Marinus Pharmaceuticals, Inc. (NASDAQ:MRNS) Q2 2022 Earnings Conference Call August 11, 2022 8:30 AM ET
Company Participants
Sasha Ellis – VP, Corporate Affairs & IR
Scott Braunstein – CEO, President & Director
Christy Shafer – Chief Commercial Officer
Joseph Hulihan – Chief Medical Officer
Steven Pfanstiel – CFO & Treasurer
Conference Call Participants
Andrew Tsai – Jefferies
Charles Duncan – Cantor Fitzgerald & Co.
Douglas Tsao – H.C. Wainwright & Co.
Jay Olson – Oppenheimer
Michael Higgins – Ladenburg Thalmann & Co.
Brian Skorney – Robert W. Baird & Co.
Marc Goodman – SVB Securities
Joon Lee – Truist Securities
Jason Butler – JMP Securities
Joseph Thome – Cowen and Company
Operator
Greetings and welcome to the Marinus Pharmaceuticals Second Quarter 2022 Financial Results and Business Update Call. This time all participants are in listen-only mode. After the speakers’ presentation there will be a question-and-answer session.
Now it is my pleasure to introduce your host, Sasha Ellis, Vice President of Corporate Affairs and Investor Relations. You may begin Ms. Damouni Ellis.
Sasha Ellis
Thank you and good morning. With me from Marinus are Dr. Scott Braunstein, Chief Executive Officer; Christy Shafer, Chief Commercial Officer; Dr. Joe Hulihan, Chief Medical Officer; and Steve Pfanstiel, Chief Financial Officer. Before we begin, I would like to remind everyone that some of the statements we are making today are forward-looking statements under the securities laws.
These forward looking statements and both substantial risks and uncertainties that could cause our clinical development programs, future results, performance or achievements to differ significantly from those expressed or implied by such forward looking statements. These risks and uncertainties and risks associated with our business are described in the company’s reports filed with the Securities and Exchange Commission, including Form 10-K, 10-Q and 8-K.
I’ll now turn the call over to our CEO, Scott Braunstein.
Scott Braunstein
Thank you Sasha and welcome to our call. We ended the first quarter with the exciting news that ZTALMY received FDA approval for the treatment of seizures associated with CDKL5 deficiency disorder in patients two years of age and older. And pleased to now be receiving our first prescription and completed patient enrolment forms.
Our sales force has been in the field engaging and educating physicians as CDD centers of excellence and National Epilepsy Centers. We are encouraged by the strong early interest in the ZTALMY. In addition to the April publication of the Phase III Marigold results in the Lancet Neurology. First international consensus recommendation for the assessment and management of individuals with CDKL5 deficiency disorder was published in Frontiers in Neurology in June.
Among the survey results in the publication respondents which include an international panel of expert clinicians and researchers, all supported offerings and ZTALMY for the treatment of seizures associated with CDD. Both of the publications are timely for the launch, which Christy will discuss in more detail shortly.
I would like to once again thank the patients, families and investigators who participated in the clinical program for all they have done to help us achieve this momentous milestone. We have a number of other operational updates. So we will be sharing during the call. And I would like to start with the first dataset from our next generation product development program.
We have seen promising initial results in our Phase I healthy volunteer study utilizing the first of our next generation formulations, which Joe will discuss in detail later on the call. The PK profile is showing several differentiated features compared to our current oral suspension, which makes us believe that we can ultimately achieve our desired goal in chronic dosing.
Key goals of the second generation formulation are to improve bioavailability and to drive higher steady state blood levels of ganaxolone, which we believe will enhance efficacy. We also believe that it will be important to improve upon ZTALMY’s dose frequency as we think about the potential for additional new indication are well suited to address areas of unmet need including Lennox-Gastaut Syndrome.
We have several important updates on our late-stage clinical pipeline that I am excited to share. Let me start with the IV program. We’ve had productive interactions with the FDA and have reached preliminary alignment on our proposed IV ganaxolone formulation change, specifically the modification of the BARDA system.
The FDA agreed that in principle it also changing the ganaxolone IV formulation is acceptable and acknowledged Marinus’ plans to transfer the production of IV ganaxolone to a new manufacturing facility for future clinical supplies, including the ongoing RAISE trial in status epilepticus. Importantly, this alignment provides us confidence that our new batches will meet the necessary FDA requirements upon the filing of a new drug application.
Early stability assessment of IV ganaxolone using a new buffer has shown promising initial results that are likely to support greater than 24 months of shelf life at room temperature. We expect to begin producing our NDA batches in the fourth quarter of this year, utilizing our new manufacturing site and buffer for our IV formulation.
I’m extremely proud of the work done by both our CMC and regulatory teams to continue a productive dialogue and scientific exchange with the FDA. Let me comment on the Phase III RAISE trial. As previously communicated, we are implementing important changes to the RAISE protocol, expanding eligibility criteria to accelerate enrollment. The protocol amendment is expected to be adopted across the majority of clinical sites by the end of the third quarter.
Moving to our Phase III TrustTSC trial in tuberous sclerosis complex, we are pleased to share that the first patient has been randomized and dosed. We continue screening patients at U.S. sites with European activations on track to begin in the third quarter of this year. We are targeting 80 global clinical sites, predominantly in the U.S., Western Europe, Canada and Israel.
We continue to believe that the new Phase III titration schedule will have a meaningful improvement on tolerability and efficacy and look forward to the anticipated data readout in the first quarter of 2024. We have been actively engaging with the TSC community, including our participation during the recent TSC World Conference.
After our team’s interactions with both clinicians and families, we continue to believe that there is a significant unmet need for patients suffering with refractory seizures associated with TSC, and ZTALMY has the potential to be an important option for these patients. Finally, some comments on how we plan to put ZTALMY to patients and families globally.
In parallel to the U.S. commercial activities, we continue to work with regulatory authorities to advance ZTALMY and other key regions. In Europe, we are targeting submitting complete responses to the EMA’s Day 120 list of questions to the CDD Marketing Authorization Application by November, which would result in a CHMP opinion by the end of the first quarter of 2023.
There have been significant efforts from both Marinus team and our strategic partner, Orion Corporation, in anticipation of a European commercial launch. In addition, we believe that there is a broader global opportunity to help patients and are exploring further ex-U.S. commercial alliances to expand ganaxolone’s footprint.
Now I would like to turn the call over to our Chief Commercial Officer, Christy Shafer, for updates on the commercial launch of ZTALMY.
Christy Shafer
Thank you, Scott. Today, I’m excited to share our early progress on the commercial launch of ZTALMY in the U.S. Since the approval in March, we’ve continued to see a high level of enthusiasm for ZTALMY from both physicians and caregivers, reflecting the need in this community and the potential that ZTALMY could provide infusion management.
In the first two weeks of launch, we are strongly encouraged by the early volume of completed patient enrollment forms and are actively fielding questions regarding enrollment and prescriptions. Initial launch feedback from the field has confirmed strong interest from a unique base of physicians in prescribing ZTALMY.
In addition to referrals from the U.S. CDD Centers of Excellence and national epilepsy centers, we’re also very encouraged by early interest coming from outside our key accounts. Additionally, we continue to establish relationships with key payers representing a large proportion of covered lives in the U.S. and have already begun to see positive coverage criteria being published to support patient access.
As a reminder, we shared in June that ZTALMY received a Schedule V designation by the Drug Enforcement Administration, which is the least restrictive schedule. We are pleased with this designation, which further builds our confidence in how parents, healthcare providers and payers will use ZTALMY as an important treatment option for seizures associated with CDKL5 deficiency disorder in patients 2 years of age and older.
The major strategic objectives of our commercial launch are to continue educating healthcare providers and caregivers on the compelling efficacy and safety profile of ZTALMY and to enable seamless patient access from prescription through fulfillment. Our marketing team has developed a suite of communication tools that provide important information to educate healthcare providers and caregivers about the benefits and important safety information of ZTALMY.
These are available at ztalmy.com patient caregiver website and ztalmyhcp.com healthcare professional website. Physicians can access information at the HCP website about prescribing ZTALMY and the prescription fulfillment process. We selected Orsini specialty pharmacy based on their strong track record and experience, which is aligned with our indication and dedication to the rare disease community.
We believe it is critical to have a single specialty pharmacy to provide individualized support to CDD patients and caregivers throughout the patient journey. As part of Marinus’ commitment to helping patients who are prescribed ZTALMY receive the support they need, we in collaboration with Orsini have launched the ZTALMY One, a comprehensive patient support program that facilitates access to treatment and provides ongoing prescription drug support and education throughout the treatment journey.
This includes prescription benefit and prior authorization support medication delivery, financial support programs for patients with no insurance, limited insurance or gap in coverage and a copay savings program that helps commercially ensure eligible patients who meet the program terms and conditions pay as low as $0 per fill for the ZTALMY prescription.
In addition, the ZTALMY One support team includes patient care coordinators available Monday through Friday, with pharmacists available 24/7. Our team of 16 field representatives who have significant rare disease and epilepsy experience are now educating physicians on the efficacy and safety profile of the ZTALMY, targeting close to 300 hospitals, large practices and epilepsy centers, including 8 distinct CDD centers of excellence and 40 key national epilepsy centers.
In parallel to our education outreach, we are also focused on supporting access to the ZTALMY for those patients who participated in the Marigold open-label extension study and the U.S. expanded access program, being mindful of the individual circumstances of each patient. The availability of the approved label has also allowed us to advance our ZTALMY coverage discussion with payers.
As a reminder, we expect approximately 60% of CDD patient population will access coverage through both fee-for-service and managed Medicaid with the remaining 40% being managed commercially and the top PBMs covering the most U.S. lives. Along with top national and regional commercial payers, we continue to establish relationship with government payers.
Our conversations thus far indicate we should be able to achieve broad access to pace and based on the level and tone of engagement, we believe payers recognize the impact of the disease on patients and families, limitations within this CDD treatment landscape and ZTALMY profile as the first product approved specifically for seizures associated with CDD. Consistent with our expectation, early coverage criteria support a confirmed CDD diagnosis in patients 2 years of agent older who have failed 1 or 2 prior antiepileptic drugs.
Our initial priority is on the 22 states that we believe include the largest concentration of CDD patients and where the centers of excellence are located. The CDD ICD-10 code, , which was established in November 2020 is being increasingly implemented into practice by physicians. Recent healthcare claims data suggests the database is on pays for 20% to 30% year-over-year growth of unique patient claims.
We believe this consistent and increasing usage of the code will help ensure access alignment with payers. Early ICD-10 code usage shows that 75% of patient visits are in pediatric patients with 25% in patients 18 years or older. We recognize that coverage determinations can take time during the illustrate launch period. Our expectations are that the majority of commercial and state Medicaid policies will be published within 6 to 8 months.
However, we have every expectation to field medical necessity requests prior to and separate from the publication of formal payer policies. As a reminder, as a part of our commitment to patients, ZTALMY One will help support eligible patient access prior to established coverage criteria. We are confident in the road ahead and look forward to continuing to work with patients, caregivers, physicians and payers over the coming months.
I’ll now hand the call over to our Chief Medical Officer, Joe Hulihan, to discuss our ongoing development program.
Joseph Hulihan
Thank you, Christy, and hello, everyone. I’d like to begin with our second-generation formulations where we’ve seen promising initial results. We believe the new formulation could be the future of the ganaxolone franchise. The goal is to improve the relationship between the amount of ganaxolone administered and the plasma concentration, allowing greater and more predictable individualization of dosing.
The target pharmacokinetic profile includes an increase in overall exposure relative to peak concentration, which could provide the potential for twice daily dosing with enhanced efficacy and a low rate of dose-related adverse effects. Initial data from a Phase I single ascending dose study in healthy volunteers demonstrated encouraging results, which we believe supports further clinical development.
Study participants received single doses ranging from 100 to 900 milligrams with the current oral suspension given as a reference controls. Plasma levels were measured through 72 hours following an excellent administration. Total exposure was measured by area under the curve, or AUC and this increased linearly in proportion to the administered dose in contrasted doses above 600 milligrams with the current oral suspension.
The increase in AUC was approximately 37% when escalating doses of the new formulation from 600 to 900 milligrams without a significant rise in Cmax. Tolerability was consistent with prior ganaxolone studies with the vast majority of adverse effects being mild in severity. The PK profile of this formulation could allow for further upward titration for efficacy without a concomitant elevation in Cmax-related adverse effects such as Sonance.
Next step in the evolution of this program include additional Phase I studies in healthy volunteers with higher single doses above 900 milligrams to determine whether further increases in exposures relative to peak concentration can be achieved. We will also be performing PK modeling to determine next steps, including the need for a study with multiple ascending doses.
We currently anticipate selecting one of the second-generation ganaxolone formulations for a Phase II study in Lennox-Gastaut syndrome to begin in 2023. Lennox-Gastaut syndrome is a rare, epileptic encephalopathy that can result from many structural or genetic causes. It’s highly treatment refractory, and we believe the new oral formulation will provide more consistent and predictable exposure to ganaxolone, which should allow physicians to individualize dosing to achieve an optimal response for each patient.
Additionally, there are several prodrug candidates that could offer further improvements in efficacy and tolerability, ease of manufacturing and dose individualization. Lead oral and IV prodrug candidates have been selected for additional IND-enabling studies with Phase I data targeted for 2024.
Now moving to our IV programs and status epilepticus, I’d like to dive a bit deeper into the RAISE protocol amendment that Scott mentioned and how we believe this will help drive enrollment. First, I’m pleased to share that the results from our Phase II trial in refractory status epilepticus were published in Epilepsia in June. As a reminder, this Phase II trial enrolled patients who had failed at least 1 second line IV AED.
None of the patients progressed to third-line IV anesthetics within 24 hours, leaving the primary endpoint in the study. Of note, 11 out of 17 participants were incubated prior to or during the study, and all patients with follow-up data, 16 out of the 17 were successfully extabated. We’re optimistic that the Phase III study will validate this finding and support the potential for ganaxolone to change the treatment paradigm in refractory status epilepticus.
With this in mind, I’d like to discuss the 3 key changes in the raised protocol amendments, which is expected to be adopted across the majority of clinical sites in the third quarter. First, RAISE enrollment criteria were amended to allow inclusion of patients who had received IV anesthesia for up to 18 hours during the current episode of status.
The original protocol inadvertently excluded many patients who had received IV anesthesia, particularly those transferred from outside hospitals or the emergency department. These patients were an important part of the Phase II population and can now be included under the amended protocol. The second key change involves the required number of prior failed treatments. The protocol initially required failure of IV benzodiazepine and 2 or more second-line IV AEDs at least 3 prior agents in total.
The amended protocol requires failure of at least 2 treatments rather than 3. Additionally, the investigator must indicate that IV anesthesia would likely be the next line of therapy with study treatment fails to control seizures. The underlying rationale for this change involved 2 issues. First, more centers are advancing to IV anesthesia after failure of the initial second-line IV AED.
Second, patients in the ICU setting may receive a second-line agent without progressing through treatment with benzodiazepine, usually because they already had received multiple benzodiazepine doses for sedation. As with the first change, this will allow enrollment of patients with a profile similar to those in Phase II to enroll in the Phase III study. We’re confident that this will support a high rate of progression to IV anesthesia in study drug treatment failures.
This will expand the pool of clinically appropriate patients who qualify for enrollment. We believe these 2 changes would potentially increase the sensitivity of the study by fostering progression to IV anesthesia and study drug failures, thereby reducing the placebo response. The third significant protocol change aligns EEG determination of study qualification more closely with clinical workflow.
Rather than requiring an investigator to quantify the EEG seizure burden in the 30 minutes immediately prior to administration of study treatment, the protocol now allows an hour for this determination. This is more consistent with usual ICU patient care in which the physician will diagnose status epilepticus then a range for treatment to be administered, which can take 15 to 30 minutes.
This change better aligns with the Phase II paradigm and should also facilitate enrollment of clinically appropriate patients. We’ve received highly positive feedback from our study sites about the potential for increasing the number of eligible patients under this new amendment, and we will be holding an investigators meeting later this month to review and discuss the changes to the protocol.
Furthermore, we’ve established an initiative of executive outreach by our scientific affairs and clinical development leaders to study sites to ensure a smooth transition adopting the amended protocol. Looking to the future of the RAISE trial, we will continue to actively monitor what’s working well and how we can further refine enrollment criteria to support the recruitment of additional patients and potentially broaden the ganaxolone label.
For example, the trial currently enrolls patients aged 12 and older. We will shortly receive data that may allow us to broaden the entry criteria to include even younger patients. Given the higher incidence of status epilepticus and children, this change could further support timely study enrollment.
As previously disclosed, we have the option for an independent data monitoring committee to conduct an interim analysis when 2/3 of participants have completed the study, which would be approximately 82 patients. At that time, the committee would recommend stopping the study for efficacy or continuing to full enrollment. U.S. site activations in the RAISE trial continue to advance, and we anticipate initiating 10 new sites in Canada beginning in the third quarter.
We continue to expect top line data in the second half of 2023. In the Phase II RESET study in established status epilepticus, the community consent process, known as exception for informed consent is well underway. We are pleased to share that we have activated the first site and are on track to begin U.S. enrollment in the second half of the year. We plan to limit site activation initially to 4 or 5, to focus on gaining a comprehensive understanding of enrollment trends before making a larger investment.
Also, the RAISE 2 protocol is now finalized. Site selection is ongoing, and we expect enrollment to begin in the second half of 2023. This trial is designed to serve as a critical piece of the European approval strategy, and we believe it also has the potential to further broaden the indication for IV ganaxolone in the U.S.
Now I’ll turn the call over to our CFO, Steven Pfanstiel, who will provide you with a financial update.
Steven Pfanstiel
Thanks, Joe, and good morning to everyone. Before diving into our financial results for the second quarter of 2022, I would like to provide a few highlights on our progress since the prior earnings call. In July, we announced that we have entered into a definitive agreement to sell our rare pediatric disease priority review voucher for $110 million.
The sale of the PRV, which is expected to close within the third quarter significantly strengthens Marinus’ financial position, and we believe extends our cash runway into the fourth quarter of 2023. Inclusive of the proceeds from the PRV, we have raised well over $200 million of funding over the last 18 months from non-dilutive sources, including our credit agreement with Oaktree, our European commercialization agreement with Orion and from our federal BARDA contract.
These funds have been critical to enabling us to execute on our pipeline, including our Phase III trials and reformulation efforts as well as the commercial launch of ZTALMY. Furthermore, under the Oaktree credit facility, we have the opportunity to further strengthen our cash position through a synthetic royalty monetization agreement related to U.S. sales of ganaxolone and have the option to draw an additional $25 million of funding under the facility subject to achievement of certain clinical and financial milestones.
As we look to the balance of 2022 and into 2023, we will focus and prioritize our investments and resources on our key programs, specifically our Phase III trials in RSE and PSC as well as the commercial launch of ZTALMY. These programs are critical to Marinus’ future and delivering shareholder value. We want to ensure they remain on track and are funded for success. As an example, we have invested in additional global sites and trial resources for both the Phase III RAISE and TrustTSC trials.
While we will continue to advance our other investments such as our earlier-stage pipeline programs, these will be a lower overall priority from a time line and funding perspective. As Christy discussed, we are excited about the launch of ZTALMY. As a reminder, we previously communicated our pricing and dosing expectations for ZTALMY. ZTALMY’s wholesale acquisition cost is 2,425 or 110-millimeter bottle.
Our sales force is focused on the pediatric population and initially, we expect the average patient to be approximately 4.5 years old and weigh 16 kilograms. This translates to an average annual wholesale acquisition cost of approximately 133,000 and expected gross net deductions, including mandatory government discounts are projected to be in the low 20%.
As a note, our age and weight estimates are based on our expectations within the pediatric population with any usage in an adult population representing upside to these projections. As the launch advances, we look forward to providing updates on our progress. Initially, we will be focused on patient enrollment metrics, including completed patient enrollment forms, new patients on therapy and total active patients on therapy.
We will also look to provide average dose-related metrics for the treated patient population, along with relevant prescriber and payer metrics. For the launch, we do not expect a significant stocking impact to occur as we are utilizing a single specialty pharmacy, and we will be coordinating closely with them. Additionally, once patient enrollment forms are complete, initial coverage determinations may take as long as 1 to 3 months to process.
I’ll now move to our financial results. For the second quarter of 2022, we recognized $1.8 million and $16 million in total revenue for the 3 and 6 months ended June 30, 2022, respectively, as compared to $1.9 million and $3.7 million in each of the same periods in the prior year. Revenues are recognized as a result of both our BARDA federal contract and our European collaboration with Orion Corporation.
The increase in 2022 revenue was driven by a, one-time revenue recognition of $12.7 million in the first quarter of 2022 related to the previously received upfront payment associated with the Orion collaboration. Excluding the Orion revenue, the company recognized $1.8 million and $3.3 million in BARDA federal contract revenue for the 3 and 6 months ended June 30, 2022, respectively, as compared to $1.9 million and $3.7 million for the same periods in the prior year.
Research and development expenses increased to $21.5 million and $39.5 million for the 3 and 6 months ended June 30, 2022, respectively, as compared to $18.6 million and $37.2 million for the same periods in the prior year. The change was due primarily to costs associated with increased R&D headcount and start-up of the Phase III TrustTSC trial.
General and administrative expenses increased to $17.1 million and $28.8 million for the 3 and 6 months ended June 30, 2022, respectively, as compared to $6.8 million and $17.2 million for the same period in the prior year. The primary drivers of the change were preparation for ZTALMY commercialization and additional support for scale-up of the company’s operations.
Additionally, during the 6 months ended June 30, 2022, a onetime cost of IP license fee of $1.2 million was recognized as expense in the first quarter of 2022 associated with the in-licensing of patents and patent applications from Ovid Therapeutics. The company reported net losses of $39.4 million and $58.8 million for the 3 and 6 months ended June 30, 2022, respectively, as compared to net losses of $23.8 million and $51 million for the same period in the prior year.
These totals include noncash stock-based compensation expense of $3.8 million and $7.2 million for the 3 and 6 months ended June 30, 2022, respectively, as compared to $3 million and $8 million for the same period in the prior year. Cash used in operating activities was $61.3 million for the 6 months ended June 30, 2022, as compared to cash used in operating activities of $39.1 million for the same period in the prior year.
As of June 30, 2022, we had cash and cash equivalents of $92.3 million. We believe this balance, when coupled with the expected net proceeds of the PRV sale will be sufficient to fund our operations into the fourth quarter of 2023 while maintaining the minimum cash balance required under our debt facility.
For the fiscal year 2022, we are providing updated guidance with BARDA revenues expected to be in the range of $7 million to $10 million, and our GAAP operating expense estimate inclusive of G&A and R&D expenses to be in the range of $150 million to $155 million, which includes approximately $15 million of noncash stock-based compensation.
These values represent a slight reduction to our GAAP operating expense estimate, which was previously projected to be between $152 million to $157 million, including approximately $17 million of noncash stock-based compensation.
Now I’ll turn the call back to Scott, who will provide concluding remarks.
Scott Braunstein
Thanks, Steve. We are very excited about the first commercial launch of ZTALMY and the results from our second-generation development program, continued advancement of our 2 ongoing Phase III trials and the strong foundation we’ve built. We are confident this launch is the first of many to come, and we’ll continue to prioritize these critical work streams to allow us to help more patients suffering from seizure disorders.
Operator, can you now open the call to questions.
Question-and-Answer Session
Operator
[Operator Instructions]. Our first question is from Andrew Tsai with Jefferies.
Andrew Tsai
Okay. Congrats on the progress, especially the launch recently. So maybe one on CDD first one on CDD first I thought I’d ask is how many patients have indeed been treated over the past few weeks or are a bulk of them still in the coverage form phase. I ask because just curious how we should be thinking about Q3 sales coming up?
Scott Braunstein
Well, it’s a great question, Andrew. As a reminder, everyone, we formally kicked off the launch about 2 weeks ago that allow physicians to fill out prior authorization forms and prescription forms. As we talked about, we’ve expected those prior authorization forms to take up to 3 months to get approval from insurance coverage.
I’ll let Christy talk a little bit more about that and turn to Steve and talk and let Steve talk a little bit about the numbers. But as a reminder to all, we’re really going to share with you a patient numbers on a quarterly basis starting next quarter in terms of new starts approvals. And we recognize that, that’s the most important metric that you guys will want to follow. But maybe, Christy, I’ll turn it over to you for a little more commentary and then Steve, to kind of round out what you’re going to be talking about in terms of future guidance.
Christy Shafer
We have, again, in the past 2 weeks, seen really, really great enthusiasm from a prescription and enrollment standpoint into ZTALMY One. We have every expectation that our payers will start to evaluate us very significantly right now. We have several published policies already. And again, in this early period, we believe that it will take between 1 and 3 months to get through that process. We’ll be fielding medical necessity requests simultaneously. But again, we think that we’ll be having patients on therapy in the near future.
Steven Pfanstiel
Andrew, this is Steve. Just to kind of specifically address the question. We’ll defer providing patient metrics and enrollment metrics until we get through the end of the quarter, I think it will be appropriate to do that on a quarterly cadence.
But we’re absolutely committed to providing kind of the right patient enrollment metrics in terms of kind of completed patient enrollment forms, new patients on therapy, total active patients on therapy, and we’ll provide other payer and associated metrics as well. So we look forward to doing that on the quarters on a routine basis.
Andrew Tsai
Fantastic and just a quick follow-up, shifting gears to RSE, it sounds like you had a great FDA discussion about the recent changes. So maybe remind us the latest and greatest, whether you are confident or not a bridging study as needed with the modified IV ganaxolone formulation so a little bit more clarity would be great?
Scott Braunstein
Sure I’m happy to, Andrew. So we — as we have done in the past, we have been very proactive with our interactions with the FDA. I mentioned on the call. We have great CMC team, a terrific addition to the leadership team on that side and our regulatory team. We’ve been incredibly transparent with the agency what we want to do, changing our buffer system, new manufacturing facility and do their communications with us.
They see that as a very reasonable approach. They commented specifically that by their guidelines, a new buffer system is in the guidelines for sNDAs and reference products. And at this point in time, we don’t see any reason why we need to do a bioequivalent study. And in fact, their green light about using this new product in the Phase III study, presuming those first batches — all hit our specs that, gives us a tremendous amount of confidence, right?
So it’s not as though we’re going to only be using our current product and then filing with a new product, they’ve given us the ability to use this new product in the current Phase III. So we have a lot of confidence in the manufacturing team, what this new buffer of data has looked like very early on. And just a reminder to everyone, the current buffer system is absolutely commercially viable. However, we don’t want to launch with a 1-year shelf life.
So the goal of the new buffer system is to really make this commercially much more interesting from a shelf life perspective, lack of refrigeration perspective — and again, ultimately, we see moving to IV bags over a 2 or 3-year period as the final steps in our development process. So I think the transparency that we have the agency we’re sharing with you, and we feel very confident that the manufacturing piece of our CMC filing will not be a gating factor for approval of the IV ganaxolone program.
Operator
The next question is from Charles Duncan with Cantor Fitzgerald.
Charles Duncan
Scott and team, congratulations on a great quarter of progress. Exciting to see first launch my first — my first question is for you or for Christy. I’m wondering if you could characterize that initial response by both the payer community as well as the prescriber community? Is it in line with what you had expected or is it beyond what you had expected in terms of the interest in ZTALMY?
Scott Braunstein
Well, let me just give a few opening comments, and then I’ll turn it over to Christy. I think we feel fantastic that going into any payer discussion, we’ve got a published Phase III study. We’ve got editorial from independent physicians supporting that. We have guidelines in the public domain that also are strongly supportive of the use of ganaxolone, ZTALMY.
And so I think going into all of these discussions, we’ve got a robust scientific package. And so we had — we certainly had high expectations, but let me turn it over to Christy and let her speak more specifically.
Christy Shafer
And it’s a great question for a commercial person to give some perspective too. But look, I think we all plan for a little bit of the work that supports some high expectations when the day actually comes.
So we had a high level of enthusiasm. I’d be remiss if I didn’t say that our excitement is pretty robust on the commercial side of the world right now, not only just with the enrollment that we’ve seen on day 1 through day 14, which is today, but also the payer community has been very supportive of our efforts.
We have several known published policies. And it just really is a testament to the 2 years’ worth of work that was done from all sides of the business, medical CMC and the commercial side. So we’re enthused at this point.
Charles Duncan
Very good and go ahead.
Steven Pfanstiel
I would just add, please, we put a lot of thought into the pricing work, and that was an organizational effort. And I think that’s a critical piece here, too. I think we priced the drug very fairly for the value proposition — that I think is critically important for these patients. And I think the payers are respecting that as well I’m sorry, go ahead why don’t you give us your next question?
Charles Duncan
Yes that seems to be the case. So just moving on to the RAISE program, and that is — or the IV program and the and specifically with regard to rates, I’m just wondering if you could give us a sense of when that interim could occur obviously, between now and second half of ’23. But when would you have about 82 patients through the required period to possibly trigger that interim result [indiscernible] 00:41:15?
Scott Braunstein
That’s a great way to ask the question, Charles. I think most importantly, the discussions with the FDA, gives us the flexibility that – to pulled the trigger on the interim. I think most importantly, we’ve had — we initiated the trial in the May timeframe. We knew it would take several weeks or sites to get up and running full year. We really feel like the vast majority of sites are now up and running full year.
We’ll have this protocol amendment coming now at currently. And so, we really feel like we’re going to be — we’re going to have the — as much of the winds to our back by the September timeframe as we can have in this study, we’ll be adding some additional sites in the third and fourth quarter to with Canada as really an important backup strategy.
And I think really by year-end, we will make a decision as an organization about where we stand in terms of monthly enrollment where the TSC study stands in terms of monthly enrollment, how those 2 studies overlap. And I think by early next year, we’ll make a corporate decision on what we want to do. But we’re not quite there yet, and we’re looking forward to the next few months of enrollment trends from both studies.
And when I think, again, having the flexibility in this case, creates a lot of opportunity for us to do what’s right for the clinical studies for our investors and for patients as well. Joe, anything you want to add on RAISE just overall commentary about the study?
Joseph Hulihan
Yes actually, I’ve been out to some sites recently and the response to the protocol amendment that we’ll be implementing is extremely positive. And there’s a lot of confidence on the part of sites that that’s going to help them boost enrollment. And so like Scott, I’m very confident that we’ll — by the end of this year, be able to see a boost in the enrollment and how the trends are going.
Operator
The next question is from Douglas Tsao with H.C. Wainwright.
Douglas Tsao
And just as you move into the launch and the remainder of the year, just raising the profile for ganaxolone, I’m just curious about presentations at medical meetings through the rest of the year and in particular, AES and what your plans are there?
Scott Braunstein
Joe talked about — Joe why don’t you talk about what’s happening on the scientific affairs side, with Alex’s team and your team, and then we’ll pass it over to Christy to give a commercial update.
Joseph Hulihan
Sure well, we’ll have a presence at — in Child Neurology Society Neurocritical care society there’s a conference in Salzburg on status epilepticus in September, where we’ll be presenting 2 posters. And then for AES, we’ve submitted 4 posters, 4 abstracts for presentation at AES. We’re going to submit an additional 2 late-breaking abstracts to the meeting.
And while we’re on the topic of AES, the American Epilepsy Society chose to publish on its website recently on its clinical corner on his clinical corner page, an article on ganaxolone in CDD, the lead author of the Lancet Neurology paper, we Pastananite discussed in the video the use of ZTALMY in CDD with 2 other epilepsy experts. And I’d also mention that international consensus guidelines on CDD treatment were published in June in Frontiers in neurology, we were glad to see that.
All of the respondents when asked whether ganaxolone should be offered for CDD responded, yes. So it was a unanimous opinion about using ganaxolone. And getting back AES, we expect to have a big presence there overall in addition to the publications.
Douglas Tsao
Just as an follow-up on.
Christy Shafer
Sorry, Doug.
Douglas Tsao
No, no, go ahead, Christy sorry.
Christy Shafer
Yes, I’ll just jump in quickly from a commercial perspective. As you can imagine, AES is kind of our coming out party for ZTALMY this year so that we’re going to have a pretty robust commercial presence that will be including our first commercial conference booth. We will also have a clinical data review by way of a product theater that will be provided by a top KOL. And then as you could imagine, really significant KOL and physician engagement from the commercial team.
Douglas Tsao
Okay great. And then just Christy, I’m just curious, what’s the sort of — if there is the most commonly asked questions about ZTALMY and the early engagements, — is there generally sort of accepted awareness of the product? And I’m just curious about what people are focusing on from clinicians?
Christy Shafer
That’s a great question. I think is twofold at this point. In this community of physicians and with families that are living with CDD, we kind of are focusing on a push-and-pull strategy. We know that this is going to be 50% guided by the physician and 50% guided by the families that are treating or that are caring for children with CDD. And so when you talk about the families, their major concern is access.
Right now, these families are dealing with multiple medications for these kids, and it can be quite an arduous process to get their kids the medicines that they need and deserve. So that’s why we built a very robust the ZTALMY One program to make sure that it is seamless access and that anyone that is appropriate for ZTALMY gets the medication.
Now if you’re talking about the physician presence, I think they really want to understand our mechanism of action. They want to see how this could be different than how they’ve treated patients previously and potentially how this is an additive effect to what they’re already on. So those are the 2 kind of push and pull, major questions and things that we address in the field on a daily basis.
Douglas Tsao
Okay great. And just, Scott, maybe a quick one on the IV formulation in terms of the 2-year shelf life do you think — can you just walk us through how that would be incorporated into the NDA? Would that data, the stability — 2 years stability data to be ready at time of filing or would that be added later on?
Scott Braunstein
It’s a great question, Doug. Well, a few different things. One, typically, we would have — we want to have stability data at least a year ahead of the filing so that when you file the NDA, you have 1-year stability data on hand. And that’s the big reason that we’re going to make sure that we have a manufacturing batch to begin in the fourth quarter of this year, right? So that would give us 1 year data by the end of in which case.
We’ve also run — we have some accelerated models that we’ve used that we’ve already tested with the new formulation, which are showing very strong results. And we will be discussing with the agency accelerated model. But remember, from the time of filing, we’ll have at least 6 more months of stability data by the time of the NDA vision. And this is a back and forth with the agency and one that we’re not too worried about.
And so over the next 18 months, we’ll be having those discussions with the agency as an example, will they take our accelerated filing or accelerated stability data as a proxy for 2-year shelf life, et cetera. So a few different strategies we can occur, having the actual data, again, that the time of approval, I would expect to have a minimum of 18 months of shelf life that would be quickly amended or we can use this accelerated approach, which would give us 2 years plus.
I mean right now, the solubility curves are really logarithmically different for the new buffer. And so we’ve got a pretty convincing early data package and don’t see it at all as a major concern for us by the time of approval.
Operator
And the next question is from Joseph Thome with Cowen.
Joseph Thome
Maybe the first one on RAISE just in terms of between now and when you can make that decision to take the interim look for the study, I guess what’s going to go into that decision point? Is it really just a bandwidth on readout between TSC and RAISE or are you going to be able to see some unblinded data or look at kind of the enrollment criteria of the patients that are coming on the study to help make that decision for you?
Scott Braunstein
I would say, I think it’s — right now, it’s going to be driven by a corporate decision. Joe can talk about it, but we certainly have a DSMB that’s in place that we’ll be reviewing our data sets. But of course, we’ll be blinded to that. And so, I don’t see any we can’t really allow the blind to be per se really affect our decision. And of course, I think — so this is, in my mind, really a corporate decision based on the monthly enrollment trends, the time to the conclusion of the study, where we are with TSC.
And we’ll look at all those factors to make the decision. But again, I think by us asking the agency well in advance, can we do this? This gives us a lot of flexibility. And certainly, we feel very good that if we choose to do an interim, we have an 80% power to hit what we think is the key secondary endpoint around date mechanical ventilation, which my view going into the launch Joe, and I haven’t talked about this was that this would be — this study is so incredibly important for the data to drive reimbursement in the hospital and we all know that’s a difficult environment.
What’s really changed from the time we started this program is our commitment to now run RAISE II. And so, we will now have 2 double-blind placebo-controlled trial over the early years of this launch, a bigger data set. And that’s also, in my mind, it influence on our decision about how big RAISE needs to be and what type of data we need to generate.
So I can’t say we’re not going to make a decision, but we’re thinking about all of those things. And certainly, I don’t know, Joe, if there’s anything else you want to comment on from the clinical side. But again, it’s hard to imagine we’re going to see a lot to push us one way from the data set itself.
Joseph Hulihan
Yes, no I mean it takes some time to do the interim. It’s an independent statistician that does it. The data has all got to be cleaned and enrollment in studies typically accelerates as they go along. And so it could be that by the time we got the interim done, there’ll be substantially more enrollment. And in that case, we would just likely wait for the final data. But as Scott said, it’s really in a consideration about the rate of enrollment.
Joseph Thome
Perfect. And then maybe a follow-up just on the novel formulation, how much higher do you think you can push the dose here? And maybe what are you looking for specifically to go forward into that LG study? Are you going to look at multiple doses or do you think you’re going to be able to now run down to take forward?
Joseph Hulihan
Yes, I can take that one. So there are a lot of decision points along the way. We’ve got a lot of choices, reformulation candidates and the prodrug. We do hope that and we’ve seen early promising results that we can increase the overall exposure and blunt the Cmax and keep going. Right now, the highest we go on dosing is a single dose is 600 milligrams, and we hope to be able to go over that individualized dosing, particularly in Runacasteaul and other epileptic encephalopathies.
Most patients tolerate the drug very well and there could be the potential to go higher. Our current label caps daily dosing at 1,800 milligrams per day — so we’d hope that the kinetics and efficacy and tolerability would allow us to go higher if patients need it. And we’re still waiting to see some of the human PK data. For example, we’re completing the single ascending dose study with the first reformulation candidate.
We’d want to see multiple ascending dose studies with repeat dosing and then decide what step to take next, a single arm or 2-arm Phase IIb against placebo, even potentially go straight to Phase III, but we don’t have the data yet to inform that decision. And it’s going to be a few weeks, months until we really know what path we want to take for a clinical development in Phase II and III.
Scott Braunstein
And Joe, the only thing I’d add to that from Joe Hulihan is that our goal when we started this program was to have a formulation and/or a prodrug that could deliver steady-state blood levels of at least 10 nanograms per ml and certainly critical to be able to go above that. And I think our back of the envelope has been great to test 150 nanograms per mL as a steady-state blood level and correlate that with these reductions and potentially 200 nanograms per ml.
And poorly, that would see the reductions in tolerability. And I think we believe and what we’ve seen and what our modeling has showed us that we can achieve that with this formulation. — quite reasonably. So we want to replicate that. We feel confident about it. And I think we have some important decisions to make around dosing and a modified release formulation. Certainly, the data to me is encouraging that we may be able to create a daily formulation with this a once-a-day formulation.
Right now, I think twice a day is well within our graph. And certainly now, we’re really getting to think a little bit harder about where do we want feedback to land? How much can we bring in SMAs in terms of tolerability. And I think now truly a focus on trough levels as well to really maintaining trough levels where we think they should be. So this is — in my mind, this is just incredibly exciting to that the data we generated to-date in line it’s very nicely with what we like to perform out of the program.
Now I remind everyone, we believe the Marigold data that blood levels of 150 nanograms are going to be drive efficacy. That was a strong signal in Marigold. Certainly, in our IV program, blood levels drive efficacy quite clearly between 4 and 5 genanograms. But we haven’t proven that, but we certainly believe there’s a very strong possibility and I think everyone can imagine that this is a very well-tolerated drug in incrementally higher blood plasma concentrations at a steady state, has a very high probability of driving higher efficacy. So that’s the full disclosure, but we feel pretty good about the success of where we stand today.
Operator
[Operator Instructions]. Our next question is from Joon Lee with Truist Securities.
Joon Lee
Does the use of CDD ICD-10 code records another diagnosis or is this based on a clinical suspicion — and has the payers required comedic diagnosis of CDD for approval of the drug?
Scott Braunstein
Christy, do you want to take the second and you welcome to take the first 2, if you want?
Christy Shafer
Yes, I’ll address the second first. I mentioned earlier that we have seen some early published policies and each of them is directly in line at a very, very minimum with our label. So we set some expectations that a good payer policy would be in line with our label that is inclusive of patients 2 years and older — confirmation of a CDD diagnosis that is inclusive of a genetic test and failure of at least 2 AEDs.
We have certainly seen published policy that is in line with that, and we’ve seen policy that is less restrictive of that, including that of a genetic test. So currently, right now, we have a few — a handful of published policies. And again, we have every determination that we think that all published policies may be going forward will have a genetic test component to it. However, we’ve seen a little bit of both knowing that it is highly used from a genetic testing component across the United States. It is, again, very likely that, that would be included.
Scott Braunstein
And Joon, just to be clear, just to back up for everyone on the call, as a good reminder, we’re fortunate to have an ICD-10 in place. That was really the work of our advocacy groups where LouLou Foundation and ISDR made a strong push for an ICD-10 code for CDKL5. That’s been in place for a little bit more than 18 months. And so what’s been so interesting to us is before Marinus was out in the field with their MSL our MSL team first and now our commercial team.
We are seeing physicians use that ICD-10 code increasing numbers. And so — and we would expect that to continue to increase, and we certainly will provide additional education in that regard. But us being able to track that ICD 10 code has been invaluable for our strategic planning about where we want to go, how we align with the ICD-10 code, our centers of excellence and key epilepsy centers that we would like to make sure that the commercial team is meeting with.
And finally, if we see ICD-10 codes from places that are not on our list, we have somewhere else to really evaluate. So it’s really a nice tool in our toolbox that will complement the data sets that we will use for the commercial team. And I think it’s a little bit more of a — it’s a relatively simple tool to add to the reimbursement for. So — and of course, what we’ve also seen is that ICD-10 code is identifying patients across all spectrums.
And it has been really interesting to us that right now, about 25% of the patients identified via the ICD-10 codes are adults or young adults. And that obviously will have some important implications for the way we’re thinking about the business. And ultimately, what drives the average weight around our revenue.
Joon Lee
Scott, a quick follow-up, what are some of the top differentials that are maybe being coded alongside that CDD ICD-10 code that might give you some hint as to where you might want to go next?
Scott Braunstein
I think the most logical place is that we would start to look at data sets for other anti-epileptics that are used in refractory patients as a tool for the commercial team. But quite honestly, June, I mean, I think the way — and Christy’s on the call, I’ll let her jump in to me. The team is doing fantastic work today. We’re going to start our KOL speaker program shortly. I think we’re going to get a great boost. Joe told you that we already have AES helping us talk about the value proposition of ganaxolone.
So I think that 3 to 6 months, we’re going to be incredibly busy with what the specific targets that we think are vital to the marketplace. And we’ve said this all along. The only way we can do this with a small sales organization successfully is that we’ve got these great centers of excellence that we have really a meaningful number of refractory epilepsy centers, but I think the way we’re thinking about our continued success in ’23 is by maximizing the data sets available to us to make sure that we’re going to the right physicians. Kristy, anything you want to add?
Christy Shafer
Just a small thing here. And Joon, it’s a great conversation one that we have quite regularly here on the commercial team. But in the past few weeks, again we are educating on the use of the code. It guides us in our conversations of where to go today. But additionally, because we’ve had such unique interest across not only our targeted accounts, but also non-targeted accounts, we’re learning other codes that are being used that are informing our data team to help some continued mapping to understand and inform our deployment strategy even further. So again, we have a very distinct education plan on the use of the ICD-10. But then again, we’re also learning other codes that are being used that are guiding our mapping even further.
Operator
The next question is from Jay Olson with Oppenheimer.
Jay Olson
Congrats on all the progress. Our question is related to RSE can you talk about any physician feedback you received on the Phase II data that was published in Epilepsia? And have you seen any impact on Phase III RAISE enrollment rates as a result of the increased awareness from publishing the Phase II data?
Scott Braunstein
Yes I mean, the feedback on the Phase II study has always been positive. And again, as I said, I’ve been out visiting sites, and we do get into discussing the data. And in the context of the amendment that’s coming up for the RAISE study, because with these changes in the protocol, it really reflects the population in the Phase II study much better. And so in the discussions about the amendment I do bring that up.
And the alignment with that population because of the features of the amendment, we do get positive feedback about enrollment. A lot of the patients in the RAISE study, as we mentioned, were intubated either when they came in were intubated when they came in to the Phase II study, I mean, and 3 got incubated along the way. And we have follow-up for all but one patient and every patient was extabated.
And so that’s — to me, that’s an incredibly positive finding, and we haven’t quite framed it that way. And so in discussions moving forward, in the few so far, where I brought up the data in that way the response has been incredibly positive. And so — and this amendment, again, will mirror the population in the Phase II study, and we see that as a great recipe for success.
Operator
The next question is from Marc Goodman with SVB.
Marc Goodman
Just curious, Europe, you mentioned it a little bit, but have you gotten the response from Europe? Are we all set here does it look like it’s going to be pretty clean and you’ll be able to get approval?
Scott Braunstein
Yes, so Marc, we’re working on that — so we’ll formally respond to the list of 120-day questions by the end of the third quarter or early in the fourth quarter. We had — it was a pretty big risk of additional studies almost — actually all were preclinical in terms of additional requirements. We’ve talked about it, the European joined some additional work with our syringes. That was the biggest impact.
And I think we — Joe actually has done a great job going back and looking at the data. As you well know, Marc, that 50% response rate is incrementally more important in Europeans. And we have some really interesting data that we are going to get to the Europeans about the statistical impact on the maintenance phase in the Marigold study. So I think we have done everything we can do to answer the questions that the Europeans are seeking and we’re enthusiastic about the outcome early next year.
Marc Goodman
And you still having discussions with some other regions to license out other regions?
Scott Braunstein
Yes, we expect to have another geography, a strategic partner in place by year-end. And I think we would certainly expect to have another significant region in place next year as well. This is a tough one for us, Marc, I mean, in a good way because we — there’s huge demand, but because these indications are more orphan like, we really are forced to have deals with the regional players, and that just creates a lot of work for our organization.
We love Orion as a strategic partner in Europe, but it’s a lot of work to teach them what we know — and certainly, they’re bringing a lot of skills to the table. But we are now the authorities on CDKL5 efficiency disorder. And I think that will be the same, whether it’s Japan or China. And I think we’re just trying to do this in a, measured fashion that bring in some meaningful economics to the company that will support our R&D efforts and our commercial efforts in the short term but doesn’t overwhelm the team.
And I feel pretty confident that China and Japan are going to be important markets for this drug. And certainly, there’s real interesting demand in mine region and in other regions and — so we’re going to knock them off one at a time, but we’re trying to start with the most meaningful from a patient number standpoint, one that we can really handle organizationally and that creates some value and some economic payments that allow us to continue to do all the things we’re doing. So yes, we feel very — about those discussions.
Marc Goodman
Also, Scott, in the past, you’ve talked about potentially doing a royalty deal. I didn’t know if that was even something still considered. Is it even necessary anymore?
Steven Pfanstiel
Yes, this is Steve. I’ll answer that one. Yes, I mean, look, the PRV was critical. We’re really excited to get that contract in place. And frankly, with it being at the high end of the range, that gives us the flexibility to look at a number of options. We’re really reassessing the royalty options, still very much in play. But I think with the PRV sale, we feel like we’ve bought some time and flexibility there.
Operator
The next question is from Brian Skorney with Baird.
Brian Skorney
I guess my sort of a combined one for Christy and Steve. I was hoping if you can maybe walk us through conversion from a prescription to receipt ZTALMY and the actual booking of revenue here. Is there inventory held at the specialty pharmacy that’s recognized as revenue or is it effectively just-in-time delivery. And will the reported revenue you get be pure demand sales. And based on the payer mix, what do you see as sort of the hurdle as far as the average co-pays going? How much are you able to offset that through ZTALMY One.
Steven Pfanstiel
Yes, Brian, so I’ll start with a little bit of kind of the revenue recognition piece, and then I’ll allow Christy to chime in as well here. We will sell to the specialty pharm partner who will then distribute to the patient. So we’d expect to recognize that when we sell it to the specialty pharma partner. Obviously, we’ll have metrics to be able to estimate gross-to-nets and account for those appropriately in our gross to net deductions.
I would not expect, as we mentioned, any significant stocking impact. We’re going to be coordinating very closely with them. So there’s no need for them to order kind of excess inventory or have any of that on hand. It will be not quite just in time, but really not far from that. So I think we’ll be able to really manage very tightly the expectations and understanding of the gross to net deductions and inventory very closely. Maybe I’ll turn it over to Christy now to talk through that conversion process.
Christy Shafer
For the conversion of the naive patients from the prescription and enrollment into ZTALMY One, it really sparks a very clean line to fulfillment, which is we start a benefit investigation that’s simultaneously once in enrolled in ZTALMY One. We’ll necessitate the need for what the out-of-pocket would be for patients. So after the benefits investigation, we assume that all will need a prior authorization.
Once that BI is done, the prior auth will then be initiated through Orsini. Again, simultaneously that need for any patient services support for commercial patients for co-pay. And again, for any patients who have limited insurance or no insurance that process will also start. So once the PA is through, we determined that those will take in this early period anywhere between 1 and 3 months, just considering we are new drugs to market.
And then when we’re talking about what we think that average co-pay will be — you’ve seen one plan, you’ve seen one plan for our Medicaid patients. We think that it will be a minimal out-of-pocket. And for our commercial patients, we think that, again, that will be a minimal out-of-pocket Again, we will be buying down to 0 for any patients who are available for that need. So again, a pretty clear line moving with one specialty pharmacy partner right now where patient services are under our .
Brian Skorney
Right thanks that’s very helpful.
Operator
The next question is from Michael Higgins with Ladenburg Thalmann.
Michael Higgins
Behave here and try to limit my question to just one topic, and congrats again on the progress with ZTALMY, the amendments and are you manufacturing. You have a lot going on. With ZTALMY having a launch underway here, if you could remind us what your percent of reach is that you’re looking at today?
You’ve noted a focus in 22 states, the states where there are centers of excellence. How is the evolving — how is that evolving with the new ICD information that you’ve noted? And what are your plans and the timing for expanding that outside of what your reach is today?
Christy Shafer
Michael, I’m happy to take that. Currently, today, we estimate, again, 2 weeks into launch that we’ll probably have about an 80% reach with that. We certainly — with the early data in the ICD-10 that’s being increasingly used that has confirmed that, again, to my earlier point that other codes in certain situations are being used, I think we’ll inform that. I personally believe that where we have our reps today, I don’t think that we’ll need to have any increased reach at that point.
We are reaching our top accounts. Again, we have about 300 centers that we’re targeting today, both from a CDD Center of Excellence, national epilepsy centers, but also down to smaller community accounts, again, that we are being able to target very easily with the sales force that we have.
Michael Higgins
Appreciate that.
Scott Braunstein
You can also say, I mean, the world is different today, right? We don’t need a salesperson to help a physician and a family find this drug. We have had that happen already. So it’s not clear that we need to actually be nice, but it’s not critical for the success or the ability to capture that last 20% by having the sales force call on that physician, right?
And the team has done an amazing job to make those materials available. They’re very straightforward. We’ve got great data. I mean I was in practice for a lot of years and didn’t see a sales rep that wrote prescriptions. And I think we’re already seeing that today, which is very exciting and gives us confidence that we are right-sized for this launch
Operator
The next question is from Jason Butler with JMP Securities.
Jason Butler
Just one on the RAISE protocol amendment obviously, as you said, the IV inclusion of IV anesthesia, you had those patients in the Phase II, so we have some level of confidence there. But can you just speak to your level of confidence around the change associated with prior failed agents?
Joseph Hulihan
Sure yes well, I think for a lot of reasons, we’re confident about that, too. Again, that parallels patients in the Phase II study as well. And we didn’t see a difference in patients who have taken fewer versus more IV AEDs previously. The other piece of that is, while it’s going to help enrollment because of a couple of reasons, patients in the ICU, they may not get a dose of benzodiazepine as is required in the current protocol.
They may progress right to a second-line IV AD because they’ve gotten so much propofol, midazolam or whatever for ventilator management. That’s one. And the other is more centers are progressing straight to IV anesthesia earlier in the treatment sequence after the first failed second-line IV AD. So by just requiring 2 agents either benzodiazepine and 1 second line or 2 second-line IV AEDs will be able to capture more patients.
The other piece of it is the current protocol specifies that IV anesthesia mustn’t be a contraindication. Now because we’re going earlier in the treatment sequence and want to treat appropriate patients. It’s now and inclusion that were not for intervention with the study drug, IV anesthesia needs to be the next intervention that they would consider or likely the next intervention that they would consider.
That does a couple of things besides making sure we’re treating patients with appropriate severity for investigation and agent, it also strengthens — it also increases the chance that IV anesthesia would be the very next treatment considerably. And since the second co-primary endpoint depends on that — we think this change actually increases the sensitivity of the study rather than decreases it.
And so, we’re — with all these things together, bolstering enrollment and some of the changes, strengthening the study further, I’m actually optimistic about that in terms of the effect on the study.
Scott Braunstein
And Joe, I think that was great. And Jason, I’ll just add, we powered the study, and we’ve talked publicly about a 40% placebo number as our powering assumptions. We’ve also talked that we believe that this placebo rate is much more likely to be closer to 20% around the progression to general anesthesia. And to Joe’s point, we really believe that these changes to the protocol have the ability to drive that number even lower because some of these patients are already going to be on mechanical ventilation.
So if you turn down their aesthetic agents, they go into status, they either get drug or placebo. If they get placebo when they’re still in status, it’s going to be a very easy decision to crank up their anesthesia, right? So we feel very good about this only having a potential positive effect for the study and a lowering of placebo effect overall.
That was going to be our last question. I just want to thank everyone for being on the call. I know we run late. We’ve got a lot going on, and we were happy to take questions around the launch. We’re super excited about the new formulation and certainly, the progress that we’re making on our Phase III trial. So thanks, everyone, for dialing in, and have a good day. Operator, back to you.
Operator
Thank you, ladies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect.
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