U.S. Markets closed

Edited Transcript of AIMT earnings conference call or presentation 28-Feb-19 10:00pm GMT

Q4 2018 Aimmune Therapeutics Inc Earnings Call

Brisbane Mar 7, 2019 (Thomson StreetEvents) -- Edited Transcript of Aimmune Therapeutics Inc earnings conference call or presentation Thursday, February 28, 2019 at 10:00:00pm GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Andrew Oxtoby

Aimmune Therapeutics, Inc. - Chief Commercial Officer

* Daniel C. Adelman

Aimmune Therapeutics, Inc. - Chief Medical Officer

* Eric H. Bjerkholt

Aimmune Therapeutics, Inc. - CFO

* Jayson Donald Alexander Dallas

Aimmune Therapeutics, Inc. - President, CEO & Director

* Laura Hansen

Aimmune Therapeutics, Inc. - VP of IR

================================================================================

Conference Call Participants

================================================================================

* Aspen Mori

BofA Merrill Lynch, Research Division - Analyst

* Charles Cliff Duncan

Cantor Fitzgerald & Co., Research Division - Senior Analyst

* Christopher Joseph Raymond

Piper Jaffray Companies, Research Division - MD & Senior Research Analyst

* Kennen B. MacKay

RBC Capital Markets, LLC, Research Division - Co-Head of Biotechnology Research

* Kyuwon Choi

Goldman Sachs Group Inc., Research Division - Equity Analyst

* Liisa Ann Bayko

JMP Securities LLC, Research Division - MD and Senior Research Analyst

* Vamil Kishore Divan

Crédit Suisse AG, Research Division - Senior Analyst

* Vasiliana Vireen Moussatos

Wedbush Securities Inc., Research Division - MD of Equity Research

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Good day, ladies and gentlemen, and welcome to the Aimmune Therapeutics Fourth Quarter 2018 Financial Results Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded.

I would now like to introduce your host for today's conference, Ms. Laura Hansen, Vice President of Investor Relations. You may begin.

--------------------------------------------------------------------------------

Laura Hansen, Aimmune Therapeutics, Inc. - VP of IR [2]

--------------------------------------------------------------------------------

Thanks, Ashley. Good afternoon, and thank you for joining us today to discuss Aimmune's fourth quarter and full year 2018 results. Today's call will be archived and a replay will be available on our corporate website, www.aimmune.com. Joining me on the call today are Dr. Jayson Dallas, President and Chief Executive Officer; Dr. Daniel Adelman, Chief Medical Officer; Andrew Oxtoby, Chief Commercial Officer; and Eric Bjerkholt, Chief Financial Officer.

Before we begin, I would like to remind you that today -- during today's call we will be making forward-looking statements. These forward-looking statements include Aimmune's expectations regarding the potential benefits of AR101, including the potential long-term immunomodulatory effects of AR101. Aimmune's expectations on when the FDA may determine whether to accept the AR101 BLA. Aimmune's expectations on a timing to begin the Phase II study for AR201. Aimmune's ability to access an additional $130 million from its credit facility. Aimmune's expectations on the timing of top line data for the ARTEMIS Phase III trial of AR101. Aimmune's expectations regarding the potential approval and commercial launch of AR101 in the United States. Aimmune's ability to build a commercial field force. Aimmune's expectations on the needs of payers, physicians and patients at the U.S. -- in the U.S., if AR101 is approved. Aimmune's expectations on submission timing of a marketing authorization application for AR101 in Europe. Aimmune's expectations regarding future clinical trials. Aimmune's expectations on the safety and efficacy profile of AR101. And Aimmune's expectations about its cash position will fund the potential launch of AR101 in the United States and Europe and advance the pipeline of treatments for other food allergies. These forward-looking statements are based on assumptions and are subject to risks and uncertainties that can cause actual results to differ significantly from those projected during the call. Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. Please refer to the company's annual report on Form 10-K for the year ended December 31, 2018, filed with the Securities and Exchange Commission today for some of the important risk factors that could cause actual results to differ materially from the forward-looking statements made on this call. Except as acquired by law, Aimmune disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. Finally, I would like to point out that Aimmune's food allergy treatments are investigational and are not FDA approved.

And now I will turn the call over to Jayson Dallas.

--------------------------------------------------------------------------------

Jayson Donald Alexander Dallas, Aimmune Therapeutics, Inc. - President, CEO & Director [3]

--------------------------------------------------------------------------------

Thank you, Laura, and good afternoon, everyone. Thank you for joining us on today's call. Today we will provide a recap of our achievements in 2018 and review our expected milestones for this year. Dan will provide a clinical update, including a recap of data presented at last week's annual American Academy of Allergy, Asthma and Immunology conference. Andrew will give an overview of our commercial preparations and Eric will provide a review of financial results for the fourth quarter and the full year of 2018. We will then open up the call for questions.

As we have said before, this is an incredibly exciting time for Aimmune. 2018 marked a year of exceptional progress and 2019 holds the promise of fundamentally transforming our company by bringing us closer to our goal of delivering important new medicines to patients with food allergies. We have a significant opportunity to help these patients who live with the threat of potential severe allergic reactions every day.

In 2018, we significantly advanced AR101 to potentially become the first approved treatment for peanut allergy. In November, results of our landmark Phase III PALISADE trial, the largest and most rigorously conducted immunotherapy trial and the only successful Phase III trial in peanut allergy, were published in the New England Journal of Medicine, which is considered by many to be the world's most prestigious medical journal. And in December, we submitted a Biologics License Application, or BLA, to the FDA for AR101 for the treatment of peanut allergy in children and adolescents, ages 4 to 17. The FDA, as you may recall, has granted AR101 Fast Track Designation for peanut allergy in September of 2014 and breakthrough therapy designation for peanut allergy in ages 4 to 17 in June of 2015.

In early January, the FDA informed us that they would not review our BLA until the government shutdown had ended, which it eventually did in late January. To that end, we expect the FDA to determine whether the AR101 BLA has been accepted for filing by the end of March, and we'll update you at such time.

In parallel, we have been diligently preparing for our company's first potential product launch, with a team of seasoned marketing, analytics and market access professionals. Our search for our company's first Chief Commercial Officer commenced last year and I'm thrilled to welcome Andrew Oxtoby, who joined our team in January, into this important leadership role. Andrew has a strong track record leading U.S. and global commercial organizations to successfully launch novel medicines and build innovative patient solutions in largely these areas. His expertise will be tremendously valuable to us as we prepare to address the emerging food allergy therapeutic space.

In addition, we continue to generate data that strengthen the case for the safety, efficacy and longer-term use of oral immunotherapy, including data that highlight the potential longer-term immunomodulatory effects of AR101.

We are also very excited about emerging data in the clinic that indicate that AR101's therapeutic profile improves over time.

Beyond AR101, we continue to advance our pipeline. And late last year, we filed an Investigational New Drug application, or IND, for our second product candidate, AR201 for the treatments of egg allergy. And we signed an exclusive worldwide supplier agreement with Michael Foods, the largest U.S. producer of value-added eggs. Nearly 6 million people worldwide are allergic to eggs, including 800,000 in the United States and as many as 4 million across Asia, where allergy to egg is the most common food allergy. Now that the government has reopened, we are on track as planned to start our Phase II program of egg allergy in the middle of this year.

Finally, we begin 2019 with a strong financial position, with approximately $340 million in cash and investments and potential access to an additional $130 million. We expect this funding to be sufficient to fund our launch of AR101 and to advance our pipeline programs.

There is a lot for us to be excited about in 2019. And above all, it's most exciting to consider the potential of finally being able to provide an effective, clinically proven, regulated treatment option to the millions of patients and families who live each day with the threat of allergic reactions to peanut.

With that, I'll turn over to Dan for a clinical update.

--------------------------------------------------------------------------------

Daniel C. Adelman, Aimmune Therapeutics, Inc. - Chief Medical Officer [4]

--------------------------------------------------------------------------------

Thanks, Jayson. I'll begin with our AR101 program. As you know, AR101 is being developed as an FDA regulated biologic product, with a characterized allergen profile intended for oral immunotherapy for patients with peanut allergy. This means that subject to FDA approval, peanut allergic patients would receive a biologic drug tightly controlled for major allergen content.

Based on the clinical results of our Phase III studies today, we believe that AR101 will become the cornerstone of care for patients with peanut allergy. Ultimately, our goal for AR101 therapy is to bridge patients from a constant state of worry about accidental exposures to peace of mind and protection from severe, potentially life-threatening reactions.

As Jayson noted, our pivotal PALISADE trial is the only Phase III trial in peanut allergy to meet its primary endpoint. Specifically, the primary analysis for the 4- to 17-year old age group show that 2/3 of the patients tolerated the equivalent of approximately 2 peanuts at the 600 milligram dose level during the exit food challenge after 1 year on therapy.

To fully appreciate the true long-term clinical benefit from any form of immunotherapy, we have to consider the biologic effect of treatment during the desensitization period. When starting oral immunotherapy or any form of immunotherapy for that matter, the antigen-specific IgE levels initially rise throughout the dose escalation period. In PALISADE, for example, the peanut-specific IgE levels rose, on average, over two-fold from baseline to the end of the dose escalation period. During this high IgE period, the peanut-specific IgE levels did not return to baseline levels until approximately the end of year 1. This time frame is typically the desensitization period. After that period when peanut-specific IgE returns to baseline and for most patients continues to drop, patients should expect fewer symptoms. In ARC004, we continue to see a favorable safety profile and improved tolerability in food challenges.

Earlier this week, at the AAAAI meeting, we presented the first data ever to show that AR101 dramatically decreased the frequency of adverse reactions requiring treatment due to accidental exposure to peanuts. This is consistent with what would be expected with a highly effective immunotherapy, as is seen with venom immunotherapy or even with aeroallergen immunotherapy in most patients.

Now regarding our BLA submission for AR101. As previously mentioned, we expect to hear from the FDA around the end of March as to whether they will accept our file for review. We are now focused on preparing for a potential FDA advisory committee later in the year, should the agency accept the BLA in March and wish to convene an advisory committee.

I would also like to touch briefly on other AR101 trials in progress. This quarter, we completed the ARTEMIS European Phase III trial and anticipate sharing top line data in the first half of 2019. We are currently on track to submit a marketing authorization application for AR101 to the European medicines agency, midyear.

The Phase III POSEIDON trial for the treatment of peanut allergy in children ages 1- to less than 4-years old, is currently enrolling patients. And finally, the Phase II trial of AR101 with adjunctive dupilumab, which is sponsored by Regeneron, is now enrolling peanut allergic patients.

I'll now turn it over to Andrew for a commercial update.

--------------------------------------------------------------------------------

Andrew Oxtoby, Aimmune Therapeutics, Inc. - Chief Commercial Officer [5]

--------------------------------------------------------------------------------

Thanks, Dan. First, I'd like to say it's great to have joined the team at Aimmune. And I'm excited about the important work we're doing. We're close to offering patients a truly major advancement in care as we prepare for the potential approval and launch of a first-of-its-kind treatment.

Peanut allergy is one of the most common food allergies in the United States. More than 1.6 million children and teens in the U.S. are affected by peanut allergy and 80% never outgrow it. Allergy to peanut is serious and potentially fatal and unfortunately, allergic events are commonplace. 1 in 4 children with peanut allergy are rushed to the emergency room every year.

Peanuts are everywhere, which is why avoidance is a challenging strategy to help protect these children. Patients and families want real-world protection in the form of a treatment that is clinically proven to protect against reactions to accidental exposure. The problem with peanut allergy in the United States is substantial. Of the estimated 1.6 million patients between the ages of 4 and 17 with this allergy, 1.25 million are already diagnosed and are seeing allergists up to 5x per year for their peanut allergy and other comorbid conditions. These patients are easily identified in need of an approved treatment, yet none exists today.

Considering the potential for an FDA approval, our preparation for launching AR101 is well underway. We are ramping up our field force and expect to complete the hiring of our Area Business Director roles in the second quarter. These Area Business Directors will then in turn hire their teams of practice account managers. Our medical science liaisons are currently deployed in the field and Dan plans to add to the medical affairs team in the coming months.

When we look to the elements of a successful launch, we'd carefully consider payers, physicians and patients in our planning. Based on our research and ongoing conversations, we believe that payers recognize the importance of a breakthrough medicine as well as the high unmet need among children and teens. Payers understand that there are no available treatments for these patients and importantly, payers perceive AR101 to be a major therapeutic advance.

The value proposition of AR101 is compelling. A once daily oral medication that reduces the frequency and severity of allergic reactions to peanut due to accidental exposures. As we get closer to the potential approval and launch, we will be able to share more specific details with you.

From the physician perspective, we believe that AR101, subject to FDA approval, could integrate into many allergy practices for 3 important reasons. First, diagnosis of peanut allergy is a core competency of allergists and the great majority of patients do not require a food challenge for a diagnosis to be made. Second, physician research shows that approximately 75% of U.S. allergists would prescribe an FDA-approved oral immunotherapy. Third, many allergy practices are high prescribers of subcutaneous immunotherapy or shots for environmental allergies today. The practice logistics associated with these shots are a helpful analogue for allergists as they prepare for an approved approach to oral immunotherapy for food allergy.

Moreover, having an FDA-approved oral immunotherapy, would reduce physicians' liability for those practicing, unapproved OIT today; provide a uniformed protocol; minimize time and effort to obtain, portion and package materials; and come with billing and reimbursement support. We also expect AR101 implementation would have comparable staff requirements and follow a similar process to allergy shots. And we've seen the anticipation and enthusiasm from allergists first hand, including most recently at the AAAAI meeting we attended earlier this week.

From the patient perspective, we plan to provide patients and their caregivers with practical and customized solutions to support them, including flexible distribution, reimbursement support services and comprehensive patient and caregiver adherence support. Based upon the size of the market and the unmet need, we believe that AR101, if approved, has meaningful global sales potential.

We're excited, motivated and driven to deliver a successful launch of AR101, subject to its FDA approval, and to transform the lives of the patients and families who are counting on this.

With that, I'll turn the call over to Eric to review the financials.

--------------------------------------------------------------------------------

Eric H. Bjerkholt, Aimmune Therapeutics, Inc. - CFO [6]

--------------------------------------------------------------------------------

Thank you, Andrew. We began 2019 in a strong financial position with $304 million in cash and investments. In January of this year, we announced that we had entered into a $170 million loan agreement with KKR, of which $40 million was funded at closing. We expect that this loan agreement, plus cash on hand, will provide us with sufficient funds to commercialize AR101 in both the United States and Europe and to develop our pipeline.

For the 12 months ended December 31, 2018, net loss was $210.8 million compared to net loss of $131.3 million for the year ended December 31, 2017. On a per share basis, net loss for the 12 months ended December 31, 2018, was $3.67 compared to a net loss per share of $2.61 for the comparable period in 2017.

R&D expenses for the 12 months ended December 31, 2018, was $133.4 million compared to $89.3 million from -- for the comparable period in 2017. The increase was primarily due to higher costs from the progression of certain AR101 clinical trials and higher contract manufacturing costs to support clinical development, manufacture the required stability loss and other regulatory activities.

General and administrative expenses for the 12 months ended December 31, 2018, was $81.9 million compared to $43.9 million for the comparable period in 2017. The increase was primarily due to additional employee-related costs and external professional services as Aimmune continued to build its infrastructure to support the development and potential commercialization of AR101. Cash, cash equivalents and investments totaled $303.9 million on December 31, 2018, an increase of approximately $121 million over December 31, 2017. The increase primarily reflects net cash proceeds of approximately $300 million from the issuance of company common stock, partially offset by cash used in operating activities of $168 million and cash used for purchase of plant and equipment of $10 million.

With that, I will turn the call back to Jayson.

--------------------------------------------------------------------------------

Jayson Donald Alexander Dallas, Aimmune Therapeutics, Inc. - President, CEO & Director [7]

--------------------------------------------------------------------------------

Thank you, Eric. So to recap, 2018 was an exceptional year for execution at Aimmune. We achieved multiple significant milestones, the data from our AR101 trials continues to support its potential to help children, teens and their families affected by peanut allergy. We start 2019 in a strong financial position with approximately $340 million in cash and investments and potential access to an additional $130 million, which we expect will be sufficient to fund AR101 commercialization as well as the development of our pipeline.

Looking ahead, we believe the Aimmune story is a very strong story in 2019 with the year ahead rich of catalysts. We look forward to hearing from the FDA next month regarding the status of our BLA. Meanwhile, our AR101 launch preparation is well underway. We expect to submit a marketing authorization application in Europe for AR101 in the middle of the year, and we plan to initiate the Phase II trial of AR201 for egg allergy in the first half of this year.

Our mission is to improve the lives of people with food allergies by addressing the large and growing public health need for food allergy treatments. We're on the cusp of realizing this goal and our success to date would not be possible without the patients, the families and investigators who have participated in our trials, the dedication and passion of our employees, and the focus of the FDA, all of whom to which we are very grateful. We couldn't be more enthusiastic about our company's future. Thank you.

And we'll now open the call to take your questions.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) And our first question comes from line of Chris Raymond with Piper Jaffray.

--------------------------------------------------------------------------------

Christopher Joseph Raymond, Piper Jaffray Companies, Research Division - MD & Senior Research Analyst [2]

--------------------------------------------------------------------------------

So I just wanted to talk a little bit about the file -- the BLA filing. So I think as I've listened to you guys in the past, you have talked at length about being in close contact with FDA, right up until you've -- to the point of filing -- of paying your PDUFA fee actually, and I guess it was back December 21. And your impression then I think was that it fell under PDUFA. And I guess it sounds like you guys found out, when we all found out, that it did not fall under PDUFA via the tweet from Scott Gottlieb. So I guess the question here is, now that you've had the chance to get some benefit of hindsight here, was the disconnect really between Aimmune and the FDA? Or was there something else going on within the FDA that may have sort of precipitated this about-face? And this is not meant to get you to criticize FDA but rather I think this is kind of unprecedented and just any color here I think would be appreciated.

--------------------------------------------------------------------------------

Jayson Donald Alexander Dallas, Aimmune Therapeutics, Inc. - President, CEO & Director [3]

--------------------------------------------------------------------------------

Sure, Chris. Thanks for the question and maybe let me provide just a little bit of color, some of which is our 10-K that will be filed today. So you're absolutely correct, we had always assumed this was going to be a PDUFA filing and the guidelines and guidance with the FDA has around this is that the non-PDUFA pathway is required for allergenic extract. What we have found, since we initially found out from FDA, that they consider this to be a non-PDUFA product, was that their intent is to declare that any allergenic product is in fact exempt from the PDUFA pathway, and that's the way they think about us. That became clear to us during the government shutdown, when they essentially stopped working on non-PDUFA files. That being said, they did pick up the file the minute that the government was back working, and the review on the file has begun. The other little bit of complexity here is that in this context, this is a unprecedented situation, in that, there has never yet been a product that has previously been granted Breakthrough Therapy Designation and has Fast Track Designation that has gone down a non-PDUFA pathway. And while a non-PDUFA pathway, by definition, doesn't have a PDUFA date, the agency does tend to issue anticipated action dates, and it's usually a 12 month date from the file being submitted. And the discussion that we're in with the FDA at the moment is how we actually work through this in terms of being the very first product ever to have gone down this pathway coming in with breakthrough therapy and fast track. And really the core of this is that in this context, we believe that the FDA should be looking at our file with the intent of an expedited review. This discussion is ongoing and I think we will all receive clarity on this at the end of March. I think if we sort of lift this up a little bit, the good news is that the file is being reviewed, we reasonably expect the file to be accepted at the end of March. And that being true, we will be ready and build out our commercial organizations for a launch in the fourth quarter of this year and whether that's at the beginning of the fourth quarter or towards end of the year, I think obviously it does make a difference and we'd like to get approved as expeditiously as possible, but the bottom line is we'll be bringing our therapy to market, and the first treatment for food allergy, if not at the very end of this year, at the very beginning of next year.

--------------------------------------------------------------------------------

Operator [4]

--------------------------------------------------------------------------------

And our next question comes from the line of Charles Duncan with Cantor Fitzgerald.

--------------------------------------------------------------------------------

Charles Cliff Duncan, Cantor Fitzgerald & Co., Research Division - Senior Analyst [5]

--------------------------------------------------------------------------------

I think you just answered this question, but I just wanted to make sure. Do you expect to hear, by roughly the end of March, some definitive information, regarding the timing of the regulatory review? And whether or not, there would be an AdCom? And is that based on recent interactions that you've had with the FDA or just gauging what you anticipate out of this relatively new process?

--------------------------------------------------------------------------------

Jayson Donald Alexander Dallas, Aimmune Therapeutics, Inc. - President, CEO & Director [6]

--------------------------------------------------------------------------------

Yes. So thanks, Charles. I think this is more the latter, which is we would expect to hear at the end of March, one, that the file has been accepted. What we can tell from precedent with non-PDUFA products is that while there is no PDUFA date, the agency does generally, in that official letter after 60 days, give an anticipated approval date. And that so far from what we can tell, it's 12 months after the initiation of the file. So I think the whole debate that we're having with them now is whether as a breakthrough therapy product, our date would be less than 12 months. And that's the discussion that we're in with. And we believe that there's plenty of precedent going back to even time that predates PDUFA to show that breakthrough therapy designation has always resulted in an expeditious review. But we would expect some indication of that from them at that time. We've had no discussion with the agency at any time point about whether they are or not anticipating an advisory committee. Usually, that's the time when they would tell you if they are or if they're not. And what we have always said that we still believe is true which is for a new therapeutic class first treatment for food allergy, pediatric population, we do reasonably expect to have an advisory committee.

--------------------------------------------------------------------------------

Charles Cliff Duncan, Cantor Fitzgerald & Co., Research Division - Senior Analyst [7]

--------------------------------------------------------------------------------

Yes, that makes sense to me as well. If I could ask another question, regarding, perhaps, some of your recent ongoing market diligence. We heard the message often at AAAAI of balancing risk and clinical benefit. And I guess I'm wondering, at this point, based on your diligence, what percentage of allergy practices would you anticipate would be willing and interested in implementing AR101 into practice, call it in the first full quarter and maybe first full year post launch? And then also related to that, do you think that there may be some confusion in the allergy community when thought leaders talk about OIT as it used to be practiced versus AR101?

--------------------------------------------------------------------------------

Jayson Donald Alexander Dallas, Aimmune Therapeutics, Inc. - President, CEO & Director [8]

--------------------------------------------------------------------------------

Thanks, Charles. So let me first sort of start with, we're in the process of developing a lot of our quantitative assessments at this point. And one of the things we have said is, while we don't anticipate giving sales guidance, as we get closer to launch we will start anticipating giving some leading indicator guidance around how many allergy practices are out there that we believe we should be calling on, how many we've called on, et cetera, et cetera. So we're sort of kind of working through those numbers now. But with that in mind, I'll hand over first to Dan to address the first part and the second part of the question. Then over to Andrew in terms of how we're thinking about this from a commercial perspective.

--------------------------------------------------------------------------------

Daniel C. Adelman, Aimmune Therapeutics, Inc. - Chief Medical Officer [9]

--------------------------------------------------------------------------------

Thanks, Jayson. And Charles, thanks for the question. This is Dan Adelman. There was a publication in the JACI in 2015, a survey that was conducted amongst the membership of the Academy as to the interest of allergists to do or to provide oral immunotherapy in their practices. And the overwhelming majority of them, first of all said that they were waiting for an FDA-approved product. They felt that, that was the responsible thing to do, given the variability of the allergen content of fresh food and the potential dangers associated with updosing when you don't know exactly what you're giving. But once they have a regulated product available, almost 75% of the allergists said that they would be interested in offering OIT to their patients. And so we do believe that there are going to be practices that are truly interested in providing this service to their patients, not only because of the importance that it has medically, but also from the point of view of being able to maintain their market share of allergy patients in light of primary care physicians doing more treatment for allergic rhinitis.

--------------------------------------------------------------------------------

Andrew Oxtoby, Aimmune Therapeutics, Inc. - Chief Commercial Officer [10]

--------------------------------------------------------------------------------

Charles, it's Andrew Oxtoby. Thanks for the question. As Jayson mentioned, we are in the process of characterizing from an analytical perspective, how many practices that there are out there that will be set up to be able to administer AR101 safely and properly upon launch. As we mentioned, there's a number of allergy practices out there today, administering allergy shots, and there are certainly parallels between that process and what one would have to do to be able to set -- be set up to administer AR101. And so as we learn what the current environment looks like in terms of practices that are set up from that perspective, we'll work with them and share best practices to ensure that practices are able to help patients upon launch, that the patients get a great experience when this drug is eventually approved.

--------------------------------------------------------------------------------

Charles Cliff Duncan, Cantor Fitzgerald & Co., Research Division - Senior Analyst [11]

--------------------------------------------------------------------------------

That's helpful. Last question, I wanted to ask you about ARTEMIS induced so quickly. But I'd like to have you remind us as to what you'd expect or hope for -- hope to see out of ARTEMIS? What would you consider to be a successful trial?

--------------------------------------------------------------------------------

Daniel C. Adelman, Aimmune Therapeutics, Inc. - Chief Medical Officer [12]

--------------------------------------------------------------------------------

So Charles, the study is complete. We're in the process of cleaning up the data and preparing to lock the database. And we expect to be able to reveal top line data we hope by the end of March.

--------------------------------------------------------------------------------

Jayson Donald Alexander Dallas, Aimmune Therapeutics, Inc. - President, CEO & Director [13]

--------------------------------------------------------------------------------

Yes. But just -- and to your question, Charles, around what the study was -- is trying to show. Remember that there are 2 purposes for doing ARTEMIS. One is that it's a European-based study. We wanted to have at least 1/3 of the patient population in the MAA submission in Europe, coming from Europe. So that's objective one. The second objective is that we piloted the study with a primary end point to show the ability to tolerate 1,000 milligrams of peanut protein rather than 600. And that is what we believe would be the most helpful data set for us when it comes not just to getting approval in Europe, but for reimbursement discussions in Europe, particularly because we think that will lead us to a label in Europe, where we can make a claim that AR101 prevents allergic reactions, anaphylaxis, due to accidental exposure to the peanut, right? So the design is slightly different. What we expect to see would be very much what we saw in PALISADE and a replication of what we think is now a fairly well-characterized product.

--------------------------------------------------------------------------------

Operator [14]

--------------------------------------------------------------------------------

And our next question comes from the line of Ying Huang with Bank of America Merrill Lynch.

--------------------------------------------------------------------------------

Aspen Mori, BofA Merrill Lynch, Research Division - Analyst [15]

--------------------------------------------------------------------------------

It's Aspen on for Ying. First, on the FDA interactions and sorry [to play] with this, I just wanted to confirm. So if you did get an expedited review, given your breakthrough in Fast Track Designation, would that also include an estimation of a review time line or is that just for the 12 months standard review? And then can you talk broadly about your learnings from ARC004 and how you might be able to use those to market AR101 if it is approved?

--------------------------------------------------------------------------------

Jayson Donald Alexander Dallas, Aimmune Therapeutics, Inc. - President, CEO & Director [16]

--------------------------------------------------------------------------------

So on your first question, as I've said, I think we've pretty said everything we know at this point, right? And this is an unprecedented situation. I think we're trying to figure out with the agency the best way to deal with it. And we'll have a lot more clarity on that at the end of March when we get the official notification from them that the file has been accepted. And I'll hand over to Dan to deal with the 004 question.

--------------------------------------------------------------------------------

Daniel C. Adelman, Aimmune Therapeutics, Inc. - Chief Medical Officer [17]

--------------------------------------------------------------------------------

Sure. So the data that we presented at the Academy on 004 showed that with an additional 6 months of treatment at the 300 milligram dose level, what we saw was a consistent safety picture, which was gratifying. And what we also saw was an -- a maturation of modulatory effect with, on average, improvement in the amount of protein tolerated at an exit food challenge. So this is completely consistent with other forms of immunotherapy where you would expect to see in the second and third and fourth and beyond year, continued improvement in the level of protection with ongoing safety.

--------------------------------------------------------------------------------

Jayson Donald Alexander Dallas, Aimmune Therapeutics, Inc. - President, CEO & Director [18]

--------------------------------------------------------------------------------

Dan, just maybe a couple of data points that are helpful for this, right? If you'll recall, at the end of the PALISADE study and the exit food challenge, about 2/3 of the patients were able to tolerate the 1,000 milligram dose. When you take that up with the extra 28 that you get in the 004 study, that goes up to about 80%. And while we didn't test 2,000 milligrams -- or as a reminder, that's a cumulative dose of about 4,000, really a very heavy amount of coverage on the upper end, we did test that at 28 weeks in 004, and we saw almost 50% of patients were able to tolerate that. The other thing I would highlight during the 6 months of the 004 study is we didn't see any cases of anaphylaxis. So we just believe the profile of the product continues to get more and more robust the longer folks stay on therapy. And again, that is exactly what you would expect from an immunotherapy product.

--------------------------------------------------------------------------------

Operator [19]

--------------------------------------------------------------------------------

And our next question comes from the line of Kennen MacKay with RBC Capital Markets.

--------------------------------------------------------------------------------

Kennen B. MacKay, RBC Capital Markets, LLC, Research Division - Co-Head of Biotechnology Research [20]

--------------------------------------------------------------------------------

I'm wondering if you had any perspective as to whether going through a PDUFA or non-PDUFA pathway could -- would have any impacts commercially? Or how you were thinking about that, given how you were thinking about that, would be incredibly helpful. And then just a second question. Wondering a little bit if you can help us sort of understand with the publication of some competitor data sort of what your takes were on, first of all, that data, the PDUFA's data. And from your interactions so far with the FDA, what's been the sort of most important endpoint or endpoints in their eyes? I was a little bit surprised to see the amount of tolerated peanut protein not mentioned at all within that publication. But would love to hear what your interactions with the FDA have been like around that?

--------------------------------------------------------------------------------

Jayson Donald Alexander Dallas, Aimmune Therapeutics, Inc. - President, CEO & Director [21]

--------------------------------------------------------------------------------

Yes. So thanks, Ken. I think on the first question, we don't really anticipate there being any difference whatsoever. I think the only difference is a time line, and I think it's whether we're going to -- likely to get approved at the beginning of or the end of the fourth quarter of this year. We don't really anticipate any other difference depending on the pathway. So to get to your second question then, I'd -- we'd rather not speak about other people's data or an interpretation of their data with -- but what I would say is that we're extraordinarily happy with what we see from AR101. And the more we see it, the happier we are. Specifically, the places that FDA has asked us a lot of questions or wanted to make certain things are robust is around ensuring that there is separation between the treatment group, and the control group in a clinical trial to make certain that any effects you see are real. The big concern that the FDA has is that folks may be on a therapy, and therefore, perceive that they have a level of protection when they go out into the real world. And while the guidance is continuously true that we always tell folks to continue avoiding peanuts, it does potentially change the way folks behave. And any risk that exposure that they then undergo happens, and they're not actually as protected as they think they are is, in fact, one of the most dangerous things that can happen when you have an allergy product. So those are the areas that FDA has been very fixated on as they talk to us.

--------------------------------------------------------------------------------

Operator [22]

--------------------------------------------------------------------------------

And our next question comes from line of Liana Moussatos with Wedbush Securities.

--------------------------------------------------------------------------------

Vasiliana Vireen Moussatos, Wedbush Securities Inc., Research Division - MD of Equity Research [23]

--------------------------------------------------------------------------------

When do you think the combination data with dupilumab will be released? And did you get your PDUFA fee back?

--------------------------------------------------------------------------------

Daniel C. Adelman, Aimmune Therapeutics, Inc. - Chief Medical Officer [24]

--------------------------------------------------------------------------------

I'm going to let other people answer the second question. The first question is that they've just begun enrolling their study. They are managing -- the Regeneron is managing that study. Our role is, as part of a joint development committee -- and -- but they're responsible for the operational aspects of that study. I would expect though that enrollment would be similar to what we've seen here. And I'm sure they will have a timely readout as soon as they have data available.

--------------------------------------------------------------------------------

Jayson Donald Alexander Dallas, Aimmune Therapeutics, Inc. - President, CEO & Director [25]

--------------------------------------------------------------------------------

I think they've guided sort of towards the end of next year, and generally...

--------------------------------------------------------------------------------

Daniel C. Adelman, Aimmune Therapeutics, Inc. - Chief Medical Officer [26]

--------------------------------------------------------------------------------

For a readout.

--------------------------------------------------------------------------------

Jayson Donald Alexander Dallas, Aimmune Therapeutics, Inc. - President, CEO & Director [27]

--------------------------------------------------------------------------------

Yes, for a readout. And then on the PDUFA, we do not have it back yet but we do anticipate getting it back, and we look forward to that.

--------------------------------------------------------------------------------

Operator [28]

--------------------------------------------------------------------------------

And our next question will come from line of Vamil Divan with Crédit Suisse.

--------------------------------------------------------------------------------

Vamil Kishore Divan, Crédit Suisse AG, Research Division - Senior Analyst [29]

--------------------------------------------------------------------------------

So just a couple here. One around the reimbursement side. You mentioned just you're willing -- you want to do what you can to support patients with the cost of therapy. I'm wondering if there's anything you can do as a manufacturer to help manage the cost of the office visits that patients have to make during the updosing period. I just wasn't sure what you're allowed to do or not do in that regard. And then second, I know you mentioned the POSEIDON trial is now initiated in children 1 to 3. I'm wondering if you have any update on how to think about the path for gaining an indication in adults. I assume the PALISADE trial would get you an -- a label through the age of 17, but wondering for 18 and above.

--------------------------------------------------------------------------------

Jayson Donald Alexander Dallas, Aimmune Therapeutics, Inc. - President, CEO & Director [30]

--------------------------------------------------------------------------------

Yes. So let me ask Andrew to take the first question.

--------------------------------------------------------------------------------

Andrew Oxtoby, Aimmune Therapeutics, Inc. - Chief Commercial Officer [31]

--------------------------------------------------------------------------------

Yes, Vamil, thanks for the question. So the very short answer to your first question regarding what we can do around patient visits and the costs associated with visits to the physician is nothing. So that is something that is separate to AR101.

--------------------------------------------------------------------------------

Jayson Donald Alexander Dallas, Aimmune Therapeutics, Inc. - President, CEO & Director [32]

--------------------------------------------------------------------------------

Yes, that would be considered as providing something of value to physicians or to patients which we are actually not able to do. I do think the context's important though? We don't anticipate this being any different to what's going on with allergy shots all the time at the moment. It's pretty much normal practice that payers cover the allergy shot administration and then the follow-up period, with one slight exception and that is with allergy shots, that can go on for 3 to 5 years. With AR101 that happens for 6 months per patient. And once they get into the therapeutic dose level, that's all happening at home and it's a standard delivery system through specialty pharmacy. Dan, do you want to take the second?

--------------------------------------------------------------------------------

Daniel C. Adelman, Aimmune Therapeutics, Inc. - Chief Medical Officer [33]

--------------------------------------------------------------------------------

Sure. So the second question was what would it take to get an adult indication? I think it's pretty clear that what we're going to need to do is run a study in the target population and demonstrate that the safety and efficacy is comparable to what we've seen in the 4- to 17-year-olds. We're currently assessing the feasibility of doing just that type of study. And later this year, we hope to make a decision one way or the other.

--------------------------------------------------------------------------------

Jayson Donald Alexander Dallas, Aimmune Therapeutics, Inc. - President, CEO & Director [34]

--------------------------------------------------------------------------------

Yes, and just to be a little clear about that, Vamil, is that as we're looking at the feasibility, we do have some patients who started AR1 (sic) [AR101] maybe when they're 15, 16, 17 within the clinical program. Or indeed some folks in that adult cohort who continued. So we've got some data in this population that we want to look at and just see if we can learn anything else from that population as we're designing an adult study. But we are -- I can tell you that we're actively working on what we need to do, to do the work to get an adult indication.

--------------------------------------------------------------------------------

Operator [35]

--------------------------------------------------------------------------------

And our next question comes from line of Liisa Bayko with JMP Securities.

--------------------------------------------------------------------------------

Liisa Ann Bayko, JMP Securities LLC, Research Division - MD and Senior Research Analyst [36]

--------------------------------------------------------------------------------

Just wanted to understand a little bit more about the commercial build-out you'll do ahead of launch. And also a little bit more on the timing for Europe, what kind of review timing are you expecting there? Any special status?

--------------------------------------------------------------------------------

Jayson Donald Alexander Dallas, Aimmune Therapeutics, Inc. - President, CEO & Director [37]

--------------------------------------------------------------------------------

Commercial build-out.

--------------------------------------------------------------------------------

Andrew Oxtoby, Aimmune Therapeutics, Inc. - Chief Commercial Officer [38]

--------------------------------------------------------------------------------

Oh, sorry. Yes, so on the commercial build-out question. So we are really in the process of evaluating where clinics are today in United States in terms of their readiness to be able to administer AR1 (sic) [AR101] safely and effectively to patients. So as we work through that work over the next few months, then we'll have a better understanding of which clinics will be ready to go upon approval and which clinics will take a bit longer before they're appropriately set up to do that.

--------------------------------------------------------------------------------

Jayson Donald Alexander Dallas, Aimmune Therapeutics, Inc. - President, CEO & Director [39]

--------------------------------------------------------------------------------

I think, Liisa, one of the other things we're doing is doing a little bit of segmentation of the allergy world because I think allergists, as we've always discussed, are in different places in terms of their existing adoption of OIT themselves without an approved product, the size of their practices, their ability to integrate something like this easily into the practice, they'll need maybe to scale up a little bit. And so there are very defined segments within the allergy community. And as we understand those and we understand those geographically and we understand them a little bit more specifically, we'll tailor the way we think about each of our territories depending on the mix of segments that we have within each of the territories. And the objective is kind of to start where there's already a lot of buy in and where there's already infrastructure and then to sort of work our way down that segmentation list. And we kind of lost you a little bit on the second question, so do you mind repeating that?

--------------------------------------------------------------------------------

Liisa Ann Bayko, JMP Securities LLC, Research Division - MD and Senior Research Analyst [40]

--------------------------------------------------------------------------------

Yes, I was just asking about any potential status that you anticipate in Europe that would lead to more expedited time lines or any other considerations?

--------------------------------------------------------------------------------

Jayson Donald Alexander Dallas, Aimmune Therapeutics, Inc. - President, CEO & Director [41]

--------------------------------------------------------------------------------

Yes, we -- there really isn't a similar pathway in Europe. And we anticipate a standard review in Europe. So we would expect to file with approval taking about a year from submission, which would be in the middle of next year.

--------------------------------------------------------------------------------

Operator [42]

--------------------------------------------------------------------------------

And our next question comes from line of Paul Choi with Goldman Sachs.

--------------------------------------------------------------------------------

Kyuwon Choi, Goldman Sachs Group Inc., Research Division - Equity Analyst [43]

--------------------------------------------------------------------------------

I had a question on commercialization with respect to the potential differences in the regulatory review time line. If you get the earlier review, you're in a position to make the 2019 [sort of period end TBM] formulary review cycle. But if you're on the longer time line, you would miss that. And you would be potentially launching in 2020 with -- in the middle of a cycle or as a 2020 formulary or set. How do you think about accessing that with regard to the longer time line and what would sort of be the potential scenario then and impact to your -- to commercialization in 2020?

--------------------------------------------------------------------------------

Andrew Oxtoby, Aimmune Therapeutics, Inc. - Chief Commercial Officer [44]

--------------------------------------------------------------------------------

Well, we're engaging pays and discussions right now, Paul. And so we'll work through the process and their time lines in terms of their plans and planning for 2020. So we are working with a plan in mind that we will be ready to launch at the beginning of Q4 this year, realizing for all the reasons that you mentioned, it may slip into 2020. But our working assumption is that we're going to be ready for the beginning of Q4.

--------------------------------------------------------------------------------

Jayson Donald Alexander Dallas, Aimmune Therapeutics, Inc. - President, CEO & Director [45]

--------------------------------------------------------------------------------

Yes, maybe a couple of other thoughts, Paul. One is that our plan is to get to payers who cover somewhere between 80% and 90% of our expected lives by the end of this year, and we can share a lot of information, a lot of data with payers in the present environments, and we plan to do that. The second one is that not all payers in terms of their P&T committees and formulary decision-makers around a sort of January to January time line. And they sort of have different kinds of rolling formulary and P&T committees and all the rest of it. So our job will be to cover all of them before we get approved. And then whenever that approval happens, to go back and cover all of them again, to make certain that we're getting up to speed very quickly and getting on to formularies as quickly as we can. And that's sort of what I would say just about to anyone at any launch whenever it was at any time of the year.

--------------------------------------------------------------------------------

Kyuwon Choi, Goldman Sachs Group Inc., Research Division - Equity Analyst [46]

--------------------------------------------------------------------------------

Okay. Great. And then just a question with respect to the trial and the very -- younger population. As you think about claims there and thinking about tolerances, is there any particular differences with respect to maximum exposure that you think in that population could support a broader claim?

--------------------------------------------------------------------------------

Jayson Donald Alexander Dallas, Aimmune Therapeutics, Inc. - President, CEO & Director [47]

--------------------------------------------------------------------------------

Can you maybe say more?

--------------------------------------------------------------------------------

Kyuwon Choi, Goldman Sachs Group Inc., Research Division - Equity Analyst [48]

--------------------------------------------------------------------------------

Oh, sure. I'm just wondering...

--------------------------------------------------------------------------------

Jayson Donald Alexander Dallas, Aimmune Therapeutics, Inc. - President, CEO & Director [49]

--------------------------------------------------------------------------------

I'm just unclear what you're asking.

--------------------------------------------------------------------------------

Kyuwon Choi, Goldman Sachs Group Inc., Research Division - Equity Analyst [50]

--------------------------------------------------------------------------------

Do you think there's a similar possibility in the younger patient trial that you -- younger pediatric population that you're running, that you would get possibly an additional claims out of that versus the current set that you're filing on?

--------------------------------------------------------------------------------

Daniel C. Adelman, Aimmune Therapeutics, Inc. - Chief Medical Officer [51]

--------------------------------------------------------------------------------

Yes, thank you for clarifying the question. This is Dan. The study has been designed purposefully to be a label expansion study. We do hope, as a single trial, to be able to go to FDA with the results and broaden our label.

--------------------------------------------------------------------------------

Jayson Donald Alexander Dallas, Aimmune Therapeutics, Inc. - President, CEO & Director [52]

--------------------------------------------------------------------------------

But in terms of design and in terms of the way we're doing the study, it's pretty much exactly the same.

--------------------------------------------------------------------------------

Daniel C. Adelman, Aimmune Therapeutics, Inc. - Chief Medical Officer [53]

--------------------------------------------------------------------------------

Right. And it would also not only be in the United States but also for label expansion in Europe.

--------------------------------------------------------------------------------

Operator [54]

--------------------------------------------------------------------------------

Ladies and gentlemen, this concludes today's Q&A session. I would now like to turn the call back over to Jayson Dallas for any closing remarks.

--------------------------------------------------------------------------------

Jayson Donald Alexander Dallas, Aimmune Therapeutics, Inc. - President, CEO & Director [55]

--------------------------------------------------------------------------------

Thank you, Ashley, and thank you, everyone, for joining us today. We're working to realize many significant achievements in 2019. And as we've said, we do think that Aimmune is a great 2019 story, and we look forward to providing you with further updates soon. Thank you very much for joining us, and have a great evening.

--------------------------------------------------------------------------------

Operator [56]

--------------------------------------------------------------------------------

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program, and you may all disconnect. Everyone, have a wonderful day.