think back to pulmonary arterial hypertension, 20 years ago, when there were virtually no therapies and there were maybe, I don't know, 3,000 patients diagnosed with PAH in the U.S., and now you look at today, it's pushing 50,000. So I think the continued education and awareness will continue, I think, will drive the diagnosis of PH-ILD. So I think that's just going to be sort of an ongoing thing that what we're doing over the coming years.
In terms of the size of the sales force, I feel pretty good about where it's sized right now. Not to say that we wouldn't change if we see something different or learned some new information. But I think, by and large, we're rightsized. We may make some changes on the margins to add in a few people here or there if we see some gaps in physician coverage. But overall, I think we're in a pretty good place with the size of the sales team.
Perfect. And on the last quarterly call, the company indicated some slightly higher gross to net discounts for Tyvaso seemingly specifically. Can you maybe go into what led to that? Why and kind of how we felt the full impact of that kind of change and now we kind of grow from here, or should we expect more?
Yes. So I think we've talked about this that we were engaging -- over the last couple of quarters -- I think we've talked about the fact that we've been engaging with payers around, contracting rebates, particularly for Tyvaso. And it's really in anticipation of competition that's potentially coming later this year. And as we kind of look at our product profile, we look at that compared to the competition, where we feel like we can win, where we're potentially -- there's opportunities for competition to make inroads. We really felt like the one thing that we could do a better job was on, on the payer front.
And so what we really wanted to do was put some rebates in place, get those rebate dollars flowing, get provisions in with the payers to keep us at parity so that we're not disadvantaged. But I think as long as we're not disadvantaged and were at parity, we take the decision out of the payers' hands, and we really make this a clinician decision. So we leave it up to the health care practitioner, we leave it up to the patient. And again, I think with our product profile, we really think that we're uniquely positioned to win that -- the vast majority of the time.
So that was really sort of the strategy and the thinking behind doing the rebate. So we gave up a little bit in the short run. But I think with the volume we have, the dollar impact to the payers is pretty significant. And so I think it's a good strategy to not have us be disadvantaged if competition comes to market later this year. In terms of how this has played out, as I said on our earnings call last week, we think it's largely played out. As we entered into contracts with the major PBMs and the Part D plans between the third quarter and fourth quarter of last year. Most of that has been pulled through. I mean there still may be some individual plans within the PBMs that haven't taken the rebates yet.
So you could see, I would say, some modest fluctuations as we move forward. But I think we did this to really position ourselves for continued growth in the double digits that Martine and I have talked about on the earnings calls and then that's what we expect going forward.
Great. And maybe on some of the new entrants to the PAH field, with Merck's WINREVAIR. Can you talk a little bit about how you have seen any changes in the business since Merck launched? And obviously, the company stopped the recent HYPERION study early. Do you anticipate that that's going to have any impact to your franchise at all?
So on the first part, we really haven't seen an impact to our business. I mean I know it's being utilized with patients that are on prostacyclin. And that makes sense because that was largely how it was studied in their pivotal trial. But if I look at our underlying demand metrics, prescriptions, patient starts, patient shipments, patient retention rate, really no change and actually growth across that. So I think that all goes very well for us as we continue to move forward.
Regarding the HYPERION study, I mean, we'll see once we see some data behind that decision, I think at the end of the day, it's important to keep in mind that over the long term, PAH is a progressive disease. And so whether a patient starts on prostacyclin or whether they start on sotatercept, the disease is going to progress. And so you're going to get to one or the other eventually. And we're very confident in that fact. I think the other thing to keep in mind is as patients are doing better on multiple therapies, they're going to live longer. That means they're going to be on our therapy and other therapies for a lot longer period of time.
And then the last thing I would just ask everybody to keep in mind is -- as it relates to PH-ILD, obviously, we're the only approved therapy there, and that's really where we see. I think we will continue to grow in PAH, but our really big growth driver is going to be in the PH-ILD indication.
And maybe related to some of the comments you made around the contracting and potential competition entering, what are your expectations for Liquidia Yutrepia approval and launch either in PAH, PH-ILD or both? And kind of what gives you confidence that Tyvaso DPI can kind of stand on its own and kind of keep seeing penetration?
Yes. So I think in terms of approval, as it stands right now, I think they can launch at the end of May, and that's kind of where things sit right now in terms of launch date. So we're expecting that they're going to be out in the market by the summer some time. As I said before, I think our product -- we think our product profile is superior to theirs. I think the convenience of our device when it comes to OneBreath procession versus 2, loading, administer the device. You don't have to clean the device, clean our device.
So I think there's a lot of things just purely from a convenience aspect that once patients and physicians see are able to look at these 2 devices together will see that ours is a better device or a more convenient device. And then you get into other things around the flow rate, which we think is our low flow rate the bias, we think is better for administering the drugs and getting that deep penetration into the lungs in a tolerable manner. So we feel very good, as I said, that if it comes down to really clinician decision patient decision, our devices -- our product is going to be preferred, and that's kind of how we think this is going to play out.
Perfect. Maybe last question on competition, and then we'll dive into some of the other components of your story, but we are going to see the Insmed TPIP data coming up, I guess, just what's the overall thought on potential competition from TPIP. And in these data that are coming up, what's the company kind of looking for, if anything?
I mean, honestly, just curious to see, I think, kind of clean data from them because it's -- I think everything that's been out there right now, it's a little confusing, maybe a little more kind of hard to kind of read the tea leaves. And so I think for us, it's really just looking at the data center and absorbing it. And then from there, we'll be able to respond. I mean it's still, I think, several years away. They'll have to do a Phase III trial, I think, on the PAH side of things.
Hopefully, we'll have ralinepag approved by then, which is our once-daily oral prostacyclin. I think that's going to trump really all of the inhaled pirenidone market. And so I think there's a lot that can happen between now and then, but really, I think at first, we just need to see the data. Yes.
And maybe sticking with Tyvaso but going over to IPF. Obviously, you mentioned the 2 readouts over the next year here. Can you kind of go back to the INCREASE study, what gave you confidence to move forward into IPF with Tyvaso?
Sure. Well, I mean, to start with the fact that there's some known anti-fibrotic effects associated with treprostinil and preclinical and nonclinical work. So that's sort of the starting point. And then in the INCREASE trial, we saw 2 interesting things. One is we saw an improvement in forced vital capacity, FVC, in a subset of the patients in the INCREASE trial, both in the main trial, but then also in the open-label extension, which went out beyond a year.
So that was super encouraging as well as a reduction in lung exacerbations, which is a kind of a surrogate endpoint for anti-fibrotic effects. So I think the combination of those things together at least there was enough there for us to say, let's do experiment. Let's do the trial. And I think if we're able to show that we are improving FVC which we're very optimistic about. I mean that's going to be a game changer for patients because as you know the current anti-fibrotic is just really slow to decline. They don't actually improve how the patient feels. So we think if we're able to -- if we're able to have a trial that shows improvement, that's going to be a huge win for patients.
And the INCREASE study was obviously originally the PH-ILD trial. Can you talk a little bit about some of the considerations that we have to think about when looking at that subset versus the true IPF Phase III studies?
Sure. I mean the main one is obviously in the increased trial, the patients are presenting with both an ILD or an IPF and pulmonary hypertension. They did have lower FVC compared to what we're seeing in the TETON trial. But we feel like that through the powering of the study, we've adjusted for that. And as I said, I think we remain very, very optimistic about the outcome of that trial.
Perfect. And we're expecting data from the first trial in the back half of this year. Can you just kind of give us an update what level of information should we expect in an initial release versus the full data package?
Yes. So we haven't really committed to a communication strategy yet on those trials. I mean, I think you could probably look back to the cadence and the content of the communications that came out when -- with the INCREASE trial, without sort of committing to it 100%. I expect it's probably going to look something like that. And that was a top line readout in the press release and then full data readout at a future medical conference.
Okay, perfect. And then on the 2 trials, is the baseline that both of these TETON 1 and TETON 2 will be needed for a submission? And maybe can you discuss the sort of CMC readiness for an IPF launch?
Yes, on the first -- I mean, it's a quick answer, yes. On the first, and we're ready to go. Yes, so we are.
Perfect. Maybe can you talk about the overall patient population here? How much larger is IPF versus PH and sort of PH-ILD?
Sure. Yes. So the IPF population in the U.S. is estimated to be about 100,000 patients. So that's roughly 2x what we see in PAH, and if you believe my 30,000 number in PH-ILD about 3x larger than that. And the nice thing about doing the 2 trials is, we believe that, that's going to set us up for a filing and approval in Europe, where you have about a similar-sized population to the U.S. So really I think opens up the door to help many tens of thousands of patients if we have a successful trial.
Perfect. And maybe moving on to transplant because I think this is the next thing we get questions on. You recently announced that you do get the IND clearance for the UKidney. Can you just remind us what's left, I guess, between now and the first transplant mid-year?
Sure. So that was, as I said at the beginning, I think it's really exciting for us to get that first IND cleared with the FDA. So really, the only gating issue right now is just working with the transplant centers to get everything in place to do the trial. So we're going through that -- doing that work right now. We'll start off with two centers to do the initial cohort of patients and then likely expand beyond that after we get through that first cohort. But I'm just trying to get all the i's dotted and t's crossed with those two centers and then we'll be able to start doing those transplants.
Great. And there is a recent compassionate use or EIND, I forget how you phrase it, but women that returned to Alabama and having a really good response, I guess. What should we be looking for in this data package, as you go along the way? Is it lack of reduction that 2 weeks, 1 month, 6 months, I guess, what's important? And what are you going to be using to kind of gauge your success?
Yes. So I mean the endpoints that the FDA has given us the criteria they're looking at, and we put this in the press release as they're looking at the patient survival, graft survival, change in filtration rate and quality of life. So I think those are sort of the main efficacy things that we're looking for in this -- really in this first cohort of 6 patients.
And how do you think about releasing data from the study? There's a stagger between the first and second procedures and maybe second and third and then you can kind of expand it from there. But how do you think about releasing data because as has gone so far, we've been able to kind of follow the press releases. But now that it's in the company's hands, how should we think what we're going to hear?
I think it will be different than what you saw in the compassionate use cases because really there the interactions were primarily between the FDA and the transplant surgeon. And the hospitals and the transplant surgeons and the patients are really front and center and taking a lead. And of course, we will be critically important to this trial. But really, all we were doing was supplying the organ.
So I think now that we're into an actual clinical trial, we're the sponsor. I don't think this is going to be -- at least from our end, I think we're going to have some restrictions around what we can provide and present as we go along. I mean, obviously, if the transplant center or the individual patient decided that they want to do something, we can't really control that. But I think from our standpoint, it's probably going to look and feel a lot like what you see with your typical clinical trial. And so probably not a lot in the way of how is every patient doing, there'll be more as we get towards the tail end of the trial.
And then as investors try to maybe incorporate this into their models or kind of see the potential here because I think it's probably broadly underrepresented, how do you see the peak potential or kind of opportunity for xeno transplantation either as a stand-alone or as it relates to kind of your current commercial business?
We see it as being, I think, very significant, if everything works. And so if you look at the patients that are eligible for the trial, right? There's 2 buckets of patients. There's those patients that aren't currently on or aren't eligible to be on the kidney transplant list, that's about 0.5 million patients in the U.S., right? So that in and of itself is pretty, pretty significant.
And then the other category of patients are those patients that are on the transplant list, which is about 100,000 patients. And then there's a portion of those that if they are expected to either die or not receive a transplant in 5 years, they're eligible to participate in the trial. I don't know what percentage of that 100,000 of those patients, I don't know what percentage of those patients are. But, in any of that, I mean, there's plenty of patients out there.
So I think from a commercial standpoint, we're, I mean, practically only limited by the number of organs that we can manufacture each year. And so think about it from that perspective, it's -- and if everything works the way we expect it to in the trial, it will be significant. It will significantly outpace our current products from a revenue standpoint.
And maybe related to that in the organs that you're available to kind of put out there, what is sort of the current footprint of the xeno franchise? And how are you thinking about step-ups that are going to be necessary and sort of the derisking events that go into that additional spend?
Sure. So we opened our clinical designation, the facility is called the DPF designated pathogen-free facility, access to biosecure facility to house the pigs and grow the pig before explant to transplant. So we built our -- we opened our first clinical-sized DPF about a year ago this time. That facility is capable of producing about 125 organs per year. We're in the process of building 2 more of that size in Houston and in Minnesota. And so that construction on both of those is underway.
And then I think really the next thing for us is the commercial scale DPF. And so we've begun pre-construction activities to build that facility, I would say, in terms of the gating issues. I mean the first one, obviously, was the clearance of the IND. So check, we've done that one.
The second thing before we get too much further down the road on that is to meet with the FDA and confirm the design, criteria, and specs for that facility. So we just want to make sure that we're on the same page with the FDA around what does that facility need to look like at commercial scale. And then I think we'll start moving into construction there.
And then the other thing to keep in mind, that will obviously be a significant larger spend than the clinical DPS because we're talking about orders of magnitude greater in terms of production capacity. But we're not -- we don't kind of check for the full amount on day 1. Those costs get spread out over multiple years. And so we feel like we're going to be able to set this up in a way where we're controlling and managing the spend as we're following the success of the clinical trial. And if the unfortunate happens and something goes south with the clinical trial, we'll be able to cut off the spend on the construction costs and vice versa.
Perfect. And you did kind of start -- mentioned a couple of times, actually during the talk when you're going back to PAH, but the ralinepag once-a-day therapy for PAH. I feel like this one also is maybe not in a lot of metals or high on the investor interest list, I guess, can you tell us where you see this fitting in, in reference to Orenitram? And you even mentioned maybe potentially going ahead of some of the inhaled therapies. Where is this going to fall, you think, if the data...
Yes. So I mean, I think, obviously, it's going to depend on how the data come out. But I think if we've got a -- meet our clinical versus end point, we show improvement. It is going to be the first truly once-a-day prostacyclin agonist product. And our expectation is if the data play out the way that we expect it to, that really moves ralinepag to the front of the line for prostacyclin use. And so I would say probably ahead of inhaled, probably ahead of Orenitram and the nice thing about what we've seen with Orenitram recently is it's taken a little while, but I think Orenitram has kind of found its niche in the treatment paradigm. And what we're seeing now is most patients going on it fast. Sbout half the patients starting on Orenitram are coming from Remodulin.
And what we found with that is by starting on Remodulin, the body gets sort of sensitized to prostacyclin. And then when you make that transition to Orenitram, you're able to start the patient at a much higher dose with a better side effect profile. Whereas if you're starting them de novo, you just have to titrate very, very slowly, it enters the side effects. So it takes a while to get up to a therapeutic dose.
So I think, yes, I think at the end of the day, there's going to be a role to play for all of these therapies because as I said before, it's a progressive disease. And then we also know that patients -- different patients respond to different therapies differently. But I think, generally speaking, with ralinepag, if we've got positive data there, we would expect that, that's going to move to the front of prostacyclin.
Perfect. And ralinepag came through a bit of BD quite a few years ago now. I guess -- how is the company thinking about additional BD? Obviously, you have a lot of cash on the balance sheet. A lot of things going on, but is BD a focus and kind of where does that fall?
It is. I mean the capital allocation -- our capital allocation strategy really has not changed over the last few years. I mean, it's first investment in the business, R&D second business development, then third return to shareholders. And interestingly, over the last year or so, we've executed our all three of those. We've done a couple of BD deals with -- obviously invested in different trials. Invested in a couple of acquisitions, smaller in size just to help round out our organ manufacturing business. So that obviously, we did a big buyback last year. So yes, so I mean I think on the BD front, we continue to look very actively. Our bar is pretty high, just because we've seen more deals go poorly than successful. And so I think we've got a pretty high bar to pull the trigger on those, but we are actively looking.
And obviously, the buyback is probably going to be a very similar response to your prior question. But the buyback was particularly well received over the past year. What conditions would the company be looking for maybe to execute that again?
Yes. I mean, again, I think it's sort of the same criteria of going through investing in the business. BD and then return to capital. We talked a little bit about the commercial xeno facility. I think -- it's fair to say we want to get our arms around that -- our interactions with the FDA to really understand what the scope, scale and cost of that's going to be. And then, related to that, as I said, we're really only constrained on commercial opportunity by how many organs we can produce. And so it's really, I think, looking at the kind of the return on investment or NPV of building commercial manufacturing facilities relative to other uses of the capital.
And maybe just in the last minute here, the company did announce on the last call that you have an enhancement to the Remodulin and the RemoPro or the...
Remunity Pump.
Remunity Pump coming ahead. I guess where do you see this sliding in? Is this going to be a growth driver for module and/or kind of just keep it in the mix? Remodulin has been particularly sticky.
Yes. So I think it could be a little bit -- well, definitely, that's going to help us maintain on patients on Remodulin. We do think that this is a better version, newer version, Remunity, that's going to be more convenient for patients just in terms of filling and just, I think, a smoother experience for them overall with the newer technology. So certainly, maintaining on Remodulin, we'll be able to achieve that.
I think with the current version of Remunity, I think there have been in certain pockets. Some doctors that have kind of flipped back to IV. We would have otherwise prescribed subcu flip back to IV just because they've had some challenges with the current version of Remunity. And so hopefully, with this newer version, once they see it, we're able to bring them back into the subcu fold. So you could see maybe some incremental growth there. But I think really, it's just making sure that those patients who are the seconds of the patients in PAH have as good of an experience as they can on Remodulin.
Perfect. And with that, we are just about out of time. So thank you very much for joining us.
Yes, thank you. Appreciate it.
