Good day, and welcome to the Travere Therapeutics First Quarter 2023 Financial Results and Corporate Update Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference call over to Vice President of Investor Relations, Naomi Eichenbaum. Please go ahead, Naomi.

Thank you. Good afternoon. And welcome to Travere Therapeutics first quarter 2023 financial results and corporate update call. Today's call will be led by our Chief Executive Officer, Dr. Eric Dube. Eric will be joined in the prepared remarks by Dr. Jula Inrig, our Chief Medical Officer; Peter Heerma, our Chief Commercial Officer; and Chris Cline, our Chief Financial Officer. Dr. Bill Rote, Senior Vice President of Research and Development will join us for the Q&A session. Before we begin, I would like to remind everyone that statements made during this call regarding matters that are not historical facts are forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of performance. They involve known and unknown risks, uncertainties, and assumptions that may cause actual results, performance, and achievements to differ materially from those expressed or implied by the statement. Please see the forward-looking statement disclaimer on the company's press release issued earlier today, as well as the Risk Factors section in our Forms 10-Q and 10-K filed with the SEC. In addition, any forward-looking statements represent our views only as of the date such statements are made, May 4, 2023, and Travere specifically disclaims any obligation to update such statements to reflect future information, events, or circumstances. With that, let me now turn the call over to Eric. Eric?

Thank you, Naomi, and good afternoon, everyone. The first quarter of 2023 has been one of the critical milestones representing significant progress across the organization. These advancements have positioned Travere for sustained growth led by the ongoing launch of FILSPARI in IgA nephropathy and bolstered by the continued progression of our pipeline. The most notable achievements in the quarter was the US accelerated approval of FILSPARI or Sparsentan for the reduction of proteinuria in adults with primary IgA nephropathy or IgAN at risk of rapid disease progression. The approval of FILSPARI marked the first and only non-immunosuppressive therapy for the reduction of proteinuria in IgAN. While we are only in the early stages, the commercial launch is progressing very well and in line with our expectations. Today we will focus on the important takeaways from the first six weeks. Though I'm very pleased with the early demand and the commercial organization's executions, which instills confidence that we will effectively position FILSPARI to meet or exceed our internal goals for the year. Furthermore, we were very excited to see the interim results from the PROTECT study published in the Lancet. These data further elucidate the clinical profile of FILSPARI demonstrating a greater than threefold reduction of proteinuria from baseline after 36 weeks of treatment compared to the active control irbesartan. The compelling dataset supports our confidence in a positive outcome from the two-year of secondary endpoints in the fourth quarter of this year. Overall, it was a great quarter for our efforts to establish the foundation for FILSPARI to become a new treatment standard in IgAN for the addressable population. Earlier this week, we were disappointed to report that our Phase 3 DUPLEX Study of sparsentan in FSGS did not achieve the primary efficacy eGFR endpoints. FSGS is a very difficult disease to study. Despite this, sparsentan still managed to demonstrate a consistent profile characterized by sustained proteinuria reduction and a well-tolerated safety profile over two years. We will continue to analyze the datasets and engage with the FDA and EMA to explore the potential for future regulatory submissions in FSGS. Once we've completed this, we will provide an update on our direction. With regard to pegtibatinase, we continue to be highly encouraged by the forward momentum in our program for classical homocystinuria or HCU. As many of you will recall, HCU is a serious and progressive metabolic disorder that can lead to thrombotic events, serious vision problems due to lens dislocations, bone malformation, and a constellation of mental and psychiatric complications. Importantly, pegtibatinase is well positioned to potentially become the first and only disease-modifying approach to treat HCU. We have made recent strides in our program and remain on track to report data from cohort-6 in the second quarter. We are incredibly grateful to the patients, family members, and physicians who have supported us in our pursuit of therapeutic advancements for diseases with high unmet needs. Our team remains committed to our mission of improving the lives of those living with rare disease, delivering for our patients for the rare disease community, and our shareholders. Now, let me turn the call over to Jula for a clinical update. Jula?

Thank you, Eric, and good afternoon, everyone. I'll start by highlighting our continued efforts to support the awareness and education of the FILSPARI clinical profile. As Eric mentioned earlier, we were very pleased with the recent publication of the interim results from the Phase 3 PROTECT study in the Lancet. The rapid publication in this renowned journal speaks to the scientific relevance and strength of the PROTECT interim results in IgA nephropathy. The publication serves as a great platform to showcase the interim results from PROTECT, the largest interventional study of its kind in IgA nephropathy. The published results detailed the rapid and sustained reductions of proteinuria seen in PROTECT along with the inclusion of significant new data on complete and partial remission. The new data highlighted that after 36 weeks of treatment in PROTECT a significantly greater proportion of patients on FILSPARI achieved complete and partial remission of proteinuria. As recently published, most high-risk IgAN patients will face kidney failure within their lifetime, and reducing and maintaining lower thresholds of proteinuria particularly to levels less than 0.5 grams per day can impact long-term kidney outcomes. We also saw encouraging early trends on important kidney outcomes. Here approximately half the number of patients treated with FILSPARI reached the confirmed 40% reduction in eGFR from baseline kidney failure or all-cause mortality compared to irbesartan. Furthermore, important data were included that support our belief and the primary efficacy objective of the Phase 3 PROTECT study that optimally antagonizing endothelin-1 and angiotensin-2 with sparsentan may lead to protective effects in the kidney structure and function beyond hemodynamics. Specifically, the authors concluded that the proteinuria lowering effect of sparsentan is unlikely to be attributable to differences in blood pressure especially given the large differences in proteinuria reduction relative to minimal differences in blood pressure. Finally, the publication also included additional safety data from the interim analysis, which reported no cases of heart failure at the time of the analysis, no treatment discontinuations or serious adverse events of peripheral edema, and no significant difference in weight change between treatment arms. These published interim results and the preliminary eGFR data from the interim analysis and the clinical literature demonstrating the relationship between proteinuria reduction and eGFR benefit support our steadfast confidence for a clinically meaningful and statistically significant treatment effect on eGFR after two years of treatment with sparsentan. I'm pleased to report that the PROTECT study continues to accrue patient data as expected and remains on track for the scheduled top line readout in the fourth quarter of this year. Since FILSPARI's accelerated approval, we've also received solid support from the nephrology community, including physicians, patients, and advocacy groups. Following a discussion with academic nephrologists at MKS, I learned that The Lancet publication was the primary reason behind their decision to start prescribing sparsentan for a handful of eligible IgAN patients. We are receiving similar anecdotes that physicians intend to alter the way that they treat their patients by including FILSPARI as a key treatment option now that it's available. Importantly, FILSPARI is now included in the treatment recommendations for IgAN on UpToDate, an industry-leading clinical decision support tool for physicians. The physician authors recommend that patients with persistent proteinuria after three to six months of RAS inhibitors be treated by adding an SGLT2 inhibitor or switching the RAS inhibitor to FILSPARI. We eagerly look forward to the confirmatory Phase 3 PROTECT study data, which we believe will put us in a strong position to enable FILSPARI to become the new foundational therapy in IgAN. We recently hosted an update call but only briefly touched on sparsentan development in FSGS. While we were disappointed to report that the DUPLEX study did not achieve statistical significance on the eGFR endpoint, it did demonstrate consistent proteinuria reduction of 50% across studies. Importantly, we also saw that with the higher dose, sparsentan continued to be well tolerated. Since we reported our results we've had a chance to engage with both nephrologists and the patient community. The resounding feedback has been supportive and encouraging. This combined with the positive trends seen in the study further supports our motivation in seeking a path forward with regulators in both the US and Europe. Beyond sparsentan, we continue to advance our pegtibatinase program in classical homocystinuria. As many of you will recall, in the first five cohorts of our ongoing Phase 1, 2 Compose Study, pegtibatinase demonstrated a dose-dependent response, an ability to dramatically reduce total homocysteine to clinically meaningful levels with a 1.5 milligrams per kilogram dose. Importantly, pegtibatinase was able to show a generally well-tolerated safety profile. In the sixth cohort we're examining a higher dose and lyophilized formulation, which will give us valuable insights for the program's next steps and aid our discussions with regulators regarding the design of a Phase 3 study to potentially initiate in the second half of this year. Additionally, we've made recent progress on our manufacturing to support a pivotal program and commercialization. We hear now more than ever from physicians and the patient community that new disease-modifying treatment options are desperately needed in HCU and so we look forward to sharing an update on those data later this quarter and plan to provide an update regarding next steps for the program later this year. With that, I'll turn the call over to Peter for the commercial update. Peter?

Thank you, Jula. I am pleased to report that we are making great progress in the early days of FILSPARI launch. Our results in the first quarter included only six weeks, and we are in line with our expectations. We are encouraged with the strong level of interest and engagements that we're seeing across stakeholders, including patients, physicians, and payers. Let me reflect on our progress and some of the metrics that we saw in the first six weeks of approval until the end of Q1. Since our approval on February 17, we have remained focused on our three launch priorities. Educating nephrologists on the efficacy and safety profile of FILSPARI, enabling broad patient access by securing reimbursement coverage, and ensuring that both patients and physicians have a positive first experience with FILSPARI. First, looking at our physician education efforts. Our commercial field team of over 80 seasoned professionals is successful in getting access to nephrologists and educating them on the FILSPARI label. Our strategy is to ultimately reach the universe of 6,000 nephrologists representing roughly 85% of the addressable IgAN patient population for FILSPARI in the US. We have face-to-face interactions with over 2,500 of these nephrologists in the first six weeks. These engagements are aligned with our profiling insights, and we are reaching those nephrologists who have been and we believe will be the early adopters. The reception to FILSPARI's efficacy and safety profile has been strong. Physicians consistently mentioned the impressive proteinuria reduction with FILSPARI and the importance of having the non-immunosuppressive agent therapy. And we are excited to see a strong increase in brand awareness, now that our team is actively discussing FILSPARI with nephrologists. As mentioned on the last earnings call, we received our first patient start forms in the first working day after approval, which was also the day that we started educating physicians about FILSPARI, and the first product was shipped to the patients only after just eight working days from approval. We heard from one of the early prescribers that this is the first patient treated with FILSPARI over the first six weeks and he has observed rapid proteinuria reduction consistent with what was demonstrated in the interim PROTECT analysis. These are the stories that energize our incredibly dedicated team. This team is going steadfast in conserving and educating our stakeholders, and it is encouraging that we're starting to still hear how patients may be benefiting from FILSPARI treatment. In the first six weeks, Travere Total Care received 146 patient start forms, and we see an increasing number of physicians getting enrolled in the REMS program because they have identified patients who can benefit from FILSPARI. Secondly, we are making robust progress in educating payers on IgAN as the leading pulmonary rare disease for kidney failure, and that most IgAN patients progress to kidney failure within 10 years to 15 years of diagnosis. Meaningful reductions in proteinuria are a prognostic indicator for disease progression. Within that context, our in-field account executives are emphasizing FILSPARI's compelling value proposition to the payers. As a result of these educational efforts, we are seeing FILSPARI being discussed at P&T committees, and the first formularies are starting to include FILSPARI in their policies. This product-specific cohort plans are aligned to the FILSPARI label's indication. In the first six weeks, we achieved 38% payer coverage of the US population. In the coming months, we anticipate coverage will continue to expand, and we will periodically share our continuing progress. Similar to other newly approved therapies for rare diseases, initial access to FILSPARI is mainly through prior authorization, and is denied through appeal processes. We are encouraged with the rate at which patients are able to gain access. Consumer claims experience slow or delay the adjudication process, we have support programs to provide eligible patients with access to products. Finally, our third launch priority is providing IgAN patients and their caregivers training for physicians to ensure a positive experience in the FILSPARI treatment journey. I am proud of the comprehensive services offered through Travere TotalCare. It was designed with the patient in mind to offer easily accessible programs including personalized education, assistance in the REMS process, support in the reimbursement process, and co-pay assistance for eligible patients. The short patient feedback is rewarding as we hear through Travere TotalCare about patients' appreciation for these other services. True to Travere TotalCare, we designed and launched support services to streamline and simplify the REMS enrollment and implementation process for physicians and patients. We are hearing from nephrologists that the REMS process is straightforward. Hence, to my earlier points, we are seeing a significant number of physicians enrolling in the REMS program because they have patients identified that could benefit from FILSPARI. From a financial perspective, we finished the first quarter with net FILSPARI sales of $3.0 million. It is important to note that this is predominantly based on the specialty pharmacies' initial stocking of the distribution channel. You may recall, we utilize a small network of specialty pharmacies to maintain high services for our patients. One of the specialty pharmacies has multiple regional distribution centers that each selected to stock for the initial launch to be ready for demand. As a result of this, we anticipate that a meaningful portion of this stocking in the first quarter will be drawn down in the second quarter and impact our second-quarter revenue. We anticipate that we will begin to see a more representative trajectory of both demand and reimbursement in the third quarter and a clear view in the fourth quarter. Overall, I believe that the launch is off to a strong start. We're seeing steady demand building. The initial metrics that I've shared indicate the nephrology community's excitement for FILSPARI's potential for IgAN patients. With the recent Lancet publication of the PROTECT interim analysis, inclusion of FILSPARI in the treatment guidance on UpToDate, the personal experiences that nephrologists are gaining, and the rapid and sustained proteinuria reduction with FILSPARI in their own patients, and the number of nephrologists that are now enrolled in the REMS program gives me confidence that we will continue building the momentum. With respect to the commercial performance outside of FILSPARI, I'm really pleased that our team is continuing the strong execution in connection with our established commercial portfolio. Our bile acid products reported $26.1 million in net product sales for the first quarter, which is consistent with our expectations of single-digit organic growth in 2023. For Thiola, we reported $21.2 million in net product sales in the first quarter, which is comparable to the same period last year. We continue to be reaching patients in spite of the competitive market dynamics. Summarizing, we are really pleased with the commercial performance to start the year. Most importantly, the initial adoption of FILSPARI is progressing well and in line with our expectations. We expect the second quarter to work through the stocking from the initial launch. And then we look forward to the true launch trajectory becoming more visible beginning in the third and fourth quarters. Let me now turn the call over to Chris for the financial update. Chris?

Thank you, Peter, and good afternoon, everyone. Our first quarter performance was highlighted by continued strong execution across the organization as well as the strengthening of our financial position. For the first quarter of 2023, net product sales were $50.3 million compared to $46.4 million from the same period in 2022. The increase is primarily attributable to the first reported sales of FILSPARI and growth in sales of the bile acid portfolio. As for FILSPARI, we utilized the sell-in methodology where we recognize revenue when products are delivered to our small network of specialty pharmacies. As you heard from Peter, that has resulted in a large amount of the FILSPARI sales recognized this quarter being related to stocking in anticipation of demand. For the legacy products, as we've seen in previous years, gross to net discounts in the first quarter were higher as a result of insurance coverage changes in the beginning of the year. As we move through the balance of the year, we expect these to normalize, but they will continue to be higher for the Thiola business than in previous years. During the quarter, we also recognized $6.7 million of license and collaboration revenue. This compares to $2 million in the same period last year. The increase is primarily driven by the sale of drug product to our partner CSL Vifor as they prepare for a potential launch of FILSPARI in Europe. This activity also resulted in a nearly proportional increase in the cost of goods sold for the quarter. Research and development expenses for the first quarter of 2023 were $59.9 million compared to $56.6 million in the same period in 2022. The difference is largely attributable to the continued advancement of our sparsentan and pegtibatinase clinical programs, including clinical trial expenses in manufacturing and increased headcount. On a non-GAAP adjusted basis, R&D expenses were $53 million for the first quarter of 2023 compared to $53.2 million for the same period in 2022. Selling, General, and administrative expenses for the first quarter of 2023 were $72.2 million compared to $46.8 million for the same period in 2022. The difference is largely attributable to the onboarding of the FILSPARI field team and supporting staff as well as launch-related activities, including the initiation of our REMS program, inpatient services with the approval of the FILSPARI launch in the first quarter. During the quarter, we also began to amortize the $23 million milestone payment paid to Ligand upon approval of FILSPARI. On a non-GAAP adjusted basis, SG&A expenses were $55.8 million for the first quarter of 2023 compared to $35 million for the same period in 2022. Total other income net for the first quarter of 2023 was $0.8 million compared to total other expense net of $9.8 million in the same period of 2022. The difference is largely attributable to a recognized loss on extinguishment of debt related to the refinancing of our convertible notes in March of 2022, partially offset by an increase in interest income. Net loss for the first quarter of 2023 was $86.3 million or $1.27 per basic share compared to a net loss of $76 million or $1.20 per basic share for the same period in 2022. On a non-GAAP adjusted basis, net loss for the first quarter of 2023 was $56.2 million or $0.82 per basic share compared to a net loss of $51.6 million or $0.82 per basic share for the same period in 2022. As of March 31, 2023, the company had cash, cash equivalents, and marketable securities of $561.5 million, which includes $216 million in net proceeds from our underwritten offering of common equity in early March and also reflects the $23 million milestone payment we made to Ligand as a result of the FILSPARI approval in February. Looking to the balance of 2023, we anticipate that our operating expenses will increase moderately and may be variable quarter-to-quarter as we advance our programs. Importantly, we will be focusing our investments in the FILSPARI launch in IgAN and the advancement of pegtibatinase as the potential first disease-modifying therapy for HCU. We will remain disciplined in our investments in FSGS while we work towards further regulatory guidance later this year. With our strong financial foundation, we anticipate that our cash balance can support our operations into 2025. This takes into account the investments I just highlighted in FILSPARI and pegtibatinase, as well as the potential further competitive dynamics for Thiola and potential milestone payments related to achievements for the programs. I'll now turn the call back over to Eric for his closing comments. Eric?

Thank you, Chris. We began the new year with the first FDA approval from our rare disease pipeline. The accelerated approval of FILSPARI marks the first and only non-immunosuppressive treatment indicated for the reduction of proteinuria in patients with IgAN. And I am very pleased with the execution so far in the launch. Most importantly, following the first six weeks of launch, we are well in line with our expectations for demand, patient access, and reimbursement, and I'm very pleased with how our team is executing on our launch plan. We will remain focused on building momentum as interest among nephrologists continues to grow, and we look forward to providing regular quarterly updates on the FILSPARI launch. We also have a number of exciting milestones ahead of us this year. We look forward to the topline results from the PROTECT study in the fourth quarter of this year and remain highly confident in the final results, achieving a statistically significant treatment effect on EGFR, as we know, physicians are excited to see those data. We believe positive results will lead to traditional approval of FILSPARI and catalyze the next phase of growth. Furthermore, we are pleased with the ongoing EMA regulatory review and look forward to a potential approval of sparsentan for IgAN in Europe in the second half of the year. And finally, we are very excited about the opportunity in HCU. The HCU community has been highly underserved, and they are eagerly seeking effective treatment options. Pegtibatinase has the potential to become the first disease-modifying therapy for this population if approved, and we look forward to providing an update on the program later this quarter. Now, let me turn the call back over to Naomi for Q&A. Naomi?

Thanks, Eric. Operator, can we now open the line for Q&A?

We'll take the first question from Maury Raycroft at Jefferies. Maury, your line is now open.

Hi, congrats on the progress with the launch and thanks for taking my questions. Based on the Lancet paper PROTECT is powered at 90% to detect an underlying treatment effect of 2.9 mil per minute per year, so that translates to 5.8 mil per minute over a two-year treatment period. Can you clarify if that is the delta versus irbesartan or is that only the sparsentan treatment effect?

Maury, thanks for the question. I will turn that over to Jula.

Thanks, Maury, for the question. So, to clarify, the greater than 90% power to detect a difference in slope of 2.9 mils per minute per year with 380 patients. So just to give some more color. This is based on historical data and achieving a 30% difference in proteinuria and recall, we achieved a 41% relative reduction in proteinuria, giving us a geometric mean ratio of 0.59%. So when you put that on the incur curve, it predicts a slope difference close to what we originally modeled. And it shows a very high positive predictive probability for a difference in eGFR slope. Even with a modest sized trial and I'll point you if you want more details, I'll point you to the anchor appendix so that you can actually do some of the analysis yourself.

Got it. That's helpful clarification. And based on the new DUPLEX data and the view that IgAN is a progressive disease. Is there anything additional you can point us to for how we should think about irbesartan arm treatment effect size on eGFR and PROTECT?

Well, remember the irbesartan in PROTECT was already essentially optimized on RAS inhibition. They were at least 50% label, maxi-tolerated RAS. So essentially, they were treatment failures because they had persistent proteinuria despite this. And there was still an incremental reduction in proteinuria on those ones, but we had a 41% relative reduction in proteinuria compared to the irbesartan. So I would imagine that we can anticipate those on irbesartan to progress time we've seen in other studies may be slightly better. And in the TarPeostudy, they progressed at 6 ml per minute per year. Maybe they'll do slightly better than that just because we had a slight reduction in protein, but that is what I would say, compared to the historical control.

Got it. That makes sense. And maybe last quick question. Similar to DUPLEX, I'm wondering if you have any feedback from FDA on whether it would be okay if you miss on total slope what hit stat on the chronic slope for PROTECT?

Bill, why don't you take that question?

So we don't have a specific dialog from the agency addressing that with PROTECT in the discussions around the design of the DUPLEX study, they did say that in the end, while the study is designed around Total slope first and chronic second, they certainly want to look at all of the elements of the study. My expectation is they'd be consistent with each program with that type of approach.

Got it, okay. Thanks for taking my questions.

Thank you, Maury.

We will take the next question from the line of Greg Harrison from Bank of America. Greg, your line is now open.

Hi, good afternoon. Congrats on the FILSPARI number and thanks for taking the questions. Are you able to give any additional color on what part of the $3 million sales number was patient demand and maybe how many patients are on treatment and then what portion of the 146 patient start forms have transitioned into paying patients or at least maybe what should we expect that rate to be over time?

Greg, thank you for the questions. We would be in a position to be able to share as we mentioned at the approval to be able to talk about the patient start forms as well as revenue but we recognize certainly that early on in any phase of launch for specialty medicine, you're going to have variability in terms of the stocking as well as how quickly you get that through. I think as both Peter and Chris mentioned, it is going to take some time to have that. While we did have some re-orders or orders that reflect underlying demand, you can largely think about that $3 million as channel stocking for the first quarter. And we are not going to be providing any specifics at this point with regard to the breakdown of or conversion of patient start forms to reimbursement. They are very much in line with our expectations. We're really pleased with all aspects of the launch so far, but those metrics really are lumpy in the first part of the launch. We want to make sure that we can provide a consistent set of metrics over time that are going to be predictable and consistent throughout the launch. So stay tuned, we may evolve and be able to share some of that as we have an underlying trend emerge in the launch, but at this point, I would say that you should rely on the 146 reflecting the underlying demand from nephrologists.

Okay, fair enough. And then the 146 number, it's pretty impressive. I think it's above most people's expectations. Do you think that reflects at all a bolus of patients that was maybe waiting for treatment or do you expect more of a steady ramp from here?

Peter, why don't you take that one?

Yes, happy to do that. Thanks Greg, for that question. Yes, I don't really see a bolus. And you have to realize IgA nephropathy is still a rare disease even though every nephrologist has at least a handful of IgA nephropathy patients. It's not like a physician has top of mind like, hi, all those patients should come in at a certain date. So I have to say, especially after spending some time in the field and seeing how busy those community practices are, IgA nephropathy for us is top of mind. For nephrology in all those patients they are serving, it's only a small fraction, so I don't think they have some bolus. We are happy with the steady demand that we are seeing and there is a big demand as well. But I wouldn't say there is a bolus of patients that you see initially; I think you will see a constant steady growing demand regarding IgA nephropathy as patients are coming into the office as we progress in advance.

Okay, great. Thanks for taking the questions.

Thank you, Greg.

We will take the next question from the line of Joseph Schwartz from SVB Securities. Joseph, your line is now open.

Hi, thanks so much. I was wondering if you can give us any insight into how many physicians have written a FILSPARI prescription to date and if you can describe the earliest adopters for us?

Peter, why don't you take that question?

At this point, we won't be disclosing how many prescribers we have. We have seen repeat prescriptions already, which aligns with the 146 patient start forms. We're pleased with how the product is being received right now. Regarding the profile of the prescribers, we have been targeting based on three aspects: the volume of patients in the clinic, the physician's behavior in adopting new innovations, and their influence. We particularly see that physicians in large community practices are essential for prescribing FILSPARI.

Thank you. I have a question about your HCU program. We've heard that these patients can be somewhat challenging to reach. Can you describe your relationship with the patient community and the physicians who treat them, and how that relationship has changed since you began the Compose Study? How difficult was it to enroll participants in that study, and what are your thoughts on the challenges you might face in enrolling a larger Phase III study?

Yes. Joe, thank you for the great question. I'll start by sharing a little bit about the relationship and how the community has evolved, and then I'll ask Jula to share some of the insights that her team has gathered in conducting the Compose Study. This is a patient community that really has been underserved. When we took over the program, many of them were actually served by connecting with the phenylketonuria or PKU community because of a lot of the similarities in how the conditions are managed. But I think as we've started to really build our relationship with them, they really start to build their own community online as well as with standard patient advocacy organizations, both here in the US as well as abroad. I think that we're starting to see a much more concerted and organized effort to articulate what the needs of that community are with regard to earlier diagnosis, improving newborn screening, helping to understand better management of the disease, as well as I think for us educating about the importance of engaging in clinical trials as a potential for innovation in the future. So, I think largely we've been really pleased with how quickly the community has evolved. I think we've really gained a lot of good learnings with regard to clinical trial enrollment. And with that I will turn it over to Jula to share more.

Thanks, Eric. Well, any rare disease, it can be challenging to recruit because there's very few patients per site. So, it can take a bit longer and you often have to go to where the patients are and you really do need to engage with your advocacy partners and with the patient community to understand what's important to them. Simplifying the trial design and providing them a lot of support. And so that's what we're doing. Moving forward, I would say also importantly we have significant engagement with the key opinion leaders to ensure that what's important to them and their patient community is what we incorporate into the design of the study. We also have a natural history study that helps us with access to patients who, if they're interested in participating, can provide us with additional patients that can help enroll a bit quicker.

Thank you for the insights.

Thanks, Joe.

We will take the next question from the line of Carter Gould from Barclays. Carter, your line is now open.

Hi, this is Leon Wang on for Carter. And thanks for taking my question and congrats on the results. So, on FILSPARI, any early signs of the patient profile that docs are prioritizing versus those that they may be waiting for more confirmatory eGFR data or any profiles of docs that are perhaps waiting for the data and not being susceptible to show a launch?

Yes, thanks for the great question. Maybe I'll start by saying with any launch, you typically will see a spectrum of adoption by physicians where you have some that are early adopters and those that are waiting. What I will say is that we're very pleased and the performance thus far from physicians is absolutely in line with our expectations, and also in my experience with launches. I'll ask Peter to share a little bit more about the types of patients that we're seeing, prescribed FILSPARI in the first six weeks as well as the profile of physicians that we see adopting.

Yes, I think, happy to provide some color on the basis that we seeing. So the majority, the vast majority of the patients are those patients that are on the rapid pace of progression which consistent has high proteinuria levels. Many of those are above 1.5, but we also have some restrictions for patients with lower proteinuria levels at 1.5 but have additional indicators for rapid progression. So I think largely in line with how the indication is written, nearly above 1.5 with some so below 1.5 gram.

Maybe the other thing, Peter that I'll add is that the payer mix is very consistent with what we had assumed with the majority of these patients having commercial insurance. So I think a lot of the work that Peter's team did to really profile what this looks like, what the launch uptake could look like, is again very much in line with our expectations and planning.

All right. Thank you.

Thank you.

We will take the next question from the line of Liisa Bayko from Evercore ISI. Lisa, your line is now open.

Thank you for taking my call, and congratulations on the good start. As we look ahead to later in the year, what kind of gross and net figures can we expect initially, and what do you think they will stabilize around?

Yes, great question, Liisa. Certainly as you alluded to the first part of a launch is going to be quite lumpy. So we've been reluctant to provide any estimates at this point, but I'll ask Chris to comment on where we think we may be landing once we get to that steady state.

Yes, thanks for the question, Liisa. Really at a stable state, we're going to be looking at mid to high teens. And I think what we're seeing now is reflective of us getting there, once we do get to that stable state. So no change from our expectations on that point.

Okay. And then back to the PROTECT and your powering. Jula, can you explain how you calculated the 2.9 milliliter difference, which assumed a 30% difference in proteinuria, but you actually observed a greater change than that? Should we expect a larger difference based on this? I didn't catch everything you mentioned; it was a bit unclear.

Yes, Jula, would you like to take that?

Well, our initial power calculation was based on historical data. And then you can map it based on the incurred data. So based on incurred data, we fall in line with our original power calculations to be able to predict a statistically significant and clinically meaningful effect at two years. The other thing I do want to add to this is that as part of our review for accelerated approval, the FDA was very focused that we'd be able to confirm our benefit after the two years. So they asked us the likelihood of achieving statistical significance, both on the chronic and total slope endpoints for the two years, so we provided conditional power calculation that looked at our available eGFR data at the time of the interim as well as the information from the trial level analysis to address their requests. Importantly, the conditional power calculation provides a very high level of confidence on achieving statistical significance at the two-year confirmatory analysis.

Okay, thanks.

Thanks, Liisa.

We will take the next question from the line of Mohit Bansal from Wells Fargo. Mohit, your line is now open.

Thanks for taking our questions. This is someone filling in for Mohit. Can you discuss whether you think new patients or those switching to FILSPARI is the bigger driver of demand in the first year after launch? Also, regarding the 3% of insured lives being covered, is that ahead of your expectations and how should we think about that as we move forward, in terms of the quarterly progression?

Sure. Peter, why don't you take those two questions?

Yes. Thanks for the question. So when you think about where is the main demand coming from with regards to patients, naive or switch. It is very complex, like the majority, the vast majority of those patients have been on ACE or ARB-based therapies in the past and are switched to FILSPARI. So I think that is quite consistent. I think ultimately you will start to see naive patients as well. I think it's a small fraction of the total patient population because the majority of those patients are prevalent and already in the offices of the physician. So what we're seeing right now is much of that phenomenon, patients that have not responded to the proteinuria levels and are being replaced with FILSPARI. We're still squarely so that was the first part of your question. With regards to the second part of the 38% coverage, it's a good number and it's much in line with our expectation, especially taking into consideration that there was only after six weeks or 38% coverage by March 31. So I think it's a good number that we feel quite proud of and I think it is at the high end of what you see with benchmark products.

Yes, Adam. Thank you for that. Peter. The only thing I would add with regard to actually both of those questions is the quality of the payer coverage. It's really important to think not just about coverage, but what's the quality of the coverage relative to the labeled indication. We're really pleased to see that there's a high degree of quality when we think about the access for patients aligned to the label and we do see a number of those payers that have stepped through ACE or ARB. But again, as Peter alluded to, the majority of these patients are already on ACE or ARB. In fact, many of these patients are referred to their nephrologists on ACE or ARB. So when we look at the actual quality of the coverage, it's not just 38% but it's actually the quality of that access, and we're really pleased. Again early days, but I think it's a great foundation upon which to build throughout the rest of this year.

Any further questions, sir? We will take the next question from the line of Laura Chico from Wedbush Securities. Laura, your line is now open.

Thanks very much. I guess I wanted to talk a little bit more about the cadence of ordering here. I guess, Eric, maybe said differently. Could you just walk us through what are the expectations around the timing from receipt of a start form to when products are actually going to be dispensed? Like what is the timeframe there? Sorry, if I missed it.

Yes. No, it's a great question, Laura, and it's an important dynamic to think about any specialty launch where there is a range of timelines from prescribing and I'll ask Peter to talk a little bit about what we're seeing and also what we expect to see throughout the rest of this year. Peter?

Yes, to respond to that, thanks Laura for that question. I think to Eric's points as is typical for many rare disease product launches, there is a wide range of what I call the time to fulfillment especially in the early days as failure access may take longer. I would say that these 30 days the FILSPARI time to fulfillment is in reach but what is typical in rare diseases, which is typically in a 30 days to 60 days range I would say. We anticipate that this pull-through will decrease as we get more payer coverage.

And I'm sorry, Peter, just to verify. You said it's ranging from 20 to 60. But over time when likely to be closer to a typical 30-day range. Do I have that correct?

Well, let’s verify that Laura. I was talking about what is common in rare disease in general, but I will say we are in that race. It's more historically, what I've seen in rare disease and specialty launches. So, I think it's not reflective of FILSPARI.

The key point to remember, Laura, is that we won't share specific numbers since we only have six weeks of experience following approval. What truly matters is that as we achieve broader and higher-quality coverage, lead times are expected to decrease. It's encouraging that Peter's team has already had a strong start with payer coverage and reimbursement, and we are beginning to notice a reduction in the average time to fill. As Peter's team continues to execute and we secure more coverage, we anticipate ongoing improvements in both the average time and the range. However, it is still early, and we prefer not to provide numbers due to variability. The trends we are observing align with what you would expect from a successful launch.

Okay, that's helpful. And maybe I'll sneak in one quick follow-up. And again, apologies if I missed this, but did you quantify how many physicians are signed up for the REMS at this point?

Peter?

No, we haven't, we haven't given a number there, but we're very pleased with as with the patient start forms that we see steadily increase in REMS certifications and enrollment and I think it speaks to the assistance that they understand the value that FILSPARI may have for their patients, but also that they understand that the REMS process is relatively straightforward.

All right. Thanks, guys.

Thanks, Laura.

We will take the next question from the line of Tim Lugo from William Blair. Tim, your line is now open.

Hi everyone, this is Lachlan standing in for Tim. Thank you for taking my questions. As we approach the launch, one potential challenge mentioned was that physicians might not have access to sufficient data, given the limited information that has been released. I'm curious about how much this has impacted the launch thus far. Have you noticed it affecting any interactions or the prescribing habits of physicians, or has it not had much of an impact compared to your expectations?

Yes, it's a great question, Lachlan. But I think first I'll point to what Jula mentioned in having a high-profile publication of the interim data that I think really gives physicians a better understanding about the data but, Peter, why don't you share a little bit more about what you're hearing from your team about going through the data on FILSPARI?

Yes, I'm happy to provide some insights. Nephrology tends to be less focused on innovation compared to other specialties, which we have noticed with previous nephrology product launches, particularly those that are rare. As Eric pointed out, we had a unique situation where we launched our product in the first six weeks without any published data, which is quite unusual. Our launch was primarily based on the preliminary information. Additionally, the promotional restrictions associated with our product in Brazil's accelerated approval process played a role. However, with the recent publication in The Lancet and its inclusion in medical guidelines like UpToDate, we expect this will enhance confidence and understanding within the medical community. I am very encouraged by the intent to prescribe and the actual prescriptions that are coming in. We have seen 446 patients in Loreto so far. I believe that with more data and subsequent publications, we will continue to build confidence within the nephrology community and promote further adoption.

Yes, I think that's absolutely right. Peter and I can share with you two maybe additional observations and like Peter, I spent quite a bit of time in the field meeting with customers. I think there's a real eagerness to understand the profile and the data to FILSPARI more so the publication and guidelines are going to really help provide some of that independent or third-party perspective. But the other aspect is that it really helps understand the REMS better and the profile of a low rate of ALT AST elevation because I think in the absence of that information. It was hard for physicians to put into perspective what the level of risk really is and I think it's been very reassuring for physicians when they see the actual rates in the publication and in the label.

Got it. Thanks. And on the topic of reimbursement. Peter, I think you mentioned that most of it had gone through but there were some delays. The patients that you're seeking reimbursement for, I guess, to the extent that there have been delays, can you maybe talk about what pushback you're getting from payers?

No, I wouldn't say that. I mean, as you don't have inclusion in formulary yet. I mean, it goes through the prior authorization pathway and so that generally takes longer. I mean, I think it's a common process in rare disease in particular. So I wouldn't indicate it as like a particular obstacle that we are seeing for FILSPARI.

Got it. Thanks.

Thanks a lot.

We'll take the next question from the line of Vamil Divan from Guggenheim Securities. Vamil, your line is now open.

Great, thanks for taking the questions. I think most of mine on the launch have been asked and answered. But just one more, just in terms of the patients that are getting FILSPARIA so far, obviously, just early. I'm trying to get a sense that you mentioned sort of the ANR dynamic. But in terms of SGLT2s, if you can comment on neuro patients already on SGLT2s or not? And also curious with the label mentioning the greater than real 1.5 gram per gram. Is that sort of a metric that physicians seem to be sticking with? Or are they just using their judgment, and maybe patients are even below that threshold? And then the second question is more on the expense side, I guess, for Chris, just how we should think about, especially SG&A spend this quarter? The first quarter was a little bit more than we were expecting. Is this sort of a reasonable amount to assume going forward?

All right. Vamil, thanks for the questions. Peter, would you like to take the first on the patients?

Yes, good question. Maybe I'll start answering the question by giving you a broader perspective on the patient profile because this is often the younger patient population. Like many of those patients are being diagnosed in their 18 or early 20s. And that's what we're seeing as well. Many young patients that are on the path of rapid progression and to your point, Greg, what we are seeing is many of the current available medications don't bring patients to the level to the target level that physicians would like to see. ACE and ARBs didn't do that. You have SGLT2. I think that's something that we mentioned as well and we see that increased utilization in SGLT2. The physician feels very comfortable in combining if needed or if appropriate with SGLT2 as it's mechanistically synergistic but also FILSPARI has that very rapid progression of 50% proteinuria hasn't seen risk medications and especially the non-immunosuppressive nature of FILSPARI with or without combination with SGLT2 makes physicians very comfortable, especially when you talk about the young patient profile that have been decided to go of immunosuppression is not quick, especially for this patient population.

And Chris for expenses.

Yes, absolutely. Thanks for the question, Vamil. What I would point back to is in the prepared remarks you talked about for overall expenses. We anticipate moderate increases for the balance of the year and really when I think about the breakdown of SG&A and R&D. That's probably more pointed towards R&D as we look to continue both the DUPLEX and PROTECT studies that are going to continue on for the balance of the year, but then also the pegtibatinase work that's going to go into the potential initiation of a Phase III as well as the supply CMC work that all needs to be done to scale up for both Phase III and commercial. And so I think that's where you'll see likely the larger magnitude of increase come for the year. I think from an SG&A perspective, there may be some modest increase from this point, but I wouldn't expect it to be of any significant magnitude, and really what we've gotten to in this first quarter is the first time in which you had the full sales force fully in place doing all the promotional activity and putting that right investment behind FILSPARI to make sure we can position it appropriately for IgA.

Okay, great. Thank you.

Thank you.

We'll take the next question from the line of Alex Thompson from Stifel. Alex, your line is now open.

Hi, great. Thanks for taking my questions. I got one IgAN question and one FSGS question. I guess on IgAN, I'll try to ask another sort of commercial dynamics question. I guess, given that you're starting by targeting a lot of higher volume prescribers. Can you talk a little bit qualitatively about whether the majority of the start forms that you're seeing so far is coming from single physicians or multiple physicians writing multiple start forms for patients or is it broader than that? And then on FSGS. Can you comment on sort of historic flexibility within the cardio renal division and if there's any good precedents for them sort of looking towards subgroup analysis in rare diseases, especially? Thanks.

All right, Alex. Thanks for the questions. Peter, would you like to take the IgAN question?

Yes. Thanks, Alex. So if I understand your question correctly, your question was like, do you see mainly prescriptions from prescribers that have had multiple prescriptions or more single, and if it's mainly in the higher volume centers. I think it's early for me to give a specific statement on that. I think we see the majority of the prescriptions coming from community centers, especially from larger community centers, but we also see prescriptions from academic centers and we see a mix of physicians that have prescribed the single time or the second time. So, but again I think it's early days on prescribing this and describing this for the first six weeks. So I wouldn't read too much into it. We see a large prescriber base, and we see both single as well as multiple prescriptions among those prescribers.

And Bill, why don't you take the question on regulatory flexibility?

Yes. No, happy to. I think the one that comes to mind quickly is Entresto for congestive heart failure was approved by cardio renal. I think in '21 if my memory is right, and that was a drug that missed their primary endpoint, but the decision of the agency was that there was clear benefits and unmet need that was something that they were interested in improvement. I think there have been other instances across rare disease indications. And I think the most recent work that I read was in JAMA where they said about the past 5 years or 10 years about 10% of the drugs approved by the FDA were ones that missed their primary endpoint in their pivotal study. So it's not a norm but it's also not something that's unheard of.

And Jula, anything further that you'd like to add on that question?

I would also point to Fabry as another potential indication for Migalastat to look at another reference.

Great, helpful. Thanks so much.

Thank you.

We will take the next question from the line of Ed Arce from HC Wainwright. Ed, your line is now open.

Thank you for including me here. Congratulations on the early progress with the launch. In the first six weeks, the $3 million reflects mostly stocking, and the 146 PSS indicates demand. I understand that this is quite variable initially, but as we move through the next few quarters and years, will you be reporting specific launch metrics regularly? For instance, we've talked about the fulfillment conversion rate or the number of prescriptions or patients on the drug, and later on, metrics like persistence or compliance rates. Also, I wanted to ask about the data readout expected later this quarter on HCU with the higher dose in the lyophilized formulation. The focus seems to be on the efficacy of that dose and the pharmacokinetics with the new formulation. What other data aspects can we expect in the readout later this quarter? Thank you.

Yes, thanks. Thanks, Ed, for the great questions. I'll take the first one. So I think we certainly are looking at a number of different metrics, and it's important for us to make sure that the metrics that we provide regularly are ones that we have confidence in the sort of trendability and the predictability. We believe that's why we focused on patient start forms and access because they really are robust predictors of underlying demand as well as the ability to pull through and have those reimbursed. I think as we look forward, you can imagine that there may likely be others like the persistence rates or the reimbursement rate and you can look to our commercial business where we have talked about persistence as a high rate of persistence etc. So as we start to understand the underlying dynamics of the FILSPARI launch, we will look to evolve what those are, but again we want to make sure that we really focus on those fundamentals this year that we believe are going to be most important in the first year of launch. And then with regard to the readout of the cohort 6 in the Compose Study, Bill, I'll turn to you to provide some further perspective on what we'll be looking for, and possibly what we would be disclosing, but I will say we haven't yet committed to what we will disclose specifically. Bill?

Sure. The cohort 6, we utilized the highest dose-to-date on a per gig basis in the study in what we view as the final cohort in the Compose Study. It also gave us the opportunity to utilize the lyophilized formulation and evaluate that in patients. What we're looking for is the most predominant biomarkers is going to be the reduction in homocysteine urea or in almost total homocysteine over time in the 12-week double-blind portion of composed. In addition to that, of course, we're looking at safety and tolerability. It's a Phase 1/2 study and evaluating that for those individuals at that dose and those patients will rollover into the open-label expansion that will give us the data then to select the dose and help us with the design of the Phase 3 study.

Sounds good. Thank you so much.

Thank you.

There are no further questions at this time. Ms. Eichenbaum, I will turn the conference back over to you for any additional or closing remarks.

Thank you everyone for joining us for our first quarter 2023 financial results call. We look forward to providing additional updates on our progress. Have a great rest of your day and thank you.

This concludes today's call. Thank you for your participation and you may now disconnect.