Idorsia Ltd (OTCPK:IDRSF) H1 2022 Earnings Conference Call July 26, 2022 8:00 AM ET
Company Participants
Jean-Paul Clozel – CEO
André Muller – CFO
Simon Jose – CCO
Andrew Weiss – Head of IR
Conference Call Participants
Peter Verdult – Citi
James Gordon – JPMorgan
Raghuram Selvaraju – HC Wainwrights
Thibault Boutherin – Morgan Stanley
Keyur Parekh – Goldman Sachs
Operator
Good day and thank you for standing-by. Welcome to the Idorsia Half Year 2022 Financial Results. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions]
Please be advised today’s conference is being recorded.
I would now like to hand the conference over to your first speaker today, Andrew Weiss, Head of Investor Relations. Please go ahead.
Andrew Weiss
Thank you, Sarah. Good morning, good afternoon, everyone and welcome to the Idorsia first half 2022 webcast. With me on this call are our CEO, Jean-Paul Clozel, our CFO, André Muller, and our Chief Commercial Officer, Simon Jose. They are all here to provide additional color to the press release and first half 2022 financial report published today at 7 AM since European summer time.
Next slide please. We will first be making prepared remarks and then we will address all of your questions at the bottom half of this call. But before kicking it off, I need to remind everybody about our disclaimer. We will be making forward-looking statements in this call. Hence you have been adequately warned about the risks associated in investing in Idorsia shares.
Next slide. With this said Jean-Paul the floor is yours.
Jean-Paul Clozel
So we are on slide three. When we created the Idorsia five years ago, we had a clear goal to become a fully fledged biopharmaceutical company. And just five years after the creation of Idorsia, I’m very pleased to report that we are really on a very good track to achieve this goal.
Next slide. We are set up from day one and we have not changed this priority list. We had defined five key priorities. First, deliver three product to the market within a midterm time. Number two was to build a world class commercial organization to be able to retain the value for our discoveries. Number three to bring as fast as possible Idorsia to sustainable profitability to continue to fuel our pipeline with new discoveries and finally, to utilize state of the art technologies to drive innovation within the company.
So slide number 5. Let’s look at what we have achieved within these five years. First two products are on the market QUVIVIQ in the U.S., PIVLAZ in Japan. But we have got very good results of our [Indiscernible] which I will describe briefly afterwards. So we are on a good track to get soon three products on the market. The U.S., Japan and European organization are now established and we are starting to have revenues and I do believe that we are on the path as we have mentioned to reach profitability in 2025. We have also continued to discover drugs.
And on top of the existing drugs that we had five years ago, we have now a very rich pipeline with some new products moving to Phase 2 or two Phase 3. And finally, and we don’t have time today to go into the details, but I can tell that we are using state of the art technologies in research, but also in also marketing where all the most modern tools including artificial intelligence are used in order to optimize our revenues for marketing but also our ability to discover new drugs.
Slide number 6. So we want and that’s a very clear goal, we don’t want to be one of these biotech companies which are not profitable after 20 years. We want to become profitable as soon as possible. And in order to achieve that, we want to come to combine not only revenues from our commercial products, and we intend to commercialize QUVIVIQ, PIVLAZ but also Lucerastat, Cenerimod and Selatogrel, but we want also to have revenues from milestones and royalty streams. As you know, we get 8% of the sales of ponesimod which is Ponvory marketed by Johnson and Johnson. We have a significant part of the revenues of Aprocitentan. We are awaiting the results of the T-type calcium channel blocker, which has been licensed or partner with neuroendocrine and we are also expecting that Vamorolone is going to be approved in not too distant future, and bring also milestones and revenues to idorsia.
So now let’s start with the first part of this revenue. Slide number 7 and I would like to give the word to Simon Jose who has been very efficient to beat the commercial organization, all around the world. He was the first person to have this task and to have to do and I have to say that he has done a fantastic work and is going first to discuss the results of his efforts and the efforts of the U.S. team with the launch of QE QUVIVIQ but of course, he will also describe the launch of PIVLAZ in Japan.
Simon Jose
Thank you, Jean-Paul. And as Jean-Paul has said, it’s a very exciting time for Idorsia as we launch our first two products, and very pleased to be able to share with you today the positive early momentum we’re seeing with both QUVIVIQ in the U.S. and with PIVLAZ in Japan.
Next slide, please. So starting with QUVIVIQ which, as you know, it was launched in May, the feedback we have received from healthcare professionals and patients has been very positive. And we’re very encouraged by the steady growth in prescriptions and physician adoption which I’ll share with you in a few minutes. But of course, before any of this can happen, we need to build awareness amongst prescribers. And as you can see here on the right, we are making good progress here with physician awareness of QUVIVIQ already at 52% in June, just a second month into the launch.
Next slide, please. So awareness is building. But what about physician receptivity to the profile of QUVIVIQ. This slide shows the results of some market research we conducted prior to launch with a blinded product profile. It shows physicians were highly attracted to using QUVIVIQ compared to the other medications they use to treat insomnia. And as you can see, 60% of physicians were passionate about using QUVIVIQ that’s the green segment, or attracted to using QUVIVIQ the blue segment. And of course, this was significantly greater than all other products in the category and importantly nearly twice the level of the other two doors in the panel.
Next slide, please. And the feedback we have gained from market research about the product profile is translating into positive feedback from doctors about their experience with the product. These quotes are just a few examples of the dozens that we have received with similar themes. And I’ll just give you a moment to read them. In fact, I was in the U.S. last week and spent a day with one of our sales representatives in Washington DC, where I received similar comments and feedback. Interestingly, I had one doctor tell me, she had switched 13 patients from ambience to QUVIVIQ and hadn’t heard a thing back from any of them. When she saw the slightly puzzled expression on my face, she quickly went on to say this was very good news. She was perfectly clear that these patients would have got straight on the phone if it wasn’t working out. So in many cases, no news is good news in this category.
Next slide, please. So turning now to the numbers, as you’ve seen in the press release, net sales in the second quarter were 0.4 million Swiss Francs. This clearly is not reflective of actual prescriptions dispensed or of product demand as to enable patient access and generate early demand. We are providing a robust patient support and copay program, including a first 30 day prescription free. As you’re aware, patient support programs are becoming commonplace now to support new launches during the period where insurance coverage is being built. Furthermore, you should also note that we did not actively stop the channel at launch.
Next slide please. As many of you know, we are partnering with a specialty pharmacy services company Vitacare to manage a key component of our patients support program. Now whilst this makes it easier for patients to get their prescriptions filled, it makes the reporting of QUVIVIQ prescriptions more difficult. QUVIVIQ does not currently in cute include VitaCcare in its sample bank, and therefore it’s syndicated report under report prescriptions for QUVIVIQ. We have full transparency of the Vitacare data and combine Vitacare and IQVIA without over coming from the majority of QUVIVIQ is coming from new patients at around 40% or switches from BENZODIAZEPINES or TRAZADONE around 47%. This is a very encouraging profile.
Next slide please. So we’re off to a good start. But what comes next? We have long maintains that consumer awareness and activation will be critical to the long term success of QUVIVIQ and our strategy is centered around this as you’ve already seen with our pre launch partnership with Jennifer Aniston. We believe branded DTC and consumer activation will be an important momentum building catalyst going forward. And we have recently announced our partnership with two celebrities as QUVIVIQ patient ambassadors, actor Taye Diggs and former Olympian and champion skier Lindsey Vonn. Both Taye and Lindsey are taken to Vivek and have positive experiences on the product. They’ve already participated in a number of media interviews. Last week with Lindsay was on The Today Show sharing her insomnia story, which then got picked up by other outlets including People Magazine. After this interview web traffic to QUVIVIQ.com tripled from the previous days. Together Taye and Lindsay have already reached 10s of millions of consumers with their messages, many QUVIVIQ branded. And in the late summer and early for DTC television commercials featuring Taye and Lindsay, are plan to start airing, we expect this to have a substantial impact on consumer awareness and motivating potential patients to talk to their doctor about QUVIVIQ.
So overall, we are pleased with the start we have made in the first couple of months in the U.S. and we’re confident that as we exit the summer months and activate our branded DTC, we will see a further positive shift in momentum.
Next slide please. Looking beyond the U.S., QUVIVIQ is on track to become a global brand. Following the EU approval in April, launch preparations are underway in the top five European markets with the first launch in Germany expected before the end of the year. The local teams are actively engaging with medical experts, policymakers and payers to introduce Idorsia and raise awareness about the significant burden of chronic insomnia. As the first Dual orexin receptor antagonist approved in Europe, there is a high level of interest among medical experts in the differentiated clinical profile of the product. We have also filed QUVIVIQ in Switzerland and Canada, where we have recently appointed General Managers on our establishing local affiliates. Finally, we have now completed recruitment of the phase 3 study in Japan and expect the top line results later this year.
Next slide please. So to finish off and just turn briefly to PIVLAZ in Japan, we launched PIVLAZ or clazosentan in Japan in April for the prevention of vasospasm following an aneurysm or subarachnoid hemorrhage, a life threatening condition which has an incidence in Japan, there’s two to three times higher than in the rest of the world.
Next slide please. There has been no new innovation in this field for over 20 years. So the availability of a new product with high quality evidence is creating a good deal of excitement within the neurosurgeon community in Japan. Neurosurgeons have responded very favorably to the robust Japanese Phase 3 data demonstrating the safety and efficacy of PIVLAZ which was published in the Journal of neurosurgery in April this year.
Next slide please. I am very pleased with the positive early results of PIVLAZ since the launch in April. Net sales in the second quarter reached 11.4 million Swiss Francs and of this nearly 70% has already been purchased by hospitals from wholesalers. And we have been receiving reorders since the beginning of May. Approximately 60% of our target hospitals have placed at least one order for PIVLAZ and as we estimate that based on the incidence of aSAH in Japan approximately 10% of patients were treated with PIVLAZ in June of 2022. We expect this positive trajectory to continue as PIVLAZ is included in more hospital formularies and treatment protocols, and neurosurgeons gain more experience with the product.
So in summary, our commercial organization is fully focused on executing against our ambitious launch plans for both QUVIVIQ and PIVLAZ. We’re hearing positive feedback from our customers about both of these innovative products. And we are seeing the number of prescribers and prescriptions dispensed increased steadily week-over-week. I’m confident that the positive momentum will continue to build after the summer months, as we ramp up our consumer activation in the U.S. and continue to gain patient share to PIVLAZ in Japan.
And with that, I’ll now hand over to Andrew.
André Muller
Yes, thank you. Thank you, Simon. Let’s move to slide 21 and make some slide. U.S. GAAP numbers built over first half. Let’s first start with the net revenues. Simon alluded to 11.4 million sales of PIVLAZ and 0.4 million QUVIVIQ as you know, we are reported net sales and not real sales. So it does not really reflect here demand and sheer volumes notably for QUVIVIQ.
We had also roughly 11 million contract revenues with more than 10 million were deferred from a previous out-licensed deals so a milestone and especially less than 1 million relating to ongoing. We’ll come back to the 407 million non-GAAP operating expenses in a minute. So this lead us to a non-GAAP operating results of minus 384 with the usual EMA and stock based compensation. So U.S. GAAP operating results reported were minus 405 billion below EBITDA 15 million is mainly relating to financial expense, 8 million in connection with your convertible bond interest and 4 million on the unrealized loss, notably on shares in connection with U.S. tax expense. So this led to a U.S. GAAP net loss of minus 499 million.
Next slide 22, please, Coming back to these non-GAAP operating expenses you’ll see we had a small increase in R&D totaling 180 million of which you had fixed cost base mainly in research more than 72 million actually study expensive off which 60 million were really on the five compounds. We see ongoing phase 3 as well as AMI where we see a nicer increase into the EBITDA recruitment base and the development of [Indiscernible] Japanese for trial set that will be finished before your end and also the initiation of [Indiscernible]. We see preparation of CFA Phase 3. Also many with drug substance and finishing trial that react that should also read out by the end of this year.
Then of course your big jump is in SG&A with 226 million slightly higher in G&A reflecting also more global footprints into U.S. in Japan and now we’re starting out also with the launch preparations having now six affiliates in Europe and Canada plus of course marketing and selling mainly driven into U.S. with QUVIVIQ and that [Indiscernible]. So 407 million a huge increase compared to last year 214.
Next slide please, 23. You see here see the cash flow. So, liquidity cash flow reconciled with liquidity was minus 455, approximately 407 non-GAAP OpEx we just discussed. CapEx 18 you have used all the stuff in CapEx we saw 12 million and you had also a 6 million milestone in connection with Japanese approval early 2022. Working capital changes 42 million mainly built up of inventories to supply both the U.S. and Japan with QUVIVIQ and PIVLAZ 22 million increase in receivable as one can expect sales which are out 10 million and the rest is other receivables or payable. And then last year you have 12 million with others, that’s many relating you have a lot of movement peer, but see a main one is deferred revenue of 11 million. So, we ended the second quarter with a liquidity of 733 million.
Next slide, 24, shows liquidity between cash and cash equivalent 238 and deposits of less than 12 months 500 million and you also see the liquidity is held main Swiss Franc 572 and also in the U.S. $146 million.
So, relating to operating loss 840 million U.S. GAAP excluding DNA and SBC and mainly non-GAAP operating loss should be as we indicated with the full year results and as mentioned in press release is Q1, 785 million for non-GAAP. We need more visibility to a guide on net sales a little more than two months after launch in Japan and less than two months because the drug was not available for QUVIVIQ but we are committed to spend around 785 million net between [Indiscernible] profitability at target.
No change here but I’m more confident when we initially published guidance which was based on [Indiscernible] U.S. products that are approved but strong results of a persistent and resistant high hypotension. We have no doubt, will be approved in U.S. and in Europe and we will get a nice array on your limits.
Jean-Paul floor is yours.
Jean-Paul Clozel
Thank you. Sorry, you were cut off Andrew. Sorry, Andrew, but we can answering the question to clarify a few points that you made. So, as you said, our expectation of becoming profitable in 25 did not include the precedent and income and I think that the good results have precedent and shows us the importance of building and continuing to build the pipeline.
So, how is moving our pipeline, slide number 28. So, on top of the which is now basically we are waiting for the Japanese results in end of this year, but for clazosentan all patients within react has been included. And we are now analyzing and we need to have a six months follow up. So, the results will be available end of this year or beginning of next year, mostly mainly beginning of next year.
Aprocitentan we got the results. I will describe them later on, but also all the other projects are moving except the selective, which is was not positive and we absolutely we have decided to stop this program. And we eventually evaluate what should we do with this compound. We have other drugs which have finished. We have finished Phase 1 as CXCR7 antagonist for multiple sclerosis, a very interesting product and other products, which are in nearly ready to initiate phase two. And of course, for all these programs, we are evaluating how to optimize the value for this product is it by doing keeping the development for us or partnering and of course, in very competitive areas, we are choosing a partnering solution.
Next side, side 29. So, I mentioned the results of Aprocitentan. This was for me a very important result because we have been working and these drugs within Idorsia is a result basically of 30 years of research of under the limits. It’s really an optimize mix the Dual endothelin receptor antagonist and what we saw is I think very clear, of course it didn’t and reduced blood pressure compared to placebo. And all the methods which have been used to measure blood pressure we being at the doctor office or ambulatory at home or after [Indiscernible] and with using these two methods, all results are consistent and show a very significant effect of Aprocitentan on blood pressure.
As mentioned the effects and this is maybe the first time that in so severe patient, such a long evaluation has been done, but the effect is maintained and very well-confirmed after a period of 48 weeks. And very interestingly the effect has been observed in a group of patients which are known to be resistant to usual antihypertensive drugs. And very important to remember that this was done, this study was done on top I have a triple therapy for 40% of the patients meaning a calcium antagonist, and a diuretic, and an 2 receptor blocker and the beta blocker in 60% of the patience. And also you will see when receptor blocker and the beta blocker in 60% of the patients. And also you will see when the results will be available that this was a very severe patient, patients combining heart failure, renal failure, obesity, diabetes for nearly 50% of these patients. And this is why the very good durability and safety that we have observed is so important. So I’m very confident that this drug is going to satisfy your highly unmet medical need in this patient. So what does the next step with Aprocitentan?
Slide number 30. We want to file the NDA before the end of the year. And we also and of course, it depends of the acceptance of abstracts and so on. But we want to show the results in the scientific presentation as soon as possible. And we want, of course, to submit these results for peer reviewed publications. And clearly, we have increased our interaction with Johnson and Johnson, with [Indiscernible] who is in charge of the commercial launch, because we of course want to have the best label and the label which also correspond to the need for a successful marketing.
Next slide. So already if we are in 2022 and when we think of what we are able to achieve in this first year, it’s quite impressive. So if we summarize what has happened during the first six months of 2022, we had QUVIVIQ approved the U.S. PIVLAZ approved in Japan. The commercial launch of Aprocitentan initiated in Japan. The commercial launch of QUVIVIQ initiated in the US. QUVIVIQ approved in Europe. And we obtained the results of Aprocitentan in phase 3 final results. Now, the rest of the year is going to be also very important, because QUVIVIQ is going to be launched in Europe. And I do believe that Europe is a fantastic ground for commercial success of QUVIVIQ because no innovation in the sleep domain has been happening for drugs within the last 20 or 30 years.
This year, we are, in the second half of 2022, we intend to launch the Phase 3, we have discussed with the FDA. And we are integrating all their requests and all our also learnings from the phase 2 within our phase 2, which should start before the end of this year. And as mentioned will get the results of daridorexant phase 3 in Japan, which will be the base of an NDA in Japan. And we want to finish the phase 3 of clazosentan for European and the U.S. And this phase 3 is called REACT. As you see a lot of things will happen. And I’m not discussing all the brand new products that we are discovering, and I can tell you we have make some breakthrough in several areas. So be prepared for more. Thank you.
Andrew Weiss
Thank you Jean-Paul. So this concludes our prepared remarks. And we are now happy to move on to the Q&A session of this call. On logistics may I quickly ask you that when you formulate your question that you limit them to one question only and drop back into the queue. Furthermore, you have the opportunity to write your questions on the webcast, and we’ll be able to then take them up in this forum.
Operator, please prepare the lines.
Question-and-Answer Session
Operator
Thank you. [Operator Instructions] We’ll now take our first question. This is from the line of Peter Verdult at Citi. Please go ahead. Your line is open.
Peter Verdult
Thanks, Peter Verdult from Citi. I have three but already asked one and drop back in the queue. The questions to Simon on QUVIVIQ I mean, patients have used the drug survey docs, the message points you give do resonate. Pay access was always going to be the issue. You previously talked about balancing the need to drive access without giving away too much on rebates. The question is do you think you have that right at the moment? And should we or the market expect any of the big three PBM to provide access by year end?
Operator
Standby while we reconnect the speaker’s line. Do we have the speaker reconnected? Apology for the delay. Please do continue to hold whilst we get speakers back on line.
Andrew you have got the line of Peter Verdult from Citi open. Do you need the question repeated?
Peter Verdult
You want me to repeat it? What did you get? Were you able to hear?
Andrew Weiss
No, we didn’t get anything. And suddenly our line just died off suddenly.
Peter Verdult
Well, I have three, but I will play by the rules and ask one drop back in the queue. When we speak to patients, patients, and docs, the message points given do resonate. Payer access was always going to be the issue. So you previously talked about balancing the needs to drive access with not giving away too much and rebate so early in the lifecycle of the product. Do you think you’ve got that balance right at the moment? And can I push you on whether when we could expect one of the big CPMs to provide access to something happened before year end? Thanks.
Andrew Weiss
So yes, I think we’re where we want to be. We’re in discussions with every single large plan. And we’re in that cat and mouse game, Peter, as we’ve talked about, where we’re trying to trade off driving demand, to make sure that we can have the right conversation about when and how much versus the long term potential of the product which has a patent life of 15 years.
So after two months, so I wouldn’t expect to have been presenting a contract. And to be honest, if I had one here now with you, I can promise you, I would have paid too much. So I can’t tell you when it will be because that’s a lot going to depend on the it’s confidential be obviously depends on how we go with the demand and where we net out. But I’m completely comfortable with where we’re at the moment. But it really is about driving demand so that the payers can respond.
Jean-Paul Clozel
So Peter, its Jean-Paul. Just wanted to insist, this is and I am very convinced when I see that when I see the feedback on the market, this is going to be a big success. We are already going to be releasing before the end of the year above summer, we are going to be the new product in sleep area the real breakthrough that people are waiting for a long time. And it would be crazy for us to give up by accepting too high rebates to give up too early. This is a long term decision. Of course, it’s always very tempting to give up. But we are not going to give that and we want a decent discount. And this is going to happen. And this is why we need to be a little bit patient because the time is working for us. You see the steady increase of the demand. And at one point, I’m pretty sure we will find a very good negotiation solution with this PBM.
Peter Verdult
Thank you. Thank you Jean-Paul.
Operator
Thank you. We’ll now take our next question. Please standby. Question is from a line of James Gordon from JPMorgan. Please go ahead.
James Gordon
Hello, James Gordon, JPMorgan. Thanks for taking the question. So there for QUVIVIQ please. So, you previously did issue ‘22 revenue guidance and then you now have withdrawn. Is that cause of challenges with coverage and more couponing, uncouponing going on longer or the tour interlinked? So is that the reason? And if so, how much better could the couponing situation be in Q3? Should we assume a lot less couponing? Or might it be a similar amount of couponing? And if we try and extrapolate your chart, I think it says on slide 13 that 60% of coupon patients have gone on to some refill patients. So does that mean? Is that how we should think of it that’s like your conversion into payment paying patients for Q3 and if I could squeeze in just a clarification point. I think I saw a comment in the release about non equity dilutive instruments. So does that basically mean debt issuance of H2?
Simon Jose
Yes. I mean, I think James that I would actually start with demand. I mean, I think that what we’ve found in launching into the market, is that the…
James Gordon
Alright. Simon James. We cut off again. Yes just coming back to your question about what’s happening in the ramp, I mean, I think the first thing I would say is that we probably have hit a tougher environment that we’re launching into with COVID. I was in the U.S. last week. And as I said, and you go into the doctor’s offices, and they’re still, some of them aren’t putting patients face to face. They are still dealing with backlog and catch up. And in that context, sort of pulling patients in on insomnia isn’t sort of top of their list. So I think we have a challenging environment that we’re launching into. We had a couple of operational things that we’ve sent squared away around electronic health systems. It’s taken us a while to get them all up and running, because some doctor’s offices are on three month contracts.
And therefore, when you have to write prescriptions electronically, a number of those doctors couldn’t do that in the first month or two. So we’ve had a few sort of headwinds that we’ve been battling with which I think is what perhaps has slowed the demand slightly. But as I say, I think if you look at the charts now, we are breaking through that and I think we’re very pleased with what we’ve got. It’s perhaps a little bit delayed compared to where we where we thought we would be. I don’t think at this point contracting is part of it, I don’t think we would have expected to have big contracts and open access at this early stage of the launch. I think it’s about driving demand to make sure that we can subsequently open those contracts up.
Regarding your second point on the 60% just to be clear, in the slide, I showed its 60% of prescriptions written include a refill, or more than one refill. There’s not that we are seeing those refills being ourselves. And just to give you a sense of what’s happening at the moment, we’ve looked at the first few cohorts in May, and the majority of prescriptions where they had a refill that refills been filled. And the majority of the time, it’s in 32 days or less.
James Gordon
Equity question. Thank you, Simon. Andrew are you still on the line?
André Muller
Of course. I missed your question Peter.
Well, I am afraid James. So you will need to be a little more patience a couple of months before we can announce such deals. But I indicated sale and leaseback I indicated right here related deals. We’re working on it. And as you can imagine, getting these strong results for Aprocitentan will dramatically help. So we’re seeing this or it will be around two type of instruments in order to again, start 2023 with a strong balance sheet and more than 12 months cash runway.
Andrew Weiss
Okay, I think James was explicitly asking whether debt could be part of that financing tool.
André Muller
Could be one of the avenue.
Operator
Thank you. We’ll now take our next question. And this is from the line of Dominic Luann from Credit Suisse. Please go ahead.
Jo Walton
Thank you. It’s Joe Walton here from Credit Suisse. I’m afraid I’m sorry to be like a stuck record. And still on QUVIVIQ and access and payments. We see that you have a $0 copay to start with. And then you have a renewal of $25 a month. If I was a payer, and I could see that my patients could get free products initially, and then they could get refills paid for by Idorsia at $25 a month, which is probably roughly what I’d be charging them for tier two. What is the incentive that brings the payer to come to Idorsia and say I want to get involved? So I guess my question is, how long is this couponing going to be going on? And specifically, if I were to look for a coupon today, how long could I look to be getting effectively free product before I have to suffer any material financial pay? Thank you.
Simon Jose
Joe, it’s Simon. It actually works. The other way around I think in that we right now estimate we’ve got 20% access and with obviously looking to drive business through that 20%. We are also every single patient that goes through Vitacare additionally is going through the process, which can ultimately lead to a prior authorization application. Some good number of which by the way of being approved. So everything in that 20% plus prior auth, the payers are paying for full price with no rebate. They also do respond to patient need patient volume. And as we start to generate demand and we go through, we go through Belsomra. And they see true demand in the marketplace and they start paying full price with no rebate for the business that’s going through, then there is an opportunity for us to have that conversation.
And that’s traditionally the way that the market works. Right now I don’t blame them, right now. They say, hey, guess what? I’ve got Belsomra, why the hell should I give you a contract for QUVIVIQ. It could well go the same way as the other two. And it isn’t, we’re already demonstrating that the volume is in on a very different trajectory than the other two. And once that picks up, and once they start seeing what they’re paying for the covered lives and I think we’ll be in a very different place to have that conversation.
With regards to the timing of couponing that will depend on where we get to with the payer contract. But essentially, once we start to see commercial coverage come up, then that will obviously come down.
Jo Walton
And I sneakily just check then a 20% access rate is a good enough rate to trade off against the cost of a national direct to consumer campaign in September when you haven’t got that much access to pay it back.
Simon Jose
Yes, I mean, over several years, yes. Because in as a primary care drug, we don’t expect to breakeven in year one usually of looking at a profitability for a primary care drug. And in year three, we were targeting, as you know, as a company, we put out guidance to be profitable in 2025.
Operator
Thank you. And we’ll now take our next question. Please stand by. This is from the line of [Indiscernible] from Deutsche Bank. Please go ahead.
Unidentified Analyst
Yes, hello, everyone. Just want to get a better sense of PIVLAZ’s revenues phasing for the next few quarters. If you can make a comment on that, please. Thank you.
Jean-Paul Clozel
I’m not going to comment on future revenue projections. I work as a thing I think I know is on a lot of people’s minds is how much of this is real and how much of it is stalking in terms of what we’ve reported out already, which I obviously can tell you retrospectively, but I’ll give you an example in June for example, wholesalers ordered net reordered 90% of what they sold out. So I think we’re already at a point where we’re at steady state in terms of what’s in May. It was 70%. And in June, it was 90%. So the volume that they sold to hospitals, they essentially reordered 90% of that volume from Idorsia.
André Muller
I think that, Jean-Paul, I think PIVLAZ has always been underestimated as the potential because people underestimate first how big is a problem of these patients, especially in Japan and we, the Japanese have done, they are basing their prescription on results obtained in Japan. It’s full two studies, the whole NDA is not only based on in terms of safety on all what we have done in Europe and the U.S., but mainly on two people, two studies in Japan. So most of this investor centers have been involved. And this explains why the pickup is fantastic at the beginning of this lunch and I’m stunned to see that already as mentioned, we are treating 10% of the patients after two months. Imagine what is going to be at the end of this year. So you can expect and I’m good. I would say good surprise for PIVLAZ compared to the expectation of the market this year.
Operator
Thank you. We’ll now take our next question. Please stand by. And the question is from the line of Raghuram Selvaraju from HC Wainwrights. Please go ahead.
Raghuram Selvaraju
Thanks very much for taking my question. This is just with respect to the long term view on QUVIVIQ. Can you comment on potential additional sleep disorders that you want to explore with the drug, given its profile and treatment of insomnia, particularly with respect to conditions like jetlag, and shiftwork disorder?
Jean-Paul Clozel
We have, especially in the U.S., I have to say we have a label, which doesn’t exclude jetlag exclude any sleep disorder. We have chosen as a strategy to go with the big indication that has the largest label and we discussed it with the FDA. So we have no restriction. And, frankly, our marketing goal is certainly not the jetlag one or two drug. The real, what we have observed is that the benefit increase with time and I think the chronic insomnia is really our target. And there are millions and millions of patients and 10s of millions of patients with chronic insomnia. What we want during the first year is to focus on marketing effort to explain that this is a chronic disease like hypertension, diabetes, where you need to be treated every night and I think that if we would start to discuss jetlag, it would be a little bit against this message.
I think it is a fantastic drug for chronic insomnia, I think it could be good. And we didn’t do the study. So but people if they want to take it for jetlag, they can. But frankly, when you trade, when you take the drug every day, this is where you have seen the benefit that we have described in our Lancet paper on daytime performance. And this comes with time and this is really a drug for chronic use.
Operator
Thank you. We will now take the next question. Please stand by. This is from the line of Thibault Boutherin from Morgan Stanley, please go ahead.
Thibault Boutherin
Hello, can you hear me? Thank you for taking my question. It’s just about the agreement with [Indiscernible] just wanted to wish you could give us some color on how this partnership has been going if you had to make any adjustments to the agreement in incentives for joining anything in the UK what to learn, since the launch in relationship with this agreement compared to your initial expectation and also stood out on for some reason you want to take back control of marketing for final reason, our binding agreement and how much freedom you have here, in terms of doing that. Thank you.
Jean-Paul Clozel
Let me start with your second question or part of question first. So just to be clear, we are in full control as Idorsia of the marketing, the pricing, medical and everything to do with the strategy of the product. Essentially are providing sales force services to us. And we’re pleased with the way that’s all going. We’ve had to make no adjustments to the contract. But I’ve said this before, but we need to be very clear that Idorsia is in full control and has built the capabilities for all of what I would describe as the strategic capabilities that the organization requires for the asset. And [Indiscernible] is providing sales force services in partnership with us. They’re doing a very good job. We’re pleased with the quality of the sales force that they’ve set up and we’ve had no cause to change anything to do with the contract.
Operator
Now we will take our next question. Please stand by. This is from the line of [Indiscernible] from Jefferies. Please go ahead.
Unidentified Analyst
Hello, good afternoon. Thank you very much for taking my question. So I will start with one also. How are you thinking about the launch plans in Europe? And I suppose it will vary in terms of country access, I think for its spoken about Italy, but I just wondered if there was an update there. Thank you.
André Muller
Yes I mean, we’re expecting actually to be launching Germany for. As Jean-Paul said, we look at you’re very bullish about Europe, because the unmet need is huge, just as big as it is in the U.S. In fact, the number of patients on prescription medicines in Europe per capita is higher than the U.S. I think that’s probably because there’s more OTC use of sleep meds in the States. And many of the European regulators and even some of the payers are really quite concerned about the long term use of Zeds and Benzos and put restrictions around their use. So being the first doer to come into the European market against that backdrop gives us a lot of confidence in the opportunity ahead of us. As I say, we’ll launch in Germany later in the year.
And then as you rightly say, we’ll roll other markets out through the course of across the break of the year and into 2023, dependent on market access. You’re right that Italy is a self pay market, which means we won’t have to wait all the way through a long protracted reimbursement process in Italy. And there is an potentially an opportunity for us to think about a similar approach in Spain, but otherwise it will be linked to reimbursement particularly in the UK and France.
And just I wanted to add there is something very special for Europe is that the label of QUVIVIQ in Europe is quite extraordinary I have to say. It’s really, for insisting on chronic use. Here, it’s and you know that in Europe, most of the drug made every drug most of the drug, I have to say especially Benzo, Zed drugs are limited to a few weeks of treatment.
Here, it’s a first chronic insomnia drug which is approved for chronic use and which is also approved for patients we have a really daily consequences. There is in the labor very clear mentioned on the fact that it should be really, it’s going to work, especially in patients with chronic daily impairment of their daytime performance and that there is a benefit of QUVIVIQ patient on daytime performance with the 50 milligram. So we have a very, very unique label, which is unique as an insomnia drug because it’s the only drug and this is very important for reimbursement because nobody can compare to a drug which is not approved for more than a few weeks. So I think it doesn’t, it really I think is very helpful. The reimbursement, it is really a drug for chronic use, and for patients with daily impairment of their activity. So this is what we try to really integrate into our launches. And we are working on that in every country.
Jean-Paul Clozel
And in addition to having chronic labeling, just to add the data on daytime performance are also in the European level, which is very beneficial for us in Europe.
Operator
Thank you. We will now take our next question. Please standby. On the line we have Keyur Parekh at Goldman Sachs. Please go ahead.
Keyur Parekh
Hi, thank you for taking my questions, please. The first one is defined look at consensus for 2022. We’ve got QUVIVIQ sales of about 70 million and then 23 at about 250 to 260 million. How comfortable are you with consensus numbers? Do you think they are broadly in the right kind of ballpark? Or do you think given some of the decisions you’re making from a commercial perspective, we should be thinking about a different curve to the ramp? Thank you.
André Muller
Yes, well, I can take it. You’ve seen that we maintain our net operating loss guidance, but we no longer break it between sales, other revenue and OPEX because we’re, we need a few more weeks to get more visibility on the uptake mainly for QUVIVIQ in U.S. So I will not comment on consensus for 2022 and even less comment for 2023 and after, but as we said and as Simon alluded to it we have almost 13 or 14 years of IP protection. So we will not sacrifice short term profitability or sales by contracting with payers. We really want to get to extract the most value of QUVIVIQ notably in U.S. So we’ll get, we’ll give fourth year full years, certainly more color with your Q3 results. But right now it’s pretty mature.
Jean-Paul Clozel
Thank you, Andre. So we got one or two questions coming in through to the webcast. One of them is for you, Andre, on the back of the non-equity financing possibilities throughout the remainder of this year. Do you want to give us a, do you want to give some more granularity as to what those could be and when that they could be actually happening?
André Muller
Well, we are definitely working on it. So I’m confident that again, will incur a few deals so will it be in Q3 or early Q4 I don’t know but for sure. Our objective is to raise cash with either as I said, sale and leaseback and/or right here related, right here monetization or right here related deals or even structured debt. So between these combination plus Jean-Paul also mentioned it but we’re out licensing takes time. But I hope also set will incur fewer outrageous and senior deals. But I’m really confident that will raise significant amount of cash putting us in a very strong position starting 2023.
Andrew Weiss
Thank you, Andre. We’ve got another question on do we have an update on the development of Lucerastat Jean-Paul?
Jean-Paul Clozel
I think that we are basically continuing the open label phase and we are preparing discussion with the authorities. We want to, we have seen as mentioned many times we have seen very interesting data on the I would say end of gun protection with this drug. We want to confirm this data with as much information as we can. We are using, as we were mentioning we are using basically all the new technologies and new techniques to evaluate these effects.
For example, we are using artificial intelligence techniques to really compare with a sort of placebo untreated group. And we will discuss at the end of this year with the authorities the results. But since the protection of this drug of Lucerastat is going to be through often protection we prefer to take our time to accumulate data abd to go to the authorities with very convincing data. That’s the situation. I can tell you that the data that we have a very impressive, and this is why we do not want to give up on this drug because I do believe it’s a very efficient drug in [Indiscernible]
Operator
Thank you. The next is from the line of Peter Verdult with Citi. Please go ahead.
Peter Verdult
The second question to Andre on the [Indiscernible] royalties. Could you characterize the level of interest that’s been from parties? How many are in the data room and your level of confidence that a deal can be done before year end? And then maybe Jean-Paul can reassure us for the edema signal imprecision is going to be considered as manageable from adults’ perspective. Thank you.
Jean-Paul Clozel
I think I have to say the edema signal is not is really I would say this is, I will not discuss the word manageable. I think it’s part of the treatment of these patients. And it’s really not causing people to stop the treatment. I think we have a few, I think we can count on basically on one hand, the patient who had to stop because of that. So I think that in this very severe patient, this is not going to be an issue.
And even more, I think that what we have observed, and what is more important that despite the very severe renal problems that these patients do have, we have not seen what I was really worried and with everybody should be worried when you treat this patient is your occurrence of acute renal failure, because when you give [Indiscernible] very severe patient this is a big risk. And we didn’t see that. So I think the safety is going to be not an issue. Of course every doctor, we look always at these patients, and but frankly, it is not to the point that it should produce, stopping the treatment. And that’s the situation. So I’m very confident. And these are very severe patients.
I said on four therapies and what we have observed also is some and we will give results later on some very interesting indication on some renal function or renal damages. We have measured proteinuria, we have measured glomerular filtration. So we have some very interesting that will be shown later on. And we should reassure everybody using the drug. And the other questions sorry, I forgot the other.
I think we’re, I think as we said we have many, many interest. But deal is a deal. And until it’s sign, it’s not signed. So I do not want to comment before we have the signature on this contract, and of course, we are working. And Andrew especially is working very hard. But the data here, I think that’s what you have also to remember is that this protocol, this protocol of the studies have been really suggested to us by the FDA. This is what they wanted to see in a drug in resistance, hypertension. And the fact that all the primary, secondary endpoints are positive. The fact that this is a protocol, really agreed with the FDA and basically suggested by them and they had a very good at, it was a very good idea, very good suggestion. I think we know that these were really should be approved. And we I know that you always have to be very careful. We’re working on the quality aspects and so on. But we know that these drugs should be approved on the merit of the clinical results. And this is really making much easier our discussion with potential YLT, for YLT deals. Now we have the results and we have been able to start the discussion.
Operator
The next question is from the line of Dominic Long from Credit Suisse. Please go ahead.
Jo Walton
Thank you, Joe Walton. Again, I’m sorry to go back to QUVIVIQ but this is a question about Europe. So I understand you have a sales force as you have in the U.S.. You have Vitacare as a distributor in the U.S. Is there any equivalent in any of the markets that you would use in Europe? And given that there hasn’t been a doer approved in Europe. How confident are you that you’ve got all of the data that you need to maximize the local reimbursement for those countries that will give reimbursement and that you won’t have to do additional clinical studies. It’s a degree question really is the degree of confidence in your knowledge about the 15 plus markets in Europe versus the one market that you have in the U.S.? Thank you.
Simon Jose
So just to be clear, Vitacare is not our third party logistics provider. So all the distribution of drug, they do some of that themselves where products come in directly to Vitacare, and they can distribute directly themselves. But we also have a 3PL in the U.S. which does the traditional distribution. And we have a 3PL in Euro that will do the same distribution throughout Europe. The actual patient service and copay model is not applicable to Europe just because of the difference in the nature of the markets. But obviously, we have all of the traditional distribution setup in Europe already.
With regard to pay we’re confident we’ve got what we need. And a large part of that, as Jean-Paul said earlier is because was pay as starting to separate out chronic versus acute and actually, I’ll give you an example that in a NICE submission in our conversations with NICE in the UK, we have agreed that QUVIVIQ will not be compared to the Zed and the Benzos. Because the Zeds and the Benzos are restricted to two to four weeks of treatment. And this is a chronic medication. And by separating out as a chronic medication, you actually avoid the need to do these sort of head to head. So I’m not saying that’s going to be the case in every single market, but we’re in a very good position to be able to use the difference in the labeling to separate out the comparisons that is required. And honestly, I think we’re very focused on the top five markets. I mean, we talk about there are 15, and we can get to 40 sometime but really, the concentration of the opportunities sits with the big five markets, and in addition probably of the Nordics.
Operator
Thank you. Please stand by. And the next question is from James Gordon from JP Morgan, please go ahead.
James Gordon
Thanks for taking the follow up question. I was just following up on the financing point. Because my understanding before had been that plan A was the divestment of royalties. And we’ve heard that it’s not to do with edema or any provability concerns. Is the challenge just that at this point, J&J hasn’t said that much about their aspirations for the product. And that may be a potential purchaser of the royalty would like to see not just the approval, but even how the launch is starting to go before they really want to commit to it?
And the other part of the question was just I heard sale and leaseback is mentioned on the balance sheet, I think PPE something like 150 million, is that the part of the company that could be for sale or to the understate it is the more to sell them that?
André Muller
On to the latter part of your question your ballpark. And this is obviously a building that we received from the merger process from [Indiscernible] back in 2017. On your first part, yes, J&J has not indicated much so far except that back in November, October, November, had an R&D day mentioning five drugs with a potential of more than 5 billion and 9 including a positive with a potential between 195 billion. Now seen as the data of the precision trial. And in large companies say wait for the results before really putting all the resources behind potential launch. And that’s what we see now. So, of course, not seeing here full sets of data is reserved for publication. Later in the year, but not want to preempt excitement around the placenta and but as Jean-Paul we see a data of CF precision trial and we are considered J&J to make Aprocitentan a big success. Recall that most of the analysts’ sales at peak north of 2 billion.
At 2 billion that we would get 550 million. So it’s not tomorrow in U.S. and other territories after, and each additional 1 billion on top of the 2 billion would be an additional 350 million. So yes, Aprocitentan for us and — related to deals was a key milestone to achieve. And I’m not saying that to regulatory risk is off the table. But with Jean-Paul said with phase 3, which was designed in with CFDA, and with primary all primary and secondary endpoints, met with statistical significance. We are highly confident that the drug will be approved and then J&J will launch it. And we have no doubt that we have an ideal partner here we [Indiscernible].
Jean-Paul Clozel
Just if I understand, James, you wanted to ask why does it take time? Is it was it one of your questions? Sorry, or?
James Gordon
Yes, why time? I’ll also just, I think the initial, at least at least what I’d understood before it, it sounded like it was very much that the Plan A was that it would be so by the end of the year, but it now sounded like there were quite a few different options being entertained. And so my question was, if it’s not the applicability, and it’s not the profile, which sounds like it’s very good. Why was it less than –
Jean-Paul Clozel
No, no, that’s all I think. It takes in Andrew can, it takes time and we want to have a good deal, you know, we don’t make YLT deal for several 100 millions. And of course, it’s going to be a big deal. We want to take the, we want to go through a real good process, and we want to find the best offer. And we want to work on every single details of this offer. It takes time. But I think that there is nothing which is in front of us, which would prevent us to do such a deal. Now we have the results. And everybody is quite confident that this drug is going to get approved. There is no issue on this side.
So I repeat we do not want to get through delusions, and we will use many, many approaches in order to avoid diluting shareholders. We are working very hard and every day we are making progress. And before the end of the year, we’ll be there. I’m quite confident. But we do not want to give a value too early and this is what, this is a topic of Andrew to try the best deal of all what we do.
James Gordon
Makes sense. Thank you.
Andrew Weiss
Thank you, James. Thank you Jean-Paul. Operator, do we have any questions left? The time has advanced.
Operator
We do. Please stand by while we take the next one. This is from [Indiscernible] Jefferies. Please go ahead.
Unidentified Analyst
Thank you for taking my follow up question. So it just cracked up a bit earlier Andrew, when you spoke about what you needed to be able to see to give us some kind of guidance on QUVIVIQ I guess for the remainder of this year. And I just wonder was what that was we kind of waiting to see that DTC have an impact I guess, the beginning of September so we can expect maybe a bit more guidance in Q4 or is it something else that we just missed? Thank you.
Jean-Paul Clozel
No, it’s really to see demand. Simon. I’m sure we can add to what we knew that we are more confident [Indiscernible] beyond this year, preliminary weeks.
André Muller
Yes I mean, Rosie, it really is for us to have some more time and see some more data points. I think momentum is good. You’ve seen the NBRX data, which is a critical lead indicator. And then we’ve got the DTC, as you mentioned, kicking in sort of late August, September. And I think once we start to see what the trajectory looks like thereafter, we’ll be in a better position to have a view as to what that looks like.
Jean-Paul Clozel
Just I would like to say as a CEO, and auto congratulations, and please believe me that we are all very focused on our task and on the challenges but which company has built within five years a GP sales force in the U.S. and now in Europe? I don’t think that has happened. And frankly, we have had at the first week, you know, it was not easy for us to go through the distributor channel. We were not a very big company compared to the big Merck or Pfizer of the world.
And of course, we had to get the organization’s distribution system in place. The electronic systems in place which is now in place. So that’s the first point. The second point was really to inform the doctors. And this is really what we have done. You have seen more than 50% of the doctors know about QUVIVIQ they are testing it. Let’s be clear, even if they believe us, I think they still believe more in the things that we’ll see by themselves. So they are testing or most of them testing in a few of the patients sometimes in a lot of their patients, but sometimes in one or two patients and what we have heard that they’re very happy. But this is a phase where the doctor are testing it but the real clear thing is that this market will take off Omni with DTC because today, doctors as we say, as some other clear priorities they have the COVID situation which was not anticipated. I frankly believe that the beginning of the year that this is with vaccination going behind us. There is, as you have seen, quite a big number of patients who have COVID.
And then when the patients will be able to really know about this drug and ask this is going to make the difference. And already we are going to be the number one doer are very soon. Frankly, before being the number one I will not have the discus with these peers. I want to be the number one to discuss, that’s always a much better situation. And we are going to see the real impact of DTC during Q3 but even more Q4 I would say. It’s Q4 issue, then we will really be able to describe with you when are we going to plan for the payers to cover us, how much is the demand and what our expectation and this is really, this is going to happen late this year.
André Muller
If I may Jean-Paul I would add your comments at the [Indiscernible] or Tesla back in 2014. You need free sampling to build experience with rotation see word of mouth, but also with physicians. So because you should get your strong feedback from a patient that’s easy is what will drive a commitment. Now Simon has shown that less than two months after alone we have already 52% awareness, which is already a significant percentage. And see a second part will be yes, PBN as Jean-Paul said and Simon said before, yeah, well, there are some barriers and with stronger demand, we will get on both but not at all. I hope will have the same profile into us center, or Tesla with north of 3 billion but look at CSS supporters. It was really a slower, slow update. Hopefully we’ll do better.
Jean-Paul Clozel
And also just to add, sorry, because I think we forgot to mention it during this. We didn’t mention it as much as I think but the importance of the 50 milligram 50 milligram dose, which is really basically recommended in Europe and which is approved and this was, it was so important for us to add 50 milligram. 50 milligrams gives a subjective improvement in the patient. We know it basically a one hour total sleep time subjective, total symptomatic improvement.
One hour per sleep per day means a whole night of sleep at the end of the week. This is major and this is really fed with the 50 milligram more than the 25 milligram and this is why we are so happy and we have to fight. And we are fighting that really people, patients take the 50 milligram dose, which is certainly the dose giving the best subjective effect without the price to pay on the side effects. And this is the indicator of personally, which I looked the most. Because if we would be having 75% of the patients 25 milligrams, I think we would be in trouble, because it would mean that the patients will not make the difference and will not tell the doctors with the due today that there is a doctor’s God, I have not slept for such a long time so well. And this is a subjective and this is a 50 milligram and we are working very hard on that. And I think this lunch is a success, will be a success because also we are spending a lot of energy on this dosing recommendation.
Andrew Weiss
Thank you Jean-Paul. Okay, we’ve overdrawn over more than a half an hour. We need to conclude the call for today. So on this, we’re going to thank everybody for their ongoing interest in Idorsia. Our next scheduled news flow will be the nine month results on the 25th of October, but I’m sure before then we’ll be talking again. So stay safe everybody. Operator, please close down the lines.
Operator
Thank you. This does conclude the conference for today. Thank you. You may now disconnect. Speakers disconnect.
Be the first to comment