Crinetics Pharmaceuticals, Inc. Q3 FY2025 Earnings Call

Thank you, operator. Good afternoon, everyone, and thank you for joining us to discuss the third quarter 2025 results. Today on the call, we have Dr. Scott Struthers, Founder and Chief Executive Officer; Isabel Kalofonos, Chief Commercial Officer; and Toby Schilke, Chief Financial Officer. Also joining for the Q&A portion will be Dr. Steve Betz, Founder and Chief Scientific Officer; Dr. Dana Pizzuti, Chief Medical and Development Officer; and Dr. Alan Krasner, Chief Endocrinologist. Please note there's a slide deck for today's presentation, which is in the Events and Presentations section of the Investors page on the Crinetics website. In addition, a press release was issued earlier today and is also available on the corporate website. As a reminder, we'll be making forward-looking statements, and I invite you to learn more about the risks and uncertainties associated with these statements as disclosed in our SEC filings. Such forward-looking statements are not a guarantee of performance, and the company's actual results could differ materially from those stated or implied in such statements due to risks and uncertainties associated with the company's business. In particular, today, we will be reviewing launch progress to date, our commercialization plans as well as estimates relating to market size, future performance and other data about the acromegaly market, which are all necessarily subject to a high degree of uncertainty and risk. These forward-looking statements are qualified in their entirety by the cautionary statements contained in today's news release, the company's other news releases and Crinetics' SEC filings, including its annual report on Form 10-K and quarterly reports on Form 10-Q. I would also like to specify that the content of this conference call contains time-sensitive information that is accurate only as of this live broadcast. Crinetics takes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call. With that, I'll hand the call over to Scott.

Thank you, Gayathri, and thank you to everyone joining us on today's call. This is a landmark year for Crinetics. It's a rare privilege to be part of a team that has taken a molecule conceived in our own labs, developed with our own global clinical trials and is now bringing it to patients as a commercial-stage biotech. With PALSONIFY, we are now redefining efficacy in acromegaly as both biochemical and symptom control. When you think about it, the last time you know of someone who made an appointment with their healthcare provider to complain about their lab results. On Slide 5 are pictures of people we've gotten to know, people who have acromegaly, carcinoid syndrome, and CAH, and who have helped guide the vision for PALSONIFY and Atumelnant. We've worked with the acromegaly community for over a decade. We've listened to their stories and hopes, stories from Ellen about the frustration of symptoms that injections don't fully control or from Wendy about the simple desire to feel like yourself again. We recently observed acromegaly awareness Day and utilized this important moment in time to both drive broader consumer awareness of the disease and advance our patient engagement strategy. Our own Chief Endocrinologist, Dr. Alan Krasner, and acromegaly patient Tony were featured in numerous broadcast media interviews across key PALSONIFY markets. These broadcasts will continue throughout the month of November, pointing viewers and listeners to acromegalyreality.com. I am proud that we can help them and many others struggling with acromegaly enter a new era of therapy with PALSONIFY. My hope is that PALSONIFY brings them freedom—from the symptoms and burdens of managing their disease. I hope they can focus on their lives while PALSONIFY fades into the background as just another pill that they take in the morning. PALSONIFY is just the beginning. We've proven that we can discover important new drugs, proven that we can conduct high-quality global clinical development, and are now in the early stages of proving that we can bring them to people struggling with acromegaly as a commercial company. We plan to apply that same focused intensity to carcinoid syndrome and CAH and the other serious endocrine diseases in our pipeline. We're just getting started. I'm excited to share that the launch of PALSONIFY is going very well. Isabel will share more details. Our goal is to make PALSONIFY the first-line treatment of choice for acromegaly. In the initial 31-week days since approval, we've already made significant progress, and the team is executing seamlessly. The first patients received their bottles of PALSONIFY only 11 days after the PDUFA date. All U.S. patients in our open-label extension studies are in the process of transitioning to commercial supplies. As expected, the bulk of our initial patients are those switching to PALSONIFY from other therapies. However, we're also pleased to see a number of patients who are newly diagnosed starting with PALSONIFY as their first medical therapy. We are making headway activating the pituitary centers and have had very good reception from community endocrinologists, some of whom are proactively calling their patients to have them come in to talk about PALSONIFY. I've spent a lot of time in the past few weeks with our field force, and their enthusiasm and knowledge of the practitioners and offices in their territories are impressive, but we aren't relying on just the sales force. It's our entire field team—MSLs, field reimbursement specialists, nurse educators, our clinical development team, and executives. We're all out there trying to help improve the care of people with acromegaly. I'm also pleased that our early experience indicates that payers also recognize the value of PALSONIFY. Prior authorizations have been mostly straightforward, and in some cases, reimbursement has been approved for up to 12-month supplies even before we've secured formulary coverage. Because of our proactive work with payers, we're seeing meaningful numbers of patients starting on reimbursed PALSONIFY. I look forward to January when we'll have a full quarter's worth of launch metrics to share with you. At that time, we will update on revenue, new patient starts, the number of unique prescribers, and further characterize what we're seeing on the payer reimbursement side of the business. We are currently in the earliest days of Phase 1 of our 3-phase strategy to help more people with acromegaly get the care they need. The focus of Phase 1 is to concentrate on switching patients already on injectable SRL depots and other therapies to PALSONIFY. In this phase, we also believe that PALSONIFY's rapid onset of action will make it the medical therapy of choice for newly diagnosed patients. Looking ahead to next year, while we continue to serve both switching and naive patients, we will also begin additional efforts towards returning previously diagnosed patients back to care. There are multiple reasons why these 1,700 patients have discontinued medical therapy recently. We hope that PALSONIFY will provide a path for them to return to the care they need. From there, we will extend our efforts to reach the approximately 7,500 patients who have unfortunately been lost to follow-up after diagnosis and returning them to medical care. There can be multiple reasons why these patients have discontinued medical therapy. It won't be easy and it will take time, but we believe that PALSONIFY will offer these patients a path back to care as well. The third and final phase will be to improve the time to diagnosis of acromegaly. Diagnosing acromegaly is easy once you suspect it, but suspecting it can be challenging even for experienced providers. We anticipate launching specific initiatives later next year and our ongoing efforts to improve acromegaly awareness and its treatment options should start making a difference sooner. The story of Crinetics is not just the acromegaly launch; it's about our execution across the entire pipeline. I want to emphasize the strength and depth of what we've built through our internal discovery and development efforts. On the discovery front, we remain committed to holding our clinical candidates to the highest possible standards. Unfortunately, during IND-enabling toxicity studies, we identified weaknesses in our lead TSH candidate for Graves' disease. Therefore, we're delaying the IND timelines as we prioritize and activate the best of the backup molecules. We're also delaying the timelines for our SST3 agonist program for ADPKD as we conduct follow-ups to the core IND-enabling studies. Given the launch of PALSONIFY and acromegaly and the multiple late-stage programs in development, we will no longer provide regular updates on the timing of preclinical programs until those programs dose their first patient in a Phase 1 study, but rest assured, we are committed to not only advancing the late-stage pipeline but also to expanding the clinical pipeline, and our discovery activities continue unabated. We expect the clinical pipeline to continue to expand in 2026 and the years to come. Moving to the top of the pipeline. Carcinoid syndrome is the second indication in development for paltusotine. People with carcinoid syndrome struggle with debilitating and frequent flushing and bowel movements. Similar to acromegaly, the standard of care for these patients is painful monthly depot injectable SRLs. Based on our Phase 2 data, we believe paltusotine could offer consistent daily control of these in an oral formulation. Our Phase 3 study is designed to evaluate its efficacy and safety in both naive and switch patients, and the open-label extension study will also evaluate control of the underlying neuroendocrine tumors. More than 20 clinical sites have been activated and are currently screening patients for this study. Complementing paltusotine is CRN09682, the first candidate from the non-peptide drug conjugate program. 9682 is comprised of a novel ligand targeting SST2 to drive internalization into tumor cells, a novel linker that is cleaved only in the tumor cell, and a payload to be delivered. We believe 9682 will be differentiated from other current modalities, and we are studying it in the BRAVESST2 Phase 1/2 basket study in patients with SST2-expressing tumors. This includes neuroendocrine tumors as well as other types of tumors that overexpress SST2. The first 6 sites in this study have been activated and are actively screening patients. The enthusiasm for this study from both investigators and potential participants has been high. This is an important study for Crinetics. It's designed to provide the first human proof of concept for our entire NDC platform, and we're thrilled for it to be underway. Moving on to Atumelnant, in the first 3 cohorts of our Phase 2 ICANS trial for congenital adrenal hyperplasia, or CAH, Atumelnant showed a remarkable ability to highly suppress adrenal androgens in these patients. As you know, we added a fourth cohort to look at morning dosing instead of evening dosing, as well as the ability to lower adrenal androgens while simultaneously reducing glucocorticoid therapy towards physiological levels. Patients in this fourth cohort have recently completed their 12-week treatment period, and we continue to see a favorable benefit-risk profile. I look forward to sharing the data from Cohort 4 in January once our analysis is completed, along with initial data from a handful of patients from prior cohorts who have now reached the 13-week assessment in the open-label extension study. Now moving on to the design of our global Phase 3 CALM-CAH trial of Atumelnant in adults with CAH. The study builds on the strong top line results from the first 3 cohorts of our Phase 2 study. It's designed to provide a novel therapeutic paradigm for CAH, where atumelnant is used to treat the disease itself and glucocorticoids are only needed for physiological replacement. People with CAH deserve physiological levels of both, and that is why we are utilizing a novel uncompromising primary endpoint that combines both goals. This is a very high bar, but appropriate for the level of efficacy we expect from Atumelnant. I'm pleased to report that the first sites for the CALM-CAH trial have been activated. Screening is underway, and we expect the first patients to be randomized before the end of the year. Moving on to the BALANCE-CAH study for pediatric patients, we believe it is crucial to address both high androgen and glucocorticoid levels in pediatric patients because each can cause significant clinical sequelae, and we designed our clinical program with that goal in mind. This study is an operationally seamless Phase 2/3 design with a Phase 2 dose selection during which glucocorticoids remain stable, followed by a Phase 3 portion in which new patients will be randomized and have the opportunity to taper glucocorticoids. Eligible patients from both phases will have the opportunity to enroll in an open-label extension. We look forward to enrolling the first patient before the end of the year. With that, let me turn the call over to Isabel to provide additional color on the launch of PALSONIFY for acromegaly.

Thank you, Scott. Turning to Slide 16. Based on our strong label, our strategy is to establish PALSONIFY as the foundational care for acromegaly. To that end, I'm pleased to share the launch is off to a very good start. Since the approval, our team has been engaging with stakeholders and executing across all aspects of the launch. Our field team is reaching patients, physicians in the community and in academic settings, and payers, and we are hearing encouraging feedback. Starting with the patient on Slide 16. Our strategy is to activate both switch and naive patients by reinforcing PALSONIFY's consistent IGF-1 and symptom control in a once-daily order. It has been exciting to see that our omnichannel marketing and messages are resonating, and we are beginning to see enrollment forms from patients who requested PALSONIFY specifically. We're also encouraged by the fact that all of the 22 U.S. patients in the open-label extension are in the process of transitioning onto the commercial product. As expected, this early in the launch, 95% of our filled prescriptions are from switch patients, reflecting the demographic of the acromegaly population. However, it is encouraging that we are already starting to see enrollments from treatment-naive patients. This supports our thesis about the significant unmet need in both of these patient segments and represents a good start to Phase 1 of our overall strategy. Moving to healthcare providers on Slide 17. Even 1 month prior to approval, PALSONIFY had high levels of awareness among academic and community physicians. Building on this foundation, our field teams had called on more than 95% of our highest priority prescriber targets, most of whom are in academic centers. We are leveraging PALSONIFY's unique label, which includes symptom control, to engage with healthcare professionals. We believe our efficacy-first messaging is resonating with providers because they prioritize both symptom and IGF-1 control alongside ease of administration. Our sales force is using these messages in the priority PTC centers and high-volume community practices, while targeted marketing extends our reach to the broader community. At this point, we are seeing about 70% of prescribers coming from the community setting and 30% from PTCs. This is encouraging because it demonstrates that PALSONIFY is also attractive to community-based prescribing physicians. In the PTC setting, our broader field-facing team is working through the typical administrative processes to support uptake. This includes taking a comprehensive approach by engaging both endocrinologists and nurses as well as pharmacists and support staff. Finally, turning to payers on Slide 18. Our payer simple launch engagement work has positioned us well to understand the payers' coverage landscape. So far, we have had follow-up meetings with plans covering the majority of lives, and the feedback on our broad label and overall value proposition remains consistently favorable. We are pleased to see coverage approvals coming across commercial, Medicare, and Medicaid plans. For those that are approved, prior authorization decisions are taking only a few days, and we are encouraged to see some approvals for up to 12 months even in the early days of the launch. The Medicare patient support program and field teams are helping patients navigate their treatment journey. We are seeing a balanced mix of reimbursed patients and those on our Quick Start program. Our team is actively working with plans to transition quickest start patients onto reimbursed product. As expected, we anticipate the full formulary process will still take the standard 6 to 9 months. Overall, our commercial team is doing an excellent job executing against our plan. We look forward to providing launch metrics in the first quarter once we have had a full quarter of experience behind us. Our goal remains to make PALSONIFY the first treatment of choice for all acromegaly patients, and we are perfectly on pace relative to our expectations. With that, I will hand the call to Toby for our financial update.

Thank you, Isabel. Turning to Slide 20. Our financial results for the third quarter of 2025 reflect our continued disciplined execution and strategic investment in advancing our pipeline and commercialization of PALSONIFY. In the third quarter, we recognized $0.1 million in revenue from our licensing agreement with our Japanese partner, SKK. As expected, we did not recognize any revenue related to the launch of PALSONIFY in the third quarter due to the timing of approval, which was close to the end of the quarter. Under GAAP, we recognize PALSONIFY revenue upon delivery of product to our specialty distributor and specialty pharmacies. Product was shipped in the first few days of the fourth quarter, as Isabella stated, so we have recognized revenue in the fourth quarter. Our research and development expenses for the third quarter were $90.5 million compared to $80.3 million in the second quarter. This increase reflects our continued investment in our clinical programs, including start-up costs for our late-stage clinical trials and ongoing advancement of CRN09682, the first candidate from our novel non-peptide drug conjugate or NDC platform in early-stage clinical studies. Selling, general and administrative expenses were $52.3 million for the third quarter compared to $49.8 million in the second quarter. This increase reflects our investments to drive the successful execution of PALSONIFY's launch, including onboarding and deploying our field force, strategic marketing initiatives and the growth of corporate functions to support our commercial team. We used $110.7 million of cash in operations during the quarter, reflecting continued clinical development and launch preparation activities. Cash used in operations was slightly higher than anticipated this quarter, primarily due to the timing of payables. We ended the quarter with $1.1 billion in cash, cash equivalents, and investments. As of October 28, 2025, we had approximately 94.9 million shares of common stock outstanding. On a fully diluted basis, we had 111.9 million shares outstanding. This includes our outstanding options, unvested restricted stock units, and shares expected to be purchased under our employee stock purchase plan. Moving to Slide 21. We are maintaining our guidance for net cash used in operations in 2025 and continue to expect that we will use between $340 million and $370 million. Based on our current operating plans and cash position, we maintain our guidance that existing cash and investments will be sufficient to fund our operations into 2029. This provides us with significant runway to execute on multiple value-creating milestones, including the U.S. commercialization of PALSONIFY and the advancement of the rest of our pipeline. I will now turn the call back to Scott for some closing remarks.

Thank you, Toby. Slide 23 lays out the major commercial and clinical catalysts that we expect to drive significant value starting early next year and continuing over the next 18 to 24 months. Commercially, our entire focus is on executing a strong U.S. launch trajectory for PALSONIFY. We're already seeing the validation of our strategy with prescriptions coming from both community endocrinologists and major pituitary centers. Initial feedback from patients, physicians, and payers is positive. As I mentioned, we'll provide detailed launch metrics from the full Q4 results in January. We also have a great deal of momentum in the clinical pipeline. We have a key near-term data readout for the T2CANS study, which will include data from Cohort 4 and the initial open-label extension patients from prior cohorts. Beyond that, we have a robust set of late-stage programs advancing. We expect them to produce key data readouts, including from our CALM-CAH adult Phase 3 trial, the BALANCE-CAH Phase 2 pediatric study, and our CAREFNDR Phase 3 trial in carcinoid syndrome. At the same time, our BRAVESST2 study for CRN-9682 is underway, and we anticipate initial data from dose escalation and expansion cohorts from this. Our Phase 2/III program for Cushing's disease is also kicking off soon. Behind all this, our discovery engine remains our foundation. We expect new internally discovered candidates to enter the clinic and provide their first early readouts during this period. In summary, we have a deep pipeline, a strong balance sheet, and a clear path to continued value creation. We are executing on all fronts and look forward to updating you as we achieve these important milestones. Thank you for joining us today. We're now happy to take your questions.

First question comes from Catherine Novack with JonesTrading.

I just want to ask a little bit maybe about some of the data that you showed at NANETS last week. I'm very interested to see the PFS data in the NET patients with paltusotine that is. Can you tell us what the evidence is for somatostatin receptor ligands in this setting? Will you ever want to conduct survival studies with paltusotine alone?

Thanks, Catherine. Somatostatin receptor ligands are known to be slowing the growth of neuroendocrine tumors, and that was proven in the CLARINET study with lanreotide. Mechanistically, we expect the same thing out of paltusotine, which is why we're monitoring this in the open-label extensions of the carcinoid Phase 2 and then soon the carcinoid Phase 3, but maybe, Alan, do you want to comment a little bit more on that to clarify what we see and what we're hoping to see.

Sure. Yes, Catherine, so as Scott said, the somatostatin receptor ligands have a known cytostatic kind of effect, improving progression-free survival in neuroendocrine tumors in general. We recently presented at NANETS our exploratory data from our Phase 2 trial open-label extension patients, a small cohort of patients. In general, the PFS in that cohort looks comparable to what you would expect in a long-term trial in neuroendocrine tumors. Neuroendocrine tumors are very, very slow-growing and advancing. In general, the time it would take to do objective response kind of trial, survival kinds of trials is sort of out of bounds. PFS is usually used as the surrogate of those kinds of outcomes in this tumor type. In general, we're seeing uncontrolled data that reflects what we would expect to see, and we'll have a lot more data coming from the long-term Phase 3 cohorts as well.

Then just it's disappointing to hear about the Graves' disease candidate, but glad that you were able to catch it early. Any clarity on what model you saw the toxicity signals? Was it an on-target toxicity? Or do you find that you're hitting a receptor that was unexpected? Any information?

No. It's an idiosyncratic finding that really was driving the decision, nothing related to on-target activity. I think we have a very good understanding of the mechanistic biology of the TSH receptor, so that's never something we've worried about.

We now turn to Cory Jubinville with LifeSci Capital.

You mentioned that the sales team has reached out to over 95% of top priority prescribers. Could you remind us how many prescribers this includes? Also, what is the concentration of the immediately addressable 10,000 acromegaly patients at those top priority prescriber centers? Additionally, when you interact with these centers, what has been the initial perception from those doctors regarding PALSONIFY? How many of them have converted to actual prescribers or are working to integrate it into their practice for the long term?

Yes. Thanks, Cory. Maybe before I hand it to Isabel to answer in a little more detail, just a reminder that we're deeply part of the pituitary community and the endocrinology community more broadly. It's great that our field force has been out there talking now at that level, but they've been out there with warm introductions from those of us who know these people for these prescribers for a long time. I'm really glad to see the response from the community, which has been quite favorable, according to comments from all across our field force and directly that I've been hearing from them. We're still working our way through some of the administrative aspects of the pituitary centers, but I think that's well underway. Maybe you want to answer in more detail, Isabel, some of the more specifics that Cory was asking about.

Yes, absolutely. Thank you. First of all, I want to start with your second question. We are delighted that the treatment is very well received by the healthcare professionals, the patients, and the payers. With healthcare professionals, they are responding really well to our very simple, powerful message on first line of treatment, fast onset of action, fewer symptoms, and finally on a pill. It's a very simple message, but it resonates because it really encompasses everything that they were looking for in a better treatment in a new standard of care. The response has been positive, and that has led to initial prescriptions from both, as Scott alluded to, PTC centers, but also community, where we see 70% of the prescriptions coming from community prescribers and 30% from PTC centers. We're encouraged by the community because many times, community tends to follow PTCs. The fact that both segments are adopting is a really good signal for us on the launch trajectory. When you look at our prescriber base, we have approximately 110 total prescribers, and the 95% doesn't refer to all of those 110 prescribers, but that the initial prescriptions, many of them are coming from members of that list.

I mean, it's interesting, building off that point, it's interesting to see that 70% of scripts are coming from community docs. Can you just help us better understand that dynamic a little bit more? I guess, why are some of these PTC centers, for lack of a better term, lagging behind? Is it just a small sample size because we're early in the launch? Or are these community practices just a bit more nimble, and you're dealing with some of the bureaucracy at these centers? Or yes, just curious to hear more about your strategy of how to activate centers.

Well, I think that we've seen in some of the other launches that have happened this year and recently, how important it is to think about the community upfront. That's how Isabel designed the whole field force as we were going into it. We deployed out to the community and to the centers in parallel. I think the thing that we've seen with the community, which is very rewarding, is that they are a little bit more nimble and more willing to reach out directly to patients and call them in and not just wait for the next appointment. If we think about the centers, I think they are more waiting for the patients to come in for their next appointment. The other thing that we're working with the centers, which is pretty much taken care of now, but it takes a little while to get the electronic medical systems so that they have one-push-button prescribing. It took a little bit to get the pharmacies activated at many of the centers. These are kind of normal administrative things that we've worked through. In no way do we see the centers as being slow. We just are pleasantly surprised at how nicely the communities have responded.

We now turn to Yasmeen Rahimi with Piper Sandler.

Congrats on a great start, and thank you for sharing all the color. Maybe one question for the commercially related. I appreciate if you could kind of tell us about how you're thinking about providing free drug while getting reimbursement and how do you make those decisions? Then very excited to look forward to the CAH open-label data early 2026. Help us understand sort of in early 2026, whether you would be able to get to all 10 patients and what you hope to show in that data set? Then I'll jump back in the queue.

Yes. Let me address the second part first, and then Isabel can handle the first part regarding acromegaly. In addition to Cohort 4, patients have started to enroll in the open-label extension, which has infrequent sampling; the first sampling occurs at 13 weeks. By early next year, we will have data from the Cohort 4 patients, along with a few patients from Cohorts 1 to 3 who have reached the 13-week mark in the open-label extension. While the sample size is still relatively small, we will begin to understand how this is performing in a more real-world environment, where doctors can lower glucocorticoids and observe the effects on adrenal androgens. Isabel, sorry for taking that part; would you like to discuss the question about acromegaly?

Yes, of course. Our market access team is executing with excellence. Our goal is to partner with our specialty pharmacies. When we get an enrollment form, our specialty pharmacies file the prior authorization to ensure that the claim is reimbursed. That's our first step. That's why we are very pleased that 50% of the claims have been reimbursed. Then, if there is a challenge to the prior authorization, we send the Quick Start program because we want to make sure that while we do benefit verification and we complement any gaps they have had, either adding some of the clinical records or putting the correct IGF-1 test in the file, we are able to process that in the background while the patients are on drug. We are ready to go with the Quick Start program as soon as possible, but we first give the opportunity to our specialty pharmacies to process the claims.

We now turn to Douglas Tsao with H.C. Wainwright.

Again on all the progress. I guess maybe just feeding off the question in terms of where you're initially seeing demand in the community versus the centers of excellence. I'm just curious to the extent that you get a sense that there is awareness within the acromegaly community, who I know has a very active patient group and how much is sort of coming from the ground up versus prescription written by clinicians who, as they see their patients, are sort of recommending a switch or offering that choice to patients.

Yes. Thanks, Doug. I think it's still very early days, so it's very anecdotal, but we're hearing both, right? We're hearing physicians who talk to patients and tell them about something they hadn't heard of and are ending up switching to PALSONIFY. We're hearing about patients going in asking their doc for PALSONIFY. That's kind of cool, actually. I think it's a mix of both, but it's too early to start putting any sort of numbers to that.

I was just going to say that we have a very experienced dedicated team that has also connections in the community, which is also really helpful. They wanted to ensure that across the board, we are nimble, we're executing, and we make sure that those physicians ready to prescribe have the opportunity to do so. As Scott said, we are seeing prescriptions that come primarily from prescribers, but we also see prescriptions that come from awareness that we have built through our marketing team and advocacy from the patients. Regardless of which prescription is done, it is because both of them agree that it's the best choice for the patients, so both the patient and the physician have to be informed. We are working across the board with those two audiences.

I'm just curious, and I know it's anecdotal, but I'm just curious in terms of prescribers as well as patients, what is interesting them? Is it the convenience of an oral therapy? Or is it really just the standout efficacy that was shown in PATHFNDR-1 and PATHFNDR-2 as a better treatment option for patients?

Go ahead, Isabel.

We have a mix, actually. It's very interesting. Some of the doctors are very intrigued by the fast onset of action of the treatment and the fact that it's a reliable disease control. They see that also as the first treatment choice for some of the switching patients, but also naive patients. For example, we have a naive patient that had surgery but had a residual tumor. The patient now has reached 3 weeks on treatment. The physician did a second IGF-1 test, and he was really pleased to see that the patient was controlled, less than upper limit of normal in the IGF-1 test, but also saw an improvement in symptoms like swelling. That kind of experience is going to motivate that physician to put more patients on treatment, as well as that patient is going to also share that experience later on with patients. We are very encouraged by that. We also see some patients that want to travel. We have, or that their job description requires that they be free from the burden of the injections. That also resonates. For instance, we have a firefighter that, of course, didn't want to come every month to the appointment and, of course, didn't want to have the painful injection but had lots of breakthrough symptoms. Both the efficacy and the ease of use were important to him and the physician. So that's the kind of experience we're hearing from the field.

Yes. The other one that I was told about is an ER doc who got just burned out on the injection, so reached out to his doc to switch. Again, these are just anecdotes, but they're very heartwarming, honestly.

We now turn to Maxwell Skor with Morgan Stanley.

This is Selena on for Max. Has the timing of benefit verification for the Quick Start program met your expectations? When do you expect to have clear visibility into the breadth and depth of prescribing trends?

Well, I think the prescribing trends will be updated further as we finish out the quarter, and we'll gain experience with that over time. Isabel, maybe you want to talk about the Quick Start program.

Yes. At the moment that we send the Quick Start program, benefit verification is happening in the background. Some of them are issues that are easy to resolve, like there was a missing IGF-1 test or some missing clinical data. Other plans are requiring a little bit more. On average, in rare diseases, it takes around 57 days to be on the Quick Start program, and we are trying to be below that number.

Yes. That's why we were pleased that we're already seeing patients getting on reimbursed PALSONIFY before we even have to give them the Quick Start program. That's been good to see. Not all of them, but some.

Yes, 50-50, which is really good results early in the launch. Because what we're seeing that is really encouraging is that payers are reimbursing to label as we had anticipated. We are also seeing that once it's approved, those approvals are coming for 6 to 12 months. The patient will continue on drug before any additional documentation is required.

We now turn to Richard Law with Goldman Sachs.

Congrats on the results so far. Based on your launch experience with PALSONIFY so far, what has been going well for you? Where can you see improvements? It would be great if you can talk about it in the context of like commercial, Medicare, and Medicaid segments. I don't know if it's too early because I assume most of these patients are coming from commercial.

Yes. I mean, broadly, I'm super pleased with the way the team is out there performing and the response from the community. Any improvements are really incremental, but maybe you want to comment on some of your favorite pieces, Isabel?

Yes. Well, I was very pleased we have Dragon channel very early in the process. I believe that the team is executing with excellence across the board. Our sales team, our marketing team, our market access team, and also commercial operations have the right tools. We know who to target and where the physicians are and where the patients are. So going very well, our CRM activation, our omnichannel strategy to create awareness, both with physicians and patients, our sales team executing and having great success in getting access with both community and PTC centers, and really delivering very powerful and simple messages. That is going really well and resonates very well. We also had a successful initial advisory board, and we're continuously getting feedback from the doctors on what resonates with them and what else they would like to see in the future. That's also shaping our communication plan for next year. We want to continue to create urgency. Some of those physicians are following the appointment cycles, waiting for the patient to come. A lot of what we want to continue to do is to create that sense of urgency. Those early positive experiences that we are seeing, that the physicians are seeing and the patients are seeing are very important for us, and we'll continue to translate them as testimonials in the future to drive the uptake of the drug to our final goal, which is making PALSONIFY the new standard of care and continuing to expand the acromegaly market.

Then what about the insight to the segments? Are these mostly commercial so far? Then maybe comment on Medicare and Medicaid segments.

Interesting. There is a mix. We have commercial patients, Medicare patients, and Medicaid patients, and we had claims approved for all 3 segments. One last point is following the market trend, basically, the majority of them are commercial claims, but basically very similar to the actual payer mix.

Then what is the turnaround time and that range of that for payers to approve PALSONIFY, assuming that patients already met the prior authorization requirements, including step edits. What's that turnaround time for payers to approve?

Let's wait for a larger sample size before we start making those calculations. It's still a bit early in the launch for that.

Then just one more. In terms of the payer rebate, I know you guys are not doing payer rebates for commercial. Is that still the case?

That's correct.

That's correct. We are not planning to do that.

Reminder folks, let's try and keep to one part question. We got a bunch more people waiting in line.

We now turn to Tyler Van Buren with TD Cowen.

This is Nick on for Tyler. Congrats on the progress so far in this launch. My question is you reported that 95% of filled prescriptions today are from switch patients, which we've talked about a little bit now. What's the plan to reach additional treatment-naive patients? Which do you expect will be the largest drivers of long-term growth?

Yes. In the past, we've mentioned that approximately 500 patients per year begin medical therapy, and it's a gradual influx of these new patients. The fact that we are starting to attract some of these patients speaks to the effectiveness of the drug, as demonstrated by one patient who has shown control just three weeks in. The bigger challenge remains, as we've discussed, in reaching those patients who are eligible for medical therapy but are currently not receiving it. There are about 4,500 treatment-naive individuals, some of whom may not be achieving the level of control they need, and we are looking deeper into that. Like many therapies for rare diseases, once we spread the word about this new therapy, which does not carry the burden associated with depot treatments, we should see an uptick in patient engagement. The initial patients in Phase 1 represent only the beginning, as there is a significant group of patients who have discontinued therapy or have become lost to follow-up that we need to re-engage. Additionally, a major goal is to enhance awareness and find more effective ways to identify acromegaly, enabling the IGF-1 test for diagnosis. We estimate there are around 17,000 individuals who remain undiagnosed, but who are suffering joint and heart damage daily. We plan to initiate various efforts to address this specifically next year. I believe that even the awareness initiatives we are currently undertaking, such as Alan's interviews with Tony, will start to have a positive impact sooner rather than later.

I have been in the field together with our sales team, and I was having a conversation with one of our key prescribers in a key center. He answered the way I think about this, who is not the right patient for PALSONIFY? Early on, of course, we're going for the switch and naive patients, but we believe that this treatment will help us expand the market over time.

We now turn to Andy Chen with Wolfe Research.

This is Brendan on for Andy. In the opening remarks, you mentioned aiming to position PALSONIFY as a first-line therapy. We're curious to know how you expect to do that with generics currently on the market.

Well, that's an easy one. I mean, if you look at the label, it's indicated for the treatment of acromegaly in patients who have not had adequate response to surgery or for whom surgery isn't indicated or appropriate. The biggest reason why you want to go on to PALSONIFY in that situation for the new patients is like that one I mentioned—they're controlled in 3 weeks. We got great data from PATHFNDR-2 showing 2 to 4 weeks to get people controlled, whereas in the depots, your first dose adjustment isn't for 3 months. You don't even know if that first dose works after 3 months, and then you go to the second dose, so you wait until 6 months. Then you may need the highest dose until you're 9 months out before you know whether it works. That's not the right medicine, so PALSONIFY is really the best option for somebody newly diagnosed. I don't see an argument that whether it's generic or not matters.

Yes, we are not seeing that kind of pushback from payers also. We see that the value proposition is resonating very well with them, and they understand the value of the treatment. The reduction of waste applies whether it's generic or not generic. The fact that patients continue to have is irrelevant to whether it's generic or not. Also, as you know, generics don't have the support services that we are able to offer, like a Quick Start program, the co-pay for the patients, 0 co-pay for commercial patients, and all the support that they will get.

We now turn to John Wolleben with Citizens.

Congrats on the progress. Scott, you kind of discussed the 3 phases of PALSONIFY's launch. I was hoping you could talk a little bit about the timing of the sequence and how you think about moving from one phase to the next, if there's benchmarks you want to hit in each one or if it's going to be more of a continuum. Just wondering how to think about you guys tackling these different buckets of patients.

Yes. I don't mean to imply it's a sequence, but it's a sequence of enhanced efforts. I really want the group out there in the field focusing on those patients in the first phase and getting the word out so that we have a broad prescriber base. I think you're seeing that already with the response of the community. Then, in addition, because it will take some time to work our way through all those Phase 1 patients. Before we're done with that, then we also would start getting more active in finding ways to bring patients back to care. That may take a variety of different forms. It's really just about how we layer on our efforts rather than go from one phase to the next, if that makes sense.

Do you think the current sales force is rightsized to handle that expansion over time?

Yes, absolutely. I think we're doing very good in the coverage. It's a fairly concentrated prescriber base. We were planning for the community from the start. I think it's more about the types of activities that we do to try and help find these patients who need to come back to care and improve diagnosis, rather than just switching efforts from one thing to another.

We now turn to Jessica Fye with JPMorgan.

I wanted to follow-up on one of the earlier questions. What should we be most focused on when we take a look at the Cohort 4 data for Atumelnant? What are you going to be watching for similarly in that Phase 2 OLE data? I guess, stepping back, how much of a read is Cohort 4 or these initial OLE patients going to give us into the potential steroid reductions that we could expect in Phase 3?

Yes. Well, a couple of things. One, I'll just put some caveats. It's still relatively small numbers of patients. It allows the chance for physicians to begin to do steroid reductions in the actual treatment period of 12 weeks. That's pretty fast, right? I think that, together with the open-label extension data, where there's a little more time, generally, I think it will give the directionality, but I wouldn't start doing power calculations or things based on it. That makes sense. I think there's been a lot of interest in this Cohort 4 data, and it's interesting, but again, it's relatively small numbers.

When should we expect the preliminary Phase 2 data for Atumelnant in pens?

I don't have exact timing on that, but that will come out in some phases because we're starting with older adolescents and then working our way down the age groups, right? We'll start expanding those populations into the Phase 3 portion as the age groups get the dose validation that we need.

We now turn to Alex Thompson with Stifel.

This is Patrick Ho on for Alex. I guess on the naive patients, are you guys seeing different dynamics here from payers? Or is it similar to the switch patients?

Similar dynamics. We had some reimbursed claims and some that we are processing through the Quick Start, so similar in both cases.

Again, early days.

We now turn to Joe Schwartz with Leerink Partners.

How does the traction you're getting at this early Phase 1 in the PALSONIFY launch compare to the market research you've done in terms of willingness to prescribe or any other factors you consider important?

Thanks, Joe. I think we have not had any real pushback from prescribers about use of PALSONIFY, as was mentioned earlier by Isabel. Who shouldn't get PALSONIFY? I think it's just the normal—we're observing the things that are basically in line with our expectations. We're building momentum and working through a little bit of inertia in the system, but the patients are starting to come in. As they come in, I think they'll be best served with PALSONIFY. There's really not much pushback.

How much of a continuum is there in terms of running from inertia to excitement, given providers are encountering a new treatment option, but they've been quite used to using legacy treatments for quite some time?

Maybe you want to take that, Isabel. I don't think it's the legacy of use that is anything that's really in the way. I think they see the benefits of PALSONIFY. Go ahead, Isabel.

Yes. We see a lot of excitement in the prescriber community. When they look at the data, they really understand the value proposition with the efficacy, the fast onset of action, finally on a pill. The inertia that Scott was referring to is more the normal cycle that takes place in rare diseases where appointments take place every 6 months to a year, and physicians are not necessarily always having the support system to start calling the patients, but they will go with the flow of the appointments and wait to offer this new option to patients when the patients have their next appointment. We see that narrowing down the story to a particular patient for that physician where urgency is higher is helping, but we know that there will be a cycle similar to all rare disease launches.

We now turn to Dennis Ding with Jefferies.

This is Anthea on for Dennis. Just two quick ones. On PALSONIFY, could you elaborate on just how many patients in the open label are now transitioning to commercial supply and the timelines there? Just curious if we would see all of that contribution in Q4 or later in 2026. Then on the pipeline, any updates on the progress for the GLP programs? I think there was previous talk of candidate selection in '25, so just curious about progress there.

Yes. Just on the open-label extension patients, all 22 are in various stages of enrollment. They've all enrolled for commercial supplies, but they have to wait until their final follow-up visit as part of the open-label extension, so we can finish all the monitoring as part of that. I think most of those are completed by the end of the year, but I don't know the exact numbers at this point. Then the GLP-1s, obviously and other obesity things we're working on, obviously, a very interesting space, especially today. I think we're going to stop talking as much about our early-stage programs now that we're really concentrated on the launch and our late-stage clinical development. I think it's just more appropriate that we—when we're in the clinic, we'll let you guys know, but we're thinking hard about it, working hard on it, and you're going to see a lot of new things come out of the Discovery Group.

Ladies and gentlemen, we have no further questions. This concludes our Q&A and today's conference call. We'd like to thank you for your participation. You may now disconnect your lines.