Good day and thank you for standing by. Welcome to Kiniksa Pharmaceuticals Third Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. After the speakers' presentation, there will be a question-and-answer session. I would now like to hand the conference over to your speaker today, Jonathan Kirshenbaum, Investor Relations.

Thank you, operator. Good morning, everyone and thank you for joining Kiniksa's call to discuss our third quarter 2024 financial results and recent portfolio execution. A press release highlighting these results can be found on our website under the Investors section. As for the agenda, our Chief Executive Officer, Sanj K. Patel, will start with an introduction. Ross Moat, our Chief Commercial Officer, will provide an update on the ARCALYST commercial execution. Then, Mark Ragosa, our Chief Financial Officer, will review our third quarter 2024 financial results. And finally, Sanj will return for closing remarks and to kick off the Q&A session, for which John Paolini, our Chief Medical Officer; and Eben Tessari, our Chief Operating Officer, will also be on the line. Before getting started, please note that we will be making forward-looking statements today that are subject to risks and uncertainties that may cause actual results to differ materially from these statements. A review of such statements and risk factors can be found on this slide, as well as under the caption Risk Factors contained in our SEC filings. These statements speak only as of the date of this presentation and we undertake no obligation to update such statements, except as required by law. With that, I will turn it over to Sanj.

Thanks, Jonathan, and good morning, everyone. Kiniksa is a well-capitalized, growth-oriented company that is well-positioned for near and long-term success. In the third quarter, we continued to drive strong commercial performance with ARCALYST, including increased prescriber adoption and repeat prescriber growth. Patients and physicians continue to report high levels of satisfaction with ARCALYST and our market-building activities are positioning us to provide that positive experience to more patients in need. Importantly, as we head into the end of the year, we are increasing our full-year ARCALYST net sales guidance to between $410 million to $420 million from the previous guidance range of $405 million to $415 million. In our pipeline, we continue to enroll and dose patients in the abiprubart Phase 2b study in Sjogren's disease. Clinical development of abiprubart is fully funded in our current operating plan. Importantly, our robust financial position and expectation of positive annual cash flow support growth investments across our business, including commercial initiatives, portfolio enhancements, and value-adding business development, which remains a key part of our strategy. Commercially, the third quarter saw a continuation of our sequential growth. We saw a 73% year-over-year growth with ARCALYST ultimately delivering $112.2 million of net product revenue for the quarter. The continued growth over the past three and a half years is a testament to our team and our commercial organization. We are well-positioned to maximize the potential of ARCALYST, the only FDA-approved therapy for recurrent pericarditis. The ARCALYST collaboration has been profitable since the fourth quarter of 2021, enabling further investments in commercial growth-oriented initiatives across multiple channels, including our salesforce, patient and physician disease education, and brand awareness. In the third quarter, the impact of these investments contributed to increases in key commercial drivers. Total prescribers since launch increased from approximately 2,300 in Q2 to approximately 2,550 in Q3. Importantly, we also saw an increase in the repeat prescriber rate, with approximately 25% of prescribers since launch writing multiple prescriptions. Additionally, prescribers appear to appreciate that recurrent pericarditis is a debilitating chronic disease that should be treated to the duration of the underlying autoinflammation. This is reflected by the increase in the total average duration of therapy to 27 months as of the end of Q3. Continued strength across our underlying fundamentals also supported the Q3 commercial performance. We continue to observe high patient and physician satisfaction with patient compliance remaining above 85% and greater than 90% payer approval of completed cases. With that, I'll turn it over to Ross to provide an overview of how we plan to drive additional growth with ARCALYST.

Thank you, Sanj. As Sanj noted, in Q3, Kiniksa's commercial team activated more than 250 new ARCALYST prescribers compared to the previous quarter, which is an increase of more than 1,000 additional new prescribers compared to Q3 of last year. This brings the total prescriber base to approximately 2,550 since launch and demonstrates accelerated growth in the breadth of prescribing with ARCALYST, which is a key part of our dual commercial strategy. Additionally, in Q3 we also drove an acceleration in the depth of prescribing with around 640 healthcare professionals who have now prescribed ARCALYST for two or more patients since launch, representing around 25% of the ever-growing total prescriber base. This growth reflects that once a physician is activated, they generally have a positive prescribing experience due to the very high payer approval rate and the significant clinical efficacy of ARCALYST, which increases the desire to identify and treat additional patients. The growth in both total and repeat ARCALYST prescribers speaks to the growing awareness of recurrent pericarditis and the understanding of ARCALYST as the only FDA approved treatment for the disease. Among surveyed cardiologists and rheumatologists, we have seen a substantial increase in the proportion of physicians who will consider prescribing ARCALYST with each additional recurrence. Importantly, we are seeing that physicians are acting upon this intent. Since the launch of ARCALYST in recurrent pericarditis just over three years ago, we have been highly targeted in our field sales efforts against the 14,000 patients with two or more recurrences, while ensuring physicians also understand the broad label and ability to prescribe earlier in the disease. In line with our promotional efforts, we are seeing around 85% of all ARCALYST prescribing is for the two-plus recurrent population and around 15% of all ARCALYST scripts being written for patients on their first recurrence. Ultimately, this earlier utilization speaks not only to the effectiveness of ARCALYST but also to the effectiveness of our brand and disease awareness efforts aimed at educating both patients and physicians around the chronic nature of this disease and the opportunity to prevent future flares. These data provide further evidence that the promotion and availability of ARCALYST have driven a change in the treatment landscape, away from non-specific drug agents and towards ARCALYST as a targeted treatment directly addressing the underlying mechanism of recurrent pericarditis. Continuing our focus on accelerating disease awareness and improving the patient journey to diagnosis, I'd like to highlight two exciting initiatives. Firstly, earlier this month we announced the launch of Life DisRPted, a recurrent pericarditis educational campaign with National Hockey League Hall of Famer Henrik Lundqvist, and just yesterday we announced that Grammy Award-winning singer-songwriter Carly Pearce has also joined the campaign. Disease awareness is a key component in our commercialization strategy for ARCALYST. One of the key drivers behind our Life DisRPted campaign is that despite the profound impact the disease has on patients, 96% of patients report that they were initially incorrectly diagnosed with other conditions. On average, patients reported 2.7 misdiagnoses prior to receiving a diagnosis of recurrent pericarditis. This results in a delayed diagnosis, and we believe we have an opportunity to increase education and improve the patient journey and optimize patient care. In addition to Life DisRPted, we're also sponsoring the American Heart Association's Addressing Recurrent Pericarditis Initiative. This initiative seeks to improve the quality of care for recurrent pericarditis patients by identifying and disseminating best practices for the diagnosis and treatment of the disease. Specifically, through our sponsorship, 15 centers of excellence have been identified across the US and are working together to improve referral pathways and develop solutions that can be shared with other pericardial disease clinics across the country. Based on our market experience, the streamlining of referral pathways could reduce the barriers to care and ultimately improve outcomes for patients. In a Harris Poll, 71% of recurrent pericarditis patients stated they would be highly likely to seek care at a recurrent pericarditis-focused clinic if one were available in the area. We're looking to address that need and aim to continue advancing the support for patients suffering from this debilitating disease. In Q3, the Kiniksa team continued to drive sequential growth in ARCALYST revenue. As a result, we have increased our full-year 2024 ARCALYST net sales guidance to $410 million to $420 million from $405 million to $415 million. With that, I'll now turn it over to Mark to discuss our third quarter financial results.

Thanks, Ross. Our detailed third quarter 2024 financial results can be found in the press release we issued earlier today. There are several items on the slide that I'd like to call your attention to this morning. First, total revenue in the third quarter of 2024 was driven entirely by ARCALYST net product revenue which grew 73% year-over-year to $112.2 million. Second, ARCALYST collaboration operating profit in the third quarter grew 68% year-over-year to $58.2 million and largely drove total collaboration expenses of $29.3 million. Third, on a year-over-year basis in the third quarter, operating expense growth was due to cost of goods sold driven by ARCALYST revenue growth as well as expenses related to the ongoing ARCALYST tech transfer, collaboration expenses driven by ARCALYST collaboration operating profit growth, and R&D and SG&A driven largely by personnel costs, manufacturing of clinical supply in ARCALYST commercialization. Fourth, net loss in the third quarter of 2024 was $12.7 million compared to a net loss of $13.9 million in the third quarter of 2023. Lastly, net cash flow in the third quarter was $5 million, bringing the end of period cash balance to $223.8 million. We continue to expect our cash reserves, as well as strong commercial execution and financial discipline, to fund our current operating plan, and we expect to remain cash flow positive on an annual basis. With that, I'll turn the call back to Sanj for closing remarks.

Thanks, Mark. We are, as ever, dedicated to helping as many patients as possible with ARCALYST and advancing the development of our clinical portfolio to help bring additional therapies to patients that are suffering from debilitating diseases. Both of these important goals are integral to our ongoing efforts to create sustainable value and grow Kiniksa into a generational company. With that, I'll now turn the call back to the operator for questions. Thank you.

Thank you. Our first question comes from Roger Song with Jefferies. You may proceed.

Great. Congrats for the quarter and thank you for taking our question. Maybe the first one is regarding the penetration or the market share in the first recurring patient. That’s interesting. You have 15% of your prescription coming from the first recurrence, which is in the label. Just curious how you can keep driving the penetration into that population. I know your initial target is in the multiple recurrence. Thank you.

Thanks, Roger. Yeah, this is Ross. So, thank you very much for the question. So, you're absolutely right that our primary focus is the 14,000-patient population. They're the patients that are suffering from two or more recurrences. That's been our key target ever since we launched more than three years ago. The reason for that is that they're the patients that are ultimately suffering the highest burden of the disease and patients that closely resemble those who were studied in the RHAPSODY data sets as well. At the end of Q2, we announced that we'd reached around 11% penetration into that target population. So, I think that speaks to the huge opportunity that we still have ahead within the two-plus recurrence. But having said that, as we highlighted in the prepared remarks, it's also encouraging that healthcare professionals are understanding how broad the label is for recurrent pericarditis, and some of them are seeking to use it on the first occurrence. So, we're very pleased with that. We think it speaks to just the efficacy of ARCALYST and the desire to help patients by reducing the risk of future flares, which is one of the key components of ARCALYST treatment. We're pleased with that. One thing to note is that on the duration, in terms of the natural history of the disease, the median duration of those patients that are on their first recurrence is often shorter. It's around six months for the patients on the first recurrence compared to a median of around three years for those patients that are on two or more recurrences, which is another reason why our key target audience is those with two-plus recurrences. But we're happy to announce that additional insight today into how physicians are treating earlier in the disease, and seeing ARCALYST being used to really prevent future flares within that.

Got it. Yeah. Thank you for the comment. I think that's upside coming from this even larger subpopulation there. Okay. And then my follow-up question is related to the quarter-on-quarter growth rate. Understand the year-on-year growth rates continue to be very strong. How should we think about the growth rate from here in terms of the fourth quarter and the next year? Are we reaching a steady state for the growth rate from here? Thank you.

Yeah. Thanks, Roger. I'm not sure whether we're reaching a steady state in the growth rate or not. We'll see as things progress, but obviously we're intent on continued growth. We think we've got a very large opportunity ahead knowing where we are with the current penetration and the trajectory that we've been on since launch to date. I guess we've always said that this is a build and a steady growth as we identify patients. But we're pleased to have landed at $112.2 million in Q3, which is around 8.5% growth versus Q2, which was a quite large Q2 that we announced. So, we were pleased to be able to increase the guidance due to that rate of growth now up to $410 million to $420 million.

Got it. Yes. Your Q2 is a big number. Thank you. That's all from us. Congrats again.

Thanks, Roger.

Thank you. Our next question comes from Liisa Bayko with Evercore ISI. You may proceed.

Hi, thanks for taking my question. Could you remind us what the gross to net figures were for the quarter?

Yeah, sure, Liisa. So, year-to-date, gross to net through the third quarter was 9.8%, which is down from 10.8 in the second quarter of this year.

Okay, great. I’m curious about the flow of patients. You have a significant number of prescribers and many of them are repeat prescribers, with an impressive average duration of 27 months. Could you share how many patients started the therapy and what percentage may have discontinued at some point? I'm trying to get a better understanding of how many people have been on therapy so far. Thank you.

Yeah, thanks, Liisa. So, we just haven't shared some of those more granular insights. Though we do have a slide on our corporate deck which speaks to the duration, both in terms of the total duration, which is now up to 27 months from 26 months of the last earnings call, as well as looking at the drop-off of those patients who are on their first treatment period. From that, you can see that even out at this time since launch 3.5 years ago now, we've still got around 20% or so of the patients who started in the initial launch quarter and are still on their initial treatment period. So, they've obviously not stopped therapy at any point throughout that time period. So, clearly, we have patients that start therapy and will remain on therapy for a long period of time, as the natural history showed us as well. But then also, obviously, we do have patients that drop off much sooner than that. We still see that there's around 45% restart rate in totality. So all those patients who stop, regardless of which time point they stop therapy at, about 45% of them restart therapy. Still, the vast majority of those, when they do restart, it's within an eight-week time period, showing that if there is underlying autoinflammation still ongoing within the patients, symptomology can come back pretty quickly as the drug washes off. The need to restart treatment is generally a very easy process for patients. But it just again speaks to the need that this is really a chronic disease, as Sanj was saying in the remarks. We really do need to treat to the underlying duration of the disease, but the totality now of the treatment duration is around 27 months up to the most recent information.

Okay. And it seems like it's helpful to get more feet on the ground, more salesforce. You're obviously being able to find more patients and there's still so many more out there. Do you think that you're right-sized? Do you think we might see additional growth in the salesforce over time? Just curious how you're thinking about that longer-term. And that's my last question. Thanks.

Thank you, Liisa. This is Sanj. We've expanded our initial launch from 29 to about 50, and recently reported around 85 to 90, based on extensive analytics. We will keep evaluating our approach and apply what we believe is appropriate. We take a data-driven approach and aim to achieve the right balance. We'll continue to assess the situation and take necessary actions.

Thank you. Our next question comes from Paul Choi with Goldman Sachs. You may proceed.

Hi, thank you. Good morning, and I appreciate you taking our questions. My first question is about the 15% of patients who receive treatment during their first recurrence. Could you discuss the awareness of ARCALYST as a first treatment option among guidelines and the understanding within the physician community? My second question is regarding the update on abiprubart. Can you share any information on the timing for enrollment and when you anticipate the last patient will be enrolled, based on your current view of patient recruitment? Thank you for addressing our questions.

Sure. Thank you, Paul, and appreciate the questions. Maybe I'll just answer quickly the abiprubart question first, and then go back to the question about first-line therapy. Regarding the abiprubart Phase 2b study in Sjogren's disease, yes, we're very excited about that study, which is now enrolling and dosing patients. At this point in time, we have not given any specific guidance about enrollment timelines because the study is just starting. But by way of a reminder, this is a 24-week study to the primary efficacy endpoint. So, six months of treatment followed by an additional six months long-term extension. What’s unique about this study is that it is the only study in this space testing monthly subcutaneous dosing of CD40 antagonists. Now back to your first question about guideline awareness and treatment of patients as early as their first recurrence. As you'll remember, the last treatment guidelines that were written were actually from Europe and were written in 2015. Of course, that predated all of the work in interleukin-1. The awareness of interleukin-1 alpha and beta is a key driver of recurrent pericarditis. Since then, with all of the work that we've done with ARCALYST and RHAPSODY, and the ultimate approval of rilonacept, ARCALYST is the first and only treatment for recurrent pericarditis and also reduction in risk. What that has done is it has left, as you mentioned, a broad label. So, what that means is that patients can be treated as soon as there is a diagnosis. In the absence of guidelines, we hear that European guidelines may be updated in the next few years, but in the meantime, thought leadership has been writing in the literature more about this evidence-based approach of treating patients with IL-1 pathway inhibition, specifically noting that RHAPSODY tested not only - basically two paradigms or two different ways of the steroid sparing paradigm. The first one, of course, is that for patients who are on steroids to get them off of steroids, but then more importantly for patients who are failing NSAIDs and colchicine, so a strategy of inflammation that to get them onto IL-1 pathway inhibition right away. That often translates, if you will, into many patients who are on their first recurrence, who are breaking through NSAIDs and colchicine with aggressive disease. In terms of how that's translated into the real world, our data from the resident's registry shows that since the time of ARCALYST launch, a real rise in second-line use of ARCALYST as second-line therapies, such that two-thirds of prescriptions of patients who were treated who were failing NSAIDs and colchicine were actually managed with IL-1 pathway inhibition. I think that's where you're seeing this evidence-based approach of translating the label into practice.

Okay, great. Thank you.

Thank you. Our next question comes from Eva Fortea-Verdejo with Wells Fargo. You may proceed.

Good morning. Congrats on the quarter and thanks for taking our question. A couple from us. The first one, you mentioned the mean duration of 27 months. Should we expect some differences here on the mean duration for patients on first recurrence versus second and third recurrence? And the second question is, what's driving the current increase in patient adds? Is it mostly coming from these patients on first recurrence or are you seeing similar growth in all three buckets of first, second, and third? Thanks.

Thanks, Eva. So, this is Ross. Maybe I'll take your last question first and then I'll hand over to John to talk through the first part of the question. Regarding patient adds, I mean, we're seeing patients added both from new prescribers that are coming on board. We've seen quite a healthy clip of increase in new prescribers quarter-on-quarter. So most recently around 250 additional new prescribers. We're also seeing the repeat prescriber base increase as well. So, as a result, we're certainly driving more total patients that are on therapy. By the time you account for those patients who have stopped therapy throughout a quarter after having come to the natural cessation of disease and drug, obviously, we're putting on far more new patients than we are losing at the other end each quarter. And then the increased total duration of therapy is also helping with that as well. So, we're seeing a good kind of increase there, which we're happy to report. So maybe, John, do you want to make a…?

Sure. Yeah, no. You've asked a very interesting question about the epidemiology of recurrent pericarditis. The median disease duration for patients who have two or more recurrences is three years, with a third of patients still suffering at five years and a quarter of patients still suffering at eight years. As you might imagine, that's a key driver of a strategy of treatment throughout the duration of the disease. That's been shown repeatedly with clinical trials data as well, that premature cessation of therapy, whether at three months, 18 months, or even 28 months, results in a very high rate of recurrence and need for advanced targeted therapy. Regarding earlier recurrence patients, yes, the epidemiology there is slightly different, collectively, the median duration of disease for patients with one recurrence is around six months. Importantly, that includes all of those patients that will run the course of their disease relatively quickly within the first year, but also includes those patients who will in fact go on to have long-term disease. Those patients tend to have more aggressive presentations at the time of their first recurrence. That's why, again, going back to that literature, the second-line use of IL-1 pathway inhibition in that patient population who are failing NSAIDs and colchicine usually reflects the treatment strategy on the part of the physician that they believe NSAIDs and colchicine will be inadequate to manage those patients.

And maybe just to add on to that, John, thank you. Ultimately, the key driver of the new patient adds is really those patients that are on two or more recurrences. While it's pleasing to hear that there are physicians utilizing our drug earlier in the disease, around 85% of ARCALYST prescribing is for the two-plus recurrent population. If you take into account the duration messages of the disease, as John has spoken to, you can see that it's the two-plus recurrence group that is really the main driver of the business here. If you look back at the first recurrence, there's around 33% of physicians now that we have surveyed that inform us that it was their intention to consider ARCALYST on the first recurrence. It’s good that ARCALYST is being considered earlier in the disease. That’s not to say that obviously all 33% will go on and prescribe within that first recurrence, but it’s an indication that the awareness of ARCALYST is growing. Physicians are considering using it early. We also see around 15% of the ARCALYST prescriptions or enrollments that were within the first recurrence. It’s pleasing data, but ultimately, it's the two-plus recurrence group that's really driving the business here.

Thank you. Our next question comes from David Nierengarten with Wedbush Securities. You may proceed.

Thanks for taking the question. Most have been asked, but I did have a follow-up on the first recurrence. Not to belabor the point, but maybe it's early, but are there any trends towards the doctors who have prescribed or more repeat prescribers prescribing earlier, or is it scattered across the board amongst doctors? Thanks.

Yeah. Thanks, David. It's a great question. We see it really scattered across the board and don't see any particular correlations of notes yet, which is why we haven't really shared anything around that topic. We do have a clear understanding that the patients are very widely dispersed across the US, and there is a need for patients to get diagnosed earlier in the disease rather than suffering from all the misdiagnoses that we see. That often elongates the journey through to diagnosis. Obviously, there's a knock-on effect of that through to treatment as well. We think that's a key component for us to look at and consider how we can partner with people to try to get diagnosis earlier. As we mentioned, the initiative that we sponsored through the American Heart Association to focus on 15 centers of excellence, now really focusing on pericardial diseases, of which recurrent pericarditis is one, is an interesting initiative that aims to shorten that treatment pathway and the pathway through to accurate diagnosis, while learning from those expert centers to be shared throughout the rest of the community. We think that's an important initiative that also kind of goes into part of our strategy around increasing awareness and just helping patients to get an earlier diagnosis.

Thank you. Our next question comes from Anupam Rama with JPMorgan. You may proceed.

Hey, guys. Thanks so much for taking the question and congrats on the quarter. Last year you guys pre-announced and gave forward year guidance at a small healthcare conference in January in San Francisco. Just wondering if that's still the plan moving forward. Thanks so much.

We are assuming we're going to the small healthcare conference in January. No thanks, Anupam. At this point, we're not quite sure what we're going to do, but certainly that was the case last year. As always, we look at it very carefully and we will do it when we do it. But at this point, we've not made any final decisions. But thank you for the reminder.

Thank you. I would now like to turn the call back over to Sanj Patel for any closing remarks.

Thank you everybody for being on the call today. Thanks for all the questions and joining us. We look very much forward to the remainder of the year and then obviously providing additional updates, as I just said, to Anupam, hopefully in the near future. So, thank you very much.

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.