Amryt Pharma plc (AMYT) on Q3 2022 Results - Earnings Call Transcript
Operator: Good morning, and welcome to the Amryt Pharma Q3 2022 Results Call and Webcast. I will now hand you over to Amryt. Please go ahead.
Simon Loughrey: Thank you, operator. On the call today to discuss the third quarter 2022 financial results are Dr. Joe Wiley, CEO; and Rory Nealon, the company's CFO and COO. In addition, Dr. Tracy Cunningham, Chief Medical Officer; Jordi Casals, President, EMEA; Dr. Helen Phillips, Head of Medical Affairs; and Sheila Frame, President, Americas, will be available to answer questions during the Q&A session. Joe will provide you 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 indicated in these statements. Words that express and reflect optimism, satisfaction with current progress, prospects or projections as well as words such as believes, intend, estimate, expect, plans, project, anticipate 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's press release and conference call, Thursday, November 3, 2022, 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 today's financial press release issued earlier 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.
Joseph Wiley: Thank you, Simon. I'm on Slide 4 of the presentation. We are pleased to be reporting strong operational and financial results for Q3 2022. Total revenues in Q3 were $61.1 million, an increase of 8.2% year-over-year. On a constant currency basis, revenue growth was 12.5%. We generated EBITDA of $12.5 million in Q3, and this was our 11th consecutive quarter of positive EBITDA generation. Operating cash flows in Q3 were $14.3 million and cash at September 30 was $83.4 million. I would note that excluding the impact of the EMA milestone payment and CVR related to the approval of Filsuvez in Europe, cash would have increased to $98.8 million at September 30. The Mycapssa relaunch is progressing well. We are pleased to report revenues of $5.7 million in Q3, which was an increase of 26.9% quarter-over-quarter and 292.8% year-over-year. In the EU, we received a positive opinion from the CHMP for Mycapssa in acromegaly. A recommendation from the European Commission on approval is expected by the end of Q4 this year. We are also developing Mycapssa for carcinoid syndrome associated with neuroendocrine tumors and the FDA granted orphan drug designation for Mycapssa for this indication in the quarter. We have a pathway agreed with the FDA for a single Phase III study in NET, and we expect to initiate this study in Q1 2023. Regarding Filsuvez, we continue to make solid progress with good demand since launch in Europe in September, exceeding forecasts in the first month. The product was also approved in Great Britain in September for the treatment of partial thickness wounds associated with dystrophic and junctional EB. For Metreleptin, we can also report that we won a significant LATAM tender for $8.3 million, and this revenue is expected to be recognized in Q4. We are today reaffirming full year 2022 revenue guidance of between $260 million to $270 million. This represents growth in the range of 17% to 21% over 2021. Given the currency headwinds we've experienced this year, the fact that we're on track to achieve these numbers speaks to the strength of our underlying business. Moving now to our commercial products, beginning with Metreleptin on Slide 5. Revenues for the third quarter were $37.9 million, representing 4.5% growth year-over-year. Of note, Metreleptin delivered significant growth in the U.S., with revenues growing by 10.3% year-over-year in Q3, with patients on therapy in the U.S. now at an all-time high. There was also robust EMEA patients demand in Q3 and patients on therapy grew by 25.4% year-over-year. However, revenues were impacted by a strong U.S. dollar. EMEA growth on a constant currency basis during Q3 would have been 13.8% year-over-year. Growth drivers in the quarter included the of Italian reimbursement for partial lipodystrophy and expansion in the Middle East and Turkey. We continue to receive positive reimbursement decisions, the Dutch Ministry of Health recently approved reimbursement for GL and reimbursement processes are being progressed in 6 other EMEA markets. As I mentioned, we won a tender for a significant Metreleptin order in LATAM that is worth $8.3 million, and this revenue is expected to be recognized in Q4. Overall, Metreleptin continues to deliver significant growth globally, and we expect this momentum to continue with more patients coming on treatment. Our plan is to seek a label expansion for Metreleptin in the U.S. to also include the treatment of partial lipodystrophy, and we initiated a global Phase III study in PL in Q4 last year. And I would note that the product has orphan designation for PL in the U.S. Let's move to Lomitapide on Slide 6. Lomitapide revenues for the third quarter were $17.2 million compared to $18.5 million in Q3 2021. We continue to increase the numbers of patients on therapy in the EMEA with patient numbers growing by 20.6% year-over-year. There was strong performance in all EU countries driven by Germany, Greece and Spain. However, revenues in the region were impacted by the strong U.S. dollar. On a constant currency basis, growth during Q3 would have been 11.8% year-over-year. In July, we were successful in winning a new Lomitapide tender in Saudi Arabia. We estimate that this will be worth approximately $6 million in annualized revenues, with deliveries expected to commence in Q4 this year. We are currently conducting a pediatric study for Lomitapide in HoFH, and we expect to have top line data in Q4. Assuming positive data, we will seek approval for Lomitapide to treat children with HoFH in both the U.S. and in Europe. Now on to Mycapssa, on Slide 7. We initiated a relaunch of Mycapssa in Q4 last year, having acquired the product through Chiasma earlier in 2021. I am pleased to say that the relaunch initiatives we spoke about on the last earnings call are taking effect. The product delivered $5.7 million in revenue in Q3, which was up 26.9% sequentially and 292.8% versus Q3 2021. The key pillars of the Mycapssa relaunch are: #1, new market positioning; #2, broader health care provider outreach and #3, enhance patient services. With regards to the new positioning, we launched new messaging earlier in the year that emphasizes consistent control and the feedback we have received is that this message is resonating with customers and the endocrinologists who have used Mycapssa have reported high satisfaction. As previously outlined, our plan has been to leverage our existing infrastructure to expand the sales focus beyond the PTCs into community endocrinologists. In terms of our health care provider engagement, we added an additional 31 new prescribers in Q3, 97% of whom are community-based physicians, bringing our year-to-date total for new prescribers to 89 with the overwhelming majority from the community. We have also increased both the reach and frequency of our HCP engagement with increasing numbers of sales calls, most of which are now in-person visits. We continue to build awareness of Mycapssa among physicians, not only through these in-person sales calls but also through a robust presence at 11 regional endocrinology conferences. On the patient access front, we are continuing to expand covered lives and improve access to therapy. In early September, Mycapssa was removed from Express Scripts National Formulary Exclusion list, resulting in an additional 22 million covered lives. In addition, we continue to both streamline and enhance our patient services with the addition of a fields reimbursement team to complement the clinical education team we launched in Q2 and ensure pull-through resulting from the Express Scripts formulary improvement. Our relaunch strategy is leading positive results, and this momentum has translated into strong sales growth in Q3. We expect this momentum to continue through the end of the year and into 2023. Regarding Mycapssa in Europe, in September, we announced that the CHMP adopted a positive opinion, recommending the approval of Mycapssa in the EU for the maintenance treatment of acromegaly in patients who have responded to and tolerated treatment with octreotide or lanreotide. A decision on EC approval is expected before year-end. If approved, Mycapssa will be the first and only oral somatostatin analog licensed in the EU, and this is a significant development for acromegaly patients in that market. We also announced recently that the COMP adopted a positive opinion recommending that the orphan disease designation of Mycapssa in the treatment of acromegaly be maintained in the EU. This qualifies Mycapssa for a period of 10 years market exclusivity for this indication. Separately, we are advancing Mycapssa into late-stage clinical development for a second indication carcinoid syndrome in patients with neuroendocrine tumors. We have agreed with the FDA on a modified 505(b)(2) regulatory pathway for marketing approval in this indication and plan to initiate a single Phase III trial in the first quarter of 2023. If approved, Mycapssa could become the first approved oral SSA indicated for the treatment of these patients. The commercial opportunity in NET is very significant, estimated at $1.9 billion globally, of which $1 billion is in the U.S. Now to Filsuvez, I'm on Slide 8. We launched the product in Europe in September following the approval from the European Commission in June for the treatment of partial thickness wounds associated with dystrophic and junctional EB in patients 6 months and older. I'm pleased to report that the European launch is progressing well. There has been good demand since launch, exceeding forecasts in the first month, and we are also seeing strong inbound interest in Filsuvez. In September, we also received both marketing authorization approval and orphan drug designation from the MHRA in Great Britain. In parallel with the initial launch, we are proceeding with market access applications in each of the larger countries, followed by the smaller countries in turn. We hope to have formal reimbursement that will enable us to launch in these additional markets by early 2024, with broad access throughout Europe expected during 2024 and 2025. As a reminder, EU approval can be the basis for submission of marketing authorization applications in other EV markets, such as the Middle East and LATAM, where we also have our own medical and commercial infrastructure in place as well as a fully established distributor network. We also expect to launch Filsuvez in these territories. Turning to Slide 9. You can see here the key centers treating EV across the major markets in Europe. This demonstrates that EB is a natural fit with our business model. That is treating rare diseases with a high unmet need where there are small numbers of patients being treated by small numbers of physicians at small numbers of centers, meaning that we can successfully address the market opportunity with a commensurately small commercial footprint. I would note that we have already demonstrated our strong track record in executing this strategy with our existing products, Lomitapide and Metreleptin in Europe. As we already have the medical and commercial infrastructure in place across Europe, the incremental cost for us to launch Filsuvez is minimal. Turning to Slide 10. Let me run through our expected news flow for the rest of 2022 and 2023. For Metreleptin, we anticipate further positive reimbursement decisions in Europe in 2023. We expect to begin Filsuvez deliveries to EB patients in other EU countries beyond Germany by the end of Q4. For Lomitapide, as I mentioned, the top line data from our pediatric HoFH study are anticipated in Q4 this year. Following the recent CHMP positive opinion for Mycapssa in acromegaly, we expect EC approval also in Q4. Looking into 2023, we have a pathway agreed with the FDA to initiate a single Phase III study for Mycapssa in NET in Q1 2023. And finally, we will continue to engage with the FDA to seek approval for Filsuvez in the U.S. As previously announced, we are proceeding with the formal dispute resolution pathway with the FDA. We expect to submit for formal dispute resolution in November this year. Let me now turn the call over to our CFO and COO, Rory Nealon, who will provide more details on the Q3 financials. Rory?
Rory Nealon: Thanks, Joe. And starting with revenues, and I refer you to Slide 11. Joe has already updated you on the performance of the individual products. I would just remind you the headline numbers and provide some color on a couple of individual items, in particular, the impact of foreign exchange and also the recurring annual order, which we received for Metreleptin and LATAM. As Joe noted, our revenues grew by 8.2% year-on-year, but on a constant currency basis, they grew by 12.5%. We conduct most of our business in U.S. dollars, whether that be in the U.S. itself or LATAM, but there's a significant euro exposure in our EMEA region. EMEA represented 37% of our business during the quarter, and in this region, we conduct most of our business in either euros or in U.S. dollars. We also have a significant Euro cost base given our headquarters and a lot of our back offices in Ireland, and I'll talk more about this later. Our strategy on foreign currency is to try and match as close as we can Euro revenues within the EMEA region and these Euro costs, thereby creating a natural hedge so we're not exposed to currency fluctuations. As such, within the EMEA region, some of our business mostly conducted in euros, but where we can control the currencies such as some countries in the Middle East, we do business in U.S. dollars. The objective being to keep our euro-denominated revenues more or less matching our euro-denominated costs. On the face of it, our EMEA Metreleptin revenues grew 4.9% year-on-year, and our Lomitapide revenues declined by 4% year-on-year. However, if you look at patient numbers, as Joe alluded to, Metreleptin patient numbers in EMEA grew by 25.4% and Lomitapide patients in EMEA grew by 20.6% year-on-year. That is a better reflection of the underlying performance in the region. Using constant currency exchange rates, Metreleptin would have grown by 13.8% and Lomitapide by 11.8% in EMEA year-on-year. The other significant item I'd like to touch on within revenues is the recent order received for Metreleptin at LATAM. These orders are sporadic in nature with the local reimbursement authority typically ordering between 6 and 15 months' worth of product at a time. I'll remind you that in 2020, we had 2 orders, 1 for $3.1 million in Q1 and an order for $6.9 million in Q3. In 2021, we had a $12.1 million order in Q2. And now in 2022, we've just won a tender for $8.3 million, which we expect to ship in Q4. As you can see, it moves around within the quarters, but it is a core and consistent part of our business. The next item I'd like to touch on briefly is our gross margin performance. It is really important that people understand that a large part of our cost of goods is noncash items as noted on Slide 12, such as the amortization on our intangibles from our various acquisitions, which was $16.6 million during the quarter and the amortization of the fair value step-up of acquired inventory from the Chiasma acquisition of $3.1 million during the quarter. These are noncash items and have no bearing on the ability of the company to drive EBITDA or cash generation and as such, I remove them for the purpose of analyzing gross margin performance. Once again, our gross margin exceeded 75% for the quarter coming in at 77%. This is consistent with, if not a little higher than the previous pattern of our gross margin, which has averaged a little over 75% for the previous 7 quarters. As noted previously, we expect to see this creep up as we move through the year and into future years through a combination of Mycapssa revenues, which we expect to increase over time and also with the introduction of Filsuvez revenues, both of which are higher-margin products. Moving on to our SG&A and R&D spend as outlined in Slide 13. Our R&D costs consist of the cost of clinical studies, including the cost of products used in these studies, the cost of our in-house clinical team and the cost of various other functions with -- in Amryt such as quality, regulatory, et cetera, which helps bring these clinical studies to fruition. As you can see from Slide 13, our R&D costs have been relatively stable for the last 7 quarters, albeit within this, there are pluses and minuses. For example, the cost of the Filsuvez study have been declining given that the product is now approved in the EU, which has been offset by other study costs such as our USPL study, which is beginning to ramp our Lomitapide pediatric study, which we're hoping for top line data at the back end of this year, our development of AP103, preparation for the NET Phase III study initiation, et cetera, et cetera. First, Slide 13 in our SG&A spend, you'll note a significant jump in Q3 last year. This was triggered by the acquisition of Chiasma on 5 August last year. We would have had an increased spend associated with this acquisition for 2 months in that quarter with a full quarter thereafter. Two interesting points stand out from this table. Firstly, the slightly declining spend from Q4 last year through to Q4 this year as we continue to extract synergies post the Chiasma deal. And I might add doing so as the business continues to grow in an inflationary environment. Secondly, the ramp from H1 last year before the Chiasma deal of approximately $18 million per quarter to an average of $28 million for the last 4 quarters since the acquisition or slightly lower, in fact, in the current quarter at $27 million. This is an increase of $9 million to $10 million per quarter since we did the Chiasma deal. And this increase is driven by Chiasma as you would expect, but also costs associated with the ongoing growth in the business and also the Filsuvez launch. I will remind you that Chiasma we're planning to spend approximately $90 million in 2022 before we acquire them. So this is a significant reduction in the level of OpEx that would otherwise have occurred and speaks to the ability of Amryt to extract synergies from acquisitions. Moving on to talk about EBITDA, which, as you know, is one of our most important key metrics. We focus on EBITDA because it removes the noncash accounting adjustments, such as amortization of intangibles, which was $16.6 million during the quarter. The fair value acquired inventory step-up amortization of $3.1 million, depreciation of $400,000 and share-based compensation expenses of $2.9 million. As you can see from Slide 14, this adds up to $23 million during the quarter, which is a significant amount of noncash accounting adjustments in just 1 quarter. The resulting EBITDA of $12.5 million for the quarter is the 11th consecutive quarter of EBITDA profitability and compares to EBITDA before Chiasma restructuring and acquisition costs of $7.2 million in Q1 and $13.3 million in Q2. Cumulatively, we've delivered EBITDA before Chiasma restructuring and acquisition costs of $33 million year-to-date. And this run rate is comparable to the full year 2021 number of $41.9 million. To be comparable to the run rate from 2021, I believe, is particularly impressive, especially when you consider we have a Filsuvez launch this year, and we're in the middle of a relaunch of Mycapssa and have a full year of same as compared to only 5 months last year. Our press release and Joe have alluded to the impact of exchange rate movements on our revenues. As I mentioned at the start of my remarks, we tried to create a natural hedge matching euro-denominated costs with euro-denominated revenues as close as we can as they were not exposed to the movement in foreign currency exchange rates. This being particularly important when you think the average dollar-euro rate in 2021 was 1.183 as compared to the average dollar-euro rate year-to-date of 1.057, or a 12% swing. I think the team have done a great job in this regard and have significantly mitigated the exposure to such currency movements. During the quarter, approximately 45% of our payroll and operating costs were in euros and 24% of our revenues were in euros. This resulted in a natural hedge I've been talking about, to a large extent, with the delta being approximately $3.1 million lower euro revenues than euro costs during Q3. Year-to-date, our euro revenues are lower than our euro cost by approximately $6.9 million. Hence, even the 12% swing we have seen in the dollar euro FX rate this year does not have a significant impact on our profitability because of the great job the team have done creating this almost natural hedge. Beneath the operating loss line in our income statement, you will note the change in the fair value of the contingent consideration of the CVRs, both of which are payable on success with our Filsuvez product, and I will touch on these in a little more detail when I get to the balance sheet and talk about cash flows. Finally, in that section of our income statement, you will note a $6.4 million charge for net finance expense for the quarter, which consists of $2.5 million in noncash accounting charges and $3.9 million in cash interest. Moving on to our balance sheet. The first 2 key metrics, which we've already covered, are our revenues and EBITDA. The third key metric is cash as outlined on Slide 15. And our EBITDA and cash are inextricably linked. We don't have significant capital expenditure. So in theory, our EBITDA should translate into growing cash balances, except when there are items of a once-off nature such as in Q3 last year, we paid off $21.6 million of Chiasma's using legacy Amryt cash. It's obviously been a once-off event. In Q3 and Q4, we paid approximately $21 million of Chiasma deal costs, again a once-off event, being the cost of both sides of the deal. Thirdly, on the acquisition of Chiasma, we inherited some large pre-committed working capital inventory spend, which have now washed through the system such that we have a lot of Mycapssa inventory, and we can now significantly reduce our spend as we bring that inventory down to more normal levels. More recently, in this quarter 3, we paid a EUR10 million milestone payment that was due when the EMA approved Filsuvez, and we also paid a $5.7 million CVR payment, which was due on the EMA approval of Filsuvez. In this context, you should note that the FDA CVR is no longer payable because we passed the deadline for such CVR to be declared payable. And all that remains is the revenue CVR of $35 million if we hit $75 million in EV sales in any 12-month period prior to June 2024. As you will see on Slide 15, our cash balances were consistently increasing prior to the Chiasma acquisition. And these acquisition-related items, I have just explained, caused our cash to reduce in the period since Q3 last year. These acquisition-related cash spends have washed through the system, and our Q3 cash this quarter would have increased to $98.8 million, as you can see from the dotted lines on Slide 15, both for the EUR10 million milestone payment and the $5.7 million CVR payment. In the near term, we only have 1 remaining similar cash payment outstanding, which is the once-off rebate to the French reimbursement authorities for metreleptin, which will likely be paid in Q4 this year or Q1 next year. On an overall basis, our net debt at the end of March was $147 million, consisting of $83 million in cash, net of our convertible debenture of $125 million and our term debt of $105 million. Excluding our convertible debenture, which could be considered as quasi equity given the conversion price as compared to analyst target share prices, our net debt converts to net debt of $22 million. To conclude, I would just like to provide a quick update on our share buyback program. Shareholders approved the form of the share purchase program on 3 March, and we announced the Board-approved plan to acquire for $30 million over the next 12 months on the 9th of March of this year. Our buyback program commenced on the 5th of July this year. And during the quarter, we spent $2.19 million purchasing 294,182 ADSs at an average price of $7.43. That is the end of my comments. I'll now hand you back to Joe.
Joseph Wiley: Thank you, Rory. I'm now on Slide 16. Let me summarize by reviewing where Amryt stands today. The approval of Filsuvez in the EU and Great Britain means that we now have a portfolio of 4 approved and growing commercial products. We are a global and diversified revenue-generating and EBITDA positive business, which delivers significant and sustainable positive operating cash flows. These operating cash flows fund our pipeline of exciting development stage assets with the potential to drive near and long-term value. If approved, these assets could increase the total market opportunity for our products significantly. And I would note that we have no funding requirements to achieve all of our key milestones. We have a track record of successful acquisition, integration, execution, performance and growth. We are currently leveraging these capabilities in the ongoing launch of Filsuvez and the relaunch of Mycapssa. And finally, we have the global commercial infrastructure, financial flexibility and experienced team to execute our plan to drive new product launches and growth. I will now hand over to our operator for Q&A. Operator?
Operator: . The first question is from Brandon Folkes of Cantor Fitzgerald.
Brandon Folkes: So maybe just on Filsuvez and the EU opportunity, can you just talk about maybe how the product is being used in Germany so far? Where is it being used in the treatment paradigm? Is it being used as you would have expected? And then, maybe similarly, I know whilst you won't give us exact pricing, are you able to comment just in terms of the pricing you received versus maybe your expectations in Germany for Filsuvez?
Joseph Wiley: Joe here. Yes, thanks for your question. We started with three questions. So, yes, on Filsuvez in Europe, we've launched in Germany. So, the way Europe works, Brandon, as you probably know, in orphan diseases, if you have orphan status that we have, you can launch in Germany and you get a period of free pricing. That used to be a year now, it's now 6 months. So, we have launched at our own price in Germany. We will then go into a negotiation at some later point after that 6-month period with the German authorities on a formal reimbursement process. But -- so we've launched at our own price. So that's as we expected. How it's being used? We don't have enough feedback. It's only -- we've only really launched in the last number of weeks. So I can't really tell you how it's being used at this point other than along with the label, which is to treat partial thickness wounds in dystrophic and junctional EB in patients aged 6 months and older. And in terms of the treatment paradigm, there's no other therapy. So there is no approved therapy, as you know, this is the first therapy approved for EB. So, in that case, it's first in the treatment paradigm. So, it's -- and the most important thing is that we're seeing that demand exceeded forecast in these early weeks. We're still early days, right? So, the revenue is relatively small, but demand has exceeded our forecasts, and that's very encouraging. Plus, we're getting inbounds, which actually is the first time in our history that we've had reimbursement bodies actually contact us about a product. Usually, it's the other way around. But we've actually received inbounds from reimbursement authorities asking when are we going to have the product available in their regions. So, again, that's very encouraging. So we're very encouraged by the early results. I hope that answers your question.
Brandon Folkes: It does. Very helpful, and congrats on all the progress.
Operator: The next question is from Edward Nash of Canaccord Genuity.
Edward Nash: Congratulations on the quarter. I wanted to see if maybe you could just talk a little bit about what the proposed design for the Phase 3 Mycapssa trial, and that will look like and just kind of what the enrollment timing for that would be.
Joseph Wiley: Thanks for your question, Edward. Tracy Cunningham, our Chief Medical Officer, is on the call. So, Tracy, I'm going to hand that over to you.
Tracy Cunningham: Thank you very much for the question, Edward. Yes. So, the Phase 3 in that follows the 505(b)(2) pathway. So we have agreed a single study. What we have is, these are patients who are experiencing a level of symptoms who are controlled. So we have prespecified the level of , the level of flushing that they have on entry. And then, those patients are randomized to go on to Mycapssa or placebo, and that's for a period of 16 weeks. And then we will evaluate the last 4 weeks of that period and compare it to the baseline to demonstrate that these patients who switch to my Mycapssa retain their control. The important thing to be aware of is, these are symptoms -- these are patient-reported symptoms. So, in order for us to not only show that these are statistically significant, we are conducting patient quantification research to ensure that we have picked and we have completed this work, and we have selected the correct endpoints. And that those endpoints when we demonstrate them in the study are also clinically meaningful for the patients. So this study will commence and will be initiated at the beginning of next year, so quarter 1 in 2023. Hopefully that answers your question, Edward.
Edward Nash: I guess, just how many patients do you expect for that trial?
Tracy Cunningham: So that's a very interesting question. So, we anticipate that it will be approximately 80 patients. However, what we will be doing is, we'll be doing a sample size reestimation without losing any alpha early in the study to ensure that that's the correct number because these are obviously studies where it's important that we get that right. And that may be a smaller number of patients or maybe slightly increased, but we will ensure that we evaluate that in that interim analysis.
Edward Nash: Great.
Operator: The next question is from Catherine Novack of Jones Research.
Catherine Novack: I'm just curious if you can comment on the depth of Mycapssa new prescriber reach, in addition to the breadth. How many of those new prescribers are continuing to write scripts? And if you are seeing discontinuations, do you have a sense of what those reasons are?
Joseph Wiley: I'm going to hand that question over to Sheila Frame, our President of the Americas, depth of Mycapssa new prescriber reach and discontinuations.
Sheila Frame: Thanks so much, Catherine, and happy to take the question. So, what we're finding is, of course, we're doing both, Catherine. So, as physicians -- as we expand our prescriber base, so recall that when we took over Mycapssa last year, the focus of the early launch was with the pituitary centers. They were very focused on the endocrinologists working in those pituitary centers, of which there's only 39 in the United States. The Amryt team, of course, had greater breadth across the U.S. with community endocrinologists. So it's something that we're tracking very carefully. What we're finding is, as physicians get that first patient on to therapy and get the feedback, then they are going deeper. Now, many of these community physicians will have a handful, 3 to 5 to 7, maybe acromegaly patients in the community. And so, we're starting to build that now as they get that feedback from patients. But from both physicians and from patients, once they're on Mycapssa, we're getting really good feedback. So, it's getting that experience up that will drive the further depth. In terms of the drop off, as you'll recall from Q2, we actually in -- at the beginning of Q2, we added a clinical educator team as well. And so, as patients consent to support through both our patient services from a reimbursement perspective but also from a clinical support perspective, we're helping them get through that first few days of the initiation of Mycapssa. And that seems to be making quite a difference. So, if they are experiencing that sort of initial well-known octreotide impact, then we are now keeping patients on therapy through that period and able to support them. But certainly it's an area that we continue to monitor as we go forward.
Operator: The next question is from Brian White of Shore Capital.
Brian White: The question is on metreleptin thinking about the longer-term prospects. And just given perhaps some of the history with metreleptin and partial lipodystrophy, I wondered if you can take lessons from the European experience where you've had a broader label to ensure perhaps more expeditious launch than we had with the general lipodystrophy indication initially in the U.S.
Joseph Wiley: So, I hope I've understood that question, Brian. You're asking how we see PL -- how we see metreleptin and PL in the U.S. once we have a that launch would look like. Yes. So you're entirely right. When we launched metreleptin in Europe, we -- it's not only launched later, it was approved to the U.S. in 2014 in GL only. In Europe, the product was approved 4 years later in July '18 in both GL and PL. And as you know, given how long it takes to get market access in Europe, we're still in launch mode across many European markets, as I alluded to my formal remarks because we're still seeing reimbursements opening up in countries such as, for instance, Italy reimbursed GL first and has just recently reimbursed PL, and we've just got GL reimbursed in the Netherlands and we'll work on PL thereafter, et cetera, and growth occurring across all markets, including the Middle East. So, we expect to see robust patients pick up if we have a successful PL study, which we expect, and then get approval from the FDA in PL as well. So -- and I think -- the reality is that the key opinion leaders in this space, like all these ultra-rare diseases, you're dealing with small numbers of patients being treated by small numbers of physicians and small numbers of centers. It also means that these physicians are experts in their field and go to international congresses and speak to each other. So, it will not be lost upon the U.S. physicians, the experience that the Europeans are having with using metreleptin very successfully in PL. I'd add in addition to that, we do actually have quite a number of patients, U.S. patients with PL on metreleptin, but they're not on commercial products. They're all on compassionate use for it appeal and it's actually done under its own IND with the FDA. So, the FDA has actually approved these patients to go on to PL. So we have actually got U.S. experience treating PL ahead of, hopefully, approval and launch.
Brian White: That's great. Additional color has been very helpful.
Operator: . The next question is from Douglas Tsao of H.C. Wainwright.
Douglas Tsao: Just following up on Mycapssa. I'm just curious, what's the amount of time that you're seeing from some of those initial contacts with some of the community-based physicians to the point when they are starting to write scripts?
Joseph Wiley: I hand this question also over to Sheila.
Sheila Frame: Thanks so much for the question, Doug. So, what we found early on, so I guess I'd characterize the time line that we're really just launching in the community essentially since the beginning of this year. So, I think the general approach to a specialty type market like this, you would expect that it takes somewhere around 8 to 12 calls to get the first prescription written where the physician is aware of the product and aware of the availability and then have the patient come in. So, in this case, what we're finding is that's not that uncommon in the community physicians to have had a number of interactions with either our sales team or with our medical affairs team as they understand the product. Now, there's a lot of understanding and knowledge and awareness of octreotide. So it's not that big a surprise. Having said that, what we're starting to find now that we're just finished the third quarter and into the fourth quarter with our team is that that's starting to accelerate. So you have the combination of, one, the fact that we've had a number of interactions. As we mentioned, we had 11 regional congresses where we were able to see an awful lot of physicians, both specialists in the pituitary centers, but as well as the community physicians. And so, what we're finding is, as we connect those docs and then a physician tries Mycapssa and gets the feedback from their patients and sees the results and the impact of the product, we're now starting to see that, okay, then I put another patient on and I'll put another patient on. So we're doing both the sort of approach of breadth and depth, but it takes about the same. It's not an unusual number of interactions before you see that first trial. And then, once we get the patient enrollment and into the system, of course, on the other end, we're working very hard to make sure that we expedite that enrollment form into both coverage and then a delivery for the patient to get going.
Douglas Tsao: And what percentage of the overall sort of acromegaly market is treated through community physicians versus the endocrinology centers?
Sheila Frame: It's a great question, and I'm not sure that I can answer off the top of my head in terms of what that split is. There's only 39 pituitary centers, and they tend to really treat those naive patients, which is not in our label. So we're in a switch label. So, our opportunity, I think, is one to make sure that the pituitary centers are aware of the availability of Mycapssa, but our focus really is on those patients that are already treated on an injectable SSA and who are looking for that consistent control that Mycapssa can give them post that initiation.
Joseph Wiley: So, Doug, just coming back on that, they're not being treated by community physicians, they are being treated by community endocrinologists, just to make that distinction. And it's about 50-50 treated to community endo treated.
Operator: Mr. Wiley, at this time, there are no questions registered, sir.
Joseph Wiley: Okay. If there's no more questions, I'd like to thank you all for joining the call today. We hope to speak with you and see you, hopefully, again soon. Thank you.
Operator: Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.
