Portola Pharmaceuticals, Inc. (PTLA) CEO Scott Garland on Q4 2018 Results - Earnings Call Transcript

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About: Portola Pharmaceuticals, Inc. (PTLA)
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Earning Call Audio

Portola Pharmaceuticals, Inc. (NASDAQ:PTLA) Q4 2018 Earnings Conference Call March 1, 2019 8:30 AM ET

Company Participants

Cara Miller - Vice President of Investor Relations and Corporate Communications

Scott Garland - President and Chief Executive Officer

Mardi Dier - Chief Financial Officer

John Curnutte - Head of Research and Development

Sheldon Koenig - Chief Commercial Officer

Jeet Mahal - Vice President of Strategic Marketing

Conference Call Participants

Dana Flanders - Goldman Sachs

Phil Nadeau - Cowen and Company

Yigal Nochomovitz - Citi

Matt Phipps - William Blair

Vikram Purohit - Morgan Stanley

Jay Olson - Oppenheimer

Uy Ear - Credit Suisse

Operator

Welcome to Portola Pharmaceuticals Conference Call. This call is being recorded. At the end of the Company's prepared remarks, we will open the call for questions and provide specific instructions.

I would now like to turn the call over to Cara Miller, Portola's Vice President of Investor Relations and Corporate Communications. Please go ahead.

Cara Miller

Thank you, and good morning everyone. Earlier today, we released our financial results for the fourth quarter and full year 2018. The press release and accompanying slides, which you can advance through the webcast are available on the Investor Relations section of the Portola website.

Joining me this morning are Scott Garland, President and CEO, Mardi Dier, Chief Financial and Chief Business Officer and Dr. John Curnutte, Head of Research and Development. Also with us this morning for the Q&A portion of the call are Sheldon Koenig, our new Chief Commercial Officer and Jeet Mahal, Vice President of Strategic Marketing.

Before we begin, I would like to remind you that remarks on this call will contain Forward-Looking Statements. For a more detailed description of important risk factors that could cause our actual results to differ materially, please refer to our most recent quarterly report on Form 10-Q and our annual report on Form 10-K.

With that, I will turn the call over to Scott.

Scott Garland

Thank you for joining us on our fourth quarter and year end 2018 financial results call. For those of you that joined us for our corporate presentation in JP Morgan in January, you remember that I talked about Portola being on a journey.

A journey to leverage our science and expertise to bring unique and potentially life-saving medicines to patients around the world. Today, we are excited to give you an update on the progress we have made on this journey and then demonstrate that Portola is executing well to deliver results. We will cover a number of significant milestones on the call today, but let me briefly summarize with the most important.

First, Andexxa continues to show strong uptake in the United States and the positive CHMP opinion we announced today, allows us to further expand the opportunity for Andexxa in Europe. Second, [indiscernible] we announced today, we have further extended our cash runway. Mardi will talk about this more later on the call.

Third, we have made solid progress on the development path for cerdulatinib. Fourth, we have strengthened our team with the addition of several experienced and talented individuals. And finally, we have gotten off to a great start executing our commercial launch of the Andexxa Generation 2 supply in Q1 of this year.

Let me provide additional details for each of these, starting with Andexxa revenues. I'm very pleased to report Q4 2018 net revenues of $14 million. This is our third consecutive quarter of strong revenues for Andexxa and reflects solid demand. As mentioned during our presentation in January, approximately 200 hospitals were stocking Andexxa by the end of the fourth quarter.

With the reorder rate of approximately 50%. That is double the roughly 100 hospitals that were restocking Andexxa at the end of the third quarter, with the reorder rate of approximately 40%. And now we have an opportunity to bring Andexxa to patients outside of the United States.

Today, we announced that the CHMP has issued a positive opinion on Ondexxya, the European brand name for andexanet alfa. This is an important milestone for patients and for Portola, and we are looking forward to the potential European Commission regulatory approval in early May.

Let me take a moment to briefly talk about the market opportunity in Europe. Recall that our commercialization plans for Europe are staged and we planning to start with just a few select countries.

These include Germany, the UK, Austria and the Nordics, recall these our Wave 1 countries. Given the broad use of Factor Xa inhibitors in Europe, we estimate that the number of eligible patients in these Wave 1 countries is equal to or perhaps even greater than the number of patients in the United States, where we estimate there were 140,000 hospital admissions due to Factor Xa-related bleeds in 2017.

As many of you know, the approach to pricing in Europe is different than in the United States and varies country-by-country. But given the unmet need across the entire region, the opportunity in Europe is meaningful. Ending final European Commission approval and the time it takes to complete pricing negotiations, we anticipate reporting our first European sales late in the second half of this year. In parallel, we continue to evaluate partnership opportunities in Europe and beyond.

[indiscernible] efforts in Europe, we have on boarded a new Head of Europe and Senior Vice President, Gerwin Winter. Gerwin brings to Portola more than two decades of international commercial experience and leadership from top-tier companies such as Celgene and Bristol-Myers. We are pleased to apply his expertise to our planned launch efforts.

Portola continues to take a disciplined approach to cash management and we have implemented steps to reduce spend and to focus our resources. This includes continuing to evaluate potential partnership opportunities for Bevyxxa, while maintaining our focus to commercial effort.

We have also made good progress with cerdulatinib, our Syk/JAK inhibitor. We had a very productive end-of-phase-2 meeting with the FDA in January, which John will describe in more detail and we believe we have agreement on a potential path forward for accelerated approval.

On the leadership front, we continue to build out our executive team with talented and experienced leaders. Our most recent addition is our Chief Commercial Officer, Sheldon Koenig, who we welcomed in late January. Sheldon brings more than three decades of commercial launch experience and global operations to our efforts already contributed a number of important insights that will help drive continued adoption of Andexxa.

Finally, we made significant progress on the large-scale commercial launch of Gen, following the US FDA approval on December 31, 2018. Let me cover some of the highlights. At the International Stroke Conference in February, we presented and simultaneously published in the New England Journal of Medicine the full results of ANNEXA-4, our Phase 3b-4 study of Andexxa. John will provide more detail later in the call, but given the consistency of the data as well as the positive feedback we received from physicians thus far, we are excited to now be able to include ANNEXA-4 data in our educational efforts.

In the first quarter of 2019, we are also marked by the publication of new joint guidelines by the American Heart Association, the American College of Cardiology, and the Heart Rhythm Society, which recommended andexanet alfa as the only agent for the reversal of life-threatening bleeding associated with rivaroxaban or apixaban.

These updated atrial fibrillation guidelines now recommend the use of NOACs over warfarin. This is an important outcome for patients and may result in a significant increase in NOAC use as warfarin is still being used by approximately 35% to 40% of patients in the United States.

This, together with our label expansion plans, which John will discuss later in the call, as well as the opportunity in Europe and the expected generic sensation of Factor Xa inhibitors in 2023 represents a large opportunity for us to save thousands of patients' lives over time.

Also [indiscernible] expansion is now complete. And we expect all 40 of our new reps be trained and seeing customers in the field in early Q2. Access and reimbursement is another critical component for success and there are a couple of important measures in place to help connect with the patients, including the NTAP granted by CMS in October and consignment through our specialty distributors.

We have also applied for a C-code, the temporary code given in advance of a permanent J-code, which will allow community-based hospitals that initiate Andexxa before transferring a patient to another hospital to receive reimbursement through Medicare Part B. We expect this code to go into effect on April 1. Combined, we believe these measures will help increase patient access to Andexxa.

In summary, we are off to a great start in 2019 and I'm pleased with the execution of our full scale commercial launch of Andexxa. Andexxa is a hospital product and as discussed, it will take time for institutions to work through the P&T approval and adoption process, but the early signs are encouraging.

And with that, I will turn the call over to John.

John Curnutte

Good. Thank you, Scott, and good morning, everyone. I would like to start by echoing Scott's sentiment on the positive reception we received to the ANNEXA-4 data that we presented at the International Stroke Conference in February. As you may have seen the presentation and publication included full results from 352 patients, of which 64% were treated for an ICH bleed and 26% were treated for a GI bleed.

Consistent with all previous ANNEXA-4 presentations, Andexxa rapidly and significantly reversed anti-Factor XA activity. We were particularly pleased to see the consistency and durability of the hemostatic efficacy and the safety across all of the patient types, regardless of age, dose, type of Factor Xa inhibitor, and type of bleed.

Of the 249 patients, who were evaluated for hemostatic efficacy, 82% achieved excellent or good hemostasis, which is the stoppage of bleeding. Most of these were in fact excellent in their response.

Importantly, we also noted a durable response among patients, who experienced an intracranial hemorrhage. Among the 71 patients with a non-traumatic single compartment intraparenchymal hematoma, 56 had excellent or good hemostasis at one hour post andexanet. Of these, 98% maintain excellent or good hemostasis at the 12-hour mark. This is important because it supports the durability of the response to Andexxa.

Now with regard to safety, within 30 days of enrollment, the mortality rate was 13.9%, consistent with previous ANNEXA-4 trial results. Thrombotic events occurred in 9.7% of patients, in line with the background thrombotic risk of the enrolled patient population. Importantly, no thrombotic events were observed among the 100 patients, who restarted oral anticoagulation.

This is a significant finding given the clinical importance of restarting NOAC therapy as soon as possible. With these data in hand, we plan to begin discussions with the FDA on a number of potential label expansion opportunities, including the addition of the ANNEXA-4 efficacy data, the inclusion of edoxaban and enoxaparin and the potential initiation of a study in urgent surgery.

We also plan to continue publishing and presenting additional data from the ANNEXA-4 trial over time. Additionally, we have now opened the randomized controlled trial -- clinical trial that the FDA requested comparing Andexxa to the standard of care.

Turning to our Syk/JAK inhibitors cerdulatinib, we recently had a productive end-of-phase-2 meeting with the FDA and we believe we have an agreement on our path forward in PTCL or peripheral T-cell lymphoma. The agency agreed that the single-arm study design is reasonable and would support accelerated approval.

They requested additional data supporting the proposed dose, which we are in the process of submitting. Pending the outcome of our discussions with the FDA, we anticipate starting the registrational study before year end.

I will now turn the call over to Mardi for the quarterly and year-end financial results.

Mardi Dier

Thank you, John and good morning, everyone. 2018 was an exciting year for our business, with the approval and launch of Andexxa. We saw solid revenue growth of Andexxa and employed a disciplined approach to cash management. Please refer to our press release issued this morning for a summary of our financial results for the fourth quarter and full year 2018, and I will touch on the highlights.

Let me start by talking about our cash. We ended 2018 with a balance -- a cash balance of $317 million, compared to $534 million at December 31, 2017. As you heard from Scott, we announced yesterday that we have secured $125 million in a non-dilutive senior secured loan from our long-term partners, HealthCare Royalty Partners and Athyrium Capital Management.

We now have cash to successfully fund the ongoing commercialization of Andexxa and launch preparations in Europe. This transaction, in addition to our existing cash balance, extends our cash runway to the end of 2020.

Moving to our revenues. Total revenues were $15.3 million for the fourth quarter and $40.1 million for the full year 2018. Total revenues for the quarter included $1.2 million in license and collaboration revenue. As stated on our last quarterly call, based on the terms of these partnerships, we expect minimal contribution from these collaborations in 2019.

In the fourth quarter, as Scott mentioned, net sales of Andexxa grew to $14 million, a more than 80% increase over the previous quarter and our third consecutive quarter of strong Andexxa revenues. This brings the 2018 revenues of Andexxa to $24 million.

Our total operating expenses for the fourth quarter were $102.5 million, up from $95.7 million for the same period in the prior year. This increase is driven primarily by two charges that were taken in the fourth quarter of 2018 relating to the transition from Gen 1 to Gen 2 Andexxa supply.

I will now provide more details on each of these charges. Stock-based compensation for the quarter was $19.8 million, which includes the first charge I referenced of $9.2 million for stock purchase by our manufacturing partner, Lonza.

As part of our long-term supply agreement, Lonza earned the right to purchase a certain number of common shares upon the approval of Gen 2 manufacturing process and at the start of tech transfer to a second manufacturing site within Lonza. Having two sites at Lonza that are validated to manufacture Gen 2 will give us manufacturing flexibility to meet the anticipated worldwide demand for Andexxa.

Cost of sales for the fourth quarter were $12.4 million and $18.1 million for the full year 2018. Included in this number is the second charge I mentioned. A $10.3 million charge taken in the fourth quarter of 2018 for additional Andexxa Gen 1 inventory that we committed to manufacturer in 2019 as a safety net in the event the FDA approval of Gen 2 was delayed.

As we have mentioned in prior quarters, we have manufactured and expensed Gen 2 product that we believe meet the anticipated demand for the next few years. However for 2019, cost of sales will include the remaining Gen 1 product that we have on hand that we plan to sell this year during the transition to Gen 2.

Moving to other operating costs, I will refer to our full year 2018 results. Research and development expenses for 2018 were $216.2 million, compared to $203.7 million for 2017. This increase is mainly due to Andexxa Gen 2 manufacturing expenses totaling $82.6 million for the year as well as the $10.3 million charge described earlier.

SG&A expenses for 2018 were $151.2 million compared to $91.1 million for the same period in 2017. This increase is due to the build-out of our field force in 2018 and the commercial-related activities for the launch of Andexxa.

For the fiscal year 2019, we expect R&D expenses to be in the range of $125 million to $140 million, including stock-based compensation expense of approximately $22 million. This significant decrease from 2018 is due to the approval of our Gen 2 manufacturing process in December and other expense reductions.

The 2019 spend includes initiation of the randomized controlled trial in Q1, anticipated initiation of a surgical study and other label-enhancing plans for Andexxa as well as the ongoing validation of our second site at Lonza.

For 2019, we expect SG&A expenses to be in the range of $200 million to $215 million, including stock-based compensation expense of approximately $36 million. This increase in 2019 includes the expansion of our sales force and marketing efforts in the U.S., including our medical affairs activities as well as preparations for the commercial launch of Ondexxya in Europe.

And with that, I will turn it back over to Scott.

Scott Garland

Thanks, Mardi. In closing 2019 will be unparalleled in terms of activity and catalyst across the Company. We dedicated to making Andexxa success in the United States and in Europe, progressing toward a registrational study for cerdulatinib and identifying the right path forward for Bevyxxa.

With the ongoing build out of our executive team over the last year, I'm confident we have the right team in place and will be well equipped to accomplish the ambitious goals we have set out for ourselves. I want to thank you for your continued interest in Portola.

And with that, I will turn the call over to questions. Operator?

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from the line of Dana Flanders with Goldman Sachs. Your line is now open.

Dana Flanders

Hi, thank you for the questions and congratulations on all the progress. My first one is just on Andexxa and maybe if you could just provide any more color on how to think about the impact to net sales in Q1 from the change in distribution model? We are in March now, so just curious if there is any more qualitative or quantitative color you can provide there? And do you plan to give us kind of what the stocking impact is versus underlying demand or use?

And then just a quick follow-up on the CHMP decision, I realize it's country-by-country pricing, but just any refined thinking on where pricing will shake out in Europe relative to the US? And as you get closer to launch, what are the factors that would drive a decision one way or the other on a potential partnership? Thank you.

Scott Garland

Great. Let me try to make sure I get all of those, and I will sort of break them up into different questions. Your first question was sort of some additional color on how things are going with the Gen 2 approval in Q1.

So obviously this is a Q4 2018 call, we are not going to be giving revenue for Q1 and so do our call in May. We are pleased though and we are happy with the signs of execution as well as the early signs of adoption. And so, of course, we will look forward to giving you some more detail on that going forward.

In terms of stocking, we will breakout stocking on our Q1 call and articulate the true demand versus the stocking. You guys remember we have switched our distribution model from a dropship to a standard specialty distribution model. So we will break that out for you in Q1, when we do our call.

I think the next question was EU pricing. I'm going to give that to Sheldon, but before we do that, let me just answer the last question, which is around EU partnership. We don't comment publicly on discussions around partnership opportunities. We know we have got a great drug in Europe.

We really do feel like the demand is there, particularly when you look at the size of the market opportunity in Europe, and also the fact that we included Germany in ANNEXA-4 trial site, which has created a lot of interest among its KOLs in many countries in Europe for this product.

So we are excited about the opportunity there. We are going to go ahead with the staged approach and we will keep looking for partnership opportunities as we go forward. Sheldon, why don't you take the pricing question?

Sheldon Koenig

Thank you, Scott, and good morning and good afternoon. So as it relates to pricing, we are not going to officially comment on specific pricing at this point, but what I can tell you is that we do know have the Factor Xa use is about 50% more in Europe than in the U.S., and this is based upon IMS data.

So we actually believe [indiscernible] countries have similar patient numbers and bleed rates as the U.S. So essentially, the opportunity is very significant. So as we continue our rollout in our launch in Europe, we will continue to update you on our progress.

Operator

Our next question comes from the line of Phil Nadeau with Cowen & Company. Your line is now open.

Phil Nadeau

Good morning and thanks for taking my questions. First a question on end user demand, appreciate You are going to give us the - I think you said distributor stocking numbers in Q1. How much visibility do you have on - how much of the product is being pulled through to actual patients versus being put on shelves in hospitals?

Scott Garland

So we certainly have visibility into the data that goes from our distributors to our hospitals. We get that data on a relatively regular basis although it is somewhat delayed relative to what we saw under a dropship model.

When the product actually gets used in a hospital, we don't actually have visibility into that. There are ways we can go after the [indiscernible] to see the actual, again when the product ultimately gets used. But right now, what we have is visibility into the hospital in terms of its use.

We certainly have a lot of anecdotal information as well as the product getting pulled through. The other way that we can assess it obviously is our reorder rate. And as we said, we see really strong reorders, which we think is indicative of real demand and real pull through.

Phil Nadeau

And do you have a sense of whether the size of our reorder at a hospital? Or I'm sure you do know this is the size at a reorder hospital the same as the initial order? Does it get bigger? Does it just get smaller? Is there any trend in the reorder order size versus the initial order?

Scott Garland

Sure, let me throw it over to Jeet, who can give you some color on that.

Jeet Mahal

Yes, thanks Phil. So the initial orders as we said in the past are not excessively large. With that said, the reorders do seem to be on the management of either the initial order slightly smaller.

Phil Nadeau

Perfect. Okay. That is very helpful. John, one for you on the update on sort of maybe - so the FDA requested more information on dosing. Can you give us some sense of what it is the FDA is looking at and whether you have the data in-house already or do you have to generate it?

John Curnutte

Right, Phil. And what they are asking for is additional data regarding dose that we are proposing for the registrational study. We presented the data at the various meetings with those doses. So we are in the process of pulling the data together that really - this helps support that dose.

We are confident that we will be able to provide that data and that all of the data we will submit will actually support the proposed dose. So it's just some additional information that they want on that proposed dose.

Phil Nadeau

Perfect. Okay. Then Mardi one for you on the cost of goods you mentioned that there will be some cost of goods expense this year from Gen 1, you may have the Gen 2 materials in excess. Can you give us quantitatively some sense of where the gross margin will fall out for the year?

Mardi Dier

So, what we have said, I'm not going to give you quantitatively what we will file for the year. What we said looking in the future, our COGS is going to be in that 15% to 20% range and that is a blended rate between Europe and the US. So for in 2020 and 2021, of course, you will see some of that, it already expensed Gen 2 flow through, so 2019 remains a little lumpy, because you do see that Gen 1 product that is a little bit more expensive to make to - we are going to finish up our Gen 1 run and that is going to flow through COGS. So it's not hugely significant Phil and looking at the consensus numbers, I think overall the analysts have that number pretty close to where we were comfortable with what we say.

Phil Nadeau

Perfect. Thanks for taking my questions.

Operator

Our next question comes from the line of Yigal Nochomovitz with Citi. Your line is now open.

Yigal Nochomovitz

Hi, thanks. Thanks for taking my question. I'm wondering if you could give us some broad perspective on the cadence over 2019 in terms of the number of hospitals that are going to be able to prescribe Andexxa? I understand that the target is around 1,500, but I just want to get a sense of that? And what percent of those are going to be online by the end of this year?

Scott Garland

Yes, sure, Yigal. I will throw that one over to Jeet.

Jeet Mahal

Yes, hi, Yigal. As we noted, we have 1,500 targets in the United States, which compromise 600 Tier 1 or what we call it the Level 1, Level 2 trauma centers and comprehensive stroke centers, and another 900 advanced primary stroke centers.

Our sales force will be able to reach all 1,500. Now, we don't expect all 1,500 to be up and running this year. As you know, there is quite a bit of a process at these institutions. And that is institution dependent for P&T reviews, order sets, training, however, so far, we are encouraged by the early progress we have made with the Gen 2 launch and the number of PT wins.

Looking back to some of our previous comments, last year when we remarked on the rate of new hospital acquisition, what we commented on is that, we weren't quite sure last year if those were the low hanging fruit of sorts, in terms of hospitals that came on in between launch and the end of Q4, But we were comfortable with that rate going forward.

So 1,500 might be our targets, in terms of talking to this year, it'd be only a portion we think will get on board by the end of year.

Yigal Nochomovitz

Okay. And I understand You are not ready to give metrics for the new year currently, but on the 1Q call, could we expect some information that could help us get a better handle on the usage rate per hospital going forward in 2019?

Scott Garland

So Yigal certainly, obviously we will give you the top-line revenue number as well as the number of hospitals that have ordered in the reorder rate. Whether or not we give any greater detail on that, we will certainly consider time. I mean if we think it really helps, substantially figure out what that - understand a little bit more about the launch kinetics. We are open to it.

As I said before, you go on as you know. I always will make sure that before we provide any data, we make sure that we are confident that that data is truly accurate, that is representative and that we will give on an ongoing basis. And we are still early on our launch. We just want to make sure we don't get ahead of ourselves. So the short answer is, we will consider that and we will certainly let you know when we announce the data.

Yigal Nochomovitz

Okay, thanks. And then regarding some of the market dynamics, and I know you can have a limited ability to track, but anecdotally, for the hospitals where Andexxa is available, is it your understanding to that is clearly the first line therapy for the Xa bleed or might there be some hospitals that while they have Andexxa available are still using kind of the older methods like fresh frozen plasma or the four-factor PCC use even though that Andexxa is available?

Scott Garland

Yes, actually what we are seeing in copay again, this is anecdotal is that when Andexxa gets used is adopted to our label and we are obviously the only approved drug for the use and the reversal of Factor Xa inhibitors. Certainly no hospitals are using PCCs and we expect, they probably will continue to use PCCs, although we believe that is inappropriate given the fact that we are the only approved agent. But in many ways, you call it, it really does vary by hospital. It's kind of hard to speak about it generally because each hospital is somewhat unique.

Yigal Nochomovitz

Okay. And then just one final one, I think a lot of the investors, including the analysts have been trying to track what the product locator website, I'm just wondering if that is being caused because it seems like the statistics been at around 200 and hasn't really moved in January, but I'm assuming you've gone beyond 200. So can you just clarify whether that is still active or not?

Scott Garland

Yes, let me turn that one over to Jeet.

Jeet Mahal

Yes, Yigal, we put together that product locator one side for the early supply program for the ability of physicians and patients. So look quickly to find where Andexxa is available locally and with the shift to the distribution model where Portola no longer directly ships to new hospital, we want to make sure that map remains accurate.

So we are going to take a little more time in terms of updating that to make sure that again when patients or physicians need to use that map that the math is accurate on where andexanet is. Going forward, we do plan to update that quarterly. So that'll be probably right around the time of our earnings calls going forward. And in the meantime, we will let you know if anything changes there.

Scott Garland

There you go, we have been adding more sites obviously since the approval of Gen 2. So you just won't see it on the map right now.

Operator

Our next question comes from the line of Matt Phipps with William Blair. Your line is now open.

Matt Phipps

Good morning. Thanks for taking my questions. In the press release on the EMA positive opinion, you mentioned additional pharmacokinetic data was going to be requested as far as the conditional full approvals. Can you give any details on that? And then any additional timing on the game plan for Bevyxxa? Could you quantify like how much spend is being utilized in the Bevyxxa pilot program and when you will have a decision once you do that?

Scott Garland

Yes. So let me break those in two. We will start with the request from EMA and then we will have Mardi do the Bevyxxa spend. So John on the EMA conditional approval?

John Curnutte

Yes, Matt. Just to clarify the dosage in the SMPC which is the European label that you will see, it's the same as that of the dose that was approved by the FDA. And as part of the conditional approval, there were several things that the agency wanted and one of the things they wanted was additional pharmacokinetic data to support the dose.

Now the reason for this is that the dose that has been derived for Andexxa comes, of course, from the Phase 2 dose-ranging study, the Phase 3 studies in the healthy volunteers and those are largely done with the Gen 1 product. So what the CHMP is looking for is a confirmation that those doses that we determine with Gen 1 are also appropriate for Gen 2.

Mardi Dier

Yes then I will just add on the Bevyxxa spend Matt. [indiscernible] our focus is the launch of Andexxa in the U.S. and like we said with Bevyxxa, we really narrowed the focus down to just a few centers, hallmark centers of excellence. And so of our overall spend, I would say, it's a very minor portion that we are spending on Bevyxxa now. And we will keep you updated on our plans strategically with Bevyxxa, what the next steps are there.

Operator

Our next question comes from the line of Matthew Harrison with Morgan Stanley. Your line is now open.

Vikram Purohit

Thanks. This is Vikram on for Matthew. So two questions from our side. One on Andexxa, could you just talk a bit more specifically about what kind of impact you expect from the availability of the C-code on Andexxa reimbursement, build ability of the product et cetera. And on cerdulatinib, just wanted to see what your current thoughts were on partnering or out-licensing that compound? Thanks.

Scott Garland

Sure. On the impact of the C-code, so as we mentioned in the script, as well as we talked about this a little bit at JP Morgan, what this does as it allows a hospital who initiates Andexxa and then transfer that patient to a different hospital and typically what would happen is the small community hospital would work a patient up, start them on Andexxa and then transfer a triad then to the larger academic hospital. It allows them to reimburse that product at an ASP-based reimbursement grade under Medicare Part D.

We do think that is something that the smaller hospitals would appreciate and actually when we had gone out, talk to hospitals, we heard as a consistent refrain that that is something that they were hoping we would be able to provide. And a result, we have applied for it and we hope to get that in on April 1.

So I do think it will have an impact on these smaller hospitals in terms of their willingness and desire to use it before they treat out that patient to a larger hospital. In terms of cerdulatinib partnering thoughts as we had said on our previous call, and on this call, we are open to partnering cerdulatinib exactly what that might look like, we haven't gotten any detail.

One of the big sort of points that we wanted to have under our belt, was the end-of-phase-2 meeting and now we have that, we are going to do some internal assessment and then obviously consider what our path forward is. And if and when we have more information on that, we will certainly share it with you.

Operator

Our next question comes from the line of Jay Olson with Oppenheimer. Your line is now open.

Jay Olson

Hey guys, thanks for taking the questions. And congratulations on the progress. With regards to the ANNEXA-4 trial, which seems to suggest a mortality benefit, do you expect the current controlled study to demonstrate a mortality benefit for Andexxa versus the standard of care. And is that something that you eventually hope to get into the ANNEXA-4 label?

Scott Garland

John, do you want take that one?

John Curnutte

Yes. Hi, Jay. The RCT study has its primary endpoints, looking at their reversal of anti-Xa and looking at hemostatic efficacy, certainly mortality is one of the endpoints that we are looking at, and it would be speculation at this point.

But I think based on the data from the ANNEXA-4 where we see it in the 15% range, one might expect to see that - might hope to see that in the randomized controlled trial. But the real focus of the RCT from the FDA point of view is to look at this hemostatic effort is the question.

In terms of how against the other agents, how many of these were on their way to stop bleeding on their own, certainly some are, that have been captured in ANNEXA-4. So that is the real question and the other one, of course, is really this background thrombotic rate, which has really come down substantially as the N of the study now is 352. So those are the main parts, but certainly mortality continues to show these encouraging results as we have seen thus far, we'd be delighted to evident the label, absolutely.

Jay Olson

Okay, great. And then just on cerdulatinib, when should we expect to see additional clinical data? Do you think there will be anything at AACR or ASCO and besides PTCL, what other patient groups are you focused on?

Scott Garland

Right, we have submitted, updated data and we have a couple of meetings mid-year that where if the abstracts are accepted, we will be presenting the data. In terms of the updates, it will really contain three pieces. Certainly as you mentioned, Jay, it will have the PTCL update and of course that is a disease that has multiple subtypes.

So it will be interesting to see those data. By, in addition to that, we will have an update on our cutaneous T-cell lymphoma work that continues to enroll. And you see some of the encouraging data there and then finally, we have the combination data where we now are combining cerdulatinib with Rituxan in the follicular lymphoma patients and we will have an update on that. So I think that is what you can expect, hopefully at two different meetings, middle of this year.

Operator

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

Uy Ear

Hi, this is Uy Ear for Vamil. A few questions please. So in the conditional EMA approval, just wondering whether there is any timeline that was imposed to get all the data and the studies done in order to get final approval. And second question is, does the conditional approval, do you expect that to sort of impact adoption or any potential partnership capability that is the ability to get a partnership. And I also have a follow-up question on cerdulatinib. Essentially, what do you think the opportunity is for PTCL? Thanks.

Scott Garland

Sure. Let me kind of take those and perhaps at different order and then I will have John cover the first one, I will take will the conditional approval affect the uptake of Andexxa or Ondexxya as it's going to be called in Europe. The short answer to that was, no. We don't think that will have an impact at all on the utilization or desired use of products in Europe.

We continue to get actually very positive feedback from our European thought leaders about the need for the drug and the fact that the drug was approved on a conditional basis is an indication that there is a high unmet need and that is recognized by the CHMP and ultimately hopefully the European Commission.

So short answer on that one is, no. I don't expect that to be an issue at all for either adoption or potential partnership opportunities. In terms of the timeline for EMA as well as -- oh, you were asking about market size for PTCL, John why don't you to do the EMA timeline for the conditional?

John Curnutte

Sure, I will. Well, so a couple of things. First of the answer is yes. There are timelines, but let me kind of set it up for you. The recommendation as you read this morning in the press release is for conditional approval.

What we are going to be required to provide is the final study report for the ANNEXA-4 trial that is actually nearly complete and when the randomized clinical trial is complete, they have also requested out in 2023 when it's going to be finished that they get a complete study report for that as well. And then as we have mentioned, they are also are asking for some additional pharmacokinetic data.

So that is really the extent of the condition. So that they have asked a quite reasonable. Now in terms of the timelines that I don't believe it has been released yet by the CHMP EMA, but there are and what will happen is in conjunction or after the European submission fully licenses the drug in early May.

There is something called an EPAR that comes out and the EPAR contains the details of exactly what those conditions look like and you will see all of the timelines there. They are quite reasonable, nothing really concerns us. I just got back from London, working with the EMA for the past week on this and I'm very pleased with what we have worked out with them.

Scott Garland

Thanks, John. And then your last question is around the market size for PTCL. We estimate there are about 3,600 relapsed/refractory PTCL patients in the United States and about another 2,000 CTCL patients in the United States either relapsed or refractory. I think the real benefit of PTCL and CTCL is obviously one that shows activity for the drug. And we see quite stunning activity for this drug, a 50% complete response rate in the PTCL patient population.

So like a lot of oncology drugs, you go in these indications, you do see where you get this initial activity and you establish a beachhead and that is important opportunity, plus there is a lot of patients who can really benefit from this drug and it's a pretty high unmet medical need. I think going beyond PTCL, John mentioned our follicular lymphoma data and the potential to combine it with Rituxan, that obviously [indiscernible] market opportunity quite a bit.

So we see PTCL and CTCL as a way of demonstrating the really powerful efficacy of this drug and also getting an accelerated approval path forward for oncology, but then broadening its usage outside into follicular lymphoma with combination with Rituxan and hopefully you will see some data this year in our efficacy and combination in follicular lymphoma.

Operator

And I'm showing no further questions in queue at this time. I would like to turn the call back to management for the closing remarks.

Scott Garland

Great, thanks so much for joining us on our call today. We look forward to talking to you next time. Take care.

Operator

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may all disconnect. Everyone, have a great day. Good-bye.