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`NPS Pharmaceuticals' CEO Discusses FDA Approval and
`Commercial launch of Gattex (Transcript)
`
`Jan. 2, 2013 11:33 PM
`ET
`
`SA Transcripts
`
`bout: NPS Pharmaceuticals, Inc. (NPSP)
`
`| | A
`
`Operator
`
`Good day, ladies and gentlemen, and welcome to the NPS Pharmaceuticals Conference Call. My name is Caris and I
`will be your coordinator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a
`question-and-answer session. (Operator Instructions) As a reminder, this call is being recorded for replay purposes.
`
`And I would now like to hand the call over to your host for today, Susan Mesco, Senior Director of Investor Relations
`and Corporate Communications. Please proceed.
`
`Susan Mesco
`
`Thank you, Caris. Welcome to today’s conference call to discuss the commercial launch of Gattex. Before we start, let
`me remind you that today’s call will include forward-looking statements based on current expectations. Such
`statements represent our judgment as of today and may involve risks and uncertainties. Please refer to our filings with
`the SEC, which are available from the SEC or our website for information concerning the risk factors that could affect
`the company.
`
`Joining me on today’s call are Dr. Francois Nader, our President and CEO; Eric Pauwels, our Chief Commercial
`Officer, and other members of our senior management team.
`
`I will now turn the call over to Dr. Francois Nader.
`
`Francois Nader
`
`Thank you, Susan. Good afternoon and a very Happy New Year to everyone joining us on today’s call. This was a
`very exciting holiday season for the NPS team and we were thrilled to close 2012 with an outstanding
`accomplishment with the U.S. approval of Gattex. After completing the most comprehensive clinical development
`program to-date in short bowel syndrome, it is very gratifying to finally be able to deliver this much needed therapy to
`patients.
`
`For nearly 40 years, short bowel syndrome patients have relied on parenteral support to receive the nutrients and
`fluids that they need to live, but have risked serious life-threatening complications along the way. With the approval of
`Gattex, the lives of these patients can change.
`
`Gattex is the first and only long-term targeted therapy that addresses the underlying issue of short bowel syndrome,
`which is mal-absorption. As you know, short bowel syndrome patients can be hooked to an intravenous line 10 hours
`to 12 hours each day. The Gattex studies showed that over half of the patients gained at least one infusion-free day
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`each week, and nearly a quarter of patients achieved three or more infusion-free days each week. These data could
`translate into anywhere from 50 days to 150 days of independence from parenteral support each year.
`
`The interim results of our two years study of Gattex in short bowel syndrome showed that 72% of patients achieved at
`least a 20% or greater reduction of parenteral support, after a year of Gattex treatment, with a 40% mere reduction in
`weekly volume. Further, what is especially exciting is that many patients achieved complete independence from
`parenteral support, while on Gattex, after being chronically dependent on PN, for up to 18 years.
`
`Freedom for – from parenteral support allows patients to experience the simple activities that many of us take for
`granted by joining family functions, traveling from home for a weekend or just a simple night of uninterrupted sleep
`and that importantly completely eliminate the risk inherent to parenteral support. We are very pleased with the
`outcome of our label negotiations with FDA and as you probably know it by now, Gattex is indicated for the treatment
`of adult patients with short bowel syndrome, who are dependent on parenteral support. And it is approved for clinic
`use, making Gattex the first long-term treatment for short bowel syndrome. As such the label provides the flexibility for
`physicians to determine the best time to initiate Gattex therapy for their patients.
`
`With respect to safety, the warnings and precautions are consistent with the non-pharmacology of Gattex, as well as
`the complications associated with short bowel syndrome and its underlying etiologies and certain clinical
`assessments are defined to ensure the continued safe use of the product.
`
`We believe the risk evaluation and mitigation strategy or REMS program is very practical and aligns very well with our
`commitment to ensure that Gattex is used appropriately and that patient initiations are successful and sustainable.
`NPS and the FDA recognized the need and importance of conducting a voluntary long-term patient registry, which has
`been defined as a post-marketing requirement. We believe the registry will be instrumental in gaining a better
`understanding of Gattex for the long-term treatment of short bowel syndrome.
`
`I would like now to address the commercial opportunity that Gattex represents. We previously reported from the
`literature and our own prevalent studies, an estimated 10,000 to 15,000 adult short bowel syndrome patients, who are
`chronically dependent on parenteral support in the U.S. However, based on precedence in the orphan space, we have
`also noted on many occasions that there is a high degree of inherent variability using top-down prevalence estimates
`for rare diseases, because of the small number of patients and the even smaller sample size used in prevalent
`studies.
`
`The recent month, we initiated a bottom-up and added this to more precisely quantified addressable population.
`Important sources of patients were those managed by the top five national home infusion companies. Additional
`patients were identified through our website shortbowelsupport.com, through previous clinical trial participants and
`information gathered from our MSLs.
`
`We also worked with various patient advocacy groups that support SBS patients or its underlying etiologies. Based on
`our findings, short bowel syndrome qualifies as an ultra-orphan disorder with an estimated Gattex addressable
`population of 3,000 patients to 5,000 patients in the U.S. While the addressable market is less than our initial
`prevalence estimate, we were very pleased with the results of our pricing research.
`
`More recently, our commercial team commissioned a rigorous pricing and access study, with an internationally
`recognized consulting firm, who has specific experience in pricing multiple successful ultra-orphan products on the
`market today. Many factors were considered in establishing the price including the fact that Gattex is the first and only
`long-term approved therapy for short bowel syndrome, which is a life-threatening disorder.
`
`The value Gattex provides to patients by improving the absorptive capacity of their intestines and reducing or
`completely eliminating the need for parenteral support, payors’ understanding of the direct and indirect burden of short
`bowel syndrome, the limitations and costs of current supportive care options and the need for an effective long-term
`treatment like Gattex; also, the potential of Gattex to address the long-term complications associated with short bowel
`syndrome and the chronic use of parenteral support, the minimal budget impact of Gattex, given the size of the
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`addressable patient population and the ultra-orphan status of Gattex and last, but certainly not least, NPS investment
`in the most comprehensive research and development program conducted to-date in short bowel syndrome.
`
`Consequently, and based on these considerations, we have set the annual list price of Gattex at $295,000. At this
`price level and given the expected patients’ adherence and compliance rates of 70% to 80%, we expect Gattex to
`achieve annual peak revenues well in excess of the $350 million per year that we previously expected. Our pricing
`strategy will go hand-in-hand with a focus on ensuring broad and sustainable coverage from both private and public
`payors.
`
`The NPSP did not spare any efforts over the last couple of years to ensure comprehensive commercial readiness and
`are undoubtedly ready to successfully launch Gattex in the U.S.
`
`At this time, I would like to invite Eric Pauwels, our Chief Commercial Officer to comment on our launch plans. Eric?
`
`Eric Pauwels
`
`Thank you, Francois, and good afternoon to everyone on today’s call. One of our very first elements of ensuring the
`successful commercialization of Gattex was to assemble a truly world-class team of passionate industry veterans.
`These individuals came to NPS from leadership roles at rare disease biopharmaceutical companies and many with
`specific expertise in successfully launching orphan products.
`
`Gattex launch-readiness focused on five key areas. Building our field-based organization; physician targeting; patient
`identification; NPS Advantage, our concierge-like patient support program; and ensuring rapid and comprehensive
`market access.
`
`With regard to our field-based organization, our leadership team has been in place for a couple of months and
`includes three key account directors and three regional business directors. For our sales organization, we are
`extremely pleased with the level of interest and talent that we’ve attracted, which went up to 24 area business
`specialists for the approval of more than 250 qualified applicants. The sales team who will market Gattex is now
`comprised of seasoned professionals with an average of 15 years of pharmaceutical industry experience and a
`successful track record with injectable orphan biologics.
`
`Our field force will be fully deployed in February, after we conduct our national sales meeting. In addition, NPS
`Medical Affairs has deployed a team of eight medical science liaisons, who have been building awareness amongst
`SBS thought leaders for over a year and are well positioned to educate the medical community on the clinical value
`and profile of Gattex.
`
`We are pleased that the launch of Gattex will be supported by an impressive number of peer-review publications,
`including the results of our Phase III STEPS study, which appeared in the December issue of Gastroenterology.
`
`Our next strategic objective was to identify physician targets. As we mentioned on our last call, we developed an initial
`target list comprised of approximately 6,000 physicians who are practicing in roughly 1,000 institutions that includes
`centers of experience and large GI practices. These potential prescribers will be better refined once our field force
`begins calling on them individually.
`
`Now, switching to patient identification. Given the ultra-orphan status of short bowel syndrome, along with the fact that
`this is a condition of a condition, without a formal support of organization, patient identification is a critical strategic
`objective. Despite the limitations of finding patients in advance of having an approved product, I’m very happy to
`report that we have identified over 1,000 unique short bowel syndrome patients who are eligible for Gattex therapy.
`Now that we have secured approval, our patient identification activities will increase as our field organization will
`communicate the value of Gattex to physicians and other stakeholders and identify additional eligible SBS patients.
`
`The fourth critical success factor is our personalized patient support service. NPS Advantage has been fully
`operational since late November. Our care coordinators are trained and ready to provide patients and healthcare
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`providers with individualized support including personalized case management, reimbursement assistance, product
`shipment scheduling, time-based deployment, product refills and prescription renewals. We’re also leveraging the
`relationships that we have established with a number of patient advocacy groups such as the Oley Foundation, of
`course, to play an important role communicating the availability of Gattex to their members and disseminating
`educational materials.
`
`The last area I would like to cover is the importance of ensuring their access to Gattex. Our market research shows
`that most short bowel patients have insurance coverage, and it’s approximately 60% covering by commercial plans
`versus 40% were covered by government and publicly insured. And, the majority of the product is being Medicare.
`
`Our key account directors have deployed – have been deployed since October and are targeting the 75 key payor
`accounts that cover up to 80% of the U.S. insured population. Government have our label approved, we’ve been – we
`will put the final touches on our payor communication and educational materials, including the AMCP dossier. These
`tools characterize the SBS burden and the value of Gattex.
`
`Based on the indications, we expect payors to provide broad access to Gattex. In our market access studies, payors
`clearly recognized the high unmet medical needs of short bowel syndrome, as well as the therapeutic improvement
`that Gattex represents over current treatment options. The value proposition is also notably strengthened by the many
`patients who achieved complete independence from parenteral support with long-term Gattex therapy. All payors
`indicated they would cover Gattex with an anticipated tier placement and restrictions fairly typical of other ultra-orphan
`products.
`
`Here also our care coordinators are ready to help stakeholders, especially patients, successfully navigate the
`reimbursement hurdles such as prior optimizations and other restrictions. In addition, we have established a
`comprehensive patient assistance program.
`
`First, our patients with commercial coverage, copay assistance will be coordinated through NPS Advantage to
`minimize or even eliminate our pocket burden. We also utilize third-party foundations for patients covered by public
`plans. And lastly, to those rare cases in which patients do not qualify for assistance or to bridge gaps in coverage, we
`offer a free goods program. As with other ultra-orphan drugs, during the initial six months to 12-month launch period,
`we expect that securing reimbursement to take 90 days to 120 days from the time of referral. We anticipate this period
`will improve as the commercialization progresses.
`
`As a reminder, Gattex will be reimbursed as a pharmacy benefit or Medicare Part D and will be dispensed by our
`limited network of specialty pharmacies. Because home infusion is a key touch point for SBS patients dependent on
`parenteral support, we established a distribution network with the five leading specialty home infusion providers,
`Accredo, BioScrip, Coram, ThriveRx, and Walgreens.
`
`Gattex will be dispensed by this network directly to patients as a monthly kit and we do not expect any meaningful
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