Good day and welcome to the Travere Therapeutics Fourth Quarter and Full Year 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 Anne Crotteau. Please go ahead, ma'am.

Thanks, Jenny. Good afternoon and welcome to Travere Therapeutics fourth quarter and full year 2023 financial results and corporate update call. Thank you all for joining. Today's call will be led by our President and 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'd 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 Form 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, February 15, 2024, 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, Anne, and welcome, everyone. 2023 was a year of many great achievements for Travere as we work towards our goal of breaking down barriers and treating rare diseases with historically little innovation. At the start of 2023, we gained the first approval from our pipeline, delivering sparsentan or FILSPARI, as the first and only non-immunosuppressive treatment option for people living with IgA nephropathy or IgAN. For decades, people living with IgAN, most of whom are diagnosed in their 20s and 30s and on average face kidney failure in 10 years, had limited treatment options. We are proud to help lead the growing evolution of the treatment paradigm that we believe will ultimately see patients get diagnosed and initiate treatment earlier, and where physicians will ultimately utilize FILSPARI as a foundational treatment with its superior proteinuria reduction and accrual of kidney preservation benefit. Following the grant of accelerated approval, our team quickly initiated our comprehensive commercial launch plan and worked throughout the year to lay a strong foundation for FILSPARI uptake. I am very pleased with our results. We continue to make substantial progress in physician demand, payer coverage, and revenue, the key aspects of the launch. Of note, FILSPARI is the only recent launch in the rare kidney space that has seen consistent growth in demand each quarter in its first year and we saw a meaningful inflection in net product sales to close out 2023. Last year, we encountered a challenge in our pursuit of a better outlook for the FSGS community. Specifically, the DUPLEX study of sparsentan in FSGS did not achieve the results we had hoped. Following our FDA engagement, it was clear we would not be in a position to submit an sNDA at that time based on the DUPLEX results alone. I am incredibly grateful and proud of how our colleagues at Travere learned and quickly adjusted. We moved quickly to align our investment in this program, implement a strategic restructuring of our organization to focus our resources and concentrate our efforts to collaborate with regulators with the goal of identifying a potential regulatory path forward in the future. As for the pegtibatinase development program for classical homocystinuria, or HCU, we achieved important milestones in 2023. Globally, we believe there are 7,000 to 10,000 patients diagnosed with HCU who are not in full control of their homocystine levels. With better diagnosis and a future where an effective treatment is available, we believe this may grow by 50% or more over time. Last year, we generated additional exciting data from our Phase I/II COMPOSE study which further demonstrates the potential for pegtibatinase to become the only disease-modifying therapy for HCU. With these data, we worked closely with regulators to align on a Phase III program, utilizing total homocysteine reduction as a primary endpoint and initiated that study before year-end. All of our efforts last year positioned us to start 2024 with focus and a plan for execution across the board. Strong launch performance in FILSPARI remains our top priority for 2024 and we expect the momentum in our launch from the second half of 2023 will continue into the New Year. We are also executing on three additional priorities aimed at broadening access to FILSPARI. Of note, we are on track to submit our sNDA this quarter to support conversion at FILSPARI from accelerated approval to full approval for IgAN in the U.S. Together with our partner, CSL Vifor, we expect an opinion on conditional approval of FILSPARI in Europe from CHMP later this quarter. We're optimistic that this will be positive. And with our recent agreement with Renalys, we are looking forward to aiding their development plans to ultimately enable access to FILSPARI in Japan and other regions in Asia, where IgAN is an even more prevalent disease and the leading cause of kidney failure. Importantly, we are excited about the opportunity we have with pegtibatinase, our novel investigational enzyme replacement therapy being evaluated for the treatment of classical homocystinuria, or HCU. In 2024, our focus will be on enrolling our Phase III HARMONY trial and raising awareness of the need for innovative treatments for this rare disorder. Let me now turn the call over to Jula for a clinical update. Jula?

Thank you, Eric, and good afternoon. I'm very pleased with the progress made on our clinical and medical affairs initiatives in 2023. With our achievements last year, we are well positioned to ultimately deliver two new treatment standards in rare diseases with limited options available. As for FILSPARI, we completed the 2-year double-blind dosing periods for our studies in FSGS and IgAN. It's important to highlight that our studies are the only ones in the space that use a maximally optimized active comparator, setting the bar highest in the field. The results which clearly demonstrated robust proteinuria reduction and preservation of kidney function in IgAN were simultaneously presented as late-breaker presentations at ASN and published in world-renowned medical journals, the Lancet and the New England Journal of Medicine. Following those data presentations, we have received positive feedback from nephrologists about the foundational role that FILSPARI can play in long-term kidney function preservation for patients with IgA nephropathy. What resonated with nephrologists is that FILSPARI is the only approved non-immunosuppressive treatment for IgAN and it's the only molecule that works by simultaneously blocking the two key pathogenic pathways in the kidney, endothelin-I and angiotensin II, which work together to drive damage and kidney function loss. FILSPARI's dual mechanism of action is critical to inhibiting the damaging pathways in the kidney in order to achieve sustained proteinuria reduction and long-term kidney function preservation that accrues over time. Unlike intermittent therapies which may have short-term benefits on kidney function, FILSPARI demonstrated a long-term accrual of benefit on eGFR. In the PROTECT study at 1 year, there was a 1.7 mill per minute favorable effect on absolute eGFR with FILSPARI compared to maximizing titrated irbesartan. That benefit increased to 3.7 mill per minute greater eGFR at 2 years. Importantly, the rate of loss of kidney function in year 2 compared to year 1 was significantly slower for FILSPARI-treated patients, suggesting a potential additive benefit with longer-term treatment. This year-over-year accrual of benefit is important for patients who have ongoing kidney injury over their lifetime and may otherwise be facing kidney failure less than 10 years from diagnosis. Our 2-year data from the PROTECT Study in IgAN shows that FILSPARI is superior to historical RAS inhibitors and is safe for chronic use, which is critical in treating patients for life. Community and academic nephrologists are continuously highlighting to us the early clinical experience with FILSPARI, where they see significant reductions in proteinuria and the ability to safely use FILSPARI with their patients chronically. We believe this cements the role that FILSPARI can play by replacing RAS inhibitors as foundational care for those at risk of rapid disease progression due to uncontrolled proteinuria. Following the positive results from PROTECT, we successfully completed a pre-NDA meeting with the FDA to discuss our plans to submit an sNDA to convert FILSPARI from accelerated approval to full approval for IgAN. Importantly, we aligned with the FDA on the data analysis to support our submission and to support potential broader labeling. I'm pleased to report that we remain on track to submit the sNDA this quarter. We are at an exciting juncture in the evolution of the IgAN treatment paradigm. We believe that nephrologists are focused on treating the damage in the kidney and then preventing further damage systemically. Our goal is to ultimately have FILSPARI used as the foundational care in IgAN, essentially replacing the historical role of RAS inhibitors and then other medicines can be added as needed. As this evolution continues, there are a number of factors that we expect will help FILSPARI achieve this goal. With full approval from the FDA, we would expect a broader label that reflects the full study population and the results. This would provide nephrologists and patients with greater flexibility to choose FILSPARI when seeking treatment options that can provide long-term kidney function preservation. Additionally, we believe FILSPARI's likely inclusion in the soon-to-be-released KDIGO guidelines should further standardize the use of FILSPARI within the nephrology community and potentially result in earlier treatment. As positions in up-to-date and recent peer-reviewed IgAN treatment articles, we anticipate FILSPARI will be described as foundational treatment in the KDIGO guidelines. We also believe that the proteinuria target for treating IgAN overall will be lowered, which would support earlier diagnosis and more aggressive treatment to avoid long-term damage as well as combination treatment in the future. Furthermore, later this year, we expect to generate longer-term data from our ongoing studies which are designed to show FILSPARI can be safely used in combination with other medicines, such as SGLT2 inhibitors, and that patients may benefit from earlier use of FILSPARI. Such data will further support the progress towards FILSPARI achieving foundational care. Beyond the U.S., we have continued to work closely with our partners at CSL Vifor on the conditional marketing authorization application that is currently under evaluation in the EU. Following a procedural clock stop to review the 2-year data, we believe that we are well-positioned for a positive CHMP opinion this quarter and an approval decision next quarter. Beyond the CSL Vifor territories, our recent agreement with Renalys provides FILSPARI with a regulatory pathway that has the potential to deliver FILSPARI across a number of Asian countries in the coming years. Overall, we are very pleased with the important groundwork laid in 2023 and we see a clear roadmap for increased utilization of FILSPARI for IgAN in 2024 and beyond. Turning briefly to FSGS; with no approved therapies for tens of thousands of patients with this condition and the high rate of progression to kidney failure; we are committed to trying to find a path forward for sparsentan and FSGS. We are taking a measured approach to evaluating our data sets and working with the community to reengage the FDA later this year towards the goal of ultimately being able to submit to have an FSGS indication added to the FILSPARI label. We anticipate being able to provide an update on this work late in the year. As Eric highlighted earlier, our enthusiasm for pegtibatinase continues to grow. We were pleased to achieve alignment with regulators on the design of our Phase III program and to reach our goal of initiating the Phase III HARMONY study before year-end. This study employs an innovative design with measurements very similar to our highly successful Phase I/II study, which we believe provides a high probability of success as a registration-enabling study. The Phase III HARMONY study is designed to recruit up to 70 patients with HCU and evaluate change in total homocysteine from baseline to week 6 to 12 as the primary endpoint. This is the measurement for which we saw a 67% reduction in the highest dose cohort in the COMPOSE study. Patients will be followed in the double-blind period for 24 weeks in total to establish durability of effect and a robust safety database. Patients who complete the full double-blind period will be eligible to enroll in an open-label study called ENSEMBLE, where there is a protocolized diet liberalization substudy for eligible patients who have well-controlled total homocystine. This portion of the study is designed to generate data throughout the life of the program, and we believe it will ultimately be able to help patients understand how they may be able to increase protein intake by taking pegtibatinase, a key area of need for patients living with HCU. As we move through 2024, we will be focused on ramping up enrollment in the HARMONY study and scaling our pegtibatinase manufacturing activities to support the full program and future commercialization. We look forward to top-line data in 2026 with a potential approval in 2027. I'll now turn the call over to Peter for the commercial update. Peter?

Thank you, Jula. Looking back on 2023, we made robust progress on what we have outlined during our launch call in February last year. Our goal was to position FILSPARI as the future foundational care for patients at risk of rapid progression through educating our nephrology targets, securing broad access, and ensuring a positive initial FILSPARI experience for patients and physicians. I am really proud of the progress our commercial team has made in the past year, especially while adapting to the initial promotional restrictions that come with accelerated approval and an unexpected advance program for liver monitoring. By the end of 2023, we reached 5,700 nephrologists with our sales team in regular face-to-face educational interactions. That is 95% of our target base of 6,000 nephrologists that we believe treat about 85% of the addressable IgAN patients in the U.S. These efforts resulted in strong and steadily increasing demand with increasing breadth and depths of prescribing nephrologists. In particular, in the fourth quarter, we built strong momentum for FILSPARI demand, and I couldn't be more pleased with how we ended the year. It was encouraging to see further growth in new patient start forms or PSFs after ASN Kidney Week, where the confirmatory PROTECT study results were presented and published. Importantly, we also received further validation of the FILSPARI profile from key leaders in nephrology, which was evidenced by an increase in key opinion leader prescribers. We ended the fourth quarter with 459 new PSFs, which demonstrated quarter-over-quarter growth for each period in 2023. In fact, this is the first recent rare nephrology product that has shown a continuation of growth in demand during each period of the first year of launch. In total, we received more than 1,450 patient start forms in 2023, which clearly indicates FILSPARI is helping fill a significant need for the nephrology community. On the payer front, we established a strong base allowing broad patient access. By the end of the year, coverage reached about 70% of U.S. lives. In the fourth quarter, we added about 180 new FILSPARI-specific formularies. Overall, more than 1,000 formularies have included FILSPARI with authorization criteria that are generally consistent with the FILSPARI label. If we account for plans that didn't yet include FILSPARI but have a clear pathway for approval, that total is about 89% of the U.S. lives. Following our team's quick adjustments to improve patient education and provide further support for the liver monitoring REMS in the second half of the year, we saw continued progress in our lead measures of REMS certifications in the first 14 days after receiving patient start forms. This also led to a growing number of reimbursed patients initiating therapy during the quarter. We are hearing almost on a daily basis from patients and physicians how impressed they are with the results that they achieved with FILSPARI. These results are consistent with what was observed in the PROTECT trial, with rapid and sustained proteinuria reductions versus a safety profile similar to ACE inhibitors and ARBs. This is encouraging for patients that started using FILSPARI and is likely why we are seeing high compliance rates so far. All these accomplishments resulted in a significant increase in net FILSPARI sales. In the fourth quarter, we reported approximately $15 million in net product sales, which resulted in nearly $30 million for the year. The revenue also remained steady, contributing approximately $25 million in net product sales in the fourth quarter. We recently learned of an approval of a generic trial that we see was narrower labeled, and we will continue to monitor what impact that may have throughout the year. Overall, we ended 2023 with solid execution, and this provides us with a robust foundation for strong performance in 2024. In fact, in the first 6 weeks of the New Year, I'm pleased to see our strong FILSPARI performance continue. Our team is ready to show the true potential of FILSPARI in this New Year and we have multiple inflection points throughout 2024 that provide confidence in continuing growth. Let me highlight the four areas that I am particularly excited about in the coming year. First, if we achieve full approval as targeted for later this year, we anticipate that an updated and potentially broader label will provide greater support for physicians to prescribe FILSPARI to more of their patients. Second, as Jula mentioned earlier, we anticipate that FILSPARI will be included in the global KDIGO guidelines, scheduled to be updated this year. This will potentially provide uniform guidance for physicians to choose FILSPARI as an early treatment for their patients. Third, additionally, if the guideline revision emphasizes earlier intervention by lowering the proteinuria targets, it would likely amplify the urgency to diagnose and treat patients earlier. We believe this would increase the number of patients that would be eligible for FILSPARI, and importantly, a broader label together with a potentially lower target to treat earlier in the guidelines would allow us to establish FILSPARI as a foundational treatment for a larger addressable patient population. And fourth, we expect the additional clinical evidence Jula highlighted earlier will ultimately provide support for physicians to treat earlier with FILSPARI and use it in combination with other available medicines for patients that may need more aggressive treatments. With all of this in mind, I could not be more excited about FILSPARI's prospects in this New Year and we feel strongly that we are well-positioned for significant growth in 2024. Let me now turn the call over to Chris for the financial update. Chris?

Thank you, Peter, and good afternoon, everyone. Following our fourth quarter results, we are in a strong financial position. From an operational perspective, we continue to grow revenues, and we have focused our investments on the ongoing launch of FILSPARI and IgA nephropathy and the advancement of our Phase III pegtibatinase program. For the fourth quarter of 2023, net product sales were $39.9 million compared to $25.8 million for the same period in 2022. The increase is attributable to growth in net product sales from the ongoing launch of FILSPARI and IgA nephropathy. During the quarter, we also recognized $5.1 million of license and collaboration revenue, which results in $45.1 million in total revenue reported for the period compared to $29.3 million in the same period in 2022. Research and development expenses for the fourth quarter of 2023 were $59.7 million compared to $58.1 million for the same period in 2022. The difference is largely attributable to the continued advancement of our pegtibatinase clinical program, partially offset by reduced investment in our FILSPARI Phase III programs following the readouts from the 2-year endpoints. On a non-GAAP adjusted basis, R&D expenses were $55.3 million for the fourth quarter of 2023 compared to $52 million for the same period in 2022. Selling, general and administrative expenses for the fourth quarter of 2023 were $63.6 million compared to $57.1 million for the same period in 2022. The difference is largely attributable to the commercial launch-related activities following the accelerated approval of FILSPARI in February of 2023. On a non-GAAP adjusted basis, SG&A expenses were $49.7 million for the fourth quarter of 2023 compared to $44.3 million for the same period in 2022. During the fourth quarter, we recognized $11.4 million in restructuring fees related to this strategic reorganization that was announced in December. Total charges related to the reorganization are expected to amount to between $12 million and $14 million. Total other income net for the fourth quarter of 2023 was $5.7 million compared to $1.1 million in the same period in 2022. The difference is largely attributable to an increase in interest income during the period. Net loss, including from discontinued operations for the fourth quarter of 2023, was $90.2 million or $1.18 per basic share compared to a net loss of $65.8 million or $1.03 per basic share for the same period in 2022. On a non-GAAP adjusted basis, net loss, including from discontinued operations for the fourth quarter of 2023 was $71.8 million or $0.94 per basic share compared to a net loss of $46.9 million or $0.73 per basic share for the same period of 2022. As of December 31, 2023, the company had cash, cash equivalents, and marketable securities of $566.9 million. Looking ahead, we expect meaningful growth in net product sales of FILSPARI in 2024 and we look to achieve non-GAAP operating expenses below $400 million for the year. We also anticipate meeting milestones for both FILSPARI and pegtibatinase that will result in us making expected net payments of approximately $50 million during the year. With our strong balance sheet, expected growth in FILSPARI revenues, and measured investments, we currently expect that our cash balance can support operations into 2028. I'll now turn it back over to Eric for his closing comments. Eric?

Thanks, Chris. We are entering a new phase of growth for Travere. Our organization is well positioned with a strong financial foundation to continue advancing FILSPARI and pegtibatinase as potential future treatment standards for their respective rare kidney and metabolic disorders. Moreover, these global markets collectively are projected to exceed $10 billion in the coming years. Our unrelenting drive is based on our desire to deliver life-changing therapies to people affected by IgAN, HCU, and potentially FSGS, who historically have had little to no innovation for their condition. We see near-term and long-term growth through the following: the continued strong execution of our FILSPARI launch, the expected conditional approval of sparsentan in the EU and full approval of FILSPARI for IgAN in the U.S. with potential broader labeling, updated IgAN treatment guidelines, and further data generation to reach the growing number of patients in need of better therapy. Finally, I'm particularly excited about the advancement of our development program for pegtibatinase as the only potential disease-modifying therapy in a market that is expected to grow meaningfully over time. This year, we look forward to raising awareness of HCU and enrolling the Phase III HARMONY study with a goal of achieving top-line data in 2026. Let me now turn the call over to Anne to open up the lines for Q&A. Anne?

Thank you, Eric. We can now open the line-up for Q&A. Jenny.

We will now take the first question from Joseph Schwartz from Leerink Partners.

I guess I'll ask on FILSPARI, how much does the higher hurdle that FILSPARI had in the PROTECT trial seem to resonate with the prescribing community? Do they appreciate that patients in the control arm were so well managed? Does this impress them? Or do you have more education to do in order for them to appreciate FILSPARI's relative performance and PROTECT?

Joe, thanks so much for the question. Peter, why don't I turn that over to you and perhaps you can also comment on what we saw coming out of ASN where there was much more discussion about the PROTECT trial and trial design.

Yes, I have to take that question, Joe. I would say the conversations I have had with physicians, and I think that's also being aligned with the market results that we saw. But if we outline the study design of PROTECT and the understanding of an active control arm is understood. There's really a great appreciation for the very robust results that we have. And we have highlighted earlier in the call, like 1.7 mill per minute per year improvement. And then in the second year, it is actually 3.7 mill per minute per year. So an accumulation of benefit over time. I think that is something that the physicians if they understand the design really speak highly of.

Jula, is there anything that you'd like to comment on from your team's engagement with thought leaders on that trial design and the high bar?

Yes. I think it does take some education because all the other trials are comparing to a not fully optimized standard which we know historically is 50%. And really, all the other trials aren't at that level. We have a higher hurdle. So, when they initially see the comparison in the slopes, most of which they don't look at in their clinical practice, it takes some education to look at the benefit and then also the accrual of benefits that we can see. We only did a 2-year snapshot, but you know that if you have a benefit that's better in year 2 versus year 1, then that's going to continue to improve year-over-year. That does take some time, but they get it once they spend some time with the data and the information.

And I think this is going to be a very important part of why we're eager to have full approval and a label that will allow us to talk about that long-term benefit and how the trial design really does help explain why we see such great results throughout the 2 years.

Our next question is going to come from Greg Harrison from Bank of America.

Just thinking through the IgAN treatment landscape. And when it comes to comparing different treatment options, especially in light of recent data, is it fair to say that the focus for investors should be on the eGFR benefit? Or is there a better way to think about it?

Greg, thanks so much for the question. I think the very short answer is no. But I'm going to let Jula talk a bit more about what she, as a nephrologist, is hearing from thought leaders about the evolving treatment landscape and the importance of eGFR and proteinuria. Jula?

First, I'll start with proteinuria and eGFR. Both are important for patient care, but proteinuria is crucial for nephrologists and regulators when assessing risk and treatment response over time. Changes in proteinuria can be observed more quickly, while eGFR changes take many years to manifest. Importantly, multiple data sets indicate a strong link between reductions in proteinuria over time and the risk of kidney failure, which is why it is a valid endpoint for accelerated approval. We also need to aim to get patients as close to normal levels as possible. Patients with 0.44 grams per day still remain at risk, so reducing proteinuria is vital. We observed that one in three patients on FILSPARI in the PROTECT study achieved complete remission of proteinuria, and so far, we are witnessing reductions in proteinuria alongside eGFR preservation that builds over time. All these factors are crucial to consider.

Our next question is going to come from Anupam Rama from JPMorgan.

And a little bit more of a kind of an acute question as we think about FILSPARI in the first quarter. Any guidance about how we should be thinking about payer reauthorizations and any seasonality considerations in the quarter?

Anupam, thanks for the question. Let me just first say that Peter's team has done a really great job starting the year strongly and we've seen good performance. Peter, why don't I turn it over to you to talk a bit more about what we expect to see in those dynamics for Q1, recognizing that we've not and will not be providing guidance. But I think certainly, Peter can talk about some of those dynamics in more detail. Peter?

Yes, happy to Eric. Yes. As I mentioned earlier, I think across the three core fundamentals of launching a product, we made really substantial progress, and in particular, ASN, I think really allowed for building that momentum we saw, like an increase of prescriptions, in particular from thought leaders. We also saw good progress in getting patients on paid product. Across the fundamentals, we see the continuation of progress in the first six weeks of this year as well. I think to your more specific question, like what is the insurance reset and reauthorization criteria, we move for the gross to net in the first quarter. While this is the first year we launched FILSPARI, so that's going to be a new learning. So, we don't know that yet. But if I look at the fundamentals, I'm really pleased with the progress we have been making.

Our next question is going to come from Tyler Van Buren from TD Cowen.

So as part of the sNDA submission by the end of the first quarter for the full approval of FILSPARI and IgAN. Does that include a request to have the black box warning removed? And if so, can you describe to us how you supported that request?

So thanks so much for the question, Tyler. Jula, why don't I first turn to you to talk about the data that we've seen from a safety standpoint? And then, Bill, certainly, you can add what we're thinking in terms of engagement with the FDA during the sNDA process.

So I want to highlight that across our development program and first year commercial launch, including patients who we've had in some of our trials on treatment for over ten years, we have had several cases of adverse effects but not beyond the expected. I do note that there isn't historic precedent for press removal of warnings, but we certainly are going to advocate for the best process for patients which will be part of our ongoing dialogue.

Yes, with the anniversary of the approval, we will be submitting our first annual REMS update, which will highlight the data that we've collected around liver safety, and we'll also be submitting the sNDA this quarter, which will give the full 2-year data in the PROTECT study. Both of those give us a launching point to begin the dialogue around the potential modification of the REMS program. At the end of the day, we need to start this dialogue. We don't know what the FDA's response will be, but it's really important for us to have the data that we have now and to begin the conversation and these interactions with the agency.

And our next question will come from Carter Gould from Barclays.

A lot of mentions of momentum and inflection on the call there. The new start form increase was somewhat more modest. I guess I'm trying to understand is that sort of mid-single-digit increase in new start forms probably a fair characterization of what we should expect going forward until those inflection points that Peter mentioned sort of hit? It does seem like those are back-end weighted. Any color or commentary would be appreciated.

Carter, thanks so much for the question. I'd say that Peter can speak to some of the qualitative and directional approach that we expect to see throughout the year for both patient start forms and demand. We will not be providing guidance on those for the year, but we certainly do expect to see a strong year of our performance, particularly in revenue. But, Peter, why don't you talk in a bit more detail about what we can expect to see moving forward.

Yes. Thanks, Carter, for the question. I think it's the characterization that you have to take into context of a prescriber base that had very low innovation in the last 30 to 40 years. So I think the adaptation takes time to educate the broad community and get to the prescriber base. Within that context, I think the growth that we showed in Q4 and basically in every quarter in the first year, I think what I called out earlier is that this is the first recent product in the rare nephrology field where you see that continued growth. I think that is something that is the data we expect this year. The guidelines to be updated that is a good momentum to show continuation of growth in patient start forms and, more importantly, ultimately in revenue as well. I think I understand your question, but I think you have to bring that into consideration with an audience that may not be used to that much innovation and really requires education. With the experience that they are gaining, and that's what we are seeing right now is the best advocate for further use and further prescription. That's where we are right now. The first year, the plans to have the continued growth that we saw, I'm really pleased with.

Our next caller is going to be Maury Raycroft from Jefferies.

For the EU, you initially filed for conditional approval and it sounds like that's what you're expecting this quarter, but then you submitted the 2-year data to the EU, which led to the clock stop. So is it possible that you could get full approval in the EU? Is there any possibility for that? Or will it still be conditional? And has EMA provided any feedback after reviewing your 2-year data?

Maury, thanks so much for the question. Bill, I will pass that over to you.

Sure. We remain optimistic about the positive CHMP decision that will be made this first quarter. The 2-year data, I think, was helpful for the EMA in making their decision because it essentially removes the regulatory risk associated with their equivalent of accelerated approval. There wasn't a discussion of potential full approval and there are aspects of the data package that they don't have yet. The full tables, figures, and listings weren't provided, more of a top-line look at the 2-year data. So, I wouldn't expect a full approval with this round.

Got it. And has EMA provided any feedback after seeing the 2-year data that they've seen?

No. There wasn't an opportunity in the process for feedback from that at this point in time. I'm sure we'll have dialogue as we go towards full approval.

Our next person is going to be Tim Lugo from William Blair.

This is John on for Tim. Just wondering if you have any sense on if the agency might require an ADCOM to discuss conversion to full approval. And as a follow-up, if you have any sense on the last date that you might be informed that ADCOM might be required?

John, thanks for the questions. Bill, I'll pass that back to you.

Sure. I don't believe this regulatory decision would involve advice from an advisory committee. The data is quite clear, so there's no need for additional external experts to interpret the trial results, and there aren't any controversial aspects to consider. Therefore, I don't expect the agency will convene an advisory committee. However, if they do, we will be prepared. Regarding your second question about timing, the agency typically informs sponsors within 60 days of submission whether an advisory committee meeting will occur. So, if we submit in the first quarter, we should know by mid to late in the second quarter if an advisory committee will be necessary.

Our next question is going to come from Liisa Bayko from Evercore ISI.

Do you have any more color on when the new guidelines will be released?

Jula?

We know they're working on it now, but I can't provide more color other than we were anticipating potentially this quarter and that means they would be finalized later in the year, but we know it's in the works.

Okay. You mentioned compliance rates were good. And can you speak to kind of where you are with compliance, and also can you describe growth from that for the year? Like what kind of average for the year should you be thinking about or when would normalize? Any color there would be helpful.

Sure. Peter, I'll turn that over to you.

I'll take the question on the compliance and Chris, maybe you can take the gross to net earn. So on the compliance rate, like if you look at chronic diseases without a well-defined treatment, overall compliance rates are not very high. What we see with FILSPARI so far is that it is actually really high. It's higher than what we anticipated, especially when you also have a REMS program with monitoring that requires monthly liver testing. So far, we see very strong compliance rates. I think it keeps also to the experience patients are having. And that's for the first time, they actually see that they are in control at target levels. I think that is motivating patients to continue to use the product and supply. I think we see also high compliance rates.

And Liisa, just on the gross to nets, we've been pleased with how we've seen things meet our expectations of having a mid- to high teens gross to net. The other thing that I would say is for Q1 with the rest of the year, we may see that be a little bit higher as we have some of our other products in the past. But overall for the year, we would expect it to remain in that mid- to high teens level.

Okay. And then can you comment at all on how many patients were on FILSPARI as we exited 2023?

So we've not provided guidance for any KPIs on the number of treated patients. I think Peter can talk about directionally what we were seeing as we ended the year. But Liisa, we're going to continue to provide updates on PSFs, payer coverage, and revenue at this point in the launch. Peter, you want to provide anything further to this question?

I think that's right. As I mentioned earlier, I think we're making robust progress on all the fundamentals, including the pull-through getting patients on base product. I think the process is well within benchmarks, which you would expect from rare disease products. So, I think we will see that continuation, and it will be reflected by revenue as well. To Eric's point.

Our next question is going to come from Vamil Divan from Guggenheim.

I have a couple of follow-up questions regarding the payers. Peter, in your prepared remarks, you mentioned that payers are generally aligning with the label concerning which patients they are reimbursing for therapy. Can you provide more details on when they are deviating from the label and what issues they might be raising? Additionally, regarding full approval, if you receive it later this year, do you anticipate an immediate shift in payer behavior, or will we need to wait until the 2024-2025 cycle for changes in formulary status or authorizations?

All right. Peter, I'll hand those over to you.

Yes. Regarding authorization criteria, payers have specific expectations to meet. Initially, when we received the label, it was primarily focused on patients with rapid disease progression and proteinuria levels around 1.5. Currently, most authorization criteria reference the label but also incorporate clinical guidelines that set lower proteinuria targets, enabling broader use. This correlates with my earlier point about the potential for more accessible proteinuria targets in the guidelines. A company like ours, possessing a broad label, can support a wider patient population eligible for covered products.

And then, Peter, what is your comment on the question around full approval and how payers will respond with full approval and how quickly they might be able to review?

Yes, I believe this relates to what I mentioned earlier about reducing proteinuria targets further and possibly expanding the label to include no restrictions on proteinuria. This change could eliminate the authorization criteria based on proteinuria thresholds, enabling us to reach a larger patient population. Additionally, there is the aspect of the evolving competitive landscape with new competitors entering the market. Our established presence and strong footing in formularies give us a significant advantage, particularly because we maintain the highest standards for study design. Our study includes an active comparator, which is considered the gold standard for payer evaluations of new products. We are well-positioned in terms of lead time and the quality of our study design as payers consider this changing landscape.

And our next question is going to come from Alex Thompson from Stifel.

I want to pivot a little bit to pay the bad news here. Maybe could you talk a little bit about the HARMONY study through the expectations around enrolling 70 patients or at least up to 70 patients based on your experience with the Phase I/II, how well identified are these patients? If this is a 12-week primary endpoint for the top line, is the 2026 readout conservative at this point? Or how are you thinking about that?

Alex, thanks so much for the question and also for the focus on the pegtibatinase program. Jula, I'll turn that one over to you.

So thanks. We think this is an exciting trial design that focuses on changes in total homocysteine, not just at 6 to 12 weeks, but also looking at durability of effect. So it is a 24-week study, and then patients roll over to our open-label trial, which is able to look at diet liberalization. To your point, we are looking to recruit 70 patients from more sites than we did for COMPOSE. It's about 50 sites overall, which will give us top-line data in 2026. While we have started the trial and we do have a list of patients who are excited to participate, we are intentionally moderating our enrollment initially to ensure we have a good experience for the sites and patients and also proper training at some of these sites, some of which are research naive, and then also to ensure our CMC scale up to support the full study as well as commercialization.

So I think perhaps if you can comment on the enrollment period before for screening that it helps explain why the timeline may be a bit longer than what people would typically say for this type of trial.

Yes. Because it is a 6-month trial, plus we have a 10-week run-in period where patients get screened to make sure they qualify as well as standardize their diet. This is clear to try and optimize our chance of success that patients understand the trial that they need to keep their diet stable, which clearly is going to impact your endpoint. We want to maximize our chance for success at the end, so it's a bit longer than what you first stated.

Yes, and we'll certainly look to move swiftly on this, but for all of the reasons that you've explained, we've been very thoughtful around the timelines that we've put out there. Alex, the only other thing that I would mention is that as we see increased awareness within this community, there are more and more patients that are being identified, and we would absolutely expect that there will be a growth in the number of patients identified, diagnosed in the overall market growth. This is something that we believe will certainly be a tailwind for us with the HARMONY trial, and even more so as we look to reach these patients once we have approval.

And I guess, how many patients do you feel like you need to enroll to feel confident in powering if it's not 70?

Bill, why don't you talk about the powering, but I can say we absolutely are confident in finding these patients. I think we've been able to help in thinking through where these patients are with sites, etc. Jula's team has done a great job of ensuring how we can enable success in the HARMONY trial. And I think, Bill, you can talk about a high level of the powering.

Yes. No, certainly, and I appreciate the question. We’re very confident in the powering of the study. Recall in Jula's initial remarks, she mentioned the 67% reduction in total homocystine that was observed in Phase II. With that level of efficacy, even with a significant diminution in the treatment effect or a reduction in the overall total sample size, which we don't anticipate, we certainly are in a good place to still achieve the endpoint. So I'm confident that we'll get there.

Jenny, can we move to the next question, please?

Yes, we have Mohit Bansal. Can you hear me?

I would like to clarify something. I understand you don’t disclose the patient count, but based on the average number of patient forms from the second quarter to the third quarter and from the third quarter to the fourth quarter, there seems to be a 57% increase, which is followed by a significant rise in revenue. Is this due to a higher conversion rate of those patient forms into paying patients, or is there some inventory factor at play? Can you provide some insight on that? Additionally, regarding the price increase you implemented in January, should we anticipate any benefits from that in 2024?

Okay, thanks so much for the question. Peter, I'll turn that over to you.

Yes. As I mentioned, one of the core fundamentals is making sure that patient forms transition ultimately to patients on products and in particular based on paid products or you continue to increase the revenue. The increase that we saw in this quarter is that we made robust progress in particular, also in the pocket of patients that we described in the earlier quarter that required some additional handholding and education with regards to the REMS loss. I mentioned that the patient REMS certification within the first 14 days has increased quite substantially and that allowed patients to go through the process and get to base product more quickly. Good progress there. To Eric's earlier point, we don't provide further details on how many patients we have on product, but I think that transition from patients to our form ultimately getting paid product is significant.

And maybe just one final thing, Mohit, for your question on inventory. That has been stable, so there has been no pattern of stocking. I think Peter is absolutely right. We expected to see a greater inflection in revenue as our teams are able to help those patients through the process. You would imagine that that is going to continue that trend this year with faster growth in revenues than perhaps what we see in patient start forms, but we'll certainly apprise you how we're doing at the end of Q1.

And our next question is going to come from someone at Citi.

I had one on FSGS. Just curious if there were any recent updates regarding the work that I believe the FDA is doing in collaboration with you on defining some of the optimal endpoints for FSGS, whether there are some variations of the eGFR slope endpoint that may be more appropriate based on some of the data cuts that you're exploring? And then secondly, on the broader landscape in IgAN, just wondering, obviously, there's been a lot of visibility around some of the newer mechanisms, anti-B-cell mechanisms. Wondering whether FILSPARI, given the position as the conditional therapy, may benefit from a combo study using the B-cell modulators on top of FILSPARI at a future point.

Great. Thank you for the questions. Jula, I will turn those over to you.

So thanks. As far as FSGS, we are continuing to do our processes with our data and external data sets, putting our trial into historical context. With regards to the FDA, this is a partnership with a patient organization with academics and the FDA. This is called Parasol. There is a website that is public, and it's really to redefine the endpoints. What they recently announced is they're really looking at alternative proteinuria-based endpoints to help enable the regulatory pathways for FSGS. We plan to reengage the FDA following their final analysis and decision on what those endpoints should be under this Parasol Group, and they're targeting ASN for that timeline. Regarding your second question on some of the newer agents and how FILSPARI should be placed, I think it's really going to be an exciting few years for IgA nephropathy patients in terms of some of these new therapies, most of which target different parts of the injury cascade contributing to IgAN and hopefully, they'll become available outside the context of a clinical trial, but we're some way away from that. Importantly, all additional immunomodulating agents are being used on top of standard-of-care foundational treatment. That's where FILSPARI plays a foundational role because it targets the injury in the kidney and the response to the immune deposition and protects against further damage. We're aligned with the KOLs that you need to target two things ongoing damage in the kidney with foundational treatment. You could potentially add another agent that targets upstream pathways, but that's additive. As far as other trials, it's important to realize that every other trial is studying a new agent on top of standard of care. Many of those trials now are being allowed to include FILSPARI as part of the foundational standard of care. We will get data over time from these trials as they read out about the combination and them being used together.

And we certainly are interested in that combination and generating additional data. I'm very proud of Jula's team, which has been able to put together two ongoing studies looking at the combination of FILSPARI plus SGLT2. These are some of the few combination studies that have yet to be initiated. We expect that this could potentially increase as other therapies are actually approved.

Our next question is going to come from Ed Arce from H.C. Wainwright.

I have a couple of quick questions. First, regarding the sNDA later this quarter for FILSPARI's approval, could you confirm the expected length of the review period? Would it be six or eight months, or could it extend into next year? Second, looking at the PSFs quarter-over-quarter from last year, I see that the growth rates are moderating a bit. Can you discuss the two inflection points mentioned previously for later this year, specifically the legal guidelines and the upcoming data analysis from ongoing trials, particularly for the SGLT2 combination? What kind of impact do you anticipate these will have on treating physicians as they gain more experience with the drug?

Thanks for the question. Bill, why don't you take the regulatory question and then Peter, you can take the PSF outlook question.

Yes. We expect to have priority review out of for this sNDA that will be consistent with how the agency treated a predecessor that went just recently before us. In that case, it would be a six-month review, so you'd have a Q3 decision. If we were a standard review, it would take until the end of the year. So, in either case, we have a decision this year. I'll pass over to Peter for the rest of your question.

Yes. Thanks for that question. There are really two elements I would like to point you to with regards to the evolving landscape, the KDIGO guidelines as well as a broader label. What would that mean for potential patient start forms in the future? There are two core elements. One is the urgency to treat or better the urgency to change with further emphasis to go lower with proteinuria, as a level of proteinuria is still not where you need to be. Last year, the RADAR data got published from the U.K. It shows that even with the proteinuria of 0.9, those patients actually have double the progression to end-stage kidney disease compared to patients that had an average proteinuria of 0.44. I think this kind of data, reinforced in the guidelines, amplifies the urgency for those physicians and changes that foundation that is currently ACE and ARBs and replaces it with a much more efficacious treatment. Recall, the proteinuria benefit that FILSPARI had after nine months was threefold but after two years, it was actually tenfold. This is an important aspect. The second is it allows for a broader patient population. We have highlighted earlier that at launch we expect to have an addressable patient population for FILSPARI between 30,000 and 50,000. We think with the broadening of the label as well as further highlights of the guidelines to go to a lower proteinuria target, we think there are potentially up to 70,000 addressable patients for FILSPARI. Those are the two core aspects I wanted to highlight with regards to the evolving landscape and what it means for the addressable patient population and potentially patients for FILSPARI.

Thank you, Peter. Jula, is there anything that you'd like to add?

Yes. Thanks. I think we have a couple of inflection points, and Peter nicely highlighted KDIGO to treat patients earlier and diagnose them earlier. The SGLT2 combination is also going to be important. We think those are two things. The third thing to point out is regarding the earlier treatment. We have a trial called SPARTAN, where we utilize FILSPARI early after they first get diagnosed and are RAS naive. We presented some of that data at ASN and it shows earlier we see an 80% reduction in proteinuria for most patients getting into complete remission and with no change in eGFR over 36 weeks. That trial has been continuing, and we'll have additional data on that over the years. I think that's an additional point as far as treating patients earlier in their disease course.

Yes, thank you, Peter and Jula. Maybe if we just take a step back for a moment, if we put ourselves towards the end of 2024 and you assume that we have full approval with a potential broader label just as the KDIGO guidelines could potentially lower the target and really increase the dynamism in the treatment of patients with IgA nephropathy, we really will be at the right place at the right time. If you think about all of the clinical experience that physicians are getting with FILSPARI, there's one thing we know from this launch and hearing from physicians and their patients who are on FILSPARI. It is a very rapid and consistent reduction in proteinuria. We believe that we'll be in the right place at the right time and our goal is to make sure that we continue to expand for new physicians to be able to get that clinical experience, and we believe that positions us very strongly for future growth.

And our next question is going to come from Laura Chico from Wedbush Securities.

I'd like to shift gears and ask one on pegtibatinase. And Eric, your comments there about the phenomena we see with orphan disease and the expansion of patient populations over time. I apologize if I missed this, but do you plan to keep a patient registry with respect to HCU? And kind of related to that, would you be able to disclose an identified patient number as you're going along?

Great question, Laura. Yes, we do have a registry and we do plan to continue that. We think that that's an incredibly important source of information for the community. It's really a great question around sharing patient information or identification. It's certainly something we know others have done; we'll be looking at the potential for us to be able to do that as well. I can't commit to it today, but absolutely something that our team is looking at.

And this will conclude the question-and-answer session of today's conference call. I'll hand the call back over to Anne. Please go ahead.

Great. Thank you, Jenny, and everyone, for joining us for our fourth quarter and full year 2023 financial results call. We look forward to providing additional updates on our progress. Have a great rest of your day.

And this concludes our call. Thank you for your participation. You may now disconnect.