Alder Biopharmaceuticals Inc (ALDR) CEO Robert Azelby on Q3 2018 Results - Earnings Call Transcript

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About: Alder Biopharmaceuticals Inc. (ALDR)
by: SA Transcripts

Alder Biopharmaceuticals Inc (NASDAQ:ALDR) Q3 2018 Results Earnings Conference Call November 5, 2018 5:00 PM ET

Executives

Michael Schaffzin - Stern, Investor Relations

Larry Benedict - Principal Accounting Officer and EVP

Robert Azelby - CEO

Eric Carter - Interim CMO

Elisabeth Sandoval - Chief Commercial Officer and EVP Corporate Strategy.

Analysts

Brian Abrahams - RBC Capital Markets

Jessica Fye - JP Morgan

Nicholas Abbott - Wells Fargo Securities

Charles Duncan - Cantor Fitzgerald

Nathaniel Tower - Stifel

Jeffrey Lin - Leerink Partners

Alexander Lim - Mizuho

Matthew Luchini - BMO Capital

Carter Gould - UBS

Sumant Kulkarni - Canaccord Genuity

Danielle Brill - Piper Jaffray

Operator

Good afternoon and welcome to the Alder BioPharmaceuticals Third Quarter 2018 Earnings Results Conference Call. At this time all, participants are in a listen-only mode. Following the formal remarks, we will open the call up for your questions. Please be advised that the call is being recorded at the company's request.

At this time, I'd like to turn the call over to Michael Schaffzin of Stern Investor Relations. Please proceed.

Michael Schaffzin

Thank you, operator. Good afternoon and thank you for joining us. Just after today's market close, we filed our Form 10-Q for the third quarter of 2018 with the Securities and Exchange Commission and issued a press release reporting on our third quarter 2018 financial and operating results, both of which are available in the Investors section of our website at www.alderbio.com. You may listen to a live webcast and listen to a replay of today's call on the Investors section of the website.

Today, on our call, we have Bob Azelby, Chief Executive Officer; Dr. Eric Carter, Interim Chief Medical Officer; and Larry Benedict, EVP and Principal Accounting Officer; as well as Elisabeth Sandoval, Chief Commercial Officer and EVP of Corporate Strategy.

Before we begin, I would like to caution you that during today's conference call we will be making forward looking statements regarding future events or the future performance of the company including statements about possible future developments regarding clinical, regulatory, commercial, financial, and strategic matters. Actual events or results, of course, could differ materially. We refer you to the documents that Alder files from time-to-time with the SEC and in particular, the company's quarterly report on Form 10-Q for the quarter ended September 30, 2018, which was filed with the SEC today November 05, 2018. These documents, which are available on the SEC's website contain and identify under the heading Risk Factors, important factors that could cause actual results to differ materially from those contained in any forward-looking statements.

With that, let me pass the call over to Bob.

Robert Azelby

Thank you, Michael, and welcome everyone to our call to discuss Alder's third quarter highlights and results. As we approach our anticipated BLA filing for eptinezumab in the first quarter of 2019, we recently announced positive results for our PK comparability study which demonstrated the comparability of Epti between our clinical trials and commercial supply. Eric will discuss results in more detail, but in short, we are pleased with the outcome.

Importantly, these results together with our chemistry, manufacturing and controls and clinical data packages, puts us in a position to prepare a robust high quality BLA. Additionally, we’ve had constructive engagement with the FDA during our pre-BLA meetings and remain encouraged by the strength of our data package.

Now I'd like to provide an in-depth look at why we think Epti is uniquely positioned to capture a distinct segment of the market, if approved by the FDA. To start, of the 13 million patients with migraine prevention candidate, it's estimated that only 3.5 million are currently receiving treatment which equates to an approximately 25% treatment penetration rate for a highly symptomatic and debilitating disease. It's been estimated that prior to the launch of anti-CGRPs despite the many treatment options available only 40% of prophylactically treated patients were satisfied with the current treatment plan.

Based on these dynamics there is clearly a large unmet need for preventative therapies and we believe both migraine treatment penetration and anti-CGRP class share will grow significantly over the coming years. This has been further validated by the recent anti-CGRP launches with prescription data from the first few months of launch, suggesting over 100,000 patients have already been prescribed an anti-CGRP. Taking together these factors reinforce our confidence and the potential size of the prevention market and the market opportunity for Epti with its differentiated clinical profile and quarterly infusion mode of administration.

At Alder, we are targeting a 5 million to 7 million highly impacted episodic and chronic migraine patients that can suffer from eight to 30 migraine days per month, which means they are being affected multiple days every week. These patients are experiencing not only pain but also additional negative symptoms, including impaired cognitive ability, depression, anxiety, and gastrointestinal issues. This aligns with the results of a 2016 Global Burden of Disease study conducted by the World Health Organization. The study noticed at level 4 of the disease hierarchy, migraine was the second most common cause of disability globally for both sexes and all ages. Even worse in those between the age of 15 and 49 migraine is the top cause of years lived with disability during the most productive time of their lives. I stress these points because the full impact of this disease on patient is not well known or understood and the patient suffering from this grievous illness prefer not to talk about it because they don't want to be stigmatized. To them it's not just the headache, as their migraines impact not only their own life but also the life of their family, colleagues and those around them.

Beyond the symptoms themselves there is an uncertainty around when a migraine will strike, which means patients don't know if they will be able to function on any given day. Truly understanding this disease and its severe impact to patients, families and society as a whole is key to understanding how underserved these patients are and the significant market opportunity for new treatments. We believe Epti is well positioned to capture this opportunity because of Epti’s encouraging clinical profile that has been demonstrated in our PROMISE 1 and PROMISE 2 pivotal Phase 3 trials. Specifically Epti is a uniquely antibody designed to have a very high specificity and strong binding affinity. Further given the immediate 100% bioavailability of this total administered drug, protection starts on day one and its efficacy is sustained through 12-weeks after a single infusion.

I would now like to share our market research findings that supports the excitement around Epti’s clinical profile and its potential positioning in the marketplace. From a patient perspective, given the extent to which migraine impact their lives, our market research indicates a majority of patients are looking for the best therapy that will quickly and effectively prevent their migraine symptoms. As a result, for patient survey, efficacy is prioritized as the key driver of product choice rather than the convenience associated with the mode of administration. We found the early and sustained magnitude and speed to prevention that Epti delivers was important to this patient population.

After sharing the Epti clinical profile with patients, more than 50% of these patients showed the Epti profile over the subcu alternative. Additionally the majority of patients in our market research believed infusion treatments are more effective and work more quickly versus self injection. And many of these patients are already seeing a neurologist or specialist on a quarterly basis which aligns to Epti’s dosing schedule. We have also engaged physicians and payers to solicit their feedback on Epti. In particular, feedback from the procedure oriented headache specialists we engage with were in a group of physicians treating the largest volume of the highly impacted patients we are targeting have been overwhelmingly positive. These physicians see approximately a 150 to 200 migraine patients per month, 80% of whom are highly impacted. The feedback from these physicians is that they believe Epti outperforms other anti-CGRPs and Botox on key efficacy attributes given its rapid onset to prevention and 50%, 75% and a 100% responder rate. Their practice model also aligns with Epti's delivery by infusion at a 63% of IV infusion capability in their office and are interested in increasing their procedure base. These physicians also value the patient adherence associated with supervised medication administration that is done on a quarterly basis.

Further, their feedback indicated Epti's rapid onset of prevention would give them the ability to know if their patients are responding to treatment following the first administration due to the immediate 100% bioavailability that Epti uniquely deliver. We also heard from payers at a recent advisory board meeting and they similarly appreciated the adherence and predictability as well as the depth of response, specifically a 100% responder rates. In addition based on our experience with payers they like the fact, they only pay for the drug when it's actually infusion for the patient, unlike products in the standard pharmacy benefit. We are encouraged by this early feedback, which we believe is a positive sign for how Epti will be received upon launch.

In summary, based on the market dynamics as well as the market research and direct conversations with physicians, patients and payers, it's becoming increasingly clear to us that there is a significant market opportunity and Epti will be well positioned to capture.

An additional update, as you may have seen in the 8-K we filed today, Elisabeth Sandoval, our Chief Commercial Officer and EVP of Corporate Strategy has notified of her intent to resign from Alder to be closer to her family in Southern California. We have a search underway for Elisabeth’s successor and Elisabeth will remain with the company through the end of March of next year. If a new CTO is hired before then, Elisabeth will stay on to ensure a smooth transition. We have a strong team in place and a lot of great work underway which Elisabeth will continue to lead in the interim and I'm confident we will make significant progress in our commercial and launch readiness activities.

Elisabeth had made a number of contributions to Alder, most importantly, laying a strong foundation for a competitive commercial strategy and building out the tactical plan for our commercial launch of Epti. Since joining Alder I have worked closely with Elisabeth and her guidance and input have been very helpful for me personally, as well as for positioning the company for a successful commercialization. On behalf of the management team and Board, I would like to thank Elisabeth for her leadership, her passion and dedication to Alder.

In summary, we are making solid progress towards finalizing our BLA submission, preparing commercial supply and advancing our commercial launch readiness activities. Needless to say we're are very excited about the path forward.

I'd now like to turn the call over to Dr. Eric Carter, who will give more specifics on our PK comparability study and how we believe Epti will fit into the current migraine treatment landscape.

Eric Carter

Thanks, Bob. And good afternoon, everyone. So building on Bob's comments, we are thrilled with the positive results of our PK comparability study that we announced last month. Our study was a randomized double-blind single-dose parallel group study, a 165 healthy adults volunteers were randomized on a one-to-one basis to either commercial test drug product or chemical referenced drug product and followed through 16 weeks. The study confirmed that the planned commercial supply of Epti had a comparable pharmacokinetic profile because the Epti that was utilized in Alder's clinical trials.

Importantly both the primary and secondary PK results met the standard pre-specified acceptance criteria for drug product comparability. Furthermore the test and reference products were well-tolerated with a similar and favorable adverse event profile which was consistent with what has previously been reported for Epti.

Bob has explained why we are confident that Epti has the real potential to be a meaningful treatment option for migraine patients and capture distinct segment of the migraine market. We have previously shared some of our clinical data from our PROMISE 1 and PROMISE 2 pivotal trials with you but it's worth reiterating some important points. As the only late stage anti-CGRP administered by quarterly infusion Epti is the only product that can deliver 100% bioavailability immediately and this results in the rapid onset of prevention that is measurable and statistically significant. For both episodic and chronic migraine patients the risk of having a headache was reduced by about 50% compared to baseline within the first 24-hours of the treatment with Epti.

Based on our research that Bob mentioned earlier, we believe that significantly reducing the risk of having a migraine right away will be very compelling to patients who will have the potential to experience more control over their debilitating symptoms within one day of treatment as opposed to waiting weeks or even months to achieve relief. Efficacy by month one is unsurpassed and we note that the substantial 50%, 75% and 100% responder rates are sustained for three months. Importantly these grades continued to improve after the second, third and fourth quarterly administration.


So when we look at our PROMISE 2 trial results in patients with chronic migraine we experienced on average 16 migraine days a month, approximately 60% of Epti patients had a 50% or greater response and about 30% of patients had a 75% or greater response over months one to three. To put this in perspective, 30% of typical patients with 16 migraine days a month went to four or less migraine days a month following a single infusion of Epti. We also noted that approximately 13% of Epti patients had a 100% response in any given month during months one to three. The patients reported outcomes data from our trials have demonstrated that these large benefits will have a significant impact on the patients’ quality of life. We believe Epti’s demonstrated level of efficacy from the first administration represents a significant competitive advantage when compared to other preventable -- prevention injectable therapies, including anti-CGRPs.

It's important to note that Epti delivered these benefits while maintaining an encouraging safety and tolerability profile consistently across all Epti studies. We are pleased to conclude that Epti has a very compelling benefit to risk profile. Echoing Bob's comments assembling the BLA remains on track and our recent pre-BLA interactions with the FDA have increased our confidence in a successful first quarter 2019 submission and subsequent review.

Beyond Epti and consistent with our commitment to build a broad migraine franchise, we continue to advance our second product candidate ALD1910. ALD1910 is a monoclonal antibody targeting PACAP-38 or pituitary adenylate cyclase-activating polypeptide-38. Like CGRP PACAP-38 is a neuropeptide understood to be a key factor in the initiation of migraine via separate pathway from CGRP. We believe the targeting PACAP-38 holds significant potential but particularly the people living with migraine who may have an inadequate response to agents targeting CGRP or its receptors. We're continuing to advance ALD1910 and we expect to initiate our first in-human study by the end of 2019.

I'll now turn the call over to Larry to review our third quarter financial results. Larry?

Larry Benedict

Thanks Eric. In regards to our third quarter 2018 financial results and outlook. We continue to garner greater clarity on our launch readiness operating costs and become more disciplined on our prioritization process. As of September 30, 2018 we had $484.7 million in cash and cash equivalents, short-term and long-term investments and restricted cash compared to $536.1 million as of June 30, 2018.

In the third quarter total operating expenses were $58.5 million consisting of R&D expenses of $47.8 million compared to $52.2 million for the same period in 2017. And G&A expenses of $10.7 million compared to $8.2 million for the same period in 2017, resulting in a net loss of $62.2 million or $0.91 per share. The decrease in R&D expenses was primarily due to lower Epti clinical trial expense offset by an increase in manufacturing activities and consulting fees to support the planned BLA submission and build up of commercial supply.

G&A expenses increased compared to the same period last year, primarily due to headcount growth and expenses to support commercial and launch readiness activities.

With respect to our financial outlook, we now expect that our full year 2018 cash investment will be in the range of approximately $250 million to $270 million. This reduction in cash investment reflects our focus on making efficient use of our capital to enhance negotiations, planning and prioritization. We continue to have sufficient cash to meet projected operating requirements into 2020.

With that, I will turn the call back over to Bob.

Robert Azelby

Thanks Larry. Before we open the call up for Q&A I’d like to underscore the importance of what all of us at Alder are working so hard to achieve and that is to have a positive impact on the lives of migraine patients who are badly restraining this illness.

I’d like to thank the entire Alder team, our clinical investigators and the thousands of patients who participated in our clinical trial program. Their efforts have enabled us to deliver significant progress over the last several quarters and have positioned Alder for a potential commercial launch in the first quarter of 2020 if our BLA is approved. Overall we are very pleased with where we are today and are very optimistic about Alder’s future.

With that, we’d like to open the call up to your questions. Operator?

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] Our first question comes from the line of Brian Abrahams of RBC Capital Markets. Your line is now open.

Brian Abrahams

My first question is around the PK bridging study. I was wondering if you could maybe help us understand the pre-specified acceptance criteria, is that a company generated criteria, is that a regulatory band and have you yet had a chance to discuss those results with FDA perhaps in your pre-BLA meeting?

Robert Azelby

So Brian I’ll let Dr. Carter take that question.

Eric Carter

So the PK comparability study was very standard, and the pre-specified comparability margins are again industry standard typically what you would see when you are comparing a product from one manufacturer to the same product manufactured in -- by a different manufacturer. So this is a very standard. Have we discussed the results with the FDA? We haven’t discussed these results specifically with the FDA but the expectation is that this is a part of a strong robust comparability package that will be accepted.

Brian Abrahams

And then we’ve seen thus far I guess with the launch of the competitive CGRPs. I am sure you’ve a better sense of the discounting landscape. I am wondering I guess what net price per year per patient on eptinezumab might be reasonable to expect as this landscape evolves and how might -- how would discounting potentially need to be relative to the subcus just given that this would likely be on the medical versus the pharmacy benefit?

Robert Azelby

As you know we’re still a fair way out from launching, so we’re not going to get into specifics on what specific discounts will or will not work from an Alder perspective, I would tell you that what occurred here with ESI in the last couple of weeks, I don’t think that was any surprise in fact even I spoke about the high likelihood that ESI as well as the other PDMs may do a one on two strategy. And then finally I think again because of our proper profile and the IV administration we’re very optimistic that we’re going to be placed on formulary and have access to a large range of patients.

Brian Abrahams

And then one more quick follow-up and I'll hop back in the queue. Obviously we've seen pretty high uptake of the CGRP class thus far. I'm just curious what your market research tells you with respect to the potential for sub-optimally responding patients to switch to an IV like eptinezumab. Do you have any sense yet from payers or doc as to the degree of switching data if any might be needed to optimize adoption in that regard?

Robert Azelby

So I think we are early on right now Brian in terms of switching and how that will occur, although we did have an advisory panel here a couple of weeks ago and that question came up and that we've discussed that if someone had a not a great response on the subcu CGRP and where would physicians go at least in the ad board that we had with dozen physicians, about 80% of them said hey we would like to put them on the IV, CGRP or Epti because you get a 100% bioavailability and they would know whether or not that patient would be a CGRP candidate or not, so we are very overoptimistic about our chances there for those patients that are not getting the results what they would anticipate from subcu.

Operator

Our next question comes from Jessica Fye of JPMorgan. Your line is now open.

Jessica Fye

I guess you -- few first just following up on the last one that touched on switching, shows what appears to be rapid initial uptake for the injectable CGRPs out of the gate. Can you maybe talk about the proportion of patients on Epti you expect will be naïve to CGRP versus coming from a prior injectable product? That's the first one. Next one, you mentioned your pre-BLA interactions have increased your confidence. Can you elaborate on what it was that increased your confidence? It sounds like it was not related to the PK data. And then I have a couple of modeling ones. With manufacturing expenses running through the R&D line in the near term as we think about 2019 OpEx curious if you can help us think about how much of the manufacturing supply will contribute to that figure? And similarly on the model when you talk about having cash into 2020, can you elaborate on just how far into the year that might be? I feel like we're always sort of skeptical and assume that means January 1st but it seems like you could get a good further than that.

Robert Azelby

Alright. So that's lot of questions, so let me make I have more handles here. Number one, as it relates to the -- our modeling of percent of patients that will be naïve or switch, we’re not that ready at this point to actually release those particular data. Obviously we’re going to watch this marketplace play out. However, with that being said, I think there’s going to be for new patients coming who have not been on a CGRP who are looking for a robust depth in terms of response as well as the rapidity of response for those patients who want to get back quickly to their normal life, we're going to have a great opportunity there. And then as you know the data suggests on the subcu 50% of patients still get a 50% response. Therefore that is 50% of patients that may not be achieving an adequate response so we think we're going to be in a great position to get an opportunity with those particular patients.

As it relates to your second question, as it relates to what gives us confidence from the -- our pre-BLA discussions, I will allow Dr. Carter to give you his sights on that.

Eric Carter

So the -- we have to pre-BLA meetings, one for clinical and pre-clinical package and the other for CMC and basically these are standard meetings that you hold with the agency where you have an opportunity to lay out what your BLA dossier will look like, all of the elements thereof and you can share some of the preliminary data. And it’s an opportunity for the agency to look at this and to give you feedback in terms as to whether or not they believe that you’ve done everything that you need to do in order for a BLA after submission to be filed and then to be successfully reviewed. And although you go into these meetings with a full expectation that you will come out with a good result, as we did, it’s always reassuring when actually that’s indeed the case. And so that's why we feel now that we know exactly what the expectations are at Alder and we are confident that we can meet those expectations.

Robert Azelby

And then Jess your third question which if I understood it correctly is how much manufacturing supply we have on hand as it relates to by the time we launch? Again we are continuing to model that internally but as the CGRP marketplace plays out and we continue to adjust not only our targeting but our forecasting estimates, we’d be in a better position to understand what our actual inventory would be at the time of the launch. But make no mistake about it, we’re going to make sure we’ve enough supply to make sure when we launch that we can hit any demand number that comes our particular way. And then finally to your question of how much cash is at January 1st that we’re going to run, when will we need additional cash? I think we’ll stay with our standard statement. We’ve enough cash that will run us into 2020 and have to raise additional capital in order to launch this product successfully in 2020 to compete against three relatively large players.

Jessica Fye

I am just trying to think about kind of related to that cash runway with what I would anticipate would be in R&D line, it starts to decline in 2019, just how much it could decline given the offset of that manufacturing spend, is it possible to kind of put some color on that?

Robert Azelby

Right now it’s not, only because we’re going through our budgeting cycle right now and we also think there’s lot of opportunities of potentially additional life cycle management programs that we can use with eptinezumab to make sure that we continue to differentiate ourselves in the marketplace and so we’re working through that process as we speak.

Jessica Fye

Does that means subcu is coming back?

Robert Azelby

What I said to people before is we’re looking at a whole bunch of different life cycle management opportunities. I don’t think it’s a rocket science to think through the different ones that we maybe considering, however what I would say is we think there’s a lot of opportunities and we’re less attracted by being the fourth subcu than generating additional data in different patient types, different particular strategic elements than the subcu piece. So, we’re not ruling it out, but I wouldn’t make that your assumption.

Operator

Thank you. Our next question comes from the line of Jim Birchenough of Wells Fargo Securities. Your line is now open.

Nicholas Abbott

Good afternoon, it’s Nick on for Jim, thanks for taking our questions. First one, Bob is, you’ve now seen the competitor labels and so what differences do you think you can get into the Epti label? You’ve mentioned several times the speed of onset, reduction in migraine risk within the first 24 hours. Is that the kind of data point you think you can get into the label to differentiate yourself?

Robert Azelby

Sure. So obviously all of that goes into labels negotiations with the FDA so you can never be assured what’s going to be in the label, what’s not in the label. Here's what I would tell you, is basically we're very encouraged by the labels we've seen from the other anti-CGRPs. They are very clean, they are very simple. And so we believe we're going to follow the same path as that. I think the other thing you have to think about is the 21st Century rule that came out of Congress I think about a year and a half ago which said if you have robust clinical data that supports your messaging you can actually use that. And I think you're seeing some of our competitors make statements about their products that may not be in the label and we would anticipate doing very, very similar things.

Nicholas Abbott

Okay, great. And then a follow-up, Lilly announced 40,000 patient observational study, with a lot of free drug floating around out there as well. So in terms of your pre-launch preparation what sort of study do you think you're doing in order to broaden the experience base for Epti?

Robert Azelby

Yes, so right now we're working through that. I'll take it in two points. As it relates to what additional clinical trials we will do? Right now we're still working through that and I'm not really that excited to announce it publicly because I know if I was at Amgen, which I was, I’d be making sure I would do everything to stop that. So there is a competitive situation here. So we don't want to give that data out yet. However, we're really excited about when we sit here and we watch Lilly, and Teva and Amgen actually give out a lot of free products. To me, that is an excellent indication of them trying to grow a very large market. We know one of the anti-CGRPs started their direct consumer commercials. Again only about 10% of patients know about anti-CGRPs, great opportunity to educate them and build the market. And our strategy when we launch is going to be more about identifying those patients that are right for eptinezumab. And we would allow these three players to grow this marketplace over the next 12 to 15 months and we would come in and identify the appropriate patients that would benefit from the Alder product. And so we like what we're seeing in the marketplace right now.

Nicholas Abbott

Thank you. And last one can you just remind us of the ex-US planning strategies and discussions with ex-US regulators?

Robert Azelby

Sure. So right now we're putting together our plan on the appropriate approach to file an MAAA -- an MAA. And then what we would tell you that we think we have the data package that is -- that's sufficed to be able to submit and actually get filed and ultimately get approved. And then what we’re saying is hey we're confident in our ability to launch this product successfully in the United States and we would be open to the partnerships in the rest of world if it made sense for patients and it made sense for shareholders.

Operator

Thank you. Our next question comes from line of Charles Duncan of Cantor Fitzgerald. Your line is now open.

Charles Duncan

Hi, guys. Thanks for taking our questions and congrats on completing the comparability study recently. So a couple of quick questions. One is, relative to the launch you just spoke to that a fair amount Robert but I'm wondering if you consider sales force timing or sizing and timing. What's your sense of over the course of say the next 12 months building that out and seeding that?

Robert Azelby

Sure so obviously we’ve said in the past that we think we're going to target roughly 3,000 neurologists, pain specialist and headache specialists. We believe that we can effectively target those with between 75 and 125 sales representatives from a field force perspective. And then if you assume first quarter 2020 launch then obviously you would just march away back in terms of when you need to hire sales representatives and have them trained, when you would need to have a management on board in order to hire that next set, so we’ll follow that whole process here in 2019.

Charles Duncan

And then relative to the question that was just asked, for ex-US strategy, when do you think it’s best to have a partner onboard, would it be before the filing of an MAA or would it even be afterwards and could you see all of that happening over the course of the next eight to 12 months?

Robert Azelby

So I would say the best time to get a partner onboard is when there’s a deal to be had where both sides are very, very excited about opportunity in terms of the commercial opportunity as well as the financial elements to go through that, so I wouldn’t say there’s a better time. Is it sooner or is it later? I think it’s from an Alder perspective and whether that third-party maybe as you come to an agreement on, the excitement about the opportunity and the financial arrangement. So I don’t think we’ve timing on what’s best or what’s worst as we march forward here.

Charles Duncan

And then final question on PACAP-38. I guess I am wondering if maybe I missed it but when do you expect first data out of it? I know the first studies are going to be PK/PD type studies but I’d love to see some clinical activity and when would you able to talk about that, do you anticipate?

Eric Carter

Well we anticipate initiating the first in-human trial in 2019 so we would anticipate that we’ll be seeing the first clinical data in 2020.

Operator

Thank you. Our next question comes from the line of Paul Matteis of Stifel. Your line is now open.

Nathaniel Tower

Hi. Good evening, guys. This is Nate from Paul’s team. Thanks for taking the question. You fielded one or two questions on patients switching around the CGRP therapies, is there a clinical rationale for patients cycling between anti-CGRP antibodies?

Robert Azelby

Dr. Carter?

Eric Carter

Yes, an interesting question of course that everybody has been thinking about, and obviously we have two different types of anti-CGRP activity, right? There’s the binding to the CGRP ligand and then there’s the binding and blocking of CGRP receptor, and does that translate in itself in a different response, therefore perhaps directing certain patients to one type versus the other? It’s too soon to tell. And I think the clinical experience will broadly be the best guide as to whether or not these subcu and anti-CGRP differentiate themselves, I think that with Epti we’ll see a different differentiation simply because we believe that we’ve a different profile as a consequence of it and 100% immediate bioavailability.

Nathaniel Tower

And then maybe one more on PACAP-38, didn’t get the numbers on, the timing, and when we’ll see some more clinical data but how closely are you watching results from Amgen’s PACAP-38 asset just as a potential catalyst for putting more money here?

Robert Azelby

Obviously we pay very close attention on what our competitors are doing and what Amgen is doing with their PACAP program and so obviously again they are a receptor and we’re a ligand and if they have really compelling results we think that improves our profitability of having really good results. If they don’t, we still believe the ligand is a better pathway than the receptor and so we will have to play that out but that would be a catalyst that there is good data for patients, right? I think if there's another avenue for these patients battling this grievous illness, that's good news to everybody.

Operator

Our next question comes from the line of Vamil Divan of Credit Suisse. Your line is now open.

Vamil Divan

So two just on the payer side, the cost side. So one obviously as we are seeing lot of drugs as was previously mentioned in the market right now. I'm just curious how you think about it when you get to the sort of 2020 timeframe when you guys are entering the market, do you think you will also have to do similar sort of use of free drug first six months to 12 months to really gain access to the formularies or do you think by that point things get settled down to a point where that may not be needed? And then second question, I’ve asked this before but I'm just curious if you have any updated thoughts given the IV formulation and the fact that the other cost beyond just the cost of the drug, the administration fee and the institution fee that could come along with, are there things you can do to help manage that cost for the patients beyond just potentially providing drug?

Robert Azelby

So Vamil on the first one as it relates to free drug, obviously when we get to the marketplace we can make that assessment on if we need to get free drug or not. I think our current thinking right now is the payers are working through their coverage policies as we speak. That free drug was to actually allow payers time to figure out how to incorporate this new type of product into the prophylactic migraine space and so we think a lot of that will have settled down by the time we have launched but obviously we have for the first quarter of 2020 to engage with payers and understand exactly what that would look like for us. But I think many of those things will have settled down by that time.

To your second question let me just clarify when you asked about IV administration cost, you were talking about cost of the patient or cost to the payer?

Vamil Divan

No the other cost that a patient may have to handle potentially?

Robert Azelby

So in terms of coinsurance because of medical benefit?

Vamil Divan

Yes, Yes, exactly, just the fee of using the -- going into.

Robert Azelby

We’re going to obviously look at all that, understand do our own co-pay and coinsurance mix and making sure we have programs in place to minimize the impact on patients with co-pay cards and alike. Keep in mind that this is a vast majority of commercial population, so you don’t run into as many of the challenges as you do with Medicare and the foundations, it is mainly a commercial product and so you’ve seen with our competitors they’ve put together innovative co-pay and coinsurance programs, we anticipate doing things similarly.

Operator

Thank you. Our next question comes from the line of Jeffrey Lin of Leerink. Your line is now open.

Jeffrey Lin

Wondering Eric if you could provide us with the antibody results for the two arms of the PK comparability study, the anti-drug antibodies and the neutralizing antibodies? And then secondly, Bob, you and I have talked about this but so is it so reasonable to think that you might do a subcu failure some sort of trial in the New Year, potentially something that you could accomplish with your current sort of financial results? And then just to go back to this notion. Do you have any evidence that patients who have not achieved a response to a subcu CGRP have responded to Epti? Thanks.

Robert Azelby

So let's start with your immunogenicity question, I'll ask Dr. Carter to address that.

Eric Carter

Sure. So I think what's very important to remember is that there's no evidence that anti-drug, antibodies or neutralizing antibodies have any impact on the safety or efficacy of Epti across the entire clinical program, including the PK study, and the ADA levels and the mAb levels in the PK studies were very consistent with the overall levels that we've seen across our other clinical trials and they were very similar between the test products and the reference products between the commercial supply Epti and Epti used in the clinical trials.

Robert Azelby

And Jeff going to your second question as it relates to what I understand subcu failure, obviously as we're working through our lifecycle management program, I don't think it takes a rocket scientist to know that that would potentially be an option that we may go forward with and there's also other options that we’re deeply considering as well. And then on your last question, as it relates to is there any evidence of switching from subcu CGRP to an IV CGRP? I don't think anyone has run that study today, there’s no clinical data. There are quite a few anecdotal reports out in the marketplace between patients benefiting from one and not the other. But at this point, no.

Operator

Thank you. Our next question comes from the line of Difei Yang of Mizuho. Your line is now open.

Alexander Lim

Hey. Good afternoon, guys. This is Alex on for Difei . Thank you for taking the questions. So my first one is on those neurologists and headache specialists that you -- that have access and the ability to infuse that you're targeting. Do you expect to compete with other CGRPs there and if yes, to what extent or how much overlap do you expect with other CGRPs in terms of competing in that prescriber group?

Robert Azelby

Yes so when we think about the 3,000 headache specialists, neurologists and pain specialists that we are talking about, I’ve been out visiting them now regularly for the last four to six weeks and they're currently using the subcu. So we anticipate that that overlap with the subcus would be very, very high.

Alexander Lim

Okay, great. And then just a quick follow-up on the succession plans maybe for a new Chief Commercial Officer. What are your thoughts there in terms of what you're looking for in terms of experience? Thank you very much.

Robert Azelby

Sure. So, from -- obviously we thank Elisabeth for all the great work that she's done here for the last 2.5 years, and I'm very grateful that she will stay with us through the end of March to make sure we transition well. As we look -- as it relates to hey what are we looking for in the next -- in the replacement and hey someone who's very, very seasoned in the commercial space that has been competing in a very, very competitive marketplace, someone who has deep experience with medical benefit and retail, especially on the medical benefit and pharmacy benefit so they understand the peer dynamics and how that impacts drug choice. And then finally we’re looking for great leadership because it’s not only important that this person goes out, build a great commercial infrastructure to compete in the marketplace but we’re scaling all elements here at Alder, making some large strategic choices, so we’re looking for someone that is going to help us grow this company across all our functions to make good strategic choices and build the culture that we’d like to build here and make Alder a big and robust company as we go forward.

Operator

Thank you. Our next question comes from the line of Matthew Luchini of BMO Capital Markets. Your line is now open.

Matthew Luchini

Thanks for taking the questions, a couple from me. So first I think in the market research results that have been discussed a little bit earlier, you mentioned that 80% of docs that had a subcu non-responder would be looking to try the IV. I was wondering if you could provide a little bit color on the 20% what’s holding them back and sort of similarly you mentioned that 63% of headache specialists have -- either have in-house or have access to IV infusion center and I am just curious if you can provide any color on the strategies you might have in place to try to grow that number since that would seem to be a good point of market expansion for you? And then lastly on the lifecycle management, you mentioned and certainly it sounds like the decisions are going to be driven through or going through the budgetary process right now and I was just wondering if you might be able to provide a sense of remind us as to when we can expect some kind of visibility into what those plans might entail and when we can expect to get a first look at the next steps?

Robert Azelby

So let me take the first one, so again let me caveat, what I was mentioning before was that advisory panel that we had a few weeks back, right? And the doctors were saying hey if I tried it on subcu I would go to an IV to get the 100% bioavailability to rule the patient in and out and that was pretty consistent. As the two physicians that chose not to do that, it wasn’t that they said they wouldn’t, in classic opinion leader fashion they said I need more detail on the specifics of the absolute patient, right? So they said it would depend. And so I was just giving that as some anecdotes from an advisory panel we had. As it relates to your question about 63% I want to make sure we’re clear there, 95% of the physicians, neurologists, headache specialists and pain specialists that we’re targeting have access to IV, 63% have IV in their own practice, right? So completely different, we think those 63% when they have the IV right there, it fits into their business model, they like to grow their procedures, they do like their persistence and compliance or adherence that goes on with IV infusion and so we’re going to make sure that not only do we sell the clinical benefits of the product but we’ll highlight that from a medical benefit perspective. And then your third question on lifecycle management budgeting, when you’ll be able to see that? I think we’ll continue to figure out what’s the right time to actually go out communicate that but clearly if we execute a clinical trial on that we would post that on clinical trials on clinicaltrials.gov most likely, and so that would be open to the world to see. But right now we want to make sure we’re dotting the Is and crossing the Ts making sure when we release information we’re not putting ourselves in a competitive disadvantage.

Operator

Thank you. Our next question comes from the line of Carter Gould of UBS. Your line is now open.

Carter Gould

Most of the questions have been answered already. But I recognize you’re not guiding to 2019 SG&A spend and I appreciate your earlier comments on the build out of sales force. But just I kind of wanted to think a little bit more on the stage-gating of that build out particularly in the context of BLA filing, potential acceptance and approval and just sort of what you really see as the key state-gates for moving the ball enough forward and then I guess also in that context of the CCO departure? And then I guess separately can you just talk about the current competitive environment in terms of filling out your commercial team and how challenging that is sort of finding the MSLs, and sales reps and rest of the commercial leadership?

Robert Azelby

Yes, so let's start with your stage-gates. Obviously the big pieces for us is going to be BLA submission and then BLA acceptance right? And so first quarter and then when we submit it then hopefully two months later we are accepted and the clock begins from an FDA perspective. I would tell you right now we are really confident in our ability to submit this and be accepted and actually to launch this product. And so with that being said we're going to planning this -- we're planning to win and we're going to work our way backwards in the standard build of a commercial organization, right. And so I wouldn’t suggest that we’re going to be waiting for certain thresholds to be met only because we have quite a bit of work to do here over the next 15, 18 months and so but we're going to follow that standard stage-gate that we wouldn’t hire everybody today, we’ll bring them as needed. I think the sales force stage-gates I’ve talked about before is a good analogy that we would use in all the other elements going into a commercial organization.

As it relates to hiring and attracting people, we get calls all the time about people being excited to come and participate in the migraine space and we think that with our particular product that we're going to have a lot of success on hiring great sales leadership, great marketing leadership but we’re beginning that journey as we go forward, now although we haven't had issues with data on the commercial side and so we still have a fair bit of work to do there.

Elisabeth Sandoval

If I could just add just to echo some of Bob's comments, we have just recently finished or actually, I think have one or two positions left, hiring our field MSL team and we are incredibly pleased with the high caliber and talented folks that have joined the team and really we’re excited and it came to us because they are -- they heard what we’re doing, they are excited about Epti, they see the opportunity in this space. So I really think it's about the products and the opportunity and also the team and the energy and everything we’re building here and so I would anticipate that as we get ready for hiring sales team as well we would find the same caliber and same type of interest and energy associated with that.

Operator

Thank you. Our next question comes from the line of Sumant Kulkarni of Canaccord Genuity. Your line is now open.

Sumant Kulkarni

So Alder now has eptinezumab which is an IV product. It's going to be interesting because at the time you are going to be launching there’s clearly already three subcutaneous products out there, we could have oral products that for the prevention of migraine that could be launched at some point. So against that backdrop how are you thinking about, is there any medicine doing head-to-head trials versus the IV products, I'm not talking about switchers and non-responders?

Robert Azelby

Obviously we can always decide to do a head-to-head trials, again that's part of our lifecycle management program on whether or not we chose to do that or not. But I think I disagree with your assumption, I don’t want to infer, but I what I get from you is you're going into a marketplace where you're undifferentiated and we actually believe we're very differentiated. I think in the depth of responses we're seeing at 50%, 75% and a 100% from IV and 100% bioavailability, US doctors they tell us that on a regular basis especially the procedure-oriented physicians are seeing a large percentage of the high frequency patients who are eight or more a month.

Number two, I think you're under-called the importance of the rapidity of the product in terms of starting out prevention within 24 hours after the first administration. If you go and talk to any chronic migraine patients they are having a minimum of 15 headaches days a month. That means you're having a headache today where they're having a headache tomorrow. And when you ask them the speed of onset how important that is to them they will tell you it's extremely important and they're not that interested waiting a month, two months, three months, sometimes six or nine months to see the benefit. I understand that was the old way with the therapies that were on that doctors would tell the patient that's going to take a long time for these products to kick in. That's not the case with this product and our market research suggests that that's going to be a compelling value proposition for patients.

Sumant Kulkarni

I have a follow-up. I actually wasn’t alluding to a differentiation or lack of in fact among the KOLs that we spoke with or the docs we spoke with IV was a big point. So the follow-up I have is what are your latest thoughts on partnering this asset in the US? And the second question is most people talk about monoclonal antibodies that are either monthly or quarterly dosing as an advantage. But how big of a disadvantage could that be in maybe in women of childbearing age for example?

Robert Azelby

Okay, so just on the partnering issue I think at the end of the day this organization is more than capable to launch its products in the United States and compete effectively because it's a specialty marketplace and there's a large number of companies that have competed in the specialty marketplace all the time. I mean I would take the point if we're going into primary care and we needed that really, really large primary care sales force for multiple products in the bag. But I think we're more than capable of competing effectively in the marketplace from a US perspective and as I stated in the rest of world we would entertain a partnership if it makes sense for patients and shareholders.

Let me come back to your second question. I didn't quite understand if you could repeat that that'd be great?

Sumant Kulkarni

Sure it’s mainly about the risk of having an antibody hanging around for a long time in the case of a potential pregnancy?

Robert Azelby

Dr. Carter?

Eric Carter

Yes, so obviously we -- excluding the clinical trials, women with pregnancies and we as everybody did get one or two pregnancies, and these folks will be followed up. We have seen no issues at all there. I think that this is a situation where it's not so much that the antibody is hanging around for a long time it’s whether or not the antibody carries any measure of risk for the developing fetus. And we've not seen this and it hasn't been seen but so the decision in terms of whether to use an antibody in pregnancy is really a benefit-risk decision that a patient with their physician needs to make is the treatment such that it warrants taking whatever the risk might be.

Robert Azelby

And just to add to that, I do think most people are very pleased with the risk benefit profile that these CGRPs have and I think if you look at our tolerability and safety profile, we’re really pleased, it’s very similar to placebo. But we’re early on in these products and over time we’ll have to continue to monitor to make sure that we’re not seeing negative impact but we haven’t seen those early signs as of yet.

Operator

Thank you. And next question comes from the line of Danielle Brill of Piper Jaffray. Your line is now open.

Danielle Brill

Thanks for the question. Just a couple. So we’ve heard some speculation that Epti would primarily or could primarily be used as a one-time upfront bridging therapy for patients for transitioning them to subcu, since they have that rapid onset. So I am curious what your thoughts are around this and whether you think that could in fact be the dynamic of the market? And then also we’ve heard that this notion that orals could be disruptive to the antibody market, because the antibody’s effects maybe diminished in patients who have been taking the orals for acute migraine management and I am just curious what your thoughts on this are as well?

Robert Azelby

So I’ll take the first one then defer to Dr. Carter on the orals. First of all on the bridging therapy, as these drugs hit out in the marketplace they can be used in multiple different ways, right? So we can’t really control that, we go out and we educate the physicians, the payers determine in many cases based on their policies how these products are being utilized. I guess I am not a believer in this whole convenience play in this marketplace because it’s symptomatic and so if I give you an IV product and it drops your -- you’re a 75% responder you go from 16 to less than four migraines a month, I think that patient is going to be excited to go back and sit in that chair in the next 90 days to get their 30 minute infusion and get them to carry themselves for the next one. And two points I would make here on that is these patients are seeing their doctors on a quarterly basis for the most part anyway. So this actually aligns with how they’re actually seeing their physicians. And so to me again this is a pain market, it’s not a blood pressure market or a dyslipidemia market where convenience is a big play and so it’s possible on the bridging. We haven’t heard a lot of that in our market research and our advisory boards. Number two, as it relates to the orals, as it relates to using orals, I am assuming in the acute setting that may impact their use in the preventative space, I’ll defer it back to Carter on that.

Eric Carter

So Danielle I am not going to speculate in terms of whether or not the gepants would be impacting antibodies. I mean I’ve heard the rumors, I have not seen that data. So I wouldn’t speculate any further. The only thing I will say is that with Epti remember that the strong rapid sustained efficacy will actually seriously diminish the need for patients to ever use acute treatment. So, I would speculate that the acute need will be quite limited and therefore any impact of orals on the Epti antibody would likewise be limited.

End of Q&A

Operator

Thank you. Ladies and gentlemen, thank you for participating in today’s conference. This concludes today’s program, and you may all disconnect. Everyone have a great day.