Verona Pharma PLC Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Andrew Tsai - Jefferies Financial Group Inc. - Analyst : Congrats on the strong launch and the strong execution. First question is your -- the data point around October net sales exceeding Q3. So does that mean we're run rating at least $17 million fourth quarter without considering any type of growth in November and December? Or should we start to think about some new variables that could come into play, like holiday period or patients starting to drop out? Or do you think the sheer volume of patient adds can offset any type of headwinds like these discontinuations?

Question: Andrew Tsai - Jefferies Financial Group Inc. - Analyst : Very good to hear. And then just as a follow-up. 5,000 prescriptions filled through October. By chance, are you willing to disclose how many unique patients you have as of October? And any other metrics you're planning to provide in the next earnings call?

Question: Yasmeen Rahimi - Piper Sandler & Co. - Analyst : Yes. And congrats on a great quarter. I want to stick with the theme of Andrew's question. I guess, it seems like things are progressing really well, but can we talk about past December into 2025? Should we be expecting that in the beginning of the year before JPMorgan, you could come out and provide some consensus or some guidance in terms of what revenue expectations are? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 04, 2024 / 2:00PM, VRNA.OQ - Q3 2024 Verona Pharma PLC Earnings Call I think it seems like you've had a great quarter, but there's just a lot of room trying to figure out how the next five quarters are going to go. So is there an opportunity to kind of help us understand like beyond fourth quarter what things are going to look like in 1Q, 2Q, 3Q? That's question one. Question two is, do you have any insight on who are -- what are the type of patients that are being prescribed Ohtuvayre? We recently did a KOL call and shockingly found out that the doctor was noting that majority of his patients are patients who failed triple therapy. So even if you don't have quantitative numbers, what are you hearing from the doctors in terms of how they're using Ohtuvayre? And then the third question is, where do you want to be in terms of physician outreach in the next -- by year end, by mid next year? Sorry for that sort of three-part long questions, and I'll jump back in the queue.

Question: Raghuram Selvaraju - H.C. Wainwright & Co - Analyst : Congrats on all the progress. Really very impressive commercial metrics here. Firstly, I wanted to ask if you could comment on any emerging prescriber trends, particularly with respect to preferences in combination regimens that prescribers are expressing they have a predilection for with respect to ensifentrine. Are there specific existing modalities that they are preferring to pair ensifentrine with? Or are you really just seeing sort of no preference and the drug effectively being very broadly deployed without any underlying emerging trends at this point?

Question: Raghuram Selvaraju - H.C. Wainwright & Co - Analyst : Great. And then with respect to the clinical indications that you are now starting to pursue proof-of-concept clinical evidence for, in particular, bronchiectasis. Can you talk a little bit about how the commercial experience with Ohtuvayre, increasing awareness of Ohtuvayre among prescribers is likely to frame these additional opportunities and how you go about pursuing them? Have those prescribers who've effectively acquainted themselves with the product since it's been launched expressed an interest in the progress of those additional indications as the drug continues to move forward on front beyond COPD?

Question: Raghuram Selvaraju - H.C. Wainwright & Co - Analyst : Great. And then lastly, this is just an accounting question. You mentioned earlier that certain expenses associated with manufacturing product prior to launch have now been shifted into the SG&A line or away from the R&D line as it were. So I was just wondering if you could give us a general maybe qualitative breakdown of which expenses going forward are likely to be segregated into the R&D line versus the SG&A line. For example, the speaker programs, how are you accounting for those? Are there any expenses, in other words, that are associated with effectively commercial activities that you are going to continue to book in the R&D line item?

Question: Thomas Shrader - BTIG, LLC - Analyst : Congratulations. Just looking at the physician number and the prescription number, it seems like you have a lot of people writing one or two prescriptions to try the drug. Do you know what they're looking for to get more excited? And I guess, the flip side is I assume you have power users. What do they tell you to refine your marketing pitch as to why they're already committed?

Question: Thomas Shrader - BTIG, LLC - Analyst : Chris, can I ask a quick follow-up on your infrastructure? How often are you giving patients drug for a month? And what is your conversion rate looks like? How does all that stuff you set up seem to be operating?

Question: Edward Thomason - Kempen & Co. N.V. - Analyst : And good to see the prints today. Well done. Just a question, please, on the ramp-up again. You mentioned, this is specifically to Mark, about inventory build. Can you just go -- talk through the dynamics there so we could better understand how that is playing out? And then roughly, if you can split it out, how much of the percentage of that -- of the initial sales we saw in Q3 is actually in market sales versus inventory build?

Question: Edward Thomason - Kempen & Co. N.V. - Analyst : I just asked whether you can disclose how much of the sales that was reported in Q3 relates to inventory build versus actual in-market sales.

Question: Edward Thomason - Kempen & Co. N.V. - Analyst : Okay. That's good to know. And then a separate question actually relates to the IP. I noticed a slight change where you've now talked about a couple of additional patents pending, notably one that's on COPD exacerbations. Can you just talk through how important that patent might be to commercial prospect? And does that patent related just to ensifentrine or specifically the use of PD3, PD4s against COPD exacerbations?

Question: Edward Thomason - Kempen & Co. N.V. - Analyst : Okay. And one last question, if I may. Just can you confirm how many patients from the ENHANCE clinical program have been converted into commercial prescriptions? And has there been demand amongst the existing user base for Ohtuvayre?

Question: Joon Lee - Trust Securities, Inc. - Analyst : Congrats on the strong quarter. Can you talk about reimbursement rate across government and commercial channels and the rate of prescription

Question: Joon Lee - Trust Securities, Inc. - Analyst : Great. Well, if I could add one more. Chris, you mentioned previously that 50% of the use is as an add-on to triple therapy, which is really interesting. Has that shifted at all in the first few months of launch? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 04, 2024 / 2:00PM, VRNA.OQ - Q3 2024 Verona Pharma PLC Earnings Call

Question: Boobalan Pachaiyappan - Roth Capital Partners - Analyst : Can you hear me?

Question: Boobalan Pachaiyappan - Roth Capital Partners - Analyst : Congrats on the progress. So we have two. Firstly, there's been some developments in the COPD landscape, most notably the recent approval of Dupixent. So we are wondering, do you expect potential headwinds from Dupi as you think about penetrating the subsection of the COPD market comprising patients who are on triple therapy? And is there a motivation for prescribers to prioritize ensifentrine for Dupi, excluding the cost benefits offered by ensifentrine?

Question: Boobalan Pachaiyappan - Roth Capital Partners - Analyst : Yes. And then maybe a second one and also the final one. So you mentioned about 2 Phase II clinical programs. I was looking at the clinical trials website this morning, and this website also included a trial actually that you're currently recruiting for. It's a Phase II study to study the effect of ensifentrine on sputum markers of inflammation in COPD patients. So I understand the mechanistic implications of the study, especially you wanted to see or know if ensifentrine interferes with the acPGP and the PGP pathway. So that aside, but I'm curious how you plan to integrate the study outcomes into your clinical and commercial strategy. Is this specifically to collect more data, potentially focusing on exacerbation and then maybe develop an add-on clinical program or this could potentially trickle down to your cystic fibrosis program in some other way? How are you thinking about it?