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Edited Transcript of UROV.OQ earnings conference call or presentation 13-Jun-19 8:30pm GMT

Q4 2019 Urovant Sciences Ltd Earnings Call

Jun 21, 2019 (Thomson StreetEvents) -- Edited Transcript of Urovant Sciences Ltd earnings conference call or presentation Thursday, June 13, 2019 at 8:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Christine G. Ocampo

Urovant Sciences Ltd. - CAO and Principal Financial & Accounting Officer

* Cornelia Haag-Molkenteller

Urovant Sciences Ltd. - Chief Medical Officer of USI

* Keith A. Katkin

Urovant Sciences Ltd. - CEO & Director

* Michael E. McFadden

Urovant Sciences Ltd. - Chief Commercial Officer of USI

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Conference Call Participants

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* Eric William Joseph

JP Morgan Chase & Co, Research Division - VP & Senior Analyst

* Fang-Ke Huang

SunTrust Robinson Humphrey, Inc., Research Division - Associate

* Jeet Mukherjee

Jefferies LLC, Research Division - Research Analyst

* Raghuram Selvaraju

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

* Ritu Subhalaksmi Baral

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

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Presentation

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Operator [1]

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Ladies and gentlemen, thank you for standing by. Welcome to the Urovant Sciences Fiscal 2018 Fourth Quarter Financial Results Conference Call. (Operator Instructions) As a reminder, today's conference is being recorded. I'd now like to turn the call over to Christine Ocampo, Chief Accounting Officer. Please go ahead, Ms. Ocampo.

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Christine G. Ocampo, Urovant Sciences Ltd. - CAO and Principal Financial & Accounting Officer [2]

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Thank you. It is my pleasure to welcome you to our conference call to discuss our financial and operating results for the fiscal 2019 fourth quarter. I'm joined today by several members of our leadership team, including Keith Katkin, our Chief Executive Officer; Dr. Cornelia Haag-Molkenteller, our Chief Medical Officer; and Michael McFadden, our Chief Commercial Officer.

After the close of market today, Urovant issued a press release containing detailed information on results. You may access this release on our company website, urovant.com. Today's remarks contain forward-looking statements, including statements regarding our plans and strategies for the clinical development of vibegron and other treatments for urologic diseases. I direct your attention to the forward-looking statements disclosure in today's press release and the Risk Factors section of the quarterly report on Form 10-Q, which was filed with the SEC in February 2019 as well as the Form 10-K, which will be filed with the SEC in the near term for a view of various risks and uncertainties that could cause actual results to differ materially from projections. And with that said, I'll turn the call over to our CEO, Keith Katkin

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Keith A. Katkin, Urovant Sciences Ltd. - CEO & Director [3]

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Thank you, Christine, and my thanks to all of you for joining us today. The fourth fiscal quarter marked a pivotal time for Urovant with the achievement of key milestones across our business, moving us closer to developing Urovant into a leading specialty urology company. In March, we announced positive top line data results from our pivotal Phase III EMPOWUR study of vibegron in patients with overactive bladder, in which vibegron met both co-primary endpoints as well as all 7 key secondary endpoints.

We believe the EMPOWUR Phase III study positions vibegron, if approved by the FDA, to be a best-in-class beta-3 agonist and potentially a best-in-class -- a best-in-category oral OAB treatment. This belief is supported by the early launch success of vibegron in Japan. March was also a milestone month for the COURAGE study, with the first patient enrolled in the pivotal Phase III trial of vibegron in men with OAB and BPH, an important supplemental program for vibegron given there is currently no approved treatment for the concomitant OAB and BPH.

Additionally, the Phase IIa trial for vibegron for IBS-related abdominal pain, which was initiated in December 2018, also continues to enroll well, with top line results expected in 2020. Furthermore, during the past quarter, we gained alignment with the FDA on the proposed Phase IIa protocol for our novel gene therapy product for OAB, URO-902. And finally, to further our cash runway, we secured a debt finance agreement with Hercules Capital for up to $100 million. With that, I'll now turn the call over to our Chief Medical Officer, Dr. Cornelia Haag-Molkenteller, who will provide a more detailed update on our clinical programs. Cornelia?

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Cornelia Haag-Molkenteller, Urovant Sciences Ltd. - Chief Medical Officer of USI [4]

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Thank you, Keith. We continue to make excellent progress across all 4 of our clinical development programs. First, I'd like to talk about our international EMPOWUR Phase III trial for vibegron results with overactive bladder. The EMPOWUR study, our pivotal Phase III study in OAB completed in early 2019 and we announced positive top line results in March. The primary efficacy analysis once daily vibegron 75 milligrams met the co-primary endpoints at week 12, achieving statistical significance compared to placebo on both reduction in daily urinary urge incontinence episodes, a key symptom for patients seeking OAB treatment and daily micturition. The difference from placebo for both daily UUI episodes, which are the Urge Urinary Incontinence episodes and micturitions was highly statistically significant by week 2, which was the first time point measured and efficacy for both primary endpoints was maintained at all time points measured throughout week 12.

Moreover, the subgroup analysis for both co-primary variables showed efficacy in patients above 65 years of age, patients with prior anticholinergic use and patients with prior mirabegron. All 7 prespecified secondary endpoints were also met, including statistically significant reductions in daily urgency episodes, the most important secondary measure. Also, vibegron significantly increased the volume voiced per micturition over placebo, which is an important and objective pharmacologic parameter for OAB drugs.

Vibegron was also well-tolerated in the Phase III. The most common interest events were at or below 4% included: headache, major pharyngitis, diarrhea and nausea. The frequency of serious adverse events were similar across treatment arms. Also, the incidence of the recorded adverse events of hypertension were equal to placebo, which is 1.7% in vibegron and 1.7% in placebo. The EMPOWUR study was recently presented at the American Urological Association meeting by Dr. David Staskin from Boston as a breaking news in the plenary session. Further presentations and full publication of the study are planned. The long-term extension study is still ongoing and results expected towards the end of the third quarter.

New Drug Application, also called NDA, preparations are continuing well with the target submission in the first quarter of 2020. Of note, we are also exploring all options to accelerate this timeline to the end of the fourth quarter of 2019. Second, we have our OAB program for men with benign prostatic hyperplasia or BPH. This is an important supplemental development program for vibegron because there is currently no FDA-approved product specifically indicated for overactive bladder in men with BPH. The co-primary endpoints are reduction in micturition frequency and urgency episodes for 24 hours. Key secondary endpoints are reduction in nocturia episodes, which is the awakening at night to void, prostate symptom scores and safety. Given the limited clinical data available on men with OAB and BPH, we aligned on a 2-part trial with the FDA. In part 1, we will assess initial safety in 80 patients via an independent data safety monitoring board. In part 2, we will assess safety and efficacy in all patients. Part 1 started enrolling in March 2019 and is expected to complete in the fall of 2019.

Next, regarding our clinical program for IBS-associated abdominal pain, we started enrollment into a Phase IIa study in December 2018. We plan to enroll 200 female patients with IBS-associated pain due to IBS with diarrhea or mixed IBS. Patients will be randomized to either 75 milligrams of vibegron or placebo. The primary endpoint is a 30% reduction of abdominal pain intensity on an 11-point rating scale at week 12 for the IBS-D. The responder is defined as a subject with at least a 30% decrease in worst abdominal pain compared to the weekly baseline average. Secondary endpoints include a global scale of safety in particular, also negative -- lack of negative effects on the stool frequency or consistency. Enrollment continues to go well and we expect to report top line data in 2020. Lastly, in the first quarter of 2019, we received feedback from the FDA on development and proposed Phase IIIa protocol for a novel gene therapy product for OAB called URO-902. The FDA was generally aligned with our plan and we expect to start patient enrollment towards the end of the fourth quarter 2019. With that, I'll turn the call over to our Chief Commercial Officer, Michael McFadden.

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Michael E. McFadden, Urovant Sciences Ltd. - Chief Commercial Officer of USI [5]

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Thanks, Cornelia. We continue to be excited about the commercial opportunities for vibegron. Beta-3 agonist market share continues to increase and new patients consistently enter pharmacologic treatment in a large OAB category. Also, we continue to observe this high patient churn with the existing treatments from the OAB class, further adding to the great opportunity of potential new treatment like vibegron, which if approved, will be the first new oral OAB product in 8 years. Post the EMPOWUR study top line data release, we conducted an in-depth qualitative market research study across 42 physicians, including both OAB thought leaders and prescribing physicians to ascertain their opinions about the vibegron data. The market research results support our belief that vibegron, if approved, will represent a highly differentiated option for physicians treating OAB.

Specifically, the interviewed physicians believe vibegron, if approved, would represent a clear choice over Myrbetriq based on vibegron's rapid 2-week onset versus Myrbetriq's 8-week onset. In addition, the interviewed doctors rated UUI episodes volume voided data, urgency and responder secondary endpoints as top differentiators versus Myrbetriq. Vibegron's single doors and lack of titration were also viewed positively by the interviewed physicians as simple dosing is always preferred. And vibegron's safety profile was rated highly by the interviewed physicians and is expected to be a significant decision-making factor on its own. The results of this market research confirm our thinking about the strength of the pivotal trial results and our commercial team's ability to differentiate vibegron from the currently available OAB medication. Our plan is to commercialize vibegron in the United States with urology and long-term care specialty sales forces that will focus on physicians who treat high numbers of OAB patients. We believe we can deliver this footprint with approximately 150 sales personnel, which will provide a significant reach into both segments. And both segments combined represent a potential market in excess of $3 billion. We plan to demonstrate success in each segment first and then either bolt on or partner our primary care and internal management sales force. Now I'd like to address the top 3 commercial questions typically raised about the launch of vibegron. First, how are we going to successfully launch vibegron? The market's large. We estimate over 8 million patients have failed 1 to 2 pharmacologic therapies. We will market to these patients directly and through partners to alert them of a new therapy option. Additionally, we'll target our sales force to urologists and long-term care providers that are seeing high numbers of patients with OAB. Our educational efforts will target these practitioners to educate them on vibegron. And lastly, we will utilize our expertise and manage markets to obtain access so that patients will have access to vibegron with an affordable copay. Second question that we receive, how can we effectively compete with Astellas? With regard to Myrbetriq, the beta-3 competitor, we plan to match Astellas share of voice among urologist as well as via new and dominant share of voice in long-term care. Now share of voice is important in this category, and we believe we can effectively compete with an efficiently sized sales force.

Third, how can we compete in a generic market? Although the OAB treatment market has been highly genericized for decades, several blockbuster drugs have entered this market over the years, which is further evidence that OAB continues to remain a market with a high unmet need, high patient turnover rate, high adverse events from anticholinergic medications, and a very large market size of 18 million prescriptions provide a great market dynamic for new products. Now I'll pass to Christine for a financial update.

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Christine G. Ocampo, Urovant Sciences Ltd. - CAO and Principal Financial & Accounting Officer [6]

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Thanks, Michael. In addition to the financial results summarized in the press release, you can find additional information, including full year information in our upcoming Form 10-K, which will be filed with the SEC in the near term. Research and development expenses were $22.9 million for the fourth quarter of 2018 compared with $16.4 million for the same period in the prior year. Research and development expenses were $92.2 million for the fiscal year 2018 compared with $32.4 million for the prior year. In the fourth fiscal quarter and the full fiscal year of 2018, research and development costs were primarily attributed to our ongoing Phase III EMPOWUR trial of vibegron in adults with OAB. General and administrative expenses of $5.9 million for the fourth quarter of 2018 compared with $2.7 million for the same period in the prior year.

General and administrative expenses were $18.6 million for the fiscal year 2018 compared with $4.6 million for the prior year. When comparing the 2 fiscal years, fiscal 2017 did not reflect a full year of G&A costs associated with the establishment of our U.S. headquarters in Irvine, California, and the related personnel costs as the office was not opened until the middle of the fourth quarter of 2017.

Total operating expenses for the fiscal year and fourth quarter of 2018 were $110.8 million and $28.8 million, respectively, compared with $37 million and $19.1 million for the same period in fiscal 2017. Cash used in operations decreased by $16.7 million to $24 million for the quarter ended March 31, 2019, as compared to the previous quarter that ended December 31, 2018.

Our net loss for the fiscal fourth quarter of 2018 was $29 million or $0.96 per share compared with a net loss of $19.1 million or $0.95 per share for the same period in fiscal 2017. Our net loss for fiscal 2018 was $111.3 million or $4.43 per share compared with a net loss of $37.1 million or $2.16 per share for fiscal 2017.

We closed our debt financing facility for up to $100 million with Hercules Capital in February, resulting in net proceeds of approximately $14.1 million received at closing. Following the announcement of the positive top line results from the EMPOWUR study, we are able to draw an additional $30 million under the debt facility anytime through September 30, 2019. As of March 31, 2019, our total cash and cash equivalents balance was $85.4 million or $115.4 million with the $30 million available from Hercules.

Looking ahead to the first quarter of 2019. We currently expect our total operating expenses to remain consistent at $27 million to $29 million as we close out our Phase III EMPOWUR trial and continue our Phase IIa trial for the treatment of abdominal pain due to IBS and Part 1 of the Phase III trial for the treatment of OAB in men with BPH, which was initiated in March.

We expect our cash used in operations in the first quarter of 2019 to be approximately $23 million to $24 million. With that summary of our financial results, I'd like to turn the call back over to Keith for closing remarks.

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Keith A. Katkin, Urovant Sciences Ltd. - CEO & Director [7]

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Thanks, Christine. To build on Christine's financial comments, I also wanted to comment on how we're thinking about our current capital plan. We're obviously very disappointed with our current stock price and do not think it reflects the true value of Urovant. As such, we do not want to do a financing at these levels in the near term as we think it would legitimize the stock price. We are fortunate that we have a strong financial backer in our parent company, Roivant, and do not need to be in a rush to do a financing at the current stock price levels.

In addition, we believe that we have a number of milestones later this year and in 2020 that can meaningfully impact the stock price. We are also pleased to see that Roivant recognizes how undervalued our stock is at the current time and is demonstrating their conviction by buying stock in the open market.

Now to recap. In the fourth fiscal quarter, we achieved significant key milestones across all aspects of our business. As I mentioned before, we look forward to a number of upcoming milestones that will continue to drive us toward the goal of developing Urovant into a leading specialty urology company.

These milestones include: completion of the EMPOWUR Phase III extension study in late summer; continuing enrollment in both our Phase III OAB BPH study and our Phase II IBS-associated pain study, with data from the IBS pain study expected in 2020; and filing our NDA for vibegron in OAB in the first quarter of 2020 while trying to accelerate that filing into the fourth quarter of 2019.

With that summary of milestones, I'll now open the call to questions. Operator?

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from the line of Biren Amin of Jefferies.

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Jeet Mukherjee, Jefferies LLC, Research Division - Research Analyst [2]

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This is Jeet on for Biren. Just wanted to know if you could provide any additional color on physician and payer feedback following the EMPOWUR readout and what data points might have spit out in particular to them compared to mirabegron?

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Keith A. Katkin, Urovant Sciences Ltd. - CEO & Director [3]

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Yes. So we conducted a qualitative market research of 42 physicians, both thought leaders and prescribing physicians, and reviewed the top line data with them. They also were aware -- these physicians were aware of other products in the market and what their data was in the context of that research. And the physician feedback was very clear. They felt that the product, if approved, will represent a clear choice versus Myrbetriq. They believe it already would represent a clear choice versus anticholinergics. And I think the attributes that were called out by the physicians as most impactful were 2-week onset versus Myrbetriq's 8-week onset. They also -- physicians commented that the UUI data volume voided data urgency and responder secondary endpoints were key differentiators and were -- represent really robust efficacy numbers. Additionally, the safety profile was viewed as favorable by those physicians. And last but not least, they commented that any drug that does not require titration, single doses starting dose is preferable for their practice.

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Operator [4]

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Our next question comes from Edward Nash of SunTrust.

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Fang-Ke Huang, SunTrust Robinson Humphrey, Inc., Research Division - Associate [5]

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This is Fang-Ke on for Edward. Did you just have any early discussion with payers with regard to how vibegron is likely going to be reimbursed?

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Keith A. Katkin, Urovant Sciences Ltd. - CEO & Director [6]

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So we completed initial payer research last summer. We did that with 2 different payer research studies, both of which came back with the exact same output from those studies. They represent over 160 million payer lives in the U.S., both commercial and Medicare B; and the payers shared with -- the output of that research was really threefold: One, they don't view the class as one that they'd highly manage or regulate; they view it as very predictable for their actuarial models to manage and price the class for employers and patients; and third, they manage the class with co-pay differential today and will continue to do so in the future, meaning that if a patient chooses to fill a branded script, they prefer to differentiate the branded script from a generic with co-pay differential. They don't actively manage the class with prior authorizations or step edits, and we believe that's due to the pricing of the class and the predictability of the class. And indeed, we've quantified that, the results of that research by looking at how drugs in the class are covered and they are covered with no restriction in over 90% of covered lives.

And that includes Myrbetriq, it included Vesicare (inaudible) and it includes Toviaz. So the payers are telling us pretty open class relative to many others that they manage. We have not done a completed research with the payers post top line data but we will do that work in the fall of this year.

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Fang-Ke Huang, SunTrust Robinson Humphrey, Inc., Research Division - Associate [7]

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That's really helpful. And then secondly, so basically you present some data of efficacy in some key subpopulations. Just -- is there anything you would like to highlight or call out?

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Keith A. Katkin, Urovant Sciences Ltd. - CEO & Director [8]

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Yes. So I think what we were very excited to see in that or we focus particularly on 3 subpopulations. The first, patients that are 65 years or older. Obviously, that is a delicate patient population that we think the profile of vibegron, if approved, would work for very well. And in that population, we're very pleased to see a strong treatment effect in that group. Additionally, one question that we get asked very frequently is what about patients that have been in prior therapy, either prior anticholinergic therapy or even importantly, prior mirabegron therapy. And so we were pleased to report that in both of those groups, we also saw a very strong treatment effect. And so we think that's very meaningful commercially. One, obviously you would expect that anticholinergics, even if people failed anticholinergics, that the beta-3s in vibegron would work, so that was good to confirm that. And then second, we often get to asked if the patient is not successful on mirabegron, then will they be successful on vibegron? And I think that these data show a very strong treatment effect and for patients that were previously on mirabegron when treated with vibegron. So we think that positions us very well as we move forward towards launch.

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Operator [9]

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Our next question comes from Ritu Baral of Cowen.

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Ritu Subhalaksmi Baral, Cowen and Company, LLC, Research Division - MD and Senior Biotechnology Analyst [10]

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I wanted to ask about a couple of things. One, what's left to do on the NDA filing? And also, you mentioned that you might be able to expedite this. What are the leverage points for potentially expediting the filing? And then I've got follow-ups.

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Keith A. Katkin, Urovant Sciences Ltd. - CEO & Director [11]

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Sure. So in terms of left-to-do, 3 things that are needed in order to file the NDA: the first is completion of the open-label extension study, which we should have late in the summer; the second is the ambulatory blood pressure study that was requested by the FDA, which that too, we should have late in the summer; and then the last, which is actually the critical path item, is stability on the new 75-milligram dose. And so that is what would potentially allow us to accelerate into Q4, is essentially how quickly we can move the stability data once we get it into the NDA.

Obviously, we want to make certain that the NDA is perfect when it's submitted, that the links work and then it's the highest quality document possible. So it really boils down to how long it will take us to get that stability data into the NDA as everything else will be complete, just waiting on the stability data.

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Ritu Subhalaksmi Baral, Cowen and Company, LLC, Research Division - MD and Senior Biotechnology Analyst [12]

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The ambulatory blood pressure study, is that open-label? Are you able to monitor that as it proceeds?

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Keith A. Katkin, Urovant Sciences Ltd. - CEO & Director [13]

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It's a double-blind study. As a reminder, 200 -- over 200 patients and we'll be obviously thoroughly monitoring blood pressure at multiple time points and multiple visits to understand what, if any, impact that vibegron has on blood pressure. And just as a reminder, our going-in assumption is that we'll see some very minimal increases much like mirabegron saw in their studies, which could result in similar labeling. That said, we do think it would be a very significant upside event if no blood pressure changes were observed in this study.

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Ritu Subhalaksmi Baral, Cowen and Company, LLC, Research Division - MD and Senior Biotechnology Analyst [14]

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Got it. Moving to commercial. You mentioned the -- right now, the estimated sales force size is about 150 reps. Can you talk about the number of potential targets that you guys have in mind? You mentioned urologists. Are there any high-prescribing PCPs also targeted in the current plan? And how do you think about potentially tiering the calls of those 150 reps?

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Keith A. Katkin, Urovant Sciences Ltd. - CEO & Director [15]

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Yes. That's a great question, Ritu. There are about 7,000 urologists that treat the majority of OAB patients and write the majority of OAB prescriptions. We'll certainly call on all of those urologists. And then there are about 1,000 to 3,000 primary care physicians/internal medicine physicians and their supporting nurse practitioner physician assistant, ACPs, that write a very large majority of the PCP, OAB prescriptions. And we would -- we plan to call on both of those with our urology sales force. And then the other segment that we're going to enter is long-term care. We feel like we can do that with a 50-person sales force and we can cover about half of the bed lives in long-term care directly and then a substantial portion indirectly with that sales force size.

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Ritu Subhalaksmi Baral, Cowen and Company, LLC, Research Division - MD and Senior Biotechnology Analyst [16]

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Got it. So the 150 includes the 50 long-term care reps or is that a separate force?

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Keith A. Katkin, Urovant Sciences Ltd. - CEO & Director [17]

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It does. No, it's included.

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Ritu Subhalaksmi Baral, Cowen and Company, LLC, Research Division - MD and Senior Biotechnology Analyst [18]

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Got it, okay. And then last question. How -- with the additional work you've done over the last few months, how are you thinking about pricing? Or should we all still assume branded parity or are there other factors at play here now?

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Keith A. Katkin, Urovant Sciences Ltd. - CEO & Director [19]

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Well, there's still work to be done with the payers this fall and that will certainly inform and expand potentially our thinking on pricing. As of now, I think parity pricing with Myrbetriq plus or minus a bracket of about 20% seems to make sense in this market. But we still need to see the data that is to come with the blood pressure study and have the market research this fall with the payers to solidify our thinking on that.

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Operator [20]

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Our next question comes from Eric Joseph with JPMorgan.

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Eric William Joseph, JP Morgan Chase & Co, Research Division - VP & Senior Analyst [21]

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I'm just wondering if you could speak to any incremental visibility on the Japanese vibegron launch by Kyorin and any feedback on how that product is being received clinically relative to Myrbetriq, whether that is now informing your commercial strategy here in the U.S.? Then I have a follow-up.

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Keith A. Katkin, Urovant Sciences Ltd. - CEO & Director [22]

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Yes. Thanks for the question, Eric. So we have very limited data on exactly what's going on with the launch in Japan. This is a reminder, it's comarketed between Kyorin and Kissei Pharmaceuticals in Japan. Kyorin actually announces their data and their quarterly revenues. And so my comment earlier in terms of the success of the Japanese launches, in their first full quarter of launch, they actually posted some pretty attractive revenue numbers in that first quarter. We're just not certain if it's a combination of all the sales between Kyorin and Kissei or if there's a revenue split between the 2 companies. But if you do look at Kyorin's forecast for this year, they actually have quite a substantial revenue forecast for vibegron. And when you consider that the Japanese market in total is about $300 million a year, they're actually projecting that they get a very nice percent market share in their first year on the market. Again, we don't have access to IMS or IQVIA-like data in Japan, so we don't have great visibility. But it does look like their first quarter revenue performance was strong and their projections for their full year revenue performance are quite strong, such that if we achieved similar levels then we'd certainly have an incredibly strong launch here in the States.

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Eric William Joseph, JP Morgan Chase & Co, Research Division - VP & Senior Analyst [23]

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Got it. Got it. Got it. And just a follow-up question here on COURAGE and then with OAB due to BPH. Just wondering to what extent do the male subjects that were accrued in EMPOWUR reflect those being recruited to COURAGE? And whether subset analyses that you may have conducted on EMPOWUR, how are you thinking about, I guess, expectations around the success of the co-primary endpoint in COURAGE of micturition and urgency episodes?

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Keith A. Katkin, Urovant Sciences Ltd. - CEO & Director [24]

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Cornelia, would you like to answer that one?

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Cornelia Haag-Molkenteller, Urovant Sciences Ltd. - Chief Medical Officer of USI [25]

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Yes. So, thank you, Eric. So first of all, the men in our current EMPOWUR study are not totally reflective because of course, here in the COURAGE study, we require them to also be on an alpha blocker. They also need to have a minimum number of urgency and micturitions and they also need to have nocturia, which was not a requirement for EMPOWUR, so you can't really compare them. We looked at micturitions (inaudible) urgency as well, looks at least in the right range. However, we do need to look, of course, at these data more carefully. But at the moment, we're confident in our current co-primary variables but we'll continue to look, of course.

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Operator [26]

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(Operator Instructions) Our next question comes from the line of Ram Selvaraju of H.C. Wainwright.

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Raghuram Selvaraju, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [27]

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Just 3 very quick ones, guys. So with respect to vibegron, I wanted to know whether you could maybe quantify for us what you think the delta or the distance might be between vibegron and mirabegron if vibegron were to obtain, successfully, a label for use in patients with concomitant OAB and BPH? Secondly, if you could give us a sense of what -- to what degree physicians would require prior treatment and failure or prior treatment at all with mirabegron in patients who would not be considered particularly good candidates for mirabegron therapy before starting vibegron therapy? So for example, those patients who either are on concomitant medications or considered candidates for concomitant medications, where there are likely to be drug-drug interactions with mirabegron. Whether you think there's any likelihood at all that physicians would continue sort of counterintuitively to insist that those patients try mirabegron first before going on vibegron. And then lastly, a question on URO-902. If you could just give us a sense of what you expect the timing of initiation of the Phase IIa study to be and also, whether you can confirm at this juncture whether the route of administration would be similar to what was used by Ion Channel before or whether it's been changed?

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Keith A. Katkin, Urovant Sciences Ltd. - CEO & Director [28]

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Thanks, Ram. Appreciate those questions. I'll tell you what. I'll take the first one. I'll let Michael take the second; and then Cornelia take the third one on that. So first off, your first question was about quantifying a potential benefit of vibegron in OAB and BPH relative to mirabegron. And there, I don't know if there's -- it's not really a question of quantifying the differential. Right now, there are no approved products for concomitant OAB and BPH. And in our discussions with the FDA, the FDA was very clear, they view that men that have OAB and BPH as a separate and distinct indication from an OAB indication. So what that means is if our study is successful, we will be able to file an sNDA and have an essentially, a label-enhancing indication allowed on the vibegron label. And so given the FDA's stance, we don't think that it's -- we don't believe that Astellas would promote into that marketplace, which then would make obviously, vibegron the only promoted product into that category.

And we do view that as a very large category. I think as you're aware, 75% of the men that have OAB and BPH, their OAB goes untreated, and so we think that is a very large market opportunity with over 2 million men out there that can benefit from vibegron, if approved, for that additional indication. So with that, let me turn over to Michael to talk about your question about whether or not physicians would -- may be required to have -- or may want prior treatment with mirabegron before prescribing vibegron.

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Michael E. McFadden, Urovant Sciences Ltd. - Chief Commercial Officer of USI [29]

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Yes. Let me comment on 2 fronts: first from the payer front, how they'll view it; and what the physicians have told us in market research. On the -- from the payer front, they have shared with us, this a non-managed class, they manage it with co-pay differential. And then their content to let each manufacturer try to differentiate their product and physicians select the product that they think is best for the patient, whether that's tolterodine or generic or whether that is Myrbetriq or ultimately, if approved, vibegron. So we believe the differentiation choice for -- from a payer standpoint is that, non-managed class, let the physician and the patient work through those issues. From the physician's standpoint, when we look at the market, I'll frame the question maybe how we're thinking about it. There are about 14 million active patients that are in the process of seeking treatment, have sought treatment or have sought treatment and fail on treatment. There are 3.3 million of those patients that are active, meaning they are taking a medicine today, they're filling scripts at a pharmacy. There are about 8 million to 10 million that have failed 1, 2 and/or 3 medications. And so as we think about the market, we will certainly pursue the active patients, the 3.3 million, because we know the medicine they're on today, over 70% of them will not be taking that medicine 6 months from now. And they stop taking it typically for tolerability issues with the old anticholinergics. And from Myrbetriq, we know they lose 40% of their patients by month 2. And so we'll actively pursue next choice for those patients as they represent the majority of the market. And then there are about 8 million to 10 million patients who failed everything, and we're actively working on ways to bring those patients back into therapy by sharing information with them, finding them first and then sharing information about a coming therapy. And ultimately, if approved, we'll talk to them about the therapy option of vibegron and ask them to engage their doctor if they want to reengage the therapy. So as we think about it, there are a lot of different opportunities across the continuum for us to differentiate the product and then actively pursue different patient types. And then last but not least, the long-term care. There's no product in OAB today that has a better profile for the long-term care patient, both from a safety and efficacy standpoint. So we believe that vibegron will be highly differentiated in that category, which we believe represents a $1 billion potential.

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Cornelia Haag-Molkenteller, Urovant Sciences Ltd. - Chief Medical Officer of USI [30]

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So on URO-902, is that correct?

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Michael E. McFadden, Urovant Sciences Ltd. - Chief Commercial Officer of USI [31]

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Yes, correct. I was about -- when we're finding out initiating and route of administration.

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Cornelia Haag-Molkenteller, Urovant Sciences Ltd. - Chief Medical Officer of USI [32]

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Yes. We are planning to initiate towards the end of the year, and the route of administration will be [intradetrusor] injections just as the last of the IMS studies and equivalent to Botox and needles. Essentially, all of that has been established for Botox injections. Under local anesthesia, it's an in-office procedure.

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Operator [33]

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At this time, I'd like to turn the call back over to Keith Katkin for any closing remarks. Sir?

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Keith A. Katkin, Urovant Sciences Ltd. - CEO & Director [34]

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Thank you. Just like to thank everybody for joining us on our conference call today, and we look forward to seeing everyone at the JMP conference in New York next week or on our next earnings call. Thank you, everyone.

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Operator [35]

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And this concludes today's conference call. Thank you for your participation, and have a wonderful day. You may disconnect your lines at this time.