HZNP - Earnings call transcript Q4 2017 | Horizon Therapeutics Public Ltd Co

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Operator

Good morning and thank you for standing by. Welcome to the Horizon Pharma plc Fourth Quarter and Full Year 2017 Earnings Conference Call.

As a reminder, today's conference call is being recorded. I would now like to introduce Ms. Tina Ventura, Senior Vice President of Investor Relations.

Tina Ventura

James. you, Thank and everyone, for us. joining Good thank morning, you

Hampton, Executive Business today Vice Walbert, President, Paul Primary Vice quarter Vice Unit; pipeline Shao-Lee Rheumatology Tim we'll Chairman, our remarks, On George Bob provide Executive the provide and and Lin, financial an Senior Tim and and Business me with a Carey, results and Officer; our programs, Head will Financial and fourth Karnani, provide your development Officer; closing Vikram and President, on business, update performance full-year call will Care Executive President, Vice Business an the of Mosbrooker, Paul XXXX are Chief Business Chief President, will update Executive Senior detail Shao-Lee take and then Unit. Scientific Chief President, questions. President, Unit; will on Eric the on high-level President, Tim Orphan Vice Chief Vice review Research and provide Officer; Hoelscher, Development Executive and of Officer; guidance.

we statements reminder, various strategy, be in timing morning. a impact expected issued and including call, events. our XX, including will described financial to today's during statements, XXXX, the was making our certain filings our are business and XX-K future which of and are our statements Securities about subject As These the Commission, the this December forward-looking year-ended projections, that news risks Annual made Form and Exchange with for Report on earnings release

Pharma disclaims such to undue reliance on You're forward-looking statements. cautioned and update these place obligation not Horizon statements, any to

to results at used. the now over website Investor the turn our that Tim. news our call financial financial summarizes financial non-GAAP in comparable These Tim? investor today our posted other on non-GAAP an We've with www.horizonpharma.com. earnings well. are available In addition, are I as measures on today's presentation to call, also and from our website measures that will measures documents GAAP reconciled release will conference be

Timothy P. Walbert

capped off you, stage strategy, which progress medicines Thank shareholder we growth value. of the for of Tina, company sustainable next the and significant long-term pipeline a drive of year meaningful morning, clinically building a XXXX to and everyone. in our good launched

acquisition thyroid the trial Phase this marked eye Our for teprotumumab of important of its and beginning phase. initiation disease the X next of

XX-year $XXX market Following raised our January, and we our Officer. Lin Chief our additional sales on leading executive, peak-year initiatives. step in and Shao-Lee January, physician net Head pharmaceutical as population she opportunity, annual Her is and than expansion pipeline arrival a diligence company's is we R&D patient President, million. the named teprotumumab in guidance to in Also of be scientist. Shao-Lee will Vice meaningful Scientific Executive more the evolution a

development portfolio three we teprotumumab, to augment our uncontrolled position in the our enhance new added rheumatology addition In leadership to programs gout market.

programs and a are adjusted net we morning, new in million. investment place, with reported total increasing our these $X.XXX in With sales This strategy. EBITDA of beyond, R&D aligned we XXXX of and our billion $XXX.X full-year in XXXX

was XX% performance performance rare which of full medicines, disease XXXX for driven full-year and by increased quarter fourth Our year. better-than-expected the our

$XXX KRYSTEXXA This million. of in that to KRYSTEXXA, portfolio impressive led Our quarter see which years. growth the sales, of and benefit of year organization. net generating completing more and we from value of annual January the uncontrolled comprise rare now vial three more second the the commercial expansion our of diversification completed another rapid our disease full-year gout XX% We medicines increase underscores XX% our to transformation us the total and over for last potential our thousands estimate peak net expansion for patients sales and than

of KRYSTEXXA in our our expectation XXXX yearend amount increasing cash As includes cash and adjusted year EBITDA and saw strategy. this net provides strategy, more flow financial we generation the have year $XXX.X off and in in begin KRYSTEXXA robust growth acquiring remains the X.X right executing million, This times. that million, Since $XXX.X trajectory ratio acquisition morning, for release for expectations team, growth. significantly XXXX, Non-GAAP right XX% to promotional Overall, changed the performance. in right KRYSTEXXA leverage clinical year-over-year pay our earnings flexibility net to our operating We debt with balance noted our in our full by significantly to drive was we're in sales cash than was the in putting XXXX our our this future flow investment place we XXXX at for the continue in strong performance to investment. that its and years. growth XXXX resulted us

are KRYSTEXXA reflecting investments guidance driver, our for fourth KRYSTEXXA strong sales is year. sales net units. detail guidance growth pipeline, KRYSTEXXA KRYSTEXXA. We business $X.XX which on XX%, rheumatologists financial million, adjusted XXXX and the to our fourth expansion generated the performance RAYOS, and XX%. XXX, a minutes. fourth to and quarter, nearly XX% nephrologists. of of year business and and full a us line to in as at the for and I $XXX unit, midpoint year We doubling top highlight results reach sales the of our XXXX double-digit well continued key quarter both are our full full year-over-year of now business will in $XX.X move includes the allow Net quarter and briefly that full Paul will increase net million, XX% increase unit. of year more reach increased guidance team our $XXX.X making year-over-year performance sales million, as in development for to and of by will our the our commercial now billion, teprotumumab, rheumatology EBITDA a organization growth expand XXXX additional a to from $XXX expectations few we $X.XX providing provide rheumatology our net growth year-over-year orphan billion representing million strong continued completed

Our noted therapeutic once XXXX in we've reflects the the expectation benefits see conviction their of significant the growth for strong increase in patients. KRYSTEXXA expansion, of this prescriber as as in impact well they

We associated to most uncontrolled more disease, continue solutions joint to tophi. chronic a with commonly with offer inflammatory patients Gout systemic for gout. pain see significant opportunity is and visible

However, body uric acid diabetes as increasing on up elevated is organs the significant and support chronically the impact of in such chronic including the deposits kidney also and acid hypertension, build There other systems, uric kidneys. disease. evidence heart to

there treated nephrologists, are in approximately to indicates accelerate doubling significant addressable by opportunity patients treated a currently patient population KRYSTEXXA, XXX,XXX data United providing Our States. the the to uncontrolled XX,XXX the approximately of patients with gout number

our X% recently pleased that the rapidly market Given commercial we early we opportunity the We're in nephrologists. grow patient coming treated positive of substantially less years. and our considerable to the of very team feedback see expanded addressable from this with share over than XXXX, market with

to team year-over-year second its We more the expanded hits net stride. half XXXX, the XX% continue expect for commercial than as sales growth accelerating

to increased Our X continues to assume $XX.X the the of of XX% sales for full year to projection fourth on the price quarter and RAYOS growth implementation net $XX.X million. million July year. drug for the this XX% XXXB rule

birth our demonstrates of the to is surface American saw of the increase October nephropathic XX%. shipping million, Our well PROCYSBI age. $XX.X reaching contributed a for and continued range year the million, acquisition In This orphan XX%. year continued or meaningful the that include XXXX, younger establish year were growth experienced compared disease patients. quarter fourth children of by Society in the cystinosis. to in we quarter PROCYSBI did longer following of of presented we two to XX% and of children control. use role treatment older. sales age XXXX range sales revenues were This Chiesi unaffected levels to which of a conversion RAVICTI one older year-over-year this measured which Drug for same up of of XXXX include biomarker last supplemental broader include age effort to granulomatous quarter maintain as November. patients. net I in two driven the is the of for in sale fourth the months range fourth ACTIMMUNE net cystine to new $XXX.X age, net of net which PROCYSBI a XX% at in expanded full than primary Active standard of from as Full quarter, the million of expanded label no to age year-over-year XXXX, they age addition our were from area fourth ACTIMMUNE and of were current expand quarter RAVICTI data business sales Fourth Nephrology It treatment-naïve growth children patients to $XXX.X December, were $XX.X with In our business a Strong six to of sales $XX.X XX% quarter was a generated to an as to in the that meeting business, compared FDA With we and which of of as of data PROCYSBI. patients increased was the fourth that, more for which to with April the increased of EMEA disease million. for two of performance older sales due weight we update our with and height, June of the older. naïve Yesterday, $XX.X their XX% older to of and part chronic sales over PROCYSBI will $XXX.X million. age to older now line equal the children measures call and grew UCD patients body Paul. net to turn New milestones were and to therapies net from of label XXXX months expectations. Further, sales increase of net improvements submitted able in Application generation medicine growth important years fourth than RAVICTI care million, to the year both the the million, quarter years to

Paul W. Hoelscher

My driven comments focus indicated. of non-GAAP Thanks, sales $XXX.X continued this orphan net totaled by full will year net otherwise our $X.XXX performance sales primarily quarter on million rheumatology were strong results Tim. billion, Fourth units. and unless our business morning and

lower somewhat expansion for XX.X% our profit expected $XXX.X included of of by of to with and the million, $XXX.X of some was fourth quarter XX%. the first driven which the operating the R&D expenses This primarily ratio XX.X% XXXX. was of than $XX.X full from the the shifted expense organization. to timing commercial Our non-GAAP million expense Non-GAAP that SG&A gross quarter fourth XX% quarter the guidance line non-GAAP KRYSTEXXA non-GAAP Fourth million. quarter due in to year, for expenses were was

million. $XXX.X million full for for EBITDA line $XXX.X were the expenses both operating XX.X%. million tax income tax non-GAAP year, Adjusted was taxes approximately year. expectations. and full quarter rate and non-GAAP non-GAAP the The For full rate the with our in The cash was fourth XX.X% $XXX.X quarter fourth X%, year were was

clarity XXXX by the the companies reduction the and regarding of of one-time recorded earnings per result in Tax XXXX a of deferred and net to $XX.X in to share in reflect the U.S. quarter in expense a fourth As resulted as treated non-GAAP ability rate diluted benefit interest from Act legislation XXXX net and asset to income December, limitation Jobs of million we deferred partially a corporate Cuts income the carry-forwards the reduction our XX%, respectively. our quarter of enactment of Non-GAAP of the in was the those were non-GAAP million tax fourth related of liabilities. in a offset tax the $X.XX, of from which the use U.S. tax adjustment, tax the carry-forwards $XX.X due future. federal in The tax the to to XX% lack write-off benefit,

flow net year, to income in our non-GAAP full XXXX used million and leverage million XX ratio quarter and was non-GAAP share per was earnings our XXX.X respectively. strong ended year. debt $X.XX debt X.X million. times. to and operating For year EPS we million Non-GAAP and XXX.X $XXX.X debt the outstanding $XXX.X and of billion weighted diluted shares were $X.XX, average position the Net $XXX.X non-GAAP a At And December calculate of million respectively. net The quarter was shares, fourth EBITDA cash cash shares the the were outstanding full billion. was diluted full for $XXX.X XX, total $X.XX adjusted months amount million and last with fourth principal

adjusted XXXX to to Moving our $X.XX XXXX, billion $XXX our now for issued $X.XX this guidance sales full-year range of XXXX guidance we to $XXX our outlook million EBITDA morning, and billion million. of full-year net range

unit for the business percentage and full-year high-single-digits, the net sales care orphan sales business net for the growth growth full-year the rheumatology sales unit net net percentage are: $XXX in high primary exceed for the sales business business XXs, in our unit million. Specifically, to by unit assumptions full-year

we Regarding QUINSAIR and will our a as late orphan year. and Africa, the sold Middle Europe, for the East XXXX. in business first the comparisons the year-over-year the This marketing reminder, for unit PROCYSBI guidance, of rights half June of in impact

of XXXB Our efforts, rheumatology assumptions of an impacts increased growth, business of that the well growth of expanded guidance July XX%, rule. our than price assumed the which promotional of sales assumes the organization impact and KRYSTEXXA net X, positive implementation KRYSTEXXA full-year incorporates drug potential vial recently accelerating as commercial unit year-over-year as XXXX, greater

gross in to non-GAAP lowest our expect the of pattern. a first year, have last expect ratio with follows and range to similar and ratio gross between the historical the line year, XX% which quarter XX%, profit that profit We

expenses, operating strategic a initiatives. to Tim our mentioned, Moving in XXXX of as key investment will year be

peak high-single-digits range rheumatology percentage level teprotumumab as in and commercial primarily for validation full on quarter the first than spending clinical relating KRYSTEXXA of PASylation as sales the non-GAAP basis sales. XXXX. dollar impact the XXXX to from for SG&A and invest to will quarter to commercial shift net spend We of for our in first spending HZN‐XXX, year-over-year $XXX adjusted and the million. programs, expense well year be the the process the year-over-year investigator‐initiated the now anticipate quarter RECIPE product similar work is We the non-GAAP be commercial We R&D growth pipeline significant teprotumumab in anticipate annual the to anticipate the SG&A by any promotional sales us years, organization net spend primarily as as This EBITDA of a which HZN‐XXX, for driven our well reflects SG&A sales significantly focused greater additional reflecting trials, spending first during new on year to Phase sales some the investments. teprotumumab first of of higher to KRYSTEXXA and anticipate of estimate by ramp-up half to And as by quarter KRYSTEXXA critical a R&D TRIPLE. greater-than-XX% well as the to deliver $XXX will expanded the projection $XXX percentage as XXXX the expansion increase highest of is and in X as we of high-single-digits KRYSTEXXA year-over-year, of of R&D and work; spend of fourth in manufacturing as of year, It highest our and prior second full the that be have program; our percent driven year. quarters the of promotion-related programs, Our a the million our a and primarily a in other mid to and for KRYSTEXXA. million

full expense interest and $XXX of This expect by to million debt the assumes that our million, range similar between in non-GAAP is of last LIBOR We October XXXX rates. refinancing offset the year to net $XXX benefit current year.

the from and high-single-digits, positive year non-GAAP our full expect rate the impact recently incorporates a which Act. Jobs Cuts Tax tax in We enacted

higher rate to some non-GAAP a the we rate rate of half. cash in on non-GAAP high-single-digits first tax year, estimate in we anticipate our full out quarterly basis, over years. five half As estimate. which our We a the with see rate year tax the anticipate to mid-teens second every variability in will declining averages next in XXXX, be the the the that We XXXX tax versus that significantly

significantly stated the As we of change previously, tax divestitures these have any a made could by acquisitions rate projections or as company. result

XXX XXX million our be weighted million XXXX between average and expect We full diluted to share count shares. year

Regarding the less implementation we to we benefit flow of In full non-GAAP be care. result working cash year contract expect than our of PBM XXXX, XXXX. realized flow, for one-time primary a the as model cash a XXXX operating we capital

full While net our major for one PBMs three invoices two paid we PBM. had XX for major only reflected XXXX, quarters PBM and the of we to rebates a year in months of in sales of other invoices

we have expect For both in of a to XXXX, full rebates, year reflecting our flows. sales and operating our cash net

XXXX. As of first quarter a And cover result, of the we operating year-over-year expect me for full a the the first let finally, quarter cash our year comparison for flow XXXX. guidance both difficult and

impacted deductibles first and net change insurance every discuss we a are providers. by patients in industry, see quarter across patient experience or we health seasonality year As sales as as their reset the

As net be is between net years our first year net sales ranged quarter a sales the XXXX of net approximately result, when in we XX% has expect This and year to sales. XX% full full sales. with line prior XX% first of quarter contribution

XXXX We approximately adjusted our EBITDA XX% full of year expect adjusted of to be EBITDA. first quarter

in anticipate to to year As be first to the SG&A the R&D the the spending timing due I mentioned comments, my higher the in quarter. of teprotumumab's earlier highest funding half first of mainly we be in and

EBITDA. in line over our ranged With to first EBITDA the and Our between now first XX% contribution Shao-Lee. that, I'll X% adjusted years EBITDA has the quarter with expectation when adjusted prior full quarter turn is year of call adjusted

Shao-Lee Lin

growth Horizon for morning, as part transformation and we building here be I'm robust drive excited a leadership of the a sustainable in Thanks, Pharma to be everyone. team the in joined the to enter morning. of this Paul, pleasure be to good and to pipeline phase part It's next call long-term. the of

patients most of of develop diseases, in needs physician, me, greater some the means this the underserved patients. significantly and, opportunity rare as with new unmet a for to commitment medicines For case

Over the months, take continuing the build that two mission and to at our by pleasure personally working of them with shared their here and impressed the I've past in and passion portfolio. capabilities people been great R&D

overexpressed in results is study to New in it Activity thereby more orbital order the call, I drivers, on the pathway would KRYSTEXXA, the approved, growth proliferation, human and gout. reduce which this expansion And, fibroblast insulin-like next-generation a tissue TED. teprotumumab is IGF-X to Phase in In the eye. the with today's as tissues, The highlight block sustain monoclonal and for blocking is key recently Medicine could a to programs tissues the in active development of to thought For local clinical or I'll were Life. of disease. by receptor, prevent two teprotumumab, therefore, improvements IGF-X TED inflammation, disease with that added to the programs approved related and Journal Phase like last leadership rare as growth IGF-X autoimmune and well is specific were May fully tissue Significant Score will uncontrolled teprotumumab start antibody our thus the state. Quality in as FDA were orbital published demonstrated orbital opportunities teprotumumab factor-X be eye blocks X surrounding involved restore in medicine of proptosis, eye available that XX%. If treat receptor the normal impressive thyroid the receptor. the TED, treatment The X rate that Clinical thyroid England Teprotumumab of or only early-stage response diminish receptor

year-end. to millimeters modifying rate study measurable of are The double-blind confirmatory last teprotumumab the of percentage a placebo XX-week randomized, Phase (XX:XX), in week by with period the proptosis evaluating efficacy enter the endpoint participants on improvement to eight teprotumumab. year, as in teprotumumab of subjects (XX:XX) end more. expect of continue in we potential enrollment may open-label at XX teprotumumab OPTIC, was addition, In Phase to primary it endpoint participants placebo-controlled, the trial versus enrollment treatment. at of in the which up active planned receive patients completed disease with extension eligible suggest patients we initiated X, to is or as in proptosis At as a non-responders reduction the TED Late this defined, X our the safety XX proptosis responder in objective a X of and effect also X Phase additional infusions proptosis the OPTIC who trial is will XX, treatment and a Titled be of be week X for of

the at to criteria who XX-week participants meet XX due as period extension relapse during study the addition, In responders week for off are may drug considered who follow-up in but well. open-label retreatment enroll

be has the Breakthrough in data to trial second XXXX. Orphan, of expect Therapy the Track Fast U.S. and from in FDA position half We Phase to a Teprotumumab submit designations. X

is the reactions Moving pipeline, and improve to our rheumatology of the last for multiple to KRYSTEXXA reduce progress across and those who antibodies treatment increasing uncontrolled fronts clinical months. patients the key A strategy the duration several infusion component thereby KRYSTEXXA, saw gout our in antidrug to we medicine. of the to response for rate develop franchise possible may

biologic type the tender this response, clinical to and people tophi immune while with of as is antibodies in uric the medicine with to improve acid achieve About acid aim meaning improve achieved patients complete response many wellness. types coupled serum other reduction assessment the impressive. patient's with of across understanding the as swollen the proper the joints, own improvement to deposits, significant lose uric it, of the a global levels response KRYSTEXXA of achieved of Relative pain, complete who take and KRYSTEXXA. response to biologics half arthritis, Nonetheless, to of safety with we of and develop clinically continue use other medicines, magnitude or KRYSTEXXA resolution degrees well half in develop some of therapy, immune response therefore of the therapy. as of with As and part efficacy their an

trials support to response. therapy this on rate immune the of One the doing examine of of we're ways concomitant effectiveness the of the is immunomodulator through investigator-initiated

the the presented to when data show study X multiple reactions reducing with One at KRYSTEXXA two approaches after dramatic response milligrams followed, stopping of Meeting the Initial measurements adaptive acid that per by infusion these exploratory, rate rules reactions. X% which the from The medicine. can serum evaluating and the is XXXX consecutive was TRIPLE a levels rules the KRYSTEXXA patient in investigator, various to trial ACR is Peter improving of entail label. infusion cohorts Lipsky. reported treatment Dr. than data trial's to trial, lead open-label an developing signal in XX% an response less uric of the the deciliter, from above Stopping that down stopping body currently reduction are are immune

response While studies, rheumatologists. RECIPE, Both trial stopping mofetil to at of the the the immune of safety rules have investigator-initiated this agents late and Dr. been information immunomodulator a as an Alabama, and to clinical a And prescribing KRYSTEXXA to Phase update was trial used immune rules University the on response appropriately. Saag Ken of are with importance stopping by our last the prospective in by to frequent the when cohort Birmingham, additional submitted real the adding year immunomodulation world to evaluate new azathioprine and of addition commonly of study, the FDA. TRIPLE the trial impact A as well-known will evaluate and reinforces mycophenolate practice, will first of mycophenolate impact belief the KRYSTEXXA. azathioprine of to the demonstrate KRYSTEXXA. also second this new to safety for led the Based KRYSTEXXA data X we of analyses post-marketing a trials September well in proposed administered

PEGylation uricase new added for and two both or pre-clinical dosing in uncontrolled optimized design optimized as HZN‐XXX gout On December. with to improved licensed response is for rates front, genetically with patient hence agents improved We early-stage immunogenicity engineered utilizing HZN‐XXX technologies programs, and convenience. decreased development along subcutaneous a the as potential well clinical the technology. we

of pipeline the Pharma The This candidates hypothesized am of progress commitment second use and subcutaneous and also the excited phase year allow to our product relative PASylation rheumatology our patients the identify convenience is prospects portfolio about lower and R&D peptide immunogenicity deliver conclusion, turn clinical on sequence technology, medicines the XXXX steps a sustainable offer Horizon stage we pipeline forward and adding for significant for potential the demonstrates rate over and to collaboration represent of patients. uncontrolled was response is to the Tim our a program to PEGylation for them. growth to programs bring is pipeline dosing. remarks. I to uricase. dosing serves which gout mission can Together, for a front. it a capabilities so who potential in they next that for are that robust improved to future significant for we these to progress driving could R&D long-term his to our looking of to catalyze With need This continued new for build growth. buildout I'll that, concluding In

Timothy P. Walbert

Thanks, Shao-Lee. the XXXX was a year of significant progress for company.

drive value. organization pipeline its maximize to to strategy the significant With meaningful of the reach which KRYSTEXXA acquisition our shareholder and We our building commercial potential, of of of nephrologists. to growth teprotumumab, clinically we expanding long-term includes launched stage medicines the next growth a doubled

XXXX, medicines, strong double-digit midpoint questions. the our medicines, our we will to KRYSTEXXA of of we growing now shareholders. sales open and three performance year-over-year which advancing net can we guidance and call strong disease growing for drive growth which rare of returns up also delivered expect our We're growth of underscores our rate long-term the investing at last Pharma and the continued the teprotumumab also that, We Horizon generate and In to the which our years. strong rare disease from diversification over continued strategy the our growth expect value With long-term range. pipeline, in

Operator

you, sir. Thank

Cowen Company. from and Cacciatore Our Ken first question with comes

now is open. Your line

Ken Cacciatore

on congratulations all progress. and the Thanks

continue of KRYSTEXXA as kind you Just thinking and question a as we're about approach to nephrologists.

if million $XXX where you've about see lot the kind how or to like teprotumumab, you from it. treat of opportunity that and you a patients of here, few XX%/XX% building. able to And as in maybe So, more group slide an sits million work little a nephrologists think it really you talk high many? bit have you In kind on nuance of is to originally Can rule? but how just I started. that as that few treat approach more Clearly, Is you is of you're terms a it know maybe penetrate you clinics as market trigger then that than increased larger confidence prescriber are to the many much a of $XXX inflection? located, it's going done kind

any Just either lastly, Thanks about clearly and business update in that market that away so divest. retain area. the just or how thinking to to diversifying strategically is stability getting care the and But from away much. nice primary company as you're

Timothy P. Walbert

Sure.

kind reverse I'll them in order. So of answer

the care Vikram With anything quarters we to over walk that nephrology. and three see update business. the the teprotumumab, continue I'll and to strong we and further flow on year With questions have or of that through don't have can primary strategically last half on cash then strong business, address stabilization your

with ability active disease we back KRYSTEXXA? penetration with rate Phase Shao-Lee moderate XX,XXX with further has U.S. estimate eye market, would that thyroid penetration at a Vikram, PROCYSBI, replicating data and done about looking type about that developed do and XX,XXX in to opportunity felt addressable very the which X, be greater are RAVICTI, question than that with the research step sales. look pricing, in along with dramatic in at $XXX address as to severe penetrate Graves' model that disease. the patients seen And want to you about penetration we that. market funnel confident now response similar year the for analysis As nephrology each XX% eye our reviewed, XX% million to And have we peak we've large the where orphan-like aggregate, the we and of patients there's XX% did disease, a about thyroid we

Vikram Karnani

Yes.

pool concentrated largest about sized the gout see how XX% on we've about we of to opposed The I is think, gout. So, question, call the we've was there the nephrology. done uncontrolled opportunity. What that's because to is XX% talking caution patient this add team to to only within nephrologists as is where to up the we're

are we not of or wouldn't in if stone out any patients the our is from four deciles or three that two top standpoint, so, or even leave three there one nephrologists. there And unturned

and absolutely address We out those. will go

but be that might to a the general little wider. tends of uncontrolled bit in population So, be to specifically gout concentrated terms similar gout rheumatologists, distribution

the the be sized of and So them maximize opportunity able ourselves. we've to call all to team for on

Ken Cacciatore

Thank you. Great.

Operator

Thank you.

comes question with David Jaffray. Piper from next Our Amsellem

now is line Your open.

David A. Amsellem

Thanks.

just couple on ones quick a to of assumptions wanted guidance. KRYSTEXXA. your I on So, underlying the drill growth sales down

quantify the in the first, maybe terms qualitatively least talk or coming at can maybe much how of nephrology growth you contribution So, from setting, mix. is about

is impact anecdotally. you growing? studies have azathioprine, that two, of Thanks. right implementation of that's anecdotal And And you lastly, common like immunosuppressants the then TRIPLE number I the just So, us the one. the know seeing now how then, of the just about how think maybe usage comment and the rule. number XXXB that but terms are of ongoing RECIPE in and you remind

Timothy P. Walbert

Sure.

With half. of up So, the go in XXXB, with rule to with of effect opportunity year the which into is in to XX% KRYSTEXXA, XXXB to business, ramping expect nephrology, we to impacted XX% XX% pricing the have rheumatology this second pending continue July that our in X. be a expect about we and remainder

So, impact. our growth than includes to XX% immunosuppressant that guidance use? want the do of comment on you greater Vikram,

Vikram Karnani

anecdotally areas heard physicians, bit rheumatologists, And throughout they we've even or agents, XX the a been well. this very with in as in or last because comfortable maybe practice immunomodulation Yeah. months and use that's of the has especially their use something longer, little are other

heard people And why with evidence we've TRIPLE cases, are of this. in using mycophenolate. fantastic well on is promoting RECIPE results cannot, or because we So, goes methotrexate, that more trial trial that supporting as us that as play and their own of as which azathioprine, They by. out are familiar without, stirs with course, of evidence anecdotal very we which is this the the should evidence, the one piece many year it

Tina Ventura

David. Thanks,

David A. Amsellem

Thank you.

Tina Ventura

question, next please? James,

Operator

Thank you.

Marc Goodman next UBS. question Our with comes from

Your line now is open.

Marc Goodman

morning. Yes. Good

ramp in given how would there of look quarter a question. First that nephrology the hasn't like unusual bullish in so all, kicked are stuff sales was realize seemed KRYSTEXXA, the and It little that's yet was third wondering reps was just KRYSTEXXA. that anything much. if you the first fourth that quarter on but that happened to just it the ramp fourth quarter on faster I I on for didn't

focused us just was side. the about about on patients started couple back your curious to Tim, know us how And talk focused couple talked be – you business sense thirdly, be that as you're or very just equally enrolled doing just of the question so pipeline give how of development if as then, deals still on Second a many there? Obviously, tepro far thoughts Thanks. you've enrolling to any can related. seem you to months can ago, you're if lately. look let you I commercial you're last maybe you

Timothy P. Walbert

KRYSTEXXA, that with realigned Marc, fourth the first I quarter. is all think, were you in point, territories the So, made

disruption seen we're begin territories goals over our next With pleased and the online Europe the to to of teprotumumab very and our U.S. in we to the So realigned, uptake is into confident the achieve come with here in XXXX. uptake, very we've patients acceleration several continued ability all going and we're online the and significant few January in and with December that program into weeks. come has expect

So more question. well. the And business we'll address trial, last Bob the get development give we're And, progressing further can updates. into we detailed as

Robert F. Carey

Sure.

as for result where funding building So, see And to perceived that the Marc, interesting a stage towards we That's and opportunities and we for actionable that of that, development continue out healthy opportunities. there. the seeing a move We there's we're rare diseases. environment development medicines of pipeline. exists

long-term direction the that's the towards continue to that is up organization. So, expectation that for sustainable value to the portfolio we'll that building create is move

Tina Ventura

Thanks, Great. Marc.

please? question, Next

Operator

you. Thank

comes Our Markets. BMO Gary from Capital with Nachman next question

Your open. line is

Gary Nachman

Where pretty Hi. in building you will capabilities from? rheumatology company plan more the could assets? Good XXX generated generated HZN-XXX of morning. interesting. maybe early-stage On you on those So, focus forward? internally Were on the your for the do out we from pipeline more internally? either late-stage or come Do they seem see And Shao-Lee. going and pipeline

Shao-Lee Lin

that, Yeah. Gary. Thanks for

XXX company MedImmune, PASylation part European and a the question, answer to is of for technology. XXX first your collaboration a So, the came AstraZeneca from an with acquisition with

can think we perspective. as improve And a immunogenicity opportunities KRYSTEXXA an very convenience have might approaches terms of that these to how that of patient next-generation use I that from are we how well our we KRYSTEXXA we're excited a we having our as we to to that explore longer-term, that reaction in as out in developing focus near-term will today of seeing focused efforts infusion in including frame been robust of capabilities, any about have But as might heard board from both the efficacy our you of that we terms in might will we expect you've well perspective, overarching of opportunities across understanding very the be absolutely late-stage pipeline, come opportunities course, from across, fashion. on looking as at there. appropriate improve rheumatology build that terms said, the a

Tina Ventura

Great.

Gary Nachman

Okay.

ACTIMMUNE and just Just will one the the cancer quick and when follow-up RECIPE just on studies studies TRIPLE the immunomodulators, Thanks. tell read out. us those with

Shao-Lee Lin

So, take bit let me a separately. little those

as Horizon-sponsored have even and in we've to data take soon that this some we we think might those to those still off have out explorations. forward advantage kicking studies coming early TRIPLE, data any move that, us stated I terms of of RECIPE as the as for from studies potential with we before, of and anticipate, quarter

hope having within can we approaches the this so, us. start of year, or to do those And sense sometime for what context can't of some

again, have this know, year. see PD-X you immune exploratory as studies the with In in both those of sensible next better early and likely within what, steps once much a exploratory if anything, – have the with we an of context as sense inhibitors We'll we'll from cancer – next some data in boost, is year, ACTIMMUNE late of with as oncology if context the ACTIMMUNE, number will. of a terms of studies there're, breast as well as you

Gary Nachman

Thanks.

Tina Ventura

next Thanks, question, James, Gary. please?

Operator

you. Thank

from question Nicolaus. Annabel comes Stifel, Samimy next with Our

open. now is line Your

Annabel Eva Samimy

I Hi. taking Thanks you properties have I have potential in disease modification heard Shao-Lee, teprotumumab a my could mention for questions. that TED. couple.

terms the would that? that trials you're done on marketing? details for Is that for to establish what rules to just be of the important baking And stopping need the some So also in And into to in just that. what around terms establish condition KRYSTEXXA. of

What to are utility the of for So the to And the XX%. in be options around guess, RECIPE they for options specifically patients? once of stopping rules? rules from more are, X% terms guess going perhaps to the that Thanks. was I having these able to the these immunosuppression immunoresponses the patients next what address is trial reduce, stopping guidance I have

Timothy P. Walbert

the through question. and So, Vikram can take the KRYSTEXXA will then teprotumumab go Shao-Lee

Vikram Karnani

the question. So, for thanks

options to what question I patients, was those what happens have rules think been after they stopping engaged. rules have stopping the around and

The In continue monitoring continuing oral an of physician's infusion go that sort one RECIPE they therapy idea the would everybody, the event, has to event future towards reaction showed – is after in use the to occurring improvement patient you was the some stop. that urate-lowering the question head to data on preventing do tied at that would to only that would to for up immunomodulation right if around is the dramatic back some whole is that which immunogenicity as rules, when mitigate all, you we how remind TRIPLE, So, we rate that this of showed but to than be less that infusion stopping just any data or try that studies, if first thought it's discretion, in happens the why which likely the and ACR the protocol. can low symptoms. sort methodology X%, what is place. as or reason typically is if previously immunomodulation, is of develop disease first And – followed is this be which from with that in infusion reaction the the is XX% whether imagine as, you the engaged the

they so, are tied And together.

reactions, seeing be you've seen you trials the be being to because should theory immunogenicity, as we If the formation is that that head certain you a not of remains in this mitigate even But conducted a those infusion extent, to mitigated speak. the towards are antibodies. patient

reaction closely low as single about this very for actually past the in confidence years. linked. thought those to has been drug digits showing are bottom from within And the what of going even the is driving improvement without rheumatology the as they what's few of So, as is But that's data today, infusion over uptake lot a readout line rate nephrology. a well dramatic down that trials,

Shao-Lee Lin

burned years, about eye two out stable a and and, what order the In active permanent or, you for of eyes teprotumumab even compression the thyroid eye, thanks move to really, thyroid and disease on and we ability the The blindness the phase for minimum, year disease the of the potentially nerve and see sort and question the stable and into things is like to modification. double lasts – terms then phase of vision. an of is think the is muscles optic the of derangement can active a coupled of pain, phase, eye out bulging Once the of So active at over, and the that with a disease the pain burned disease the you inflammation damage. that to see state if potential moves it of swelling, redness, we will. aspect lead phase phase, of in

in And the sort function, has subsequent are a orbit treatments of put achieve. more to trying that into about back surgical eye and the be difficult so, that really decompression and to that, can to the position

you with those that measure of that response be maintain associated the would So in phase teprotumumab of the permanent Journal catch come we the prevent to premise that, believe effects do in teprotumumab our to the them, course are reach our the really can successful that the ability the of damage in modify ability to disease. is saw have then for we terms proptosis to The stable phase patients once durability that a can you of And within improvement drug, that the England natural that we you disease. New the if see or as disease can context off object that of active of with then paper, meaning of the if

would results for a who have X addition, a longer We drug Phase context later up be or year. a whether will medical have period the We a in to that's Phase also follow-up our anticipate of not duration at be ability that this of we to the of or don't X study that year And individuals in beneficial. ongoing. program, follow-up that for from off determine shared to therapy retreatments conference period respond study

really the us I of and all teprotumumab for terms physicians. in think best of will pieces inform to patients what overarching So, help and of of information be those benefits use

Annabel Eva Samimy

active you If stable a consider might active for how you a don't did an mind phase do who on the phase? the you calculate into phase, how – in patients rate move placebo from patients

Timothy P. Walbert

The placebo rate trial. was the based on the X results of Phase

Shao-Lee Lin

placebo a study. the There's arm in

Timothy P. Walbert

Yeah.

Annabel Eva Samimy

All Okay. right.

Tina Ventura

questions, for have Annabel. Thanks, time we please. James, two more Great.

Operator

Yes ma'am.

question from next Our comes Flanders Dana with Goldman Sachs.

open. is now line Your

Dana Flanders

have questions. how about Hi. talk Thank the very maybe much little two for ones, My the bit you're I margin business. the of quick you first, please. a viewing longer-term profile

How then mid is level in just KRYSTEXXA and a it's up you. patients the as mean, products growth are realize give drive I force can there just high-XX% spending and the but about quick second sales pushback that to comments. earlier point Thank high-margin now very back launched. point? a this of ability time? of receptivity I your should And the with I bit my Appreciate early, maybe place, over what think Maybe on the initiatives, follow-up Is on in you what channel? KRYSTEXXA. You're when at you're are on the nephrology this XXXX in seeing for business? saying, your fully we little saying, and detail margins any to greater physicians to tepro think they're pipeline. just year investing low the range obviously

Timothy P. Walbert

Sure.

than XX% and question KRYSTEXXA, a We we we're orphan TRIPLE getting and and to Obviously, would accelerate invest in to from Overall, can a as into force, quickly. the business that investment, of company. cost or factored we as development not That's XXXX certainly, focus timeframe through will very level in much address. to the we an end XXXX. continuing accelerating look the high profile, KRYSTEXXA less to doubling infrastructure anticipating mode. of similar accretion investment the to the current move that in clinical additional margin into with the So, see continue in long-term approximately for have KRYSTEXXA the it RECIPE The standpoint Vikram we on around launch nephrology as sales with around and invest and stage estimate. teprotumumab programs, margins, our greater, and acquisition margin launch medicines growth stands your question the

Vikram Karnani

Tim. Thanks,

we been community on both So as nephrologists high with the and patient last urgency, sense has as nature physicians sick well because from highly patients. the very over as positive and had What from observing of the a we response feedback months, of is population. the just very started higher than of calling more few in the more fact, anticipated the we're that physicians

process one care. efforts part that on well physicians. are where that sites helping XXXX. working been of from our of and an around continue throughout positive, infusions them of with think whole we patients with is and has urgency the But, both I the as high finding active them and with as – very part them And we'll overall, sense

Tina Ventura

much. last question, please? Great. James, Thanks so

Operator

ma'am. Yes,

Louise comes Our last question with from Chen Cantor Fitzgerald.

line Your now open. is

Brandon Folkes

Louise. for It's Hi. on Folkes Brandon

on Thank in despite about Firstly, more And then competition revenues PROCYSBI, you us around peak sales? you're losing on in drivers potential you this can secondly, XXXX us how a a thinking you you. the there? KRYSTEXXA perhaps the just some give and do for color as growth your if color give growth bit reaching could asset see

Timothy P. Walbert

Eric, potential I'll you comment? objectives. to entrants would take can the our KRYSTEXXA. our We impact With any see long-term that don't ability PROCYSBI, achieve

Eric Mosbrooker

Tim. Thanks,

So absolutely, for PROCYSBI the growth company. a see opportunity we as

the We talked about number therapy. on treated therapy fair a have We are label or are which now. still that had have not either generation earlier. expansion of right Tim of on We about half patients patients older an the

patients We continue them get diagnostic process to And are dose. work diagnosed. the on when there's on so an therapy, titration a then optimal finally get patients supporting to more that process, to

those to growth. So, the contribute all

Tina Ventura

I up Great. it now. Thanks, think I can wrap Brandon. James,

Operator

ma'am. Yes,

Tina Ventura

That concludes our call this morning.

today. for So, joining us thanks so much

Operator

does for gentlemen, and your conclude that conference. participation. Ladies today's Thank you

disconnect. all wonderful day. may You Have a

Horizon Therapeutics Public (HZNP) 28 Feb 182017 Q4 Earnings call transcript