Albireo Pharma, Inc. (ALBO) on Q4 2021 Results - Earnings Call Transcript
Operator: Good morning, and welcome to the Albireo Pharma, Inc. Fourth Quarter and Year-End 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note that this conference is being recorded. I will now turn the call over to your host, Paul Arndt, Managing Director of LifeSci Advisors. Thank you. You may begin. Paul Arndt: Thank you, operator, and good morning, everyone. Thank you for joining today's call. This morning, Albireo issued a press release highlighting its recent business accomplishments and reporting its financial results for the fourth quarter and year ended December 31, 2021. This press release is accessible via the company's website at www.albireopharma.com. Before proceeding, we would like to take note that management's comments today may include forward-looking statements regarding the company's plans and expectations. These statements are being made under the Private Securities Litigation Reform Act of 1995, and they are subject to various risks and uncertainties. Actual results may differ materially due to various important factors, including those described in the Risk Factors section of our most recent Form 10-K and our subsequent SEC filings. These filings can be accessed from the Media and Investors section of our website at albireopharma.com, or on the SEC's website. Any forward-looking statements represent our views as of today, Tuesday, March 1, 2022, and should not be relied upon as representing our views as of any subsequent dates. We undertake no obligation to publicly update these statements. Now it is my pleasure to turn the call over to Ron Cooper, Albireo's President and Chief Executive Officer. Ron? Ron Cooper: Thank you, Paul, and thank you, everyone, for joining us this morning. With me today are Simon Harford, our Chief Financial Officer; Pamela Stephenson, our Chief Commercial Officer; and Dr. Jan Mattsson, Chief Scientific Officer and Head of R&D. So we step back and reflect on 2021, it was a historic year for Albireo. It really was one for the record books where our journey to bring a new first-in-class medicine to children and families managing the high burden of rare disease was realized with the approval of Bylvay in both the U.S. and Europe. Last summer, this approval transformed our company from a clinical-stage company to one with an approved product that is building an integrated biopharmaceutical company. Albireo is a company with a tremendous amount of growth potential across three different drivers of value. First, the global Bylvay launch in PFIC. Second, the expanded use of Bylvay in Alagille syndrome and biliary atresia with our Phase 3 ASSERT and BOLD studies with the goal of adding two additional indications. This would allow us to provide a new treatment option for the approximately 100,000 cholestatic liver disease patients worldwide towards our ambition to make Bylvay a $1 billion product in the second half of the decade. And third, the rapidly emerging early-stage products. So let me begin by speaking about the Bylvay PFIC launch. Today, we are only going in one direction. Starting with delivering on a fast update. As reported in our press release this morning, we ended 2021 delivering $7 million in Bylvay product revenue. Original guidance for 2021 was $3 million to $4 million. We updated this at the start of the year to $6 million to $7 million, so we're thrilled to deliver on the high end of the range. Pamela will tell you a bit more about the drivers of performance, but the key takeaway is the response from prescribers is terrific. We're hearing from both HCPs and patients that Bylvay is making an impact, and we're seeing a fast launch update. We expect to continue to see growth from these initial patients as Bylvay is a chronic therapy with weight-based dosing. And as patients continue to grow, they will increase their daily medication. Playing on that base, we will continue to initiate new patient prescriptions that will gain some discontinuations each quarter in the U.S. and Germany. And then beyond those two opportunities for growth as the year progresses, we're planning for additional country launches in Europe as pricing and reimbursement is achieved, like most recently in the UK. So overall, our opportunity with Bylvay continues to grow with the potential for great impact on families who are cared for children with cholestatic liver diseases. To get into more detail in the launch, I'll turn it over to Pamela to take you through key metrics and achievements. Pamela? Pamela Stephenson: Thanks, Ron. I'm really pleased with the progress that we have made with Bylvay. The response from health care providers and payers and the impact on patients has been outstanding. The ongoing feedback from physicians is that they are relieved to have a drug option for their patients and payers are supporting the unmet need by recognizing the value of Bylvay and covering it. Today, the launch is going as planned, and we are delivering on our global strategy with a fast launch uptake to reach the estimated 2,500 PFIC patients who are available for treatment. In Q3, we outlined our five key metrics we plan to report on a consistent basis. So let me go through these five metrics and provide a little bit of color for you. Starting with the total net product revenue, we reported a total of $1.1 million in Q3 with $800,000 in the U.S. and 300,000 internationally. We finished out the year at $7 million in total net product revenue with $5.3 million in the U.S. and $1.7 million in international. Overall, our performance to date represents the solid penetration in the U.S. market and international sales beginning to be significant with Germany leading our European launches. Our second metric is number of new prescriptions. These are total new prescriptions generated in 2021. As you may recall, these are new prescriptions with some still going through the reimbursement process. As we reported, we had 28 new patient prescriptions in the Q3, then we saw prescriptions to continue to grow with 65 in Q4, totally – we totaled 93 new prescriptions worldwide by the end of 2021. This number of prescriptions generated this early in the launch period clearly reflects the unmet need and the interest in the market. Moving to the number of patients on Bylvay. We had 14 patients on reimbursed Bylvay in the third quarter, meaning these are new prescriptions that have been approved by payers and product has shipped. Through end of year, we were very pleased to see we added another 39 patients to arrive at a total 53 patients with approved reimbursement and product shipped for 2021. This is a strong indicator that our AlbireoAssist patient support team model is working as planned and that payers understand the clear value of Bylvay. The decision to have an in-house patient services team is a significant advantage in gaining access and supporting each family to navigate the reimbursement process, all of which have contributed to our success in driving prescriptions and getting patients on drug. Physicians are already seeing the advantages of our AlbireoAssist program based on their first experiences and they recognize the value this brings when interfacing with insurance companies and our three specialty pharmacies to evaluate a patient's insurance benefit and gain quick access to Bylvay. The next metric is the number of potential rollover patients on Bylvay. As a refresher, this captures the number of patients who are currently on drug and available to transition to commercial sales in the future. Patients included in this number are currently in the PEDFIC 2 extension study, our EAP or our managed access program. In Q3, we reported 100 rollover patients. And at the end of the year, we had around 90 patients, demonstrating our ability to transition patients quickly to commercial Bylvay in our reimbursed launch markets, U.S. and Germany. With time, we expect many more of these patients to roll over as we gain pricing and reimbursement in Europe and continue to transition these patients to commercial sales. The last metric is unique prescribers in the U.S. In the third quarter, we reported 19 prescribers, and we more than doubled that in the fourth quarter to end the year with 51 unique prescribers. We are making great progress, showing immediate breadth and building a solid base of physicians who now have experience with Bylvay. We are penetrating the new market successfully by generating multiple prescriptions by prescribers, and I'm really happy with our reach to date and continued engagement with the remaining targets. While we are pleased with the launch momentum, we are even more excited about the prospects of the successful 2022. Priorities are to deepen our penetration in the U.S., gain pricing and reimbursement in other countries and increased sales of Bylvay as we launch around the world. In the U.S., the key to performance is execution and continuing to reach the physicians and centers that have not yet prescribed Bylvay, while also reaching patients and families to ensure awareness of Bylvay as the first drive option for the treatment with PFIC. We feel confident in our ability to grow prescriptions in the U.S. and obtain assets for patients. We expect sales as our patient – our sales to increase as our patient base from 2021 increases in value as those patients continue to grow. Then we add new patients, less discontinuations and less the expected launch inventory that we will continue to work through and new country launches, which added together sets us up well for a successful year ahead. As we look at global pricing and reimbursement, our goal is to ensure patients have access to Bylvay while achieving reimbursement at a price that reflects the value of Bylvay. In Europe, we are actively pursuing pricing and reimbursement with ongoing discussions in 13 countries. Very recently, we announced that the National Institute for Health and Care Excellence, or NICE, issued guidance that recommended Bylvay through the HST pathway. This was the fastest HST evaluation ever, and we believe that ultimately, the recommendation came as a result of the high unmet medical need, the work that we've done to create a compelling data package and the high degree of expertise and execution by our team, who have been preparing for pricing and reimbursement for many years. This is the first country in Europe that has assessed Bylvay from both a clinical and economic perspective. And we are confident that this will have a positive impact across other countries that are in the assessment period. In France, Bylvay has received an SMR important and ASMR III from the HAS Transparency Committee, which is exceptional and encouraging as we now have multiple independent health technology assessment organizations that have recognized the gold standard clinical program and data for Bylvay. While we remain confident in our ability to gain pricing and reimbursement in major countries such as France and Italy, we do not know when we will gain final approval for reimbursement and what the net price will be. As the year progresses, our intent is to continue to launch in additional European countries, and this will be an important driver of growth for 2022 with the majority of the approximate 90 rollover patients residing in Europe. Given the very solid start, our key actions to penetrate its estimated 2,500 global PFIC patient opportunity are focused on HCP outreach and education, moving prescriptions through to reimbursement, gaining market access in new countries and expanding our geographic footprint. So with that, let me turn it over to Ron. Ron Cooper: Super. Thanks, Pamela and congratulations to you and our entire Albireo team for an excellent launch. Overall, it's clear there's a significant unmet need and Bylvay is making a difference. As we advance our plans to make Bylvay a billion-dollar product, the key for us to take Bylvay from a PFIC drug to a leading pediatric cholestatic liver disease drug. So how do we achieve that? First, we’ll continue to penetrate in PFIC, building on our base quarter-by-quarter. Depending on your net pricing assumptions, we’re looking at an acquisition of about 3,000 to 4,000 patients up to 100,000 pediatric cholestatic liver patients in the world to deliver $1 billion in sales. Expansion beyond PFIC is the second goal as we continue to be confident in the high level of translatability of our gold standard PFIC Phase 3 study into other diseases and pipeline programs, matched with our ability to commercialize the drug. Therefore, we’re looking forward to an important Phase 3 readout this year with the pivotal ASSERT study, the Alagille syndrome remaining on tract to deliver top line data by the end of the year. ASSERT is a gold standard, double-blind, randomized, placebo-controlled study that both the FDA and the EMA have agreed would be sufficient for approval with a positive outcome. Also on track is our gold standard and the only Phase 3 double-blind, randomized, placebo-controlled study in biliary atresia called BOLD. We know that biliary atresia is the largest pediatric cholestatic liver disease, and we have great potential to be able to deliver another first drug treatment option to this patient group in need. BOLD is a study of 200 patients randomized to Bylvay or placebo and studied over a two-year time frame. There are a number of unknowns executing the first phase – first global Phase 3 trial in biliary atresia with an IBAT, given that this is a trial for patients who are babies that have not been born as yet. So we’re really proud of our ability to execute and in effect to be enroll more than 50% of the patients by the end of 2021 and expect to complete enrollment this year, reiterating our guidance for top line data readout in 2024. Third driver of value for our organizations are rapidly emerging early assets. We have two unique one-of-a-kind products with A3907 and A2342. A3907 is the world’s first and only high systemic bioavailable ASBT inhibitor in clinical development. So what does that mean? In our preclinical models, A3907 remove bile acids from the body, not only by the stools to the intestines like other IBAT inhibitors, but in the urine through the kidney. In our Phase 1 study, we were able to demonstrate excellent systemic exposure and good tolerability. The next key question is it we can replicate systemic effects in humans with disease, and we plan to demonstrate this in a Phase 2 study, which we anticipate starting by the end of this year. We also have A2342, which is the world’s first and only oral NTCP inhibitor. Today a subcutaneous peptide NTCP inhibitors currently available in the EU, and it’s an effective drug, but you have to inject yourself every single day. If we look at the development for A2342, is tracking completely like the subcu NTCP inhibitor and that the potency NTCP and the effect on markers or target engagement are similar. However, the major difference is, is an A2342 is a small molecule and has excellent systemic exposure after oral dosing in preclinical models. Need to demonstrate similar tolerability and safety profile as the subcu NTCP inhibitor, allowing us to advance A2342 into a Phase 1 study by the end of the year with the intent of proving to be a unique component of a combination treatment for hepatitis B&D. Drive this plan, we also have great strength of our leadership and for organization to have spent their careers of launching products and growing commercial biopharmaceutical companies in order to maximize the potential of our assets, one way we’re leveraging our capabilities and experience is with our recent creation of the Chief Business Officer role and the appointment of Constantine Chinoporos who joined us in December. Prior to joining our organization, Constantine was with Boston Pharmaceuticals, where he completed over 20 licensing transactions and before that with Sanofi Genzyme. Constantine in partnership with our enterprise team and key leaders in the organization will be evaluating new opportunities to accelerate our plans and for expansion as an integrated biopharmaceutical company. Overall, we have a tremendous opportunity with our three growth drivers: First, with Bylvay in PFIC; Second, with the expansion of Bylvay into other cholestatic liver diseases with our two additional Phase 3 clinical programs; and the third driver being our early assets in adult liver disease. It’s exciting to be part of Albireo as a company with a first-in-class and first-to-market product for near-term growth with strong candidates in the pipeline as we plan for the future. With that, it’s now my pleasure to turn the call over to Simon for a financial update. Simon? Simon Harford: Many thanks, Ron. Let me summarize our financial results for Q4 and the full year 2021. Bylvay product revenue was $7 million for the year ended December 31, 2021, at the top end of our guidance range of $6 million to $7 million for the full year due to Bylvay patient sales and some inventory stocking at our three U.S. specialty pharmacies. U.S. revenue was $5.3 million, and international revenue was $1.7 million for the full year. Fourth quarter Bylvay product revenue was $5.9 million, with U.S. revenue of $4.5 million and international revenue of $1.4 million. Royalty revenue was $18.6 million for the year ended December 31, 2021 compared with $8.3 million for 2020, an increase of $10.3 million. Royalty revenue was $11.6 million for the fourth quarter of 2021 compared with $2.7 million in the same period of 2020, an increase of $8.9 million. The increase for both the quarter and full year relates to higher estimated royalty revenue and achievement of an $8.6 million milestone to be received from EA Pharma to elobixibat for the treatment of chronic constipation, which is passed on to health care royalty partners. License revenue was $15 million for 2021 due to cash received in Q4 related to the upfront fee from the recently announced deal with Jadeite, the licensing rights to Bylvay in Japan. There was no license revenue for the year ended December 31, 2020. Cost of product revenue was $1.4 million for the full year and $0.9 million for the fourth quarter. Following Bylvay approval, certain manufacturing and quality headcount costs are now included in cost of product revenue. There were no material costs as materials related to current products sold were expensed prior to approval. Given Bylvay was only approved in the summer of 2021, there was no cost of product revenue in 2020. R&D expenses were $82.5 million for the year ended December 31, 2021 compared with $76.8 million for 2020, an increase of $5.7 million. The increase in R&D expenses for the full year 2021 period were primarily due to the Bylvay pivotal Phase 3 studies for biliary atresia and Alagille syndrome as well as A3907, offset by preclinical expenses and in the previous year, completion of the PEDFIC 1 study and the elobixibat Phase 2 study in NASH. Q4 2021 R&D expenses were $20.6 million compared with $20.1 million in the same period of 2020, an increase of $0.5 million. SG&A expenses were $69.6 million for the year ended December 31, 2021, compared with $42.4 million for the previous year, an increase of $27.1 million. SG&A was $19.7 million for Q4 2021 compared with $14.2 million for the fourth quarter of 2020, an increase of $5.6 million. SG&A expenses were primarily made up of commercial expenses related to sales and marketing as well as the necessary support functions as we increase commercialization activities related to Bylvay. The increases for both the full year and fourth quarter of 2021 were mainly attributable to a ramp-up in headcount in our U.S. and European commercial operations. The increases were also due to the need to put in place appropriate people and systems to ensure efficient operations for the long term and appropriate governance as we evolve to a commercial stage biotech on a global basis. Net loss for the year ended December 31, 2021, was $34 million or a loss of $1.77 per share compared to a loss of $107.6 million or a loss of $6.73 per share for the previous year. Net loss for the fourth quarter of 2021 was $11 million or $0.57 per share compared to $24.8 million or a loss of $1.30 per share in the prior period. As of December 31, 2021, the company had cash and cash equivalents of at least $248.1 million. In fact, we did have exactly $248.1 million versus $262.6 million as of the end of September 2021. We are reiterating our guidance that current cash is sufficient to last into 2024 based upon our current revenue and expense projections. For the first quarter of 2022, we anticipate Bylvay product revenue to be between $5 million and $6 million. At the appropriate time during the year, we will look to provide full year Bylvay revenue guidance once we have better visibility on the timing of launches in European markets. However, when you think about the outlook for Bylvay revenue in 2022, we expect a hockey stick with higher revenue in the second half of the year as we gain reimbursement and launch in a number of international markets and continue to roll patients over to commercial sales. Some end of 2021 inventory will potentially reduce in Q1 2022 at the three U.S. specialty pharmacies in the U.S. Price per patient is likely to change based on weight gain, but total net price could be lower with more European launches beyond the current free pricing in Germany, and we expect a high persistency rate. However, there will inevitably be some discontinuations. We will continue to monitor the early launch metrics and are anticipating a very strong year. With that, let me turn the call back over to Ron for closing remarks. Ron Cooper: Thank you, Simon. Before I turn it over to Q&A, let me summarize what we expect for 2022. We plan to fulfill our commitments and deliver on quarter-over-quarter Bylvay growth as we add patients and launch in additional countries. We plan to announce the full enrollment of both the ASSERT and BOLD Phase 3 studies as we remain on track with our development time lines. We expect an important Phase 3 readout of ASSERT by the end of the year. We also expect to advance A3907 into a Phase 2 proof-of-concept study and A2342 into humans for the first time by the end of the year. I’m very proud of our organization’s ability to deliver and execute as planned and thank each and every one of our employees for their commitment, drive and innovation. We thank everybody for joining us and are pleased to open the call now for Q&A. Operator? Operator: Our first question comes from the line of Eun Yang with Jefferies. Please proceed with your question. Eun Yang: Thank you. Can you comment on what was the inventory level at the end of last year? Simon Harford: Hi, Eun. This is Simon. We did have some inventory for the launch uptake, as I mentioned at the three U.S. specialty pharmacies in Q4 as we’ve actually recognize revenue when we ship to those pharmacies. That inventory is likely to wash out for the most part during the first quarter of this year, and there was no inventory of any relevance in the international markets. So I think what you’re asking is how do you use a baseline to model going forward. So in terms of trying to withstand 2022 revenue, the 53 patients who are on drug who are reimbursed at the end of 2021, using average net prices is probably a good baseline of which to project further growth projections. But inventory will fluctuate up and down by quarter. So we’re not going to get into every detail quarter-by-quarter, but that’s the situation. Eun Yang: Okay. And then you mentioned that sales are going to increase rapidly in the second half of this year as you launch in the general countries and reimbursement coming on. But that said, current consensus is about $48 million, Bylvay sales for 2022. Can you comment on how do you feel about the consensus number? Simon Harford: Honestly, at this stage, it would be premature, as we’ve said, to provide revenue guidance given the uncertainty around the timing of launches in international markets due to pricing and reimbursement. I mean the good news is clearly that we think we’re making really good progress with pricing and reimbursement. And I think the nice recommendation was a really strong endorsement of both the innovative nature of the product, our care of burden information as well as our management capabilities in that area. So we feel good about that. The question is timing and timing can swing things depending on when it happens in the year, and that’s why we’re saying we’ll give further guidance at a point for the full year when we have more visibility. But clearly, you would anticipate to see more of that being on the back end, just given the nature of when those launches are likely to come. Ron Cooper: And I think the other factor to think about Eun, there’s two swings in this, right, that Simon has indicated when those launches occur, and we’ll have better visibility on that as the year goes on, and those discussions are going very well, like Simon has indicated from a nice perspective. But also one of the other metrics we report is the patients that are potential rollover patients. And there’s about 90 of those individuals. The majority of those are in those international markets, right? And so as we get pricing and reimbursement, that will roll into commercial, and that will have a pretty significant impact on our revenue. Eun Yang: Okay. My one last question. So patients who got on Bylvay commercially, how many of those have discontinued? Thank you. Pamela Stephenson: Yes. Hi. We’ve seen a handful of discontinuations, yes. This is very much in line with expectations. There’s no real pattern that’s emerged. It’s a bit of a dynamic measure. And in fact, some of the patients that have discontinued are considering restarting. Eun Yang: Thank you. Operator: Thank you. Our next question comes from the line of Ritu Baral with Cowen and Company. Please proceed with your question. Ritu Baral: Hi, guys. Thanks for taking the question. Have you started seeing now that we’re a handful of months out, have you started seeing any trends in time to fill as we look at the difference between NRxs and NRxs shipped? And also, are you seeing some new trends, unexpected trends, expected trends in those NRxs not just in 4Q, but in first quarter 2022, things like you mentioned on our previous call community-based prescriptions, young adults versus children, et cetera? Thanks. Pamela Stephenson: Let me answer your first question on the average time to fill. We are having great success in getting patients through the system and on to reimburse Bylvay. We continue to see a wide range of cases coming through, and we’re able to pull some prescriptions through very quickly, and others take a few weeks to go through the process, right? The prior authorization appeals in some cases. And it’s exactly as we expected, and we’re really pleased that we’ve been able to get the 53 patients on to reimburse Bylvay. Ron Cooper: And then I think the second part of what you’re asking, Ritu, is sort of the trend of the patients and who are prescribers, right? And I think what you see is we’re just delighted first of all, to almost more than double the number of prescribers, right? And so that suggests that we’re really starting to penetrate deeply in the U.S. We’re seeing that same trend where the majority of the patients are at those tertiary centers, but we are seeing some folks in some places that are secondary play sets to centers and like Kansas or in North Carolina, where we’re seeing really good prescription uptake as well. And then to characterize the patients pretty much gone as we’d expected, right? The majority of the patients are acute patients where we get a wide range of patients and a range of ages and weights as well. But we’re really pleased that, in fact, we’re getting really good penetration from the physician base and that the early response with the patients that have been initiated has been really terrific. Ritu Baral: Got it. Thanks. Ron Cooper: Thank you, Ritu. Operator: Thank you. Our next question comes from the line of Brian Skorney with Baird. Please proceed with your question. Brian Skorney: Good morning, everyone. Thank you for taking my question. I was hoping to maybe get – pull you guys to get some granularity on the 1Q 2022 guide of $5.6 million and just kind of the assumptions that are underpinning that. I mean I hear the inventory build may be a bit of a headwind for 1Q, but even if I kind of assume like a three-week, four-week build in inventory last quarter and normalizing NRxs in the U.S. just kind of seems like that should offset. So I’m just trying to understand, are there other sort of headwinds beyond inventory that you would be guiding for a flat to down quarter? Simon Harford: Hi, Brian. This is Simon. I think it’s fair to say that beyond some of the sort of fluctuations in inventory really does not anything more really to say about Q1 because I think what is highly relevant here is we have 53 patients initiated on drug as a baseline at year-end. And I think as you think about the year going forward, you really need to sort of think about those patients at as an average net price and then some growth off that. But there’s nothing beyond sort of the normal inventory fluctuations that I would have to say about Q1 $5 million to $6 million. Brian Skorney: Okay. And then maybe if I could just add one question on the ALGS opportunity. How should we be thinking about differences in weight between ALGS and PFIC patients? And given that ASSERT is testing just the 120 microgram per day dose, how should we be thinking about that eventual pricing dynamic as it would seem like there’s a potential for average price in ALGS to be substantially higher than that in PFIC? Thanks. Simon Harford : Yes. Thanks for both of your questions, Brian. I think right now, if you look at the baseline weight of the Alagille patients, it’s pretty similar to the PFIC patients. We are using the 120 microgram dose in that. And I think let’s wait and see till we get the results. Let’s wait and see what the market looks like at that will kind of sort out from a dosing and pricing perspective at that time. Thanks for your questions, Brian. Brian Skorney: Okay. Thank you. Operator: Thank you. Our next question comes from the line of Tim Lugo with William Blair. Please proceed with your question. Tim Lugo: Thanks for taking the question. Going back to the Q1 expectation, does that $5 million to $6 million assume any European, I guess, reimbursement positions over the next month? And if one does come through, I guess does that materially change that? And maybe on the pipeline, can you just maybe comment on the BOLD study and how you came to decide using the proportion of patients undergoing liver transplant as your primary endpoint versus serum bilirubin levels? Simon Harford: So I’ll take the first question. Hi, Tim. In terms of Q1, it does not assume any additional launches beyond Germany because, in fact, with the recent recommendation from NICE, which would – the UK, obviously, will be the next one in the Q, and that takes roughly up to 90 days before we actually get on the market. So there isn’t any included. Ron? Ron Cooper: Yes. So in regards to BOLD, look, we’re pretty excited that we made a lot of progress with BOLD. We’re now over 50% enrolled by the end of last year. And so we’re right on track. To your question about endpoints, it’s pretty simple, right? We’ve had a discussion with both the FDA and the EMA. We said to them, we’d like to get approval for this product. We talk to them about multiple scenarios and multiple different endpoints. But they said to us that they wanted an unequivocal endpoint, the proportion of patients that are alive or have their need of liver at the end of two years, and we’re doing what those regulatory agencies want. So we’re pretty excited about the potential for the treatment of biliary atresia patients with Bylvay, and we’re looking forward to announcing full enrollment of the BOLD trial sometime this year. Tim Lugo: All right, thank you. Simon Harford: Welcome. Ron Cooper: Thanks Tim. Operator: Thank you. Our next question comes from the line of Ed Arce with H.C. Wainwright. Please proceed with your question. Ed Arce: Great, thanks for taking my questions. Just a few for me. Firstly, just wondering how you're thinking about and projecting any ongoing impacts from the COVID pandemic through 2022? Ron Cooper: Well, I think, Ed, COVID is just part of our lives and part of our businesses, right. So we've had this in the background as we tried to prepare for launch. We've had this in the background as our representatives have been reaching out to physicians. We've had this in the background as we try and bring up sites for ASSERT and BOLD and as we try and enroll patients in that. And I think what you've seen from this team is that we just deal with it, right. And we focus on executing. We focus on delivering as planned. And if you look at the history of this organization, we've been able to do that and we plan on doing that in the future as well. Ed Arce: Right, right, of course. I guess what I'm getting to, Ron, is if, in fact, as many people hope and perhaps expect sometime later this year, there's a significant diminution of restrictions and everything else from the pandemic. Would you necessarily expect any sort of discrete increase in, say, prescriptions or ultimately sales? Any sort of step up that could be pointed to from that change? Thanks. Ron Cooper: No, Ed, we don't expect any change, it would be sort of business as usual. Ed Arce: Okay. And then wondering how to think about COGS through this year? I know you mentioned earlier that I think Simon did that inventory is likely to wash out sometime this quarter. But when would you expect the COGS to sort of normalize as you build from newly manufactured product. And is the 90% gross margin, a reasonable assumption? Ron Cooper: So I'd say the following. If you think about what our cost of product revenue are, as you refer to a COGS is made up of currently. It's made up of really two key components. One is certain manufacturing and quality headcount costs – and obviously, those individuals are sort of a stable number of people, a relatively fixed allocation to COGS. The remainder would be made up of product material costs and product material costs at this stage are zero. And the reason for that is because we expensed the material that we are currently using prior to approval in the future with new lots that material will get allocated to COGS. But that's a ways down the road at this point in time. So that's not something you really need to worry about for 2022. But clearly, by definition, given we're giving an allocation of headcount and manufacturing costs, as your revenue goes up, you would expect that allocation as a percent of revenue to fall over time. And to your longer-term question, we haven't given explicit guidance, but suffice it to say in rare disease relative to price. Obviously, this is a fairly attractive margin product. Ed Arce: Right, okay. Fair enough. And then just a final question on the royalty revenue. Of course, your quarterly royalty revenue turns over to EA Pharma. But I believe the $8.6 million milestone is retained by you. Is that correct? Ron Cooper: No, that's not correct. That gets passed on to a health care royalty partners. Ed Arce: Okay, great. Thanks so much. Ron Cooper: Thank you, Ed. Operator: Thank you. Our next question comes from the line of Andreas Argyrides with Wedbush Securities. Please proceed with your question. Andreas Argyrides: Good morning and thanks for taking my question. So it looks like you added 29 new patients, those – well, let me phrase that patients that were not on – or rolled over from the 100 that you originally identified as rollovers. How are you thinking about the 90 patients going on to drug for the remainder of the year? Thanks. Pamela Stephenson: Andreas, so we have, as you mentioned, approximately 90 enroller patients worldwide. And these are mainly international patients as we've already moved most of the U.S. patients on to commercial drug, right, because they're rolling off the PEDFIC 2 clinical trial. So is this a large number of patients who are on product who would be ready to roll over to commercial drug as we get the reimbursement in each of the upcoming countries. So we're excited about that number and working very hard on the reimbursement negotiations as mentioned. Andreas Argyrides: Okay. So just a follow-up. You can't provide any guidance as to our pace of adding these patients on? Or is that – is it 10 patients per quarter, a fair assumption? Or how are you guys guiding or estimating that? Ron Cooper: Well, it sort of connects to the comment that Simon made earlier, Andres, we really need to get pricing and reimbursement in those countries, right. So if we were to get pricing and reimbursement in a large country in say, for example, the middle of the summer versus the fall, the patients in that country that are part of the 90 would roll over relatively quickly. Maybe it was in the summer versus the fall that would be quite a difference, right. So until we have line of sight on pricing and reimbursement, which, by the way, as Pamela as indicated, is going very well. We expect that to occur until we have line of sight of that, it's really hard for us to predict how those – how and when those patients roll over. Andreas Argyrides: Okay. And then just another follow-up to that. Do you – as part of your year-end forecast, this uptick in the second half of the year, are you anticipating that to come from those rollover patients coming on? Are you looking at the population outside of the rollover? Ron Cooper: Well, all three drivers, right. So the first driver of value for us, the patients that we exit the year on, right, those 53 patients are going to grow over time. The second thing that's going to occur is we'll continue to deepen our penetration in the U.S. and Germany where we have access. So that will grow over time. And the third driver is we've just been talking about, right, pricing and reimbursement in other countries and the rollover of those 90 patients into commercial. Andreas Argyrides: All right, thanks for that. I’ll get back into the queue. Ron Cooper: Great, thanks Andreas. Operator: Thank you. Our next question is a follow-up from the line of Eun Yang with Jefferies. Please proceed with your question. Eun Yang: Thank you. I have two follow-up questions. So Phase 3 data in Alagille syndrome is expected by end of this year. What's the kind of a current expectation for approval time line? And do you expect some off-label usage before approval in 2023? And then second question is more clarification. So for last year, there are 53 patients on the drug. Does that exclude the number of patients who discontinued? Or does that represent the number of patients who initiated the drug? Thank you. Ron Cooper: Why don't you take that second question, and then I'll talk a little bit about ASSERT? Pamela Stephenson: Yes. So I'll take the second question you asked was the 53 patients that is inclusive of the patients who have discontinued. And as I mentioned earlier, it is a handful, and it's a bit of a dynamic metric in that some of these patients are considering restarting. Ron Cooper: Then as it relates to ASSERT, we're pretty excited on is going very well. We expect data by the end of the year. The ASSERT filing with the Alagille in the U.S. will be a supplementary and a variation in Europe, so relatively quick time line. As you would expect, we do not promote anything off-label at Albireo, but we've already received a number of off-label prescriptions generated by physicians. Thanks for the questions, Eun. Eun Yang: Thank you. Operator: Thank you. Ladies and gentlemen, this concludes our question-and-answer session. I'll turn the floor back to Mr. Cooper for any final comments. Ron Cooper: Thank you, operator, and thank you all for attending today's conference call. We'll keep you updated on our three value drivers as we continue to advance Albireo's mission to provide hope to families of patients with liver disease and the entire liver community. And I thank you all for your continued support, and have a great day. Operator: Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.ALBO Ratings Summary
ALBO Quant Ranking
Related Analysis
Albireo Pharma’s Bylvay EU Launch Begins in Germany
Albireo Pharma, Inc. (NASDAQ:ALBO), an emerging pharmaceutical company focusing on the development and commercialization of drugs for the treatment of liver and gastrointestinal diseases including Bylvay (odevixibat) for the treatment of progressive familial intrahepatic cholestasis (PFIC), announced that Bylvay is now available to patients in Germany, making it the first drug on the European market for PFIC.
With Germany having the largest EU market potential of the ~1,900 patients living with PFIC outside of the U.S., the launch of Bylvay in Germany is a major opportunity for the company to establish a following and build up revenue before expanding into additional European countries.
Analysts at Wedbush increased their price target on the company’s shares to $84 from $82, maintaining their outperform rating. While their current net revenue estimates of $5.8 million and $30.9 million for 2021 and 2022, respectively account for typical initial launch challenges, they anticipate net revenues reaching over $713 million in 2028 following a growth inflection point in 2023 as a result of likely broad payer coverage.
Albireo Pharma’s Bylvay EU Launch Begins in Germany
Albireo Pharma, Inc. (NASDAQ:ALBO), an emerging pharmaceutical company focusing on the development and commercialization of drugs for the treatment of liver and gastrointestinal diseases including Bylvay (odevixibat) for the treatment of progressive familial intrahepatic cholestasis (PFIC), announced that Bylvay is now available to patients in Germany, making it the first drug on the European market for PFIC.
With Germany having the largest EU market potential of the ~1,900 patients living with PFIC outside of the U.S., the launch of Bylvay in Germany is a major opportunity for the company to establish a following and build up revenue before expanding into additional European countries.
Analysts at Wedbush increased their price target on the company’s shares to $84 from $82, maintaining their outperform rating. While their current net revenue estimates of $5.8 million and $30.9 million for 2021 and 2022, respectively account for typical initial launch challenges, they anticipate net revenues reaching over $713 million in 2028 following a growth inflection point in 2023 as a result of likely broad payer coverage.
