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Edited Transcript of SBBP earnings conference call or presentation 25-Feb-20 1:30pm GMT

·29 min read

Q4 2019 Strongbridge Biopharma plc Earnings Call TREVOSE Mar 7, 2020 (Thomson StreetEvents) -- Edited Transcript of Strongbridge Biopharma plc earnings conference call or presentation Tuesday, February 25, 2020 at 1:30:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Fredric Cohen Strongbridge Biopharma plc - Chief Medical Officer * John H. Johnson Strongbridge Biopharma plc - Executive Chairman * Robert Matthew Lutz Strongbridge Biopharma plc - CFO * Scott L. Wilhoit Strongbridge Biopharma plc - Chief Commercial Officer ================================================================================ Conference Call Participants ================================================================================ * Avatar Jones Stifel, Nicolaus & Company, Incorporated, Research Division - Research Analyst * Christopher Lawrence Howerton Jefferies LLC, Research Division - Equity Analyst * Esther Lannie Hong Janney Montgomery Scott LLC, Research Division - Director of Biotechnology * Hartaj Singh Oppenheimer & Co. Inc., Research Division - Research Analyst * Lindsay Rocco;Elixir Health Public Relations;Managing Partner and Co-Founder ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Ladies and gentlemen, thank you for standing by, and welcome to Strongbridge Biopharma plc Corporate Update and Fourth Quarter 2019 Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions) It is now my pleasure to introduce Lindsay Rocco of Elixir Health Public Relations. -------------------------------------------------------------------------------- Lindsay Rocco;Elixir Health Public Relations;Managing Partner and Co-Founder, [2] -------------------------------------------------------------------------------- Thank you, Andrew, and good morning, everyone. We are pleased that you could join us today for Strongbridge Biopharma's Fourth Quarter and Full Year 2019 Earnings Conference Call. Joining me from Strongbridge this morning are John Johnson, Executive Chairman; Dr. Fred Cohen, Chief Medical Officer; Scott Wilhoit, Chief Commercial Officer and Rob Lutz, Chief Financial Officer. Before we begin, I would like to remind you that during this call, the company will be making forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ from the results discussed in the forward-looking statements. Reference to these risks and uncertainties are made in today's press release and disclosed in detail in the company's periodic and current event filings with the U.S. Securities and Exchange Commission. Please note that during Scott's portion of the call, there will be an accompanying set of slides, highlighting an initial view of the market opportunity in Cushing's syndrome based upon company-sponsored market research. To access and download these slides, please go to the Investor Events, Presentations, & Publications section of the Strongbridge website. These slides will also be made available online as part of the company's corporate presentation following this call within the same section of the website. I will now turn the call over to John Johnson. -------------------------------------------------------------------------------- John H. Johnson, Strongbridge Biopharma plc - Executive Chairman [3] -------------------------------------------------------------------------------- Thanks, Lindsay. Good morning, everyone, and thank you for joining us today. For today's call, I would first like to begin by reviewing the strong 2019 performance of KEVEYIS, and I would like to thank this team for their continued dedication to serving the many unmet needs of the Primary Periodic Paralysis community. KEVEYIS achieved revenues of $5.6 million for the fourth quarter and $21.7 million for the full year, exceeding the company's revenue guidance range of $18 million to $20 million, representing a 29% increase over the $16.8 million in total revenue in 2018. We believe that this growth can be attributed to both a steady flow of referrals from physicians that has resulted in new patient starts and improved retention rates. We are confident that we can continue this growth in 2020. And therefore, today, we confirmed our preliminary revenue guidance of $26 million to $27 million for this year. We also expect to realize a continued positive and growing contribution margin in 2020 from KEVEYIS. These results, coupled with actions taken in the fourth quarter to strengthen the company's overall financial position, have allowed us to extend our cash runway to the third quarter of 2021, which is at least one year beyond our anticipated time frame for reporting top line LOGICS results. With regard to our clinical development program for RECORLEV in endogenous Cushing's syndrome, today, we announced enrollment in the Phase III LOGICS trial is approximately 85% complete compared to the approximately 70% complete as reported on January 9. The company projects that all of the remaining patients required to complete enrollment are currently in the titration and maintenance phase. With this progress, over the past 6 weeks, we have been able to tighten our guidance to report top line data. We're now anticipating reporting the top line data from LOGICS at the end of the second quarter or during the third quarter of this year. I would like to reiterate that completing the LOGICS study and preparing a quality new drug application for RECORLEV are among our top priorities in 2020. I look forward to the continued work with this team as we plan for and execute upon a number of important milestones this year. With that, I will now turn the call over to Fred. -------------------------------------------------------------------------------- Fredric Cohen, Strongbridge Biopharma plc - Chief Medical Officer [4] -------------------------------------------------------------------------------- Thank you, John. I would like to begin with a quick update on KEVEYIS development and life cycle activities. As we have previously noted, KEVEYIS data exclusivity in the United States is currently provided through orphan drug exclusivity, which expires in August of 2022. As we have previously stated, we have been working towards the possibility of obtaining intellectual property protection for KEVEYIS based upon the research that we have conducted. We are pleased to report that we are making progress towards that goal, and we'd like to briefly describe some of our efforts. We have filed 14 patent applications in the United States and 3 PCT patent applications, with all, but 2, of these applications belonging to 4 primary families of patents. We filed the first of these applications with the U.S. PTO in the fourth quarter of 2018. We are working closely with outside counsel to prosecute these patent applications. The proposed claims relate to methods of using the active ingredient in KEVEYIS in a manner consistent with the recently revised FDA labeling for the product. As we have previously stated, we have also been engaging in life cycle development activities applicable to our KEVEYIS business. Specifically, we have developed proprietary modified release formulation prototypes of the active ingredient in KEVEYIS and are currently testing the performance of these prototypes in a Phase I clinical study. Although we are optimistic about the performance of these formulations, at this time, for competitive reasons, we will not be disclosing details of the formulations or our thinking regarding how one or more of them might be developed further. We expect to provide further information in the second half of this year. Now turning to RECORLEV. This morning, we provided an update on the LOGICS Phase III study of RECORLEV for the treatment of endogenous Cushing's syndrome. We continue to advance patients through the LOGICS trial as expected and are on track to deliver top line results at the end of the second quarter or during the third quarter of 2020. Please recall that LOGICS is a double-blind, placebo-controlled, randomized withdrawal study, targeting approximately 46 to 54 subjects for enrollment, which is comprised of 4 phases: a screening phase, plus 3 therapeutic phases. The primary endpoint comes at the end of the third phase, which is the randomized withdrawal phase. Our top line results will consist of data through the end of this phase. As John mentioned earlier, we have now rolled 85% of the patients required to complete this study, and we believe that all of the remaining patients needed to complete enrollment are currently in titration maintenance. When the last patient has been enrolled, we will provide more precise guidance for the expected timing of the announcement of top line results. As it relates to an NDA submission, we continue to believe that we can submit an NDA approximately 6 months after top line LOGICS results are reported. As stated previously, we believe that if our NDA is accepted for review, we can expect a review cycle of 10 months from the date of submission, which is the standard PDUFA cycle time for a review of a new active substance via the 505(b)(2) NDA pathway. And with that, I will now turn the call over to Scott, who will provide a commercial update. Scott? -------------------------------------------------------------------------------- Scott L. Wilhoit, Strongbridge Biopharma plc - Chief Commercial Officer [5] -------------------------------------------------------------------------------- Thank you, Fred. Good morning, everyone, and thanks for joining us. As mentioned earlier, this portion of the call contains an accompanying set of slides to help illustrate our initial view of the market opportunity in Cushing's syndrome based upon company-sponsored research. To access and download these slides, please go to the Investor Events, Presentations, & Publications section of the Strongbridge website. Before we begin and as a reminder, RECORLEV is currently being investigated for the potential treatment for endogenous Cushing's syndrome. RECORLEV has not been approved by the FDA as safe and effective. Turning to Slide 3. We recently conducted an in-depth market assessment, which included landscape assessment in both qualitative and quantitative research with more than 160 endocrinologists. In addition, we conducted qualitative research with 10 major payers, comprised of both regional and national plans. As you can see, the health care provider qualitative research phase included 13 leading and community endocrinologists, who treated an average range of 12 to 62 Cushing's syndrome patients in the last 6 months. In the quantitative research phase, 153 respondents treated an average of 25 to 68 endogenous Cushing's syndrome patients without malignant causes in the last 6 months. The primary purpose of this assessment was to evaluate perceptions of current and future products for treating Cushing's syndrome's patients. On the following slides, we will discuss our key findings related to the market landscape, unmet needs, the potential RECORLEV opportunity and payer access. Our research here on Slide 4 shows that the diagnosed prevalence in Cushing's syndrome in the U.S. is in the range of approximately 25,000 patients. Surgery is typically the first-line treatment. However, our research indicated that approximately 8,000 of these patients are pharmacologically treated. Importantly, of those 8,000 patients, endocrinologists reported that approximately 40% or about 3,200 patients remain uncontrolled on current treatments. As illustrated on Slide 5, the current product market shares, as reported in our research, for both approved and unapproved products shown here, illustrate that none of the current treatment options have a dominant share of the market, and more than 80% of the prescription-treated patients are using products that are unapproved for Cushing's syndrome. Ketoconazole remains the market leader with 27% market share of patients treated. As a reminder, Corcept has guided to a 2020 revenue range of $355 million to $375 million for Korlym, which is one of the only approved branded Cushing's syndrome therapies. We also ask endocrinologists to indicate their interest in new treatment options. As you can see here on Slide 6, more than 80% reported moderate to high interest level in new therapies for Cushing's syndrome. Endocrinologist satisfaction levels with current treatment options also underscore the need for potential new treatment options, particularly with unapproved products. Only 37% of ketoconazole-experienced treaters are highly satisfied, 36% of metyrapone-experienced treaters are highly satisfied, and only 29% of cabergoline-experienced treaters are highly satisfied. In general, endocrinologists dedicate a higher satisfaction level with approved products. Furthermore, endocrinologists reported a considerable number of patients who were uncontrolled, which may further illustrate the need for new treatment options. Here on Slide 7, we show the results pertaining to endocrinologists perceptions of RECORLEV. After reviewing the clinical profile for RECORLEV, which was based upon results from our recently published Phase III science clinical trial, 86% of endocrinologists treating more than 40 patients in the last 6 months indicated they were likely to prescribe RECORLEV, and 81% believe RECORLEV fulfills an unmet need. Turning to Slide 8. If RECORLEV is approved, we believe that endocrinologists may recognize the potential advantages prescribed in RECORLEV, on-label with supporting clinical data, directions for use in Cushing's syndrome and comprehensive provider in patient support. As a reminder, in the U.S., ketoconazole was only indicated as a last line antifungal and is not well studied prospectively in Cushing's syndrome. Further, the FDA label indicates weekly liver monitoring and warns that use of ketoconazole in Cushing's syndrome has not been approved. Turning to pricing and reimbursement. As you can see here on Slide 9, the current annual wholesale acquisition cost for FDA-approved Cushing's syndrome therapies ranges from approximately $165,000 to $755,000, depending upon the product and corresponding dose. Signifor and Signifor LARs annual wholesale acquisition cost is approximately $165,000. Korlym's annual wholesale acquisition cost range is approximately $189,000 to $755,000. We believe that both products provide relevant potential analogs for RECORLEV, if approved. As you can see here on Slide 10, payers cover current branded Cushing's syndrome products on a nonpreferred formulary tier, as is typical for treating products trading rare disease. Additionally, as expected, all payers have prior authorizations to ensure medical necessity and appropriate use. Some payers require step edits through other non approved products, but not the majority. As I mentioned earlier, we conducted interviews with 10 national and regional payers, where we tested both the RECORLEV profile and price range. As illustrated here on Slide 11, payer respondents expressed an initial willingness, an average of 6 out of 9 rating, to provide coverage for RECORLEV. They expect to use existing utilization management criteria to ensure appropriate patients, only appropriate patients, have access to RECORLEV. As expected, in some cases, more highly restricted payers may require a step edit. Turning to Slide 12. As a reminder, when we showed more than 150 endocrinologists the clinical profiles for all of the potential next-generation products, including RECORLEV, in the future state of the Cushing's syndrome market, they expected those next-generation products to capture the majority of the market share. If approved, RECORLEV, as part of that next-generation, may offer endocrinologists a useful new treatment option. As you can see here on Slide 13, we plan to fully leverage our existing infrastructure in rare disease experience. Over the last several years, we have built a commercial and medical affairs team that has a proven track record of success. In the near term, we aim to maximize our relationships with key opinion leaders and continue to foster relationships with leading patient advocacy groups. In addition, we intend to fully utilize our core capabilities such as market and analytics as well as customer-facing functions such as sales, patient services and medical science liaisons to support our go-to-market strategy. Turning to Slide 14, which is the final slide for this portion of the call. In terms of our initial targeting approach, we are currently planning to utilize approximately 25 to 45 customer-facing field positions at launch. We believe this will provide us with the required resources to reach the approximately 1,500 to 2,000 community and neuroendocrine specialists and approximately 125 to 150 pituitary centers and KOLs across the U.S. In summary, we are truly energized about the potential opportunity for RECORLEV in Cushing's syndrome. This research underscores the significant unmet needs, and that we believe RECORLEV may address. And we are eager to advance this product to market, so we can hopefully make meaningful improvement in the lives of patients with Cushing's syndrome. With that, I'll turn the call over to Rob Lutz, our CFO, who will review our financial highlights from the fourth quarter and full year before we open up the call to questions. -------------------------------------------------------------------------------- Robert Matthew Lutz, Strongbridge Biopharma plc - CFO [6] -------------------------------------------------------------------------------- Thank you, Scott. Our press release contains details of our financial results for the fourth quarter and full year of 2019. Rather than read through all of those details, my comments today will provide some context on our cash spend and runway. As we disclosed previously, we ended 2019 with $78 million in cash, cash equivalents and marketable securities. And based on our projections for KEVEYIS and for operating expenditures, we expect our cash to last at least through Q3 2021, which is at least one year past our expected announcement of top line data for LOGICS. Our cash burn in Q4 of 2019 was $2 million, in part because of a $6 million onetime benefit from the payment from Novo Nordisk. We expect cash burn to fluctuate due to variability in operating expenses and working capital. Additionally, we expect average cash burn to be higher in the early quarters of 2020 and trend down starting in later 2020 because we expect KEVEYIS will continue to grow and because R&D expenses will diminish as LOGICS comes to an end. Until we achieve positive cash flow, we will regularly evaluate when and how to raise initial capital to fund our business. With a revenue-producing asset and a late-stage asset, both with upcoming milestones, we believe there are multiple ways we can raise capital to fuel the growth of our business with the goal of increasing shareholder value. And operator, with that, we are ready for questions. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) And our first question comes from the line of Chris Howerton with Jefferies. -------------------------------------------------------------------------------- Christopher Lawrence Howerton, Jefferies LLC, Research Division - Equity Analyst [2] -------------------------------------------------------------------------------- I guess, just real quick, maybe this one for Fred. I missed the -- could you described the 4 patent families that you're using or considering for life cycle management for KEVEYIS? I think I just missed the concepts there, the 4. -------------------------------------------------------------------------------- Fredric Cohen, Strongbridge Biopharma plc - Chief Medical Officer [3] -------------------------------------------------------------------------------- Thanks, Chris. We actually are not going to go into any details around the families themselves. I always said at today's call is that the patent applications are on the active ingredient in KEVEYIS and that they are consistent with the current product labeling for the drug. So further details to come later. -------------------------------------------------------------------------------- Christopher Lawrence Howerton, Jefferies LLC, Research Division - Equity Analyst [4] -------------------------------------------------------------------------------- Okay. Okay. I guess moving forward to the market rate research that Scott kind of went over. A couple of things that I'd be interested in is that, on Slide 6, when you ask endocrinologists why they're dissatisfied or whether or not they're satisfied, I guess, with current treatments, what were the drivers of dissatisfaction with current treatments, primarily? -------------------------------------------------------------------------------- Scott L. Wilhoit, Strongbridge Biopharma plc - Chief Commercial Officer [5] -------------------------------------------------------------------------------- Yes, Chris. This is Scott. Good question. I think we had them long list several. But I think the ones that rose to the top were just a need for consistent and predictable cortisol control was one. Improve safety and tolerability. I think it's the balance of the risk benefit of that. And then, I think, while it was a gestalt, I think the -- what rose to the top were improvements in CV-related endpoints were meaningful to them. So I think if they -- they were looking for products that would bring those 3 things, among others, to the market. -------------------------------------------------------------------------------- Christopher Lawrence Howerton, Jefferies LLC, Research Division - Equity Analyst [6] -------------------------------------------------------------------------------- Got it. Okay. And then I guess, switching to the payer perspective. And I think this has, frankly, been a question of a lot of investors in terms of what's going to happen in the face of RECORLEV approval with off-label ketoconazole. So when you talk about step edits is a possibility for certain more conservative payers, what do you think that step edit will be? Will it be for off-label ketoconazole or other approved therapies for Cushing's syndrome? -------------------------------------------------------------------------------- Scott L. Wilhoit, Strongbridge Biopharma plc - Chief Commercial Officer [7] -------------------------------------------------------------------------------- Yes. Another good question, Chris. I think that the first point I'd make is that, in the work that we did, we clearly got a sense, both you saw the secondary research as well as the primary resource with RECORLEV, we got the sense when they were shown the profile that they had a positive inclination to cover RECORLEV, number one. I think in terms of -- you mentioned more restricted plans, and there's always sets of restricted plans. I think for those payers, I think what you could see is the [PA] criteria that you see on the bottom of that slide that you're referencing as well as some step through lower cost options, and one of those could be ketoconazole. The good news, I guess, in that regard is, in earlier slides that we presented, there is a fairly large set of patients who are on ketoconazole. And we mentioned also that there's an uncontrolled population. We'll have to do more work around the percentage of uncontrolled within keto. But we believe there is opportunity there from that perspective. -------------------------------------------------------------------------------- John H. Johnson, Strongbridge Biopharma plc - Executive Chairman [8] -------------------------------------------------------------------------------- Chris, it's John. I do think that payers are going to find themselves in a pretty difficult position. When you have a label for keto that warns against the use in Cushing's, in particular, and calls out Cushing's in the label. So as we look at it, we'll be working with payers. This is not a huge category. There's not a lot of patients here, and we expect that as physicians work with the payers to help them understand the potential risks of keto and the body of scientific evidence that's been developed for RECORLEV, that we're not going to have issues in terms of patients getting access. It may even require our physicians to do a little bit more work. But certainly, we think that there will be plenty of data for them to reference as they work with the payers to get the patients access. -------------------------------------------------------------------------------- Christopher Lawrence Howerton, Jefferies LLC, Research Division - Equity Analyst [9] -------------------------------------------------------------------------------- Sure. Okay. And then maybe just one quick one operationally. Obviously, we're all waiting for the LOGICS readout and that'll be a very important event for your company and expected to move the path for RECORLEV approval. But in anticipation of positive results, what else has to be done in order to get the NDA submitted? Anything from a CMC or other kind of perspective that we should be aware of? -------------------------------------------------------------------------------- John H. Johnson, Strongbridge Biopharma plc - Executive Chairman [10] -------------------------------------------------------------------------------- So what we said is that we're on track with our NDA preparation. We've been preparing for the submission for a while now. The LOGICS data are expected to be the rate limiter in terms of assembly of the package. And if we learn anything else contrary to that in the future, we'll let you know. But right now, that's where we stand. -------------------------------------------------------------------------------- Operator [11] -------------------------------------------------------------------------------- And our next question comes from the line of Annabel Samimy with Stifel. -------------------------------------------------------------------------------- Avatar Jones, Stifel, Nicolaus & Company, Incorporated, Research Division - Research Analyst [12] -------------------------------------------------------------------------------- This is Avatar Jones on for Annabel. You guys presented some pretty compelling market research. And on Slide 6, specifically, you mentioned that only 37% of your prescribers were highly satisfied with ketoconazole. Can you give a little more granularity on how many of those prescribers were actually just moderately satisfied to highly satisfied? And a second question, as you prepare for the potential launch of RECORLEV, do you anticipate any targeting of high-volume prescribers? And just what is the logistics around your approach to launch an engaging physician? -------------------------------------------------------------------------------- Scott L. Wilhoit, Strongbridge Biopharma plc - Chief Commercial Officer [13] -------------------------------------------------------------------------------- Yes. Good question. Let me start with the last one first. As you see on the last slide, Slide 14, that we covered, this is preliminary kind of our initial view of how we would go about targeting and then potentially deploying resources against the targets. But you see, we'll use an approach of looking at diagnostic claims data as well as prescriptions claim data. We know that there are about 8,000 endocrinologists in the U.S., likely around 1,500 to 2,000 neuroendocrine specialist and 100 to 150 pituitary centers. So we think about deploying against those. We think that the range that we have in the 25 to 45 range that are customer-facing positions should cover those -- that range of targets. And that really comes down to about 100 to 125 targets per territory in that range. Now we'll have to do additional work as we get closer to launch to kind of refine and fine-tune that. But that's kind of our initial working view of the target audiences, how we would approach it and the potential size of the team that are customer-facing. -------------------------------------------------------------------------------- John H. Johnson, Strongbridge Biopharma plc - Executive Chairman [14] -------------------------------------------------------------------------------- Yes. And I would just add that Scott and the team have also done some behavioral and aptitudinal segmentation. For competitive reasons, we're not going to be sharing that. But that will continue to evolve as we see the data from LOGICS and that will determine how we put calls, how frequently we hit some of these folks. Scott's described their reach, but our frequency and some of our actual approaches with promotion will be based upon those factors. But I just want to make sure that everyone's aware that we've undertaken that work, but we're not going to share that work. -------------------------------------------------------------------------------- Avatar Jones, Stifel, Nicolaus & Company, Incorporated, Research Division - Research Analyst [15] -------------------------------------------------------------------------------- Okay. And the first question regarding the physicians levels of satisfaction for ketoconazole, just be moderate levels of satisfaction? -------------------------------------------------------------------------------- Scott L. Wilhoit, Strongbridge Biopharma plc - Chief Commercial Officer [16] -------------------------------------------------------------------------------- Yes. You know what? I'm going to have to look at the broader slide deck. We didn't share that in this call. And we have -- I don't have that data at my fingertips, but I can follow up. -------------------------------------------------------------------------------- Avatar Jones, Stifel, Nicolaus & Company, Incorporated, Research Division - Research Analyst [17] -------------------------------------------------------------------------------- Okay. Well, if I just ask one more. Do you have any insight on how physicians -- willing physicians are to complete prior authorizations and step edits in this space with these new concerns around the payer pushback? -------------------------------------------------------------------------------- Scott L. Wilhoit, Strongbridge Biopharma plc - Chief Commercial Officer [18] -------------------------------------------------------------------------------- Yes. I think in general terms, I think prior authorizations in rare disease and in this category with 2 analog products are fairly common. It doesn't mean that physicians like it, I think it's just -- it's a common thing that has to take place. And I think that especially the higher volume offices are probably very used to doing these types of prior authorizations. So as we get closer to launch, we'll learn more. And as we launch and support physicians under our CareConnection program, we'll provide the appropriate education for physicians to educate them on the requirements that payers may have. -------------------------------------------------------------------------------- Operator [19] -------------------------------------------------------------------------------- And our next question comes from the line of Hartaj Singh with Oppenheimer. -------------------------------------------------------------------------------- Hartaj Singh, Oppenheimer & Co. Inc., Research Division - Research Analyst [20] -------------------------------------------------------------------------------- Great. I just had a couple of follow-up questions from earlier ones. Just specifically, do you think it's the uncontrolled patients that you think will be more likely to sort of be candidates for RECORLEV, assuming positive LOGICS in a launch? And then -- or do you think it will be the patients or where there's low satisfaction with existing drugs like ketoconazole and some of the other one that you saw on your slides or a mix of both? Just any color there would really help. And then I just got a couple of follow-up ones. -------------------------------------------------------------------------------- Scott L. Wilhoit, Strongbridge Biopharma plc - Chief Commercial Officer [21] -------------------------------------------------------------------------------- Yes. Good question. I think frankly, it's probably a little bit of both. We've got -- as John mentioned, we've got some more work. So we've done some initial work on kind of the behavioral segments, in particular, with ketoconazole, which we're not going to share now but I think it's both. I think those that are uncontrolled that -- we believe and heard through the research that, that may indicate a number of potential switching that goes on in the category anyway. So that could be an opportunity, irrespective of the reason that they're in control. And I think from a behavioral perspective, there may be opportunities to target certain physicians that utilize or don't utilize certain products. -------------------------------------------------------------------------------- Hartaj Singh, Oppenheimer & Co. Inc., Research Division - Research Analyst [22] -------------------------------------------------------------------------------- Great. And then do you think you'll have a fairly robust pharmacoeconomic database post LOGICS? I assume that, in this area, where there's a lot of generics, there's -- or payers would probably require a lot of pharmacoeconomic modeling. And then would you also consider consulting with ICER prior to launching the drug? -------------------------------------------------------------------------------- Scott L. Wilhoit, Strongbridge Biopharma plc - Chief Commercial Officer [23] -------------------------------------------------------------------------------- Yes, I think -- it's very good question. I think given -- at this point, it's probably a little too early for us to make a call on that. Clearly, we'll be discussing with payers in due course the burden of the illness and how they -- how we view RECORLEV as a potential treatment option. But TBD on how we would engage ICER if we would engage or not and any pharmacoeconomic data associated with the product, in particular. -------------------------------------------------------------------------------- Hartaj Singh, Oppenheimer & Co. Inc., Research Division - Research Analyst [24] -------------------------------------------------------------------------------- Great. And last question, just on KEVEYIS. I thought it was fascinating, Fred, you're talking about the long-acting version. Do you think that -- I'm really looking forward to seeing your thoughts on second half of the year. Do you think that with a long-acting version of KEVEYIS in an episodic disease like periodic paralysis, you could actually potentially have increased the number of patients? Because -- and having short-acting drugs don't -- are harder in episodic disease like periodic paralysis, just any thoughts there. -------------------------------------------------------------------------------- Fredric Cohen, Strongbridge Biopharma plc - Chief Medical Officer [25] -------------------------------------------------------------------------------- So by way of clarification, Hartaj, we didn't say anything about long-acting formulation. We said modified release. And I would also point out that in our current formulation of KEVEYIS, although it is an immediate release formulation, it has a very long half-life, approximately 36 hours or so. So the -- at steady state, basically, the patients don't go through any substantial trough cycling, as you might expect, with a very short-acting drug. So they keep a fair amount of drug on board, even at the lower doses. And so -- yes, so hopefully that addresses your question. But all I can say is, in terms of the modified release is, that we -- although we are optimistic, at this point, we're just not ready to disclose the details of our thinking around that. But we promise when the time is right that we'll be much more forthcoming. -------------------------------------------------------------------------------- Operator [26] -------------------------------------------------------------------------------- And our next question comes from the line of Esther Hong with Janney Montgomery Scott. -------------------------------------------------------------------------------- Esther Lannie Hong, Janney Montgomery Scott LLC, Research Division - Director of Biotechnology [27] -------------------------------------------------------------------------------- So with Phase III SONICS data soon approaching, NDA submission expected later this year, maybe early next year, can you speak about the potential next-gen competitive landscape for Cushing's and specifically osilodrostat? And how you think RECORLEV and osilodrostat would both fit in the treatment of Cushing's? -------------------------------------------------------------------------------- John H. Johnson, Strongbridge Biopharma plc - Executive Chairman [28] -------------------------------------------------------------------------------- So thanks. Yes. So just to clarify, LOGICS is the study that we're waiting for the Phase III data to come. -------------------------------------------------------------------------------- Esther Lannie Hong, Janney Montgomery Scott LLC, Research Division - Director of Biotechnology [29] -------------------------------------------------------------------------------- Oh, I'm sorry. -------------------------------------------------------------------------------- John H. Johnson, Strongbridge Biopharma plc - Executive Chairman [30] -------------------------------------------------------------------------------- Yes. No worries. At the end of the second quarter or third quarter. In terms of next generation, what the landscape, Scott pointed out in his slides, some of the drugs, we think, are likely to be a part of that next generation, including osilodrostat, which was recently approved by the European Medicines Agency, is awaiting approval by the FDA. And then another drug in Phase III, relacorilant is the drug from Corcept, which is the so-called next-generation version of mifepristone. So we think we have a pretty good handle on what the current profiles are of that -- of those 2 drugs. Obviously, we're waiting for more details on both of them to emerge. Osilodrostat is the neuro one. It is an adrenal cortisol synthesis inhibitor. It acts very specifically with high potency against one of the enzymes responsible for the synthesis of cortisol as well as aldosterone and that enzyme is 11 beta hydroxylase. RECORLEV also blocks that enzyme. The main difference between the 2 drugs in terms of mechanism, though, is that RECORLEV blocks several different enzymes along the pathway that lead to cortisol synthesis. So in that way, you get a -- basically a blockage of activity along the cortisol and androgen synthesis pathways with RECORLEV that you don't get with osilodrostat. So that when feedback -- not to get too technical, but when feedback this inhibition occurs and you get ACTH from the pituitary go up, driving adrenal steroid production, when you block only one of the enzymes, all the other steroids that are under the control of ACTH can be increased in synthesis. So with the drug that's a very specific blocker, like osilodrostat or metyrapone, you do tend to see things like a mineralocorticoid, weak mineralocorticoid production go up, that is the precursors to aldosterone as well as androgens. Those are considered unfavorable types of effects in a cortisol blocker. You'd prefer for a cortisol blocker to block cortisol, perhaps block androgen production in the adrenal gland, but not do anything to increase precursors or do very little. And so that's the main point of differentiation there. Osilodrostat, you can think of as a very potent and longer-acting form of metyrapone that -- in that regard. -------------------------------------------------------------------------------- Operator [31] -------------------------------------------------------------------------------- Thank you. I am showing no further questions at this time. I will now turn the call back over to Executive Chairman, John Johnson for any closing remarks. -------------------------------------------------------------------------------- John H. Johnson, Strongbridge Biopharma plc - Executive Chairman [32] -------------------------------------------------------------------------------- Thank you. In summary, 2019 was an important year for Strongbridge. KEVEYIS became contribution margin positive and heads into 2020 with solid momentum. The LOGICS trial is approaching its conclusion. I would like to take a moment to thank all the patients who agreed to be part of the trial for their contribution to the Cushing's scientific body of evidence. The initial market research with physicians in this disease area were impressive. These findings, combined with the interest expressed by endocrinologists in prescribing RECORLEV, if approved, provides increased confidence in a potential successful launch. Finally, I would like to thank all of our employees for their continued dedication and support on behalf of the physicians and patients we serve. Thank you for joining today's call and for your continued support. -------------------------------------------------------------------------------- Operator [33] -------------------------------------------------------------------------------- Ladies and gentlemen, this concludes today's conference call. Thank you for participating, and you may now disconnect.