Spark Therapeutics, Inc. (NASDAQ:ONCE) Q3 2017 Earnings Conference Call November 7, 2017 8:30 AM ET
Executives
Ryan Asay - IR
Jeff Marrazzo - CEO
Kathy High - President & Head, R&D
Stephen Webster - CFO
John Furey - COO
Analysts
Cory Kasimov - JPMorgan
Phil Nadeau - Cowen & Company
Salveen Richter - Goldman Sachs
Michael Yee - Jefferies
Vincent Chen - Bernstein & Company
Joseph Schwartz - Leerink Partners
Raju Prasad - William Blair
Steven Breazzano - Evercore ISI
Matthew Eckler - RBC Capital Markets
Operator
Good day, ladies and gentlemen and welcome to the Third Quarter 2017 Spark Therapeutics Earnings Conference Call. At this time, all participants are in a listen-only mode and later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions]
As a reminder, this conference is being recorded. I would now like to introduce your host for today's conference, Mr. Ryan Asay, Head of Investor Relations. Sir, you may begin.
Ryan Asay
Thank you, Amanda. We welcome everyone to the Spark Therapeutics Third Quarter 2017 Conference Call. With me today from the Company are Jeff Marrazzo, Chief Executive Officer; Dr. Kathy High, President and Head of Research and Development; John Furey, Chief Operating Officer; and Stephen Webster, Chief Financial Officer. Jeff, Kathy and Stephen will have prepared remarks, and John will be available for Q&A.
Please note that this conference call will include forward-looking statements regarding our programs and product candidates. Because such statements deal with future events and are subject to many risks and uncertainties, actual results may differ materially from those in the forward-looking statements. For a full discussion of these risks and uncertainties, please review our Annual Report on Form 10-K and our quarterly reports on Form 10-Q that are filed with the U.S. Securities and Exchange Commission.
This conference call will contain time-sensitive information that is accurate only as of the date of this live broadcast, November 7, 2017. Spark undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call. This conference call is being webcast and will be archived on our website for approximately one week.
Earlier this morning we released financial results for the quarter ended September 30, 2017 and recent business highlights. This news release is available on the Investors section of our website at sparktx.com.
I'd now like to introduce Jeff Marrazzo, Spark's CEO.
Jeff Marrazzo
Thanks, Ryan, and welcome, everyone. On this morning's call, I'll start by highlighting our recent regulatory progress with Luxturna and provide an update on the four key priorities we are executing against in preparation for launch. Kathy will discuss the Luxturna FDA Advisory Committee Meeting or FDA AdCom in more detail, as well as provide some brief comments about our hemophilia programs and EMA before turning it over to Stephen to review the third quarter financials. I will conclude by covering the amended agreement we announced this morning with Pfizer and recently completed transaction with Genethon as well as highlighting our continued progress in building a fully-integrated gene therapy company.
Since our call in August, we have made important regulatory progress with Luxturna. We are extremely pleased with the outcome of the AdCom that FDA held last month, especially the unanimous vote in favor of Luxturna's approval. In addition in August, we completed the FDA pre-approval inspection of our manufacturing facility with no critical observation cited. This is a remarkable achievement given it involves a process that is never-before been validated for commercial use, operation of novel analytical methods and the new facility. Finally, our Marketing Authorization Application or MAA was validated by the European Medicines Agency or EMA in August.
This is an exciting time for all of us here at Spark as our PDUFA date nears and we finalize our preparations for the commercial launch of Luxturna if approved. Over the last 18 months, we have focused on four key priorities in support of a potential U.S. launch of Luxturna, including identifying patients, educating the medical community, preparing a network to provide the best patient experience and ensuring market access. I will provide a brief update on the first three of these before offering some new insight into our ongoing efforts to ensure market access.
Our first priority has been to identify patients with inherited retinal diseases while increasing awareness among patients and physicians about the importance of genetic testing. We have made good progress with our IDE or IRD genetic testing initiative. This initiative has been well-received and continues to help empower physicians, caregivers and patients to seek a genetic diagnosis. Our medical and diagnostic field teams continue to work with healthcare providers to increase the availability of genetic testing to IRD patients -- the large majority of whom because of the absence of the treatment have not undergone genetic testing.
Our second priority is to educate the healthcare community about monogenic IRDs to our medical organization and where appropriate shared the Luxturna clinical data through scientific exchange. In many ways, we are rewriting the medical textbook for retinal disorders. Putting IRDs on the map is something that should be properly diagnosed and potentially giving retinal specialists for the first time a solution that they can offer their patients to treat one of these diseases. We have built a geographically dispersed field team of medical science liaisons to ensure adequate reach and coverage across the United States. That work is progressing well as we continue to observe that retinal specialists are eager to learn about a treatment which could address the unmet medical needs of patients who currently are under-diagnosed and have no pharmacologic treatment options. We will be presenting additional data from our clinical program at the 2017 American Academy of Ophthalmology meeting later this week and based on our interactions to date, we anticipate great receptivity among retinal specialists to the prospect of Luxturna, if it's approved.
Our third priority is preparing to establish, train and organize a network of care to support appropriate administration of Luxturna, should it be approved. At launch, we anticipate this network in the United States will include three to four treatment centers where Luxturna could be administered to appropriate pediatric and/or adult patients. We expect that this network will eventually grow to accommodate additional patient needs. Each center will be required to meet certain criteria designed to support appropriate care for patients and their caregivers, ensuring a seamless patient experience. In addition, following the PDUFA action date and before launch, Spark will provide training for surgeons and pharmacists who will be involved in the administration and preparation of Luxturna.
Finally, our fourth launch priority is to ensure market access for patients seeking to be treated with Luxturna, if approved. Over the past year, our market access team has been working diligently to engage payers about the potential approval of Luxturna. We've had conversations with all the large commercial payers, many regional ensurers as well as CMS and numerous Medicaid plans. In these interactions, we have been successful in helping payers understand the burden of RPE65 mediated IRD, as well as how Luxturna could be a lifelong term solution based on its expected positive risk benefit profile and the evidence of its durable effect from a single dose.
As we are not yet approved, we have yet to set and discuss a specific price point with payers. However, we have tested multiple approaches to valuing the functional improvements in vision that we have observed in our clinical trials and the positive impact on patients' lives that we heard so compellingly described during the open public hearing portion of the FDA AdCom last month. Today, I want to share with you some of our insights about what these improvements may mean and be worth to patients' family and society including the healthcare system.
Well now without its challenges, health economic modeling is an important approach to assessing the value of any healthcare intervention. For a condition like blindness, an economic model should not only measure the impact the treatment has on quality of life and direct medical costs, but also importantly on indirect costs such as unemployment and lost caregiver wages. Further, a proper model of the gene therapy should uniquely account for any treatment impact over a long period of a patient's lifetime due to the durability of effect from a single dose.
To illustrate the importance of indirect costs, the National Federation of the Blind indicates that 70% of working aged Americans who are blind are unemployed despite federal and state annual rehabilitation expenditures of over $250 million. This economic reality of unemployment reminds us of a wonderful real-life example of the value of Luxturna that we shared at the FDA AdCom, about the second oldest participant in our Phase 3 trial. This woman who is 38 years-old have been unable to work due to loss and function of vision caused by her RPE65 mediated IRD. Shortly after receiving investigational Luxturna, her surgeon reported that the improvements observed in her vision allowed her to secure her very first job and she has since reported feeling an increased sense of empowerment and independence.
Caregivers of visually impaired children also face an enviable decisions that directly pit their child's welfare against their family's economic standing. For example, the loss in wages for our caregiver who leaves behind his or her job to care for a blind child, as well as the increased costs to educate that child have direct economic consequences for that family and society. At the FDA AdCom, we heard from the mother of two sons to separate from another form of IRD. This mother spoke directly about the magnitude of the wages she has foregone over the past decade and-a-half and the additional educational cost that have been incurred to simply level the playing field for her two boys.
These illustrations provide important insights into the value of Luxturna. While it is not our intention today to guide you with the potential price if it is approved, we are encouraged that by modeling reasonable assumptions about the impact of Luxturna on these types of indirect costs, as well as on quality of life and direct medical cost over a patient's lifetime that there is support for the value of the therapy in excess of $1 million per patient.
Additional approaches that we tested to value Luxturna independently corroborate this figure. Specifically, the compensation paid out under a long term disability policy and awards reached in the sampling of recent state court cases where individuals have suffered impairments to their vision are at or above the $1 million mark, providing even further evidence of the substantial value our society already places on sight.
While our pricing decision will not be announced until after our approval, we believe there is clear opportunity to set a reasonable price relative to the value Luxturna delivers. Further, I want to reiterate that Spark is first and foremost committed to helping patients, their families and providers find a path to access Luxturna, if it is approved. We would not want a family who would benefit from this therapy to not pursue it due to concerns about the price, which is why we are developing support programs to directly help patients with access. We plan to unveil more of the details of our patients' services and assistance programs as we get closer to launch.
Now, let me turn it over to Kathy.
Kathy High
Thanks, Jeff, and good morning, everyone. As Jeff mentioned, we cannot be more pleased with the outcome of the recent FDA AdCom. The unanimous 16-0 vote the broad panel composed of experts and AAD vector design and manufacturing inherited retinal diseases, [indiscernible] retinal surgeries, genetics immunology and biostatistics give us great confidence. While the recommendation of the AdCom is not binding on FDA, the vote is a testament to the strength of the preclinical, clinical and CNC data packages that we have submitted and most importantly, the life-changing impact Luxturna has had on participants involved in the clinical trials -- several of them shared their experiences during the open public hearing portion of the AdCom.
Thus far, all evidence that we have, both preclinical and clinical suggests that this life-changing impact will be durable. As we indicated at the FDA AdCom, all the participants in the intervention group of our Phase 3 trial have now been assessed at the three-year mark with no statistically significant signs of whining [ph] of therapeutic effect. Four of these participants have now reached the four-year term point with the sale result and observation is ongoing.
The AdCom members devoted time to discussion of the multi luminance mobility test and novel clinical endpoint and to the extent that gene therapy strategies are used in classes of disease that have previously lacked therapeutic approaches, novel endpoints may need to be developed. The performance of the test itself, the separate study conducted to support its validity and its relationship to other more conventional methods of assessing visual and retinal functions were topics of interest to the committee and further validated the rigorous approach we have taken to the developments and use of this endpoint.
I would like to thank and congratulate the Spark team for doing such an incredible job at the FDA AdCom and for the tremendous amount of work they've put into preparing for it. I would also like to express my sincere gratitude to the KOLs, expert panelists, the FDA and especially to the patients who stepped forward to enroll in the trials. Without their courage and willingness to volunteer, new treatments are not possible. This successful FDA AdCom brings us one step closer to approval in the United States of the first gene therapy for a genetic disease and the first disease modifying treatment for inherited retinal disease.
In addition to the positive FDA AdCom, we've made important regulatory progress in other ways as well, including as Jeff mentioned, completing the FDA pre-approval inspection of our manufacturing facility and the FDA good clinical practices inspections of our clinical sites without any issues. The FDA labeling negotiation is still in front of us and we look forward to continuing forth with FDA to finalize the review process by the January 12, 2018 PDUFA date. Not to be overlooked, our MAA was validated in August and we expect to receive Day 1 20 questions from the EMA next month.
Moving on to a brief update on SPK-8011, our lead hemophilia A product candidate. On our second quarter earnings call in early August, we indicated that at that time we've enrolled three participants in the trial, two at an initial dose of 5x1011 vector genomes per kilogram and one as a second dose of 1x1012 vector genomes per kilogram. Those interim results were released last week in the abstract we submitted to ASH. Since then, we have dosed two additional participants -- the second participant at 1x1012 vector genomes per kilogram and our first participant at a third dose of 2x1012. These dose ranging approach is what was originally contemplated in the trial design. We will now be providing an update on the data at this time, however, our abstract to ASH was accepted for oral presentation and will be presented on December 11. At that time, we will provide an interim update on the data from these first five participants.
With respect to hemophilia B, we also will share an update on our Phase 1-2 clinical results at the ASH annual meeting in a separate oral presentation, at which time we will be approaching the one year end point of the study for the chance participants we have described to date. As we have discussed in the past, the hemophilia B program transitions to our partner Pfizer after Phase 1-2. That transition is underway and going under. As we referenced in our press release this morning, we have amended our agreement with Pfizer to include up to five additional participants in the ongoing Phase 1-2 trial using vector produced in an enhanced manufacturing process. Jeff will provide additional details about this amendment in his closing remark.
A brief comment on our solid [ph] program. We continue to follow the 15 participants in our ongoing Phase 1-2 trial and as we said on our earnings call in May, we expect to conduct another analysis of the data at the completion of its two-year endpoint of the trial for the first 10 participants. We will keep you apprised as appropriate following these next steps.
Let me now turn it over to Stephen who will give you a brief update on our third quarter financials.
Stephen Webster
Thanks, Kathy. In the three months ended September 30, 2017 and 2016, we recognized $1.9 million and $1.3 million respectively of revenue associated with our Pfizer collaboration. R&D expenses for the three months ended September 30, 2017 were $41.1 million, versus $22.4 million for the three months ended September 30, 2016. The $18.7 million increase was due to a $14.6 million increase in internal R&D expenses, primarily due to increased headcount and an increase of $4.1 million in external R&D primarily from an increase of $2.3 million in expenses related to our hemophilia A program and $1.8 million related to the preclinical and clinical development of other product candidates in the pipeline.
General and administrative expenses for the three months ended September 30, 2017 were $26.6 million versus $12 million in the three months ended September 30, 2016. The $14.6 million increase primarily was due to an increase in salaries in related costs including stock-based compensation of $7.2 million and an increase in launch preparation activities for Luxturna, legal and patent expenses, professional fees and other operating costs of $7.4 million.
Our net loss for the three months ended September 30, 2017 was $65 million or $1.90 basic and diluted net loss for common share as compared with a net loss of $32.6 million or $1.07 basic and diluted for the three months ended September 30, 2016. Please see our press release from earlier this morning for comparison of the first nine months of the year.
As of September 30, 2017, we had cash, cash equivalents and marketable securities of $574.9 million which includes net proceeds of $379.9 million from the follow-on offering in August. We expect this capital be sufficient to fund our needs into 2021. We have 36.9 million shares outstanding. I'll now hand it back to Jeff for his closing remarks.
Jeff Marrazzo
Thanks, Stephen. As Kathy mentioned, we and our partner, Pfizer have ventured into an amendment of our license agreement for SPK-9001 for hemophilia B. Based on this amendment, we will enroll up to five additional participants in the current Phase 1-2 clinical trial. These additional participants will be dosed with SPK-9001 manufactured using an enhanced process. The goal of this bridge in cohort of patients is to demonstrate comparability for the first 10 participants enrolled in the ongoing trial. The changes which are process-related are designed to enhance scalability and support commercial manufacturing. One of the additional participants has already been treated with material manufactured using this enhanced process. As of October 23, this participant has been followed for 32 weeks post infusion.
The participant's factor IX activity level has plateaued within the range that is considered comparable to the first 10 participants and this participants' number of prophylactic intravenous factor IX infusions has been reduced to zero. We're off to a great start in its bridging component of the study. In addition to our clinical programs, we continue to focus on and remain excited about the potential of our preclinical programs. We have more to say about these early stage programs in 2018, but I do specifically want to highlight the program we recently in-licensed from Genethon. We are not yet disclosing the specific disease, but it is an AAV gene therapy targeting the liver to address a rare genetic condition. We believe this agreement makes strategic sense as we build on our expertise and success in liver-directed AAV gene therapy and we expect to continue to explore adding expertise technologies and programs to external partnerships and collaborations.
I'll finish by reinforcing a consistent message. An important part of the success of this company continues to be the more than 300 incredible people who now work here. There is one new hire we'd like to specifically note today, Federico Mingozzi, who recently joined Spark as our Chief Scientific Officer. Federico joined Spark from the French National Institute of Health and Medical Research in Genethon where he led development of liver-targeted gene therapies. He will report to Kathy who will continue as our President and Head of Research and Development, as well as continuing to serve on the Board of Directors. We are excited to have Federico join us. He brings a wealth of experience in research and early stage clinical investigation of gene therapies and has been a great addition to the team.
We are now happy to take your questions.
Question-and-Answer Session
Operator
Thank you. [Operator Instructions] Our first question comes from the line of Cory Kasimov of JPMorgan. Your line is open.
Cory Kasimov
Hey. Good morning, guys. Thanks for taking the questions and for all the Luxturna detail in those prepared comments. That was very helpful. I guess a question I have for you is on the ongoing hemophilia A program and can you talk about the key determinants in terms of expanding at a certain dose cohort versus moving into the next one? I guess at this point, do you have a plan to move into a fourth dose cohort? And I have a one follow up if that's okay.
Jeff Marrazzo
Let me take a step back and I think in Kathy's prepared remarks, Cory, what you heard was that the original trial design and design of those escalation study was to test three doses and required a minimal number of at least two patients in each dose cohort before we were to dose-escalate. So we actually are following the exact design that the study has originally contemplated. That's the path that we're taking.
Cory Kasimov
Okay, all right. And then regarding that enhanced manufacturing process for hemophilia B. Is the same process been in use for hemophilia A or this changes you're contemplated about making in the future for that program as well?
Jeff Marrazzo
Yes. Thanks for the question. I think you probably recall that we have discussed the idea that we believe the demands for hemophilia B can be met with the upstream adherent subculture process that we use not only for Luxturna, but we can also service the demands we forecast and anticipate for hemophilia B. For hemophilia A, as you recall, we discussed previously, we have developed and are in the middle of scaling up a suspension subculture-based system based on the same HEK-293 cell line and that process of scale-up is going extremely well. So that would be a different process that we would use for hemophilia A.
Cory Kasimov
All right. Great. Thanks for taking the question.
Operator
Thank you. And our next question comes from the line of Phil Nadeau of Cowen & Company. Your line is open.
Phil Nadeau
Good morning. Thanks for taking my question. First on Luxturna; I know you've talked about one of your priorities is identifying patients. Can you give us some sense of where you are in that process, how many patients who are relevant to Luxturna have been identified as we approach the PDUFA date?
Jeff Marrazzo
Phil, we're not guiding to specific number on that. What I can say is we have spoken about the idea previously that what we are observing in actual practice is consistent with what we have heard in sort of studies previously described, which is that there is and has been a much higher percentage of genetic testing done within the previously described LCA population than in the previously described RP population. So we believe that what we have seen and what we will see at launch is that there is a group of patients who have previously been diagnosed, largely who came in with an earlier onset form who were described as LCA and then there are a group of patients with retinitis pigmentosa like [indiscernible], were a lot of our investment and work which has started will continue very much in earnest over the launch year and beyond to identify those RP patients.
John, anything you want to add?
John Furey
Yes. Thank you, Jeff. I think you covered it very well. The only thing I would add is that since last month's AdCom, we've seen enough take in requests for information from patients and physicians and we expect the level of interest to continue to arise as we approach potential approval.
Phil Nadeau
In all the works you've done, have you seen anything that led you to conclude the portion of patients with RPE65 mutations that started in the academic literature is incorrect? Are you seeing higher or lower frequency of that mutation among LCA and RP patients?
Jeff Marrazzo
I didn't catch the beginning of the question. You said something about the orphan designation?
Phil Nadeau
Of the work that you've done to identify patients, has any of that led you to conclude the rate of RP65 mutations that's cited in the academic literature as wrong? Either higher or lower than what you've had?
Jeff Marrazzo
I think you know that we have may or may not. There are hundreds -- actually a couple of hundred publications in papers that refer to the prevalence and incidents of the clinical classification of diseases, as well as the genetic frequency of various types of LCA and RP. And we have done analysis of that literature in different forms and now the conclusion that we're seeing is consistent with different ways you can analyze that data.
Phil Nadeau
Great. And then last question which you probably won't answer is on the hem A program. On the last call you disclosed that the patient at the second dose would have a dose proportional increase in factor compared to the first dose. Could you update that comment? Is that consistent with what you're seeing in the additional patients? Do you continue to see dose proportional increases in factor based on increasing the dose?
Jeff Marrazzo
Yes. Your preposition was correct. Not about this patient, but that any of the data are the update of it was of August 1 and we do not want to jeopardize our ASH presentation. So we'll provide our next update at ASH. We're going to update on those five patients that we talked about.
Phil Nadeau
Fair enough. Thanks for taking my questions.
Jeff Marrazzo
Thanks.
Operator
Thank you. Our next question comes from the line of Salveen Richter of Goldman Sachs. Your line is open.
Salveen Richter
Thanks for taking my question. Just with regard to Luxturna, I think previously you were targeting about 8 to 10 centers of excellence and now it looks like a much more focused approach at four to five. So just want to understand the rationale behind this and then if you have a sense of how many patients are currently identified at these sites? Thanks.
Jeff Marrazzo
Thank you very much for the question. I think the Luxturna commercial plan will be focused on driving patient identification and diagnosis in an ultra-rare disease with a one-time treatment. What we're really focused on as patient care, what we're doing initially is working with three to four centers to get them up to speed in the initial setting and included in that is the necessary training that we will need to do post approval. We will expand to 8 to 10 treatment centers shortly thereafter. So our planning is pretty much consistent with our original efforts. We are not guiding the number of patients at each of those individual treatment centers at this time.
Salveen Richter
As a follow up for the SPK-8011 study in hem A, Patient 4 and Patient 5, can you give us any sense of when these patients are actually dosed?
Jeff Marrazzo
Yes and consistent with what I shared before, we'll give interim update on the data at ASH. We're not going to get into sort of specific timing of them. We have said previously that there is a dose stagger. This will be a stagger between subjects in each dose cohort as well as a cross-dose cohort. So it should give you some indication that these were not all stacked on top of each other.
Salveen Richter
Thank you.
Operator
Thank you. And our next question comes from the line of Michael Yee of Jefferies. Your line is open.
Michael Yee
Thanks, good morning. On factor VIII hem A, you have previously said this in preclinical data that doubling the dose across those different cohorts that you've described has generally led to double the factor level. Can you just confirm that that is sort of how you've characterized prior data and that that should hold true across this current study? And then as it relates to Luxturna, I'm following along some of the prior questions. Presumably, these three to four sites are centers of excellence where there are some identified patients ready to go. Can you just talk a little bit about how you would think that would start out? Do you think they would treat perhaps one patient and wait a while? Do you think that they would treat a couple of patients? How do you think that that type of launch may occur? Or whether there's a bolus? Thanks so much.
Jeff Marrazzo
Maybe on the first part of the question which is around factor VIII. What we have previously presented I think at...
Kathy High
At several different meetings including ASGCT, is that we have seen a dose response with the SPK-8011 in animal models. I can confirm, Michael, that you have understood that correctly.
Michael Yee
Got it.
Jeff Marrazzo
And then with respect to the treatment centers, John, do you want to take that?
John Furey
Yes. We've been obviously working with the treatment centers in terms of getting them prepared. As with all orphan diseases, the individual treatment centers do have patients under care, but until we finalize the labeling and understand the final direction of the approval, we can't guide at this time in respect to the number of patients that we could reasonably expect in that initial bolus. In regard to the treatment in terms of the timing, we haven't got into the modalities of fully understanding the treatment paradigm, but we would expect that the physicians and the treatment centers will be anxious to treat patients as soon as they're eligible and as soon as they're available for treatment.
Michael Yee
Great. Thank you so much.
Jeff Marrazzo
Thank you.
Operator
Thank you. Your next question comes from the line of Vincent Chen of Bernstein. Your line is open.
Vincent Chen
Good morning and thanks for taking my question. I want to figure the sense with how you're thinking about the target levels for hemophilia A. You've historically spoken of comfortably greater in 12% or so as the target level for benefiting hemophilia and if I think about your doses test before SPK-8011, it seems that the low dose probably gets just slightly above this, the mid dose probably 20% to 30% or so and the high dose, near to lower bound normal, around 50% or so. Prior to the study, it really makes sense in plan for multiple doses than the dose escalation study. You don't know what dose is going to be in range, you don't know that's going to be therapeutic, etcetera, but once you have data from the low and mid dose arms, what's the expected benefit of the higher dose?
Is it a matter of ensuring that patients are going to range even if they are particularly co-responders? Is it a shift in thinking as to what target levels might confer the most benefit? Or is it simply a matter of the drug seems really safe and we'll tolerate it, if we don't get more variability with increasing dose, that's what's the initial plan was so why not go upward?
Jeff Marrazzo
I think a lot of the potential answers to the question you've given, is potential reasons for it. I think we can certainly speak to it of course more fully at the interim update we'll provide at ASH. At a high level though, we have not changed our perspective on what the target is, which is that 12% target with clear to the headroom above is important and we don't think we should be achieving levels that are too high that introduce potential safety risks. We spoke about even back in August at our call that we wanted to ensure that we took the time in Phase 1-2 to do the work necessary to test various doses and make sure we understood fully the properties and the characteristics of the vector and all those areas doses. And as I said earlier in this call and Kathy mentioned in her prepared remarks, we've executed the dose escalation study in the way that we plan to coming into the study.
Operator
Thank you. And our next question comes from the line of Joseph Schwartz of Leerink Partners. Your line is open.
Joseph Schwartz
Thanks very much. Congrats on the progress. I have a question on hemophilia A and then B. So first on hemophilia A or perhaps this could apply to B as well -- some of your peers in hemophilia gene therapy now believe that there's no correlation between preexisting antibody titers and efficacy to their gene therapies so they're planning studies to treat patients who historically would have been excluded because it was thought that they wouldn't respond. So, given how important this is for your market footprint, given your capsid 0 [ph] positivity profile, I was wondering how you're thinking about this issue at this juncture.
Kathy High
There are a lot of characteristics of the vector that can influence the response to neutralizing antibodies. But without any question, substantial portions of the adult population carrying neutralizing antibodies to AAV. So I don't think anybody would dispute that and it's incumbent on sponsors to assess those verbally and to develop therapeutic approaches that will allow as many patients as possible to be incorporated as potential recipient.
Joseph Schwartz
So then do you have a plan in place to do with some of these other peers of yours are doing now? When is the appropriate time to evaluate that?
Jeff Marrazzo
The short answer is we do have plans in place. We have obviously initiated clinical studies with criteria that allows us to include patients who have neutralizing antibody, tighter [indiscernible] of less than one to five. That is what's defined in the protocol today. We may take different strategies to patients who are clean -- are fully clean with those from those preexisting antibodies to those that might have lower titers and we have plans to address multiple portions of that population. But as Kathy said, I think the data and what we've seen is pretty consistent about what preexisting antibodies can mean to the efficacy of the gene therapy treatment.
Joseph Schwartz
Okay. Very helpful, thanks. And then on hemophilia B; I know that you said up to five patients may receive the enhanced manufacturing process. So what plans are in place now for an additional up to four patients to receive drug, given that the first patient received it 32 weeks ago? What are you waiting to see before any additional patients get drug made with the new process and what is the realistic timeline for us to assume it takes to transfer enhanced manufacturing process to Pfizer and then start Phase 3? Can you give us some visibility into when Phase 3 might be ready to start?
Kathy High
Let me first take your question about enrollment of additional subject to the hemophilia B study and just say that we do have a waiting list of individuals who have expressed interest in enrolling. So we expect to begin screening those this quarter and as you heard, there are four additional slots. So we expect that that will be concluded fairly quickly.
Joseph Schwartz
Okay.
Jeff Marrazzo
And in terms of the process -- the process had largely been transferred. Go ahead, John.
John Furey
Yes. The process is largely being transferred to Pfizer prior to this, during the course of 2017. I don't expect to take transferring itself to be getting to the conduct of the trials, so the receipt of the process and optimizing that in their manufacturing facility really is a matter for Pfizer. But the tech transfer will be substantially complete in time to facilitate whatever they may need to do.
Operator
Thank you. And our next question comes from the line of Geno Wang [ph] of Barclays. Your line is open.
Unidentified Analyst
Hi, sorry, this is Shabina Hochina [ph], thank you so much for taking our question. Maybe one question, Luxturna launch; so you mentioned that after receiving FDA approval, you're going to change the sedations and certify the size, as well sort of identify the patient and obtain maybe prioritization. Can you walk us through the whole process and how long the whole process do you anticipate to take to treat maybe the first patient or the first batch of patients?
John Furey
Thank you for your question. Let me just provide some general guidance on the launch of Luxturna at this point. I think there are a couple of critical insights for you to consider about the unique nature of this launch. I think firstly, it's in regards to the delivery of treatment. The training of treatment centers can't begin until after FDA approval when the risk management plan and the product labeling will be finalized. Surgeon training is scheduled for late January-early Feb, contingent on the finalization of the label. Secondly and keenly as Jeff discussed in his prepared remarks, market access is critical for first of its kind gene therapy in the U.S. As we know, the current system is not designed to accommodate or encourage medical breakthroughs and discoveries like gene therapy. So from a pricing and reimbursement perspective, securing access across the many different types of commercial and government payer plan for our first of its kind therapy doesn't happen overnight. Over the last number of months, through the course of the second half of 2017, we've been conducting a significant number of meetings with payers in accordance with the 21st Century Cures Act to establish the value proposition and contracting mechanics for Luxturna.
While these discussions are incredibly valuable for us, they cannot take the place of post approval commercial discussions. Thirdly I would say in regard to patients as they come through post-approval, a key part of that market access component will be confirmation of a genetic mutation. So for each patient, we expect the confirmation in genetic test will be required by payers as a prior authorization. So these are the steps that we will need to engage in, post-launch to secure and bring our first patients to therapy. I will also just make a couple of remarks in regard to Europe. We have filed our marketing authorization with the MEA in August 2017. While the MEA doesn't provide a formal approval date, we are anticipating that in Q3 of 2018, a European approval. And in regard to market preparation there, we have hired a team and started commencing our market preparations, but obviously in terms of first patients in Europe, the pricing and reimbursement process in European markets is substantially longer and more comprehensive than in the U.S.
Unidentified Analyst
Got it, that's very helpful. And then just a quick question on your preclinical programs, especially in the eyes. You are conducting your IRD initiative. Just based on what you learned from the program, as well as maybe your preclinical data, just want to get your sense about your criteria to move forward for your preclinical program?
Jeff Marrazzo
Yes. As I mentioned in my prepared remarks, we do anticipate providing more fulsome update on our preclinical programs next year in 2018 and we look forward to doing that in a way that we can unveil the data around potentially one or more preclinical programs.
Unidentified Analyst
Okay. Thank you so much.
Operator
Thank you. Our next question is from the line of Matthew Luchini of BMO. Your line is open.
Unidentified Analyst
Good morning, everyone. Congratulations on all the progress and thank you for taking our question. This is Brian [ph], on for Matt. I was hoping that you could remind us where your current agreement of programs stand now and how you're thinking about which endpoints are the most important moving forward. Can you give us a little color on that?
Jeff Marrazzo
Sure. What we have mentioned back on our May call when we gave an interim look -- I'm sorry, top line weed out of the data that we have seen, was that in the 10 patients that we had initially enrolled who were at later stage of their disorder, we saw indications in one or more endpoints on four of the 10 patients that was not statistically significant, but indicated potential difference in the injected eye compared to the controllable eye. We said at that time we would want to continue to follow those patients and do an initial analysis of those 10 patients when they got out to the two-year mark and you heard Kathy remark in her prepared statements about that, that is the next step in the program, to do that more fulsome analysis when we reach the two-year mark which is in 2018.
We spoke also on the May call about the fact that we believe that going into earlier stage subjects who got more viable retinal tissue to inject is the potential viable path forward. And we have since discussing that enrolled five additional patients with earlier staged disease. And just to give you some general perspective, the patients in that later stage group of patients had a visual field as measured by Golden Visual field of less than 100-some total degrees versus these five earlier stage patients having closer to 1,000. So about tenfold difference in the background retinal viability and visual function as measured by visual field. So they're different state of patients, different background of patients and we have enrolled and injected one eye in each of those earlier staged subjects and are also following them and will do additional analysis if those come up on logical half-year or year endpoints.
Unidentified Analyst
Great, it's very helpful. Thank you.
Jeff Marrazzo
You're welcome.
Operator
Thank you. Our next question is from the line of Carter Gold of UST [ph]. Your line is open.
Unidentified Analyst
Good morning, guys, and congrats on all the progress. John, I appreciate all the comments on the commercialization of Luxturna. I guess just coming back to Europe again, is the assumption that it will be sort of a center of excellence designate in each country? Is there a chance to maybe do something more innovative on a regional basis there? And then I guess on the reimbursement side in Europe, I recognize it's early, is the starting point for those conversations still going to be a single upfront payment, or are you looking maybe a little more creatively? Thank you.
John Furey
Yes. Thank you for your question, Carter. Certainly in Europe at the moment, we're thinking about this as treatment centers based on each unique geography. We recognize the challenges in cross-border treatment and reimbursement that's associated with having centralized treatment centers in Europe. So we are looking at designated treatment centers -- maybe multiples in particular geographies as we go forward in Europe. It's early days yet, we haven't started to engage specific discussions with treatment centers, we've had some initial discussions, but that's our general thinking right now in respect to Europe and treatment centers.
In regard to market access, we have not engaged directly in conversations with reimbursement agencies. We've actually just started preliminary discussions with the likes of [indiscernible]. We haven't engaged yet and with the German and French payers, the way you're intending to in the near term, I suppose I would make the general comment. You have more flexibility in Europe in respect to unique payment models whether that's annuity or pay for performance. You don't have the same structural impediments that you have with price reporting here in the U.S. So we are open as we go forward in those discussions to different models to secure reimbursement in Europe. But as I said, it's very early days yet.
Unidentified Analyst
Thank you.
Operator
Thank you. Our next question is from the line of Raju Prasad of William Blair. Your line is open.
Raju Prasad
Thanks for taking the question. Maybe just to follow up on how to think about Luxturna pricing. Presumably, if you guys get approved in February, you'll have five years with the duration data, but without knowing the tale, can you just provide a high-level commentary on how you think about pricing and given your comments on Europe, maybe in U.S. and Europe, is this something where if you end up having 10 years of duration or 20 years of duration, you could have a type of payment for X years plus? Or maybe some high level commentary, that would be great.
Jeff Marrazzo
Well, I think part of our prepared remarks were the goal which was to encapsulate the idea that when you look at the value that we believe Luxturna confers, when you look at that from an economic modeling perspective, not only are you capturing direct costs and quality of life impact, but importantly as we outlined today, the importance of capturing indirect costs, but just as importantly, capturing the durability effect in any model and our belief is that based on the comments that you heard Kathy make that thus far, our preclinical and clinical data, we don't have any evidence to suggest that it is not a durable long term effect and that is what we believe should be properly and appropriately modeled into assessing the value of the therapy like Luxturna, but frankly, gene therapies we believe in general.
So that's the way we would go about having those discussions. Structurally, yes, there are differences between the United States and frankly not Europe, but the United States and each individual market in Europe. And the United States does have certain impediments today that are probably well understood including things like patient portability across insurers as well as government price reporting regulations which may limit the ability of a manufacturer to offer models where costs are spread out of over time or there are performance-based payments.
Raju Prasad
That's helpful. Thanks, Jeff.
Jeff Marrazzo
Okay.
Operator
Thank you. And our next question comes from the line of Steven Breazzano of Evercore ISI. Your line is open.
Steven Breazzano
Thanks for taking the question. On hemophilia, could you maybe just talk about some of the factors that go into the variability of factor expression between patients and would you expect higher variability at higher doses? Thank you.
Kathy High
Well, if you think about what's involved in AAV transduction, when you're introducing the vectors through the circulation, you can really list off all the different biological steps that may influence patient variability. So obviously, first and foremost neutralizing antibody in the circulation, but then number of receptors on the hepatocyte self-surface. The efficiency of the vector escape from the endosome, the efficiency with which the vector uncoats [ph], the efficiency with which second strand synthesis occurs, that's critical of hemophilia A where everyone is using a single-stranded vector encoding factor VIII, and really, there are more steps than that. You can see that there are probably a number of steps where biological variability can draw differences in circulating the levels of factors at the same dose.
Steven Breazzano
Thanks.
Operator
Thank you. And our next question comes from the line of Matthew Eckler of RBC Capital Markets. Your line is now open.
Matthew Eckler
Great, and thanks for taking the question. I wanted to ask a little bit more about the enhanced manufacturing process for hemophilia B. Specifically, was the decision to dose an additional five patients driven by FDA feedback? And then will you need to collect data from all five of these patients before initiating a Phase 3?
Jeff Marrazzo
I think it's particularly because a lot of these conversations do involve Spark, but they also involve Pfizer. I certainly are not ready to go into the specific details of those discussions, I think. But I can tell you the high level is that the thought process here as that some of the enhancements we've made in the manufacturing process would further provide certainty of using that process for commercial launch and therefore regardless of where and how the feedback came about, that that was the critical decision that allowing that process to be used with support commercial launch without the need to do additional work along the way. So that was the driving force behind that. The goal of course would be to generate some data that you can use to convince yourself or regulators about that and that's obviously what we'll do rather rapidly here as Kathy indicated in engaging in that enrollment process this quarter.
Matthew Eckler
Okay, great. So that definitely makes sense. Maybe just also ask you about uniQure's recent announcement to advance their Hemophilia B gene therapy into a pivotal study, maybe if you could just compare and contrast SPK-9001 with their approach, as well as discuss whether or not you think your starting to study could have any impact on Pfizer's ability to enroll a Phase 3?
Jeff Marrazzo
Yes. I mean I think in the second portion of the question, I would defer to Pfizer about that. I will just say as sort of an observer from the side that Pfizer still has I believe the largest market share of the hemophilia B business globally and they market that product as the last time I checked in almost 60 different countries. I wouldn't necessarily be concerned about their reach getting to patients throughout the world and enrolling a study. With respect to the first part of your question, I don't know that I could speak to you for the compare and contrast of the different vectors. Obviously we have generated clinical data with ours and I know uniQure sounds like they have plans to do so with theirs. I think that ultimately will play out in terms of what the differences that inherently exist between vectors as well as differences in manufacturing processes. These are the things that we've talked about over the years that may lead to different results based on small decisions that add up in terms of potential differences.
Matthew Eckler
Okay, great. Thanks for taking the question.
Operator
Thank you. You have a follow-up from the line of Vincent Chen from Bernstein. Your line is open. Mr. Chen, your line is open for your follow up question.
Vincent Chen
Hi. Thank you for taking the follow up. I recall on previous discussions of the natural variability of gene therapy, that you have mentioned variability probably in the two or three X range as what's natural and probably unavoidable. You treated more patients and gained more experience and have also seen what competitors have shown, are you still thinking along these lines, the sort of two to three X range of natural variability?
Kathy High
Yes. We're still thinking that if all factors are duly considered, that I haven't seen anything that would cause me to believe that there is more extensive variation than two to threefolds and that's based both on experience and extensive experience in preclinical models and also our own experience in Hemophilia B.
Vincent Chen
Great. Thank you very much.
Operator
Thank you. And at this time, I'm showing no further questions. I would like to turn the conference back over to Jeff Marrazzo, Spark's Chief Executive Officer for closing remarks.
Jeff Marrazzo
Thank you, everyone, for joining the call today. We certainly appreciate you making time in joining us and look forward to continue interactions over the coming month as we approach ASH and our upcoming PDUFA date. Thanks again.
Operator
Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everybody, have a great day.
