Feb 6, 2020
Operator
Dear ladies and gentlemen, welcome to the Idorsia Conference Call regarding the Presentation of the Full Year Financial Results 2019. At our customer's request, this conference will be recorded.
[Operator Instructions] May I now hand you over to Andrew Weiss, who will lead you through this conference. Please go ahead.
Andrew Weiss
Thank you, Angela. Good afternoon or good morning to you all from where you are dialing in.
My name is Andrew Weiss and I want to welcome you all to your full year financial results publication call today. Today, we are going to talk about our financial performance and update you on the progress we’ve made in 2019, as well as give you an outlook for 2020.
With me on the call are our CEO, Jean-Paul Clozel and our CFO, André Muller; They are here to give you additional color on the results published this morning at 7 AM, together with the annual report. Please note that we are experiencing a slight technical trouble.
So, I ask you all to download the presentations from our website at this point in time as they will not be able to be scrolled forward. Next slide.
Before handing over the mike, I need to remind everyone that we will be making forward-looking statements, you are therefore been adequately warned about the risks and opportunities of investing in Idorsia shares. With that, I hand over to Jean-Paul for his introductory remarks.
Jean-Paul Clozel
Thank you, Andrew. Good morning and good afternoon to everyone.
It’s a pleasure to present to you the progress we have made at Idorsia during 2019 and highlight a few of the exciting developments we expect in 2020. Let’s first look at the achievements of 2019.
To begin with, we have added two innovative compounds to our pipeline from our drug discovery team. We have advanced each of our clinical programs and we are expecting the first Phase 3 results in the next few months.
We have been sharing our works with scientific publications and at congresses. We have been able to engage with experts in our different teams and we began building our commercial capabilities and planning the launch of our first products.
Now let’s discuss these points in a little more detail. So, Slide 5, Clinical Development Pipeline.
Here you can see our clinical development pipeline of 12 assets from top to bottom, late-stage, mid-stage and early assets. We are very proud of this pipeline, because all of our products are extremely innovative.
They address a large medical need. Slide 6.
Let’s look at our late-stage assets first. We are expecting the results of the first of the two pivotal studies with Daridorexant in insomnia in the next few months and the second pivotal study will follow closely behind.
Both studies are fully recruited today. Slide 7.
The speed at which we have been able to advance Daridorexant is very impressive, particularly when you remember that we created Idorsia right in the middle of this program. What potentially differentiates Daridorexant from existing treatments is the delivery of clinically meaningful benefits in sleep onset and maintenance without exceeding a normal night.
Patients with insomnia face multiple challenges, including both, falling asleep and staying asleep. They are actually seeking new safe and effective treatment options which can address both these needs ultimately, helping them to function better during the day.
By blocking the action of orexin, we hope that Daridorexant will allow patients to sleep throughout the night while avoiding the rebound, withdrawal, or tolerance problems associated with many sleep medications that act through broad sedation of the brain. We are really only a matter of months from the first set of data, so watch this space.
Slide 8. Later in 2020, we also expect to have the results of the Japanese registration study with Clazosentan a selective endothelin ETA receptor antagonist being developed for the cerebral vasospasm, after subarachnoid hemorrhage.
This is a significant problem in Japan, where the prevalence of subarachnoid hemorrhage is around twice as high as in the rest of the world. Clazosentan could really make a big difference for these patients who seem to make a good recovery from hemorrhage.
Only for the vasospasm to cause devastating effects. The global Phase 3 outside of Japan for prevention of clinical deterioration due to vasospasm is progressing well, with results expected around a year after the Japanese data.
Slide 9. We are also making progress with the development of development of lucerastat, an oral therapy offering a new treatment approach for all patients with Fabry disease, irrespective of mutation type.
Lucerastat acts by reducing the damaging build-up of lipids, which is responsible for all the symptoms of Fabry disease. It can penetrate tissues and the central and peripheral nervous system.
This is the reason we believe that Lucerastat can reduce this lipid build-up and therefore reduce neuropathic pain, which is the endpoint which we have chosen and modified. The recruitment has been slower than originally anticipated and the results are now expecting in 2021.
Slide 10. Our fourth Phase 3 program involves Aprocitentan, an orally active dual endothelin receptor antagonist investigated in the PRECISION trial for patients whose blood pressure is uncontrolled despite the use of at least three antihypertensive drugs.
Because some of the patients which had to be included in this study were planned to be in China we are compensating for the problem of China, of course, related to the coronavirus by increasing the number of sites to compensate and to be able to have the results of Aprocitentan studies at the end of next year or beginning of 2022. Slide 11.
As our late-stage assets progress, the mid-stage assets come more into focus. Slide 12.
Cenerimod, our selective S1P1 receptor modulator is being investigated for the treatment of lupus in a multiple-dose efficacy and safety study; which could become a pivotal trial depending on the results. The study was initiated in early 2019 and so far, we are making good progress with the recruitment.
We may get the result of this study by the end of 2020 or early 2022. We have been very encouraged by the results of the first study in patients and therefore, we are getting ready to initiate the second pivotal study as soon as this current study is concluded.
Slide 13. This year we also shared the results from Phase 2 study and the result in particular the result of selatogrel, our highly selective P2Y12 receptor antagonist.
We have shown that selatogrel demonstrates a very rapid onset of action with the effects lasting between 4 to 8 hours after subcutaneously administration in patients suffering a heart attack. With this efficacy, together we observed safety and tolerability profile, we believe that selatogrel could be self-administered at the onset of symptoms to stop a suspected heart attack and preserve cardiac muscle and heart function, an incredibly innovative approach to a very serious problem.
The key aspect of this approach was to find a safe and a reliable device, easy to use under stressful conditions. Last November, we were very pleased to sign a deal with Antares Pharma to develop a novel drug-device product combining selatogrel with the subcutaneous QuickShot auto-injector.
We are now running usability and reliability studies and in parallel, we are negotiating an SPA for a large Phase 3 study with the FDA. We plan to initiate Phase 3 in the first half of 2021.
Finally, Slide 14. Early-Stage Assets.
As I said, we have added two very innovative new compounds to the clinical pipeline and this shows the productivity of our drug discovery engine. Furthermore, we have negotiated with Neurocrine, an option deal for T-type calcium channel blocker.
As soon as the FDA will give their feedback for the IND of this product by mid this year, Neurocrine will have to decide to exercise this option. Our strategy remains in drug discovery to balance novel projects, testing new mechanism of action with the projects, which are aiming to optimize drugs with an established mechanism of action.
Basically, we aim to be the first-in-class or best-in-class. Slide 15.
In 2019, we put considerable into sharing our data with experts in the different fields that we are active in. We have been able to share the results of several of our programs Daridorexant in insomnia, Aprocitentan in uncontrolled hypertension, Selatogrel in heart attack, Cenerimod in Lupus, with experts at the most prestigious medical conferences reaching more than 60,000 key experts.
We are also very excited to see our partner Johnson & Johnson reporting data from a successful Phase 3 trial on ponesimod for the treatment of relapsing multiple sclerosis at ECTRIMS 2019. This was particularly rewarding because not only of the scientists who discovered ponesimod now with Idorsia.
But also our revenue-sharing agreement with J&J means that the quarterly payments of 8% of the net sales of ponesimod are likely to be our first source of regular income. J&J has announced in their Annual Call two weeks ago that the intent to file ponesimod this year.
The last point, Slide 16 that I want to highlight is the effort that our Chief Commercial Officer, Simon Jose is putting into preparing for success. This year he has been establishing his core commercial team and defining detailed commercial strategy for key late-stage compounds.
He has been able to fill several critical roles most recently appointing Patricia Torr as President of our U.S. commercial organization.
As CEO of Idorsia, I am very proud that we have been able to attract some top talents and seasoned industry leaders. With that, I would now like to hand over to Andre, who will take you through the financial results of 2019.
André Muller
Thank you, Jean-Paul. Good afternoon or good morning to everyone.
So, I’d like to go to Slide 17. As you see here, we see CHF 470 million non-GAAP OpEx.
We spent less in 2019 than originally expected. Just to recall, we guided with the Q3 results that we would spend slightly less than CHF 500 million.
Going to here next Slide 18. Let’s have a look of how the U.S.GAAP net results came about.
On the left-side you see revenues, CHF 24 million. This includes CHF 5 million from the R&D collaboration with Roche and the revenue recognition of CHF 19 million regarding Aprocitentan for the development and collaboration with Janssen.
I said and I will come later on this. Non-GAAP operating expenses amounted to CHF 470 million.
So we have a non-GAAP operating result of 446 including CHF 20 million D&A, CHF 17 million stock-based compensation. We have U.S.
GAAP operating results of $482. Below EBIT, you have little non-GAAP or cash expenses, roughly CHF 2 million, mainly interest expense in the – negative interest rate environments and a small capital tax.
OpEx roughly CHF 10 million is really non-cash expenses, mainly CHF 8 million we see operation expenses CHF 8 million with deferred tax, CHF 4 million relating to the Swiss Tax Reform, CHF 4 million relating to the stock-based compensation and we had a gain of CHF 6 million which is actually mark-to-market on fee as Santhera shares that we received in connection with the DMD compound vamorolone. Let’s go now to Slide 19.
The non-GAAP operating expenses. Here you have the comparison between 2018 CHF 399 million and 2019, CHF 470 million.
As you can see, drug discovery is stable at CHF 115 million. These are 90% functional OpEx, i.e.
fixed cost. You see the increase mainly coming from the developments going from 215 to 297.
If you break down this slide in 97, you see roughly that we have functional OpEx around CHF 70 million, i.e. fixed cost base for clinical and pharmaceutical developments and also rest is really variable costs including CHF 160 million study costs.
This increased by almost CHF 50 million, compared to 2018 and a significant portion, CHF 61 million relating to drug substance and drug products, as we actually need in order to be able to investigate our various compounds in the clinical stage and this one also increased by roughly CHF 10 million. SG&A was more or less stable at 58 versus 54.
Actually the 58 includes CHF 10 million relating to commercial where it was close to zero in 2018, meaning also that the real G&A part was going down as we manage also to get out of all the transitional service agreements that we had from the merger with Actelion. And last year, just to recall that we paid a milestone in connection with vamorolone the DMD compound of CHF 15 million.
So if we switch to the next slide, 20. Regarding cash flow.
Left side you see the milestone received. This year it’s a CHF 5 million, upfront paid by Neurocrine with respect to the calcium T channel blocker that Jean-Paul just mentioned, compared to last year where we got the CHF 15 million, the CHF 35 million is Roche with the R&D collaboration CHF 15 million and CHF 20 million in connection with the sub-license of the DMD compound to Santhera.
The operation – the funds from operation 473 or 402 from last year are directly in line with the non-GAAP operating expenses that I just mentioned. Difference is really minor, around CHF 3 million relating as I said previously to see financial expenses and some minor capital tax.
Last year, you may recall that in July 2018, we raised CHF 505 million, CHF 305 million in equity, straight equity and CHF 200 million in convertible bonds. This year, we did not tap equity or equity-linked capital markets.
The CapEx is around CHF 19 million, compared to CHF 17 million last year. It’s mainly maintenance CapEx except CHF 5 million this year for a small manufacturing unit that we invested in, in order to be able to supply in tiny manner the clinical batches that we would need for some of the late-stage assets.
And the other is mainly relating to working capital requirements. Let’s go to Slide 21, liquidity.
Just wanted to go back from the demerger on 16th of June 2017, as you know, we demerged from Actelion with 1 billion cash, CHF 420 million which was cash spun out of Actelion and CHF 580 million with the convertible bonds held by Johnson & Johnson. The 6.5 months of 2017, we had CHF 91 million inflow, which was mainly relating to the Apro deal with Janssen and the upfront of $230 million milestone.
We discussed already the 129 in 2018 and the minus 481 in 2019. So we ended up the year 2019 with CHF 739 million cash or liquidities, liquidity.
So it means that we are well funded. But to be very clear, we are not funded to breakeven.
So I would conclude with the next slide with the guidance which will be around CHF 500 million non-GAAP OpEx or CHF 540 million U.S. GAAP including stock-based compensation and D&A.
So as I often said, again we see CHF 740 million. We are well funded with more than one year cash versus the next 12 months cash burn that we anticipate for 2020.
With this, I hand over to Jean-Paul for his concluding remarks.
Jean-Paul Clozel
Thank you, Andre. So, as you have heard, Idorsia has achieved a lot in 2019.
Our product line has dramatically progressed and soon we are going to obtain our first Phase 3 results. For a company which is only 2.5 year old, this is unique.
The success of the launch of Daridorexant will be key for the future of Idorsia. So in 2020, we will all do our utmost to be ready for this challenge.
And now, I hand over to Andrew to open the floor for questions.
Andrew Weiss
Thank you, Jean-Paul. So we've come to the end of our prepared remarks and are ready to take your questions.
Operator, please populate the roster.
Operator
[Operator Instructions] We’ve received a first question. It is from Richard Parkes of Deutsche Bank.
Please go ahead. Your line is now open.
Richard Parkes
Hi, thanks very much for taking my questions. Just start with a couple.
First, just wondered if you could talk about your optimism either potential labeling of Daridorexant and how that’s impacted by the approval of Lemborexant. So, felt like your competition seems very confident about getting an attractive label, but it doesn’t seem to have worked out that way.
So, I am just wondering, to what degree you think the FDA will treat some of the side-effects on sleep paralysis, cataplexy and impact on next day function is plus effects versus allowing you applying a label. So that’s the first one.
Second one, just wondered if you could talk a little bit about your current thoughts on commercialization strategy for Daridorexant . Just wondering to what degree the Mochida tale in Japan as you guide if what we should expect for collaborations?
Thanks for taking my questions.
Jean-Paul Clozel
Okay. So, let me answer about your labeling questions.
First of all, in the label, I think that even as a company, they are – I think that mentioned in the label. I don’t think that’s driving, you know, you can say, drive – take your drug and drive afterwards rightly, just afterwards.
I think there is also a question of liability and I wouldn’t like – not to mention any issue or any potential issue with driving. So there are things where I think that the FDA whatever we will see you know there is, we’d ask to be very cautious.
But we have also made a lot of efforts in collaboration with the FDA and I’ll tell you that the FDA is very, very eager to see a result. For example, to test our drug in patients and very high dose our drug in patients with respiratory problems, in elderly, we have tried to look at all potential drug interactions and you have seen that a lot of the studies has not been included with Lemborexant still in the post-commercial commitment.
So, I think that – and also the last thing to mention is the fact that we have tested in Phase 3 three doses. Therefore we are agreeing to be really – able to take the dose which gives the best compromise in efficacy and safety.
For all the other products, basically, one dose was or two doses maximum, but - were tested into Phase 3 and there was not any of this flexibility. So, I think that we are going to – we have done the very, very large program and I think that the FDA is going to reward us.
I am quite convinced by helping us to find the best dose and have the most adequate label. Now for the commercial strategy, Mochida was very clear.
It was very clear in Japan that we needed a partner. Japan is a country which requires a lot of medical representatives to see the doctors.
Therefore, there was no way that we could sell a drug on our own in Japan. In the other countries, we have – the only thing I can tell you and I will not go into the detail of this strategy is that we want to keep the control, meaning to have the regulatory responsibility, the drug safety pharmacovigilant, the production responsibility and also the medical marketing role to choose the next studies that we should do and how we should profile the drug.
The rest is quite open. There are many possibilities.
We can have medical representatives from clinical sales organization. We can rent these contract sales organizations.
And we will – as soon as we get the results, we will go in more detail with you on our strategy to successfully launch a drug.
Richard Parkes
Thank you.
Andrew Weiss
Thank you, Richard. Operator, next question please.
Operator
The next question is from Ram Selvaraju of H.C. Wainwright.
Please go ahead. Your line is now open.
Edward Marks
Good afternoon. This is Edward Marks on for Ram.
I appreciate you guys taken the questions. We noticed recently that the INSPIRE CKD study was withdrawn from clinicaltrials.gov and I know you mentioned it in your shareholder letter, as well.
Just wondering if that study is still on track to start this quarter? And if not, are you – do you have any updated timelines for ever starting that study?
Jean-Paul Clozel
Yes. Hi, Edward.
So, we are not going to be pursuing forward with the INSPIRE study. What we are going to be doing is that, the efforts that have been put in, in starting off that trial are going to be basically merged into the PRECISION trial, such that all the sites that have been put up to run are going to be put into the PRECISION.
We’ve been seeing a number of patients suffering of kidney disorders in the PRECISION trial and therefore we think that that’s appropriate way to address it.
Edward Marks
Okay. That makes sense.
Just a quick one on Cenerimod. I am wondering when completion of enrollment in the ongoing trial in active SLE is anticipated?
Jean-Paul Clozel
Could you repeat the question please?
Edward Marks
Yes, sorry. When is completion of enrollment in the ongoing Cenerimod active SLE trial anticipated?
Jean-Paul Clozel
Finish - end of this year we are planning to finish the enrollment, end of this year. And then it’s a six months – it’s a six month trial.
So results will be available next year.
Edward Marks
Got it. And then, finally, you had a recent amendment to the ACT 478 licensing agreement.
I was just wondering if, considering all the early-stage assets that you have, are you in further licensing discussions for any of the additional Phase 1 assets. And are any of them garnering particular interest among licensees or do you anticipate just self-commercializing most of them?
Jean-Paul Clozel
I think there is a big gap between the Phase 1 and commercialization. I think that, what we have observed is that then you can see with the last deals of Novartis and – company is ready to pay 9 billion while and those same assets was 1 billion or 2 billion a few months ago.
That more and more big companies don’t like to take risk. And therefore, the value is exponential with time, because people are eager to really have late-stage assets.
And therefore, most of the time I think, we are going to at least initiate early-stage developments, it’s not the most expensive, but Phase 1, Phase 2 and when you have proof of efficacy, when you have an idea of the dose and the safety, I think that these assets are much higher value. And that is going to be our strategy.
But certainly, we are not going to really want to develop and commercialize all these products on our own.
Edward Marks
Thank you very much.
Andrew Weiss
Thank you, Edward. Operator, next question please.
Operator
The next question is from Graig Suvannavejh, of Goldman Sachs. Please go ahead.
Your line is now open.
Graig Suvannavejh
Thank you and good morning, good afternoon. I’ve got three questions if I could.
My first question has to do with total OpEx for 2020 and I am wondering if you could give us a little bit more color around the ramp of R&D and SG&A and how we should think about that relative to what you reported for fiscal year 2019? That would be helpful.
That would be my first question. My second question has to do with, if you could provide just a little bit more granularity around what you are hoping to see in the Phase 3 studies for Daridorexant?
Any particular outcome measure in terms of sleep latency or onsets in terms of specific numbers and of the magnitude of effects you are hoping to see and how that might differentiate versus the existing dual orexin receptor antagonist? That would be great.
And then lastly, if you could just talk about how you are looking at 2020 and your capital needs? Clearly, you are well funded right now, but as we look to 2021, which I assume will be another relatively intense year in terms of capital needed.
Just how you are thinking about your different options for 2020? Thanks again and congrats on the progress.
Jean-Paul Clozel
Andre, do you want to take the first question?
André Muller
Yes. Sure.
Just to give you a little more color regarding the CHF 500 million that we indicated for 2020, this of course include positive readouts in – for Daridorexant and for Clazosentan in Japan. So, we would to gear up in both the countries, because we do not have any commercial organization except a very small team that Sun manage to set up here at the headquarter.
You’ve seen the appointment of Patty Torr will join us bringing up very much. So there is a lot in both countries to prepare for the launches of Daridorexant and Clazosentan.
Of course, this is – this will be a contingent to positive readouts mainly for Daridorexant, but also for Clazosentan. So, there is a slight increase for 470 to 500.
That’s mainly driven by the additional commercial expenses. We need also some slightly more G&A, because we need also to set up an affiliate agency right.
And for the rest, I would say, globally R&D would be in the same range as the numbers that you’ve seen for the actual in 2019.
Jean-Paul Clozel
And therefore, Daridorexant, it’s a very – I think you are asking a very good question, because the expectations are very important. And I think that what we had struggle and we made more than 30,000 products really to select this compound and why was it so difficult?
It was so difficult because we wanted the ideal pharmacokinetic. You might have seen, if you look at little bit at the level of Lemborexant and Suvorexant, you see a lot of effects during the day.
The following day after administration of the drug, you see some no lunch, you see side-effects which are due to the very long half-life and in case of Lemborexant the presence of a active metabolite, active metabolite is about the words that you can expect from such a drug. Because you don’t know how long it’s going to work and how different from one patient to another it’s going to be.
So, you have this continuation of the effect. And therefore, in order to avoid the side-effect, the companies which have developed these drugs needed to reduce the dose and I think reduce the potential efficacy of the drug in order to avoid the side-effects.
So the first thing we should look at our drug is, simply, efficacy. How fast can it work?
How long can it work? What is the effect on the pure sleep parameters?
That’s going to be efficacy for me is going to be number one. Let’s look at this, let’s compare to the other orexin compounds.
Let’s compare to the other drugs on the market, number one. Number two is, safety, side-effects.
How many patients and we are setting three doses. So, we will choose one dose or one or two doses.
Let’s look at what are the side-effects. Can the three doses be given without too much side-effects on these two doses.
We will see with the results. But, some announced the next day, next day performance, all these drug interactions, all these effects which are related to the pharmacokinetic of the drug.
You have to look at. And finally, and I will not really – I will not believe that we can look at efficacy, but maybe, we have no negative effect, is the next day performance.
Because we have agreed on a PRO with the FDA to evaluate at the end of the next day, after taking our drug to ask the patient, how did they functioned during the day and is that been a two or three years effort to develop a PRO, specific with this - agreed with the FDA. And of course, we are going to see what are the effects of improving sleep on the next day performance.
This will be the first – I can tell you the FDA is looking forward, because nobody has ever been able to evaluate these types of effects. So, in other words, we have three doses and we are going to have to choose the best compromise between the efficacy, not only on sleep, but on the next day performance.
And that’s going to help us really to choose the best dose of the drug in these patients.
Graig Suvannavejh
Thanks. And just follow-up on the financing or liquidity for 2020.
Jean-Paul Clozel
Please, Andre.
André Muller
Yes, well, you are right and as just said, we are not funded to breakeven and we – I also said that we have different avenues to fund – to bridge the funding gap. Of course, the most classical one is the equity capital markets and here, we will remain opportunistic.
We have here the possibility to drill down the J&J credit facility for another CHF 243 million Swiss Francs. And as you’ve seen Jean-Paul went through the pipeline, we have a lot of fully unencumbered clinical assets that could be also – could be partnered.
It takes time. We need also to find the right partner, but also as Jean-Paul said, we need also to get the right value for such assets in such collaborations.
So these are all the different ways to finance and at one stage, yes, we will have – we will need to action one or the other or several of these avenues.
Graig Suvannavejh
Okay. Thank you very much and we look forward to the Phase 3 data for Daridorexant.
Thank you.
Jean-Paul Clozel
Thank you, Graig. We also.
Andrew Weiss
Are there any further questions?
Operator
Yes, there is one further question and it’s from Emmanuel Papadakis of Barclays. Please go ahead.
Your line is now open.
Emmanuel Papadakis
Thanks for taking the question. Emmanuel Papadakis from Barclays.
Just a few follow-ups actually. So, Andre, you said at some point you will need to consider additional sources of capital.
Could you just confirm that will very likely be within this calendar year. It seems, you’ll have to make some decisions towards the end of the year, at least.
Follow-up on Daridorexant, I mean, it sounds like both the headline efficacy, but also the tolerability or the effects are going to be key metrics we should be looking at. Some no lengths, was it relatively actually modest incidents in both the Suvorexant and in Lemborexant studies, something like mid-single-digit.
Do you expect it to come in lower than that? And if so, do you think that is going to serve as a meaningful point of differentiation in clinical practice in terms of driving uptake of the drug.
And then just one on Aprocitentan. I mean, the rationale for discontinuing CKD, does that reflect a lack of medical interest difficulty with patient recruitment?
And then if you can just comment on the timing of PRECISION clinicaltrials.gov has early 2021, you are clearly pointing towards the end of 2021. Is that just an inaccuracy on the work site?
Or are there any reasons why you might actually get the data sooner? Thanks very much.
Jean-Paul Clozel
Okay. Andre, do you want to take the source of capital question?
André Muller
Yes, on personal note, welcome back, Immanuel. Thanks a lot for the initiation of the coverage.
I read it thoroughly. Some disagreement on CSA’s expectations, but we will have at the last time to discuss this once we have seen the launch of the drug.
Yes, well, I would not commit to a deadline should it be before the end of the year. It will depend on the various sources of cash that we could raise.
So it might be a combination of the different avenues. So, I would not put a deadline by the end of December of this year.
What is sure, because we do not want to be against the war – i.e. also hiring through a partner some of the assets in worth conditions.
We really want to have liquidity at least for the next 12 months cash burn. So, you can do the math.
But it will – this is the easiest path and it will depend on the different sources of financing.
Jean-Paul Clozel
So, come back and thank you to giving me the opportunity to really precise what that was meaning. When we say, there is a low incidence in the level for some – if we consider that 7% at 5 mg of some – and 10% of 10 mg is low, then I agree.
But for my side, I consider it as very high and I really hope that we don’t have this type of percentage. I really hope so.
At least for me, it’s unacceptable and I think this is completely related to the pharmacokinetic or the active metabolite. Nobody knows what is the role played by this active metabolite over Lemborexant into this effect.
I really – I think, we – this is one of the reason. It’s not is going to be of course those relations, which is why we have chosen to do the Phase 3 with three doses in parallel and let’s see the data.
There was another question about the COPD PRECISION. CKD, I don’t think it’s – there was huge interest.
There is a huge interest in CKD, but frankly, we are just afraid that these are the same centers in the PRECISION and we really want to finish PRECISION. And in addition, we have within PRECISION a lot of the patients who now we realize now because we have a significant number of patients who have renal problems and the renal impairments.
And we treat for one year these patients. So, we are going and we also discuss these studies with the FDA, we are going to get a lot of information about the safety of our drug in patients with impaired renal function and I don’t think this – in this frame, it makes a lot of sense to invest again and to divert attention from the centers to PRECISION study.
Now, of course, once we have PRECISION, everything is open. CKD study, other studies will be variable.
We can do it. But then we will have a lot of information and also in terms of safety it will be very much easier to recruit the patients once we have shown the safety of this – and the efficacy of our drug in these patients.
Andrew Weiss
And just to close on the comment with regard to clinicaltrials.gov, our understanding and our expectation is that, by the end of 2021 or still into 2022 we should have the data. So, the data and the databases is likely to be an inaccuracy at this point in time.
Emmanuel Papadakis
Thanks very much.
Andrew Weiss
Thank you, Immanuel. Operator, next question please.
Operator
The next question is a follow-up question of Richard Parkes from Deutsche Bank. Please go ahead.
Your line is now open.
Richard Parkes
Hi, yes. Thanks for taking my follow-ups.
First one is just on the Aprocitentan, again. It feels like recruitment has been a little bit slower than you thought for and I am just wondering to what degree does this just reflect a difficulty in recruiting patients that got documentation that you felt kind of three other therapies versus lack of patients out there.
So I am just wondering how that impacts your optimism about the commercial opportunities. Is it just a clinical trial issue or does it reflect kind of the medical need is lower?
Then the second last question, just your competitor is conducting a broad program for its CNS penetrating GCS inhibitor Venglustat and I just wonder whether you see potential for Lucerastat beyond the initial Fabry’s indication? Thanks.
Jean-Paul Clozel
I think that, for Aprocitentan, what we have seen is, from the beginning of fantastic enthusiasm with this study with the use of these drugs and when you discuss with specialists and frankly, our evaluation that there are six – just in the U.S. six million of uncontrolled hypertensive patients.
And you might have seen recently the new guidelines of the FDA who wants to insist on the fact that decreasing x millimeters of mercury counts, decreasing blood pressure is a more sure way of preventing may come cardiovascular events, stroke, mild cardio infection. So, we really see a fantastic interest.
Now, you might remind that with the FDA, we have agreed on a very – I would say, sophisticated study, you know that there is a first part of the study where we evaluate one month of treatment and then patients switch and have followed for a year and therefore, the total I think it’s today 16 visits. So, the problem is really to find patients who have a high blood pressure.
But it’s not really the question. The question is patients want to go 16 times to have to the hospital, to have the check of their blood pressure.
And this was needed because the FDA wanted to be sure that after one year, the drug is still working. There is no tachyphylaxis or there is not an issue.
And that’s – and you know, they have agreed that we perform only one Phase 3 trial, but the price to pay is a very complex study and that’s what we see today. We would have had, I would say, ten times more patients if we would not have this study, for example, we would had been able to follow only for one month.
And that issue frankly it’s quite difficult study to perform.
Richard Parkes
Perfect. Thank you.
André Muller
And Venglustat.
Jean-Paul Clozel
And Venglustat. We have a chance to have Lucerastat on one time and another product called OGT and frankly, we will have the choice to – between these two products to really go to several indications where accumulations of this metabolites or GDC is playing a role and we have – I am not saying that we should go with Lucerastat.
Maybe we would go with a next product.
Richard Parkes
Perfect. Thank you very much.
Andrew Weiss
Thank you, Richard. Operator, do we have another question?
Operator
Yes. The next question is from Stefan Schneider of Vontobel.
Please go ahead. Please go ahead.
Your line is now open.
Stefan Schneider
Yes. Thanks for having my questions.
Just on Daridorexant quickly. The marketing and distribution is planned from Idorsia or is – do we expect the partnering for the U.S.?
And the other one is, is it possible to specify a bit more clearly what the cost associated for selling and marketing versus administration was 2019 and it is also planned for 2020? Thank you.
Jean-Paul Clozel
Maybe, Andre, can you?
André Muller
Yes, for the second part of your question, commercial will remain limited, because it’s really a preparation of launches, again, provided that we have positive readouts for Daridorexant and Clazo in Clazosentan in Japan. So it will – it was CHF 10 million in 2019.
It will increase, but will remain limited. And again, it’s gated to the success of the pivotal trial.
Jean-Paul Clozel
And of course, we want to keep a control, as I said on Daridorexant, which means we will distribute this in the U.S. and in Japan it’s shared with Mochida.
But we are going to keep regulatory responsibility, I would – we are going to keep drug safety, pharmacovigilance, we are going to keep production, which is – it’s under control. Of course, production – we partner with some factories to make the product.
But we are checking the quality and we are responsible of this production. And finally, medical marketing, because we are going to have be responsible to choose other studies, Phase 4 studies to be made.
And then, the commercial operations, we are going to make the branding. We are going to design the strategy and the question is of course we are not going – I can tell you to recruit hundreds of inside – I would say, Idorsia medical representatives, but we are looking for solutions such as partnering with contract sales organizations in order to be able to partner with this organization and to work with the medical representatives.
Andrew Weiss
And we want to keep also payers access.
Jean-Paul Clozel
And of course, payer access, we have already, we have somebody we are working of course on that. That’s…
André Muller
Yes.
Jean-Paul Clozel
It’s something which is going to be key for this product of course.
Stefan Schneider
Yes. Thank you.
Andrew Weiss
Thank you, Stefan. Operator, do we have further questions?
Operator
No, there are no further questions at this time. I would like to turn it back to you.
Andrew Weiss
Thank you very much, Angela.
Jean-Paul Clozel
So, thank you very much for your enduring interest in our story and in Idorsia. Next news flow is prepared to be the first quarter announcement on the 23rd of April.
Otherwise, we do have the Daridorexant Phase 3 trial for the 301 trial coming through very soon in the second quarter. So, stay tuned for that.
Andrew Weiss
Thank you very much for your ongoing interest. Operator, close down the lines please.
Operator
Thank you for your attendance. This call has been concluded.
You may disconnect.