Travere Therapeutics, Inc. Q4 FY2025 Earnings Call

Good afternoon, and welcome to the Travere Therapeutics Fourth Quarter and Full Year 2025 Financial Results Conference Call. Today's call is being recorded. At this time, I would like to turn the conference call over to Nivi Nehra, Vice President, Corporate Communications and Investor Relations. Please go ahead, Nivi.

Thank you, operator. Good afternoon, and welcome to Travere Therapeutics Fourth Quarter and Full Year 2025 Financial Results and Corporate Update Call. Thank you all for joining. Today's call will be led by Dr. Eric Dube, our President and Chief Executive Officer. 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, our Chief Research Officer, will join us for the Q&A. 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 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, February 19, 2026, 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.

Thank you, Nivi. Good afternoon, and thank you all for joining us today. 2025 was an incredible year for Travere, one that was defined by achieving a new high in the number of patients we were able to reach with our approved medicines and clear advancement of our pipeline. This success was driven by focused execution against our strategy, strong commercial performance and an unwavering commitment to bring new medicines to communities that have been waiting far too long. In IgA nephropathy, we saw record demand and strong revenue growth in the fourth quarter, even as additional therapies entered the market. Physician confidence in FILSPARI continues to build as real-world experience reinforces our long-term clinical data and its role as a foundational non-immunosuppressive therapy that can be used chronically and in combination. These results reflect growing use of FILSPARI in clinical practice, supported by strong execution across access, fulfillment and patient support. We remain confident in our ability to deliver continued growth in IgA nephropathy and reach more patients in 2026 and in the years ahead. We also continue to advance the next phase of growth for Travere. In FSGS, patients face a rapidly progressive disease with no FDA-approved medication today. The acceptance of our sNDA for an FSGS indication for FILSPARI last year marked an important step towards our goal of delivering the first approved medicine for this community. In January, we received notification of a major amendment to our sNDA following additional information requests received before the holidays. As a result, our new FDA PDUFA target action date is April 13, 2026. While the date for an action by the FDA has shifted, our conviction in the clinical profile of FILSPARI as a potential FSGS therapy and the benefit it could provide to the FSGS community remains unchanged. We will continue to work with the agency as they advance their review and with our expanded commercial team fully established, are ready to execute with excellence if approved. Beyond FILSPARI, we are also advancing pegtibatinase for classical homocystinuria, or HCU, which we believe has the potential to become an important contributor to growth beyond FILSPARI. Pegtibatinase has the potential to be the first disease-modifying medicine to address the underlying cause of the disease. Notably, we have recently resumed site activation for our pivotal Phase III HARMONY study to enable enrollment globally. As we look ahead, our priorities are clear: solidify FILSPARI's foundational role in IgAN; successfully deliver the first approved medicine for FSGS, if approved; advance enrollment in our Phase III HARMONY study; and continue to build a durable growing rare disease company grounded in execution and scientific rigor. We entered 2026 with focus, discipline and confidence in our path forward and most importantly, with a continued commitment to delivering meaningful progress for patients. With that, I'll now turn the call over to Jula to talk more about the advancement of our programs.

Thank you, Eric. We are pleased with the consistent nephrologist feedback about the critical role of dual antagonism of endothelin and angiotensin as part of the foundational treatment paradigm to preserve kidney function in patients with IgA nephropathy. As we continue to generate FILSPARI data across a broad spectrum of patients with IgA nephropathy from early after diagnosis to recurrent post-transplant as well as in combination with other therapies, we are hearing consistent feedback from nephrologists that they are aligned with KDIGO and that FILSPARI has the potential to replace the historic role of RAS inhibitors and provide long-term nephroprotection for patients with IgA nephropathy. This support is rooted in data such as our recently published secondary analysis of PROTECT, which demonstrated that achievement of complete remission of proteinuria to less than 0.3 grams per day, of which 80% were treated with FILSPARI, was associated with an annual eGFR decline as recommended by KDIGO of less than 1 milliliter per minute per year, reflecting meaningful preservation of kidney function. Importantly, we believe the convergence of physician conviction and robust clinical evidence positions FILSPARI as foundational care in IgA nephropathy as we look ahead. Turning to FSGS. We continue working towards our new PDUFA date of April 13, and look forward to working with the agency as the review advances. We remain confident in FILSPARI's clinical profile and its potential, if approved, to meaningfully advance treatment for patients with FSGS by protecting podocyte health. This confidence is based on the strength and consistency of the data generated across our Phase II DUET and Phase III DUPLEX studies, which together represent 2 of the largest interventional clinical trials ever conducted in FSGS. Across these studies, FILSPARI consistently reduced proteinuria, a well-established driver of long-term kidney outcomes in this disease. Importantly, the trial data demonstrate consistent proteinuria reduction across a heterogeneous patient population, including both primary and genetic forms of FSGS as well as in pediatric patients. And the magnitude of treatment effect on proteinuria observed with FILSPARI versus active compared to irbesartan translated into a clinically meaningful reduction in kidney failure events, both within the DUPLEX trial and when extrapolated based on external data such as RaDaR. In our ongoing engagements with the nephrology community, we continue to hear strong alignment around the clinical relevance of the DUPLEX data, which is even more compelling given the absence of any FDA-approved medication indicated for FSGS today and the urgent need for earlier, more effective interventions relative to historical standard of care. Many clinicians emphasized the importance of proteinuria reduction as the primary treatment goal and recognize the consistency of FILSPARI's antiproteinuric effect across patient subgroups. Taken together, the totality of the data and the feedback we continue to hear from the FSGS community reinforce our belief in FILSPARI's potential to meaningfully change the treatment paradigm for patients living with FSGS, and we look forward to the FDA's upcoming review decision. Let me now turn to pegtibatinase in classical homocystinuria. Classical HCU is a serious genetic metabolic disorder with limited treatment options. These patients are born with a deficiency in their CBS enzyme that would normally help to metabolize certain proteins in their diet. This deficiency results in a toxic buildup of homocysteine, which can lead to serious and life-threatening thrombotic events such as stroke and pulmonary embolism or deep vein thrombosis in addition to vision and skeletal abnormalities and developmental delays. To put this into context, if untreated, approximately 25% of these patients have an ischemic event before they become a teenager and 50% experience an ischemic event before they turn 30. Pegtibatinase is an investigational enzyme replacement therapy designed to address the underlying CBS enzyme deficiency that drives toxic homocysteine accumulation rather than managing downstream consequences alone. The Phase I/II COMPOSE data demonstrated clinically meaningful reductions in total homocysteine, including normalization for one patient, a clear dose response and a favorable tolerability profile, supporting advancement into Phase III development. In 2025, we achieved key manufacturing process optimizations, an important milestone that positions the program for late-stage development and future potential commercialization. We have now resumed activating clinical trial sites for the Phase III HARMONY study and the long-term extension study ENSEMBLE, which are designed to evaluate sustained total homocysteine control and explore outcomes that matter to patients, including the potential for greater dietary flexibility. HARMONY is a randomized double-blind study of pegtibatinase versus placebo. The double-blind period will follow patients for 24 weeks, which includes the primary endpoint measuring change from baseline in plasma total homocysteine averaged over weeks 6 through 12, with durability of treatment measured as a secondary endpoint to week 24. There's also a 4-week screening period and following initial screening, there is a pretreatment diet stabilization period of up to 6 weeks to help minimize protein intake variability. The total study duration can range up to 38 weeks prior to entering into the ENSEMBLE extension study. We believe pegtibatinase has the potential to become the first disease-modifying therapy for classical HCU and, importantly, to meaningfully improve the day-to-day lived experience for patients and families. Our focus is now on building momentum as the trial resumes, and we expect to reinitiate dosing of new patients in the near future. Across our programs, we're looking forward to presenting new data at medical congresses this year. In IgAN, these efforts are intended to further support FILSPARI's role as foundational therapy. While in FSGS, they're focused on deepening the understanding of FILSPARI's clinical profile and its potential role in addressing the high unmet need in these patients. With that, I'll now turn it over to Peter for a commercial update.

Thank you, Jula. I am pleased to share that the fourth quarter of 2025 marked a strong finish to the year for FILSPARI with continued momentum driven by growing physician adoption, robust demand and increasing confidence in FILSPARI's role as a foundational therapy in IgA nephropathy. During the fourth quarter, we saw record demand of 908 new patient start forms for FILSPARI. Notably, we are seeing a strong level of demand continue into the first quarter. The demand in the fourth quarter was driven by both new prescribers and increasing use among established prescribers. Importantly, we continue to see an increasing number of practices treating multiple patients with FILSPARI, which we view as a meaningful indicator of physicians' confidence and experience in the therapy's effectiveness, tolerability and long-term utility. The strong demand translated into robust growth to the end of the year. In the fourth quarter, FILSPARI generated approximately $103 million in net product sales and approximately $322 million for the full year of 2025, representing a 144% year-over-year growth. We believe these results underscore the momentum and the significant growth opportunity for FILSPARI and its ability to continue to perform strongly as the IgA nephropathy treatment landscape evolves with new entrants. We believe FILSPARI's continued success in the fourth quarter was driven by its differentiated profile, simplification of the REMS monitoring requirements and the publication of the KDIGO guidelines. As a once-daily non-immunosuppressive oral therapy, FILSPARI provides a proven and convenient option for chronic use in a disease that requires long-term nephroprotective treatment. In addition, FILSPARI's ability to be used in combination with other therapies provides flexibility for nephrologists as they tailor treatment strategies to individual patients. We are also seeing broad utilization of FILSPARI across the full spectrum of adult patients with IgA nephropathy with increasing adoption in patients with elevated proteinuria levels, but below 1.5 grams per gram. This trend is consistent with the direction of the KDIGO guidelines as they emphasize a lower treatment target and earlier intervention. It is important as while FILSPARI continues to be used in patients with higher levels of proteinuria, we are seeing accelerating adoption in those below 1.5 grams per gram, which represents approximately two-thirds of the addressable IgA nephropathy population. From the patient perspective, feedback indicates that satisfaction with FILSPARI and our patient support services remain high with strong patient compliance and sustained persistence observed over time. Patients frequently cite the convenience of a once-daily oral medicine and the non-immunosuppressive and nephroprotective profile with long-term kidney preservation as important factors in their treatment experience. In parallel, we have continued to build commercial readiness in anticipation of a potential approval in FSGS. Given the rapidly progressive nature of FSGS and the lack of approved therapies today, we believe our existing relationships, experience in IgA nephropathy and commercial infrastructure position us well to support patients and physicians in this setting. Based on the feedback from the FSGS community, we believe this indication, if approved, could be an even larger opportunity with a more rapid uptake compared to IgA nephropathy, and we stand ready to deliver for this patient community. In summary, the fourth quarter of 2025 demonstrated exceptional commercial execution and performance, evidenced by record demand and revenue. Building on our established commercial foundation and the strong performance amidst additional treatment options becoming available, I am confident in FILSPARI's ability to deliver sustainable growth and long-term leadership in rare kidney disease care. I couldn't be prouder of our commercial team and the impact they make on patients' lives daily. And I'm excited about how they will continue to support patients and physicians in 2026. Let me now turn the call over to Chris for the financial update.

Thank you, Peter, and good afternoon all. We ended the year in a strong financial position. This was bolstered by continued net product sales growth, focused investment in key priorities to support our current performance and sustainable growth potential and strategic partner milestones that added to our balance sheet strength. Beginning with revenue. For the fourth quarter, we reported U.S. net product sales of $126.6 million. For the full year 2025, total net product sales were $410.5 million. This marks significant year-over-year growth in our revenue base. FILSPARI generated $103.3 million in U.S. net product sales for the fourth quarter, resulting in $322 million in net product sales for the full year 2025. Thiola and Thiola EC contributed $23.3 million in U.S. net product sales during the fourth quarter and $88.5 million for the full year 2025. For the fourth quarter and full year 2025, we also recognized $3.1 million and $80.3 million, respectively, in license and collaboration revenue. Moving to operating expenses. Our research and development expenses for the fourth quarter of 2025 were $57.9 million compared to $62.1 million for the same period in 2024. On a non-GAAP adjusted basis, R&D expenses were $54 million compared to $58.6 million for the same period in 2024. Selling, general and administrative expenses for the fourth quarter were $101.7 million compared to $69.5 million for the same period in 2024. And on a non-GAAP adjusted basis, SG&A expenses were $76 million for the fourth quarter compared to $51.6 million for the same period in 2024. The increase in SG&A is primarily attributable to investments in preparation for potential launch in FSGS, including the first full quarter with an expanded sales force, increased amortization expense related to FILSPARI royalties as FILSPARI continues to grow significantly as well as increased investments to support commercial efforts for FILSPARI in IgA nephropathy. Total other income net for the fourth quarter of 2025 was $11.4 million compared to less than $1 million for the same period in 2024. The difference is largely attributable to approximately $10 million in proceeds received as a result of the Renalys acquisition by Chugai that was completed in the fourth quarter. During the fourth quarter, we also recognized approximately $25 million of income from discontinued operations. This resulted from Mirum Pharmaceuticals achieving a sales-based milestone of $25 million that is expected to be paid to Travere in the first half of this year. Net income for the fourth quarter of 2025 was $2.7 million or $0.03 per basic share compared to a net loss of $60.3 million or $0.73 per basic share for the same period in 2024. On a non-GAAP adjusted basis, net income for the fourth quarter of 2025 was $33.3 million or $0.37 per basic share compared to a net loss of $39 million or $0.47 per basic share for the same period in 2024. As of December 31, 2025, we had cash, cash equivalents and marketable securities totaling approximately $322.8 million. This balance reflects the proceeds of the $40 million milestone payment received from CSL during the quarter as well as approximately $10 million from the Renalys acquisition by Chugai. Looking ahead in 2026, we expect meaningful net product sales growth from FILSPARI and IgA nephropathy to continue strengthening our financial position. While we anticipate modestly higher gross to net discounts compared to last year, as Peter mentioned, underlying demand remains strong, and we expect FILSPARI to deliver robust growth as foundational therapy. If approved for FSGS, we believe this represents a meaningful opportunity to build on our momentum from IgA nephropathy and further support potential top-line growth. From an operating expense perspective, we will continue to invest thoughtfully to advance both our current performance and long-term growth potential. We expect moderate operating expense growth versus 2025, primarily driven by the restart and execution of the global Phase III HARMONY study as well as supply for pegtibatinase, continued evidence generation for FILSPARI and commercial investment to support the potential FSGS launch. Importantly, we do not anticipate a near-term need for additional capital to support our current priorities. Our strong balance sheet, coupled with expected revenue growth and a focused investment approach position us to drive near- and long-term value. I'll now turn it over to Eric for his closing comments.

Thank you, Chris. In closing, Travere is well positioned as we enter the next phase of growth with strong commercial momentum in IgA nephropathy, a meaningful potential opportunity in FSGS as FILSPARI advances through the regulatory review process and a pipeline advancing with purpose. Our strategy is focused. Our teams are executing with discipline, and our balance sheet provides the flexibility to deliver on our priorities. Most importantly, we remain driven by the urgency felt by the patients and families we serve and by our responsibility to deliver meaningful progress on their behalf. Now let me turn the call over to Nivi for Q&A.

Thank you, Eric. Operator, we can now open up the line for Q&A.

We will now take the first question from Vamil Divan from Guggenheim Securities.

Great. So just want to dig a little deeper into the IgAN performance. Obviously, strong new patient start forms. I'm wondering now that you've been in the market for a little bit. We also have some new competition obviously in the market over the last year or so. If you can give a little more detail in terms of how and where the product is being prescribed in IgAN, so more of a breakdown between community-based nephrologists and those that may be more academic centers and then also in terms of the treatment paradigm. So where is it being added on? And specifically in combination, are you seeing any issues with providers trying to use 2 branded products at the same time in terms of payers pushback and getting providers to prioritize one over the other?

Vamil, thanks for the question. Peter, I will turn that over to you, and I'll make sure that we capture all the kind of questions that Vamil asked there. Go ahead, Peter.

Thank you, Eric, and thank you, Vamil, for that question. I captured several components, so let me try to clarify. Vamil, please let me know if I answered your question satisfactorily. To address your point about what drove the demand in Q4, it was a very strong quarter with 908 new patient start forms, primarily due to the modification of our REMS requirement and the publication of KDIGO. Educating the broader community has created growth opportunities for the market and for FILSPARI specifically. Regarding the second part of your question about the utilization of the community versus academic prescribers, as we have mentioned before, the majority of those patients reside in the community, and our utilization reflects that. We see more use in the community, consistent with where the patient population is located. The last part of your question was about the payer situation in a changing treatment landscape. As we have discussed previously, we hold a strong position in payer formularies. Our goal has always been to ensure broad utilization, and we have achieved that, with over 96% of the patient population having a pathway to reimbursement for FILSPARI. This remains unchanged as the landscape evolves with new competition. I believe I've addressed all three of your questions, but Vamil, please feel free to add anything if I missed something.

No, that's helpful color. I'll jump back in the queue and...

Vamil, one thing that maybe I can just add is that we see a robust level of growth that's coming not just from the dynamics that Peter talked about, but also from new and repeat prescribers. When I think about sustainable growth in terms of the longer-term potential, this is exactly what we would hope to see. We are seeing new physicians starting to prescribe as driven by the modification of REMS, KDIGO and the comfort that they're hearing from their peers, but we're also seeing physicians find new patients as repeat prescribers. That is very encouraging, particularly as new treatment options come to these patients, we're very excited and I want to emphasize one thing that Peter mentioned in his prepared remarks, which is these trends for strong demand continued in the first part of this year to start out this year very strongly. So we're very excited about the future potential growth for FILSPARI and IgA nephropathy.

Our next question comes from the line of Tyler Van Buren from TD Cowen.

Great to see the progress during the quarter. Can you tell us if you've had more significant data requests from the FDA following the last disclosure in the new year? And if so, what the nature of them were? And maybe just as a kicker here, given the ALIGN IgAN study data with 2.5 years of follow-up that Novartis reported for the Vanrafia last week, can you help us put that into context and compare it to what you've all reported for FILSPARI?

Tyler, thanks for the questions. I'll take the first one on FDA, and then I'll ask Jula to comment on the IgA nephropathy data. So we are continuing to have FDA engage and review our file. Our practice is not to comment on ongoing reviews. We did provide comment on the information request that we got at the end of last year just based on the unusual timing of those. But at this point, I'd say we provided the FDA what they've asked for, and we're on track for the April 13 PDUFA date. Jula?

Yes. And with regards to the ALIGN trial data, we can't really make cross-trial comparisons given there's different trial designs and different time points for the endpoints. But I want to reiterate, FILSPARI was studied for 2 years against a maximum dose active comparator, which we know also preserves kidney function versus atrasentan was studied against the placebo with an endpoint at about 2.5 years. But let me reiterate what we demonstrated in PROTECT with FILSPARI. First, there was a 3.7-milliliter greater absolute preservation in eGFR at 2 years versus an active control. And this effect was nominally statistically significant. Importantly, we saw an accrual of benefit on kidney function over time, such that at 1 year, there was a 1.8-milliliter greater preservation in eGFR. And as I mentioned, at 2 years, this grew to 3.7-milliliter difference. Lastly, our primary endpoint of total eGFR slope in the preferred FDA analysis, which we have in our label, that was statistically significant with a treatment effect of 1.2 milliliters per minute per year versus active comparator. So in totality, we're confident in the data to support FILSPARI provides superior long-term nephroprotection versus a maximum dose irbesartan in PROTECT and that's what provides support for its first-line placement in the KDIGO guidelines.

Our next question comes from the line of Laura Chico from Wedbush Securities.

For the FILSPARI sNDA, I'm sorry if I missed this in the earlier response. I'm wondering if you could further elaborate on some of the specific aspects of clinical benefit characterization the agency is focused on. I guess I'm just trying to understand whether this signals any change in the agency's receptivity to proteinuria as an endpoint for FSGS. And then just a separate follow-up for Peter. What proportion of the new 4Q PSFs came from patients with proteinuria less than 1.5 grams per gram? It sounds like it's an increasing proportion. I'm just wondering if you could kind of contextualize that versus the earlier days of launch.

Laura, thanks for the questions. I will take the first one on the sNDA, and then I'll hand it over to Peter on the PSFs. We've not provided the level of detail on the types of information requests that FDA provides. That's our practice just not to comment on that level of detail. What we have said is that all of the information requests we received late last year were focused on clinical benefit. And what I would say is that from what we've seen throughout our engagements with the FDA as well as what other sponsors have commented on in their discussions around proteinuria as an endpoint, we believe that this is the endpoint that could be used as a validated surrogate endpoint for full approval. So we're on track for the PDUFA date, and there's nothing that we've seen that would suggest that they're questioning or walking away from proteinuria as an endpoint. And with that, I'll turn it over to Peter.

Perfect. Thank you, Eric, and thank you, Laura, for that question. To clarify your question, we still see demand also with patients with proteinuria levels of 1.5 and higher. But if you look at the totality of patient start forms that we are receiving, you see more and more patient start forms with proteinuria levels below 1.5. And if I look at the median, it continues to go down and it's well below 1.5, but we haven't split it out like in percentage-wise. So I can't comment on that.

Our next question comes from the line of Anupam Rama from JPMorgan.

This is Priyanka on for Anupam. Can you remind us of the sales infrastructure for IgAN and how this will need to be expanded for an FSGS approval?

Priyanka, thanks for the question, and I will hand that one over to Peter.

Yes. Thank you, Priyanka. So first of all, I think it's good to realize that the prescriber base for FSGS is very similar compared to IgA nephropathy. I mean in the past, I've called out there's like an over 80% overlap between IgA nephropathy and FSGS. The only real different prescriber base would be pediatric nephrologists. But to the point that you're making, we want to make sure that we continue to deliver for IgA nephropathy patients while also really optimizing the opportunity for FSGS. And so we have expanded our field team for that, and that is fully operational already.

That's right. And we previously commented that we had about 80 field-based personnel and we have expanded that to more than 100 in the field. We've not broken down that, but I think that certainly provides us with a very strong infrastructure to be able to realize strong growth in reaching patients with IgA nephropathy and FSGS, if approved.

Our next question comes from the line of Joe Schwartz from Leerink Partners.

I was wondering if you could elaborate on your commentary earlier regarding gross to net and give us some insight into how we should expect that to evolve over the balance of the year?

Joe, thanks for the question. I will hand that one over to Chris.

Thank you for the question, Joe. Regarding the mechanics for gross to nets, we expect them to follow a pattern similar to what we have seen in prior years. Specifically, we anticipate that in the first quarter, there will be the largest discrepancy between gross and net amounts, with significant discounts. This should decrease in the second and third quarters, maintaining a similar trend. However, it's important to note that our gross to nets are anticipated to increase modestly this year. For FILSPARI, we expect to be in the mid-20s percentage range for the full year, which is an increase from last year when we finished at around 20%.

Our next question comes from the line of Prakhar Agrawal from Cantor.

Congrats on the strong quarter. So I had 2. Maybe firstly, on FSGS. Given that externally, we have limited information on the nature of these information requests from the FDA. What is your confidence level in getting FILSPARI approval for FSGS based on FDA's level of questioning? And what is driving that conviction? And secondly, on IgAN with the Otsuka's launch of their APRIL blocker in 4Q. It seems like they have got 500 patient start forms since launch. Where are they gaining new patient starts versus FILSPARI? And how much impact from Otsuka's drug and future BAFF/APRIL drugs are you incorporating in 2026?

Thank you for the questions. I will address the first question regarding FSGS and then pass it to Peter to discuss the changing treatment landscape. Regarding FSGS, we've provided some information about the nature of the questions, but not in specific terms. Our confidence in FILSPARI as a potential treatment for FSGS has increased. This is not only based on the data we've published in the New England Journal of Medicine but also on our work contextualizing it with the PARASOL analysis, which shows the independent predictive value of proteinuria concerning long-term kidney failure risk. This was further reinforced by our reviews and additional analyses, some of which were presented at ASN in the fall. Our confidence in FILSPARI's profile remains very high, and as Jula noted, two of the largest studies conducted in FSGS support the conclusions from PARASOL. Jula, do you have anything else to add regarding the data?

No. Just we continue to feel quite confident in the data that we presented, as you mentioned, as well as what we submitted in our file and presented at ASN. FILSPARI clearly reduces proteinuria, as I mentioned in my prepared remarks, across a broad spectrum of patients with FSGS and we have strong conviction that it should be available for treatment for the high-risk patient population that really has very little other treatment options.

Thanks, Jula. And Peter, why don't you take the question about the Otsuka launch?

Yes, I’d be happy to. The 500 patient start forms from Otsuka highlight the overall growth of the IgAN market and the need for earlier intervention. KDIGO emphasizes a two-pronged approach. It involves kidney-targeted therapies, historically with ACE and ARBs, now complemented by FILSPARI as a new and better option. Previously, there were generic steroids, but now B-cell therapy is emerging as a replacement. We are hearing that physicians are responding accordingly, seeing it as a substitute for steroids in patients with higher proteinuria. Additionally, to reiterate my earlier point, we are observing strong and sustained demand in the first part of the year, which shows no signs of switching or using B-cell therapies before FILSPARI. I’m very encouraged by our current observations, which align with our marketplace expectations and the KDIGO guidelines.

Thank you, Peter. Prakhar, I believe that if we take a step back, we will see a marketplace experiencing significant growth due to new treatment options for patients. The KDIGO guidelines clearly outline the reasons for this anticipated growth. We expect therapies that target the immune system, such as the Otsuka compound, to expand alongside the anticipated shift away from traditional RAS inhibitors, just as they will replace the conventional use of steroids. This evolution in innovation is set to drive growth across both sides of the treatment algorithm.

Our next question comes from the line of Mohit Bansal from Wells Fargo.

This is Sadia Rahman on for Mohit. So you've been seeing really good traction in the market recently and it sounds like you expect robust growth this year. So just wondering if you can comment on how penetrated the U.S. market is today and how you view FILSPARI's potential, how much further you think this can grow? I think the current expectations imply that penetration could double over time from current levels, which still seem low. So just wondering if you think that's appropriate given the new competition that's coming? Or do you think FILSPARI's expansion potential might be underappreciated?

Thanks, Sadia. Those were very insightful questions. Before I turn it over to Peter, I want to clarify that we are not providing any guidance. However, we can discuss some of the potential and dynamics at play. Peter, could you start by discussing the estimated penetration we are seeing? That will allow us to reflect on the actual potential for further growth in our market segment.

Yes. I believe that’s a solid starting point. Overall, it’s important to understand that historically, this market has been served by generic medications. When we look at analogous areas in other diseases, there's a significant chance for superior branded treatment options. Our data indicates that we have a strong opportunity. Currently, our cumulative patient start forms show that we have not yet reached even 10% of the addressable patient population, which signifies a substantial growth potential. Particularly, many patients are still being treated with ACE inhibitors or ARBs for IgA nephropathy despite the availability of a superior treatment, presenting an opportunity for us. There are three key categories through which I would classify our ongoing growth. First, innovation is crucial. Our superior product, FILSPARI, has the potential to replace generic RAS inhibitors. Second, as previously discussed, with KDIGO and the emphasis on early and aggressive treatment for these patients, there is an opportunity to expand the market and reach more untreated patients. The guidelines support our movement into this segment. Third, building on earlier comments regarding Otsuka, we anticipate increased combination therapies, especially with more ambitious treatment goals. A single treatment may not suffice, which underlines the ongoing use of foundational therapies like FILSPARI alongside innovative immunosuppressive agents, such as B cell inhibitors or complement inhibitors. Overall, I am confident that this market is set to grow, and with FILSPARI, we are well-positioned within the foundational treatment category. You will see this market continue to expand.

Yes. Thank you, Peter. And just to round out, Sadia, the other aspect is that we have shared that at peak, we believe that IgA nephropathy alone for FILSPARI will be well above $1 billion potential. So real opportunity for further growth in the years to come.

Our next question comes from the line of Gavin Clark-Gartner from Evercore.

I was just wondering what your plans are for communicating with the investor community more broadly as we approach the FSGS PDUFA over the next 2 months or so.

Gavin, thanks for the question. I will hand that one over to Chris.

Thanks, Gavin. We're going to approach this very similar to how we did the last time around, and we're going to enter into a quiet period here at the end of the month. And then once we have a material communication from the FDA on their decision for the PDUFA action, we'll provide an update and make sure everybody is on the same page. But it will be done very similar to before where we'll go into a quiet period, and you shouldn't expect to hear much from us on an incremental basis between now and then.

Next question comes from the line of Maury Raycroft from Jefferies.

You've commented a few times on the demand going into your first quarter. Can you set expectations for first quarter as it relates to new patient starts and how insurance resets or other variables could influence your sales number relative to fourth quarter '25? And then for FSGS, have you had any discussions with FDA on the label yet? And what are your latest expectations on what the label could look like?

Maury, thanks for the questions. Peter, I will have you talk about demand in Q1. And then Bill, if you can take the question on the FSGS label.

Very good. Well, thanks, Maury, for that question. And yes, indeed, we are very happy with the very strong demand exceeding 900. I think it's too early to say if that would be our new baseline, but I'm encouraged with what we are seeing so far in the beginning of the year. Having said that, I also want to make sure that we realize this is a rare disease and that you may see variability quarter-over-quarter. But most importantly, I'm confident to deliver sustainable growth and long-term leadership in IgA nephropathy with FILSPARI.

And I'll tackle the label question. We're about 7 weeks out from our action date, which is a little bit early for us to be getting the initiation of label negotiation. We expect that to begin as we get a little bit closer. As to what the label should look like, we believe that FILSPARI has broad applicability in FSGS and should be used across all forms. We've submitted a label that matches that intent. We have seen across all patients used very broad efficacy with a consistent safety profile. So that's the expectation that we have around the indication on the label.

And Maury, maybe just to add one thing on the revenue side on 1Q to answer your question fully. I mentioned earlier on the call that we expect higher gross to nets for the year. But in the first quarter, you see the biggest effect of that. So 4Q going to 1Q, you will see an increase in that discount. So I want to make sure that everybody is taking that into account for their model. Again, same as what we've seen in previous years, but we will see a higher discount in 1Q relative to the other quarters.

Our next question comes from the line of Jason Zemansky from Bank of America.

Congrats on the progress. Peter, one for you, if I may. Can you speak to the potential of a halo effect if FILSPARI receives approval in FSGS for IgAN? I know you said the prescriber base overlaps about 80%. But I guess, any opportunities for increased awareness or I don't know, potentially a lowering of some of the friction points that might cause an IgAN prescriber some pause or, I don't know, underlying inertia?

Thanks, Jason. Peter?

Yes. Thank you, Jason, for that question. And I think it's a very good point that you bring up. Is there a halo effect once you get an FSGS approval and would that have a good reflection on IgA nephropathy as well? Well, to your point, I mean, given that this is largely the same prescriber base, I think you're absolutely right. There will be a halo effect, and there will be some crosstalk between the 2 indications. And yes, I think even more reason to be very excited about the FSGS opportunity, not only for serving this patient community that has been without an approved treatment for far too long, but also how that could reflect then on further confidence in the profile of FILSPARI for IgA nephropathy patients.

Tough to say. I think directionally, we absolutely expect there to be a synergistic effect between the 2. And certainly, as you point out, simplifying the process for these offices that are incredibly busy, particularly community nephrology offices. But I'd say it's too early for us to be able to quantify. But directionally, absolutely, we would expect there to be a synergistic effect.

Our next question comes from the line of Alex Thompson from Stifel.

Maybe again on FDA interactions over the last few months related to the FSGS filing. Could you comment on the consistency of interactions among members of the cardio-renal division? Has it been the same group throughout this process? And does it continue to be the same group?

Thanks, Alex. Bill, I'll turn that one over to you.

Sure. Recently, we've been made aware of some changes within the review team, but I think it's important to note that we also see continuity through the team, especially in those folks that were involved in the PARASOL project, looking at proteinuria as an endpoint for FSGS. Importantly, our recent interactions have also included the division level of leadership, and that leadership has remained consistent and engaged throughout the process.

Our next question comes from the line of Yigal Nochomovitz from Citigroup.

I have a question about FILSPARI and another about pegtibatinase. I'm curious about the quarter-on-quarter trends from the third quarter to the fourth quarter. You saw a 13% increase in revenue and almost double that in start forms growth. Could you elaborate on the time lag between the significant growth in start forms of 25% to 24% and the revenue growth? Additionally, regarding pegtibatinase and the study you're conducting, could you explain what level of reduction in homocysteine levels would be considered statistically significant for the primary endpoint? Are you also analyzing the percentage of patients who drop below specific thresholds, such as 12 micromolar or even lower, like below 10 micromolar, in your analysis?

Yigal, thanks for the questions. Peter, why don't you take the one on demand versus revenue? And then, Jula, if you can take the question on our endpoints.

Absolutely. Thanks, Yigal. Yes, over the last few quarters, we had the opposite. We had strong revenue growth relative to patient start forms. I think the most important point is to the point that you made. There's always a time lag between patient start form generation and revenue recognition. And we saw that same phenomenon after our full approval in September 2024. Two specifics to call out here. One, December was our strongest month. So they will carry over into Q1 revenue recognition. And the second part is something that we highlighted in the Q3 earnings call is that our gross to net will be higher in Q4.

I'll discuss the HARMONY study. We haven't publicly disclosed the treatment effect needed for statistical significance, but I want to refer back to our COMPOSE study, where we had about 5 to 6 patients per group and observed a 67% reduction in total homocysteine, which was highly statistically significant despite the small sample size. We're moving to a larger sample size, planning to enroll approximately 70 patients, and we are well positioned to achieve statistical significance even if we see results comparable to or less than what we found earlier. I want to emphasize that we have already evaluated the long-term durability of the treatment effect. Our primary endpoint spans 6 to 12 weeks, during which we observed the 67% reduction in total homocysteine in our Phase I/II study. However, we have also tracked these patients from COMPOSE for up to 1 year, where they maintained a reduction of over 50% in total homocysteine. Therefore, we're very confident in our study design and believe we will achieve our primary endpoint. Additionally, regarding secondary endpoints or other considerations, we will certainly evaluate clinically meaningful thresholds. You've also inquired about the responder criteria. Importantly, our data shows that everyone treated with pegtibatinase experiences a reduction in total homocysteine, in line with its mechanism of action and our study findings. Thus, we are confident in our study design and expect to demonstrate both a clinically meaningful treatment effect and various thresholds for analysis.

Ladies and gentlemen, this concludes the question-and-answer session of today's conference call. I'll hand the call over back to Nivi.

Thank you, everyone, for joining today's call. Have a great rest of your day.

This concludes today's conference call. Thank you for participating. You may now disconnect.