Provention Bio, Inc. (PRVB) on Q3 2021 Results - Earnings Call Transcript
Operator: Good morning. My name is Sarah, and I will be your conference operator today. At this time, I would like to welcome everyone to the Provention Bio call. There will be a question-and-answer session to follow. . Please be advised that this call is being recorded at the company's request. I would now like to turn the call over to Mr. Robert Doody, Vice President of Investor Relations for Provention Bio.
Robert Doody: Thank you, Operator, and thank you all for joining us on Provention Bio's Third Quarter 2021 Financial Results Conference Call. Joining today's call from the Provention Bio team is Ashleigh Palmer, Chief Executive Officer, and Co-Founder; Francisco Leon, Chief Scientific Officer and Co-Founder; Jason Hoitt, Chief Commercial Officer; and Andrew Drechsler, Chief Financial Officer. Before we begin, let me remind you that the various remarks we will make today constitute forward-looking statements. These include statements about our future plans and expectations, clinical results, regulatory, and other developments and timelines related to our product candidates, including for teplizumab, our plan to work with the FDA to address identified in its CRL, including their PK comparability and product quality considerations, as well as the planned delivery of significant catalysts over the next 24 months; the potential safety, efficacy and commercial success of teplizumab and our other product candidates; the potential COVID-19 impact on our clinical studies and business plans; financial projections, including our anticipated use of cash and our cash runway; and our business plans and prospects, including with respect to any potential DLA resubmission for teplizumab and projected timing for the same. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of our most recent quarterly report on Form 10-Q, which we filed with the SEC this morning, and in other filings that we may make with the SEC in the future. Any forward-looking statements represent our views as of today only. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our views change, except as required by law. Therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today. There is more complete information regarding forward-looking statements, risks, and uncertainties in the reports Provention files with the SEC. These documents are available on Provention's website at www.proventionbio.com under the Investors section. We encourage you to review these documents carefully. With that, I’ll now turn the call over to Ashleigh.
Ashleigh Palmer: Thank you, Bob, and good morning to everyone joining us on the call today. We've made considerable progress across the company over the past few months. And this morning, I will begin by providing an update on the planned regulatory pathway and next steps relating to our efforts to potentially secure approval for teplizumab for the delay of Type 1 diabetes in at-risk individuals. I’ll also provide an update on our PROTECT Phase 3 trial of teplizumab for newly diagnosed T1D patients. Jason will then be sharing with you some of the activities and progress our commercialization team has been making in preparation for the potential approval and launch of teplizumab. Francisco will then discuss the exciting first-in-human interim data that we announced last week pertaining to our polyvalent coxsackievirus B vaccine candidates, as well as provide status updates on our other pipeline candidates targeting serious autoimmune diseases. Lastly, Andy will summarize our financial results for the quarter, before we open up the call for your questions. In September, we issued a press release updating you on the status of our interactions with the FDA in response to considerations noted in the complete response letter we received this past July. Specifically, we took part in a Type A FDA meeting in August to discuss those considerations related to product quality and manufacturing. As noted in the press release, we believe these have either been addressed by amendments filed prior to the issuance of the CRL, which the FDA had not yet reviewed, or items our team is currently addressing and expects to have completed by the time the BLA is potentially resubmitted. The CRL also noted findings from a then recent inspection at a contract fill/finish facility. We can confirm this inspection has been closed out by the FDA as expected. Given this progress, we believe the remaining gating factor for approvability of teplizumab, is our ability to either demonstrate through PK data derived from therapeutically-dosed patients that our to-be commercialized drug product, is comparable with material used in prior clinical trials, manufactured from drug sub-study produced by Eli Lilly 11 years ago. Or to provide the FDA with sufficient data to confirm that any difference in PK area under the curve seen in a single fractional low-dose PK study in healthy volunteers, does not translate into efficacy concerns in patients. It is our intention to do both of these things. During the first quarter of this year, we initiated a PK/PD sub-study within the PROTECT trial to collect samples from actual patients receiving either the Eli Lily source material or the to-be commercialized products. We have since completed the collection of samples from approximately 160 patients, and currently remain blinded to the PK AUC data. At the beginning of last month, following the FDA’s recommendation, we requested a formal Type A meeting and submitted briefing documents so the FDA can formally agree on the population PK models design prior to the unblinding of data collected from the PROTECT sub-study. The FDA has scheduled this meeting for the second half of this month. Assuming we receive the FDA's agreement at this Type A meeting, we will then proceed to populate the PK model, analyze the results, and work with the FDA to determine the regulatory path forward. In our September press release, we also provided preliminary unblinded pharmacodynamic data collected from the PROTECT sub-study. Our view is that the relevant PD markers, such as lymphocyte counts, CD3 receptor occupancy, and T cell activation, indicate both drug products act on targeted T cells in a consistent and remarkably similar manner. While we cannot get claim these markers in isolation are determinative of compatibility, we do believe they are robustly supportive and provide strong rationale to present to the FDA why PK AUC compatibility differences for this therapeutic antibody, may not be clinically relevant. Switching now to teplizumab’s potential use in newly diagnosed T1D patients, our goal for the PROTECT Phase 3 study was to enroll 300 patients within six weeks of their initial diagnosis. Our guidance for some time now has been that completion of target enrollment would occur in quarter three, but I'm delighted to report that we indeed accomplished this objective at the end of August. Out of an abundance of caution, given the challenges the COVID pandemic has presented to clinical trials across our industry, we continued enrolling patients to exceed this target by about 10%, to ensure that we will have sufficient evaluable patients. I do want to acknowledge and applaud our PROTECT study team, the collaborators, the investigators, and clinical trial sites. And most importantly, we want to thank the patients and their families for their efforts and participation. As per prior guidance, we remain on track to deliver topline results from the trial in mid-2023. Before I turn the call over to Jason to discuss our commercialization preparations and progress, I'd like to remind you that our planning approach to date has been carefully gated and aligned with our regulatory risks and milestones. As we gain more clarity and confidence in potentially moving forward, we will begin to increase spending on pre-launch activities. Nevertheless, despite this prudent gating, Jason and his team have been able to make great progress on a number of proprietary fronts, and we would like to update you on this now. Jason?
Jason Hoitt: Thank you, Ashleigh, and good morning, everyone. I'm excited to speak with you all today, and provide you with an update with respect to the great progress we've been making within the context of the gated spend and hiring approach we've taken, as Ashleigh mentioned. Beginning with payer engagement, our market access team has been engaging payers to educate on T1D patient screening, and when requested, on the teplizumab clinical data for over a year now. As of the end of the third quarter, our team had engaged more than 65 individual payers, representing over 200 million lives across the commercial and Medicaid payer segments. The key areas of interest within this group consist of screening, incidents and prevalence of T1D, our plan distribution model, sites of care, and patient services. Importantly, these payers have generally not expressed any concerns related to our CRL or launch timing delay, and have expressed interest in further engagement in the event of a BLA resubmission with a new PDUFA date. Additionally, our team has developed new resources on auto antibody testing and general T1D education, including a recently published white paper in AJMC, a payer-focused journal. We continue our pricing research and the feedback with respect to unmet need and teplizumab’s potential ability to meet that need, has been to date incredibly positive. We believe our messages resonate quite well, and we anticipate strong coverage across our payer mix. We're making strong progress with regard to government pricing and contracting policies, and we remain on track for those to be in place quickly following an approval. Our distribution model has been established, with key contracts in place, and we remain on track to be ready to distribute teplizumab as quickly as possible upon approval. Additionally, our patient services program has been designed with input from key stakeholders, including patients and caregivers, as well as healthcare providers. We’ve selected and contracted with key partners to deliver a patient services offering designed to meet the needs of families and physicians alike, and are on track for launch readiness. From a marketing perspective, we've conducted extensive market research across multiple stakeholder audiences, including pediatric endocrinologists, adult endocrinologists, pediatricians, NPs and PAs, T1D patients, along with their relatives and caregivers. The insights gleaned from this research with more than 1,300 participants to date, have informed our go-to-market strategy. As you may recall, we launched two disease awareness campaigns in late 2020. Our Type 1 tested consumer website, which has received national recognition for its content, has seen significant traffic, and notably, the traffic has amplified significantly in the third quarter of this year. Additionally, our healthcare provider website connected by T1D, is also exceeding our expectations, both in terms of traffic, along with the amount of time visitors are spending on the site. Lastly, we recruited, trained, and deployed a small sales force pilot team, which has been focused on introducing Provention Bio to key customers, providing disease state education, and profiling key accounts across the country. Overall, I'm very happy with the progress our team has made toward launch readiness, and I'm pleased to be able to share that with you today. I'm now going to pass the call over to Francisco for an update on the PRV-101 data, as well as further updates on the pipeline. Francisco?
Francisco Leon: Thank you, Jason. I am very pleased to join you today to discuss the updates regarding our autoimmune disease-focused pipeline. Let us first begin discussing the exciting topline results from the PREVENT study, a first in-human study of PRV-101, our polyvalent inactivated coxsackievirus B vaccine candidate, which targets all five key CVB strains associated with T1D autoimmunity. CVB is not just a common cause of acute morbidity, such as myocarditis, otitis, pericarditis, meningitis, and hand-foot-mouth disease. In addition, chronic infection of pancreatic and interspinous cells, it’s strongly associated with the development of T1D and celiac disease in many patients, and is believed to be a trigger which sets off the immune escape, leading to the concept of these autoimmune diseases. PREVENT is a placebo-controlled double-blind randomized first-in-human study of two-dose levels of PRV-101 in healthy adult volunteers who were provided three administrations in four-week intervals. The interim analysis was conducted after all trial participants completed four weeks of follow-up after the third dose had been administered. An additional six-month follow-up is being conducted, and we expect the final trial results in the first half of next year. In the interim results we provided last month, PRV-101 met the primary endpoint, demonstrating that it was well tolerated in this study, with no treatment-emergent serious adverse events, no adverse events of special interest, and no adverse events that led to study drug discontinuation or study withdrawal. Importantly, PRV-101 also met the secondary efficacy endpoint, as it induced high titers of viral-neutralizing antibodies against all of the CVB serotypes included in the vaccine, and in a dose-dependent fashion. Response to the vaccine was predefined as a seroconversion for baseline negative subjects, or a 4x increase in titers for baseline-positive subjects. The percentage of subjects who responded to all five serotypes, was 0% in placebo, 67% in the low-dose arm, and 100% in the high-dose arm of PRV-101. Overall, the results we've seen so far from PRV-101, are incredibly exciting and a significant step forward for this program. We believe PRV-101 has the potential to be the first vaccine ever to prevent CBV infection and its many complications, and ultimately contribute to decrease the global incidence of both T1D and celiac disease. The next steps right now are to complete the follow-up from this trial, as we engage in potential partnering discussions to help us advance the program. Moving now to other key programs in our pipeline. First, let us begin with PRV-015, our fully human anti-interleukin-15 monoclonal antibody, which is partnered with Amgen, and has been developed for the treatment of gluten-free diet non-responsive celiac disease. As we initiated this trial in August of 2020 with a target recruitment of 220 adult celiac patients. While we managed to push forward despite COVID-19, the pandemic is now having an impact in our timeline. In addition to general COVID-19-related disruptions, which have led to delays in many trials worldwide, we have also encountered celiac-specific factors, which are impacting our study as well as all celiac trials, according to our competitive intelligence. Some examples of these factors include shutdowns of elective endoscopy procedures, lack of prioritization of chronic non-life threatening diseases, and reduced exposure to gluten related to people's reduction in travel and in dining out during the pandemic. We are working closely with our investigators and sites, and implementing several strategic activities. And we believe that conditions will also continue to improve as the world begins to resume more normal operating conditions. However, at this time, we are adjusting our timelines and guidance for this trial, with the expectation that we will complete the enrollment and have topline results in 2023. We believe PRV-015 has the potential to become the first ever drug approved for the treatment of celiac disease. Lastly, I would like to take a moment to touch on the PREVAIL program, developing PRV-3279, our humanized bispecific scaffold DART, targeting both CD32B and CD79B, which is designed to trigger inhibition of B-cell function, including suppression of autoantibody production without depleting the B-cells. As we saw positive results in terms of long-lasting B-cell inhibition in the Phase 1b study, and we are now on track to initiate screening in the Phase 2a trial in systemic lupus erythematosus, in the fourth quarter of this year. The PREVAIL 2 study is a 24-week prevention-of-relapse, proof-of-concept trial. We look forward to sharing more details on this exciting program once we announce the initiation of the trial. I will now turn the call back over to Ashleigh.
Ashleigh Palmer: Thank you, Jason, and Francisco, for providing us with those updates. Before we move into the financial results, as you will have noted from a separate press release issued this morning, our Chief Financial Officer, Andy Drechsler, will be retiring at the end of this year. And this role will be taken forward by Thierry Chauche, who will be joining us in December, and we look forward to introducing you all to Thierry upon his arrival. However, today, we recognize Andy. I can speak unreservedly for the board and my colleagues at Provention, in emphasizing what a profound and lasting contribution Andy has made to our mission. Andy has discussed in many interactions with you, the personal impact of T1D and celiac disease within his own family, and the associated burdens and challenges that they face. We feel fortunate to have had the opportunity to work so closely with Andy, and to have benefited so considerably from the crucial role he has played in bringing Provention Bio to this promising stage. In doing so, he has always allowed us to see the world of serious autoimmune diseases through his personal lens. Andy, way beyond being a close colleague, you were a close friend and family member to us all, and we wish you every happiness and all the good fortune and good health possible in your retirement, so you can spend more time with your precious family, as well as devote more time and leadership to your advocacy for T1D patients and their families. Andy?
Andrew Drechsler: Thank you Ashleigh. A special thanks to our board, my colleagues on the executive team, and the entire team of passionate individuals at Provention. It has been incredibly rewarding to work in an organization that is so committed to conquering diseases that affect so many people, including those in my family. I am very proud of both the pipeline we built, and the team we built. I'm also looking forward to assisting Thierry in his transition, as his strategic and commercial financial experience, is a perfect fit for our team. And I have no doubt he will be quite successful helping to guide Provention to the next stage of growth. I also want to thank all of you in the investment community for the relationships we've developed over the past 24 years that I have worked in the biotech sector. Before I begin discussing the financials for the quarter, I would encourage you to read our 10-Q that was filed today. The 10-Q includes our financial statements, risk factors, as well as management's discussion and analysis of our financial condition. I would also like to call your attention to the earnings press release, which was issued prior to this call. Let me start with the P&L. we generated a net loss for the third quarter 2021 of $27 million or $0.43 per basic and diluted share. This compares with a net loss of $31.3 million or $0.56 per basic and diluted share in the same period of 2020. The decrease in net loss is primarily attributable to a decrease in teplizumab manufacturing costs, as we incurred significant costs for production of GMP and PPQ batches of drug supply and drug product during the third quarter of 2020. We also saw a decrease in regulatory expenses, which were incurred in the prior year related to the initial teplizumab BLA submission. The decrease in research and development costs, was offset by increased clinical development costs for the teplizumab Phase 3 PROTECT trial, and the PRV-015 proactive study in celiac disease. G&A expenses were relatively flat, as an increase in corporate infrastructure costs were offset by a $1.8 million decrease in pre-commercial expenses, primarily related to a reduction in our pre-commercial activities following the CRL issued by the FDA in July. Shifting now to cash. As of September 30, 2021, our cash position was $150.8 million. Our net cash-based operating expenses, which exclude non-cash expense for stock-based compensation and depreciation, were $24.6 million for the third quarter ended September 30, 2021. We expect to use between $25 million and $29 million of cash for operations in the fourth quarter of 2021. We expect our current cash, cash equivalents, and marketable securities, will be sufficient to fund projected operating requirements for at least the next 12 months, and that will enable us to actively develop all four of our clinical programs. We plan to provide additional cash guidance on each quarterly call, as we continue to progress towards the potential regulatory approval and commercial launch of teplizumab. With that, let me turn the call over to Ashleigh for his closing comments. Ashleigh?
Ashleigh Palmer: Thank you, Andy. Before we open up the call for questions, I want to make a few closing remarks. As we approach the final months of 2021, I think back to the founding vision Francisco and I shared about creating a company dedicated to a new paradigm in which the devastating consequences of the advanced stages of serious autoimmune diseases, can be intercepted, delayed, or prevented. I want to acknowledge and thank our investors for sharing our vision, and providing the financial strength to build Provention, and acquire and advance our exciting therapeutic pipelines. We are now working to overcome the remaining hurdles in the way of our potential first drug approval. I would also like to acknowledge and thank our colleagues at Provention, who not only share our vision, but also the courage and dedication to take on the challenges that come with pioneering new approaches to reducing the enormous unmet need and socioeconomic burden of autoimmune disease. We also appreciate all the members of the FDA teplizumab BLA review team, who remained committed to working alongside us. We recognize that you have dealt with unprecedented challenges in the face of COVID, and yet provided teplizumab and Provention with the care and attention required. Lastly, we so deeply appreciate all of the patients, caregivers, and family members affected by serious autoimmune diseases. It is your plight that provides us with our purpose, and that is always at the forefront of our every consideration. With that, Operator, we'd like to take any questions.
Operator: Thank you. . Our first question comes from Alethia Young with Cantor. Please go ahead.
Alethia Young: Hey guys. Thanks for taking my question, and congrats on a great career, Andy, and wishing you all the best. Two questions, I guess. One obviously on teplizumab, can you talk a little bit more about like some of the scenarios that - kind of scenario on analyzing the FDA conversation that's upcoming, just kind of maybe help us understand like how you're thinking about different outcomes and events and set that up. I know you ultimately won't know until you have it, but you obviously must be planning and thinking about some different scenarios. And then on PRV-101, I know you have the data coming over the next six months for the final analysis, but can you talk about maybe the next steps potentially for another study for this program? Thank you.
Ashleigh Palmer: Thanks very much, Alethia, for your question. So, we’re taking the FDA interactions one step at a time. As I mentioned, we have the Type A meeting in the second half of November. After that meeting, we will immediately populate the model, analyze the data, and discuss the appropriate next steps with the FDA. As I also set out in my comments this morning and the press release previously, we think that in parallel with this, we have very strong, robust, supportive data for the PD markers. And so, we believe that we're assembling a very robust proposition to address this remaining CRL consideration. We’re planning for success. As you heard from Jason, it's our intent if the data supports these arguments, to move forward and submit the - or resubmit the BLA at our earliest opportunity, and maintain the momentum with respect to an anticipated launch. That’s really all that at this point. We’re considering. I think to speculate beyond that is not something that we want to do. We are very confident that the data and the arguments will support what we've said all along, that the comparability is an important consideration for the FDA, but that ultimately it’s not clinically relevant.
Alethia Young: And then 101?
Ashleigh Palmer: Francisco, could you explain the next steps in the PRV-101 program?
Francisco Leon: Good morning, Alethia. So, on the heels of this incredibly exciting data, we are going to share the details with the community more broadly at a couple of forthcoming scientific conferences, and then engage potential partners that will help us move the program forward. Our next steps are to conduct a pediatric study, also safety and immunogenicity as the focus of that study, and advance towards proof-of-concept in children, which is the ultimate target of the vaccine.
Alethia Young: Okay, that makes sense. Thanks.
Operator: Our next question comes from Gregory Renza with RBC Capital Markets. Please go ahead.
Gregory Renza: Good morning, Ashleigh and team. Thank you for taking my question, and also let me add my congratulations and well-wishes to Andy on the next leg post Provention. It was a pleasure to work with you, Andy. Ashleigh, just following up on the previous question, just wondering if you could elaborate a bit on Provention’s disclosure plan following the Type A meeting, and how you're thinking about sharing your views from that experience, as well as the outcomes as those become clearer to you. And then secondly, maybe a question for Jason, just to build on his commentary. Just wondering if you could comment a little bit on how you are maintaining that momentum with respect to the stakeholders post the positive outcome, as the focus has been on the manufacturing issue. And maybe related to that, with an eventual refiling, how we would think about the inclusion of the three-year follow-up data that was shared just in flight as you're preparing for the initial BLA submission. Thank you very much.
Ashleigh Palmer: Thanks, Greg, and good morning. So, we want to leave ourselves room to interact properly with the FDA. So, we anticipate that we will be making a disclosure regarding the outcome of the Type A meeting after we receive the minutes. So, we can make sure that our assessment of that meeting is accurate. However, whilst that may indeed be prudent to do so from a disclosure perspective, we'll obviously be working immediately, based on the feedback from that Type A meeting, to hopefully unblind the data, run the model, and begin the analysis. Jason, do you want to speak to maintaining the momentum?
Jason Hoitt: Yes, absolutely. I think, we're able to continue the momentum, Greg, frankly, because we did have a little bit of a lead time here, right? We've done a lot of work over the course of the past year and a half to lay that foundation. And we've got our two-disease awareness campaigns out in the market. We’re continuing to execute on those. We've seen a pretty sizable increase in traffic and impressions on our sites because of refined media strategy and targeting. We've got our very limited pilot team that's out there engaging with healthcare professionals in the field. And I think that's given us a lot of momentum over the last five or six months to be able to have that personal promotion of disease awareness and screening, and have those direct conversations to supplement the non-personal tactics. So, I think the level of education needed around screening and disease awareness, I think is really important. And the fact that we have both personal and non-personal channels that we're executing against, has really allowed us to continue that momentum in the field.
Gregory Renza: That's great. Thank you very much. And just comment on the three-year data and potential inclusion for resubmissions to the FDA?
Ashleigh Palmer: I'm sorry. Could you repeat the question?
Gregory Renza: Yes, sure. Just as far as the teplizumab follow-up data at three years that was shared last year. Just curious if that's part of the - will be part of the package to resubmit to the FDA.
Ashleigh Palmer: Francisco, do you want to talk about that? I'm not quite sure what data Greg is referring to there.
Francisco Leon: Greg, you referred to our pharmacokinetic data in the PROTECT sub-study?
Gregory Renza: Sorry, Francisco. Referring to the ADA 2020 data that was shared. I recall last year it was just too close to be part of the submission with the initial BLA filing.
Ashleigh Palmer: The TN-10 Study. Right. So, Francisco, yes, no, that is not - we'll provide an update on safety data. That was a request of the CRL. But remember, this CRL has no issues with respect to safety or efficacy at all. And so, we will put forward the best arguments we possibly can with the best data for the strongest labeling. But our goal is to address this remaining PK comparability consideration, and resubmit as soon as possible.
Gregory Renza: Great. Thank you.
Operator: Our next question comes from Thomas Smith with SVB Leerink. Please go ahead.
Thomas Smith: Hey guys. Good morning. Thanks for taking the questions, and let me add my congrats and best wishes to Andy on his next chapter. I guess, just to follow up on one of the earlier questions, thinking about the timing and cadence for updates from the regulatory interactions and the PK data analysis. It sounds like you're planning to provide an update once you have the FDA meeting minutes, which would presumably be in the second half of December. Is it reasonable to think that we could see, I guess, topline data results from the PK/PD sub-study either concurrent with that update or perhaps shortly thereafter? Or how should we be thinking about the timing to actually seeing results from the PK sub-study?
Ashleigh Palmer: That's not an unreasonable assumption, but again, we want to make sure that we present the most accurate and up-to-date picture based on FDA interactions. And so, we can't speculate yet what the Type A meeting will result in. We hope that it will be a straightforward approval of the model and be able to initiate the analysis and then report the topline results as soon as possible from that. But again, we're going to take it one step at a time. We believe that the methodology of the FDA here is to make sure that we do everything in a very complete and robust manner, because this is - from our perspective, and we believe the FDA's perspective, the remaining consideration that needs to take place and be addressed in order to resubmit BLA and move forward with a potential approval.
Thomas Smith: Okay, got it. And then just turning to Europe, was wondering if you could just provide an update on how the conversations with EMA are going and how you're thinking about potential submission in Europe. And then perhaps a follow-up to that, have your conversations to date included anything related to the PK/PD comparability, or are they more focused on the clinical data and the at-risk population?
Ashleigh Palmer: Yes. So, in the 10-Q today, we disclosed that we've had initial discussions and are advancing the ILAP process with the UK. I think we've indicated in the past that we think the best path forward outside of the United States post-Brexit, is to file in the UK first and maintain the momentum from an agency that tends to be more aligned with FDA assessment. We're targeting the filing of the UK MAA in the second half of next year. And that assumes that we will be able to address the comparability consideration to the FDA's satisfaction, because to your point, until we can address that, it's likely to be a consideration for all regulatory authorities. And then we're planning further engagement with the EMA throughout next year, assuming that the PK comparability issue can be properly addressed.
Thomas Smith: Got it. Okay. That makes sense. Thanks, Ashleigh, for the color and the updates, and again, best wishes to Andy on the next chapter.
Operator: Our next question comes from Raghuram Selvaraju with H.C. Wainwright. Please go ahead.
Raghuram Selvaraju: Thanks so much for taking my questions. Ashleigh, just a very quick one with respect to the interactions with the FDA. Just wanted to clarify whether coming out of the upcoming FDA meetings, you anticipate that all other items that were raised in the original CRL that don't pertain to the compatibility data, are likely to either be conclusively addressed or have a definitive pathway to being addressed.
Ashleigh Palmer: Yes. So, thank you for the question, Ram. We had a Type A meeting to address the product quality and CMC and manufacturing issues, and review with the agency, the status of those approvability issues with them, and our plans to address any outstanding issues that we had not already addressed by submissions that they had not reviewed. And that Type A meeting allowed us to make the statement back in August that we believe, to your point, they have been addressed or are addressable prior to the BLA resubmission. And therefore, they're not on the critical path to submitting. It is the CRL - it is the PK comparability consideration that is the - is really the remaining obstacle to overcome to a BLA resubmission. The CRL also requested a safety data update, and that's not because there were any concerns over safety. It's because the agency, obviously, prudently wants to make sure that it has all safety data available to it in the period from when we last filed the BLA to this point. There’s obviously been studies, the PROTECT study and so on, where patients have continued to receive the teplizumab, and they want an update on that. And we see that as a routine request, which we are confident we will be able to comply with.
Raghuram Selvaraju: Okay, perfect. And then just following on from what you were discussing earlier regarding the way in which regulators, other than the FDA, are likely to look at the PK compatibility data. Have you actually had substantive discussions with any other regulator beyond the FDA regarding the specific topics of concern that the FDA originally raised? And if so, what's your read on how similarly the other regulators in other countries are likely to treat this issue relative to the way the FDA has treated it?
Ashleigh Palmer: Yes. Thank you for the follow up. So, the comparability consideration is a review issue as a result of submitting a market application. We’ve not submitted a market application anywhere else other than in the United States. And so, the substantive conversations that we've had with the UK and with the EMA have been scientific advice conversations, looking at the totality of the data, the specific clinical trials, the unmet need, and receiving advice on how to put forward a marketing authorization application. And so, therefore we have not had substantive discussions with the agencies outside of the United States on the comparability consideration. Nevertheless, the likelihood that those agencies will be satisfied if there is no PK consideration from the FDA's point of view, having seen the PK in actual patients receiving therapeutic doses over a 12 or 14-day period, I think it's very likely that they will see it the same way.
Raghuram Selvaraju: Okay, thank you. That's helpful. Just a few financial questions. Also wanted to extend my best wishes to Andy on his upcoming retirement. The questions are as follows. Firstly, looking at the expenses that you reported today for the third quarter, especially on the G&A line, those seem to have declined substantially relative to the amounts that were reported in the first and second quarters. And I was just wondering whether the G&A of quarterly amounts, the quarterly spend that was reported in the third quarter, is likely to be a more dependable baseline for us to consider for upcoming quarters. And then the next two questions are accounting-related. With respect to the revenue reported in the third quarter, can you just kind of break down for us precisely what that was and what you expect to be reporting on a go-forward basis, purely driven by kind of amortization-based considerations. And then with respect to the MacroGenics milestone that would be due as I understand it on the approval of teplizumab, can you just give us a sense of how you will be treating that from an accounting perspective, and how that's likely to show up on the P&L? Thanks.
Ashleigh Palmer: Andy?
Andrew Drechsler: Yes. Thanks, Ram. Good morning. I appreciate the questions and the well wishes. So, Q3 expenses, what you saw was, yes, a reduction in G&A, and quite frankly, just a pullback on the pre-commercial spend, right, that we were starting to ramp up in the first half of the year. Once we received the CRL, we obviously reined that in. But I think it's - we would be reasonable to expect that same rough level in Q4, and that's the only guidance we've put forward, right, is the $25 million to $29 million of operating burn in the fourth quarter. From a revenue perspective, Ram, what you saw in this quarter was the beginning, right, f the amortization of those monies that were provided by Huadong, right, the upfront money, the milestone money. We will recognize that as the activities around that Phase 2 study for lupus are conducted, right? So, over the next couple of years, we'll end up recognizing that full amount of revenue. Happy to take offline the conversation on any detailed calculations of that. And then finally, MacroGenics, there is a milestone payment upon approval, and that would be recognized or paid soon after the approval occurs. I think it's paid within about 90 days.
Raghuram Selvaraju: Thank you.
Operator: Our next question comes from David Hoang with SMBC. Please go ahead.
David Hoang: Hey, thanks so much for taking my questions. So, the first one I think is probably one for Jason. I'm just wondering if you could share a little bit more color, more granularity on the discussions that you've had with the payers. It sounds like those have been going really well, but I'm just wondering if things like what type of prior authorization, any restrictions, how will they manage the product, if that has come up.
Ashleigh Palmer: Jason?
Jason Hoitt: Yes. Thanks, David. So, I agree with your sentiment. I think I'm encouraged by both the feedback, the quality of the feedback and the consistency of the feedback that we've been receiving from payers, frankly, for the past year and a half. I would say that our expectation and our goal strategically is to have a streamlined prior authorization to label. I think what we've heard from payers is that that's how they would anticipate covering this, that it would likely be covered as a medical benefit under most plans, and that they would anticipate covering to label, assuming that they don't see the price as something egregious, and we haven't set the price yet. So, I would anticipate broad coverage and the anticipated goal that we have is a streamlined PA to label.
David Hoang: Got it. That’s really helpful. Thanks for that. And then I just had a couple questions on PRV-101, the vaccine candidate. So, if I'm reading this correctly, it sounds like for the next stage that is in kind of Phase 2 efficacy study, you would be wanting to have a partner to really advance the products forward. So, just want to make sure my read is correct there. And then similarly, you've also mentioned the potential use case for not only T1D, but also celiac disease. So, I'm wondering if there are any plans at this time to develop it for celiac.
Ashleigh Palmer: Yes, thanks a lot. So, yes, I think you're reading it correctly. We think we've created enormous value in this asset by conducting this first in-human study and showing the immunogenicity that the polyvalent vaccine is able to generate. And this, we believe, is a very good mechanistic proof-of-concept that will allow us to have good partnering discussions, because we are not a vaccine company, and we think that the advanced stages of vaccine development, and the ultimate commercialization, is better handle handled by a company that has that expertise and experience.
David Hoang: Okay, great. Well, thanks for taking my question, and good luck to you, Andy, in your next chapter.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Ashleigh Palmer for any closing or marks.
Ashleigh Palmer: Well, thank you again for your time and attention this morning. We look forward to continuing to keep you up to date on our progress going forward, and we'd like to wish you and all of your families, a happy and healthy holiday season as we approach that time. Thank you very much.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
