Earnings Call Transcript - FOLD Q1 2023

Operator, Operator

Good morning ladies and gentlemen and welcome to the Amicus Therapeutics first quarter 2023 financial results conference call and webcast. At this time, all participants are in a listen-only mode. Later we will conduct a question and answer session and instructions will follow at that time. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr. Andrew Faughnan, Vice President of Investor Relations. You may begin.

Andrew Faughnan, Vice President of Investor Relations

Good morning, thank you Gigi. Thank you for joining our conference call to discuss Amicus Therapeutics first quarter 2023 financial results and corporate highlights. Leading today’s call, we have Bradley Campbell, President and Chief Executive Officer; Daphne Quimi, Chief Financial Officer; Sébastien Martel, Chief Business Officer; and Dr. Jeff Castelli, Chief Development Officer. Joining for Q&A is Dr. Mitchell Goldman, Chief Medical Officer, and Ellen Rosenberg, Chief Legal Officer. As referenced on Slide 2, we may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 relating to our business, as well as our plans and prospects. Our forward-looking statements should not be regarded as representation by us that any of our plans will be achieved. Any or all of the forward-looking statements made on this call may turn out to be wrong and can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. You are cautioned not to place undue reliance on any forward-looking statements which speak only as of the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement and we undertake no obligation to revise or update this presentation and conference call to reflect or circumstances after the date hereof. For a full discussion of such forward-looking statements and the risks and uncertainties that may impact them, we refer you to the forward-looking statements and risk factors section of our annual report on Form 10-K for the year ended December 31, 2022, and the quarterly report on Form 10-Q for the quarter ended March 31, 2023, to be filed later today with the Securities and Exchange Commission. At this time, it’s my pleasure to turn the call over to Bradley Campbell, President and Chief Executive Officer. Bradley?

Bradley Campbell, President and Chief Executive Officer

Great, thank you Andrew, and welcome everyone to our first quarter 2023 conference call. I’m pleased to report a successful start to the year across our global business. As we did in this morning’s press release, let me highlight several key points before I turn it over to the team to provide more detail. First Galafold - we continue to be very pleased with the commercial uptake of Galafold globally with $86 million in first quarter revenue, representing 14% growth from the first quarter last year on a constant currency basis. Strong trends continue across a number of our key performance indicators, including increasing demand through new patient starts from both switch and naïve populations, steady growth of in-person visits between our field team and Fabry treaters, and sustained patient compliance and adherence rates of over 90%. We expect to see continued double-digit growth in 2023 fueled by significant demand from patients and physicians, and in fact as Sébastien will highlight in a moment, this was the best first quarter performance for net new patient starts in the past four years. Second, we continue to make great progress on our global regulatory filings and commercial planning for AT-GAA, our novel two-component therapy for Pompe disease. Importantly, I’m very happy to report that the US FDA has recently completed the required preapproval inspection of the WuXi Biologics manufacturing site in China. We’re very pleased with the outcome of the inspection and believe the comments and observations received by WuXi at the close of the inspection are all addressable. We therefore continue to expect regulatory approval of AT-GAA in the United States in the third quarter of 2023. I’d also like to give a word of thanks to the FDA inspectors, the WuXi team, and the Amicus team for the collaborative and professional conduct leading up to and during the course of the inspection. The regulatory reviews in Europe and the U.K. also remain on track. In March, the European Commission granted approval of Pombiliti for use in combination with Opfolda for adults with late onset Pompe disease, and as we just announced, the CHMP also adopted a positive opinion recommending marketing authorization of Opfolda, so we continue to anticipate the full approval of Pombiliti plus Opfolda to occur in the third quarter this year, and upon approval this will be the first two-component therapy available in the European Union for the treatment of adults living with late onset Pompe disease. Finally, the U.K. regulatory process for AT-GAA was initiated in December of last year and is following a similar timeline as the U.S. in Europe, with expected approval in the third quarter this year as well. As we observed throughout 2022, we remain extremely pleased with the level of interest and participation we’re seeing in our expanded access mechanisms for AT-GAA globally. As we get through the first part of 2023 across all of our ongoing clinical studies and expanded access programs, there are now approximately 200 patients on AT-GAA, which we believe represents more than 5% of the total treated Pompe patients around the world, and we have more patients in the queue, so we expect this number to continue to trickle upward as we approach launch. In anticipation of the regulatory approvals, our global launch planning progress continues as we eagerly anticipate the final approval of AT-GAA. We very much look forward to providing a real choice in this therapeutic area, both in the United States and in Europe, with regulatory applications in additional countries planned in the months ahead. Third, Amicus has maintained a strong financial position as we continue to execute on the global expansion of Galafold and prepare for the global launch of AT-GAA. Importantly, based on the latest assumptions on approvals and launch of AT-GAA, our current operating plan and continued careful management of expenses, we remain on track to achieve non-GAAP profitability, which we expect in the second half this year. On Slide 4, as we laid out at the beginning of the year, we are laser-focused on achieving our key strategic priorities for 2023, including: number one, sustaining that double-digit revenue growth of 12% to 17% for Galafold at constant exchange rates, delivering this important medicine to more people living with Fabry disease with amenable variants in existing and new markets; second, securing regulatory approvals of AT-GAA by the FDA, EMA and NHRA this year, as well as continuing to advance preparations for the anticipated launches; number three, continue to judiciously invest in the advancement of our best-in-class next generation Fabry and Pompe genetic medicines and capabilities, as well as our next-generation chaperone for Fabry disease; and number four, as always, maintaining a strong financial position as we carefully manage our expenses and investments on our path to non-GAAP profitability. With that overview, let me now turn the call over to Sébastien Martel, our Chief Business Officer to further highlight the Galafold performance. Sébastien?

Sébastien Martel, Chief Business Officer

Thank you Bradley and good morning to everyone on the call. I will start by providing you with more details on our Galafold performance for the quarter. As you can see on Slide 6, for the first quarter 2023 Galafold reported revenue reached $86.1 million, driven primarily by strong patient demand. The geographic breakdown of revenue during the quarter consisted of $57 million or two-thirds of revenue generated outside of the U.S. and the remaining $29 million or one-third coming from within the U.S. That’s in line with the split that we expect as we continue to grow both parts of the business. As Bradley mentioned, we were pleased to see continued patient growth in countries across our leading markets. Now turning to Slide 7, our results for the first quarter highlight the strength of our global commercial efforts. The demand for Galafold globally continues to be strong with patients added in all major markets, delivering an operational growth rate of 14% over the same period in 2022 at constant exchange rates. From a year-over-year perspective, the negative impact from foreign currencies was 4% in the period; as a result, Galafold reported revenue growth versus the same period last year was 10% for the first quarter. Galafold continues to be the fastest-growing treatment for Fabry disease globally. I’m pleased to report that our monthly net new patient trends continue to increase, and if you look at the growth in net patients on Galafold globally, which is the truest measure of the underlying business, we see a high teens growth rate in patients on Galafold at the end of Q1 this year versus the same period last year, so all indications are of the continued and growing demand for Galafold. When we ended the first quarter, we had more than 55% of global market share of treated amenable patients, and within the global mix, we’re starting to see stronger uptake in naïve populations, so while we are achieving high market share in countries where we’ve been approved the longest, there’s still plenty of opportunity to continue to switch patients over to Galafold and continue to grow the market as we penetrate into the diagnosed untreated and newly diagnosed segments. All of that is underpinned by impressive compliance and adherence rates that continue to exceed 90%, reiterating our belief that those patients who go on Galafold permanently stay on Galafold. Importantly, the value of Galafold continues to be recognized by payors as we’ve got a very strong track record of successfully negotiating and renegotiating reimbursement outside of the U.S. Our relentless commitment remains on ensuring access to Galafold for anyone who needs it. Based on the performance we’ve seen here in the first quarter of 2023, Galafold uptake continues to track very well and we are seeing those trends continue with growth across all our major markets, as well as most of our smaller markets. Turning to Slide 8, Galafold growth remains strong, as mentioned on past calls, due to a variety of factors, including uneven ordering patterns and FX fluctuations. The rate of growth within the year is typically non-linear and we expect that to continue throughout 2023. In the table that you have on the right-hand side of the slide, we have provided a five-year historical snapshot of the percent of Galafold sales that occur each quarter during a given year. We would expect that similar trends will occur this year. Now moving onto Slide 9, we know there is significant demand for Galafold and that the segment of the global Fabry market made of patients with amenable mutations has the potential to surpass $1 billion in annual revenue in around five years. We anticipate sustained growth throughout 2023 to be driven by several key co-drivers: continuing to penetrate into existing markets, further uptake into the diagnosed untreated population, expanding into new geographies, and label extensions. As we just mentioned, all of these efforts are supported by strong compliance and adherence rates and positive reimbursement and access mechanisms around the world. I’m pleased to share that we’re making continuous progress on expanding into new markets and also on extending our label. To name a few examples, we recently received marketing authorization for Galafold in Hong Kong, the extension of use to adolescent patients 12 years and above has recently been approved in Canada, and we’ve submitted the marketing authorization application in New Zealand and we’ve now entered into pricing and reimbursement negotiations for Galafold driven by diagnosing patients through a variety of measures, including high-risk screening, newborn screening, and other diagnostic initiatives which we continue to support and invest in as well. Also important to note here, we have orphan exclusivity in the U.S. and Europe. In addition to our now 49 Orange Book listed patents, including eight composition of matter patents, and 33 of those give us IP coverage until the late 2030s which provides us the opportunity to provide access to Galafold globally for a long time to come. Now moving onto Slide 10, we’re happy today to stand less than a quarter from the commercial launch of Pombiliti and Opfolda. On that slide, we outline launch preparations as we are poised for another successful product launch. As you know, Amicus has a presence in over 40 countries around the world today, including all the major Fabry and Pompe markets. That team that will launch Pombiliti and Opfolda has largely stayed the same with only a few additional FTEs. They’re now fully recruited and trained to support the first wave of launch countries. I’m pleased to note that the product has been positioned to support the first group of patients coming onto commercial supply. We have experience across all areas that are needed for a successful drug launch: regulatory, commercial, supply chain, experience with payors, reimbursement and access, and, most importantly, the key relationships with physicians. We’re confident in our world-class organization that we leverage their experience and relationships to deliver AT-GAA to people living with Pompe disease around the world. Our educational and promotional materials are ready, and training in our initial launch countries is now completed. Market mapping is also complete. From the teams in medical education and publications, our ability to market rare disease products successfully, our experience with reimbursement and access around the world, and again all the strategic planning that we’ve been doing together with building inventory with our partners at WuXi Biologics, we believe we are in a very strong position for a second successful launch at Amicus.

Jeff Castelli, Chief Development Officer

Thank you Sébastien, and good morning everyone. On Slide 12, we’ll start with our AT-GAA program. Pompe is a severe and fatal neuromuscular disease and one of the most prevalent lysosomal disorders. Multiple publications and natural history studies have shown that the initial benefits of treatment are often followed by continued long-term decline for many individuals. We recognize that Pompe disease continues to pose a range of health challenges for people affected by the disease and having therapeutic choices is crucial. Moving onto Slide 13, we remain very excited to be anticipating potential regulatory approvals in three of the largest Pompe markets in the third quarter this year, as Bradley noted. On this slide, we summarize the status of the anticipated regulatory milestones by market. First in the EU, Pombiliti was granted European Commission approval in March. In April, the CHMP adopted a positive opinion of Opfolda and we expect an EC approval to occur in the third quarter of 2023. In the U.S., the FDA recently completed the required preapproval inspection of the WuXi Biologics manufacturing site in China, and we are very pleased with the outcome and believe that the comments and observations received by WuXi at the close of the inspection are all addressable. We continue to expect approval of both components of AT-GAA together in the third quarter of this year. Finally, the regulatory submission process for AT-GAA in the U.K. was initiated in December via the recognition procedure based on the CHMP opinion, and we’re on track for an expected MHRA approval also in the third quarter, so lots of great momentum across the key markets.

Daphne Quimi, Chief Financial Officer

Thank you Jeff, and good morning everyone. Our financial overview begins on Slide 16 with our income statement for the first quarter ending March 31, 2023. For the first quarter, we achieved total revenue of $86.3 million, which is a 10% increase over the same period in 2022. This includes year-over-year operational revenue growth measured at constant currency exchange rates of 14%, impacted by a negative currency of 4%. Cost of goods sold as a percentage of net sales was 8% in the year as compared to 9.6% for the prior year period. Total GAAP operating expenses decreased to $117 million for the first quarter of 2023, as compared to $146.5 million in the first quarter of 2022. On a non-GAAP basis, total operating expenses decreased to $80.6 million for the first quarter of 2023, as compared to $109 million for the first quarter of 2022, reflecting decreased program spend. We define non-GAAP operating expense as research and development and SG&A expenses, excluding share-based compensation expense, loss on impairment of assets, changes in fair value of contingent consideration, and depreciation. Net loss for the first quarter of 2023 was $52.9 million or $0.18 per share as compared to a net loss of $85.3 million or $0.30 per share for the prior year period. Driven by the revenue growth of Galafold and careful expense management, we continue to make progress towards our path to non-GAAP profitability in the second half of this year. As of March 31, 2023, we had approximately 283 million shares outstanding. Turning now to Slide 17, we continue to operate from a position of financial strength, and our goal remains to achieve non-GAAP profitability in the second half of 2023, as defined in our press release. Profitability is dependent on a number of factors, including the timing of approvals and launch of AT-GAA. Our full year 2023 non-GAAP operating expense guidance is $340 million to $360 million. The expected decrease in operating expense for 2023 as compared to 2022 will be achieved by continuing to drive efficiencies and prudent expense management offset by continued investment in the global growth of Galafold and pre-launch and launch activities for AT-GAA. We anticipate operating expenses to be non-linear this year due to these pre-launch and launch expenses, as well as certain non-recurring manufacturing costs that we expect will be incurred in the second and third quarters of this year. We also expect to see a larger portion of our operating expense to be allocated to G&A this year as we align our resources to support the launch of AT-GAA and the continued growth of Galafold. A few comments about our cash position and 2023 financial guidance. Cash, cash equivalents and marketable securities were $267.1 million at March 31, 2023 compared to $293.6 million at December 31, 2022. Our full year Galafold revenue guidance is revenue growth of 12% to 17% at constant exchange rates in addition to our non-GAAP operating expense guidance of $340 million to $360 million.

Operator, Operator

Thank you. Your first question comes from the line of Anupam Rama from JP Morgan.

Malcolm Kuno, Analyst

Hi, thanks for taking the question. This is actually Malcolm Kuno on for Anupam. Looking past the third quarter approval, what observations have you learned from Sanofi’s launch in Pompe that you can perhaps apply to your own launch, and then how should we view your launch curve relative to that competition?

Bradley Campbell, President and Chief Executive Officer

Yes, thanks for the question. Maybe I’ll start. Look, we are laser focused, as we said, at getting through the approvals and launch, and I think for us, the most important thing is providing a new choice that we think is differentiated, in particular with its two-component mechanism of action. We watched Sanofi, both in the United States and other markets around the world, and I think you could see, depending on when they launched, how they’ve progressed. For us, I think it’s much more about continuing to demonstrate the value of AT-GAA to physicians and patients. I think we look at the expanded access programs and uptake where the product is available through those mechanisms, and we take great confidence from the way we see patients and physicians using the medicine. From our perspective, the most important thing is looking at what we’ve demonstrated in the clinic, that in particular in the experienced population when patients switch from therapy, we see a significant increase in six-minute walk distance, as well as improvement in forced vital capacity. We think that differentiation, the only therapy that’s shown in a controlled study that we can show those changes, we think that sets us up as a very differentiated therapy when we launch, and we’re just really eager to get over the finish line. To your second question in terms of how we think about the launch uptake, it will come as no surprise but of course the first focus is to convert our existing clinical and expanded access patients over to commercial medicine, and we’re prepared to do that as quickly as possible. We’ll also be focusing, of course, on patients who we think we can switch current standard of care over to AT-GAA. The goal this year, frankly, just given the fact the approvals happen in the back half of the year, it takes time from a pricing and reimbursement perspective, the goal really is to maximize the number of patients on therapy by the end of the year, and that we think gives us a really strong run rate going into 2024.

Operator, Operator

Thank you. One moment for our next question. Our next question comes from the line of Ellie Merle from UBS.

Ellie Merle, Analyst

Hey guys, thanks so much for taking the question. Just wondering if you could elaborate a little bit on the comments and observations received from the FDA inspection and maybe what drives your confidence that all of these are addressable, and then just a question procedurally how to think about the time frame from inspection to approval, I guess just in situations like this, like a deferred action. How should we think about the typical time frame, and maybe also just next steps from here in terms of the timeline for addressing the comments and observations. Thanks.

Bradley Campbell, President and Chief Executive Officer

Yes, thanks Ellie for the questions. As we said previously leading up to the inspection, we’re not going to provide details of the findings, but I will reiterate we’re very pleased with the outcome. The color I can provide is that we think the feedback was straightforward and addressable - that’s shared by WuXi with all their experience with inspections, and that’s why we feel very confident here reiterating the approval in the third quarter. I would say too, there was a high level of engagement and professionalism between the inspectors, WuXi and Amicus, and so all of this together makes us feel very confident in that timeline that we reiterated today. You’re right - in terms of what happens from here, we are in a little bit of an unusual situation, but typically what happens is as the FDA finalizes the inspection, which has now happened, then they finalize the inspection report - that takes a period of time, and once the inspection report is finalized and provided to the review division, that’s where you get that kind of 30 to 60-day timeline to approval, and so that gives us a lot of comfort that we’re on track there based on the fact that we received the deferred action letter, and again I’d remind folks at least per the regulations, it says that those can only be given when no other issues remain and the application otherwise satisfies the requirements for approval. That gives us great confidence that effectively it’s really just getting through the final inspection report and then final memos within the Agency, and then we’re onto approval and launch.

Operator, Operator

Thank you. One moment for our next question. Our next question comes from the line of Joseph Schwartz from SVB Securities.

Joseph Schwartz, Analyst

Hi, thanks so much. I was wondering if you could talk a little bit about the market opportunity from Pombiliti and whether that has evolved or your strategy for launching it has evolved, now that the launch has been delayed and a competitor has been on the market for a while longer than was initially expected.

Bradley Campbell, President and Chief Executive Officer

Yes, maybe Sébastien, do you want to talk a little bit about what we’re seeing and why we’re remaining confident in that market opportunity, to Joe’s question?

Sébastien Martel, Chief Business Officer

Yes, Joe, the overall market for Pompe last year was approximately $1.2 billion. This market has been growing at a rate of high single digits to low double digits for several years. It remains a condition that is frequently under-diagnosed, so we anticipate that the market growth rate will continue at least at the same pace. In terms of geographical focus, our primary targets are the U.S., the U.K., and Europe, which are the three largest markets for Pompe disease. We estimate around 1,300 patients receiving treatment for Pompe in Europe, a few hundred in the U.K., and over 800 patients in the U.S. Our market research consistently shows that physicians respond positively to the product profile of AT-GAA, especially with the switch data we've gathered from the PROPEL study. The major part of our opportunity lies in this switch scenario, as the number of newly diagnosed naive patients globally is much less, estimated at about 100 to 200 annually, while the total number of treated patients is between 3,500 and 4,000. Thus, we are focusing on ensuring that we provide easy access to AT-GAA. As Bradley mentioned, the insights gained from our early access programs are promising for the launch of AT-GAA.

Operator, Operator

Thank you. One moment for our next question. Our next question comes from the line of Ritu Baral from TD Cowen.

Athena, Analyst

Hey guys, this is Athena on for Ritu. Thanks for taking the question. Just another follow-up on the WuXi inspection. Has every building as part of the entire supply chain been inspected at this point, and do you anticipate that any of the inspection findings could be gating for approval? Thank you.

Bradley Campbell, President and Chief Executive Officer

Yes, thanks for the question, Athena. The important part of this inspection, so WuXi has been inspected, that site in China has been inspected multiple times by multiple regulators for multiple products, all successful, so that’s a good thing. This particular inspection was focused on the drug substance and drug product manufacturing facilities for our product in particular, and so I think that’s the difference here. Now that that’s been complete, there are no other inspections by the United States that we believe are necessary ahead of approval, and so we feel very confident at this point that we are on track there based on the outcome of the inspection. I think at this point, we’re sort of all systems go and looking forward to getting through to the finalization of the review and heading towards approval and launch.

Operator, Operator

Thank you. One moment for our next question. Our next question comes from the line of Dae Gon Ha from Stifel.

Dae Gon Ha, Analyst

Hey, good morning guys. Thanks for taking our question. I’ll stick to one. Wanted to get your take on pricing strategy, given the parallel review, and I understand you guys gave guidance on the 3Q approval for both sides of the Atlantic, but it does seem like EU might come sooner considering the processes remaining for the FDA side, so how are you thinking about that overall, and how does that compare to your Fabry strategy? Thanks so much.

Bradley Campbell, President and Chief Executive Officer

Yes, thanks Dae Gon. We have taken the strategy that we will price our medicines at parity or a modest discount to the standard of care, and that’s really because we value access more than anything else, so our goal is to get as many patients on therapy as quickly as possible, and we feel like taking price off the table, in other words focusing on the value of the medicine that it brings to patients and physicians versus the cost of the medicine, is the best way to ensure that you move through the reimbursement process as quickly as possible. What we saw with Galafold, to your point, is that we actually moved through that reimbursement process successfully and that we did it in times that were much faster than industry average, so we’ll look to apply the same strategy here, and in some instances, actually, those discussions are already ongoing, so we look forward to deploying the same strategy and again focusing on the value of the medicine versus the cost.

Operator, Operator

Thank you. One moment for our next question. Our next question comes from the line of Kristen Kluska from Cantor Fitzgerald.

Kristen Kluska, Analyst

Hi everyone, good morning. Thanks for taking my question. Wanted to ask what your latest thoughts are on how you might position AT-GAA relative to the benefits across respiratory outcomes and different measurements there. I know you presented more data at Worlds this year, and in the past you’ve cited this as a really important endpoint considering it’s a leading cause of mortality for these patients. Thank you.

Bradley Campbell, President and Chief Executive Officer

Yes, thanks Kristen. Jeff, maybe you can talk through the data we’ve seen, both in the initial phase of the study and then what we released at Worlds with the extension data.

Jeff Castelli, Chief Development Officer

Thank you, Brad, and thank you, Kristen, for the question. In our clinical studies with AT-GAA, we observed that pulmonary function, a primary cause of mortality in Pompe disease, showed a significant decline in patients on standard care ERTH while those who switched to AT-GAA demonstrated good stabilization of pulmonary function. Data from our extension studies in Phase I/II over four years and from our PROPEL study over two years indicate that this stability is maintained and durable over extended periods. We are very optimistic about the potential to help stabilize the progressive decline in pulmonary function, and essential to note, the motor function and muscle strength also showed improvements in patients who transitioned to AT-GAA, which was not necessarily expected. Overall, we are enthusiastic about both the initial response to treatment observed in PROPEL and the sustained response seen in the extension trials.

Operator, Operator

Thank you. One moment for our next question. Our next question comes from the line of Shrinatra on behalf of Salveen from Goldman Sachs.

Shrinatra, Analyst

Hi, this is Shrinatra on for Salveen. We have two questions. The first is how soon post-approval can we expect the first patients to be treated with AT-GAA, and I’m referring to patients who are not on the early access program. The second is could you provide some color on what we can expect in the first few months of the launch? Thank you.

Bradley Campbell, President and Chief Executive Officer

Thank you for the question. Regarding the first patients on therapy, there are two different scenarios. In the United States, after getting approved, we usually move quickly to set up infusions and prescriptions to get patients started on therapy. Based on our experience with Galafold, our aim is to switch all patients on therapy, who are on label, to the commercial drug within the first 90 days, and we were able to achieve this very effectively during the Galafold launch. We believe we can replicate that success here. In Europe, after gaining approval in Germany, there is typically a pre-pricing period, so reimbursement comes almost immediately. Our goal will again be to rapidly switch patients on existing therapy. Additionally, in Germany, we have an extended access program in place within the 30 to 90-day period. In the U.K., we will go through the reimbursement process, which is why focusing on access is essential. There will be some time required for the process from MHRA approval to NICE approval and reimbursement. While converting existing patients, we will also work on initiating treatment for patients on existing therapy in the U.S. and for all eligible patients outside the U.S.

Operator, Operator

Thank you. One moment for our next question. Our next question comes from the line of Jeff Hung from Morgan Stanley.

Jeff Hung, Analyst

Thanks for taking my question. Can you talk about the recent feedback you’ve heard from payors on AT-GAA and what kind of comments do you hear on potential barriers on access or restrictions? Thanks.

Bradley Campbell, President and Chief Executive Officer

Yes, thanks for the question. All of our market research from a payor perspective has been, I think, very supportive of the approach that we outlined here in terms of our strategy, which is that as long as it’s on label and if we have a parity or modest discount strategy, payors I think will be very supportive of this medicine. They’ve gotten more sophisticated, especially in this disease area, so they do review the data very carefully, and we expect that process to continue. Then likewise outside the U.S., where you’re going through the HCA assessments, again I think with the data that we have, with the market research we’ve done leading into this process, and now with the ongoing negotiations we’ve started with some of those payors, we think this is going to be a very successful access strategy and we’re just eager to get through the process and provide this medicine to patients.

Operator, Operator

Thank you. One moment for our next question. Our next question comes from the line of Zhiqiang Shu with Berenberg.

Zhiqiang Shu, Analyst

Good morning. Thanks for taking the question. I wanted to just ask your thoughts on the announcement about the expansion of the supply and manufacturing agreement with WuXi on its Ireland facility. Can you talk about the transition plan from the China facility to the Ireland facility, and also do you expect the FDA inspection on the Ireland facility in due course? Thanks very much.

Bradley Campbell, President and Chief Executive Officer

Yes, great question. Yes, we announced in the last couple of weeks, we did enter into a commercial manufacturing agreement with WuXi. That was something that was in the works for quite some time and we’re really thrilled to solidify that. That effectively secures capacity, longer-term capacity and supply from WuXi from both their China facility as well as their Ireland facility. The strategy really is to eventually transition so that the majority of supply comes from Ireland, and what we’ve suggested before is we’re on track for that process to conclude, that facility to be licensed, and material to start to enter the commercial supply chain in the back half of next year or early 2025, and that process is going well. In terms of inspection of the facility, of course you’ll have to go through the typical PPQ and validation and comparability work as we transition to Ireland. All of that is kind of contained in the timeline that I shared with you. Will the FDA or other regulatory agencies inspect the facility? Almost certainly they will at some point. Whether that will be required as a pre-licensure inspection or whether it will happen sometime in due course, to be determined; but we’re very confident in that process and we’re eager to have, of course, a second site of manufacturing come online and one that’s geographically diversified as well.

Operator, Operator

Thank you. At this time, I would now like to turn the conference back over to Bradley Campbell for closing remarks.

Bradley Campbell, President and Chief Executive Officer

Great, thanks Operator. Thanks everybody for the participation in the call today, all your great questions. Hope everybody has a great day. Take care.

Operator, Operator

Thank you. This concludes today’s conference call. Thank you and have a great day.