Zogenix Inc (ZGNX) Q3 2020 Earnings Call Transcript

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Zogenix Inc (NASDAQ:ZGNX)
Q3 2020 Earnings Call
Nov 9, 2020, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to the Zogenix Third Quarter Financial Results 2020 Conference Call. [Operator Instructions]

It is now my pleasure to introduce your host, Mr. Brian Ritchie of LifeSci Advisors. Please go ahead, sir.

Brian RitchieManaging Director

Thank you, operator, and thank you, all, for joining us this afternoon.

With me on today’s call are Chief Executive Officer, Dr. Stephen Farr; Chief Commercial Officer, Ashish Sagrolikar; and Chief Financial Officer, Michael Smith.

This afternoon, Zogenix issued a news release providing a business update and announcing financial results for the third quarter ended September 30, 2020.

Please note that certain information discussed on the call today is covered under the Safe Harbor provision of the Private Securities Litigation Reform Act. We caution listeners that during this call, Zogenix management will be making forward-looking statements. Actual results could differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with the Company’s business. These forward-looking statements are qualified by the cautionary statements contained in Zogenix’s press release issued today and the Company’s SEC filings, including the Annual Report on Form 10-K and subsequent filings. This conference call also contains time-sensitive information that is accurate only as of the date of this live broadcast, November 9, 2020. Zogenix undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call.

Now I’d like to turn the call over to Steve.

Stephen J. FarrPresident and Chief Executive Officer

Thank you, Brian, and good afternoon to revenue joining us today.

I’m very pleased to share key updates on what has been a truly exciting quarter for Zogenix as we continue our transition to a global commercial space rare disease company.

As we announced at our last quarterly call, the launch of Fintepla for the treatment of seizures associated with Dravet syndrome in the United States began on July 27, and in the short term since then, our experienced commercial team has made impressive progress making Fintepla available to the US [Indecipherable]. The significant enthusiasm and feedback received from physicians, caregivers and payors during the first two months of the US launch has increased our excitement about the future success of Fintepla as a new treatment option for Dravet syndrome patients and their families. As Ashish will detail today, we have seen strong physician adoption and excellent execution of operations within our Fintepla REMS program and Zogenix Central services, allowing the seamless enrollment, transitioning and initiation of patients to therapy, including many who are new to Fintepla.

In addition, we were pleased to receive a positive opinion from the CHMP in Europe on October 16, recommending approval of our MAA for Fintepla in Dravet syndrome. Accordingly, we continue to ramp up our preparations for a potential European launch of Fintepla in the first quarter of next year.

I’m now very happy to turn the call to over to Ashish Sagrolikar for further color and details on how our launch is progressing in United States and for an update on launch preparation in Europe.

Ashish, over to you.

Ashish SagrolikarExecutive Vice President and Chief Commercial Officer

Thank you, Steve.

As Steve mentioned, we are very excited with the success and momentum we are seeing in the Fintepla launch, reinforcing its potential to provide transformational and durable seizure reduction or more Dravet patient syndrome — Dravet syndrome patients. This is particularly noteworthy given the challenges and the disruptions to everyday life that the COVID-19 pandemic continues to cause. Despite the significantly altered environment, our advanced preparations have enabled our teams to gain excellent traction and deliver solid initial results.

All aspects of our US commercial and medical operations are running as expected. As a reminder, we have 20 key account managers and 10 [Indecipherable] in the field who are driving patient and physician education both virtually and in person. Our comprehensive patient support platform, Zogenix Central, is doing an outstanding job of providing support to patients and families who are either starting Fintepla therapy for the first time or transitioning out of our clinical trials or expanded access program.

While we are not setting and reporting standard metrics yet in these early days of the launch, I would like to provide some specific color on the momentum we are experiencing in the initial launch period. As of September 30, more than 360 clinicians had enrolled in the Fintepla REMS program and completed the certification process. This is a necessary first step in patients’ ability to access Fintepla as only REMS certified clinicians can prescribe the therapy.

During the third quarter, approximately 300 patients were prescribed Fintepla and enrolled in the REMS program to become eligible to receive therapy. Over 50% of these patients were new to Fintepla while the others transferred from our clinical trials and expanded access program. We are on track to transition the remaining clinical trial and expanded access program patients to commercial product in next three to six months. Our experience to-date indicate that it takes up to four to six weeks from the time of patient enrollment in the REMS program to the dispensing of a covered Fintepla prescription. By the end of September, we had approximately half of the REMS-enrolled patients on the reimbursement — on the reimbursed-commercial therapy, a vast majority of them started in September.

With respect to reimbursement, we are highly encouraged by the positive responses to Fintepla from commercial and government payors. To date, we have met with insurance plans representing more than 80% of covered lives in both commercial and government sectors. While it typically takes six to nine months to fully establish commercial coverage policies post-approval, we have been able to gain strong traction and have obtained early positive coverage determinations from both commercial and government payor segments. We believe this reflects Fintepla’s unique efficacy profile as well as research indicating that seizures for more than 80% of Dravet patients are not controlled on existing therapies. This has resulted in receiving positive coverage to label policy determinations from payors.

Physicians and caregivers have also noted the seamlessness and the ease of our on-boarding process. Once a certified physician prescribes Fintepla, a patient is enrolled into the REMS program and their caregivers are put in contact with the Zogenix Central for disease and product information and services, including reimbursement and echocardiogram scheduling support. Despite the COVID-19 pandemic, approximately 90% of the patients — patients enrolled in the REMS program as of September 30 had completed their required baseline echocardiograms. Thus, the scheduling and completion of echocardiograms has not expected our ability to onboard patients to the Fintepla therapy. As I stated earlier, it takes up to four to six weeks from the initial contact to the dispensing of commercial product. We have seen this timing of onboarding vary depending on the patients’ location and their specific COVID-19 environment. Once the impact of COVID-19 subsides, we project that this four to six weeks’ timeline will be released.

Now let’s discuss our progress in Europe. Following the news of positive opinion from CHMP on October 16, for Dravet patients aged two years and older, we expect a final decision on our Marketing Authorization Application by the year-end. If authorized, Fintepla will be approved for use in all European Union member countries as well as United Kingdom, Iceland, Liechtenstein and Norway. When approved by the EMA, we would then begin the process of securing reimbursement for Fintepla in major EU countries. We intend to launch Fintepla first in Germany shortly after the approval to leverage automatic first-year reimbursement process, and in parallel, work to finalize a negotiated price.

To support this planned launch, we have established our office in Germany and have the leadership, medical and sales teams already in place. Our key account managers are being trained and will be ready to launch Fintepla if approved in the Q1 of next year. We have a robust EUwide distribution program that we will implement the regulatory requirements we believe will be included in our label to ensure a safe and appropriate use of Fintepla. Wherever permitted ahead of approval, specifically in the United Kingdom and Denmark, we have begun discussions with the relevant healthcare authorities to understand their needs and prepare relevant submissions to secure reimbursement.

In conclusion, this is a busy and a very exciting time for the entire Zogenix team. We are extremely pleased with the early launch results and significant progress achieved in the US as well as the important advances made toward the potential approval and launch in Europe next year. We look forward to building on this initial, strong commercial foundation with Fintepla.

Now I’ll turn it back to Steve. Steve?

Stephen J. FarrPresident and Chief Executive Officer

Thank you, Ashish.

As Ashish described, we are thrilled with the launch of Fintepla in the United States and are preparing to begin a series of country launches in Europe next year if we receive approval of the MAA by the end of this year.

Additionally, with respect to our development program for Japan, we announced positive top line results from our third Phase III study of Fintepla in Dravet syndrome in September. The results corroborated the highly statistically significant convulsive seizure reductions seen in various [Phonetic] multinational Phase III studies of Fintepla in Dravet. And this positive study will support a JNDA submission in Japan planned in the third quarter of 2021.

As a reminder, commercialization and distribution of Fintepla in Japan is covered by an exclusive distribution agreement with Nippon Shinyaku. Under that agreement signed in March 2019, Zogenix will supply product to Nippon Shinyaku but retain responsibility for completing the clinical development programs and regulatory submissions for Fintepla in Dravet syndrome and Lennox-Gastaut syndrome or LGS.

Turning to LGS. We conducted a Type C meeting with the FDA in September, and are actively working on a supplemental NDA or sNDA for Fintepla in LGS for submission in the second quarter of 2021. We anticipate submitting for approval in LGS in Europe in the third quarter of next year.

Before I move on from Fintepla, I would like to note the significant presence we will have once again at the annual American Epilepsy Society, or AES, meeting which will take place virtually from December 4 through December 8. Results from several studies of Fintepla will be highlighted in nine separate presentations, including analyses from our Phase III study in LGS, a three-year update of long-term safety and efficacy in Dravet syndrome and real-world experience from the US expanded access program in Dravet syndrome, among others.

In addition, at AES, we are pleased that Dr. Orrin Devinsky and colleagues will present results from an investigator-initiated study of the use of fenfluramine to treat convulsive seizures in CDKL5 deficiency disorder or CDD. Encouraging preliminary results from this study were recently presented by Dr. Devinsky at the CDKL5 Forum 2020 Meeting. We are also committed to exploring Fintepla’s effectiveness in other genetic epileptic [Indecipherable] disease. I look forward to initiating a Phase II basket study once the [Indecipherable] environment permits us to do so.

Now I’d like to switch to MT1621, our late-stage investigational therapy being developed through our subsidiary, Modis Therapeutics, for the treatment of a mitochondrial DNA depletion disorder called thymidine kinase 2 deficiency or TK2d. MT1621 is an oral fixed-dose combination treatment that serves as a substrate enhancement therapy to restore [Indecipherable] mitochondrial DNA function. The goal of this boosting therapy is to treat the progressive and often fatal deficits in motor, respiratory and feeding functions that characterize this disease, for which no approved treatments currently exist.

Following meetings with health authorities in the second quarter, we believe we have a clear path with advancing our development program for MT1621. This includes the continuation of Study 102, a prospective safety and efficacy study of MT1621 in 47 TK2d patients, 35 of whom transferred from the earlier RETRO study or Study 101.

Separately, in response to an FDA request, we will initiate a [Indecipherable] study to gather other data to support the survival analysis in TK2d patients who may have been treated with chemical-grade deoxycytidine and deoxythymidine outside of the Modis studies. We also anticipate initiating a Phase I [Indecipherable] study in early 2021. We continue to expect that all data for a potential NDA submission will be available by the end of 2021, with a planned filing in the first half of 2022. We intend to see European approval soon after the US submission.

With that, let me hand over now to Mike for his financial review. Mike?

Michael P. SmithExecutive Vice President, Chief Financial Officer, Treasurer and Secretary

Thanks, Steve, and good afternoon, everyone.

Today, we issued a press release announcing our business and financial results for the third quarter ended September 30, 2020, which I’ll now review. We recognized $2.9 million in revenue during the third quarter of 2020. This was a result of $1.5 million in product sales of Fintepla in the US and $1.4 million in revenue related to our exclusive distribution and collaboration with Nippon Shinyaku for Fintepla in Dravet syndrome and LGS in Japan. We recognized $0.6 million in revenue for the corresponding period in the prior year.

R&D expenses for the third quarter were $34.4 million, an increase of approximately $6 million from $28.4 million in the corresponding period of 2019, and this increase is attributable to the modest increase in spending in our Phase III LGS study 1601, development expenses related to MT1621 and an increase in personnel and R&D operational costs, all partially offset by a decrease in spending on our Dravet syndrome program.

SG&A expenses for the third quarter ended September 30, 2020, totaled $24.6 million compared with $15.8 million for the third quarter of 2019, and the increase of approximately $8.8 million is primarily driven by the continued investment related to the launch of Fintepla in the US which began in the third quarter and for the preparations related to prospectively launching in Europe during the first quarter of 2021.

Net loss for the third quarter ended September 30, 2020, was $60.1 million or $1.08 per share. This compares to a net loss of $290.5 million or $6.75 per share in the third quarter ended September 30, 2019. And we ended the third quarter with a strong balance sheet with cash and cash equivalents and marketable securities of $525.2 million. As you know, in late September, we closed on an offering of 2.75% convertible senior notes due in 2027 for the aggregate net proceeds of approximately $222.7 million. This financing allows us to robustly support and invest in the launch of Fintepla in Dravet syndrome in the US as well as the planned launch in that indication in EU as well as planned launches in LGS in both the US and EU for Fintepla and MT1621 for TK2d.

With that, I will now turn the call over to the operator to start our Q&A session. Operator, will you please open the line for questions?

Questions and Answers:

Operator

[Operator Instructions] The first question is from Paul and Stifel. Please go ahead.

AlexStifel — Analyst

Hey, this is Alex on for Paul. Thanks for taking the question and congrats on the quarter. First question on sort of the Fintepla launch so far. Of that 50% of the 300 patients that are enrolled in the REMS that are on the drug, could you give us a sense of the proportion of those that are from the [Technical Issues] access program? And I have another follow-up. Thanks.

Stephen J. FarrPresident and Chief Executive Officer

Hi Alex, this is Steve. If I heard your question correctly, you were asking a question about the [Indecipherable] patients doing the clinical trial [Indecipherable] the expanded access program.

AlexStifel — Analyst

Yeah.

Stephen J. FarrPresident and Chief Executive Officer

Yeah. I would say, up until — as of September 30, we were able to move over the vast majority of expanded access patients first and then the clinical trial patients will follow. The reason for that is that patients who are in clinical trials obviously need to have an end of study visit in order to be compliant with GCP practices at the various sites, and that’s one of the reasons why it takes a little while longer to move the clinical trial patients over. As Ashish said, we certainly expect to have all of them over within the next three to six months.

AlexStifel — Analyst

So, are the — just to clarify — the majority of the patients actually on commercial drug from the EAP at this point or not?

Stephen J. FarrPresident and Chief Executive Officer

Ashish, would you like to address that?

Ashish SagrolikarExecutive Vice President and Chief Commercial Officer

Yeah, definitely. So I’m expecting — what we said is out of those 300, half of them were dupe [Phonetic] and half of them are on the commercial product. So, I wouldn’t say it’s majority, but at least half of them are on the commercial product. So I hope that clarifies.

AlexStifel — Analyst

Okay. And then a question on LGS. Could you provide any more color on your recent FDA meeting and anymore additional steps prior to the sNDA submission? Thanks.

Stephen J. FarrPresident and Chief Executive Officer

Yeah. So the FDA meeting confirms our development path and timelines toward the supplemental NDA submission. Really the major question at that meeting was around the two-year carcinogenicity studies that you know we started some time ago and whether they would be required to the submission and in what form. And we now have agreement with the FDA that we will — that they are required for the submission, and those studies are currently in the reporting stage. We will have final reports available in Q1 of next year. In addition, obviously, we’ll be completing a long-term safety analysis of our ongoing Study 1601 which will form the basis of — summery basis of — I should say, the summary of safety for the NDA and as well as the efficacy data that came from that from that same study. So we essentially have everything that we need, either incorporating or actually toward writing the NDA at this current time.

AlexStifel — Analyst

Great. Thanks.

Operator

The next question is from Marc Goodman, SVB Leerink. Please go ahead, sir.

Roanna C. RuizSVB Leerink — Analyst

Hi, this is Roanna on the line for Marc Goodman. Thanks for taking the question. I was curious, thinking about the European launch in first quarter, could you give us some guidance on what you expect in terms of SG&A spend, how that might uptick as you launch country by country.

Stephen J. FarrPresident and Chief Executive Officer

Yeah. I’ll ask Ashish just to [Indecipherable] with respect to staffing for European launch, and then, Mike, you might want to talk a little about SG&A after that. So over to you, Ashish.

Ashish SagrolikarExecutive Vice President and Chief Commercial Officer

Thanks, Steve. So, again, in terms of SG&A, we already — for the Germany, we already have the team in place. So we don’t — we will not see any more people being added there. And in terms of adding more people, it will purely depend on when we will receive the reimbursement, and as you know, it can take anywhere between nine months to 12 months after the approval in individual countries. But our plan is to continue having these conversations.

We are ready to make all the submissions as soon as we receive the approval, and we will be bringing on the — the sales team — the key account manager team at least three months before the expected approval of the reimbursement. And the medical team, as you know, is already on the ground, and we have had medical team in Europe for some time. So I would say that would be the range of ramp-up over 2021.

Mike, anything else?

Michael P. SmithExecutive Vice President, Chief Financial Officer, Treasurer and Secretary

Yeah. So on the — the question on expense items, we’re not guiding 2021 expense levels by class at this point. You can expect us to be launching on a country-by-country basis, though, and so there is a, as Ashish noted, substantial amount of personnel that we’ve already put in place in Europe and in Germany.

Great. Thanks. And I have one question related to the launch in the US. What kind of feedback are you guys getting from prescribers of who have completed the online REMS sign-up process, how smooth has that been for their offices?

Stephen J. FarrPresident and Chief Executive Officer

Yeah. I’ll ask Ashish to respond to that one for you, Roanna.

Ashish SagrolikarExecutive Vice President and Chief Commercial Officer

Yeah. So, Roanna, I think the feedback so far has been very positive. The process is very seamless for both physicians as well as for the patients. Since we have anecdotes of both the segments enrolling even on their iPhones or on a tablet, we have made it electronic. Even the signatures are done through electronic process, and we use — verify the processes there. So I think that process has gone very smoothly. So far, the feedback has been very smooth as well as seamless.

Roanna C. RuizSVB Leerink — Analyst

Got it. Thanks.

Operator

We have a question from Yatin Suneja, Guggenheim Partners. Please go ahead.

Eddie HickmanGuggenheim Securities — Analyst

Hi guys, this is Eddie on for Yatin. Thanks for taking my question. The first is, for the new patients that have — that are getting the scripts that aren’t from the EAP or the clinical trials, do you have a sense of what the average weight of those patients with the dose in those new scripts? And then can you also let us know what your gross to net and inventory levels were for the quarter? Thank you.

Stephen J. FarrPresident and Chief Executive Officer

Yeah. I’ll take the — the first question, and maybe, Mike, you could get ready for the second part of that. What I will say is, we’re not going to go into details of the average weight and — of the patients and the dose that we’ve seen of the new patients coming to the trial. We’re very early during the launch. What I can tell you is that I think what we’ve seen in the first period of this launch is consistent with our expectations and assumptions that we used on the basis of our experience in the expanded access and clinical trial. So there has been no surprises as everything appears to be as we expected.

Michael P. SmithExecutive Vice President, Chief Financial Officer, Treasurer and Secretary

Yeah. And this is Mike. Can you repeat the second question?

Eddie HickmanGuggenheim Securities — Analyst

Just wondering what your gross to net was for the quarter and if there is sort of any inventory level that you want to talk about that, it might be helpful for us understanding the launch — the early launch.

Michael P. SmithExecutive Vice President, Chief Financial Officer, Treasurer and Secretary

Sure. Yeah. We’re not talking about the gross to net as a percentage just because it’s really early and not reflective of where we could get away from the patient makeup. I just want to get people off — in correct level. But long-term, we, as said, we would expect it to be 20% to — 20%, 25% to 30% in the gross to net for the product. So that’s still holds. We — we are — we’re — the US model is one where there is very, very little inventory held at the specialty pharmacy. So there is a high degree of, call it, transparency or fidelity of what our end sales — end user sales are and what we’re recording. We’re recording when we send it to the specialty pharmacy, but there is very little inventory that they hold.

Eddie HickmanGuggenheim Securities — Analyst

Great. I appreciate it. Is there any sort of prior authorization issues that you’re seeing like — or is it pretty standard and what your — what you expected going into the — going into the launch?

Stephen J. FarrPresident and Chief Executive Officer

Yeah, we feel very encouraged with the coverage received so far. Everything has been covered for the label, as Ashish said. So no step-up that’s been have mandated. Obviously everything is per label. So we feel good about that. Ashish, anything you want to add, just to [Speech Overlap]

Ashish SagrolikarExecutive Vice President and Chief Commercial Officer

No, I think that covers. No, Steve, that covers it. Really, I think we — it’s to the label, and we haven’t had any — we haven’t had any challenges there.

Eddie HickmanGuggenheim Securities — Analyst

All right. Thanks for taking my questions, guys.

Stephen J. FarrPresident and Chief Executive Officer

Thank you.

Operator

The next question is from Danielle Brill, Raymond James. Please go ahead.

Danielle BrillRaymond James — Analyst

Hi guys, congrats on the launch and thanks for the question. So I just want to make sure that I heard the first question correctly. So I’ll start there. But you said over 300 prescribed, over half of those are new. So let’s just say, half, about 150 new prescriptions not rolling over from a prior study. Of those, how many unique prescribers has written scripts thus far?

Stephen J. FarrPresident and Chief Executive Officer

Ashish, you want to speak to that one?

Ashish SagrolikarExecutive Vice President and Chief Commercial Officer

Yeah, I’ll take that. So, Danielle, we have not — kind of giving guidance on how many prescribers have prescribed. But you can imagine that most of the new prescriptions that are coming from the centers where we are focused on, where they do have multiple Dravet patients and some of them are familiar but we are also seeing a lot of prescriptions coming from the physicians who were not part of our clinical studies or early access program and are really impressed by the efficacy that the product provides.

Danielle BrillRaymond James — Analyst

Okay. So are you getting prescriptions outside of your targeted 450 to 500 centers? And then a follow-up to that. How many of those centers have you engaged with either in person or remote since launch? Thanks.

Ashish SagrolikarExecutive Vice President and Chief Commercial Officer

Yeah. So, again, specifically, segment-wise, we are not breaking out that information at this time. But in terms of visiting the centers, both the target 450 that has been made. But that doesn’t mean we are not calling on any other physicians, because we are calling on all the physicians, but the — the focus is mainly on the — the large group — the target segment of 450. So — and our visits have been both, I would say, in-person as well as though the remote channels, and it all depends on the particular geography and the situation in that geography. We have had places where in-person visits have been possible, and there are some places where only the telemedicine has been possible. So I would say we started that at 50-50 and that measure goes either way depending on the COVID situation. And maybe of the follow-up visits that we do, they generally happen on the telemedicine.

One important thing to remember here, Danielle, is the team that we have. We have hired really experienced people in epilepsy, so they do know these offices, they do know people in the offices as well as the physicians, and that has been really helpful and also instrumental in really generating the enthusiasm connecting with the physicians, but at the same time educating them remotely given if the in-person was not available.

Danielle BrillRaymond James — Analyst

Understood. Thanks for the question.

Stephen J. FarrPresident and Chief Executive Officer

Thank you, Danielle.

Operator

The next question is from Difei Yang, Mizuho.

Alexander LimMizuho Americas — Analyst

Hi, good afternoon, everyone. This is Alex on for Difei. Thanks for taking the question. Could you — could you describe the cadence of new patient additions outside of the expanded access and open-label extension studies over the quarter and how do you expect that could evolve into the fourth quarter?

Stephen J. FarrPresident and Chief Executive Officer

Just a quick comment from me. We’re not going to — we’re not going to talk about what’s happening [Phonetic] in this quarter other than to say that we still feel very encouraged by the way in which this launch has moved forward in the first few months. Do you want to say anything about cadence of new patients in the third quarter, Ashish?

Ashish SagrolikarExecutive Vice President and Chief Commercial Officer

Yeah, I can make one comment here, Alex. That is, as you know, we launched in — on July 27, and after that, once we started the information and education with the offices, I think we started getting prescriptions starting in the month of August. And we are not talking — we are not sharing the information on what the cadence on a monthly basis looks like. But as you can imagine, here the patients are coming in, we go through the process of picking them, getting through the echo, plus the all-benefit verification process, and that can take up to four weeks and in some cases up to six weeks, and you start getting patients on therapy. And as I said in the prepared remarks, majority of the patients that have got on the therapy, they’ve got on therapy in September. So I think that should give you a guidance in terms of how we can get it.

Alexander LimMizuho Americas — Analyst

Okay. Great. Thank you. And do you expect to provide guidance at some point next year?

Ashish SagrolikarExecutive Vice President and Chief Commercial Officer

Mike?

Stephen J. FarrPresident and Chief Executive Officer

We are — we’re thinking about — here, right now, we don’t have any — any — any firm clasp one way or the other right now because it’s so early. We want to make sure that we understand exactly how this is moving forward. But certainly, we will make that determination as we get into early 2021. We’ll have a full quarter of experience [Indecipherable] that time.

Alexander LimMizuho Americas — Analyst

Okay. Great. Thank you.

Operator

[Operator Instructions] We have a question from Serge Belanger, Needham. Please go ahead.

Tian SunNeedham & Company — Analyst

Hey guys, thanks. This is Tian on for Serge. I think you mentioned that there is about 80 million covered lives across both the commercial and government plans. But could you give us a breakdown of that, I guess, how much is the commercial versus how much is coming from Medicaid side?

Ashish SagrolikarExecutive Vice President and Chief Commercial Officer

Yeah, so let me clarify that. What we said is, we have been — we have reached and made presentations to payors who cover 80 million lives. And in terms of breakdown, we are not providing that. But you can imagine that it is all the usual large payors as well as the large Medicare programs. As you can see — and we have talked about this earlier — we expect that the payor mix based on the analogs that are out there in the Dravet space or in the rare epilepsy space, somewhere around 55% to 60% of the patients will be covered under the Medicaid programs, that is the state Medicare programs, and we see the similar pattern coming out in how we are approaching the payor space and how we prioritize and connect with them.

Tian SunNeedham & Company — Analyst

Okay. Thanks. And then, on the REMS enrollment to dispensing, I think you said about four to six weeks. I guess, could you give us any detail as to what’s — what’s accounting for the bulk of that time frame? I guess, how much is traveling to getting an echo versus how much time is needed to get a coverage determination? So any details there would be appreciated. Thank you.

Stephen J. FarrPresident and Chief Executive Officer

Ashish, please address that one.

Ashish SagrolikarExecutive Vice President and Chief Commercial Officer

Yep. So, we said it’s up to four to six weeks, and depending on the situation, it can be less. It can be even three weeks, it can be even less than that and it can go up to six weeks. So it’s a range. In terms of exact time, how much it takes, I think it’s very difficult to make a trend because it’s very early and the numbers are too small. But I can give you a process. Once we have the patient enrolled into the REMS and referred to the hub, I think both the things start in parallel in terms of scheduling and echo and getting an echo, which can take time. And we have seen that some places, it can happen in a week; some places, it could take up to three weeks, because, as you can imagine, depending on the local situation, even if we find a echocardiogram place closer to where patient lives, they do not have the appointments available or because of the COVID situation, they may not be accepting.

One thing to remember here is, these are really, really very sick childrens — sick children. And as you know, 80% of them are not controlled on the existing medication. And as they are making a decision to go on a new therapy and all these things that are coming into the — coming into play there, that takes the time. So we have had successes where we have seen patients coming on board in less than two weeks, and we have seen in some places where there is a huge COVID environment and they haven’t been able to get echo appointment soon; it could have taken up to five to six weeks.

So that’s the range what we are looking at. But in terms of specifically how much is echo and how much is the payor environment, we haven’t separated that out and haven’t provided guidance on it.

Tian SunNeedham & Company — Analyst

Got it. Thank you for the details.

Operator

The next question is from Tazeen Ahmad, Bank of America. Please go ahead, sir.

Tazeen AhmadBank of America Merrill Lynch — Analyst

Okay. I think that’s me. Hi guys, thanks for taking my questions. Maybe a couple, and forgive me if you’ve already answered this in part. I just wanted to get a sense maybe about how long do you think it will take for Fintepla to have more of a permanent position within formularies. Would you consider the work that’s being done now to get permission from insurance providers as one of the main bottlenecks in the speed with which patients can get access to Fintepla? And I’m wondering if you think that is going to ease in coming quarters. And then the second question I had also deals with titration. Do you have any sense of how titration is working in a real world setting thus far compared to [Technical Issues] on the clinical study? Thank you.

Stephen J. FarrPresident and Chief Executive Officer

Thanks, Tazeen, for your questions about the [Technical Issues] over to Ashish.

Ashish SagrolikarExecutive Vice President and Chief Commercial Officer

Yeah. So Tazeen, let me start with the titration and then I will come to the formularies. So the titration, again, it’s been just two weeks. So it is too early to talk about the — how we are seeing it. Maybe once we had two, three months and a few more shipments, then we can really see the trend. But based on our experience in early access program, we firmly believe that it’s — the experience in the real world is not going to be much different than what we saw in EAP where it took anywhere between three to six months for — to titrate to the most effective dose.

In terms of formulary, the decisions that we have received so far, they are to the label. And, as you know with the Dravet syndrome, you — and the way our label is that you have to have Fintepla is added to the therapy and in our clinical trial and the diagnosis of Dravet syndrome, you have to have failed at least two or three different therapies, if not more. So, given all that surrounding, we are not seeing that getting reimbursement or getting a formulary decision or even a policy determination has a bottleneck to get access to the Fintepla, and so far, we have been able to secure that access with the conversations with the pace, but even the coverage determination that we have received have been consistent with that level.

Operator

Excuse me. Are there any further questions from Bank of America? We have a question from Tim Lugo William Blair. Please go ahead.

Lachlan Hanbury-BrownWilliam Blair & Company — Analyst

Hey, this is Lachlan on for Tim. Thanks for taking the questions. I was wondering, you mentioned there were about 360 [Phonetic] REMS certified physicians. I assume a large portion of that are sort of trial investigators that rolled over and got certified given they have patients on there. Can you kind of give any insight as to what proportion of those physicians are trial investigators versus new physicians who weren’t involved in the trial? And I guess related to that, you sort of touched on it earlier, but among the new patients, there are new brand [Phonetic] patients. Any sense of how they are sort of splitting out between the physicians that already have several patients on drug from trial versus the new physicians?

Stephen J. FarrPresident and Chief Executive Officer

I can start and then Ashish can take over. I just want to set the frame. We talked about 360 clinicians involved in the REMS program. No, we had approximately or less than 50 sites in United States conducting our clinical studies. So I think I’ll put into perspective that we clearly see physicians who we’re enrolling the REMS were not part of our clinical trial expanded access programs. Ashish, with that, anything else you might add?

Ashish SagrolikarExecutive Vice President and Chief Commercial Officer

Yeah. One thing I’ll add, Lachlan, is that, in terms of seeing the prescriptions for new patients, we are seeing them from everywhere. Not only from the clinical studies. And as Steve said, there are less than 50 physicians who were part of the overall early access and the clinical trial. You got vast majority of people who have signed up for our programs and who are prescribing. They were not part of that program.

Lachlan Hanbury-BrownWilliam Blair & Company — Analyst

Okay. Thanks. Congrats on the progress. Best of luck.

Ashish SagrolikarExecutive Vice President and Chief Commercial Officer

Thanks.

Operator

There are no further questions at this time. I’d like to turn the floor back over to Dr. Stephen Farr for closing comments.

Stephen J. FarrPresident and Chief Executive Officer

Well, thank you, operator, and thank all of you for joining us on our call today. We’re very pleased to show successes and progress as we start to grow our commercial rare disease company, developing, commercializing new therapies to address significant unmet needs faced by rare disease patients, as always. Really look forward to providing you further updates on our commercial and clinical activities as we move forward, and thank you all again for joining us on our call today. Enjoy the rest of your day.

Operator

[Operator Closing Remarks]

Duration: 46 minutes

Call participants:

Brian RitchieManaging Director

Stephen J. FarrPresident and Chief Executive Officer

Ashish SagrolikarExecutive Vice President and Chief Commercial Officer

Michael P. SmithExecutive Vice President, Chief Financial Officer, Treasurer and Secretary

AlexStifel — Analyst

Roanna C. RuizSVB Leerink — Analyst

Eddie HickmanGuggenheim Securities — Analyst

Danielle BrillRaymond James — Analyst

Alexander LimMizuho Americas — Analyst

Tian SunNeedham & Company — Analyst

Tazeen AhmadBank of America Merrill Lynch — Analyst

Lachlan Hanbury-BrownWilliam Blair & Company — Analyst

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