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Edited Transcript of LJPC earnings conference call or presentation 4-Mar-19 9:30pm GMT

Q4 2018 La Jolla Pharmaceutical Co Earnings Call

SAN DIEGO Mar 8, 2019 (Thomson StreetEvents) -- Edited Transcript of La Jolla Pharmaceutical Co earnings conference call or presentation Monday, March 4, 2019 at 9:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Dennis M. Mulroy

La Jolla Pharmaceutical Company - CFO

* George F. Tidmarsh

La Jolla Pharmaceutical Company - President, CEO, Secretary & Director

* Sandra Vedrick

La Jolla Pharmaceutical Company - Director of IR & HR

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Conference Call Participants

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* Edward Patrick White

H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst

* Joon So Lee

SunTrust Robinson Humphrey, Inc., Research Division - VP

* Kyung Yang

Jefferies LLC, Research Division - MD & Senior Equity Research Analyst

* Philip M. Nadeau

Cowen and Company, LLC, Research Division - MD and Senior Research Analyst

* Tessa Thomas Romero

JP Morgan Chase & Co, Research Division - Analyst

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Presentation

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Operator [1]

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Welcome to the La Jolla Pharmaceuticals Company Fourth Quarter and Full Year 2018 Financial Results Call. (Operator Instructions) On today's call, La Jolla will be making forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements related to La Jolla's expectations regarding net sales and net cash used in operating activities for the full year 2019, the expectations regarding future clinical and regulatory milestones such as expected NDA submissions and approvals and expected timing for commencement and completion of clinical studies. These statements relate to expectations regarding future events or La Jolla's future results of operations. These statements are only predictions or statements of current expectations and involve known and unknown risk, uncertainties and other factors that may cause actual results to materially different from those anticipated by forward-looking statements. La Jolla cautions listeners not to place undue reliance on any such forward-looking statements, which speak only as of the date they were made. Certain of these risks, uncertainties and other factors are described in greater detail in La Jolla's filings with the U.S. Securities and Exchange Commission, SEC, all of which are available free of charge on the SEC's website at www.sec.gov. These risks include, but are not limited to, risks relating to La Jolla's ability to successfully commercialize market and achieve market acceptance of GIAPREZA, La Jolla's ability to grow net sales of GIAPREZA, potential market sizes, including for septic or other distributive shock, the timing and prospects for approval of GIAPREZA by the European Medicines Agency or other regulatory authorities, the scope of product labels and potential market sizes as well as broader commercial opportunities for GIAPREZA and La Jolla's product candidates, the impact of pharmaceutical industry's regulations and health care litigation in the U.S., United States, the success of development activities for the LJPC-401, LJPC-0118 and other product candidates, potential indications for which La Jolla's product candidates may be developed, the timing, costs, conduct and outcome of clinical studies, risks relating to the relevant drug candidates, the anticipated treatment of future clinical data by the U.S. Food and Drug Administration, EMA and other regulatory authorities including whether such data will be sufficient for approval, the expected duration over which La Jolla's cash balances will fund its operations, and other risks and uncertainties identified in La Jolla's filings with the SEC. La Jolla expressly disclaims any intent to update any forward-looking statements to reflect the outcome of subsequent events.

I will now turn the call over to Sandra Vedrick, Director of Investor Relations and Human Resources at La Jolla. Please go ahead.

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Sandra Vedrick, La Jolla Pharmaceutical Company - Director of IR & HR [2]

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Thank you, operator, and thank you for joining our fourth quarter and full year 2018 conference call. I would like to introduce the members of La Jolla management that are present on the call today. Dr. George Tidmarsh, our President and Chief Executive Officer; Dennis Mulroy, our Chief Financial Officer; and Jennifer Carver, our Chief Operating Officer. Now I will turn the call over to George.

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George F. Tidmarsh, La Jolla Pharmaceutical Company - President, CEO, Secretary & Director [3]

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Thank you, Sandra. Good afternoon, and thank you for joining us. In 2018, we made important strides towards fulfilling our mission of developing and commercializing innovative therapies intended to significantly improve outcomes in patients suffering from life-threatening diseases. First, we launched our first commercial product, GIAPREZA, at the end of March 2018; second, our Marketing Authorisation Application or MAA, for GIAPREZA was validated by the European regulatory authorities; and finally, we achieved important milestones in our development-stage programs that we expect will lead to an NDA filing for LJPC-0118 and a key data readout for LJPC-401, both in the second half of this year.

I'll begin by reviewing GIAPREZA, which was approved by the U.S. Food and Drug Administration as a vasoconstrictor indicated to increase blood pressure in adults with septic or other distributive shock. GIAPREZA mimics the body's endogenous regulatory peptide angiotensin II, that is central to the renin–angiotensin–aldosterone system to increase blood pressure. Shock occurs when the organs and tissues of the body do not receive adequate blood flow and it is associated with a mortality rate exceeding most acute conditions requiring hospitalization. Distributive shock is the most common type of shock in the inpatient setting, with approximately 800,000 distributive shock cases in the U.S. each year. Despite the availability of catecholamines and vasopressin, approximately 300,000 patients a year are not able to achieve adequate blood pressure. And prior to the approval of GIAPREZA, there had been no new treatment innovations for these patients over the past 50 years.

We launched GIAPREZA in the U.S. in March 2018. To support commercialization, we built sales, marketing, medical affairs and pharmacovigilance capabilities, among others. The sales organization includes health systems access, clinical nurse educator, and critical care specialist teams. Together, these groups work in tandem to educate health care providers regarding the value that GIAPREZA brings to patients with distributive shock.

Since launch, we continue to build a strong reputation with the clinical community that treats distributive shock patients. To date, approximately 380 hospitals have ordered GIAPREZA, and we have heard anecdotally from these hospitals that GIAPREZA is performing favorably and consistent with what we expected based on our earlier clinical findings. Our commercial efforts this year are focused on securing formulary approvals at the hospital -- at the hospitals that collectively will give us access to approximately 70% of the patients that are treated for distributive shock.

Turning our attention to the European Union. The Marketing Authorisation Application for GIAPREZA that was validated by the EMA was for the treatment of hypotension in adults with distributive or vasodilatory shock, remaining hypotensive despite fluid and vasopressor therapy. Our MAA is based on data from the ATHOS-3 Phase III study, which establishes the safety and efficacy of GIAPREZA in the proposed indication. In January, we announced that we expect to receive the EMA's decision on the MAA in June of this year.

If approved, GIAPREZA could be available for marketing in the EU in early 2020. In the European Union, the annual incidence of sepsis in adults is estimated to be more than 500,000, with more than 170,000 patients progressing to septic shock. Beyond our commercial progress, we had a number of data presentations at the Society of Critical Care Medicines Congress last month. First, in a subset analysis of patients enrolled in ATHOS-3, GIAPREZA was found to improve mean arterial pressure, or MAP, in patients with postoperative vasoplegia and catecholamine-resistant shock. Separately, an independent analysis of time below MAP threshold showed a strong association between the time below blood pressure threshold and morbidity and mortality. These data emphasize the need for rapid improvement in blood pressure, which is a core strength of GIAPREZA. In another presentation, an analysis of data from ATHOS-3 showed that patients who experienced a significant reduction in catecholamine dose after treatment, suffered fewer adverse events and this was more pronounced in the GIAPREZA-treated group compared to placebo.

Finally, in support of a potential pediatric indication for GIAPREZA, data from an animal model was presented showing that GIAPREZA raises MAP levels in juvenile animals and was well tolerated with no treatment-related clinical abnormalities or effects on any developmental tissue by microscopic assessment at the end of the 28-day recovery period.

I will now turn the call over to Dennis, who will review our financial results before I conclude the call with a discussion of our investigational product candidates. Dennis?

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Dennis M. Mulroy, La Jolla Pharmaceutical Company - CFO [4]

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Thank you, George. For the 3 months ended December 31, 2018, GIAPREZA net product sales were $4.2 million. This compares to $3.5 million for the 3 months ended September 30, 2018; $1.6 million for the 3 months ended June 30, 2018; and $0.8 million for the 3 months ended March 31, 2018.

For the 12 months ended December 31, 2018, GIAPREZA net product sales were $10.1 million. As a reminder, in December 2017, GIAPREZA was approved by the FDA as a vasoconstrictor indicated to increase blood pressure in adults with septic or other distributive shock, and in March 2018, La Jolla launched GIAPREZA in the U.S. La Jolla expects 2019 net product sales of $24 million to $28 million. Our net loss for the 3 and 12 months ended December 31, 2018, was $45.4 million and $199.5 million, or $1.73 per share and $7.85 per share, respectively, compared to $38.5 million and $114.8 million, or $1.74 per share and $5.41 per share, respectively, for the same periods in 2017.

As of December 31, 2018, we had $172 million in cash and cash equivalents compared to $90.9 million as of December 31, 2017. The increase in cash and cash equivalents was the result of $109.8 million of net proceeds from our March 2018 common stock offering, and $124.3 million of net proceeds from our May 2018 royalty financing, offset primarily by net cash used in operating activities. Net cash used in operating activities for the 3 and 12 months ended December 31, 2018, was $32 million and $152.4 million, respectively, compared to $25.4 million and $85.1 million, respectively, for the same period in 2017. La Jolla has no debt as of December 31, 2018 and 2017. In 2019, we expect our net cash used for operating activities to be $89 million to $94 million. I will now turn the call back over to George.

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George F. Tidmarsh, La Jolla Pharmaceutical Company - President, CEO, Secretary & Director [5]

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Thank you, Dennis. Before opening the call for Q&A, I'd like to briefly review our development programs with our other clinical product candidates. LJPC-0118 is our investigational product for the treatment of severe malaria, a serious and sometimes fatal disease caused by a parasite that commonly infects a certain type of mosquito, which feeds on humans. Severe malaria is often complicated by a Central Nervous System infections that may lead to delirium, which may progress to coma. The active pharmaceutical ingredient in LJPC-0118 was demonstrated to be superior to quinine in reducing mortality in patients with severe falciparum malaria infection in 2 randomized controlled clinical studies.

We plan to file an NDA with the FDA in the fourth quarter of this year for LJPC-0118 for the treatment of severe malaria.

Next, LJPC-401 is our proprietary formulation of synthetic human hepcidin. Hepcidin, an endogenous peptide hormone, is the body's naturally occurring regulator of iron absorption and distribution. In healthy individuals, hepcidin prevents excessive iron accumulation in vital organs such as the liver and heart, where it can cause significant damage and even result in death. We are advancing LJPC-401 for the potential treatment of iron overload, which occurs as a result of primary overload diseases such as hereditary hemochromatosis, or secondary iron overload diseases such as beta thalassemia, sickle cell disease, myelodysplastic syndrome and polycythemia vera. The EMA has designated LJPC-401 as an orphan medicinal product for the treatment of beta thalassemia intermedia and major, and sickle cell disease. LJPC-401 is currently being evaluated in 2 Phase II studies. The first ongoing study is a pivotal, multinational, multicenter, randomized controlled study in patients with beta thalassemia who, despite chelation therapy, have cardiac iron levels above normal. Beta thalassemia is a disease characterized by the underproduction of hemoglobin due to a genetic mutation. Due to the underlying anemia, these patients accumulate excessive iron in major organs independent of blood transfusions. This iron overload causes organ damage, which may lead to death.

In addition, patients with this disease are often dependent on frequent blood transfusions, which adds to the excess of iron accumulation. The primary efficacy endpoint of this study is a change in iron content in the heart after 6 months' treatment. We expect to report top line results from this study in mid-2020, and if successful, we expect to file an MAA in the European Union.

The second ongoing study of LJPC-401 is a multinational, multicenter, randomized, Phase II study in patients with hereditary hemochromatosis, a genetic deficiency in the production of hepcidin that leads to excessive iron accumulation. There are no FDA-approved therapies for hereditary hemochromatosis, and the current standard of care is phlebotomy procedures that typically involve the removal of a pint of blood on a regular basis and is associated with significant adverse effects. The primary efficacy endpoint of this study is the change in transferrin saturation, a standard measurement of iron levels in the body and 1 of the 2 key measurements used to detect and treat iron overload.

We are studying the change from the baseline to the end of treatment. We expect to report top line results from this study in the second half of this year.

In summary, over the course of the last year, we transformed our company into a fully integrated organization with active clinical development programs in late stage and the launch of GIAPREZA, a therapy that we believe has the potential to change the treatment landscape for patients with septic or other distributive shock. This year, we expect to file an NDA for LJPC-0118 for the treatment of severe malaria and to report top line results for our Phase II study of LJPC-401 for the treatment of hereditary hemochromatosis. We are also excited about the potential for LJPC-401 in treating iron overload in patients with beta thalassemia, an MAA-designated orphan drug indication for which we expect to report top line results from our pivotal study in mid-2020. We will now open the call up to questions. Operator?

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from the line of Joon Lee with SunTrust.

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Joon So Lee, SunTrust Robinson Humphrey, Inc., Research Division - VP [2]

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For the hepcidin asset, what amount of iron reduction in the heart would you need to see in order for the drug to be commercially viable? And can you remind us what the magnitude of heart iron reduction you see with the -- is with the chelators?

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George F. Tidmarsh, La Jolla Pharmaceutical Company - President, CEO, Secretary & Director [3]

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Sure. So to the second half of that question, it's highly dependent upon the chelator used and how it's used. Some chelators really are very poor at removing iron from the heart. They're much better from -- for removing iron from the liver. And so none of them have an indication for removal of iron from the heart. And oftentimes, it actually requires 2 chelators used simultaneously to kind of shuttle from the heart to the circulation to be excreted out of the body. So there is no current optimal chelation therapy for iron overload in the heart. And also, just remember, for the design of this trial, these patients are already on chelation therapy and failing as evidenced by abnormal levels of iron in the heart. So in terms of the significance of this trial, if we reach the primary endpoint with only 100 patients in the trial, then it will be clinically meaningful. The clinically meaningful is really, highly intrinsically associated with the size of the trial you need to meet a statistical significance on the primary endpoint. And as you know, many studies are hundreds of patients large to have the power to reach statistical significance. So again, we expect that should we reach statistical significance on our endpoint, and this was all agreed upon with the EMA, then we will have a clinically meaningful improvement in cardiac iron.

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Joon So Lee, SunTrust Robinson Humphrey, Inc., Research Division - VP [4]

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And I have a 1 quick follow-up. In your previous study, I think you had a mix of hemochromatosis and beta thalassemia patients, where you showed that you have reduction in iron -- serum iron for a week. Have you ever disclosed the data based on, stratified by the disease type?

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George F. Tidmarsh, La Jolla Pharmaceutical Company - President, CEO, Secretary & Director [5]

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I believe that in our post -- one of our posters or presentations at EHA, we had individual patient data, but I could go back and look at that. What I can tell you is that there was, in that cohort of patients, which wasn't large, we didn't see any difference in the disease type in terms of the effect of LJPC-401. That is, it was equally effective for iron reduction in all of the different disease types that were studied.

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Joon So Lee, SunTrust Robinson Humphrey, Inc., Research Division - VP [6]

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Great. And one last question. Can you remind me what the cash runway is?

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George F. Tidmarsh, La Jolla Pharmaceutical Company - President, CEO, Secretary & Director [7]

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Currently, based on our cash balance and our expected net burn, we have cash into the second half of 2020.

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Operator [8]

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Our next question comes from the line of Phil Nadeau with Cowen and Company.

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Philip M. Nadeau, Cowen and Company, LLC, Research Division - MD and Senior Research Analyst [9]

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I guess the first on the GIAPREZA launch. Could you give us an update on what proportion of patients who have distributive shock today have access to GIAPREZA? I think you said the goal was 70% this year or over the next couple of years. Where are you today?

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George F. Tidmarsh, La Jolla Pharmaceutical Company - President, CEO, Secretary & Director [10]

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I'm sorry, could you repeat the question?

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Philip M. Nadeau, Cowen and Company, LLC, Research Division - MD and Senior Research Analyst [11]

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Yes, what percent of patients having distributive shock have access to GIAPREZA today?

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George F. Tidmarsh, La Jolla Pharmaceutical Company - President, CEO, Secretary & Director [12]

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So we are aiming to have access to 70% of the patients in the U.S. that have distributive shock this year. That's our goal this year. That's always been our stated goal. With 380 ordering institutions out of the little over 1,000, we're probably in the 40% range -- 35%, 40% range. But I could follow up with that exact calculation. Now obviously...

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Philip M. Nadeau, Cowen and Company, LLC, Research Division - MD and Senior Research Analyst [13]

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No, that's very helpful. That's helpful.

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George F. Tidmarsh, La Jolla Pharmaceutical Company - President, CEO, Secretary & Director [14]

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That represents a -- if you say, we are in a institution that's ordering, it's not to say that we've fully penetrated that institution. But in terms of the ordering, it's -- we're well into that 70% which we've targeted.

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Philip M. Nadeau, Cowen and Company, LLC, Research Division - MD and Senior Research Analyst [15]

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And back in January, I think, you said that one of the other goals for 2019 was to increase the penetration of those hospitals that are ordering already? Can you talk a little bit about what you expect to do to increase that penetration?

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George F. Tidmarsh, La Jolla Pharmaceutical Company - President, CEO, Secretary & Director [16]

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Yes. So what -- our main objective for this year is to present contracting opportunities to hospitals that have utilized GIAPREZA and want to increase that utilization, but are understandably cost-sensitive. The -- our contracting efforts typically involve a volume discount tier, which is fairly standard in the industry. So that as the volume of a given institution goes up then their percent -- they get a increasing percent discount over that increased volume. So we are presenting those contracting opportunities to the major health systems and institutions. And typically, it's those institutions that already have experience with GIAPREZA. For those institutions that don't have experience with GIAPREZA yet, where we hear that cost is a barrier to entry, we have other contracting opportunities for those institutions. They tend to be short-term discounts and it really takes -- it's designed to take cost off the table to drive volume. And we're very confident that as these institutions get experience with GIAPREZA that they will see the full value of the use of GIAPREZA and the treatment of septic or other distributive shock.

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Philip M. Nadeau, Cowen and Company, LLC, Research Division - MD and Senior Research Analyst [17]

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Okay, that's very helpful. Second question is on 401. What are your plans for beta thalassemia in the U.S.? Is there any update on the ability to take that pivotal data to the U.S. regulators?

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George F. Tidmarsh, La Jolla Pharmaceutical Company - President, CEO, Secretary & Director [18]

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No update from what we've said before. The FDA is aware of our protocol and has signed off on it. We have not engaged in any Special Protocol Assessment or other approval discussions with FDA. We do believe that our endpoint is a clinically meaningful endpoint that the FDA is very comfortable with. And should we reach statistical significance, I have confidence that we will have a good chance at approval in the U.S. as well.

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Philip M. Nadeau, Cowen and Company, LLC, Research Division - MD and Senior Research Analyst [19]

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Great. Then one last question on the finances. The cash burn guidance seems to imply a pretty big cut in quarterly operating expenses. One, is that a fair assessment? And two, if so, can you give us some sense of where that expense is coming from? Is it coming from R&D or SG&A?

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Dennis M. Mulroy, La Jolla Pharmaceutical Company - CFO [20]

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Yes. There is going to be a significant change in our spending in 2019 versus 2018. And we took those -- made those changes in the fourth quarter, and they were pretty evenly spread throughout the company to reduce spending in the various areas and yet, still maintain our focus and the efficiency of generating the GIAPREZA sales.

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George F. Tidmarsh, La Jolla Pharmaceutical Company - President, CEO, Secretary & Director [21]

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Yes, just to -- sure, and I'll just expand on that a bit. We have done fairly sophisticated analyses on the team needed to commercialize GIAPREZA. And we are very confident that our organization currently and with some changes, additions and sort of some changes in terms of the direction of the organization, we're very confident that we have sufficient commercial effort behind GIAPREZA to maximize sales.

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Operator [22]

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Our next question comes from the line of Eun Yang with Jefferies.

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Kyung Yang, Jefferies LLC, Research Division - MD & Senior Equity Research Analyst [23]

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I have a question on 401 for hereditary hemochromatosis. So now we're expecting data in the second half of this year. What do you think you then need to show in order to capture market share or replace current standard of care phlebotomy? From talking to physicians it seems to me that, although the general limitation is relatively common, the disease penetrancy is low and phlebotomy is quite effective, we do once monthly or bimonthly dosing or maintenance. So kind of wondering what would you need to show to compete in the marketplace, if approved?

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George F. Tidmarsh, La Jolla Pharmaceutical Company - President, CEO, Secretary & Director [24]

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So of course, first of all, Eun, thank you for the question. And to reiterate, there are no approved therapies currently for the treatment of hereditary hemochromatosis. So in terms of FDA approval, there really is nothing out there to compare to. Phlebotomy is used and there is a general perception amongst physicians that it can adequately control the iron levels in patients. I think unfortunately, that perception is not routinely shared with the patient -- amongst the patient population. And we have done a significant amount of work there. If you speak with the patients, they are looking for an alternative to phlebotomy because phlebotomy, not only is it inconvenient, you have to travel to a infusion or blood donation center, you have to take several hours out of your day, it is associated with significant adverse effects, including the insertion of a large bore needle. And interestingly enough, there are many publications showing that phlebotomy actually worsens some of the symptoms of hereditary hemochromatosis, most specifically the joint pain and the joint discomfort. And so I think that with our once-weekly subcutaneous injection without the need to leave your place of work, to be inconvenienced, to suffer some of those adverse effects, we think that LJPC-401 has a potential to displace phlebotomy significantly for the treatment of hereditary hemochromatosis. And to our knowledge, there really is nothing else in development for HH. And so if successful, we would likely be the first approved therapy. So I think that we will significantly improve the outcome for these patients. Now to your point about the penetrance, we -- so we estimate -- well, the data suggests there is over 1 million patients in the U.S. affected genetically with the mutation that causes low hepcidin. But to your point, there -- we estimate that only about a 0.25 million of these patients are recognized and undergo treatment. So it's not unusual actually that a patient will get diagnosed somewhat accidentally by either presentation of an incurred adverse effect such as organ failure or on a routine blood test. So we will certainly launch a significant effort to more broadly educate and diagnose patients with HH, so that they can potentially be treated with LJPC-401 before they incur the organ damage that necessitates very frequent phlebotomy that, again, is attendant with significant adverse effects. So -- did I fully answer your question?

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Kyung Yang, Jefferies LLC, Research Division - MD & Senior Equity Research Analyst [25]

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Sure. That's helpful. And 401, what's the subcu weekly dosing volume?

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George F. Tidmarsh, La Jolla Pharmaceutical Company - President, CEO, Secretary & Director [26]

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The current volume is 1 ml.

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Kyung Yang, Jefferies LLC, Research Division - MD & Senior Equity Research Analyst [27]

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Okay. And the last question is on GIAPREZA. So are you expecting European approval in June this year? So upon approval, when do we expect European partnership? Or would you go alone and started doing kind of a pricing negotiation with the various governments in Europe?

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George F. Tidmarsh, La Jolla Pharmaceutical Company - President, CEO, Secretary & Director [28]

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So yes, the decision on the MAA is expected in June of this year. And we have begun to undertake all of the necessary groundwork in Europe, such as meeting with some of the individual country pricing authorities. And we will assess as we go along about the value of any potential partnership if we were to do that. We have been approached by multiple entities, and we will assess those as they come, but we don't have any stated time line for any potential partnership.

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Operator [29]

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Our next question comes from the line of Ed White with H.C. Wainwright.

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Edward Patrick White, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [30]

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So just on 0118, can you tell us a bit more about the data that you have seen there and that you are using for the potential NDA filing? And then also, just looking -- thinking of our priority review voucher, what steps have to be taken to undergo an application for a priority review voucher and the chances for attaining that?

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George F. Tidmarsh, La Jolla Pharmaceutical Company - President, CEO, Secretary & Director [31]

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Sure. So we are in the process of wrapping up the clinical study that was requested by FDA for our NDA submission. Then we'll update as we gain further clarity about the timing and the filing that we expect later this year. We have gained additional data from 2 large randomized, controlled trials in the treatment of severe malaria that showed a survival benefit of the active ingredient of LJPC-0118. And so we're confident as we stand today, that we have sufficient data based on our communications with FDA and remain on track for that filing time line. So yes, that -- and I'm sorry, what was the second part of your question?

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Edward Patrick White, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [32]

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The second part was just about the priority review voucher.

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George F. Tidmarsh, La Jolla Pharmaceutical Company - President, CEO, Secretary & Director [33]

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Priority review voucher. Yes, so typically what happens, as part of the NDA submission there is a separate part of the application for the priority review voucher. And we strongly believe that we meet all of the statutory requirements for the issuance of a PRV. Malaria itself, we know, is a neglected tropical disease that's on the stated list of diseases that are eligible for priority review voucher.

Secondly, the active ingredient has to not have been approved previously. And we believe, based on all our analyses that, that is, in fact, the case, and then the clinical data has to show significant benefit. And we are very confident that the data does show a significant benefit. So while we can't always be certain until it actually happens, we believe by a very thorough and exhaustive analysis of the statutory requirements for issuance of a PRV that we will be eligible, but that process takes place in parallel with the NDA review.

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Edward Patrick White, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [34]

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Okay. And then, as far as marketing, is this something that you would market on your own? Or would you look for a partner?

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George F. Tidmarsh, La Jolla Pharmaceutical Company - President, CEO, Secretary & Director [35]

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Well, this -- since there's about 1,700 malaria patients in the U.S. every year, almost 300 will be -- will progress to severe malaria. And since there will really be no other treatment, we do not believe that this will require much effort in terms of marketing. So we do have the infrastructure currently that would support this. We're working with the distributors to get the drug. For GIAPREZA, we have the relationships with distributors to have approved products on the hospital shelf, so if 0118 is approved, we have that infrastructure. We have the infrastructure with our pharmacovigilance to support it, medical affairs and so forth, but we do not believe that it would require significant sales and marketing effort simply because it would be a essential therapy for a very rare condition that is severely life-threatening.

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Operator [36]

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Our next question comes from the line of Anupam Rama with JP Morgan.

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Tessa Thomas Romero, JP Morgan Chase & Co, Research Division - Analyst [37]

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This is Tessa on for Anupam this evening. I believe you have mentioned that a clinical trial needed for the NDA for LJPC-0118 and malaria is underway and fully recruited. Can you orient us to the trial design and what would be considered a win here? And then, maybe related, piggybacking on the last question, is there a publishing strategy on the earlier clinical trial data?

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George F. Tidmarsh, La Jolla Pharmaceutical Company - President, CEO, Secretary & Director [38]

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Yes, I think, for sure, the data that we are collecting currently is a trial that really looks at the pharmacokinetics and the distribution of our version -- our LJPC-0118, our version of the active ingredient, which has previously been shown to improve outcomes. And yes, that trial is fully enrolled, and we are finalizing the collection of the last bits of data, and we'll update everyone at the time that we are completed with that trial and update on our timing -- expected timing for the NDA. I think we will absolutely publish the data, and I think we will -- we do have certainly a plan in place to update the public and the medical community about the data and the availability of 0118 should it get approved. So yes, we do have a coherent publication strategy.

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Operator [39]

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And we have no further questions at this time.

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George F. Tidmarsh, La Jolla Pharmaceutical Company - President, CEO, Secretary & Director [40]

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Thank you all for attending our conference call today, and appreciate your support of LJPC.

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Operator [41]

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