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Edited Transcript of PTLA earnings conference call or presentation 7-Aug-19 8:30pm GMT

Q2 2019 Portola Pharmaceuticals Inc Earnings Call

South San Francisco Aug 30, 2019 (Thomson StreetEvents) -- Edited Transcript of Portola Pharmaceuticals Inc earnings conference call or presentation Wednesday, August 7, 2019 at 8:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Cara Miller

Portola Pharmaceuticals, Inc. - VP of IR and Corporate Communications

* J. Scott Garland

Portola Pharmaceuticals, Inc. - President, CEO & Director

* Mardi C. Dier

Portola Pharmaceuticals, Inc. - Executive VP, Chief Business Officer & CFO

* Sheldon L. Koenig

Portola Pharmaceuticals, Inc. - Executive VP & Chief Commercial Officer

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Conference Call Participants

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* Jay Olson

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

* Matthew Christopher Phipps

William Blair & Company L.L.C., Research Division - Senior Research Analyst

* Matthew Kelsey Harrison

Morgan Stanley, Research Division - Executive Director

* Philip M. Nadeau

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

* Yigal Dov Nochomovitz

Citigroup Inc, Research Division - Director

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Presentation

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Operator [1]

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Welcome to Portola Pharmaceuticals Conference Call. This call is being recorded. (Operator Instructions)

I would now like to turn the call over to Cara Miller, Portola's Vice President of Investor Relations and Corporate Communications. Please go ahead.

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Cara Miller, Portola Pharmaceuticals, Inc. - VP of IR and Corporate Communications [2]

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Thank you, and good afternoon, everyone. Today, we released our financial results for the second quarter of 2019. The press release and accompanying slides, which you can advance through the webcast, are available on the Investor Relations section of the Portola website.

In the room with me today are Scott Garland, President and CEO; Mardi Dier, Chief Financial and Chief Business Officer; and Sheldon Koenig, our Chief Commercial Officer. Also with us this morning for the Q&A portion of the call are Pam Conley, Senior Vice President of Research; Jeff Myers, Vice President of Medical Affairs; and Jeet Mahal, Vice President, Strategic Marketing.

Before we begin, I would like to remind you that remarks on this call will contain forward-looking statements. For a more detailed description of important risk factors that could cause our actual results to differ materially, please refer to our annual report on Form 10-K.

With that, I will turn the call over to Scott Garland.

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J. Scott Garland, Portola Pharmaceuticals, Inc. - President, CEO & Director [3]

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Thank you, Cara. Hello, everyone, and thank you for joining us on our second quarter 2019 financial results call. This is an exciting and important time for Portola. We're operating from a position of strength as illustrated by 3 key points I'd like to talk about today. First, our team's exceptional execution on the launch of AndexXa is driving continued revenue growth. For the second quarter, net product revenues for AndexXa were $27.1 million, marking our fifth consecutive quarter of strong revenue. We've also added 125 new accounts to our existing hospital base this quarter.

There is continued strength in demand for AndexXa. In fact, 74% of our sales in the quarter came from reorders, reflecting real pull-through and increasing use in patients. In addition, our reorder rate remains steady at 55% for the quarter, in tandem with an incremental number of hospital adds that was beyond our expectations and a significant percent of new hospitals coming on late in the quarter. All this gives us great confidence in our execution and excitement for the long-term growth of our business. Sheldon will talk more about this in a moment.

We recently conducted an extensive benchmarking analysis of nearly 50 hospital product launches over the last 30 years. Of those, 10 went on to have sales between $600 million and $2.5 billion. I'm proud to share that based on our first 5 quarters of revenue, AndexXa is 1 of the top 5 hospital drug launches over the last 30 years. We are clearly off to a fantastic start.

Second, the U.S. Factor X inhibitor market is large and growing. According to the most recent Truven data available through June of 2018, approximately 5 million patients in the United States are taking a Factor Xa inhibitor. Of these, approximately 150,000 patients are hospitalized each year with serious life-threatening bleeds. Factor Xa inhibitors are an important medical advance. The use of these medicines, and therefore, the risk of related bleeds continues to grow by double digits every year. For example, just last week, BMS recorded 30% demand growth for Eliquis in the United States over the second quarter of last year.

Because the need for AndexXa is directly related to the number of patients on a Factor Xa inhibitor, as shown by Slide 6. Through market growth, label expansion and the genericization of Factor X inhibitors, we estimate that by 2025, the overall number of patients needing Factor Xa reversal in the U.S. and Europe could exceed 700,000 patients.

In addition, awareness of the value of AndexXa is continuing to increase among health care practitioners as well as key government agencies like CMS. As we announced on Monday, CMS increased the maximum reimbursement amount of AndexXa NTAP from 50% to 65% or up to approximately $18,000. This is a very important milestone that will further expand Medicare beneficiary access to AndexXa.

Also last week, the Joint Commission, known as JCAHO, the oldest and largest accrediting body for hospitals in America, issued a new report on DOACs. The report directs accredited hospitals and critical care centers to stock antidotes appropriate for the use with each type of anticoagulant. Reports like these are making it clear that AndexXa is becoming the standard of care for patients on apixaban or rivaroxaban. Sheldon will talk more about this in a moment.

Third, yesterday, we announced our first sales of Ondexxya in Europe, marking the official launch of AndexXa -- of Ondexxya in our Wave 1 countries. Achieving these sales milestones in advance of our planned time lines demonstrates excellent execution from our team in Europe as well as strong initial demand in the market.

As you may recall, the number of patients in our Wave 1 countries is equal to or potentially even greater than the 150,000 estimated patients in the United States. These 3 drivers, launch execution, an expanding U.S. market and strong demand in Europe, all reinforce our confidence in the long-term potential of AndexXa.

Before turning it over to Sheldon to talk more about our launch progress in the U.S. and Europe, I want to provide a few updates on our label expansion plans for AndexXa as well as an update on our SYK/JAK inhibitor, cerdulatinib. I'll start with AndexXa. We are on track to initiate a registrational study in urgent surgery later this year or in early 2020 based on the timing of our discussions with the FDA. We estimate that approximately 60,000 patients on rivaroxaban or apixaban in the United States must undergo urgent surgery each year and could benefit from the use of AndexXa. In addition, we're working with the FDA on plans for the potential inclusion of other Factor Xa inhibitors in our label.

We're also continuing to generate new data that support AndexXa's unique position as the only agent approved for the reversal of apixaban or rivaroxaban and endorsed by multiple clinical practice guidelines. We recently presented compelling in vitro data demonstrating that 4-factor PCCs do not restore thrombin generation in plasma treated with Factor Xa inhibitors, except at very low levels of anticoagulation. In contrast, data from the same thrombin generation assay demonstrated that AndexXa fully corrected the inhibition of thrombin generation by apixaban or rivaroxaban across a broad range of inhibitor concentrations. These data further support the unique mechanism of action of AndexXa as distinct from PCCs, which are effective in reversing warfarin but not approved for the reversal of the Factor Xa inhibitors.

Adding to this growing body of evidence, we are -- be presenting new subsets in the ANNEXA-4 study at major medical meetings this year.

Moving to cerdulatinib. In June, we presented data on cerdulatinib in combination with Rituxan in follicular lymphoma at 2 international hematology conferences. In a group of heavily pretreated patients, cerdulatinib achieved a 45% overall response rate as a single agent and 62% overall response rate in combination with Rituxan. Cerdulatinib was generally well tolerated with a manageable AE profile. As mentioned previously, we plan to start a registrational study for cerdulatinib in PTCL by year-end.

This is an important and exciting time for Portola and for the patients we serve. We are confident in our strategy and execution in this growing market, and we continue to expand our launch and drive value.

And with that, I'll turn the call over to Sheldon for a detailed update on our launch progress.

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Sheldon L. Koenig, Portola Pharmaceuticals, Inc. - Executive VP & Chief Commercial Officer [4]

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Thank you, Scott, and hello, everyone. I'd like to start by echoing Scott's enthusiasm about the success of this launch and the long-term potential for this important medicine. The team is executing well, and we have some significant updates to share. First, we continue to optimize our targeting efforts based on a number of key analytics including Factor Xa inhibitor usage by zip code and hospital discharge data on patients with serious, life-threatening bleeds requiring hospitalization. As a result, we have expanded our hospital targets to 2,100, which represents about 80% of the market potential.

Second, as Scott mentioned, we are consistently increasing our hospital base and have added 125 accounts in the second quarter. Adding new accounts is just one part of ensuring continued growth. The second component is deepening utilization within existing accounts, and we are seeing encouraging trends.

As Scott mentioned, our reorder rate in the second quarter was approximately 55%. More importantly, reorders in the second quarter grew to 74% of our total AndexXa revenues, reflecting real pull-through and increasing use in patients. Additionally, we have had several important developments on the reimbursement front. First, as Scott mentioned, CMS has increased the NTAP reimbursement for AndexXa to a maximum of 65% or approximately $18,000 effective October 1 of this year. This decision is important for 2 reasons. First, it will expand patient access to AndexXa; and second, it underscores the breakthrough innovation AndexXa represents and the clinical value of rapidly reversing the anticoagulating effects of apixaban and rivaroxaban.

In April, we received our new C-code, allowing for outpatient reimbursement. And in June, we began participating in federal supply schedule pricing, which ensures access across the Veterans Administration or VA Health System. The VA is one of the largest health care systems in the U.S., and we are excited to share that a number of VA hospitals have already ordered AndexXa now that this pricing is available.

Finally, AndexXa continues to gain support from leading KOLs in the medical community and health care outcome experts. AndexXa is now recommended on 16 medical society guidelines, including 9 in Europe, and has been recognized by the Joint Commission in 2 separate ways.

Joint Commission is an independent nonprofit organization that accredits and certifies nearly 21,000 health care organizations, including hospitals in the U.S., and is recognized nationwide as a symbol of quality and performance standards. In early July, the Joint Commission updated national patient safety goals for anticoagulation therapy, which require accredited institutions to use evidence-based practice guidelines for the reversal of anticoagulation and advises providers to be aware of appropriate reversal agents for each medication.

And as Scott mentioned, just last week, the Joint Commission issued its Sentinel Event Alert, Issue 61. Importantly, that report noted that stopping bleeding in patients taking DOACs requires different intervention than from warfarin. Again, this highlights the unique role of AndexXa as the only approved reversal agent for apixaban or rivaroxaban.

Moving to our progress in Europe. We were thrilled to share with you yesterday the first sales of Ondexxya in Europe, which underscore the experience and execution of our team in Europe and initial demand for this novel therapy. As you know, launching in Europe is a country-by-country process and it happens in stages. These first sales in Austria and the U.K. mark our official launch and the availability of Ondexxya for ordering in Austria, the U.K., the Netherlands, Sweden, Denmark and Finland. Germany is also part of our Wave 1 launch, and we expect Ondexxya to be available there later this year.

Reimbursement discussions with health authorities in key countries like Germany and the U.K. are underway. We plan to submit our dossier to AMNOG later this year, which will allow us to start Ondexxya sales in Germany as we work through the process, which we expect to be completed later next year.

In addition, we are making progress in applying for the NUB, which is similar to the NTAP payment we have in the U.S. and allows for German hospitals to receive supplemental payments for Ondexxya. In the U.K., we have submitted our clinical and economic dossier to NICE, and we are on the agenda for review at a meeting late in the first quarter of 2020. We expect the process to be complete and full reimbursement to be in place by the second half of 2020.

In closing, we are incredibly proud of the progress we have made in the U.S. and in Europe. The need for AndexXa is well defined, and we remain confident in the market opportunity in front of us.

With that, I'll turn the call over to Mardi for a review of the financials.

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Mardi C. Dier, Portola Pharmaceuticals, Inc. - Executive VP, Chief Business Officer & CFO [5]

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Thank you, Sheldon, and hello, everyone. Please refer to our press release issued today for a summary of our financial results for the second quarter, and I'll touch on the highlights.

Our second quarter results reflect the fifth consecutive quarter of strong launch execution and growing demand for AndexXa. Total revenues were $28.4 million for the second quarter driven by $27.1 million in net revenues on AndexXa. Total GAAP operating expenses for the second quarter were $92.4 million, down from $107.7 million for the same period in the prior year. This decrease is driven primarily by our Gen 2 manufacturing costs now being capitalized into inventory.

Research and development expenses for the second quarter were $33.7 million compared to $66.4 million for the same period in 2018. This number includes a $3.1 million impairment charge taken during the second quarter related to the discontinuation of an early development program. The year-over-year decrease in R&D expense is mainly due to the Gen 2 manufacturing costs I just mentioned.

On a non-GAAP basis, R&D expenses for the second quarter were $30.4 million, which excludes the impairment charge I just previously discussed. SG&A expenses for the second quarter were $53.7 million compared to $40.2 million for the same period in 2018. This increase is mainly due to the expansion of our sales force and other commercial-related activities for the launch of AndexXa in the U.S. and Ondexxya in Europe.

Cash, cash equivalents and investments as of June 30, 2019, totaled $274 million compared to $317 million at December 31, 2018. We have cash available to fund our operations through the end of 2020.

As shown in the Q1 and Q2 results, we continued to see strong growth in AndexXa demand and sales in the first 6 months of 2019. Our operating expenses are in line with our 2019 guidance, and we have cash through 2020. As we look towards the third quarter, we're excited to build on the momentum we have built so far this year.

With that, I'll turn the call back over to Scott for closing remarks.

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J. Scott Garland, Portola Pharmaceuticals, Inc. - President, CEO & Director [6]

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Thank you, Mardi. In the first half of the year, our concentration has been on 3 drivers of success for Portola: launch execution, an expanding U.S. market and strong demand in Europe. Building on those achievements as we head into the second half of the year, we're focused on expanding our hospital base and deepening account usage in the United States, our launch progress in Europe and bringing this important medicine to patients around the globe. We're very pleased with the launch trajectory of AndexXa thus far and the potential for Ondexxya in Europe. We look forward to updating you on future calls. I want to thank you for your continued interest in Portola.

And with that, I'll turn it over 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 or comment comes from the line of Matthew Phipps from William Blair.

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Matthew Christopher Phipps, William Blair & Company L.L.C., Research Division - Senior Research Analyst [2]

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And just congrats on the real continued strong execution this year. Wanted to touch a little bit on the new hospital adds in the U.S. You mentioned 125 in the quarter. That's obviously a little bit of an uptick from the previous quarters, but you did mention, Scott, that some of those, I guess, came in kind of late in the quarter. Do you think that affects Q3 new hospital adds?

And then also, Sheldon, you mentioned an increasing utilization trend with existing accounts. I think they were -- do you think this is kind of a natural progression of these physicians expanding beyond maybe just IT educations initially to treating more patients? Or is there any other color you can give us there?

And then lastly, how should we think about the rollout in Europe? And is there similarities to the U.S.? Obviously, some pricing works going to happen here with NICE and Germany and such. But can you give us any kind of guidance, I guess, without real guidance...

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J. Scott Garland, Portola Pharmaceuticals, Inc. - President, CEO & Director [3]

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Yes. Sure, Matt. Why don't I actually have Sheldon take all 3 of those? You could comment to those new adds, and then -- yes.

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Sheldon L. Koenig, Portola Pharmaceuticals, Inc. - Executive VP & Chief Commercial Officer [4]

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Matt, thank you for your question. So let me just start with the reorders. As I mentioned, again, we exceeded our expectations by having 125 new accounts for this quarter. This is something that, as we continue our rollout, as you know, in April, we added additional 40 representatives, which gives us a total of approximately 116. So this is something that we will continue to monitor. That 125 new accounts, again, one thing I want to talk about is the fact that many of them did come in late quarter. As it relates to how that will affect quarters moving forward, I'm not really going to comment on. But what I do want to bring to the attention again is that 74% of the revenue of the second quarter came from reorders. So that really, again, gives us confidence in our pull-through and demand that we're seeing for AndexXa.

The one last thing is that 74% of revenue from reorders, that's also -- we're seeing that grow over quarter-on-quarter basis. As we look to take Europe, and so we're very early in the stages of Europe. Again, we're thrilled with the fact that we were able to report our first sales yesterday in Europe. Again, this story speaks to the execution and the team that we've put into place in Europe. And we'll be following this closely over the next quarters, and we'll continue to update you.

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J. Scott Garland, Portola Pharmaceuticals, Inc. - President, CEO & Director [5]

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And then, Matt, I think you asked about whether or not we're seeing increasing use beyond intracranial hemorrhage patients. Little bit too early to tell in the quarter. We do track that. We do track it with a chart [or poll]. What we have said in the past and what's very encouraging is that we are definitely seeing usage in patients outside of the intracranial hemorrhage space. Whether or not that is going to continue going forward, we certainly expect that. But it's a little bit too early to tell.

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Operator [6]

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Our next question or comment comes from the line of Matthew Harrison from Morgan Stanley.

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Cara Miller, Portola Pharmaceuticals, Inc. - VP of IR and Corporate Communications [7]

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He just got dropped. I feel like he's going to go back in the queue.

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Operator [8]

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Our next question or comment comes from the line of Yigal Nochomovitz from Citigroup.

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Yigal Dov Nochomovitz, Citigroup Inc, Research Division - Director [9]

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No worries. Scott, you mentioned very interestingly some of the other hospital launches that have compared very well against. Could you give us just a little bit more detail as to what those 5 launches were over the last 30 years and if those were pure hospital launches or if there was some mix of hospitals and outpatient or clinic sales for those?

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J. Scott Garland, Portola Pharmaceuticals, Inc. - President, CEO & Director [10]

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Yes, Yigal. We looked at 50 total hospital drug launches over the last 30 years. I don't actually have all top 10 in front of me. I do know they included Lovenox. They included Cubicin. They included Activase. They included a number of drugs that went on to be highly successful. But I can't remember exactly what the top 10 are. We could certainly follow up with you, Yigal, with the list and provide that to you offline.

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Yigal Dov Nochomovitz, Citigroup Inc, Research Division - Director [11]

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Okay. Great. And then regarding NTAP, I believe, in the press release on that, you would get either 2 or 3 years. Could you just clarify whether that -- how -- what determines the range on 2 versus 3 years for NTAP? And then once that expires, is the expectation that the full cost of AndexXa is going to be incorporated into the DRG rates or only what was reimbursed under the NTAP? And then more broadly, what -- how will portfolio play a role in advocating for the DRG recalibration? And do you have a seat at the table on those discussions?

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J. Scott Garland, Portola Pharmaceuticals, Inc. - President, CEO & Director [12]

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I'll give that one to Sheldon.

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Sheldon L. Koenig, Portola Pharmaceuticals, Inc. - Executive VP & Chief Commercial Officer [13]

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Yes. Yigal, thanks for the questions. So as it relates to NTAP, first of all, again, we're really excited moving from 50% to 65%. This reinforces what we have always stated before as it relates to how AndexXa is really realized as a breakthrough therapy and as a new technology. As we know, it's not easy to get the NTAP designation. A few products do receive it.

Related to the timing of 2 to 3 years and also legislation and policy as it pertains to how this will fit into a DRG or a DRG carve-out, we've recently hired a Vice President of Market Access who has a lot of experience in this area and in policy, and we're currently now working with CMS. We can update you in future quarters of how this will play out.

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Yigal Dov Nochomovitz, Citigroup Inc, Research Division - Director [14]

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Okay. Great. And then just final question for me is with respect to the C-code that was issued, I believe, on the first day of 2Q '19, just wondering if you could comment on the percent of the volume is going -- getting reimbursed through Part B on the outpatient angle.

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J. Scott Garland, Portola Pharmaceuticals, Inc. - President, CEO & Director [15]

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Sheldon?

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Sheldon L. Koenig, Portola Pharmaceuticals, Inc. - Executive VP & Chief Commercial Officer [16]

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So that's -- as we mentioned earlier, the C-code was effective as of April 1 of this year, 2019. Unfortunately, CMS is not as fast we would like as far as giving us data. So we still have to wait some time and we'll definitely update you. I can provide you, though, an anecdote of how the C-code works. And recently, we just heard a report of a patient who is in a community-based hospital who presented with intracranial hemorrhage and was started with AndexXa and airlifted to a Tier 1 institution. And the physicians were just amazed by how this patient was doing. As we do get new data, though, as it relates to CMS and the utilization of the C-code, I'm sorry, we will definitely share that with you.

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Operator [17]

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We'll try Mr. Matthew Harrison from Morgan Stanley once again.

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Matthew Kelsey Harrison, Morgan Stanley, Research Division - Executive Director [18]

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I appreciate it. I guess maybe 2 for me. I'm sorry, I may not have heard this so I apologize if I ask again. But on Europe, can you just talk about the components of the reimbursement process in Europe that you're going to have to go through and just broadly how we should think about your ability to add and stock hospitals if you get online in each country there?

And then for the U.S., I don't know if I want to ask this, but can you just talk about the rate of your ability to continue to add hospitals? So you continue to expect that to increase quarter-over-quarter? Or do you think 100 to 125 is a pretty steady rate?

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J. Scott Garland, Portola Pharmaceuticals, Inc. - President, CEO & Director [19]

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Yes. Let me take number 2 around the rate of hospital adds, and then I'll have Sheldon comment on the European adds. Obviously, the 125 adds that we had this quarter was ahead of expectations. I have been saying all along, we expected a linear uptick in hospital adds, 100 -- pretty much 100 a quarter. So the fact that we had 125 was something we feel really good about.

In terms of how that's going to look going forward, it's a little hard to say, and I don't want to give any forward-looking guidance. I will tell you we're really happy with what we're seeing, both in terms of new account adds as well as deepening of the utilization. And we'll certainly give you updates as we move forward.

But moving to Europe and the European reimbursement process, I'll turn that over to Sheldon.

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Sheldon L. Koenig, Portola Pharmaceuticals, Inc. - Executive VP & Chief Commercial Officer [20]

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Matt, thanks for the question. So as you know, the reimbursement environment in Europe is a country-by-country basis. As I mentioned, we've currently just submitted our NICE dossier for the U.K. That will be under review in 2020. We hope to submit our dossier for the AMNOG process, which will take place in Germany. That will happen sometime in the September, October time frame. Again, we're really early here as it relates to Europe and where we have started. It's great to see these first sales and the interest, and we'll continue to update you as we move forward through this. But strong execution in Europe, and we'll continue to update you.

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Mardi C. Dier, Portola Pharmaceuticals, Inc. - Executive VP, Chief Business Officer & CFO [21]

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I'll just make one comment. This is Mardi. On the AMNOG process, once we're able to submit the dossier, which will happen soon, then we're able to -- we have a year of free pricing or we have a free pricing period before we start negotiation with the health authorities. So we'll be able to sell in Germany very soon.

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J. Scott Garland, Portola Pharmaceuticals, Inc. - President, CEO & Director [22]

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Great.

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Mardi C. Dier, Portola Pharmaceuticals, Inc. - Executive VP, Chief Business Officer & CFO [23]

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Anything else, Matt?

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Matthew Kelsey Harrison, Morgan Stanley, Research Division - Executive Director [24]

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No. No. No. That's it.

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Operator [25]

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

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Philip M. Nadeau, Cowen and Company, LLC, Research Division - MD & Senior Research Analyst [26]

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Congrats on the progress. Two for me. First, it looks like in this quarter with about 400 stock hospitals and $27 million of revenue, you did about $67,500 per stock hospital, which is consistent with the revenue per stock hospital in the past. There's a concern among investors that, over time, as you get later doctors to stock a drug, their utilization is going to be less than the people who have stocked already, so the revenue curve is going to begin to plateau or decelerate? What are your thoughts on that concern that's in the marketplace?

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J. Scott Garland, Portola Pharmaceuticals, Inc. - President, CEO & Director [27]

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Yes. Let me go ahead and answer that question. That's definitely not what we're seeing. As you look at this average account per usage per month, it's important to remember the mix of accounts that have been coming on over time. So as we move from our early supply program into our Gen 2 launch, we're seeing more and more Tier 2 and Tier 3 accounts come online. So that mix is important when you're thinking about how you calculate that average use per patient per month.

What we are seeing, as we've looked at a cohort of our institutions, large important institutions that came on earlier at EAP, and actually what we're seeing is increased usage over time or deepening usage over time. There's nothing that we're seeing today that makes us concerned about a lack of pull-through or a plateauing of our utilization.

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Philip M. Nadeau, Cowen and Company, LLC, Research Division - MD & Senior Research Analyst [28]

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And do you have more Tier 1 hospitals to add over time? So are you -- is the mix of hospitals that get added in the next few quarters is going to be similar to what's happened in the last few?

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J. Scott Garland, Portola Pharmaceuticals, Inc. - President, CEO & Director [29]

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I would expect the mix to stay somewhat consistent, although we do have more penetration, more opportunity to grow in the Tier 1 accounts. The only thing I want to point out, which is driving our usage as well, we think that there's really 3 things. It's account adds that are driving usage. There's deepening of usage in existing accounts. But then there's the underlying growth of the Factor Xa market. That's significant. And that's something we want to point on the call today. I'll reiterate that BMS recorded a 30% increase in volume for Eliquis over the prior year. So those 3 things are really driving the growth right now.

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Philip M. Nadeau, Cowen and Company, LLC, Research Division - MD & Senior Research Analyst [30]

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Perfect. And then second question is on the addition of the -- or the increase in the new technology add-on from 50% to 65% of cost. Do you have a sense of how many hospitals out there today are either limiting utilization because that payment was only 50% of cost? And/or how many hospitals are out there who did not begin to stock AndexXa because the new technology add-on payment was too small of a percentage of cost?

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J. Scott Garland, Portola Pharmaceuticals, Inc. - President, CEO & Director [31]

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Sheldon?

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Sheldon L. Koenig, Portola Pharmaceuticals, Inc. - Executive VP & Chief Commercial Officer [32]

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So we've always viewed the NTAP again as somewhat advantageous that, again, really highlights the value of AndexXa. Unfortunately, we don't have the data yet as it relates to the utilization of NTAP. We do make institutions aware of NTAP. They're interested in this. And as we get that information, once we get it, we'll supply it. Similar to the C-code, there's a delay in the timing of actually getting that type of data.

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Operator [33]

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Our next question or comment comes from the line of Jay Olson from Oppenheimer.

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Jay Olson, Oppenheimer & Co. Inc., Research Division - Executive Director & Senior Analyst [34]

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Congrats on the quarter. I had a couple of them. First one is about the reorder rate, which seems to have stabilized at 55%. Is that related to the fact that you added a large number of new hospitals towards the end of the quarter, and so they would not have needed to reorder? Or do you think that 55% is more of a long-term steady-state reorder rate?

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J. Scott Garland, Portola Pharmaceuticals, Inc. - President, CEO & Director [35]

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Yes, it's definitely because of the incremental account adds that we have this quarter and the fact that they came on late. We do expect that reorder rate to continue to go up. One of the challenges of the reorder rate is that it's heavily influenced by the denominator. And as the denominator increased incrementally in this quarter and the timing of which these accounts came on, they don't have enough time to actually reorder. So that is one of the challenges that's associated with this reorder rate. That's why we provided the percentage of our revenues that are coming from reorder, and we're seeing a very steady increase in that over time. But that essentially explains it. We definitely expect the reorder rate to continue to increase.

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Jay Olson, Oppenheimer & Co. Inc., Research Division - Executive Director & Senior Analyst [36]

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Great. That's very helpful. And then I think earlier this year, you had mentioned that you were making AndexXa available on consignment. Can you just talk about how that's going and how may that -- that may have impacted demand?

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J. Scott Garland, Portola Pharmaceuticals, Inc. - President, CEO & Director [37]

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Sheldon?

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Sheldon L. Koenig, Portola Pharmaceuticals, Inc. - Executive VP & Chief Commercial Officer [38]

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Yes. So we started consignment earlier this year. Again, this is something that allows hospitals and patients to have greater access, just another way of having access to AndexXa. This is something that is really operationalized through our specialty distributors. It still represents a small portion of our business.

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Mardi C. Dier, Portola Pharmaceuticals, Inc. - Executive VP, Chief Business Officer & CFO [39]

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And Jay, just to clarify, consignment is an arrangement between the specialty distributors and the hospitals. It's not something that we own or provide. It's really a financial arrangement. So when Sheldon said it provides more access, it really allows the hospitals to have AndexXa on-site before they pay for it. But that's -- the special distributors underwrite that, so to speak. And it provides that service for the hospitals.

And I'll just mention one thing, that from a demand standpoint, it's transparent to us. The way we look at stocking is how much inventory the special distributors have. And just between first and second quarter, that stayed steady at about 2 weeks of demand, and we think that will continue.

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Operator [40]

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(Operator Instructions) I'm showing no additional audio questions in the queue at this time. I would like to turn the conference back over to management for any closing remarks.

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J. Scott Garland, Portola Pharmaceuticals, Inc. - President, CEO & Director [41]

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So thank you for your continued interest in Portola. Have a great rest of your week. Thanks.

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Operator [42]

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Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day.