Release Date: July 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ARCALYST net product revenue grew to $103.4 million, representing a 90% year-over-year growth.
- The company has maintained a strong financial position and expects to be cash flow positive on an annual basis.
- Enrollment has started for the Phase 2b study of abiprubart in Sjögren’s disease, a chronic autoimmune disease with no FDA-approved therapies.
- The number of prescribers for ARCALYST has increased from approximately 2,000 in Q1 to approximately 2,300 in Q2.
- Kiniksa has expanded its sales force and launched initiatives with the American Heart Association and Henrik Lundqvist to raise awareness and improve care for recurrent pericarditis.
Negative Points
- Net loss in the second quarter was $3.9 million compared to net income of $15 million in the same quarter last year.
- Higher cost of goods sold and collaboration expenses have driven year-over-year operating expense growth.
- The company does not expect the same rate of improvement in compliance and gross-to-net metrics in future quarters.
- Only 11% of the 14,000 target population for recurrent pericarditis are currently on ARCALYST treatment, indicating room for improvement.
- There is uncertainty regarding the future gross-to-net percentage, which could impact financial projections.
Q & A Highlights
Q: As you're thinking about ARCALYST treatment duration now over two years, where would you say physician and payer understanding about ARCALYST being more of a chronic therapy versus a product used for sort of a defined treatment duration is currently?
A: Sanjiv Patel, CEO: We see recurrent pericarditis as a chronic flowing disease, and our education to both payers and physicians has been along that line. There is a growing understanding that this is a chronic disease, reflected by the increase in treatment duration since launch. Ross Moat, Chief Commercial Officer: We are seeing a shift in understanding, with the average treatment duration increasing from 23 months to 26 months. Payers generally approve for 12 months, with re-approval based on physician attestation.
Q: When you talk about the GTN decreasing this quarter, what should the steady state be going forward? And any color on the cadence of enrollment in the abiprubart trial?
A: Ross Moat, Chief Commercial Officer: The gross-to-net (GTN) decreased from 13.5% in Q1 to 10.8% in Q2, largely due to co-pay dynamics. We have not provided a forward look for the full year. John Paolini, Chief Medical Officer: Enrollment for the Phase 2b abiprubart trial in Sjögren's disease has initiated, and updates will be provided through clinicaltrials.gov.
Q: You mentioned 11% of patients with multiple recurrences were on ARCALYST treatment. Can you provide more color on how this is split between patients on second and third recurrence and beyond? And how should we think about the cadence of new trials in new indications for abiprubart?
A: Ross Moat, Chief Commercial Officer: The 11% penetration is among patients with two or more recurrences, but we also have patients on their first recurrence. Sanjiv Patel, CEO: We are looking closely at the applicability of abiprubart for other indications, but have not disclosed specifics yet.
Q: Was there any inventory changes this quarter? And what is the gross-to-net expectation for the next two quarters or overall for the year?
A: Sanjiv Patel, CEO: There were no significant inventory changes. We have not provided specific guidance for gross-to-net for the remainder of the year.
Q: Can you provide more details on the payer approval process for ARCALYST?
A: Ross Moat, Chief Commercial Officer: Payers generally approve ARCALYST for a 12-month duration, with re-approval based on physician attestation of the patient's need to continue therapy.
Q: How are you addressing disease awareness for recurrent pericarditis?
A: Ross Moat, Chief Commercial Officer: We are focusing on improving disease awareness through digital marketing, expanding our field force, and initiatives like the American Heart Association's Addressing Recurrent Pericarditis initiative and a partnership with Henrik Lundqvist to raise awareness.
Q: What are the key drivers behind the strong commercial performance of ARCALYST?
A: Ross Moat, Chief Commercial Officer: Key drivers include increasing prescriber adoption, high physician and patient satisfaction, and over 90% payer approval of completed cases. We also saw higher compliance and lower gross-to-net in Q2.
Q: Can you provide an update on the financial performance and cash flow expectations?
A: Mark Ragosa, CFO: Total revenue in Q2 was $108.6 million, with ARCALYST net product revenue of $103.4 million. Net cash flow in Q2 was $5.2 million, bringing our cash balance to $218.8 million. We expect to remain cash flow positive on an annual basis.
Q: What are the future growth opportunities for Kiniksa?
A: Sanjiv Patel, CEO: We are focused on accelerating growth through commercial execution with ARCALYST and advancing our pipeline, particularly with abiprubart. We expect to remain cash flow positive while continuing to invest in value-creating opportunities.
Q: How is the prescriber base evolving for ARCALYST?
A: Ross Moat, Chief Commercial Officer: The total prescriber base has grown to over 2,300 since launch, with around 550 repeat prescribers. We are seeing an acceleration in both new and repeat prescribers, which bodes well for future growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
