Amryt Pharma plc (AMYT) on Q2 2021 Results - Earnings Call Transcript
Unidentified Company Representative: Thank you operator. On the call today to discuss Amryt’s Q2 results are Dr. Joe Wiley; CEO and Rory Nealon; the company's CFO and COO. In addition, Dr. Mark Sumeray, Amryt's Chief Medical Officer and Sheila Frame; President, Americas will be available to answer questions during the Q&A session. Joe will provide an update on the business and then Rory will go through the financials in detail. Before I hand it over to Joe for his formal remarks, let me remind you that this webcast and conference call contains forward-looking statements that involve risks, uncertainties and assumptions that are difficult to predict and which may be outside of the company's control, including, among other things, the development of its business, the trends in its operating industry, changing economic, financial or other market conditions. In light of these risks, uncertainties and assumptions, the events or circumstances referred to in the forward looking statements may differ materially from those indications in the statements. Word expressing reflect optimism, satisfaction with current progress, prospects or projections, as well as words such as believes, intends, estimates, expects, plans, projects, anticipates and other similar variations identify forward looking statements, but their absence does not mean that the statement is not forward-looking. Such forward looking statements are not a guarantee of performance, and the company's actual results could differ materially from those contained in such statements. Any forward looking statements made, speak only as of the date of today press release and conference call Friday, August 6 2021. And the company undertakes no obligation to publicly update any forward looking statements or supply new information regarding the circumstances after the date of this call. For more information, I would refer you to the forward-looking statements section of the full year financial press release issued earlier today, as well as the company's filings with the SEC. At this time, I will turn the call over to Dr. Joe Wiley. Joe please go ahead.
Dr. Joe Wiley: Thank you, Simon. I am on slide four of the presentation. Today we have issued record quarterly results, and again have raised our full year 2021 revenue guidance. Today's results demonstrates the continued performance and growth of our commercial business. We delivered 35.9% organic revenue growth year-over-year in Q2 with strong underlying performance in both our metreleptin and lomitapide franchises. I would add that this performance was driven by increasing the number of patients with access to our therapies globally. We generated $17.4 million of EBITDA in the quarter. This represents our sixth consecutive quarter of positive EBITDA generation. Total cash as of June 30 2021 was $142.9 million increased from $118.6 million at the end of the first quarter. We are pleased to report that we have now closed the Chiasma acquisition. And I would note that of those who voted over 99% of shareholders from both companies supported the transaction. We will now begin the process of integrating and growing our combined businesses. Following the deal close, Amryt now has three approved commercial products and a robust clinical pipeline. During the quarter, we also made significant progress on the regulatory pathway for our lead pipeline assets. Oleogel-S10 in both the U.S. and Europe. We believe we are on a path to potentially achieve approval and commercial launch of Oleogel-S10 by the end of this calendar year in the U.S. and Q1, 2022 in Europe. Overall, this was a truly exceptional quarter for Amryt and we look forward to continuing to grow the business in the second half of 2021 and beyond. Moving on to slide five. I will now provide more details on our business performance. Second quarter total revenues grew by 35.9% year-over-year to $62.8 million. This included the impact of a significant LATAM order for metreleptin locked in the quarter of $12.1 million. Regarding the revenue guidance given the strong performance of the commercial business year-to-date, we are now expecting 2021 revenues to be in the range of between $210 million to $215 billion which represents year-over-year growth of 15% to 18%. This is an increase from our previous guidance of $205 million to $210 million issued when we reported our Q1 results. This clearly demonstrates the board's confidence in the outlook for our business. At this time we are not yet including any revenue contribution from Mycapssa in this forecast, but we are excited by the potential for this product and we will update the market in due course. Moving now to our commercial products, I'm now on slide six. Starting with metreleptin, global sales in the second quarter were $43.1 million, compared with $27.9 million in Q2 last year, representing growth of 54.3%. The U.S. accounted for 41.2% of global metreleptin revenues and the EMEA accounted for 25.6% in Q2. We have previously shared our lifecycle plan in the U.S. to seek a label expansion for metreleptin to include the treatment of partial lipodystrophy in addition to the currently approved label for the treatment of general lipodystrophy. We received feedback from the FDA on the path forward for this initiative which will require a phase three study and we are on track to initiate this study by the end of 2021. As we have discussed, we estimate the market opportunity in the U.S. with the current GL label to be approximately $140 million. And if we are successful in adding PL we believe that it will approximately double the size of the addressable U.S. markers to $280 million. Let's move to lomitapide on slide seven. Second quarter sales were $19.5 million a 7.7% increase year-over-year. The U.S. accounted for 43.7% of global lomitapide revenues, and EMEA accounted for 38.5% in Q2. EMEA lomitapide revenues increased by 18.1% in Q2, 2021 versus Q2, 2020. Year-to-date growth in the EMEA was 29% driven by double digit growth across all the major European markets. We are conducting a pediatric study for lomitapide HoFH and we expect to have data in early 2022. Assuming positive data, we will seek the approval of lomitapide to treat children with HoFH in both the U.S. and Europe. Let's switch gears now and talk for a couple of minutes about the highlights of the Chiasma acquisition. And now I am on slide eight. We went over transaction in detail when it was announced on May 5. But I think it's worthwhile to revisit exactly why we're so excited about it. In addition, the addition of MYCAPSSA means the combined company now has three products on the market with strong IP protection. MYCAPSSA is currently approved for appropriate patients with acromegaly in a global market estimated at approximately $800 million. There is also the potential to expand into patients with carcinoid symptoms stemming from neuro endocrine tumors or NET where the opportunity is estimated at approximately $1.9 billion globally. Importantly, the acquisition of Chiasma will leverage our successful track record of business integration and commercialization. MYCAPSSA has recently been launched in the U.S. and given the significant degree of customer core points overlap. We believe that combined business will potentially accelerate the adoption of MYCAPSSA with endocrinologists. By combining and scaling sales forces, we believe that this will both drive MYCAPSSA adoption as well as potentially enabling further metreleptin revenue growth. We will also leverage our regulatory affairs experience on global commercial infrastructure to seek approval and launch of MYCAPSSA internationally. Now that the acquisition has officially closed, our immediate priority is to start to integrate the two companies. We should be able to provide more details on how the integration is progressing during the virtual capital markets event that we plan to hold in mid September. We will also discuss our plans for MYCAPSSA in more detail at this event. The combined portfolio of Amryt products and pipeline post closing of the Chiasma acquisition is summarized here on slide nine. For the first two commercial Amryt products lomitapide and metreleptin you can see the approved indications in the upper section of the chart. MYCAPSSA and acromegaly is now our third marketed product in the U.S. and has been submitted to the EMA in Q2 this year. For neuroendocrine tumors Amryt is planning for a modified 505 B2 regulatory pathway in the U.S. and is our intention to start a phase three study in NET in the first half of 2022 post FDA discussions. I will discuss Oleogel-S10 in the next slide, but I would also draw your attention to our exciting gene therapy assets AP-103 which is expected to enter the clinic next year. The important thing to note here is not just the breadth of our portfolio, but also that these products will generate meaningful use flow this year, into 2022 and beyond. Now, to our pipeline assets Oleogel-S10. I'm now on slide 10. Oleogel-S10 is a potential novel treatment for the cutaneous manifestations of severe EB, a rare and distressing genetic skin disorder affecting young children and adults. There is currently no approved treatment for this condition, and if approved, Oleogel-S10 will be the first to market for those patients suffering from this devastation condition. Early in June, the FDA confirmed that our NDA for Oleogel-S10 was accepted for filing and also informed us that the application has been granted priority review. The target for PDUFA date is November 30, purchase 2021. In addition, the agency confirmed that Oleogel-S10 will not require an advisory committee meeting. As a reminder, Oleogel-S10 previously received fast track designation and rare pediatric disease designation from the FDA. If approved under priority review, Amryt will be entitled to apply for a priority review voucher. A marketing authorization application for Oleogel-S10 for EB treatment to the European Medicines Agency was validated in March this year. The assessment by EMA is progressing on the timetable as previously identified, and we are in line with the standard timetable. We continue to anticipate the decision by Q1, 2022. While the regulatory activities are ongoing, we are moving forward with our launch plans to address the market opportunity based on a rare disease philosophy and experience. EB represents a highly concentrated market with 100 key positions treating the majority of patients at 56 key centers across the U.S., EU five countries and Japan. We expect that it will require relatively modest incremental investment in our existing customer facing infrastructure in order to drive global access and demand. If approved, Oleogel-S10 will be the first and only approved treatment for EB which is an important advancement for these patients. We are encouraged by the FDA decision to pursue a priority review and if approved, we will endeavor to ensure the product reaches patients as quickly as possible. There is a well-established patient advocacy, scientific and research community built up around EB and we have already forged strong relationships here. In addition, we are currently scaling up our manufacturing and supply chain to ensure adequate drug supply to meet expected demand. Our existing manufacturing facility should be sufficient to build enough API for launch volumes through 2023. Following that, we intend to have a dual sourcing strategy that will be executed across the supply chain and manufacturing scale up in order to support commercial demand beyond this. Let me now turn the call over to our CFO and CEO Rory Nealon who will provide more details on the Q2 financials. Rory.
Rory Nealon: Thanks, Joe. I plan to provide some commentary on the Q2 numbers as I normally do on these calls. But I'll also provide some color on the cap table poster acquisition of Chiasma at the end of my remarks. Let's start with our revenues. Joe has already covered the revenue performance by product and by geography. Just to remind you the headline numbers we've seen an overall increase of 35.9% in our quarterly year-on-year revenues, and 29.6% quarter-on-quarter growth rate which in part is driven by that substantial 12.1 metreleptin order LATAM which we alluded to as part of our Q1 results call. What is really pleasing is that we're seeing growth in metreleptin and lomitapide revenues both year-on-year and also quarter-on-quarter. Compared to this time last year, U.S. sales are up 9% with the most significant increase being in LATM which is nearly four times higher than the same period last year. And within this growth, there has only been a price increase in the USA which was approximately 4%. In other words, almost all our growth is coming from volume increases. Finally, before concluding on revenues, as noted in the press release and reiterating what Joe has said we are revising our revenue guidance for the full year 2021 to$ 210 million to $215 million, which is 15% to 18% on the actual 2020 revenues of $182.6 million. This revised guidance as Joe said, excludes the impact of MYCAPSSA revenues, which we'll talk more to in our September analysts briefing day, once we have a chance to get our feet under the table in Chiasma . If you look at our progression of our business over the last three years, you will note that we've delivered consistent growth year-on-year with annual revenues growing from $136 million in 2018 being the last full year when was a standalone company to $254 million in 2019, with both 2018 and 2019, being pro forma combined numbers of Amryt and were emerged from January 2018, increasing again to $182.6 million in 2020 and finally to guidance of $210 million to $215 million for 2021. We anticipate this growth rate will now change significantly in the coming years with the acquisition of MYCAPSSA for the treatment of acromegaly, and also the impending launch of Oleogel-S10 in EB if the product is approved by the FDA and EMA. The next slides, I'd like to touch on as our gross margin performance excluding the impact of the non cash items, which is consistent at 75.8% for the quarter and 75.7% year-to-date. This compares I'll remind you to 73.5% for the year as a whole in 2020. Within these numbers, the mix varies by product and by geography, with the higher third party royalties on metreleptin making that product a lower margin product as compared to the with the addition of MYCAPSSA which has no third party royalties and hopefully, those of us are Oleogel-S10 it is approved, which has a 9% third party royalty rate we'd expect this combined group margin to edge upwards as revenues of these new products grow. Regarding the non cash items and our cost of sales that we adjust as in calculating the EBITDA, we no longer have any amortization of the fair value step up from the Algerian acquisition. Remaining $250,000 has now been amortized, and there's none remaining. We will however have to step up the acquisition inventory from the Chiasma acquisition and this is something we'll talk more about on our next quarterly conference call. The other non cash item is the amortization of intangible assets from the Algerian acquisition, which is approximately $10.7 million per quarter and this will continue for the patent life of these assets. And as you'd expect, we will need to assess the value of any Chiasma intangibles which will result in similar amortization, and which we will talk to once again in the next conference call. Moving on to our SG&A and our R&D spend. Our R&D spend is broadly consistent with our Q1 spend, with a minor reduction from $8.9 million in Q1 to $8.5 million in Q2. Our spend during the first six months of the year is understandably heavily focused on EB activities, being the Oleogel-S10 product and also our AP-103 gene therapy products. We've also been spending on our various post approval commitment studies and also our pediatric study lomitapide which is on track to read out in 2022. The other significant study which is about to commence is our USPL study, which we expect will begin towards the end of the year. Ignoring the impact of spend on the Chiasma acquisition our SG&A spend has been consistent for the last four quarters. During the quarter we spent $18.9 million excluding acquisition costs, which is marginally up on the $18.2 million we spent in Q1 and also marginally up on the average for quarter three and four last year of $18.3 million. We're particularly happy to have managed to contain the spend while our underlying revenues have been increasing. As we do go forward into H2 we're understandably starting to increase our preparation and pre-launch planned for Oleogel-S10 in EB in the hope that the product will be approved by the FDA towards the end of this year and early next year by the EMA. Accordingly, we believe our total SG&A spend will increase as we move forward. The next key metric I'd like to focus on is EBITDA before I come back and touch on the constituent components. EBITDA is the key metric for us given it was a good proxy for our cash from operations in the year 2020. I will draw your attention to slide 11 where we adjust our Q2 operating results for non cash items and get to adjusted EBITDA of $17.4 million for the quarter, or $27.2 million for the year-to-date. This compares to $6.9 million for the same quarter and 2020 or $11.5 million for the first half last year and as our sixth consecutive successive quarter of positive EBITDA. We remind you that when we close the Algerian acquisition September 19, we stated our objective was to turn the business into an EBITDA positive business through a significant reduction in the pro forma combined operating cost based on both legacy during and legacy Amryt. In particular, we transitioned a sizable number of non customer facing roles and functions from Boston to Dublin which resulted in significant economies of scale. We also leveraged our significant previous experience that the management team that Amryt has from acquisitions, integrating processes and extracting synergies. The outcome of that integration process was that we not only achieved or exceeded our objectives and expectations, and the business is now driving significant EBITDA. With the acquisition of Chiasma today, we now face a repeat exercise where we're integrating the Chiasma business with the Amryt business with a similar combination of roles and extraction of synergies. We're obviously going to leverage off Amryt management's past experience, including the specific experience from the Algerian integration. Our intention is to promptly merge the two combined teams with a view to converting Chiasma from a business, which had an operating loss in Q1 this year of $18 million to a business that will be EBITDA positive for the calendar year as a whole in 2022. This is the topic which we'll come back to more at our analysts meeting in September. Before moving all the way to EBITDA you will know from the press release that we calculate EBITDA by adjusting for non-cash items such as intangible amortization, depreciation, share based payment expenses, and the amortization of fair value step up in inventory acquires in the Algerian acquisition. This fair value step has now been completely eliminated in Q2, as noted earlier. Going forward, we'll have similar adjustments which be triggered by the Chiasma acquisition, including incremental intangible amortization, and the amortization of the fair value step of Chiasma inventory acquired today. We provide more color on these as I noted earlier on our Q3 results conference call. Beneath the operating loss line in our earning our operating results line in our income statement, you will note that the non cash change in the fair value of the contingency consideration, and the non cash continued value rates expense are broadly consistent with quarter one this year. And finally, in that section of our income statement, you will notice a 5.8 million charge for net finance expense for the quarter of which $2.6 million is non cash and $3.3 million is the cash interest payable in the quarter on our convertible bonds and on our term debt. Before getting to our revised cap table, I just like to summarize our current net debt position. Excluding the convertible debenture, we have net cash of $52.6 million as at the end of June, being cash of $142.9 million and term debt of $90.3 million. This $52.6 million comparison net cash at the end of March of $29.8 million or $22.8 million increase during the quarter. Obviously, this was largely driven by the significant EBITDA performance during the quarter, and was also helped, in fact, helped by the fact that we're no longer paying bills inheritance DOJ fines of approximately $4 million per quarter, which we inherited when we acquired Algerian and the last of which was paid in Q1 this year. In addition to our term debt, we do have a convertible loan with a principal value of $125 million with a conversion price on this of $12.95 per ADS or $2.59 per ordinary share. Given the strong ongoing operational performance of the business and the recent phase three data and EB we believe it is likely that this will get converted to equity before it is otherwise due for payment in April 2025. As a result, we view this as more akin to equity and debt. Before moving off our net cash position, I will note that we will use approximately $25 million of our cash to clear remaining debt in the Chiasma organization and other similar costs. Chiasma will then have no debt and all the related costs will have been paid. Before concluding I thought I'd give some clarity on the cap table for the new Amryt post the acquisition of Chiasma. Amryt trades ordinary shares on the aim market of the London Stock Exchange and ADS is on NASDAQ with five ordinary shares representing one ADS. For simplicity, I'll confine myself to at ADS when talking about the cap table, given the vast majority of our shareholders and now share liquidity is on NASDAQ. As of today, post close, Amryt has 63.2 million ADSs or 63,217,036 ADSs to be precise. This 63.2 million consists of legacy Amryt ADS is coming into the deal of 35.9 million. ADSs issued today to Chiasma shareholders of $25.5 million and $1.8 million ADSs which were previously in the form of Amryt zero cost warrants which were also exercised yesterday. As of today, there are no warrants remaining with Amryt with old zero cost warrants now exercise. And likewise, no warrants are carried over from Chiasma. Amryt have share options and orders use and issued to directors and employees. Further details of the legacy Amryt adoptions and orders use are outlined in note four of our financial statements today which shows approximately 5.8 million ADS options and options and options use with a weighted average strike price on the options of $10.33 per ADS. We're also inherited an equity plan from Chiasma would share options and a very small number of use. In total, this could result in an additional $3.7 million Amryt ADSs has been issued albeit the Amryt ADS strike price for these options is from $3.41 to $72 with the majority of these options being out of the money. That is the end of my remarks. I will now hand it back to Joe.
Dr. Joe Wiley: Thank you, Rory. I am now on slide 12. Let me summarize by reviewing where Amryt stands today post closing of the Chiasma acquisition. We have a revenue generating commercial portfolio does now comprised of three marketed products, each of them growing and addressing large attractive markets. In addition, we have an exciting pipeline of development stage assets with the potential to drive near and long term growth. There is a potential near term approval for Oleogel-S10 in a market estimated to be worth in excess of $1 billion. And we are also preparing to enter phase three with MYCAPSSA in neuroendocrine tumors where we estimates the global market opportunity is $1.9 billion. We have a strong balance sheet and financial flexibility to execute on our growth plans. And finally, we have a global commercial infrastructure and experienced team in place to drive new product launches and growth. I will now hand over to our operator for Q&A. Operator?
Operator: Thank you. Ladies and gentlemen we will now begin the question and answer session. And your first question comes from the line of Brandon Folkes. Please go ahead.
Brandon Folkes: Hi, thanks for taking my question and congratulations on another very good quarter. Maybe firstly, on Oleogel, label is never final until we get the final label. But just given your interactions with the FDA to date, are you still thinking of a broad label there and then should the product be approved? Any commentary just in terms of how we should be thinking about a launch here? Is it a quick adoption? Should we think of reimbursement taking time just any analog or any color you're willing to share at this stage would be very helpful. And then, lastly, maybe just on Chiasma on the 15 million in synergies how should we think about timing of extracting that just given that you have made a lot of infrastructure ready on Algerian and so how do we think about that 50 million should we look at the timing that it took you to pull out the Algerian synergies or maybe a little bit quicker than that. Thank you.
Dr. Joe Wiley: Hi, Brandon. Thanks for your questions. Good to hear from you. So we have both Mark summary and Sheila Frame. Mark as our chief medical officer, and Sheila is our president of the Americas on the line. So I think I'll ask Mark, maybe to comment on the first question, which Mark was, as a reminder, the how we think about the label for Oleogel and then I'll ask Sheila to take the question on the launch given that the U.S. is likely to be the first market in which we launch if approved. So over to you Mark.
Mark Sumeray: Thanks Joe. Hi Brandon. Thanks for the question. With respect to the discussions with the FDA, we are still at a relatively early stage in terms of finalizing what ultimately we hope will become the label and specifically the patient population that would be covered by the indication statement. So I can't answer your question directly. I can say that as you know, when you look at the data, in specifically the results of the primary efficacy endpoint analysis, you can see that the overall result is really driven by the difference that seen within the recessive dystrophic EB patient population. That makes up the majority of the population that was in the study but more importantly, perhaps it also makes up the vast majority of the patients that we would anticipate would use the product in clinical practice because that's where most of the unmet medical needs is. If we're able to argue successfully with the FDA, that physicians ought to be able to use the product in other subtypes of EB, I suspect it will be based on sort of pragmatic argument that with a product that has a very good safety profile, physicians ought to be able to evaluate whether the product is working or not. And then discontinue treatment obviously if it doesn't. It's that kind of argument that I think might be persuasive in terms of allowing more broad use. But I think the data really are pretty clear in terms of which patient population showed evidence of benefits in terms of the primary endpoint. So I guess I'll end by saying, we have to wait and see those discussions. We anticipate will occur over the next few weeks and months.
Dr. Joe Wiley: Maybe I will just add a little bit more color on that Brandon, in terms of so Mark has identified the answer to question on the FDA, and the label. However, if you look at this having modeled this out yourself, or if you look at the likely usage of the product it is and when you model it, the vast majority of the likely usage will come in the recessive dystrophic patient population, given that those patients have more severe disease, therefore, they have more body surface area percentage effectors plus, these patients go on to to live into adulthood. So that's the patient population in which you would expect to see we estimate 80 plus percent of the usage of the product, and that's the patient population, which we simply seen, as you know, the greatest efficacy in the phase three. So I'll hand over to you Sheila, and maybe you could talk a little bit about our launch plans in the U.S., if approved.
Sheila Frame: Sure, thanks, Joe. And, Brandon, I think you were asking sort of specifically about launch readiness, and then time to reimbursement. So we are putting in place all of those launch plans right now. We'll talk more obviously, as we get closer to the analysts day in September in terms of specifically what we're expecting, but I think as you know, the high unmet medical need in this space, we don't expect any reimbursement challenges at this point. I think, as we partner with payers and start to outline the clinical benefits of making sure that Oleogel-S10 gets to patients as quickly as possible, in combination with our medical affairs team has been working very closely with the patient organizations as well. So I think you're going to see a pretty rapid launch. We'll be ready for sure in terms of that PDUFA date and ready to go as soon as we can.
Dr. Joe Wiley: Brandon your other question is on your questions. Your other questions are on solid ground. And maybe I'll address that if that's okay. I would say we've a lot of experience a number of us in the Amryt management team of doing these deals over the years. And I would say to you that about 60% to 70% of the heavy lifting is typically done within the first two quarters. Now you don't necessarily see that come through in the first two quarters because in combination with those savings, there's obviously severance cost, recruitment costs overlap when you've got transition people leaving to replace those roles be replaced elsewhere. So it turns out have a massive bearing in the first quarter. So more than the second quarter, by the end of the second quarter, you tend to have about 60% to 70% of the savings extracted and then it's on a declining scale they around. So hopefully that gives you a little bit of color Brandon and it's something we will touch on in greater detail when we have the analyst day in September.
Michelle Gilson: Great, thanks to everyone. That was all very helpful.
Operator: Thank you. And your next question comes from the line of Michelle Gilson, please go ahead.
Michelle Gilson: Hi, this Michelle from Canaccord. Congratulations on the quarter. I was hoping that you could maybe help us understand the European opportunity for MYCAPSSA a bit more. What territory is might be profitable, how big is the market for acromegaly, and any considerations around pricing in Europe that might be different from the U.S. and then in the U.S. I don't think, did you disclose what the sales for MYCAPSSA in the second quarter were and if you're starting to see some of the, I guess any signs that some of the repositioning efforts for MYCAPSSA in the U.S. are starting to gain traction. And then just one quick one on as you know, you have your day 74 letter now, were there any filing issues identified?
Dr. Joe Wiley: Thanks Michelle. All good questions. So let me try to address maybe the first two, and then I'll hand over to Mark to talk about the filter of his filing. So in terms of MYCAPSSA in Europe, you've identified that the pricing is going to be more challenging in Europe that is absolutely the case and in rare and orphan diseases, that is very often the case in fact. f you look at our performance of our existing portfolio, however, we have been very successful despite that fact at gaining market access in Europe, despite significant price pressure in that territory for both the Lomitapide for when we first acquired from in December 2016. One of the things we did incredibly well actually was to gain market access and reimbursements in across the European markets and subsequently since acquiring metreleptin in Europe, equally we have gained and we have announced market access. So we have a very strong track record actually of being able to accomplish that despite the obvious issues in terms of price, pressure, etc in Europe. So we will apply that same playbook to MYCAPSSA across not just Europe, by the way, we have global infrastructure. So as you've heard today, on this call, we had significant orders out of LATM. So we have a LATAM infrastructure. We have significant infrastructure across the Middle East, for example. We see opportunities there. And we have a global distributor network built beyond that. So we very much see that there's an opportunity out ex-US for this product. And it will be as it is with our existing portfolio of products on a dealt it on a country by country basis. So we will look at each country and see what the market opportunity looks like before deciding to invest and launch. You asked about the market opportunity. The addressable market, we believe globally for the existing indication from MYCAPSSA and acromegaly is sort of $800 million, of which approximately $400 million is in the U.S. And that means ex-US there is a $400 million market opportunity for MYCAPSSA. In terms of the second question you asked, which was sales of MYCAPSSA in Q2, we haven't disclosed that . The transaction just completed. So , we have not had our hands on this product as of yet well as of today but especially one day. So what I will say is the direction of travel is in line with our expectations and we're excited about the potential for the product. We see that the market adoption is picking up and there is a significant opportunity we believe now to go and derive that, given the significant call point overlap I alluded to in my remarks earlier. And we will increase both the breadth and depth of our U.S. sales force in endocrinology through this transaction. And that's going to help us not just drive MYCAPSSA given that we've already got those existing relationships with the community endocrinologist across the U.S., so we can leverage those relationships in terms of driving MYCAPSSA growth and also given that increase in breadth and depth we believe that that can also help drive metreleptin in the U.S. So, hopefully, that gives you a little bit of color. We will as I said in my previous remarks provide an update in September. So it was a little bit of time to get our feet under the table so to speak and grasp hold of this product and we will in a short timeframe come back in September to the market with a virtual analyst day and we will provide color then. So the increasing guidance that we gave revenue guidance earlier did not include any contribution from MYCAPSSA and clearly we would expect there will be a contribution from MYCAPSSA this year and we will update the market then we will give you that color. So and then Mark, maybe I'll hand over to you on the filter. There's no issues being reported back on the filing?
Mark Sumeray: Yes. Hi, Michelle. So this is a quick one, actually, the answer is no. So we have had our mid cycle review meeting with the FDA and that is an opportunity for the review division to give an update on progress with their review of our submission and I can just make a general comment about the tone and the content of that meeting which is that it was all very-very much a straightforward meeting that did not raise any concerns, specific issues. Although it is important to realize that even though it's mid cycle, there is still a substantial amount of review that the review division have to do ahead of them. But going back to your question, though, the answer's no. We do not have any filing issues.
Michelle Gilson: Okay, thank you so much for taking my questions. And congrats again on the quarter.
Dr. Joe Wiley: Thanks Michelle.
Operator: Thank you. Your next question comes from the line of Max Herrmann. Please go ahead.
Max Herrmann: Great. Thanks very much for taking my questions. And congratulations on a strong quarter. Firstly I just like to understand, obviously, the quarter was very much driven by this large, LATAM order. And it's trying to understand how predictable any of those are, is there any ability to understand. You flagged this at the end of the first quarter results but clear was much bigger order than we'd seen in the past. So just try and get a way we can perhaps estimate those rest of world all LATAM orders coming through. And then on again, on the performance seems to be stronger in the U.S. than in Europe, whereas I think you're getting you've had in UK and French reimbursement, agreed. So I was expecting maybe a stronger growth to come from the EMEA region rather than the U.S. which has also been a stronger area. And then finally, just on MYCAPSSA in terms of integrating the sales force, just get a little bit more color on what the timing of that would be and how big of sales force you're expecting. How many you going to add to that the combined company sales force?
Dr. Joe Wiley: Thanks Max. Thanks for your questions. So let me maybe address the issue first. And then I'll hand off Rory to speak to maybe the lifetime predictability question you asked, and then Sheila can teach the final question on the CapEx sales force in the U.S. So you're right. We're enormously proud actually, Max, we're growing our Myalept business once again. So when we acquired this business in the U.S., that was not the case. The Myalept business in the U.S. was actually in decline. And we've been very successful, turning that around and now growing that business and that was at the time when we acquired metreleptin we said to the market that we had a strategy that we were going to implement using our rare disease playbook and to know how, and we would deploy that know how playbook to the U.S. market and having deploy that market that strategy very successfully. Prior to that, as I alluded to earlier with the metreleptin in Europe, we then applied the same methodology to the U.S. metreleptin business and that is now as you alluded to growing once again. So that's an obviously pleasing. And you are right, if you look at the Q2 EU metreleptin business versus Q2, 2020. It's flat which is, as you say, which is surprising, but it's really a timing issue Max. It's just a timing of orders. So when I looked at the underlying patient growth, you see significant growth. So you would expect to see the growth overall this year will be very, very strong. And actually in line or exceeding expectations. So that's really more a timing issue. And Rory, do you want to take the predictability pointsh from the last time].
Rory Nealon: Yes. Maybe just add to the previous point first, just remind you, Max, this time last year what we said was we talked about an order for LATAM and whatnot. But we also talked about how orders have been pulled forwards from Q3 into Q2 because of COVID. And it was very hard to quantify that. So perhaps an element of that going on with the prior compares okay. In terms of the Brazil orders, LATAM orders from they tend to be they are tender based. I guess as with all of these tenders, it depends on the availability of funds. It also depends the tenders themselves can be infrequent when those tenders happen. Amit Even though they were the only supplier of this product on the globe you tend to find other people sometimes tender for the same and then come looking for the product. So there is an era of unpredictability that makes it hard to be definitive. When an order will actually come through when a tender will be completed. We've historically seeing two orders per annum all these go back to 2019. I think it was settled or not. But last year, we've seen to all the smaller orders of magnitude than the $12.1 million we just did this quarter. At this point in time, there is nothing on the horizon for the rest of the year. And it's not to say it won't happen. But there's nothing on the horizon for the rest of the year and hence the guidance of 210 to 215. Hopefully that answers your question.
Dr. Joe Wiley: And maybe Sheila, could you answer Max's question on the MYCAPSSA sales force and U.S.?
Sheila Frame: Sure. We're going to meet with them today, actually, Max. So they have a current field deployment model of 16 sales reps focused primarily on pituitary centers and have had that for the last year or so. We expected we look now we were staffed for just said in Myalept in the US as the core Amryt business, we're now adding MYCAPSSA as Joe's talked about already, we do believe that there's an opportunity for greater breadth across the endocrinology market in combining the two organizations together. And then of course, we also have to be ready for a launch into the dermatology medical dermatology space for EB later this year. So we're taking a look at the entire U.S. field deployment, number one, and then number two in a post-COVID world. There's also sort of what is the new commercial model going to look like? And so we're doing all of that work. We can provide more color as we get closer to Q4 and so you know, we're just doing all the analysis right now and getting to know the folks from MYCAPSSA and then taking a look at what we currently have. There's obviously lots of transition and that kind of thing that we're just heading into now. So we will give you more detail in September.
Max Herrmann: Great, thanks very much.
Dr. Joe Wiley: Thanks, Max.
Operator: Thank you. And your next question comes from the line of Douglas Tsao. Please go ahead.
Douglas Tsao: Hi, good morning. Thanks for taking questions.ind Just in terms of MYCAPSSA and where you are sort of taking over this product in terms of the launch and your expansion with sales force. I mean did you find that most of the or do you think that most clinicians are aware of the product or do you think that to some extent, you're going to need to do some education around the product and how does that affect the sort of trajectory that you might expect taking off the product? Thanks. And I have a follow up.
Dr. Joe Wiley: So this again, Sheila maybe you will have that.
Sheila Frame: Sure. I mean, I think the MYCAPSSA launch happened right in the middle of COVID, when a lot of the pituitary centers and a lot of big key academic centers have largely been closed and difficult to access. So I think what I would say is do I expect to have education, of course, it's still in launch mode. And what you might expect, in an under non-pandemic situation, you could achieve much faster uptake in terms of making sure that physicians are aware of and educated on the value of the product. I think that has certainly been delayed, just given the pandemic environment. Having said that, at least the key physicians and patients for that matter. I mean, the team at Chiasma did a really good job of making sure that there is really strong awareness. And I think now the challenge for us is going to be to make sure that you've got stable patients in the context of a pandemic environment and you need to switch them to this oral therapy for a number of reasons. So I think that's where we'll take some time with our medical affairs colleagues as well as our integrated sales force in order to really see where is that awareness and where's the willingness and desire to switch and what's the value of that. So that's kind of where we're heading. In terms of its trajectory, I think, as you've seen across the entire industry in launching products during the pandemic has certainly shifted significantly what you might expect in terms of time to peak. So until we get a chance to really get I think the expression that's been used today is our legs under the table, our feet under the table, I really don't want to speculate on what we think that trajectory is going to be. But certainly we know that it has been slower for everyone trying to launch during the pandemic. So we're hopeful that some of the return to some version of normal in the U.S. will happen rapidly without this fourth wave coming.
Douglas Tsao: Great, that's helpful. And then just on Oleogel obviously, you're hoping for as broad a label as possible that you recognize or sort of noted that the who was in the recessive population, we saw the most clinical benefit, and just curious how you're sort of thinking about positioning the product to ensure physicians have a good experience with the product and use it appropriately because you just obviously don't want to have them use it perhaps in patients where results aren't as good as in the recessive population, and then decide broadly that the product might not be as effective as I think we all agree it is. Thank you.
Dr. Joe Wiley: Thanks Douglas, yes. Mark has already spoken to the label. So maybe Sheila is on the position. Do you want to take though?
Sheila Frame: Yes. We're obviously looking at all these scenarios. And so I think our expectation is, given the high unmet medical need, and the fact that this is the first and only or would be the first and only one approved product, I do think that we will be very clear and specific in terms of our promotional approach to the marketplace. But also we do certainly we're very optimistic that the product will see demand right at approval across the patient population just given the high unmet medical need. I mean, this is one of the most emotional areas that I've ever worked in and seen. And I think you're going to see the engagement with the patient organizations and just the desperation that these patients have in terms of making sure that they get access to treatment. I think you're going to see pretty significant demand at approval. And again in terms of positioning the product overall, we believe that this is the kind of product that patients will want to have closed more like if I think about an analogy, more like a backbone type therapy that you would always have it on hand, and irrespective of what other products might come to the market later. But I think being the first and only will mean that we'll have significant demand at launch. And we're really excited about what we can do for patients.
Douglas Tsao: Well, and if I can just one quick follow up. I mean, I guess I think I completely understand you're sort of the sense that there will be significant demand, just given the amount of unmet need across all the patient subtypes. Do you want to try to set expectations across the different subtypes just given what we saw in the clinical trials because obviously, there were signals in the populations outside of ourselves, but it wasn't as strong as what we saw in the recessive population.
Dr. Joe Wiley: Maybe I take that first, and then Sheila you can chime in with your comments as well. Look, it's going to depend on the label that's that's clearly going to be a significant impact on how we think about commercializing the product. And as Mark has spoken about earlier today that remains to be seen from the FDA. In terms of market opportunity, I've already alluded to, though that 80% of the market opportunity for the product is in the recessive dystrophy population anyway. And that's what where we clearly have the strongest signal. Albeit we do have efficacy data in the other severe subtypes as well. So and it's going to depend on what that label looks like, in terms of how we can promote the product. Sheila I don't know do you have any additional color you'd like to add there?
Sheila Frame: No, I think you've covered it all. I think we're again, we're just so it's such an incredible opportunity for us to be able to bring this product to the market. And so I would just say we will be ready and we will do everything we can to make sure that patients can access this product as soon as we get approval. And we'll certainly be promoting it on label once we finalize the label with the FDA.
Dr. Joe Wiley: And to your points, I mean, I similarly have never worked in my medical career in such an emotive area as it truly is the worst disease you've never heard of. That was a phrase coined by Brett Copes and the patient of Deborah of America, the patient advocacy group for patients when you meet, meet and speak to these patients on their cares, it's truly horrific disease. And they are desperate for anything that's going to make life even little bit better. So we're, we're proud that we have the first product first and only product to-date that has shown efficacy in this patient population. And we think that there's a significant unmet medical need here.
Sheila Frame: Okay, great. Thank you.
Operator: Thank you. And your next question comes from the line of Naz Rahman. Please go ahead.
Naz Rahman: Thanks for taking my question. and congrats on the quarter. On metreleptin ultralight for discrete study can you talk a little more about the timing in terms of how long do you expect the trials to take to enroll and when can you ultimately expect data? And furthermore, based on your conversation with clinical investigators have you guys heard any comments about how Delta variant might impact enrollment? Thanks.
Dr. Joe Wiley: Mark, maybe I'll hand that over to you. So the question was around the timing of the PL study for metreleptin.
Max Herrmann: Yes. Latin. So the study that we anticipate conducting will enroll patents in a double blind, placebo controlled fashion for a total of one year participation. So each patient will be in trial for a year. We expect it will probably take about a year to enroll the study. So and then there is obviously time, you have to add on at the end for the database lock cleaning and lock process as well as the analysis in the report writing, etc. So to answer your question, if we start the study towards the end of this year, which is our plan, then if we take a year to enroll, the last patient would be in the study roughly a year from now with one year participation. So that into the now. So the end of 2023, and then into probably the middle of 2024, when we have data, data analysis and support for us. So in terms of the impact on enrollment by the Delta variants I think that's a really difficult one to answer. And we're all aware of the impact that it has had historically, up till now on stability and clinical trials things have improved. Let's hope they continue to improve certainly we conducted a detailed feasibility assessment and we've interviewed all of the sites that we think in different countries that we think of would be eligible to participate. We have a very accurate view of our ability to enroll to study and where we need to go. I think the timeline that I just mentioned to you are certainly achievable and unless something happens that is very surprising which one, of course can never be sure, won't happen. And I mean, when I say that say, I think the impact of another variatnt lockdown. So I'd be reasonably confident on those signs, notwithstanding that possibility.
Naz Rahman: Thank you.
Operator: Thank you. That does conclude the question and answer session for today. I would not like to hand over back to Joe Wiley for closing.
Dr. Joe Wiley: Thank you operator. Thank you all for joining us today. We look forward to speaking with you, and hopefully seeing you again soon. Thank you.
