Provention Bio, Inc. (PRVB) on Q4 2021 Results - Earnings Call Transcript
Operator: Good morning. My name is Irene, and I will be your conference operator for 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 Prevention Bio's Fourth Quarter and Full Year 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 Thierry Chauche, 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 time lines related to our product candidates, including our plan to continue working with the FDA as they review our BLA resubmissions and continuing our efforts towards securing a potential FDA approval or and commercialization of teplizumab for an at-risk indication 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 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 annual report on Form 10-K, 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 filed 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 will now turn the call over to Ashleigh.
Ashleigh Palmer: Thank you, Bob, and thank you to everyone joining us on this morning's call. We are very pleased to be highlighting for you today our progress in the fourth quarter of 2021 and the first 2 months of 2022. Prevention Bio was founded on our belief that recognizing and intercepting or even preventing autoimmunity before irreversible tissue damage and potential organ failure takes place can fundamentally change the world for millions of patients and their families, thereby enabling those individuals to be less impacted by their disease and more focused on living their lives and realizing their true potential, in turn, making the world a better place for all of us. Autoimmune diseases affect over 23 million patients in the United States alone. And it is our assessment that our industry has, to date, underserved this sizable population and underappreciated the potential associated with innovating to address its considerable unmet need. Instead, autoimmunity has tended to be viewed by biopharmaceutical companies and the medical system as a whole from the perspective of waiting for symptoms to present to clinicians who are then left with no alternative but to try to manage more advanced stages of disease and their complication as well as to treat ever worsening symptoms chronically for a lifetime, often at the cost of significant therapeutic burden to patients and their caregivers with a corresponding reduction in quality of life for all concerned. We believe there are no better example of this suboptimal approach than celiac disease and type 1 diabetes. Celiac disease has no approved therapeutic option of any kind. Instead, patients are left to try to manage their disease by attempting to evade contamination from a ubiquitous pathological antigen, gluten. Separately, the first time a patient presents with the symptoms of type 1 diabetes, such as life-threatening diabetic ketoacidosis, they can no longer produce enough insulin to control their blood sugar. This would be akin to a patient with chronic kidney disease finding out that they are sick the very same day they need five hours of dialysis three times a week every week just to stay alive. To all of us at Provention Bio, this is simply unacceptable. These patients and their families deserve better. And it is our strategic intent to make a difference. In fact, the key consideration when we founded Provention Bio was our belief that we could pioneer conceptually similar immunomodulatory approaches for autoimmune disease to those we have all witnessed offer such profound effect at the immuno-oncology end of the spectrum of immune-mediated diseases. Using our conceptual platform, our expertise in immunology and our experience and track record in creative business developments and corporate partnering, we have acquired, and we are advancing a pipeline of product candidates that are uniquely focused on early autoimmune disease intervention. We have two lead assets, teplizumab and PRV-3279, that we believe have potential for applicability across a broad spectrum of autoimmune disorders, both as monotherapies and in combination with other emerging approaches such as cell therapy, gene therapy and antigen-specific tolerization. And we are now even more committed and well positioned to unlock this potential, whether it be through independent development program or strategic partnerships. Throughout 2021, we made significant progress advancing our two lead therapeutic candidates along with our other clinical-stage pipeline assets. And we were especially delighted to announce earlier this week the resubmission of our teplizumab BLA to delay the onset of clinical type 1 diabetes in at-risk individuals. This resubmission follows very productive and collaborative interactions with the FDA throughout last year, including an advisory committee vote in May in favor of teplizumab's approval in at-risk type 1 diabetes and a subsequent complete response letter in July that cited no clinical deficiencies related to the efficacy and safety data packages submitted to the original BLA. A BLA that included data from the pivotal NIH-sponsored TN10 clinical trial conducted by TrialNet, in which a single 14-day course of teplizumab significantly delayed the onset of clinical stage, insulin-dependent type 1 diabetes in at-risk patients by a median of approximately 3 years. Last week's BLA resubmission followed a Type B meeting held 3 weeks earlier, at which the FDA proposed, and the company agreed to use PK modeling to adjust the 14-day dosing regimen for our planned commercial products to match the exposure of material manufactured over a decade ago that was used in prior clinical trials, including the pivotal TN10 study. Under FDA guidelines, the agency now has 30 days to verify that our resubmission is complete and acceptable and design a goal date for review completion. It is our understanding this goal date should be set within 6 months of last week's resubmission date, at which point, if approved, teplizumab has the prospect of becoming the first ever disease-modifying therapy in type 1 diabetes. Following a potential approval and U.S. launch of teplizumab for at-risk T1D by the end of this year, our future clinical development plans for this indication aim to broaden initial labeling and market potential by exploring younger age group below 8 years as well as the impact of repeat dosing to potentially extend a single course of therapies 3 year median delay in progression. We next look forward to the top line results of our Phase III PROTECT trial of teplizumab in newly diagnosed T1D patients. We completed our target enrollment in quarter 3 of last year. And out of an abundance of caution, given potential COVID-related challenges for clinical trial follow-up, we proceeded to over-enroll this study by about 10%. We remain on track to deliver top line results following completion of PROTECT's 18-month follow-up period in the second half of next year. Our longer-term plans include the evaluation of subcutaneous formulation as well as the exploration of potential combinations of teplizumab with other rapidly advancing approaches such as pancreatic and B2 cell transplant patients, targeting the growing market of 1.8 million established insulin-dependent type 1 diabetics in the United States alone. It is worth noting here that in prior published studies, the addition of teplizumab to islet transplantation induction regimen has been successful in extending the durability of favorable post-transplantation results with 75% of transplanted patients remaining free from the burden of insulin dependency for more than 5 years. Outside of T1D, we plan to explore the potential use of teplizumab across other autoimmune-related disorders, such as celiac and Crohn's disease, early rheumatoid arteritis and autoimmune hepatitis. Turning now to the rest of our pipeline. At the end of last year, we were pleased to announce positive interim results for the first-in-human study of our PRV-101 vaccine candidate targeting coxsackievirus B, which is known to trigger both T1D and celiac disease. This Phase I trial demonstrated in a dose-dependent fashion PRV-101's ability to induce high titers of viral neutralizing antibodies against all of the coxsackievirus B stereotype targeted by this polyvalent vaccine. We are expecting the final results from this first-in-human study in the first half of this year. PRV-015, which has now been assigned the name Ordesekimab, is currently being studied in a Phase IIb trial with the goal of becoming the first ever therapy to intercept gluten-free diet, non-responsive celiac disease. Our target date for top line results from this trial is by the end of next year. Regarding PRV-3279, our nondepleting bispecific scaffold targeting B-cell mediated disease, we were very pleased to announce at the beginning of this year that we have successfully initiated our PREVAIL-2 Phase IIa trial evaluating 3279 in systemic lupus erythematosus. And we expect this trial to be completed and read out top line results in the first half of 2024. It is our current intention to hold a series of R&D-related investor events throughout this year to dive more deeply into our pipeline development plan as well as our plans for teplizumab's label expansion and life cycle management. We are also planning to conduct an investor educational event in the second quarter focused on providing you with more in-depth insights and details regarding teplizumab's potential at-risk T1D launch and commercialization. However, let me now ask Jason to provide you with a brief update to whet your appetite. 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 on the great progress we're making in preparation for our potential commercialization of teplizumab for at-risk T1D. Over the course of 2021, the commercial team has substantially enhanced our launch readiness and added both breadth and depth to our understanding of the market in at-risk patients. To date, we have conducted market research with more than 1,300 participants across key stakeholder audience, including health care providers, patients, caregivers, payers and others. In a recent blinded quantitative study of both pediatric and adult endocrinologists, when shown a target product profile for teplizumab in at-risk patient, they indicated their intent to prescribe the product for 93% of their next 10 patients, which is quite remarkable. In addition, we conducted a quantitative market research study with more than 200 patients, caregivers and at-risk individuals. And after reviewing a target product profile, they provided insight into 2 pieces of important information. They stated that with an approved treatment, nearly 89% of them would get screened for T1D autoantibody if recommended by their health care provider. When talking about T1D patients and caregivers only, that percentage increases to 96%. When the same group of market research participants were asked about the likelihood of taking teplizumab after seeing its target product profile, 81% said they would take the treatment with their doctor's recommendation. Finally, in another quantitative market research study that included both pediatric and adult endocrinologists, after viewing a target product profile for teplizumab, 76% of endocrinologists indicated they will increase screening of first-degree T1D family members at the time that they have an FDA-approved intervention to offer their patients. To overcome the largest barrier to teplizumab use based on market research, 14 consecutive days of infusion, both health care providers and consumers alike become much more comfortable when presented with the potential for multiple scenarios as it relates to site of care. To further our understanding of the health care provider environment, we deployed a 12 person pilot team strategically placed across the country in the middle of 2021. The goals for this team have been twofold: firstly, education, to educate health care providers about the benefits of screening family members, such as avoiding diabetic ketoacidosis; and secondly, to learn to further enhance our understanding of the T1D treating health care providers. The team has interacted with over 1,300 providers, including more than 2,200 educational calls on type 1 diabetes treating physicians. This team has gathered valuable insights, which are enhancing our commercial plan. As I've mentioned on previous calls, we've had 2 complementary disease awareness campaigns in the market since late 2020, and we continue to see a high level of engagement with these sites. In the fourth quarter, we also launched Twitter and Reddit account to enhance and drive disease and screening awareness as we've seen social media channels be highly engaging with our consumer audience, driving the lion's share of traffic to our consumer disease awareness platform type1tested.com. Our social content educates on T1D risk, an autoantibody testing, connects and engages with the T1D community and drives people to the unbranded website to learn more. Our Facebook and Instagram accounts have seen substantial traffic with over 400,000 engagement of our unique content. As we enter 2022, we intend to launch additional social media channels for health care providers and the T1D community. In addition to our engagement of health care providers and consumers in 2021, we also continue to engage with payers through both blinded market research and direct engagement of our market access. We continue to be encouraged by the feedback we've heard from payers and their positive feedback on the profile of teplizumab and the unmet need it targets in T1D. We look forward to furthering our dialogue with payers once the new action date has been set by the FDA. Finally, in regard to the build-out of our limited distribution model. We have contracts in place with our third-party logistics provider, specialty distributor and limited network of specialty pharmacy and are on track with implementation to be ready at the time of a potential FDA approval. We look forward to continuing to update the market on our commercial plans that build out as we move further into 2022. I'll now turn the call over to Thierry to discuss our financial results. Thierry?
Thierry Chauche: Thank you, Jason. Before I begin discussing the financials for the quarter, I would encourage you to read our 10-K that was filed today. The 10-K 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 our current cash position and cash projection. As of December 31, 2021, our cash, cash equivalents and marketable securities position was $127.1 million. Our cash-based operating expenses for the fourth quarter ended December 31, 2021 was $23.9 million. We expect our cash-based operating expenses to be between $25 million and $29 million in the first quarter of 2022 as we continue to prudently gate our expenses. Based on our current business plan, we believe that our cash, cash equivalents and marketable securities on hand at December 31, 2021 are sufficient to meet our operating requirements for at least the next 12 months. However, if the teplizumab BLA is approved, we will need additional capital to fall increases in costs related to commercialization and the payment of potential milestones triggered under our current agreement, including with MacroGenics. We will provide additional cash guidance on this quarterly call as we continue to progress towards the potential regulatory approval and commercial launch of teplizumab. From a P&L perspective, we generated a net loss for the fourth quarter of 2021 of $25.8 million or $0.41 per basic and diluted share compared to a net loss of $32.6 million or $0.58 per basic and diluted share for the fourth quarter of 2020. The decrease in net loss compared to the fourth quarter of 2020 is attributable to lower noncash stock-based compensation expense, primarily driven by stock option with performance-based metrics that vested in the prior year period. Also contributing to the decrease in net loss were lower manufacturing costs for teplizumab and PRV-101 and lower regulatory costs. This was partly offset by increased costs for our pre-commercial activities and our recently initiated PRV-3279 PREVAIL-2 Phase IIa study. Our fourth quarter net loss included $2.6 million of noncash stock-based compensation. The net loss for the full year of 2021 was $114.4 million or $1.81 per basic and diluted share compared to a net loss of $98.6 million or $1.88 per basic and diluted share for the full year of 2020. The increase in net loss over 2020 was attributable to an increase in study cost for PROTECT, PROACTIVE, which was initiated in August 2020, and PREVAIL-2 as start-up activities began into - in the second half of 2021. An increase in precommercial, medical affairs and general and administration expenses as we build the organization in preparation to teplizumab commercialization, partly offset by lower manufacturing costs for teplizumab and PRV-101 and lower regulatory cost with teplizumab. The net loss for 2021 included $11.8 million of noncash comp-based compensation expense. Also, in 2021, we recognized $1.4 million of collaboration revenue under our license agreement with Huadong. I will now turn the call back over to Ashleigh.
Ashleigh Palmer: Thank you, Jason and Thierry. We made a great deal of progress in 2021, and this year is already off to a tremendous start for Provention. Having resubmitted our BLA, we are very excited to move forward with our launch planning and the potential for teplizumab to be approved for the delay in clinical stage T1D in at-risk individuals, which would validate our conceptual platform focused on early interception or prevention of autoimmune disease ahead of irreversible tissue damage and possible organ failure. We believe we are pioneering and catalyzing a potential paradigm shift in the management of autoimmunity, whereby individuals will be less impacted by the risk, disabilities and therapeutic burden of advanced-stage disease. In so doing, we will be allowing them and their loved ones to focus on living their lives and realizing their true potential, in turn, making the world a better place for all of us. With that, operator, we'd like to take any questions.
Operator: Thank you. We will now begin the question-and-answer. Our first question is from Gregory Renza of RBC Capital Markets. Please go ahead.
Gregory Renza: Hey, good morning, Ashleigh and team. Congrats on the progress, the refile this weekend. Ashleigh, maybe I'll just start with your mention of investor education and the appetite to do that over the course of the year. It's helpful to hear Jason touch on that as well. I'm curious if you can elaborate on any specific components of that, of teplizumab in at-risk population that you think does merit clarification or is perhaps misunderstood by those stakeholders. Maybe we can start there. Thank you.
Ashleigh Palmer: Thanks very much for the question, Greg. We're not really seeking to correct misunderstandings. We're really wanting to provide more details for our pipeline product. As you can appreciate, during last year, the focus was on teplizumab in at-risk individuals. So we want to make sure that during the course of this year, we gave our investors an opportunity to understand the potential of teplizumab from a label expansion perspective, from a life cycle management perspective, outside of T1D as well as leveraging teplizumab mechanism of action to enable the company's technological platforms and combination therapy and so on. And then we want to do justice to the potential of 3279 in particular and the rest of our pipeline. And then I think from Jason's perspective, with respect to providing commercialization details in quarter two, again, obviously, our focus has been on the regulatory pathway. We've had questions from investors and focused on conference calls throughout the second half of last year on very detailed aspects of regulatory considerations. And we think that you and the rest of our investors and analysts will appreciate an opportunity to dive deeper into commercial preparations in the next quarter.
Gregory Renza: That's really helpful. We look forward to those updates. And maybe just on the refile. I'm just curious if you could perhaps provide maybe some guidance on when we would learn more about the dosing level being contemplated with respect to your work with FDA and the new dosing regimen. Is that something that we would expect to hear in a short course of time? Are we waiting for FDA comfort on that? Just any color on your disclosure plans would be great. Thank you.
Ashleigh Palmer: Yes. Thanks again for the follow-up question there. So obviously, we resubmitted last week. The next milestone would be the FDA's acceptance within 30 days. And then they will begin to their review process in earnest, assuming that they accept it. And certainly, during the course of that review - the process, we hope to be interacting with them and getting feedback. And if there's anything material there, we would disclose that as the normal part of our quarterly updates or by exception. At some point, we hope the agency will fix on a dosage regimen adjustment that will perhaps begin to be included in labeling discussions and negotiations. And I think as soon as we get to that point, we would be comfortable beginning to discuss that more publicly as the potential dosage regimen for potential approval.
Gregory Renza: That's great. Thanks, Ashleigh. We look forward to these update. And thanks for taking my question.
Ashleigh Palmer: Thank you, Greg.
Operator: Our next question is from Thomas Smith of SVB Leerink. Please go ahead.
Thomas Smith: Hey, guys, good morning. Thanks for taking the questions and congrats on the progress on the BLA resubmission. I just wanted to ask one on the regulatory side with respect to PROTECT. Maybe if you could just outline what the plans are for engaging with regulators, and any kind of dialogue with respect to the dosing in PROTECT? Are there any plans to implement or study the PK-modeled dosing regimen in this study?
Ashleigh Palmer: Thanks, Tom. So we're obviously closely monitoring a dialogue with the agency and the context of that risk. PROTECT is clearly a little different. There, we have both therapeutic drug products in that study. We believe that, that study is well powered. And as I mentioned in my opening remarks, we over-enrolled by 10% to make sure that we had sufficient patients to do the necessary analysis. We still feel very strongly that despite differences in PK between the drug products, the material intended to be commercialized and the material that had been used 11 years ago - manufactured 11 years ago that was used in TN-10, that they lead to similar pharmacodynamic impact and impact on the immune system, and therefore, that they're both efficacious. We hope the PROTECT study will perhaps confirm that. Also, recall that we're giving two courses of therapy in PROTECT, whereas as TN-10 only gave one. And this also may be helpful in mitigating some of the FDA's PK comparability consideration. I think the agency is concerned with TN-10 given the materials manufactured 10, 11 years ago. The TN-10 study was a sort of 7 year duration study. They, like we, want to make sure that the patients that get this single course of 14 days get enough exposure going forward, matching the exposure that TN-10 patients received to get the 3-year median delay with the - potentially to be commercialized products. And so a modest adjustment in dosage iteration and accomplishes that without creating any concerns, and I think that's a different situation than the one that we're in where we are conducting the PROTECT Phase III trial with two courses of therapy with some patients receiving one product and the other group receiving the to-be commercialized product. Does that help?
Thomas Smith: Okay. Yes. No, that's helpful. Thanks, Ashleigh. And then just a question in terms of commercial planning and, yes, looking forward to the event here in the next quarter. Can you talk a little bit about the commercial manufacturing activities and where you feel like you are in terms of potential launch supply?
Ashleigh Palmer: Yes, thanks for that question. I'm going to hand that over to Jason. Jason, could you answer that question, please?
Jason Hoitt: Yes, absolutely, Tom. So we've obviously been working with AGC Biologics and then our fill, finish manufacturer and feel that we are adequately stocked to supply the launch later this year.
Thomas Smith: Okay. Great. And then just lastly, if you could just, Ashleigh, maybe give us an update on any of the other potentially outstanding issues that were cited in the CRL. I know they were manufacturing and other CMC issues that were cited. But you also had the Type A meeting back in August. Just I guess the latest on where you stand with respect to those issues.
Ashleigh Palmer: Yes. Thanks, Tom. So if you recall, some of those were issues we felt we'd already addressed, but the agency didn't have time to review by the time the CRL was issued. And then some were sort of represented for the first time in the CRL, which we thought were addressable. And out of an abundance of caution, we had the Type A meeting in August to walk through our action plan to address those with the agency. And that was done to our and, I believe, their satisfaction. And so on the basis of that, we focused in on the PK comparability and resubmitted the BLA last week to address all of the CRL considerations.
Thomas Smith: Got it. okay, great. Thanks guys for taking the questions and congrats again the progress.
Ashleigh Palmer: Thank you, Tom.
Operator: Our next question is from Justin Kim of Oppenheimer & Co.
Justin Kim: Hi, good morning. Thanks for taking the question and let me add my congrats on the progress this past quarter and year. As you approach a potential PDUFA, how do you think about the timing and initiation of studies that explore label expansion? I know the expectation for these post approval and potentially may be included as post-marketing commitments. But curious how small the delay between approval and label expansion studies might be and whether there are any items that could be done ahead of, let's say, that event.
Ashleigh Palmer: Yes, Justin, thank you very much. So in their spare time, while we have been resubmitting the BLA and interacting with the agency on the modeling and the PK comparability, our team has been very much working on protocol, design and are ready to have discussions with the agency regarding, for example, the under 8 years. And that cannot just be something that we address by way of a specific study, but also a registry to capture information from patient post marketing, if we're fortunate enough to have the approval. The same with re-dosing. We don't necessarily believe that the label will specify a single dose, and it can only be a single dose. But we obviously have to provide data for the agency to include follow-up dosing to obtain specific outcomes. We have to present that data at the agency and get the agency's approval to include it in the label. And certainly, payers would be expecting that type of information to inform them with respect to their decision. So we have been thinking about this very thoroughly. And I think that upon a potential approval, you would be a relatively smooth and expedited process to get those studies and initiatives up and running.
Justin Kim: Understood, understood. And was really interested to hear the work on creating flexibility in site of care by Jason. Would you be able to share any additional color on the potential scenarios being pursued currently?
Ashleigh Palmer: Jason?
Jason Hoitt: Yes, absolutely. Thanks for the question, Justin. I've mentioned on previous calls before that our intent with respect to site of care or site of infusion is that it's a decision that really needs to be made by the patient and/or caregiver in consultation with their health care provider. And as such, our intent is to ensure that we are making teplizumab as available and that we're being as flexible in terms of product acquisition as we possibly can be. So let me expand on that a little bit. So for example, a provider that wants to infuse the patient in their hospital infusion center can go ahead and acquire the product through our specialty distributor and then bill a patient's insurance. We know obviously that launching teplizumab will be launching with a miscellaneous J code, and some infusion centers may not want to take that risk. So they'll have the ability to white bag the product through one of our limited network of specialty pharmacies. Should a patient and or health care provider want to administer the first few days under observation in an infusion center, however many days that may be, they can go ahead and do that. And we'll call that something like a hybrid model where they start in infusion center and then transition to home infusion. I think one of the benefits of the 2 specialty pharmacies that we have in our network is that they have home infusion capabilities in all 50 states. And then lastly, if a health care provider and/or patient wants to pursue home infusion, we obviously have that option available as well. We think that will be more of a longer-term site of care alternative that patients and health care providers will take. We think that initially with a novel therapeutic, that most will want to start in an infusion center. But our intent is to put this decision in the hands of those that should be making the decision, the health care providers and the patients and doing everything we can to remove as many barriers as possible.
Justin Kim: Got it. Great. Great. And just a final for curiosity. I mean, with regards to the MacroGenics payment associated with your potential approval of teplizumab. Has there been any potential to restructure that agreement or payment specifically to better align with the business cash needs?
Ashleigh Palmer: There's always potential to discuss those types of things. And if that takes place, we'll be updating the - you and the investors accordingly.
Justin Kim: Great, thanks. Congrats on the progress.
Ashleigh Palmer: Thank you, Justin.
Operator: Our next question is from David Hoang of SMBC.
David Hoang: Hi, Ashleigh and team, congrats on the continued progress. And thanks for taking my question. I just wanted to ask first on the - in terms of the eventual commercial rollout, if we do get the PDUFA date assigned, and we see an approval in the next 6 months or so. How quickly do you feel that you can get the drug into the channel and available to patients? And when would you, I guess, consider the sales force to be at 100% capacity?
Ashleigh Palmer: Thanks for that question, David. Obviously, there's 2 very discrete questions there, ensuring that patients have access with the appropriate support being one, and then the other, the full scale-up of sales force infrastructure. So I'll hand those over to Jason. But you can imagine that the access one is especially important to us given the potential breakthrough nature of teplizumab. Jason?
Jason Hoitt: Yes. Thanks for the question, David. So our intent - the short answer is, our intent is to get the product into the channel and made available to providers and patients as quickly as we possibly can, but with the right levels of support in the background to make sure that, that initial experience is a positive one. And so as we've mentioned in the past, we're gating our hiring and our spend to regulatory clarity throughout the course of the year. And as such, based on upcoming gates and milestones, we'll be able to provide additional clarity. But our goal is to shorten the window as much as we possibly can to launch as fast as we possibly can after a new FDA action date.
David Hoang: Great. And just a follow-up, if I may. In terms of pricing and such, I imagine you would probably want to announce that closer at the time of launch. And just, is that kind of how you're thinking about it? And then in terms of the payer discussions, anything to update us there in regards to sort of their feedback or color, tone from these meetings in terms of their expectations on restrictions for - any restrictions for the product or any kind of label expectations as the payers see it?
Ashleigh Palmer: Thanks, David. Yes. So you're exactly right with respect to the pricing and the decision point. But I think, Jason, you would agree that you're seeing a very encouraging feedback from payers. Do you want to give some details to David?
Jason Hoitt: Yes, absolutely. Thanks again, David. So you're spot on. We would anticipate announcing a price at the time of a potential approval down the road. We've completed our pricing research. Our pricing committee will set a price relatively close to an action date. So we haven't set a price yet. At the time of approval, we would anticipate announcing that. But again, I continue to be really encouraged with the consistency of the feedback that we've heard from payers over the course of the last 2 years. I think that what we've most recently heard is that the vast majority of payers anticipate covering this as a medical benefit and look to cover this with a prior authorization to label, which is strategically what we intend and are hoping and planning for.
David Hoang: Okay, great. Thanks so much for taking the questions.
Operator: Thank you. Our last question is from Alethia Young of Cantor. Please go ahead.
Alethia Young: Hey, guys. Thanks for taking my question. Congrats on getting back to the starting line of the launch. The first question is a big picture question, which is - and maybe it's for Jason and Ashleigh. Just now you've had a year to really kind of prep to think about things. Like what do you think is the key - the main challenge that kind of keeps you - not keeps you up, but you know that, that's the main hurdle about this launch that you have to get over. It may be kind of front-running it. But like, I guess, I'm curious when you think about screening and what's going on today, just can you talk a little bit about how we get the screening to be very, very standardized? And do you feel that it's just a function of the drug has to be in the market? Or do you feel like there's been forward progress over the past 12 months and getting people's head wrapped around the fact that there just needs to be a greater degree of screening so that people will know their autoantibodies therapy?
Ashleigh Palmer: Alethia, thanks for the question. So you're spot on. It's screening, screening, screening, finding the patients and making sure that we use teplizumab catalytically, leverage its pioneering potential to introduce a paradigm shift. And I think that you mentioned we're back to the starting line, and I appreciate the perspective that leads you to say that. But we're not. We have way beyond that starting line with many respects to the potential introduction of the first disease-modifying therapy in T1D. And although we've had a hiatus with respect to the regulatory pathway for teplizumab in at-risk individuals, during that time, the entire community has been making forward progress and momentum. And the prospect of teplizumab, following the advisory committee meeting and those - the way the community rallied around the open mic to express the unmet need here and so on, has really had a catalytic effect on the ecosystem and has meant that the prospect of a potential approval and launch will have more momentum behind it than it would have had. So I'm going to hand over to Jason to give you some more specifics. But I think what I personally take away rather than sort of worrying about is that we have already initiated a change with some of the work we've been doing with JDRF. I think Jason should speak to the sponsorship of T1Detect and making screening more accessible there. But we've already had an effect. Even if a therapy doesn't get approved, and we certainly hope and believe it will, just bringing awareness to type 1 diabetes, to the fact that you can identify it before the later stages. And if that helps, populations appreciate the impact of diabetic ketoacidosis and brings their attention to early symptoms so that the diagnosis of clinical stage disease is a more gentle one. Then we've accomplished something. But we anticipate being able to do so much more. Jason?
Jason Hoitt: Yes, absolutely. Thanks for the question, Alethia. And I think Ashleigh is spot on, right? I think we know that there are families out there and patients out there that currently want to know their autoantibody status so that they can adequately and appropriately prepare for what the transition to insulin dependence looks like. We also know that there are other patients and families out there that, in the absence of a therapeutic intervention, are - don't want the anxiety of knowing what's coming. And so as you saw from some of the market research data that I highlighted during our prepared remarks, both physicians with a 76% intent to increase screening and patients with an 89% acceptance of autoantibody screening in the context of an approved drug highlights that catalytic nature of teplizumab that Ashleigh was speaking to. So I think in the short term, it activates the at-risk individuals that were reluctant to be screened in the absence of an intervention that can address the problem that they're screening for. But then in terms of our longer-term strategy, the introduction of a novel immunomodulatory therapeutic intervention like teplizumab really catalyzes that conversation around population-based screening and how we ultimately make that a standard of care during routine pediatric well visits in the United States moving forward.
Ashleigh Palmer: And very humbly, we're so grateful to the way in which the community has rallied around this opportunity, this prospect. Working with the patient advocacy groups is a thrill, to see their excitement and the potential that we bring to change their circumstances. Do you want to mention T1Detect, Jason? Because I think that, that is especially a good initiative we sponsored run by JDRF that brings screening to the kitchen table in the relatives of the patients.
Jason Hoitt: Yes. Absolutely, Ashleigh, and thanks for the reminder there. So T1Detect is JDRF-run program that allows for dry blood spot autoantibody screening in the comfort of a patient's own home. And I think the fact that JDRF launched this program over a year ago now in - during the height of the COVID pandemic made it all that much more relevant. And I think there are three really core components of the program that JDRF rolled out that are important to highlight, the first of which being the educational component for the core constituent audience of JDRF, which is the already diagnosed type 1 community, right? Encouraging them to get their loved ones screened, making this as easy and accessible as possible through dry blood spot technology that comes in a kit with a lancet to be able to assess your autoantibody status. The linkage to care on the back end is critically important. And then lastly, and I think most importantly, the affordability component of this. The auto - the complete kit that comes to a patient's home through the T1Detect program only costs $55. And if that $55 cost is too much for a patient, if they can't afford the $55, JDRF will buy that down to $10. So for a cost of $10, a patient can be screened, as Ashleigh mentioned, at their kitchen table, which I think makes screening that much more accessible to a broader population of patients. So I think it's a really novel program, and we're incredibly proud to have been the founding sponsors of that with JDRF.
Alethia Young: Yes. That's actually really cool. And also, yes, Ashleigh, yes, I went in your, sorry, in line, with the whole storyline, but just your kind of back to finally we can get ready to focus on lunch and commercial. But obviously, you guys have been shocking incredible now with in the past 12 months. I guess the follow-up to that is - it was kind of also around accessibility and pricing. You talked about a little bit about, Jason, just now with being able to cut the cost. So like how do you think about like the cost to these patients? And kind of the, I mean, I know there's kind of out-of-pocket costs. And I mean some of it is screening. So it sounds like maybe $10. But are there any other things like as far as like when the person goes to get the drug administered that you think about? And then just, I guess, the other piece of this question is - see, it's a different - obviously, it's a different approach to treating patients and a preventative approach. And do you think that people, parents, I guess, namely, have any kind of concern or how the patient is about kind of using an antibody treatment in their children? Or kind of how are you guys talking to managing that thing?
Ashleigh Palmer: Great follow-up question. Thank you. Jason, do you want to answer both of those?
Jason Hoitt: Yes. So absolutely, Alethia. So maybe I'll answer the second question first and say that, obviously, when looking at a target product profile, there are questions around safety. But once we talk through the nuances of the product, what the unmet need is, how the product ultimately addresses that need, you see in quantitative research after viewing a TPP, that 81% of patients intend to accept treatment with teplizumab after a health care provider's recommendation. So I think that number is - I think that number reflects exactly the question that you're asking, right? And then with respect to our patient support program, we're still in the final stages of designing that. But I think it's important to note that our anticipated payer mix is 60% commercial, 35% Medicaid and then about 5% other. So our intent will be to do what we can to support out-of-pocket costs for those commercial patients where we can.
Ashleigh Palmer: And Jason's response to the first part is one of the reasons we're so excited with respect to the prospect of combination therapies with emerging therapies like cell therapy, B2 cell transplant patient and so on, trading off a lifetime of insulin therapy for a lifetime of transplantation, immune suppression, to keep that transplant going is something that hangs in the balance. But because we administer a discrete course of therapy that can potentially protect on only the B2 cells that a patient has their own, but potentially those that might be transplanted in from a 14-day course of therapy, to restack and reboot the immune system, we're very excited about the prospect of working with the companies we admire in that space that are driving that technology forward to see if the combination with teplizumab can give them a good outcome relative to some of their other options.
Alethia Young: Awesome. Thank you.
Ashleigh Palmer: Thank you, Alethia.
Operator: This concludes our question-and-answer session. I would now like to turn the conference back over to Ashleigh Palmer for any closing remarks.
Ashleigh Palmer: Thank you, Irene. And thanks for the questions, and thank you all again for your time and attention this morning. We very much look forward to keeping you all updated on our progress throughout 2022.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
