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Operator: Good day, and welcome to the Travere Therapeutics Fourth Quarter and Full Year 2022 Financial Results and Corporate Update. Today’s conference call is being recorded. At this time, I would like to turn the conference call over to the Vice President of Investor Relations, Naomi Eichenbaum. Please go ahead, Naomi. Thank you.

Naomi Eichenbaum: Thank you, Rachel. Good afternoon, and welcome to Travere Therapeutics’ Fourth Quarter and Full Year 2022 Financial Results and Corporate Update Call. Thank you all for joining us. Today’s call will be led by our Chief Executive Officer, Dr. Eric Dube. Eric will be joined in the prepared remarks by Dr. Jula Inrig, our Chief Medical Officer; Peter Heerma, our Chief Commercial Officer; and Chris Cline, our Chief Financial Officer. Dr. Bill Rote, Senior Vice President of Research and Development, will join us for the Q&A session. Before we begin, I would like to remind everyone that statements made during this call regarding matters that are not historical facts are forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are not guarantees of performance. They involve known and unknown risks, uncertainties and assumptions that may cause actual results, performance and achievements to differ materially from those expressed or implied by the statement. Please see the forward-looking statement disclaimers on the company’s press release issued earlier today as well as the Risk Factors section in our Forms 10-Q and 10-K with the SEC. In addition, any forward-looking statements represent our views as of only the date such statements are made, February 23, 2023, and Travere specifically disclaims any obligation to update such statements to reflect future information, events or circumstances. During today’s call, we will be covering certain financial results for the quarter and for the year ended December 31, 2022, including certain non-GAAP financial results.

Please refer to the company’s press release issued earlier today again, among other things, a reconciliation of the differences between the non-GAAP financial results and the most direct comparable GAAP financial results. You can access the press release on our website at travere.com. With that, let me turn the call over to Eric. Eric?

Eric Dube: Thank you, Naomi, and good afternoon, everyone. 2022 was a year of many achievements that have further strengthened our position as a leader in the rare disease community. This is founded in our mission to identify, develop and deliver life-changing therapies to people living with rare disease. Throughout last year, we advanced our pipeline, prepared our organization for launch and continue to reach the patients that currently rely on our approved medicines. . Perhaps most importantly, our work culminated in the recent accelerated approval of FILSPARI for the reduction of proteinuria in adults with primary IgA nephropathy or IgAN, at risk of rapid disease progression. FILSPARI is the first and only nonimmunosuppressive medicine approved for IgA, which has demonstrated a threefold superior proteinuria reduction compared to a standard of care irbesartan.

As you heard us talk about on our recent approval call, we have high aspirations for FILSPARI as we believe it will become the foundational treatment option for IgAN patients who are at risk of rapid progression. Importantly, we have the deep market insights, the product profile, the team and the strategy to achieve that goal. If we are successful, we will be able to positively impact many patients in the U.S. with this important new medicine. We are only a few days into the launch in the U.S., but we’re encouraged by the initial engagement with physicians, patients and payers and Peter will go into in a bit more detail shortly. We still have more fighting milestones to come with FILSPARI in 2023. Beyond setting the launch trajectory in the U.S., we are anticipating a review decision from the EMA in the second half of 2023 for the conditional marketing authorization application for sparsentan in the treatment of IgAN in Europe.

We will continue to work closely with our partner, CSL Vifor throughout the review process. And we also look forward to the 2-year data from the ongoing PROTECT study. As a reminder, the interim results from the study supported the accelerated approval of FILSPARI last week. As such, we are waiting with anticipation of the 2-year data set, which is planned for the fourth quarter of this year. Based upon the interim results, we believe the preliminary EGFR data available at the time of the interim analysis were indicative of a potentially clinically meaningful treatment effect after 2 years of treatment and that we’ll be able to utilize those data for a traditional approval submission in 2024. Additionally, from sparsentan, we expect to have top line data from the 2-year endpoint in the ongoing DUPLEX study in FSGS during the second quarter of this year.

If the results from DUPLEX are supportive of an FSGS regulatory submission, we would anticipate being in a position to submit an sNDA in the second half of this year and would also target submitting together with CSL Vifor for a subsequent variation to our European CMA application by end of year. This would represent an incredible opportunity for us to help patients with FSGS, one of the leading causes of kidney failure due to glomerular disease. Beyond sparsentan, we continue to advance our novel devatinase program for classical homocystinuria, or HCU. Later this year, we anticipate being in position to provide additional data from the ongoing COMPOSE study as well as plans for a potential Phase III program after we complete our regulatory engagements.

2022 was a remarkable year for Travere, and I’m proud of our organization’s accomplishments and perseverance ultimately get us to our first approval from our pipeline of therapies targeting rare diseases. We have started off 2023 with a key milestone that has been years in the making, and we have much more to come and continue working towards our mission of delivering life-changing therapies to people living with rare disease. Let me now turn the call over to Jula for a clinical update. Jula?

Jula Inrig: Thank you, Eric, and good afternoon, everyone. As Eric stated, 2023 promises to be an exciting year for Travere, the bare kidney community and the patients and families impacted by IgAN. We could not be more pleased with the recent accelerated approval of FILSPARI. This milestone has created momentum in the IgAN community and set the stage for many exciting developments to come. It is important to remember that IgAN is the most prevalent primary glomerulonephritis worldwide. It is often uncontrolled. And as a result, it is a major cause of kidney failure. In fact, high-risk people living with IgAN face a median time to kidney failure of approximately 11 years. Along the way, many faced pain and debilitating fatigue, depression and anxiety and challenges with keeping up with everyday work life.

Patients and their nephrologists are desperately seeking new treatments that can effectively reduce proteinuria and be utilized with less concern for limiting side effects. Right now, that’s limited to ACE inhibitors or angiotensin receptor blockers, which more than 50% of patients don’t respond adequately to and SGLT2 inhibitors, which are less effective at reducing proteinuria. Steroids are also available, but are generally reserved for more severe IgAN patients because of their challenging safety and tolerability profile. FILSPARI is the only once-daily oral non-immunosuppressive medication approved for the reduction of proteinuria in IgAN. As the first of its kind, dual endothelin angiotensin receptor antagonist, FILSPARI targets 2 causal pathways critical to IgAN disease progression.

In the PROTECT study, we observed a rapid sustained and 3x greater reduction in proteinuria compared to while showing a consistent and tolerable safety profile similar to irbesartan. We are thankful for the FDA’s accelerated approval of FILSPARI and are proud of the label we have received, which highlights the strongest clinical data demonstrated in a head-to-head Phase III study in IgAN to date. I encourage you to review the entire label at filspari.com to further understand the clinical performance, safety profile and the REMS process. A point worth noting is that both the liver and pregnancy REMS monitoring can be obtained with a single blood draw in high-risk patients typically undergo monthly medical visits and labs, we expect that integrating REMS monitoring into their current course of will be seamless and serve as an effective tool for physicians monitoring their patients.

Overall, we believe this label will provide nephrologists with the confidence needed to prescribe FILSPARI for their IgAN patients at risk of rapid disease progression and that this is just the beginning for realizing FILSPARI’s potential. Later this year, we’re expecting top line data from the confirmatory portion of the PROTECT study. If these data demonstrate a clinically meaningful benefit on eGFR after 2 years of treatment, this will further solidify FILSPARI’s potential as a new treatment standard. Achieving this would enable us to submit for a traditional approval with the expectation of a label that would be more representative of the total studied and PROTECT and reflect the long-term benefits of FILSPARI. Beyond IgAN, we’re nearing the tiling results from the DUPLEX study of sparsentan in FSGS.

The DUPLEX study is progressing according to plan, and we’re pleased with the continued conduct and efforts to get to database lock. If the 2-year data progresses in a favorable manner, we expect to submit an sNDA for sparsentan to gain an indication for FSGS and be added to the FILSPARI label. We would also look to submit a variation to our CMA application, if approved for IgAN in Europe. This could be paramount for people living with FSGS as many are facing an even faster progression to kidney failure and fewer effective and safe treatment options. Beyond sparsentan, we continue to advance our pegtibatinase program in classical homocystinuria. During the fourth quarter, we completed enrollment activities in the sixth and final cohort of the ongoing Phase I/II COMPOSE study.

As a reminder, pegtibatinase demonstrated dose-dependent reductions in total homocystine during 12 weeks of treatment in COMPOSE. In the 1.5 milligrams per kilogram twice weekly dose cohort, treatment with pegtibatinase resulted in rapid and sustained reductions in total homocystine of approximately 55%, resulting in maintenance of total homocystine below a clinically meaningful threshold of 100 micromoles from week 2 through week 12 of treatment. Our sixth cohort is evaluating on additional higher dose and also a lyophilized formulation that if effective could be utilized in a potential pivotal program and the commercial setting if approved. We remain on track for additional data from COMPOSE later this year. These data will be helpful for completing our engagement with regulators and potentially initiating a Phase III study in the second half of this year.

Finally, on the development programs, we received Fast Track designation for our Chenodal development program in 2022. As many of you may recall, Chenodal is currently approved for the treatment of radiolucent gallstones, but it has been recognized as the standard of care for cerebrotendinous xanthomatosis or CTX for many years. Our ongoing Phase III RESTORE study is designed to provide a data set that will allow us to submit an sNDA to have the label amended to reflect what we believe is the true use of the product. We believe this could significantly aid patient identification and help people living with CTX gain earlier access to a greatly needed treatment option. We know that if CTX is identified and treated early, oftentimes, patients can go on to live a relatively normal life.

We expect to have data from the Phase III study in-house this year and to subsequently submit an sNDA if the data are supportive. With that, I’ll turn the call over to Peter for the commercial update, including additional color on the FILSPARI launch. Peter?

Peter Heerma: Thank you, Jula. This has already been an exciting week for us. As I mentioned on the call last Friday, we built our FILSPARI launch upon our proven commercial infrastructure, which has delivered consistent results over the past 8 years. We further strengthened our execution capabilities and now have a dedicated launch team with specific experience and expertise to be successful with FILSPARI. I mentioned that this team was ready to execute with a sense of urgency, and I’m pleased to report that our team has been executing very well since approval of Friday afternoon. Within 1 day, our materials were finalized consistent to the label in the FILSPARI, FILSPARI REMS and for the total care websites were nice and operational.

Even though Monday was a public holiday, our commercial field teams were excited to finish that framing and get out into the field, engaging with their customers, both nephrologists as well as payers. All these extensive planning and execution efforts led to the first FILSPARI prescription being written within 8 business hours of approval. We anticipate this positive momentum to continue to build. To provide you a bit more context on our initial date of FILSPARI commercialization. Our experienced commercial field team of more than 80 seasoned professionals is engaging in productive conversations with nephrologists and payers. Focusing on the burden of disease IgAN. The challenges with current set of care and how FILSPARI’s profile could potentially address the shortcomings in the addressable population of adult patients at risk of rapid progressing.

The receptivity and initial interest from the nephrology community is in line with our expectations, simplifying that patients have been waiting for a product like FILSPARI. Through approval, nephrologists have consistently expressed that they need more efficacious treatment options that allow for long-term use in treating their IgAN patients who are at risk of rapid progression. Without the tolerability issues of immunosuppressive agents. We believe FILSPARI is well positioned to fill that need. It blocks consistent with what nephrologists has been going over the past 30 years, built upon a common belief and routine, but it adds the missing component of antagonizing the endothelin. And we know that endothelin and stimulate each other and act in tandem to amplify damage to the filtration barrier in the kidney, resulting increased proteinuria levels.

Integral blocking, endothelin and angiotensin with FILSPARI has allowed for the superior efficacy relative to as observed in the interim readout on the trial. Based on FILSPARI for novel motive actin and robust efficacy and safety data, we are convinced that FILSPARI has the potential to become the foundational treatment option from the roughly 30,000 to 50,000 IgAN patients addressable under the current indication. It is our goal to make FILSPARI, the cornerstone therapy for these patients within the evolving IgAN treatment paradigm. Lastly, I mentioned on the approval call that we have from recent product launch in rare nephrology and that we know that nephrologists have a largely mechanism and data driven. Therefore, our initial focus is to educate nephrologists on the FILSPARI profile, both the efficacy and safety filings as outlined in the label.

— to give them a sought understanding how FILSPARI may help their rapidly progressing in IgAN patients. Another launch dynamic that we will be navigating is the process of getting to pay a coverage. Here, I believe we are also off to a solid starts. Prior to approval, we have already conducted scientific preapproval engagement with payers covering over 150 million lives and we are building upon those initial conversations now. This week, we have already interacted with several national payers and these interactions have reinforced that payers are generally well aware of the IgAN and appreciate the importance of proteinuria reduction in relation to disease progression. also referenced that we plan for an exclusive virtual experience for patients and physicians.

We have established trade total care to help patients by offering personalized education, support in the reimbursement process and copay-assistance for patients. also participation and physicians with their REMS enrollments, which is typically a simple procedure. During this process, physicians will review the prescriber guide and ignore their understanding of the label. Then they will be prepared to prescribe FILSPARI. It is also worth emphasizing that our REMS monitoring to integrate seamlessly with the established REMS processes nephrologist currently used for other therapies. From a logistical standpoint, we remain on track for FILSPARI to be shipped our specialty pharmacies next week. In summary, our execution has started according to plan, and we are well positioned to deliver on our powerful purpose, bring FILSPARI to patients who need it most.

Turning to the performance of our in-line product portfolio in the fourth quarter of 2022. I continue to be very pleased with the execution of our commercial organization. For Thiola, we continue to see solid demand as we have further supported the identification and treatment of cystinuria patients. This is a testament to our organizations basing inspired way of operating and our established capabilities in the rare kidney space. We are pleased with the meaningful Thiola performance within the evolving competitive landscape. As we have talked about historically, we are seeing the impact of generic dynamics that affect net sales of Thiola and we expected this could materialize further this year. Our bile acid portfolio continued to deliver growth in the fourth quarter.

The team has a long-standing reputation of performance in dedication to educating pediatric and hepatologists. These efforts have been key to continued growth. Our team’s capability to help physicians in patient identification of these ultra-rare conditions is fundamental. This expertise provides a solid foundation to build upon as we prepare for a potential future CTX indication for and as we progress is the fact even developed program. In 2023, we expect to return to year-over-year growth in net product sales, while we expect the Thiola we anticipate that this will be offset by expected growth of our bile acid portfolio in the FILSPARI launch performance. As a reminder, we anticipate that FILSPARI’s performance will be in line with recent benchmarks in the first 6 to 9 months.

And once we gain meaningful FILSPARI payer coverage and prescribers gain their initial experiences and observed the same consistent proteinuria reduction as observed in the PROTECT trial, we anticipate accelerated adoption towards the end of the year. Beyond this first year, we are well positioned for ongoing growth of FILSPARI, which is exemplified by our ability to execute, as demonstrated with our commercial performance in 2022. This, together with the higher end of, the robust profile of FILSPARI and our meaningful timing advantage before traditional therapies may potentially be approved gives us confidence that we will succeed in our strategic objective to make FILSPARI the foundational treatment for rapidly progressing IgAN patients. Let me now turn the call over for Chris for the financial update.

Chris?

Christopher Cline: Thank you, Peter, and good afternoon, everyone. With the continued execution of our commercial organization and the focus on our key priorities throughout the business, we ended 2022 in a strong financial position. For the fourth quarter of 2022, net product sales were $52.3 million compared to $54.6 million for the same period in 2021. For the full year 2022, net product sales were $200.5 million compared to $210.8 million for the same period in 2021. The difference is largely attributable to a decrease in Thiola sales, partially offset by an increase in sales for the company’s bile acid products. Research and development expenses for the fourth quarter of 2022 were $60.2 million compared to $62.2 million for the same period in 2021.

For the full year 2022, R&D expenses were $235.8 million compared to $210.3 million for the same period in 2021. The difference is largely attributable to the continued advancement of the company’s percent and pegtibatinase clinical programs, including clinical trial expenses, manufacturing and increased headcount. On a non-GAAP adjusted basis, R&D expenses were $54.2 million for the fourth quarter of 2022 compared to $57.7 million for the same period in 2021. Selling, general and administrative expenses for the fourth quarter of 2022 was $2.9 million compared to $42.1 million for the same period in 2021. For the full year 2022, SG&A expenses were $220.2 million compared to $149.9 million for the same period in 2021. The difference is largely attributable to the commercial launch preparations for FILSPARI, including having the full sales team on board and ready to launch this week.

On a non-GAAP adjusted basis, SG&A expenses were $50.2 million for the fourth quarter of 2022 compared to $30.9 million for the same period in 2021. Total other income net for the fourth quarter of 2022 was $1.1 million compared to total other expense net of $4.4 million in the same period in 2021. The difference is largely attributable to increased interest income and lower interest expense during the period. Net loss for the fourth quarter of 2022 was $65.8 million or $1.03 per basic share compared to a net loss of $51.6 million or $0.84 per basic share for the same period in 2021. For the full year 2020, net loss was $278.5 million compared to $180.1 million for the same period in 2021. On a non-GAAP adjusted basis, net loss for the fourth quarter of 2022 was $49.1 million or $0.76 per basic share compared to a net loss of $37.6 million or $0.61 per basic share for the same period in 2021.

As of December 31, 2022, the company had cash, cash equivalents and marketable securities of $450.2 million. As we look to the year ahead, we anticipate that our operating expenses will continue to increase and may be variable quarter-to-quarter as we advance our programs. For SG&A, this is primarily driven by having a full year of the expanded sales team in place and our associated launch investments to position FILSPARI for success. For R&D, it is primarily driven by the continuation of both the PROTECT and DUPLEX studies of sparsentan and as well as our work to evaluate percent in combination with inhibitors and prepared to for a potential pivotal program, including building supply. Accordingly, we anticipate that we can manage our balance sheet to support our operations well into 2024.

This takes into account potential further competitive dynamics for Thiola, investing in launches for both IgA and potentially FSGS, advancing pegtibatinase as well as milestone payments related to achievements for the programs. Importantly, we entered the new year with a strong financial position to support this exciting period of launch execution and the continued advancement of our pipeline to a number of key milestones in 2023. I’ll now turn it back over to Eric for his closing comments. Eric?

Eric Dube: Thank you, Chris. I want to express my gratitude to the rare disease community, the patients, their families and the Travere team for their hard work and dedication that has led us to the successful moment, the launch of FILSPARI. The strong reception by physicians, patients and payers, even in these early days, demonstrates the value of FILSPARI in addressing the unmet need of those in the rare kidney community. . We are committed to improving the lives of patients and to do so are focused on the advancement of our pipeline. In this regard, we still have a number of exciting milestones to come, including the potential approval of sparsentan for IgAN in Europe in the second half of this year and the 2-year data from the PROTECT trial in IgAN in the fourth quarter.

We also anticipate top line data from the 2-year endpoints in the DUPLEX study of sparsentan in FSGS in the second quarter of this year, which could lead to an important new indication for sparsentan. And finally, we expect to be able to share more this year on our novel pegtibatinase program as we prepare for a potential Phase III program. Our years of hard work has set us up for an incredibly bright 2023. I am confident our talented team will deliver strong results for our patients and for the rare disease community. Let me now turn the call over to Naomi for Q&A. Naomi?

Naomi Eichenbaum: Thanks, Eric. Rachel, can you please go ahead and open the lines for Q&A?

Operator: . We will take our first question from the line of Greg Harrison with Bank of America.

Gregory Harrison: Maybe just to start off, could you walk me through the process from a patient’s perspective of getting the script, enrolling in the REMS program and then the monthly maintenance testing for the REMS?

Eric Dube: Yes, Greg, for the question. Jula, maybe we’ll turn to you first and you can walk through how this fits within how these patients are treated. And Peter, you can walk through what the process is for prescription and receiving FILSPARI.

Jula Inrig: Certainly. Thanks, Greg, for the question. So realize that patients who are at risk for progression are going to see their nephrologists and more frequently, particularly if you have a change in their treatment algorithm. So they may see them every month with labs. And so as the patient is going to go see their nephrologist, they’re going to discuss their overall risk of progression, having significant proteinuria as well as their eGFR decline and nephrologist is going to sign up for the REMS. And this process for signing up for the REMS is relatively simple from both the physician perspective as well as the patient. They need to be educated. That’s a significant proportion of the REMS that means reading the label, reading the prescriber and pharmacy guide and then signing up means filling out your contact details and then signing a statement that says you’re going to monitor your patient appropriately.

That’s the same process for a patient. They give their contact details, state that they’ve been informed about the overall risk benefit and that they’re going to follow the process. And for a patient, what that means is that they’re going to get their labs every month and then they’re going to get the therapy through the specialty pharmacy. And then just I’ll add 1 additional detail is we have just a couple of specialty pharmacies, and they’re going to go through a similar process. read the label, be informed to read the prescriber pharmacy guide and then give their contact details and then a test that they’re going to follow this process.

Peter Heerma: Yes, let me build on what Jula said and thanks, Greg, for that question. Before giving you a little more details on the mechanistics of the total care patient services. I think it’s good to realize the high need for these patients. And that’s the reason why we have accelerated approval in the first move. We have to realize this is a younger patient population and it’s often diagnosed in the late teens or early 20s. Hard of those patients progress to kidney failure within 11 years, and as Jula mentioned in the previous remarks. So that means that a lot of those stations will end up in dialysis in the midst of their productive lives. . When we talk about the REMS and the early responses we have seen so far, and this is still early days, it’s day 4 of promoting FILSPARI, but early response from nephrologists confirmed that they don’t have alternative treatment options today for these patients as they have and option.

So once nephrologists understand the efficacy and safety profile of FILSPARI, they appreciate the simple procedure of the REMS enrollment and they focus back to the clinical value that FILSPARI may have for their patients. I think you have talked already about like what the physician as well as the specialty pharma system will be doing, but I will also say that within Total Care, we provide the services to make this process as convenient as possible for both physicians with specialty pharmacists and especially the patients.

Gregory Harrison: Great. That’s really helpful. And then could you remind us how many IgAN patients are treated by community nephrologists and how this has influenced your launch strategy?

Peter Heerma: So the far majority of those patients are being treated by the community nephrologists. And we have plans for that as well. That’s why I mentioned in the call last week that we will be consistently going on about 6,000 nephrologists to cover about 85% of the patient potential.

Operator: We will take our next question from the line of Maury Raycroft from Jefferies.

Maurice Raycroft: When you did your most recent market research at the end of last year and asked about intent to prescribe in 6 months or 1 year of launch, I’m wondering if you tested key aspects of the label in the market research.

Eric Dube: Thanks, Maury for that great question. Peter, would you like to take that?

Peter Heerma: Yes, absolutely. And thanks, Maury, for that question. So we have done consistent market research and that consolidated by external research, for example, by syndicated market reserve. It was quite surprising to me like that, the intent to protect did not change after we announced the liver monitoring REMS that intent to prescribe to remain 90%. And we just did — I just saw a result actually this week of the latest profile the label. And again, the intent of prescribe came in at 88%. So very consistent at around 90% prescription in the first year and about 70% intent to prescribe in the first 6 months. So they didn’t really meaningfully change.

Maurice Raycroft: Got it. And Peter, you highlighted some of the plans around doctor education efforts. Can you talk about where the most challenging learning curves will be? And how will you message around eGFR to doctors?

Peter Heerma: Yes, absolutely. I mean it’s early days, as I make is it’s day for — but what we see so far, what I’m hearing from our field reps, there is great excitement for the promise of FILSPARI. In fact, I got a text yesterday from one of our games saying who has been in the field for 30 years. Saying that he has never seen this level of excitement among nephrologists. So I think there is a certain level of excitement to learn about the profile of FILSPARI and proteinuria is often the market that physicians are measuring on a monthly basis and also how they monitor progression of disease and how they change their treatment plan. So the conversation eGFR has not come up yet in many of those conversations. They understand it’s an ongoing trial and very excited to learn more about the FILSPARI profile over time.

Operator: Our next question comes from the line of Joseph Schwartz with SVB Securities.

Joseph Schwartz: I have a question on IgA nephropathy and then FSGS. So how do you expect the rate of FILSPARI uptake to differ, if at all, amongst patients treated academics versus community nephrology centers? And beyond those segments, are there any other particular physician demographics that you expect to be earlier or later adopters?

Eric Dube: Joe, thank you very much for the great question. Peter, I’ll pass that over to you.

Peter Heerma: Yes, very timely question, Joe, because this was also part of the market research that I was just referencing. So I saw that yesterday. Very interesting, the utilization, the intended utilization for FILSPARI is basically similar across community nephrologists as it is in academic nephrology. So we will see how that materializes over time, but the intent to prescribe is quite similar among those 2 specialty categories.

Eric Dube: Thanks, Peter. Maybe if I could just add, Joe, one of the things that we are reflecting in our launch plans, and Peter’s team has done a fantastic job is really helping to understand not just those 6,000 for targeting but also the segments to make sure that we recognize who are those physicians that have through their behavior adopted recent innovation more quickly. The sort of early adopters versus late adopters. And so our team is making sure that we’re very much focusing our efforts in the first part of launch. — on those clinicians that we would see as early adopters, very similar to many other launches. So I think it’s not just about academic versus community, but it’s also a number of patients and, as I say, behavior such as adoption of recent rare renal launches.

Peter Heerma: If I may build on that, Eric, I just mentioned that we will be consistently calling about 6,000 nephrologists. So maybe to give you a little more context how we got to those 6,000. It’s really based on 3 different segmentation and targeting assessment that we did. One was based on patient volume. One was based on behavior, in particular on new product utilization to really get to those in early adopters. And the third 1 is to influence on the nephrology community. So we have a very clear way to target and segment those physicians that we see as most valuable in the prescription process to get to that broad patient population.

Joseph Schwartz: Very interesting. And then for the FSGS data next quarter, how should we be thinking about the bar for success in terms of eGFR difference? What is the overlap between what’s clinically meaningful and the bar for approval. How does that look? And do you have any specific guidance from the FDA that says what you need to achieve there in order to be able to file for approval?

Eric Dube: Sure. Thank you, Joe, for the question. I’ll turn Jula first to you on the clinical relevance of the EGFR treatment effect. And where we would see success and then Bill, you can share insights and expectations from a regulatory perspective.

Jula Inrig: Certainly. Thanks for the question. I think it’s important to note that we saw have clicked and meaningful and significant reduction in proteinuria in FSGS that should translate into a significant treatment effect on eGFR. And if you look historically at other trials looking at a difference in eGFR slope, most of them, I mean, if you look at the SDLP 2 inhibitor data the difference in slope that’s clinically meaningful for showing a long-term kidney protection is anywhere in the range from 0.75 to 1 ml per minute difference. . And so we powered the trial appropriately to show both a clinically meaningful and statistically significant difference based on the proteinuria reduction that we’ve seen to date.

William Rote: Yes. I think when I think about it more regulatory perspective — yes, this is Bill. From a regulatory perspective, it lines up pretty closely with what is clinically meaningful. We’ve seen was approved with a 0.75 difference. So the agency is clearly recognizing what Jula is talking about. And with the therapy that’s treated for years, consistent therapy, a small difference in mls per minute has a very large impact on time to progression or if you’re looking at time to renal replacement or need for dialysis, impact is really quite significant even with small differences in eGFR slopes.

Operator: We will take the next question from the line of Tim Lugo from William Blair.

Lachlan Hanbury-Brown: This is Lachlan for Tim. First, I guess, maybe for Chris, I was just wondering if we should expect any stocking dynamics in months, I guess? Or yes, they’re not much stocking at the specialty pharmacies. And then second 1 quickly, just we noticed that there’s a late breaker at WCN. Can you give any color on what will be presented there or will new data that’s not in the label be presented in that presentation?

Eric Dube: All right. Chris, why don’t you take that? Do you look and cover WCN?

Christopher Cline: Sure. Thanks for the question, Lachlan. So with our distribution model, you really shouldn’t expect to have any kind of meaningful stocking. And really when we get to stable state here, which we expect it to be somewhere in the range of a week or 2 weeks at most. So not much of a dynamic there to work through at the beginning, there will be a little bit, but not really much at stable state.

Jula Inrig: Yes. And thanks. We’re really excited to be able to present our data at WCN. Next month, you can expect to see additional efficacy data as well as our safety data. We will not be releasing our eGFR data as we have agreement with the FDA that we won’t release that until we complete the clinical trial. But we’re really excited to be able to present that to the nephrology community.

Operator: We will take the next question from the line of Guyn Kim with Piper Sandler.

Guyn Kim: A question on the Phase III DUPLEX study in FSGS. When we look at or think about the eGFR slope, the 108-week data readout, could we use the DUET extension study and the slope that was calculated for there as a good estimate. And when you calculate the slope of the eGFR curve, what time points do you look at? I know for DUET, you were looking starting at day 42, to week 108, — just wanted to know where the starting point is?

Eric Dube: So thanks for the question. I’d say we certainly do feel that there is a parallel between what we have seen in DUET and what we expect to see and how we designed DUPLEX. I’ll turn the question to you on Sorry, I’m getting a little feedback. But I’ll turn the question to you on how we might expect to see the slopes for for sparsentan, but also perhaps natural history given that we didn’t have a long-term follow-up of an active comparator in that trial.

Jula Inrig: Yes. I think the long-term data that we’ve received from DUET shows kidney preservation compared to what we would expect to see in long term for patients who are at high risk of progression with primary FSGS. I would say historically, those patients can progress more at a rate of greater than 5 ml per minute, more like 7, 8, 9, 10 mls per minute per year, and we saw less than that in our long-term eGFR data that we presented last year at ASN. And then in particular, in patients who achieve complete remission, saw significant preservation in those patients with regards to long-term eGFR slope. I don’t know if there’s any additional granularity you’d like me to provide around that.

Guyn Kim: Just wanted to see how the slope is calculated. Do you look at the slope of the curve from the beginning of the study out to 108 weeks? I know it’s not a difference of a moment in time at week 108, but just the overall slope of the curve.

Jula Inrig: You do look at the total data from the very beginning, all the way to the steady end. And that’s what’s so great about looking at slope. You use every single data point for all patients to look at the trajectory of the curve and we will look at both total, which has come in the very beginning all the way for the end and wait all the data equally as well as chronic slope, which looks more after 6 weeks to the study end to minimize the effect of the acute hemodynamic effect.

Guyn Kim: Great. That’s helpful. And a quick question for Chris. How will you account for the FILSPARI royalty to ligand in the income statement?

Christopher Cline: Thanks for the question. We’ll be updating that when we report 1Q, so we’re finalizing that now. We’ll make sure that it’s clear out to you guys and being able to view the financial statements as to how exactly we’re paying that.

Operator: We’ll take the next question from the line of Liisa Bayko with Evercore ISI.

Liisa Bayko: I think most of my questions have been answered. But I guess I would just ask what the level of confidence for a good outcome in the upcoming FSCS final data? Maybe you can just explain that level of confidence? Are you highly confident, kind of hopeful but moderate, not so confident. Just curious on how you’re thinking about it. We’re getting a ton of questions on FSGS these days.

Eric Dube: Sure. Yes, Liisa, thank you very much for the question. We certainly are excited about this upcoming data readout next quarter. I would say that we remain confident in the outcome, and that’s largely because the way that we designed the trial was based on showing a robust and statistically significant superiority on proteinuria that then would predict out to eGFR. And certainly, as we’ve looked at the way that the trial is conducted, the number of patients that we’ve retained in the trial, all of those things that we look at to ensure that the study is being conducted as we had hoped is there. I’ll turn it over to Jula, maybe, Bill, if you have any further thoughts on why we remain confident and really what does good look like coming out of the 2-year results.

Jula Inrig: Yes. I’ll just continue on with what Eric was saying, we see in clinically capable and statistically significant separation and reduction in proteinuria with sparsentan versus irbesartan. And I would say importantly, when we met with the FDA, they said the study is designed can support traditional approval. And so that also what gives us the confidence that we will be able to achieve what we have set out. We powered the study appropriately. We — as Eric said, we continue to have a significant number of patients to be able to achieve our endpoint separation or to show the treatment effect on eGFR. And we’ll also be going under — or maybe in this to Bill to talk about looking at an sNDA versus accelerated approval. It’s a very different situation. Bill, do you want to add color around that?

William Rote: Sure. I think that when you’re in the position as the agency on accelerated approval, they’ve demonstrated that they approach it very deliberately and somewhat conservatively because you have a partial data set both for safety and for efficacy. At the end of the study, it’s a much more traditional approval. So that’s helpful in that we aren’t asking them at that point to take regulatory risk and their ability to be more flexible is there in looking at the totality of the data. I think the other additional element is last Friday’s approval of FILSPARI means that we’re now looking at an additional indication to a drug that’s already approved, both safe and efficacious. . So I think that puts it in a different frame from a regulatory standpoint when compared with an interim analysis under Subpart H accelerated approval.

Operator: We’ll take the next question from the line of Carter Gould with Barclays.

Carter Gould: I guess the first — I guess the first half is on the top line FSGS data in 2Q. I guess, how much data is going to be in that top line release? Are we going to have — see enough data that we can assess the clinical significance for that? Or are you going to prioritize saving that data for a medical meeting? And maybe alongside that, Peter and Jula, when you think about that data coming out, to what extent do you think nephrologists may read through from potentially positive eGFR data in FSGS to IgAN and potentially pulling forward some of the demand in that launch?

Eric Dube: Carter, thanks for the question. Jula, why don’t you take the top line, what the team is thinking and any potential readthrough? And then Peter, you can add your thoughts.

Jula Inrig: Well, it’s a great question. I mean, we’ll have a trial that’s completed. So we’re not limited with regards to keeping data. However, it’s a balance because we do want to have a very high tiered publication and presentation at an important meeting, but we will be able to release the eGFR data, our total — whether we give you all and all the additional data, we’re going to have to make that decision probably pretty soon, but at least enough to give you confidence about the results of the trial. . With regards to the nephrologists and the read-through, I would point through to the SGLT2 inhibitor data, where we don’t necessarily see the same magnitude and treatment effect in 1 disease versus the other with regards to the endpoint of 40% decline in eGFR kidney failure, dialysis and transplant.

Each disease is quite different. And even though the drug you might think should work across the board with regards to one or the other, it may not for a number of different reasons, whether it’s the underlying disease, the heterogeneity, the patient population studied and other things. So I wouldn’t say that there’s necessarily going to be carried through from one or the other depending on the magnitude of the treatment effect or what we see there. Peter, do you want to make other comments around that?

Peter Heerma: No. Let me make what you said, I think it’s those patient profiles are quite different. The way I think about it, Carter, is really excited that we have that continuous data stream and hasn’t been continuously to talk about with the physician. And I think they only built the excitement for FILSPARI. So it is — in that aspect, it’s almost like a continuing launch with new data and new approvals coming in the next year. .

Operator: We will take the question from the line of Mohit Bansal with Wells Fargo.

Unidentified Analyst: This is Adam on for Mohit. Is it fair to say that you prescribe information for ePCR in class effects compared to the FDA label in touring past nephrology approvals? And then separately, could the EU preserves be better equipped to do any monitoring that they would conduct due to a greater share of do practicing in academic centers?

Eric Dube: Let me clarify the first question around the label. Are you asking just the level of detail and data that we have on UPC and our label compared to others? I want to make sure that I answer the right question.

Unidentified Analyst: No, I’m asking for the the approval in Europe that when you would ultimately get put in that geography ultimately, whether it have the same specificity on what you PCR ranges of patients you treat as well as some of the safety detail potentially could be heavier in the U.S. label relative to what the past our labels have looked like?

Eric Dube: Okay. Got it. Bill, maybe we can turn that to you. I mean, certainly, we won’t be able to speak to specifics on the European label, given that we’re still in that process. But Bill, maybe you can give some thoughts on how the labeling may vary across regions.

William Rote: Yes. No, thanks for the question. And you’re right, Eric. It’s a speculative answer because we’re in process with the review with EMA. It’s important to realize they’re looking at the same data set. The filing for 1 doesn’t contain different data from the filing for the U.S. FDA NDA, but they do have differences in how they present data, how they treat data. For example, there isn’t such a thing as a REMS in Europe. They treat risks in a different fashion. I think it’s — we don’t have indication at this point in the review of any great differences between the agencies, but it’s too early to really be definitive on anything. So we look forward to that, updating you on that in the future.

Eric Dube: Peter, do you want to take any thoughts on the — any difference in practice based on patients being seen more predominantly in academic centers in Europe and how that might play out? .

Peter Heerma: Having had the experience to be in Europe as European. I think that it’s generally right. I mean it depends country by country. I think, I think generally, it’s more service in Europe. I think overall, you see higher GMO levels for patients that are being referred to nephrologists. I think that is generally right, it depends very much more to more.

Operator: We will take the next question from the line of Laura Chico with Wedbush Securities.

Laura Chico: I’ve got 2. One first on the clinical and I guess our own market research has shown about 20%, 25% of IgAN patients are now receiving SGLT2 inhibitors. And I’m not sure if Jula or Peter could comment of the patients that are on an SGLT2 inhibitor, what proportion of those remain over a gram on proteinuria?

Eric Dube: All right. We would like to take that question.

Peter Heerma: Yes, I’m happy to kick that off. And Laura, I think your mortgage research signings are quite consistent to what we have found as well. I think one of the important things to mention is what Jula mentioned on the call earlier as well. has not conveyed but does not have the profound proteinuria-reducing effect or FILSPARI. And the nephrologist I have been speaking to as well as what we saw in market research, they’re very excited about the complementary mechanism of FILSPARI versus SGLT2. And they’re excited about the novel and nonimmunosuppressive combination approach that they may have now. And additionally, I think also your can talk more about it, is the complementary profile of SGLT2 with regards to sodium excretion in the diuretics. Jula can speak in more detail on that.

Jula Inrig: Yes, I would agree with that. Probably excited to use them in The most interesting combination that they’re interested in using together is SGLT2 inhibitors plus sparsentan due to the complementary mechanism of action of SGLT2s, we don’t know how they’re kidney protective exactly, but you do have the tubular feedback that helps to enhance sodium excretion and we know that sparsentan has a direct benefit on the glomerulus, the podocyte, the tubular interstitium to have that kidney protecting reducing proteinuria. And the magnitude of proteinuria is significantly greater with sparsentan. Mean all the proteinuria data that we have with SGLT2s other than anecdotally, when you talk to nephrologists of where they get their patients, all the trials were done in patients with low levels of proteinuria, less than a gram.

I mean if you look at the, they were relatively low levels. So they tend to be used in kind of later stage in general. So we don’t have the more high-risk patient profile to tell you what proportion get under a gram. But I think the vast majority are going to need combination therapy to really get them to where we want the less than the gram and even further, the complete remission patient, where you can get them under than 0.3 grams to get them to that really lower-risk patient profile.

Eric Dube: You talking through the — sorry, Laura, it might be worth, Jula, just speaking to some of the data that we would expect to have next year from the study that we have because I think, Laura, it would be useful to be able to see those data in a clinical setting in the trials that we are doing. .

Jula Inrig: Yes. I think, Laura, we already do have a drug-drug interaction that shows that we can safely combine. And then additionally, we’re going to have 2 types of combination studies, one, where you’ve got patients on sparsentan and you add an SGLT2 inhibitor and the other of the opposite direction where patients are on an SGLT2 inhibitor, and we add sparsentan. And we’ll have safety data and we’ll have proteinuria and efficacy and then eGFR data, and we’ll have at information on that next year. .

Laura Chico: We certainly looking forward to that. And then maybe 1 follow-up question on the financial. Chris, I heard you mention cash runway well into ’24. I believe I heard correctly. Could you talk a little bit more about the flexibility on the balance sheet for extending runway? I know they’re a milestone payment due to Ligand and Bristol, but any other inbound milestones that we should be considering in terms of our modeling?

Christopher Cline: Yes. Thanks for that question, Laura. So when I think about the balance sheet and specifically to the milestones, we have some that would be coming in potentially for things like regulatory approvals in Europe. And then also, we will have some coming out for things like pegtibatinase advancing, right? So there may be a net effect to those. . And when I think about the but overall and we look at cash burn, there certainly is flexibility. There’s a number of things that go into our estimate there, and we’ve commented in the past where we take a conservative approach, right? We’re taking into account the potential for further generic erosion for Thiola. We’re taking into account all the investments needed for positioning FILSPARI appropriately for IgAN and FSGS launch, et cetera. So there certainly is some flexibility in that, but we’re trying to give you guys a good view as to what we expect to use for our operations going forward.

Operator: We will take the next question from the line of Alex Thompson from Stifel.

Alexander Thompson: Just maybe a quick follow-up on SGLT2 inhibitors. I guess, at this stage in the launch and based on some of your initial conversations with payers, what has been the receptivity with covering FILSPARI on top of SGLT2s prior to some of this clinical data you’re going to generate next year?

Eric Dube: Alex, thanks for the great question. Peter, would you like to take that?

Peter Heerma: Yes. I think, Alex, thanks for that. It’s early days to comment on that. But I think we have had quite some pre-approval of conversation with payers. They — what I took away from that is that payers are not anticipating to have like a step through with SGLT2. SGLT2 has a broad label is both for diabetic and nondiabetic CKD. And it’s kind of like of the rate of IgA nephropathy, particularly. So we don’t anticipate that to be a road map for reimbursement for FILSPARI.

Alexander Thompson: Great. And then maybe a quick follow-up on sort of the base commercial business outside of FILSPARI. I guess with potential expansion of the label how should we think about sort of the trajectory of that base commercial business over time? Is that a meaningful uptick in the potential opportunity? How are you thinking about that over the next few years?

Eric Dube: Sure. Peter?

Peter Heerma: Well, we’re certainly excited about the extension in particular, as I think there may be more adult patients with that we will have an opportunity to reach by educating the physicians. We haven’t given any guidance what the upside potential is. And we may be in a better position once we see the data of the trial.

Operator: We will take the next question from the line of Ed Arce with H.C. Wainwright.

Antonio Arce: Some have already been asked, but I did want to follow up on a point made earlier, and that is on the upcoming readout next quarter, the 2-year eGFS, the eGFR, excuse me. Just wanted to make sure I understood correctly, the primary endpoint here whether it was total slope or the other slope, I think you mentioned, started after the first 6 weeks, both of those include interval data points throughout the period, and I’m just wondering what those intervals are as well.

Eric Dube: Sure. Jula, would you like to take that?

Jula Inrig: Yes. So we’ll be looking at and we have agreements with the regulatory agencies on looking at the chronic slope as well as total slope, and that’s an end point from the beginning of the study to week 108.

Antonio Arce: And what are the measurement intervals throughout the period?

Jula Inrig: Are you asking when patients get labs? Is that what you’re asking? Or should we clarify? .

Antonio Arce: Yes.

Jula Inrig: Okay. So patients get labs at the beginning and then there’s a subsequent lab at, I believe it’s 2, 4 and then 8 weeks and then it’s every 3 months thereafter.

Antonio Arce: Maybe just 1 last one. I know this has been discussed before. But just wondering, as you start this launch and have some patients switch from their current therapy on to FILSPARI, do you have a sense for the proportion of patients today that visit the urologists on a monthly basis as a routine?

Eric Dube: Ed, thank you for the question. We certainly have looked into the patient journey and how frequently these patients are visiting. Peter, would you like to share a bit of that work?

Peter Heerma: Yes, thanks for that question. I think there is — especially when you talk about the rapidly progressing patients, those patients are being seen by nephrologists at least quarterly, but it’s not uncommon to see those patients actually on a monthly basis. Is the heart of your question is like what does that mean from a REMS perspective? Is it good to realize that for the REMS program, those patients don’t need to be seen by the nephrology on monthly base. They do the lab testing on a monthly base and the physician will see the results, but there is not an obligation for those patients to see their nephrologists every month. Even though it is quite common for quite some patients to see those — their nephrologists there also.

Operator: This concludes today’s question-and-answer session. I will turn the call back to Naomi Eichenbaum.

Naomi Eichenbaum: Thank you, everyone, for joining us for our fourth quarter and full year 2022 financial results and corporate update call. We look forward to the exciting year ahead and providing updates on our progress along the way. Have a great rest of your day. Thank you for joining.