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Edited Transcript of MDCO earnings conference call or presentation 24-Jul-19 12:30pm GMT

Q2 2019 Medicines Co Earnings Call

PARSIPPANY Jul 30, 2019 (Thomson StreetEvents) -- Edited Transcript of Medicines Co earnings conference call or presentation Wednesday, July 24, 2019 at 12:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Christopher J. Visioli

The Medicines Company - CFO & Treasurer

* Goutham Krishna Gorti

The Medicines Company - VP & Head of IR

* Mark Timney

The Medicines Company - CEO & Director

* Peter Wijngaard

The Medicines Company - Executive VP & Chief Development Officer

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Conference Call Participants

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* Akash Tewari

Wolfe Research, LLC - Director of Equity Research & Senior Research Analyst

* Chris Shibutani

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

* Dae Gon Ha

SVB Leerink LLC, Research Division - Associate

* Jay Olson

Oppenheimer & Co. Inc., Research Division - Executive Director & Senior Analyst

* Jessica Macomber Fye

JP Morgan Chase & Co, Research Division - Analyst

* Joel Lawrence Beatty

Citigroup Inc, Research Division - VP & Analyst

* Kyuwon Choi

Goldman Sachs Group Inc., Research Division - Equity Analyst

* Madhu Sudhan Kumar

Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst

* Mayank Mamtani

B. Riley FBR, Inc., Research Division - Research Analyst

* Umer Raffat

Evercore ISI Institutional Equities, Research Division - Senior MD & Senior Analyst of Equity Research

* Yasmeen Rahimi

Roth Capital Partners, LLC, Research Division - MD, Senior Research Analyst & Co-Head of Biotechnology Research

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Presentation

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Operator [1]

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Greetings, and welcome to The Medicines Company Second Quarter 2019 Earnings Call Webcast. (Operator Instructions) As a reminder, this conference is being recorded. And I'd like to turn the conference over to your host Krishna Gorti, Vice President of Investor Relations. Thank you, you may begin.

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Goutham Krishna Gorti, The Medicines Company - VP & Head of IR [2]

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Thank you, operator. Good morning, everyone, and welcome to The Medicines Company's Second Quarter 2019 Conference Call. I'm joined today by our Chief Executive Officer, Mark Timney; our Chief Financial Officer, Christopher Visioli; and our Chief Development Officer, Peter Wijngaard.

Earlier this morning, we issued a press release reporting our second quarter 2019 financial and operating results. The press release is available in the Investor and Media Relations section of our website.

Before we begin, I'd like to remind you that our discussion during the call will include forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those indicated by those forward-looking statements.

Additional information regarding these risks and uncertainties is discussed under the forward-looking statements legend in this morning's press release as well as in our periodic reports filed with the Securities and Exchange Commission, which can be obtained from the SEC or by visiting the Investor Relations section of our website.

During today's call, we will also discuss certain financial measures that were not prepared in accordance with the U.S. generally accepted accounting principles. Please refer to this morning's press release for a reconciliation of these non-GAAP measures to the most directly comparable GAAP financial measures. With that, I'll now turn the call over to Mark. Mark?

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Mark Timney, The Medicines Company - CEO & Director [3]

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Thank you, Krishna. Good morning, everyone, and thank you for joining us today. Before I discuss the quarter, I'd like to remind us all why we're here. The millions of people worldwide who continue to die as a result of the world's #1 killer, cardiovascular disease. Atherosclerotic cardiovascular disease, or ASCVD, is the leading contributor to morbidity and death due to cardiovascular disease and it's a root cause cumulative exposure to elevated LDL cholesterol. It's also the most readily modifiable risk factor.

Despite the widespread availability and use of proven LDL-lowering therapies, notably statins, many people with ASCVD are not meeting treatment goals. At The Medicines Company, we believe there are 2 critical unmet needs: first, additional LDL-C lowering is needed so that ASCVD patients consistently reach their goal and avoid cardiovascular events; second, underlying this first need is poor patient adherence to LDL-C lowering therapy. Entering the third quarter of this momentous year for The Medicines Company and inclisiran, we continue to make steady progress keeping a sharp focus on highly disciplined execution. We're moving closer to our goal of realizing the intrinsic value of inclisiran, which we believe has the potential to fundamentally change the treatment of cardiovascular disease.

Inclisiran is the first cholesterol-lowering therapy in the siRNA class. In phase II studies, inclisiran has shown clinically significant LDL-C reductions greater than 50% on top of optimal background lipid lowering therapy and has the potential to deliver durable and potent effects through a 6-month dosing interval. This unique twice-a-year dosing regimen administered by a healthcare professional can circumvent many of the challenges around adherence to existing therapies.

The twice-a-year dosing also aligns well with the common physician practice of twice-a-year appointments with ASCVD patients. Based on the durable and potent efficacy, there is extremely high potential for significant cardiovascular outcome benefit with inclisiran, which also has multiple other advantages such as no requirement for cold chain storage and a relatively simple scalable low-cost manufacturing and supply chain.

Now let me focus on the quarter, which was busy and exciting. During the second quarter, the company launched a public offering of shares of its common stock and received net proceeds from the offering of approximately $161.6 million. We believe the net proceeds from the offering combined with the existing cash materially extends our cash runway well into the second half of 2020 and enhances the company's strategic financial flexibility. Chris will go into more detail later into the call.

Now turning to the clinical development program. We continued our strong momentum and execution during the second quarter where we successfully advanced inclisiran in the pivotal ORION Phase III trials. The pivotal Phase III studies are ongoing and on track. We expect to communicate top line results upon completion of each trial.

As previously disclosed, we expect to start reporting Phase III readouts in the second half of the third quarter of 2019. In line with that expectation, we submitted a promissory abstract to the European Society of Cardiology for a late-breaking science session to present efficacy, tolerability, and safety data from ORION-11. That abstract was accepted for presentation on Monday, September 2 at 9:22 a.m. Central European time.

Last week, the Independent Data Monitoring Committee reviewed un-blinded safety and efficacy data from the Phase III trials for the seventh time as planned and recommended continuation of the trials without modification of the protocols. At the time of the seventh IDMC review, substantially all randomized patients had been treated with 4 doses. And to date, more than 3,500 patient years of inclisiran safety data have been accumulated in the ORION program.

Our ongoing review of blinded data to date from the Phase III trials show no material safety issues and the emerging data are at least as favorable as those generated from the ORION-1 Phase II study and the ORION-3 open-label extension study.

It is worth noting that the inclisiran development program is the industry's largest siRNA program targeting atherosclerotic cardiovascular disease. Patients who have completed their respective Phase III studies are now enrolling into an ORION-8, an open-label long-term extension study where patients completing ORION-9, ORION-10 and ORION-11 will receive inclisiran for 3 years to evaluate the efficacy, safety and tolerability of long-term dosing.

Enrollment of patients into the ORION-4 cardiovascular outcomes trial is also ongoing and remains on track. As a reminder, we plan to complete enrollment within 1 to 2 years. During the second quarter, we brought forward new data and analyses for presentation and publication at medical conferences in May. During the late-breaking clinical trial session at the National Lipid Association Scientific Sessions in Miami, we presented interim results from the ongoing ORION-3 open-label extension study, which showed that twice-a year dosing with inclisiran sodium 300 milligrams resulted in consistent lowering of LDL cholesterol by more than 50% with overall follow-up of up to 3 years. Inclisiran was well tolerated and no material safety issues were observed in the study.

During the 87th European Atherosclerosis Society Congress in Maastricht, Netherlands, the company presented a combined analysis of safety and efficacy data in renal impaired patients from ORION-1 and ORION-7 during an oral abstract session. The analysis demonstrated that patient's across a range of renal function levels achieved consistent reductions in LDL cholesterol with no dose adjustment necessary for patients with renal impairment and no safety concerns with using inclisiran in patients with severe renal impairment. Importantly, this analysis allowed inclusion of such patients into ORION-10 and ORION-4.

Also during this Congress, the company presented as a late-breaking abstract, results from the Phase II ORION-2 pilot study in patients with homozygous familial hypercholesterolemia, a genetic disorder characterized by very high level of LDL-C and early onset of cardiovascular disease. Those results show that inclisiran provided durable reductions than LDL-C levels up to day 180, 180 without the need to increase the dose of inclisiran or change the frequency of dosing.

Our ongoing robust pre-commercialization work has further increased our excitement around inclisiran's profile and potential. The team's planning has been informed by a wealth of insight-driven analysis centered on patients, providers, health systems, and payers that comprise the healthcare ecosystem. We are working with industry-leading partners to conduct several rounds of qualitative and quantitative market research globally. Early feedback on the target product profile for inclisiran has been very positive across stakeholders, who see the game changing potential for this first-in-class siRNA therapy to deliver durable and potent lowering of LDL-cholesterol. I'll speak more about initial feedback from payers. We secured input from senior decision makers at health plans and health systems in the U.S., the European Big 5 and Japan. There is general agreement among payers in several important areas that support inclisiran's strong value proposition for patients requiring lipid-lowering therapy.

Messaging related to disease burden as well as clinical efficacy and safety for inclisiran has resonated well with decision makers across all markets. They see how a product with inclisiran's profile can help address the overwhelming unmet needs that contribute to the world's leading cause of death. Low adherence to existing therapies is seen as a significant driver of unmet need and inclisiran's dosing profile is viewed as the potential solution to help circumvent the challenges of treatment adherence by improving therapeutic coverage and persistence.

Looking a little deeper into what differentiates inclisiran. This important stakeholder group used twice-a-year dosing, healthcare practitioner administration and the ability to significantly lower LDL-C over a long period of time as core value drivers. There is strong feedback on the possibility for inclisiran to deliver a positive treatment experience through twice-a-year dosing. Administered to the patient by a healthcare professionals, which aligns with common approaches to care for patients with ASCVD, including the frequency of follow-up office visits.

And lastly, payers are receptive to our focus on patient affordability in attempts to create an environment that responsibly support access to all patients who could benefit from inclisiran. These discussions reinforce our confidence in inclisiran as the first-in-class cholesterol-lowering siRNA offering a vastly different value proposition compared to any other LDL-C lowering option. We'll continue to have more engagements with the full range of stakeholders, and we'll continue to analyze the feedback. We look forward to providing more information about this and other pre-commercialization work, as we head through the second half of 2019.

The opportunity to help people simply and dramatically lower LDL-C, and therefore, live healthier lives and the magnitude of the unmet need and health challenge speaks to the potential market opportunity for inclisiran. There are numbers of high-risk under-treated patients with the ASCVD and FH requiring lipid-lowering therapies is staggering. In the U.S. alone we believe nearly 12.7 million patients could benefit from inclisiran. And on a global basis, that number could double. We're confident in the promise of inclisiran to significantly lower LDL-C and address long-standing adherence challenges for millions of people.

I'll now turn the call over to our Chief Financial Officer, Chris Visioli, who'll cover our financial results for the second quarter. Chris?

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Christopher J. Visioli, The Medicines Company - CFO & Treasurer [4]

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Thank you, Mark, and good morning, everyone. During the second quarter of 2019, we continued to execute the plan. As Mark highlighted, our recent equity offering raising proceeds of $161.6 million, we believe, materially extends our cash runway well into the second half of 2020 enhances the company's strategic financial flexibility.

Research and development expenses were $28.1 million, including $2.4 million in stock-based compensation expense in the second quarter of 2019 compared to $30.3 million including $1.2 million in stock-based compensation expense for the same period in 2018.

R&D expenses for the quarter included continued cost associated with pivotal ORION Phase III clinical programs, inclisiran manufacturing development work, progression of enrollment in the ORION-4 CVOT program, the continued transition of patients from the pivotal programs into the ORION-8 extension study, and headcount associated with R&D.

SG&A expense was $19.9 million including $3.3 million in stock-based compensation expense in the second quarter of 2019 compared to $21 million including $3.4 million in stock-based compensation expense for the same period in 2018.

Our cash and cash equivalents at the end of the second quarter was $319.3 million, which we anticipate will enable us to fund operating expenses well into the second half of 2020.

We look forward to the pivotal Phase III data readouts that are right around the corner. With that, I'll turn the call back over to Mark. Mark?

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Mark Timney, The Medicines Company - CEO & Director [5]

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Thanks, Chris. So in summary, the company is going into a catalyst rich second half of 2019, which include sequential release of top line data readouts for ORION-11, ORION-9 and ORION-10 starting in the second half of the third quarter. Submissions to congresses and preparation of publications in peer-reviewed journals, completion of validation of manufacturing batches for commercialization in the third quarter and anticipated U.S. NDA filing in the fourth quarter.

In parallel, pre-commercialization work's ongoing and affirms the highly competitive profile of inclisiran. We believe the net proceeds from the recent public offering combined with the existing cash materially extends our cash runway well into the second half of 2020 and enhances the company's strategic financial flexibility. We believe inclisiran could become a game changer in cardiovascular care and help to overcome many of the existing barriers in the fight against cardiovascular disease, the world's leading cause of death.

With that, we thank you for listening. I'll turn the call back over to Matt, the operator, so we can take some questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question here is from Umer Raffat from Evercore ISI.

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Umer Raffat, Evercore ISI Institutional Equities, Research Division - Senior MD & Senior Analyst of Equity Research [2]

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I have one and a follow-up, if I may. First, in the past when you've described the blinded safety looks you've always mentioned that it's tracking at least as favorable as the data from Phase II. And I noticed today, you've added on language to include it's tracking at least as favorable as data from Phase II and the ORION phase III open-label extension studies. Should we be reading into that that you've expanded the scope of what you were referencing as? What it's tracking favorable relative to? That's one. And the second one is, maybe one for Mark, when it says no-material-safety issues, how should we think about that as we're heading into the press release?

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Peter Wijngaard, The Medicines Company - Executive VP & Chief Development Officer [3]

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Umer, this is Peter. So when we announced the ORION-3 results, we made it clear in our disclosure that the results we've seen in ORION-3 are consistent with the result we've seen in ORION-1, just for the longer-term follow-up of up to 3 years. So I don't think you need to read anything more and that it is consistent from ORION-1 to ORION-3 and what we're seeing in blinded if we look to Phase III program.

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Mark Timney, The Medicines Company - CEO & Director [4]

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You're going to handle the safety -- no material safety issues as well Peter, fairly straightforward.

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Peter Wijngaard, The Medicines Company - Executive VP & Chief Development Officer [5]

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Yes, it's sort of the same thing. So we have established the safety profile in Phase II in ORION-1, which now extended out to 3 years with ORION-3. Again, we look at the blinded safety information from Phase III. So you look at aggregate event rates that you see there. And again, we're consistent with what we have seen in ORION-1 and ORION-3 and what is sort of expected with the background of the cardiovascular disease that these patients have. So that what's defined no-material safety, as we've have said before.

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Operator [6]

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Our next question is from Joseph Schwartz from Leerink.

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Dae Gon Ha, SVB Leerink LLC, Research Division - Associate [7]

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This is Dae Gon dialing in for Joe. So one question and one follow-up for me as well. Just based on our conversation with investors, there are several recurring questions and I wanted to get your take. So first question is on your prior call in Miami held with Dr. John Kastelein, I remember him saying he predicted about 54% LDL reduction on day 510 and a consequent improvement in MACE. So since ORION-4 data aren't expected for several more years and we're expecting the sequential data in third quarter, wondering what is the lower bar in your view on the LDL reduction that can materialize? And what is it from the KOL that they would like to see as a bare minimum? And as a follow-up, we're still hearing investors cautious on the PCSK9 market, so can you frame for us based on either commercial PCSK9 monoclonal sales or your own market research that, Mark, you alluded to in your prepared remarks, what is the industry's appetite for 6 monthly subQ drug like inclisiran?

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Mark Timney, The Medicines Company - CEO & Director [8]

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Thanks, Dae Gon. I'll let Peter handle the first part and I'll continue with the second.

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Peter Wijngaard, The Medicines Company - Executive VP & Chief Development Officer [9]

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Thanks, Joe. So if you go back to the ORION-3 data that we presented at NLA, it is sort of combined with ORION-3 6 years -- 3 years of follow-up and up to 6 doses of inclisiran given in individual patients. And what was striking of the ORION-3 data, one, we got consistently more than 50% of LDL-C reductions. And two, the LDL-C response was identical or consistent every single time you gave inclisiran. So we anticipate that consistency is maintained over the long term. In the population that we had in ORION-3, we had on average a 60 milligrams per deciliter of absolute reduction in LDL-C because that's driven by the baseline that this particular population had. But that is -- this was the number that you have to keep in mind if you want to extrapolate that to what you could expect in outcome studies in the long term.

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Mark Timney, The Medicines Company - CEO & Director [10]

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If I can -- I'll cover the couple of questions which are more around the commercial impact. When you think about sort of the lower bar, certainly in our research we've presented a profile, which is 50% or greater in our market research in terms of LDL-C lowering, that has been received extremely positively. However, it's much more around the whole profile where we're getting feedback, the twice-a-year dosing. Actually putting the control back into the hands of the physician that's coming across is very, very positive. And I think this speaks to the second part of your question around this 6-month dosing. The beauty of this and what we're hearing in the research is that these high-risk ASCVD patients are seeing their healthcare practitioners twice a year routinely as a majority of them anyway. And we're seeing that as very positive not only for the physicians, again, who feel that they've got a control and also giving a purpose for the visit. But it sort of guarantees their adherence but also for the patient they're feeling a reassurance that they know they got LDL-C lowering on board as they try to achieve these treatment goals also.

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Operator [11]

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Your next question is from Jessica Fye from JP Morgan.

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Jessica Macomber Fye, JP Morgan Chase & Co, Research Division - Analyst [12]

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Maybe building a little bit on the last topic. I know you can't comment on any ongoing discussions or strategic interests, but can you just give us a sense of the types of players who could be interested in owning this asset? And what's specific attributes in inclisiran you think they might find attractive whether it be the revenue potential, potential COGs advantage, et cetera. Just sort of hoping you could give us a sense of whether you think there could be a competitive process to own this asset?

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Mark Timney, The Medicines Company - CEO & Director [13]

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Thanks for the question. Obviously, I can't comment on any sort of speculation. As you know, we've always said that we would seek to have strategic optionality and flexibility in whatever we're doing. And obviously, having a range of options is very important to us. What we can say is that if you look at the profile and if you think about the profile of inclisiran that is going to give you potency, durability, sort of that consistent lowering of LDL-C then you have on top of that the fact that you're also going to put the control back into the hands of the healthcare practitioner, which will help certainly with adherence, and obviously, the reduction in the amounts of time that you have to take this medication. You start to get a very different profile. Coupled with that, we're starting to have conversations which are very different with payers that I've experienced before around an LDL-C lowering medication where they're starting to look at specific patient types and groups of populations, which is being quite -- and this is why we talk about it being game changing because they're starting to consider it in -- around the discussion terms to population health very quickly. So -- I mean you have probably answered the question yourself as we gave you the examples. You've got a differentiated profile, you've got a very attractive COGs. And so, therefore, you've got the flexibility in how you position this certainly from patient affordability. It's very, very exciting for I would imagine, a range of companies.

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Jessica Macomber Fye, JP Morgan Chase & Co, Research Division - Analyst [14]

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Great. And maybe just one follow-up on just the cadence of news flow we can think about over the back half of the year. So based on the projected completion of these Phase III trials, do you anticipate all 3 of them will be presented at conferences by year-end? Or is it possible we might have to wait until ACC, for example, to see some of the data details?

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Peter Wijngaard, The Medicines Company - Executive VP & Chief Development Officer [15]

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Jessica, this is Peter again. As we've stated the first one will be presented at ESC, the second one following 9 and 10 as you remember enrollment was finished in the time span of the 3 studies of 6 weeks earlier last year. We anticipate those results to come out sort of the same sequence in roughly about the same time span. So they would be ready for major conferences later in the year. Obviously, we have to go through the process of abstract submission and acceptance. So that's the part we don't know yet.

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Operator [16]

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Our next question is from Joel Beatty from Citi.

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Joel Lawrence Beatty, Citigroup Inc, Research Division - VP & Analyst [17]

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The first one is on the top line data from the first trial reading out at ESC. Is there any potential for top line data to come sometime before ESC? And then the second follow-up question is could you discuss where you're currently at in terms of hiring for commercialization and any plans to ramp that up in the near term?

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Mark Timney, The Medicines Company - CEO & Director [18]

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Peter, you need to handle the timing.

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Peter Wijngaard, The Medicines Company - Executive VP & Chief Development Officer [19]

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Yes, I can answer the first part of your question, Joel. As we said in the call earlier as well as previously, we will report top line data from the 3 studies as they come available to us. And so also ORION-11 will become available to us before ESC. So we will do a top line announcement prior to ESC, but full results will be then disclosed at ESC in the late-breaking scientific session on Monday, September 2.

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Mark Timney, The Medicines Company - CEO & Director [20]

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With regards to -- Joel, thanks for the question. With regards to commercialization and planning, we're about really 6, 7 months into it now. Everything that's ongoing is as you were expecting normal pharma company. We're doing extensive work around research. We're doing extensive work around the scientific platform. It really is pre-commercialization. We're very early in that process and it's all going to plan. And it's -- as I've said on the call, we're very, very excited about what's coming back in terms of our research and it's really affirming the competitive profile that we have for inclisiran. Very exciting.

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Operator [21]

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Our next question is from Chris Shibutani from Cowen and Company.

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Chris Shibutani, Cowen and Company, LLC, Research Division - MD & Senior Research Analyst [22]

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Two questions, if I may. On the outcomes study, I think you mentioned that there was potential for a range of enrollment completion in 1 or 2 years. Can you comment on what the rate limiting factors are for that? And then number two, you discussed some of the feedback that you have from payers, U.S., Europe, and Japan. Can you comment about what kind of assumptions the payers were contemplating from a pricing standpoint? And as well how they thought about the potential for patients using inclisiran either new to therapy versus the possibility of benefit of switching over patients on monoclonals, which may be more -- priced higher? If you could comment on the considerations that went into the thinking of the payers that you've been discussing with that would be helpful.

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Mark Timney, The Medicines Company - CEO & Director [23]

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Thanks, Chris I'll let -- Peter will talk to you about the outcomes and I'll take the commercial questions.

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Peter Wijngaard, The Medicines Company - Executive VP & Chief Development Officer [24]

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Thanks, Chris. So you probably remember that ORION-4 has been conducted in 2 countries: the U.K. and the U.S. We're using a streamlined approach to conduct this study. At that we've been using prescreening methodologies to identify patients who are potentially eligible for the study and then they will be going to the trial sites to be screened. And ultimately if fulfilling the inclusion and exclusion criteria, they will be enrolled into the study and follow-up for duration of the study. So there's no typical or any different rate limiting factors that you would have in any of these types of trial. It comes down to identifying the sites, which we have already done, activating them and then having the patients come to the scheduled visits for the screening procedures. And if selected positively, then can be enrolled and treated in the study. So fairly standard and that's why we base to 1 to 2 years of enrollment period on.

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Mark Timney, The Medicines Company - CEO & Director [25]

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Thanks, Peter. And with regards to the commercial question, with regards to payers, Chris, as we've said, we've secured the input from senior decision makers with health plans, health systems in the U.S., European Top 5 countries and also Japan. Strong general agreement among payers in several important areas that's supporting inclisiran's strong value proposition for patients who do require this additional lipid-lowering therapy. I can say that whilst we do not -- at this stage it's very early, we do not disclose any pricing, the payers are very receptive to our focus on patient affordability. And all of our attempts really to create that environment that responsibly support access to all the patients who can benefit for inclisiran. With regard to the types of patients that we would be targeting, and again, very early in our work. However, the early feedback is very clear to us that suggests that inclisiran is essentially -- it's a new product and a new class and will be a market of one. So highly differentiated and very clear to us that we should not just be positioned with regards to the monoclonal antibodies and that the opportunity is much greater.

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Operator [26]

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Your next question is from Madhu Kumar from Robert W. Baird.

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Madhu Sudhan Kumar, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [27]

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So we're just curious in kind of a big picture perspective, what do you think oligo manufacturing capacity looks like now and over the next few years? So recognizing there may be a long-term COGs benefit for inclisiran, do you think kind of the manufacturing capacity for oligo drugs like inclisiran, is [indiscernible] not for the kind of, like first few years of a potential inclisiran launch?

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Mark Timney, The Medicines Company - CEO & Director [28]

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Yes, Madhu, this is Mark. Thanks for the question. We've obviously -- by third quarter, we will have our commercial scale in place. We've got a very strong partnership in place with Agilent. We've obviously got very clear plans and pathway to our initial launch and then to subsequent scaling. We believe we've got sufficient access and a runway for large numbers of patients which we believe will be applicable to have access for inclisiran. We've focused very clearly on a target number of patients in these very early years, which we would like to gain access to, and we've got contracts and assurances and a brand new site, which has just opened for Agilent in Frederick, Colorado, which essentially will be dedicated to our manufacturing.

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Madhu Sudhan Kumar, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [29]

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To that end, would that kind of target number you envision sit within the ballpark of where Repatha and Praluent are selling today or is it still going to be even larger than that? I mean obviously you can't give hard numbers but kind of what are you thinking is an initial target number for the current rounds of manufacturing capacity?

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Mark Timney, The Medicines Company - CEO & Director [30]

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Yes. Let me answer that similar to the way I answered Chris' question. It's very clear in the feedback that we've got a very differentiated profile and inclisiran we will be seeing as a market of one. Therefore, our numbers in terms of manufacturing capacity are substantially different as to what you would see with the antibodies.

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Operator [31]

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Next question is from Paul Choi from Goldman Sachs.

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Kyuwon Choi, Goldman Sachs Group Inc., Research Division - Equity Analyst [32]

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Recognizing that the political landscape is shifting almost on a daily basis here, could you maybe comment on how you're thinking about potential and theoretical exposure to Medicare, particularly in Part B exposure, as you think about the dispensing and prescribing within the physician office going forward? And just how you're thinking about sort of pricing pockets for that particular population?

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Mark Timney, The Medicines Company - CEO & Director [33]

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Yes, thanks for the question, Paul. I mean obviously a very sensitive area and there is lots of moving parts in this space at the moment. The beauty for inclisiran is it's going to be applicable for a range of different types of reimbursements and access that provides us with tremendous, tremendous flexibility. However, I would say for us, it's very early for us to be thinking about all of the changes that are taking place in DC at the moment, as you know many of these will not come to fruition and some will. We're working very closely with policy advisers down in DC in sort of keeping track of the changes that would affect inclisiran, but it's very early for us to be able to actually say anything since we really -- we're 18 months for launch and do have a high degree of flexibility to anticipate and respond to those changes. That's the beauty of being a one-product company, we can position that in however way we want as those changes unfold.

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Kyuwon Choi, Goldman Sachs Group Inc., Research Division - Equity Analyst [34]

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Great, thanks for that. And then as a follow-up, can you maybe just confirm for us either on the clinical or non-clinical side whether you have any other outstanding CMC or any manufacturing validation processes or test you need to do before you submit your NDA filing?

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Mark Timney, The Medicines Company - CEO & Director [35]

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Peter?

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Peter Wijngaard, The Medicines Company - Executive VP & Chief Development Officer [36]

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As we've said before so obviously, we will have a full NDA file which includes manufacturing and nonclinical activities, including the validations you've referred to. We have said before for the program to complete to NDA, the clinical program is on critical path, not the CMC part, not the nonclinical part. So we're on track for the totality of the NDA for submission by the -- for the NDA and the FDA by the end of the year and for the EMEA for Europe in Q1 of 2020.

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Operator [37]

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Our next question is from Yasmeen Rahimi from Roth Capital Partners.

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Yasmeen Rahimi, Roth Capital Partners, LLC, Research Division - MD, Senior Research Analyst & Co-Head of Biotechnology Research [38]

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I have 2 questions for you. Question one is for Peter. Peter, we know that ORION-11 study has 12.5 patients that have high-risk equivalent. How do you think the transferability will be with that nuance from the ORION-11 data to ORION-10? And then the follow-up is congrats on getting into the European Society of Cardiology meeting for your presentation, why was it so critical that you needed to really secure a presentation at this time? Deadline for AHA for (inaudible) is August 14, so it should be expected to see all data potentially at upcoming AHA meeting? And then what is sort of the feedback you're getting from physicians. Is there a difference between U.S.-based physicians versus European?

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Peter Wijngaard, The Medicines Company - Executive VP & Chief Development Officer [39]

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Okay, let me start with your middle question or may I say, AHA. You're correct the absolute deadline is August 14. And so we're working towards abstract submissions in the similar way that we did that for ESC. But as I said before, it's dependent on whether the abstracts will be accepted by the review committee of the societies, whether we will be able to present the data at that conferences later in the year, I can't comment on that specifically. The ESC is the first one after we have -- over the first study readout, as we have now disclosed. We felt that it was important to present the results as early as possible as they come known to us that's why we executed the plan in that particular way. And with respect to your first question, so there's regulatory guidance both from FDA and from Europe with respect to the various populations as has been done in previous lipid lowering development programs, we essentially followed that cadence and therefore we did the study in ORION-11 in Europe with the 2 populations, ASCVD and ASCVD risk equivalent because they have essentially the same risk of cardiovascular risk and subsequent events to that, so both populations are important. And in the U.S. the guidance is more focused on ASCVD, hence we did an entirely dedicated ASCVD study in the U.S. It's the standard procedures that we followed here. We're executing accordingly, and we will make the submissions to regulators in the same standard way.

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Mark Timney, The Medicines Company - CEO & Director [40]

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Let me sort of touch on some of that first question then I'll go to the second part of the question. I'll just say, as Peter said, I've been highly consistent since I came into the company that I would like to get this data out as quickly as possible. That objective has not changed. This is very important data for a very high risk group of patients and the sooner we can communicate that the better. I would say in terms of our research that we're seeing across the U.S. as compared to the EU and the rest of the world, the only subtle difference that we're really seeing, I mean, there's high consistency about the differentiated profile, high consistency about their -- the value of twice-a-year dosing, physician administered, a healthcare practitioner administered and also the adherence benefits. Coupled with the durability, the ability to stay low over that 6 months period that is sort of garnering, it's -- the feedback's coming back of confidence, of reassurance. It's very, very reassuring. However, I will say there's subtle differences the way that they think about their populations, the majority certainly ex-U. S. think of population health, how does this work within, for example, our country. When we've got x hundred thousand or x million patients who could be applicable, how do we think about gaining access and what does that look like. And obviously, that is much more fragmented within the U.S. system.

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Operator [41]

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Your next question here is from Akash Tewari from Wolfe Research.

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Akash Tewari, Wolfe Research, LLC - Director of Equity Research & Senior Research Analyst [42]

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So can you expand a bit on the EU opportunity for inclisiran and how payers would view your asset versus the traditional PCSK9? And also outside of the initially high WAAC, what other commercialization areas you feel Amgen and Regeneron made when launching their products?

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Mark Timney, The Medicines Company - CEO & Director [43]

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Thanks for the question, Akash. So -- I will caveat this and it will probably form the majority of my response here. The EU and any of our commercial research is still early. The early feedback, as I said, is very positive. We haven't really dug into the size of the opportunity yet, as we're working our way through. We have payer and system research. We're very early in our physician research within the EU. But I'll just reiterate the differentiated profile's coming out strong and if conversation quickly turns to what is that patient population. We have deeper understanding in various countries, which for competitive reasons, I will not go into. But it's -- let's just say, it's substantial opportunity that we have to try to help governments figure through for the amount of patients that they have. In terms of the antibodies, obviously, they -- I don't want to comment about what they did and what they did right and what they did wrong. I think, for us, and I want to be very clear that the feedback supports exactly our positioning that inclisiran is going to be a market of one. It's a totally different value proposition, which has advantages and can be thought about very, very differently. So we're -- you touched on, obviously, their initial pricing, but for me, this is about -- we think about patient affordability, but then there's much more to this. You've got to be able to gain access for -- to the right group of patients. So there's a whole spectrum in how any company should think about launching such a product as inclisiran, which is -- this is -- you have to understand how beneficial the product could be for a large group of patients. So therefore, our launch structure is -- and thoughts and thinking in pre-commercialization work looks vastly different to what the antibodies would would've been thinking.

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Operator [44]

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The next question here is from Mayank Mamtani from B. Riley FBR.

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Mayank Mamtani, B. Riley FBR, Inc., Research Division - Research Analyst [45]

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I have 2 for Peter and there's one for Mark. Just follow-up to the questions that have been asked before. Just understanding that ORION-11 top line release that precedes ESC, is there a difference in the embargo rules relative to ACC or AHA, which may allow you to have more or less granularity, particularly on the baseline characteristics, if you may? And then second on the clinical side, as I understand ORION-11, obviously, closely mimics ORION-1 baseline, given the European side focus. But I think you made a comment that it lacks the more renally impaired group, so anything else you could comment on comparing the difference in baseline characteristics for ORION-11 relative to ORION-10 and ORION-4 in terms of underlying liver or renal disease? And then for Mark, I know you talked a lot about Part B -- versus Part B. But just on the characteristics of poorly adherent patients, is there anything you are identifying that is maybe unique to that subgroup, maybe across U.S. and EU? And how maybe the antibodies are doing in that particular segment?

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Peter Wijngaard, The Medicines Company - Executive VP & Chief Development Officer [46]

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Thanks, Mayank, I'll take your first 2 questions. So generally the embargo rules that the major societies have like ESC, ACC and ASA are very similar and obviously they've recognized the need that we are as a public and a small company, so we will be discussing with them what we can and what we cannot say in the top line results once we have the data and then we will decide what exactly will be included. But I think you can look up the rules of the embargo because they are on the websites of the societies and that will give you bit of the general guidance of where they are going but what can and what could not be said. With respect to the baseline characteristics, the only thing that we have disclosed on that so far is point out by you correctly, ORION-11 has done in Europe and has ASCVD patient population and ASCVD risk equivalent with what's similar to ORION-1. We have disclosed the baseline LDL-C level of all the Phase III studies in our NLA presentation in May and that was 110, 112 and 160, respectively, the larger one for ORION-9 which is the heterozygous efficacy study. They expect to have a higher baseline. So 10 and 11 are similar even though they have slightly different patient populations. And then they point out that that baseline in ORION-11 and ORION-10 is also slightly lower baseline we had in ORION-1, which was around 125 across the dosing groups that we tested in ORION-1. The only other thing that we have disclosed to your point and you made the comment yourself already is that the ORION-7 study allows us to include severe renal impairment patients in the Phase III program towards the end once ORION-7 was completed. That was not possible in ORION-1 because we didn't have the data at that point in time. And that's all the things that we have sort of said publicly on the baseline characteristics of the studies.

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Mark Timney, The Medicines Company - CEO & Director [47]

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Thanks, Peter. And thanks for the question. So the -- if I understand it correctly, is there anything sort of unique in the patient subgroup who were -- that were nonadherent or anything that we're seeing in the U.S. or across the rest of the world. The short answer in terms of certainly the feedback that we've received in our research from patients, it is very clear. They want to get to go, even the nonadherent patients, they're frustrated. They've hadn't a CV event. It's pretty clear that the majority understand the risk that they're at, but they're frustrated. They're frustrated that they can't get to go or they're frustrated in terms of getting access to the right medications and that's a real challenge. So that comes through really strongly. Now I'm not saying that is all patients because it's very clear to us in the research and we see if there's the patients regardless will stop taking their medication -- oral medication and statins after 1 year. That's 2/3 of patients. That's a very, very significant number. And the research that runs beside that is that the healthcare practitioner, the fact that they are then taking control and taking this issue away from patients who're trying to do the right thing is where the benefit applies.

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Mayank Mamtani, B. Riley FBR, Inc., Research Division - Research Analyst [48]

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Is there anything that the payers could potentially also do in your view that could allow for maybe earlier utilization over other options. Just recognizing proactively there's a subgroup that is just going to be very poorly adherent and hence the economic burden on the system group?

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Mark Timney, The Medicines Company - CEO & Director [49]

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Yes, that's -- it's a great point. It's certainly come through in our research from payers. They identify this group regardless of really their risk profile that there is just a group of non-adherent patients that they also want to get under control. They understand the benefit of that and they've spoken to us about it and it's very clear that they're looking for a solution. So I do think there's a role for all stakeholders and that's sort of the approach that we're taking in pre-commercialization.

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Operator [50]

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Your next question here is from Jay Olson from Oppenheimer.

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Jay Olson, Oppenheimer & Co. Inc., Research Division - Executive Director & Senior Analyst [51]

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I'm curious if you saw recent publication in AAH Journal -- AHA Journal that analyzes patients who have limited access to PCSK9 therapy it shows increased risk of cardiovascular events. And I was wondering if that type of analysis could be used to strengthen the value proposition for inclisiran and potentially help you create a more compelling argument with payers?

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Mark Timney, The Medicines Company - CEO & Director [52]

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Thanks for the question, Jay. And yes, we saw the article -- the recent article. I think it was -- I think we only saw it yesterday or the day prior. Very -- I mean for us obviously very timely. And it -- obviously, it dovetailed so well into our existing research that's coming back. I think you answered the question yourself. I think it would -- it's certainly beneficial. However, for us this is -- it's so important to have the understanding that this is a different product to you, what are termed PCSK9 inhibitors and I -- the monoclonal antibodies have wonderful science, it's great science and it's validated and it validated the target. Inclisiran's differentiated profile is coming through. It's so different. Therefore, we're -- certainly in our research, we're picking that up and I think access is a critical component when you have a large number of patients who could be applicable to this treatment. So we can have different discussions, but it's certainly -- the easier you make those -- that access or the better it can become then you have to solve the adherence issue. You can get 100% access for a product but if the patients are still not going to take the product, you still don't get the benefit and that's where inclisiran comes in.

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Operator [53]

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Your next question is a follow-up from Umer Raffat from Evercore ISI.

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Umer Raffat, Evercore ISI Institutional Equities, Research Division - Senior MD & Senior Analyst of Equity Research [54]

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My question was -- I just wanted to confirm this. So ORION-11 was -- had the last patient randomized on 29th of January. So day 510 patient would have meant June 23 for the primary endpoint. So is it safe to assume the trial has readout internally and the statisticians are working on it?

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Peter Wijngaard, The Medicines Company - Executive VP & Chief Development Officer [55]

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Thanks, Umer for your math. Your math is not exactly correct. There is always a little bit of flexibility in the visit windows that you have to factor in. Then you have to factor in database cleaning before you can lock the database and run the analysis. As we've said before, the trials are on track and are ongoing. So we're where we are and we will release the data as it comes available to us in the top line and present it at Monday morning, 9:22, September 2, in Paris at the ESC.

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Umer Raffat, Evercore ISI Institutional Equities, Research Division - Senior MD & Senior Analyst of Equity Research [56]

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Got it. But just to be clear, Peter, the trial has -- it may be in the database clean up stage, but the trial has officially met -- probably, we're past the primary endpoint, correct? Meaning management's not aware, but internally there might be a cleanup going on?

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Peter Wijngaard, The Medicines Company - Executive VP & Chief Development Officer [57]

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As we've said just before, the trial is ongoing and on track. I can't specifically comment on where we're exactly on an individual last patient (inaudible).

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Operator [58]

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This concludes the question-and-answer session. I'd like to turn the floor back to management for any closing comments.

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Mark Timney, The Medicines Company - CEO & Director [59]

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Okay. Thank you, Matt. And thank you all for your questions and wish us a good luck. Inclisiran's unique profile, vast global market opportunity coupled with The Medicines Company full unencumbered commercial rights to inclisiran in all markets and market exclusivity to mid-2030 forward expected extension into 2035, you set the stage with significant shareholder value creation. Inclisiran is moving very quickly through Phase III trials. We're encouraged by the emerging clinical and safety profile and expect the Phase III data to start reading out in the second half of the third quarter.

In parallel, our pre-commercialization work is ongoing and it affirms the highly competitive profile of inclisiran. The Board and the management team are fully aligned and committed to unlocking the value of inclisiran for its shareholders and ultimately, people who would benefit from this unique therapy. So with that, I'll close the call, and I wish you all a very good day. Thank you.

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Operator [60]

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This concludes today's teleconference. You may disconnect your lines at this time. Thank you again for your participation.