Feb 5, 2021
Operator
Dear, ladies and gentlemen, welcome to the Idorsia conference call. 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 for this conference.
Please go ahead.
Andrew Weiss
Good morning, good afternoon, everyone, and welcome to today's conference call/webcast. My name is Andrew Weiss.
I'm the Head of Investor Relations and Corporate Communications here at Idorsia. We are here to discuss our full year 2020 results performance as well as give you an outlook on 2021.
With me on the call are our CEO, Jean-Paul Clozel; and our CFO, André Muller. They'll be presenting in the first part of this session.
For the Q&A, we will also have our Chief Commercial Officer, Simon Jose, join us. So let's dive right in, next slide.
As customary, I need to remind everybody that we will be making forward-looking statements. You have therefore been adequately warned about the risks and benefits of investing in Idorsia.
Next slide, we are on Slide 3. Jean-Paul the floor is all yours.
Jean-Paul Clozel
Thank you, Andrew. So good morning and good afternoon to everyone.
2020 have been a very bizarre year and quite a dangerous one if we think about this terrible epidemic. But despite this very difficult and tough conditions, Idorsia has done extremely well.
And I have to say much better than many would have expected, than personally I would have expected. It's very rare, as you will see, to have met nearly all our goals and fulfill all what we were expecting for 2020.
So next slide, let's have a look at the highlights. Clearly, in 2020, we have announced positive pivotal results for daridorexant in insomnia.
And we have been able, at the beginning of this year, to file this NDA, which has been submitted to the FDA. We have been able in 2020 to obtain very positive results for the 2 registration studies which are required for the clazosentan approval in Japan.
What we have done also in 2020 is to strengthen our liquidity, and we have been able to raise CHF865 million. What we have also done in 2020 was to establish our U.S.
commercial operations under the leadership of Simon Jose. And also just we happened to know very recently, we have won the case against the previous Axovan shareholders we were requesting the payment of the milestones after the J&J acquisition.
Next slide. What makes really the engine of any biotech company is, of course, the pipeline.
And this slide summarize our pipeline, which is comprising 12 products without mentioning the T channel calcium blocker, which has been licensed to Neurocrine and which is in Phase II of clinical development for a rare form of epilepsy. But as you can see, our pipeline from daridorexant already submitted and the 3 additional Phase III programs.
And clearly, now with selatogrel, which is very soon, which is going to start the Phase III very soon. And of course, cenerimod, where we are waiting the results before starting the final pivotal trial.
You see that this pipeline is very rich, is also not only having late-phase product, but also Phase II product and early project. And we have been able to start new clinical developments of some very new innovative drugs.
But we will today focus on the later-phase program, which are going to bring new products to the market within the next 3 years for Idorsia. Next slide.
So daridorexant for insomnia. Daridorexant is quite a unique product because as an orexin receptor antagonist with a short half-life, we have been able to show that this drug could improve the sleep, but also could improve daytime functioning.
And this improvement of daytime functioning has been measured using a validated instrument developed in collaboration with the FDA. So as I've mentioned, the NDA has been submitted in January of this year.
And we are going, very soon in the coming months, to submit the market authorization for the EU. And we are planning to be able to launch daridorexant in the U.S.
in Q2 of 2022 and hopefully in Europe for the end of 2022. Next slide.
So clazosentan has done also extremely well. As you know, this endothelin receptor antagonist, it's a selective ETA receptor antagonist, has been able to show in the 2 pivotal study, pivotal trial study in Japan, has been able to show that it could prevent the cerebral ischemia -- sorry, it could prevent the vasospasm and the clinical consequences following cerebral ischemia post-subarachnoid hemorrhage.
So the 2 studies, one was in patients treated with surgery or clipping and one with patients with coiling, so without surgery. Both studies showed nearly the same very strong effect and a prevention of not only the vasospasm, but it's clinical consequences.
So we are planning in the coming months to file clazosentan in Japan. And we are also pursuing in Europe and in U.S.
another study which will be required for the filing in U.S. and in Europe.
This study is called REACT, and we are halfway through the recruitment. This study is the one from all our program which is suffering most of this COVID crisis because all the patients are treated within intensive care and a lot of intensive care units are extremely busy with the COVID crisis and situation.
But we hope to be able to finish maybe this year or first half of next year, finish the recruitment within REACT. Next slide, so lucerastat.
Lucerastat is an oral drug, which is distributing extremely well within the whole body. It can penetrate the tissue and it can particularly penetrate the CNS, central nervous system and prevent the buildup of lipids within this central nervous system.
And as you know, within Fabry, there is an accumulation of some of this lipid, and this accumulation within the nerves, in particular, is producing neuropathic pain. A lot of also consequences of the Fabry disease is the accumulation of this lipid within the heart, within the kidney, within the gastrointestinal system.
So by having a drug which distributes everywhere in the body, we think we have a drug which is going to have a major clinical effect on the disease and on its symptoms. And the main symptoms, which is the primary endpoint of the study, which is now going on and where we have finished the recruitment, and we have the results in the second half of this year.
This study called MODIFY is evaluating neuropathic pain with a patient-reported outcome, evaluating the complaint about the pain from the patient. Next slide.
So aprocitentan is an oral endothelin receptor antagonist, and we are evaluating its effects in patients which are nonresponsive to the most of the generic anti-hypertensive drugs. So the patients who cannot be controlled with existing anti-hypertensive drugs are included in the study called PRECISION.
And once we have shown that these patients are true resistant hypertensive patients, we are testing on them aprocitentan at 2 doses. And we are also evaluating the long-term effect on blood pressure of aprocitentan during the 8 months chronic treatment.
At the end of this 8 months, we are doing a randomized withdrawal to be able to show that the drug is still very effective after 9 months of treatment. So the study is going extremely well.
We are finishing the screening and the inclusion of the patients will be done in the coming months. And the results are expected in the first half of 2022.
We already had, I think, 5 review of the safety committee. So the safety, which is very important in this very severe patient, is extremely -- seems to be posing no problems, and we are very optimistic that this drug is going to fulfill a very high medical need.
As you know a lot of patients because of diabetes, because of genetic background, because of obesity, in the U.S. there is an increasing number of patients which are not controlled for their blood pressure, and a new drug effective in these patients is going to be very important.
As you know, Janssen will have the rights, commercial rights about this drug, and we will get royalties. Next slide, selatogrel.
Selatogrel is also, I would think, a revolution in cardiology because it's a self-injected device where the patient in case of a recuring myocardial infarction, so these are patients who already got a myocardial infarction. And once they have another pain and therefore, they are at risk of a second myocardial infarction, they can inject themselves with selatogrel and then be protected for 4 hours, which gives them the time to call an ambulance and to go to the hospital where they will be treated.
The drug is not long-acting, so once they are within the hospital, every intervention, every treatment can be done without the risk of an interaction with selatogrel. I think it's very important, and we have seen that in the time of COVID, for example, ambulance delay is a huge problem.
In New York, patients have to wait sometimes 3, 4 hours to get an ambulance to be hospitalized and such a drug will be extremely useful and will be extremely useful. The clinical program, Phase III, is going to be initiated within, I would say, the first patient of this program are going to be treated in the second half of this year, but we are already contacting the centers and preparing for this Phase III program, which has an SPA, which means that we have agreed with the FDA of the program and its endpoints.
Next slide, cenerimod. So cenerimod is the third-generation sphingosine-1-phosphate receptor modulator.
This drug has been selected not only because of its selectivity, its potency because of a very specific interaction with the S1P1 receptor, which leads to a really very good safety profile. And I think that with this drug, cenerimod, we'll be able to show that we are avoiding some side effects of the first generation or second-generation S1P1 receptor.
It received a fast track designation from the FDA. And the study, the first pivotal study called CARE, which is also a dose response, but which has a clinical endpoint.
And therefore, can be used if it's positive as a pivotal trial. This CARE study will have its recruitment completed by the end of February, and we'll get the results before the end of the year of 2021.
And we are planning to have basically a discussion before the end of the year with the FDA in order to start in 2022 the second pivotal trial. Next slide.
So as you see, we are at an inflection point. Idorsia is really because of this fantastic 2020 year, 2020 year, we are in a very good situation.
We are going to see many, many important milestones crucial for the company. In 2021, you have seen that we have filed daridorexant in FDA, soon with the EMA.
Clazosentan will be filed also soon in Japan. Selatogrel Phase III will be initiated.
Lucerastat results, Phase III results, final Phase III results will be available second half of this year. And cenerimod, also cenerimod results, we know will be available before the end of 2021.
But also in 2022, we are going to have crucial results, crucial milestone, hopefully, with the approval and the launch of daridorexant, of course, in the U.S., but also with the results of aprocitentan, also the launch of clazosentan in Japan and the results of clazosentan in, sorry, clazosentan in Japan, the launch in Japan. Sorry, Andrew, I don't see the slide anymore.
Andrew Weiss
Yes. I seem to have a network problem.
I don't have the slides up on the screen anymore.
Jean-Paul Clozel
Okay. So I just can go to Slide 13, but it doesn't really -- I don't know.
Andrew Weiss
It's the building of the commercial organization.
Jean-Paul Clozel
Yes, the building. But do people see, I don't know if the people now see it.
Andrew Weiss
They will see it.
Jean-Paul Clozel
They will see. Good.
So just, what is also important is the buildup of the commercial organization. Simon Jose within 2020 has been able to gather a team of very experienced people.
And also not only in the central position in Allschwil in Switzerland, but also we have the team complete, the U.S. team complete to be ready to launch in 2022 daridorexant.
And with Patty Torr as the President of the U.S., we have the complete team now. And most of the prelaunch and the preparation of the launch operations is ongoing now in the U.S.
We have been also within 2020 to engage with key partners such as Syneos for the medical representative, Omnicom for the branding, advertising and Ruder Finn also for the public or the PR activities. So what, finally, next slide.
What, of course, has been extremely important is the raising of cash. And you will hear what is our financial situation and also how our financial means have been evolving in 2020.
So André, please can you, that's your turn.
André Muller
Yes. Thank you, Jean-Paul, and good afternoon or good morning to everyone.
Thank you for your continuous support. Maybe before jumping to the slides, giving you some color on the full year numbers published this morning.
I would say that 2020 numbers were globally in line, even if slightly below our guidance updated last October. So I would say the full year 2020 was almost uneventful, until the first of February and the judgment of the arbitral tribunal regarding the Axovan litigation.
Call it intuition or precaution, I asked my team to draft 3 versions of financial statements. First one, if no final award would have been granted before publication.
Second, a worst-case scenario where the claim would have been granted to the claimant. And the third one, which is published this morning, the scenario that eventually materialized where the claim was dismissed.
So now we can move to Slide 15, U.S. GAAP net results.
As usual, we start with this waterfall, showing how U.S. net results came about.
First, on your left-hand side, you see CHF72 million revenues. This includes mainly the license and R&D collaboration we entered into with Neurocrine for the calcium T channel blocker, so CHF50 million.
We had also CHF11 million deferred revenue from the collaboration with Janssen regarding aprocitentan. And the remaining CHF11 million was: Roche, CHF6 million with the research collaboration; Mochida with daridorexant in Japan; and Santhera, CHF2 million for the assignment of the option to license vamorolone.
Then you see and we come back to the CHF444 million non-GAAP operating expenses, leading to a non-GAAP operating result of minus CHF372 million, with D&A of CHF19 million, stock-based compensation of CHF19 million. The U.S.
GAAP operating results amounted to CHF411 million. There is a quite unusual amount below EBIT of CHF35 million, which led to the CHF445 million U.S.
GAAP net result. The reason for this CHF35 million is mainly due to the financial results with U.S.
GAAP of net financial loss of CHF39 million and non-GAAP financial expense of CHF18 million. So the CHF18 million were mainly relating to the foreign exchange loss that we have on our U.S.
deposits. And the reconciliation between non-GAAP and U.S.
GAAP are relating to the accretion expense on the J&J convertible bond, CHF8 million, and a relatively significant amount, CHF13 million, on the loss or the mark-to-market on the 1.7 million shares of Santhera that we hold. Of course, we did not pay for these shares.
We get them from the different deals that we entered into with Santhera. And some of the shares or most of the shares are blocked until the results of vamorolone.
But of course, in U.S. GAAP, you value these shares at the market price.
So now we can move to Slide 16, non-GAAP operating expenses. The non-GAAP R&D expenses amounted to CHF355 million compared to CHF412 million in 2019, so a significant decrease in R&D.
Here, you can see how these R&D expenses broke down. Research, slightly below at CHF107 million with biology, chemistry, pharmacology and preclinical activities.
You see development, if you exclude the CHF9 million and the inventory build that are also included in R&D, but development was really impacted by COVID-19 and the delay in some of the clinical trials. And you see that we had CHF212 million compared to almost CHF300 million in the previous year.
The CHF9 million milestone, you may recall that we acquired some of the Axovan claims from a non-claimant for less than 1/3 of their face value in June 2020, so CHF9 million. And we started to build in drug substance and drug product.
We started to build inventory in preparation of the launch that is expected in 2022. And as you know, as long as the drug is not approved, you can't book it as an inventory, so it hits your P&L in the R&D line.
And this was CHF26 million. For the SG&A, as anticipated, we had an increase out of the CHF90 million you see here.
You have CHF63 million in G&A and CHF27 million in selling. So CHF444 million, less than the previous year, CHF470 million, less than what we expected.
If we move to the next slide, which is Slide 17. You see on a quarterly basis that we spend much more in Q4 with CHF142 million.
And you really see the impact of COVID in Q2 because if you exclude the CHF9 million milestone in Q2, you see that we spend as less, I would say, than the CHF77 million. So a catch-up in Q4, as we expected, which also give you a clear hint on what will happen and will even increase in 2021.
But we'll come back to the guidance a little later. So if we move now to Slide 18, the cash flow, we entered the year 2020 with CHF739 million liquidity.
As we discussed, we spent CHF444 million non-GAAP operating expenses. We cashed in milestone, CHF61 million.
So that's the cash part of the milestone, not all recognized in the P&L. But in the CHF61 million, you have, of course, the CHF50 million of Neurocrine.
You had the CHF9 million with Mochida. And you had also CHF2 million from Roche in connection with the research collaboration.
Limited CapEx, CHF9 million. Other means working capital requirements diminishing by CHF10 million.
And as Jean-Paul already alluded, CHF843 million cash raise, the net amount of the 2 equity raise made in 2020. So we end up with a really round the number, easy to recall, CHF1.2 billion liquidity.
And the next slide, so Slide 19 gives you the breakdown of this liquidity. On the left-hand side, you see the cash, the cash deposit that aim to decrease the negative yield on Swiss deposits and also benefit from the U.S.
yield curve on our U.S. deposits.
Right side, you see in terms of the breakdown between the main currencies, mainly Swiss franc, CHF927 million and USD 268 million, which are aimed to cover our foreseeable expenses, which are denominated in U.S. dollar.
Of course, with U.S. organization, that will grow in order to properly prepare for the launch of daridorexant, but also for expenses in U.S.
denominated in U.S. dollars, namely primarily for clinical trials.
Now we can move to Slide 20 and see the guidance. Before going into the numbers, I must say, I'm really happy to mention that the guidance excludes, as usual, the unforeseen events, but I'm more than happy that we could remove the language around any potential payment in connection with the Axovan arbitration.
This is behind us as we already mentioned because we have the final award from the arbitral tribunal removes a serious Damocles sword above our head. It was a claim alleging the change of control with the acquisition of Actelion by J&J and the concurrent demerger of Idorsia from Actelion that would have led to an immediate payment of all outstanding milestone for clazosentan.
This claim was dismissed. So the total amount would have been quite substantial, close to CHF100 million if you include also the late payment, statutory interest on late payment.
And frankly, this CHF100 million will be better used to fund 2021. So you see the non-GAAP OpEx of CHF640 million.
I will start with the easiest one, CHF5 million milestone. Because of the very positive result of clazosentan in Japan, we will file the dossier with the relevant authorities in Japan.
And to this extent, we'll pay this CHF5 million milestone to Roche. We will continue to build an inventory.
But as long as the drug is not approved, it hits the P&L for around CHF35 million, mainly with daridorexant, but also for clazosentan in Japan, and which means that we will have around CHF600 million functional operating expenses, of which CHF370 million with R&D expenses. So we will actually on R&D spend a little more than what we spent in 2020.
The reason for it is not so much on the fixed cost base. Even with this broad portfolio, we will need to increase our headcount in R&D and in clinical, pharmaceutical, mainly pharmacovigilance, drug safety.
But more importantly, we will also increase the cost for study cost. In late stage, the lion's share is, of course, for the late stage.
Here, daridorexant will go down. Because of some delay with the REACT trial research, clazosentan, and also lucerastat even if the enrollment is now well on track, as Jean-Paul mentioned, we will more or less spend what we had in 2020.
Aprocitentan is more or less the same. But the main driver for the increase will be selatogrel with this integrated drug device, developing with Antares in the U.S.
and cenerimod, where we should get the results of the Phase IIb by the end of this year, 2021. And of course, as you've seen, we have a rich pipeline with Phase I and Phase II assets.
That's the advantage also for having a very productive drug discovery engine. And we also plan to spend a little more on Phase I and Phase II assets.
And among others, the single orexin receptor antagonist that we want to investigate in binge eating disorders. So that's the reason for increase of R&D expenses.
And of course, the most significant increase is in SG&A. And for this, of course, it's all about the preparation for the launch of daridorexant in the U.S.
and clazosentan in Japan. There's a significant amount, around CHF90 million, really only product-related external spend.
And as you can imagine, maybe with daridorexant. The rest is, of course, to gear up the commercial organization with marketing, selling, access, medical affairs, supply chain.
And G&A will increase, both in the affiliates where we see support functions, but also at headquarter, notably with IT assistance because we need to be ready for launching these kind of drugs. So this gives you the reason for this CHF640 million non-GAAP operating expenses.
On top, we have planned for roughly CHF20 million D&A. Slightly higher stock-based compensation with CHF25 million because of a larger organization, not only in Switzerland, but mainly in the U.S.
and in Japan. So U.S.
GAAP OpEx should be around CHF685 million. Let's move now to the next slide, so which is Slide 21, sorry.
We do not guide on revenues. I say it depends primarily on existing collaboration, less aside the new ones, I mean, the out-licensing deal that by essence are not predictable.
Looking ahead to 2021, we could have various sources of revenue. With Mochida, the next milestone is the first patient enrolled in the Japanese Phase III trial.
With Roche regarding the R&D collaboration, which was actually extended until end of 2021. With Santhera, depending on the clinical results of vamorolone in DMD, which are expected by the end of H1 2022.
And of course, with ponesimod, as you know, ponesimod was developed by the Actelion team almost to the end and taken over by the Janssen team. And now, of course, it belongs to J&J according to the merger agreement.
But with the NDA and MAA submitted in the U.S. and in Europe by Janssen in March 2022, we can reasonably expect the PDUFA for ponesimod in MS this spring.
And with this revenue sharing agreement in place, i.e., granting us 8% of the annual net sales, this is very likely to become Idorsia's first recurring revenue stream, and which brings me to the next slide, Slide 22, which is actually my last slide. Idorsia revenue model moving forward will be actually a dual.
On the one side, you see it on the left-hand side, we'll have revenues coming from net sales from our own product developed in-house and that we will commercialize with our marketing and selling organization. And it means that our commercial organization will market GP products using when needed partners, e.g., Syneos in the U.S.
or Mochida in Japan, orphan drug products like clazosentan and hopefully lucerastat and also specialty products like cenerimod and selatogrel. So we will, hopefully, in different ways, launch these products and get a very diverse source of revenues.
Idorsia is not a single asset company by far. And on the other side and you have it on the right-hand side, we count also on milestone and royalty stream coming from ponesimod.
We just alluded to it. Hopefully also tiered royalty between 20% and 35% on aprocitentan with J&J.
And hopefully, beginning of 2022, we'll get the result of the Phase III. And regulatory and sales milestone as well as royalty on our T channel blocker from Neurocrine if, of course, the studies are positive.
So with this, I hand over for the concluding slide to you, Jean-Paul. Jean-Paul, the floor is yours.
Jean-Paul Clozel
So thank you. So as a summary, I just wanted to say that this -- and thank you, André, first.
But clearly, the year 2020 has been key and prepare for very exciting 2021. I know I am going to repeat.
But first of all, this strong balance sheet is really helping us a lot because we have to do a lot in 2021. So not only we have filed, and we should file daridorexant and clazosentan this year, but we are starting the selatogrel Phase III, and we will wait for the result of lucerastat and cenerimod.
And if these 2 drugs make it, then basically it would mean that we would have 6 Phase III assets within Idorsia in 2021. So you see that this strong balance sheet was very important.
We are in good shape. And I hope that now this presentation has given you a reason to believe even more in the future success of Idorsia.
So maybe Andrew.
Andrew Weiss
Thank you, Jean-Paul. So with this, this concludes our session with our prepared remarks and opens the door for the Q&A, where Simon Jose is going to join us.
Before I open the line with the operator. I also want to remind that it's possible to reach me via e-mail, [email protected], if you prefer to send your questions through like this.
Operator, please open the lines.
Operator
[Operator Instructions]. And the first question is from James Gordon, JPMorgan.
James Gordon
James Gordon from JPMorgan. A couple of questions, please.
One was just, in the release this morning, there was a comment about recruitment in the CARE study for cenerimod and the MODIFY study for lucerastat, how they've been impacted by COVID. Then you've made some adjustments in consultation with health authorities.
And so you've adapted the enrollment. So the first question was, what were those changes?
How have you changed the enrollment? Second question was, lucerastat looks like a big readout for this year, Phase III data.
I'm not aware that we've got data on this particular endpoint previously, the neuropathic pain primary. So just how are you thinking about the risk profile there and other even if you haven't already got data on neuropathic pain, is there other things you've seen before that makes you encouraged?
And then just the third and final question, daridorexant. I think we know where we are in terms of Western and Japan plan.
But what about China? When does that place get that fleshed out?
And then what will you consider doing yourself in China versus letting a third party have a go?
Andrew Weiss
Okay. James.
Thank you for all those questions. I think the comment on the trial design at lucerastat, the endpoint, Jean-Paul, and then we can refer the dari to Simon.
Jean-Paul Clozel
But maybe there is about the recruitment of also of cenerimod. This was another question.
So I'd take that. Yes.
So I think that, first, for lucerastat, we have finished the recruitment, we didn't change the number. In fact, because we had discussion with the FDA during the year to slightly modify the endpoint.
And in fact, to really be able to get a more precise evaluation of the pain, especially with time. So we got an agreement with the FDA.
And this would have allowed to, in fact, decrease the number of patients needed in lucerastat study. But we have been able in the last coming months to recruit a very big number.
In fact, I think we are going to have more patients than what we anticipated. And therefore, we really have tried to optimize our chances, and we will have with the pain for the pain PRO.
We have more patients than what we had anticipated. And now you ask me, of course, we don't know.
We have never shown an effect on pain. What tells us, what is giving us some optimism.
And of course, it's a blinded study. The fact is that I think nearly 100% of the patients who have been offered to go into the open-label study have decided to go into the open-label study, which shows that at least the patients like the drug, at least.
But also what has also give us some, I think, some help was some anecdote from first Phase II and some patients who seem to have benefited. But of course, it's just anecdote.
So really, for lucerastat, I think we need to wait until the last moment to really know if this drug works on pain. So that for cenerimod, we have decided.
And in fact, we will have enough patients to really not modify our program. We had just discussed with the FDA what they really needed to see.
And in fact, the main change in the program of cenerimod is the fact that after the 6 months, which is the primary endpoint, we are going to follow the patient for 1 year. And this is in the fast track situation.
It is really to be able to have more patient long-term evaluation in order, in fact, to do a smaller phase, a second Phase III and to be able to register with enough long-term data. So that the FDA agreed, and we are continuing to treat the patients after having evaluated the primary endpoint for safety reason.
That's for cenerimod. And so we will get the results and hopefully, it will be very interesting to see if we have a lupus drug.
So for daridorexant, yes, we are going to file in Europe and in the U.S. And in China, we have done the first evaluation, and maybe Simon can give a little bit his opinion.
Simon Jose
Sure, James. We're looking at China very carefully, actually.
I think clazo and luce with the recent changes in the regulatory process and the potential to sort of file off the back of foreign approval, this is something that we're looking at. And certainly with clazosentan in subarachnoid hemorrhage, that is quite common as it is in Japan.
So daridorexant in insomnia, it looks to be a very, very big market in China. I think we're looking at like 140 million people.
And even if you simply look at the number of people that are in the outpatients in the large hospitals, there's 26 million, which is more than we've got in the U.S. So it's a big market.
Benzodiazepines are the standard of care. So there's a big opportunity there.
We haven't yet decided and determined the degree to which we'll go ourselves and use a partner, which is something that we're working through, but we are looking at China carefully and see a big opportunity there.
Operator
The next question is from Rajan Sharma, Deutsche Bank.
Rajan Sharma
Firstly, just on selatogrel. And I was wondering if you're able to kind of further disclose any detail on the design of the Phase III.
Just specifically how you can ensure recruitment of the correct patient population given the strategy for administration and also how you can ensure correct use of the device? And then secondly, just on daridorexant.
And if you could just expand on your prelaunch strategy for that one. And maybe any observations from the competitor Dayvigo launch in the U.S.
and any feedback on that launch that may inform your plans for daridorexant?
Jean-Paul Clozel
Yes. So I think that I will take the clinical development of selatogrel and Simon will answer about Dayvigo and the prelaunch.
So just for selatogrel, it's a very good question. In fact, you are hitting a very endpoint.
We have an SPA. So the endpoint is really basically -- I don't want to go in detail, but it's basically do the patient, how many patients who took our drug selatogrel compared to placebo that got a severe myocardial infarction, a small myocardial infarction or nothing at all.
So we looked at what are the consequences of the second pain and the second crisis. And of course also, we are looking at the long, I would say, long term, so semi long term after 1 month and 3 months, that's the secondary endpoint, but can we prevent with selatogrel, can we prevent the occurrence of heart failure.
This would have a major, of course, impact, economical impact because heart failure is for the life of the patients. And if you could, by giving one drug in one day prevent long-term consequences, it's such a huge economical impact.
So the question that you are asking is, how do we go for the right patient. The right patient is not difficult.
They must have a myocardial infarction. The diagnostic of myocardial infarction today is quite simple.
So they must have a myocardial infarction plus a second risk factor. It can be diabetes.
It can be renal failure or what is increasing markedly the chances to get a second myocardial infarction. So we want to have a number of events sufficient to be able, a little bit like you see with a vaccine, to be able to take a conclusion.
And of course, we will have many more events than what is done with today's vaccine, but it's the same principle. I think we need about 500 events, and we count that maybe 2/3 of the events will not be because the patient diagnosed himself, his pain.
And we know that maybe 2 or maybe 3 times over 4, the pain will not be a myocardial infarction. But 1 over 4 times, it will be a myocardial infarction.
So the patients are high-risk patients. They need also to be able to remember that they have an auto-injector.
We're not going to treat patients with Alzheimer's unless, and this is also what is done, there is somebody next to this patient, somebody, a caretaker, which I can guarantee that in case of a second infarction, this patient can inject himself or with the help of the caretaker. So there would be, within the study, a sort of test that before entering into the trial, every patient should show that he can inject himself.
It will be with a placebo, of course, but he will use the auto-injector, and he has to demonstrate that he can really inject himself. He's not afraid of the pain, and he doesn't have a psychological problem, which would prevent him to inject himself.
So that's the way we guarantee that we are taking the right patient population. Maybe go to daridorexant?
Andrew Weiss
Simon?
Simon Jose
Yes, sure. Let me start with Dayvigo.
I think the Dayvigo launch has been, at least seen through our eyes, disappointing. They've got in the first 6 months 6,000 prescriptions.
And if you compare that to suvorexant at the same time point, they had 28,000. The degree to which that is the profile of the product due to the long half-life, whether it's launching in COVID or the priority of receiving in a pool company, it's hard to tell.
And obviously, you'll need to address that to Eisai, but I certainly think it's been a disappointing launch. In terms of our own activity, we are now rapidly sort of building and moving forward with our preparations for launch.
We will build and own what I would call the core commercial capabilities ourselves of pricing, access, marketing medical affairs and supply chain. But obviously, as you know, we're partnering with Syneos to build the U.S.
sales force. So we'll control the strategic elements of that, and we'll work with Syneos as a partner to get to the primary care market where there's about 60% of the volume.
We see this as a very strong consumer play. I mean it's obviously a prescription product, needless to say.
But nonetheless, we believe that activating consumers and being very focused on consumer channels, digital channels is going to be very important for the launch, and we're very focused on that and building that as we speak. And finally, obviously, over the course of the next several months and during the course of the year, we'll be engaging with the medical community and critically with the payer organizations to make sure that we're prepared for the launch when we turn into that in Q2 of next year.
Operator
The next question is from Graig Suvannavejh, Goldman Sachs.
Graig Suvannavejh
I have two, please, perhaps the first more strategic for JP. Jean-Paul, when you look at the pipeline, it's quite diverse.
And so from a strategic perspective, if you could help us get a view as to how you're thinking about which assets that you're developing are perhaps more appropriate for Idorsia to commercialize on its own versus potentially out-licensing opportunities or partnership opportunities? So that's my first question.
And then my second question, with key readouts in the second half of this year for lucerastat and cenerimod, could you give us a sense of what that threshold for success might look like in those trials? What would you consider to be a successful outcome in terms of some of the metrics that we should be looking at?
Jean-Paul Clozel
Yes. So let's discuss about the strategy.
The strategy is very clear. We have an incredible drug with daridorexant.
To have a drug which can make you sleep better, can you really improve your day performance, it's which drug improve your day performance. Everybody dreams of having the possibility to improve how you feel, what is your mood during the day, how you function.
So we have an incredible drug. And this drug by its own, with a 15 years, I think with a 15 years long patent life, it's sufficient to ensure a very big success for Idorsia, which should lead us to profitability alone with this drug.
I think this is really justifying to set up the commercial organization, and we have decided to really not share, except maybe we do it in Japan, maybe in some countries, but in the main countries, we really, we want to launch it and to keep the most of the value of this drug. So that's the key for Idorsia.
But on top of it, we have the chance to get hospitalized and orphan drug type of drugs, which are going to increase our margin and which are going to not -- once we have a commercial optimization already in place, we, of course, don't need to set up another organization. So all the revenues will come with increased market or margin and not mentioning the addition as a third wave of revenues of the milestones and the royalties, of which we will get from aprocitentan, from also ponesimod, of course.
So you see we have this 3. And in fact, the strategy is going to be simply, in fact, to reinvest the fantastic revenue.
I think it's going to be massive. These revenues, we will have to have other drugs to ensure the growth because we will be very big revenues.
And I can tell you, you will ask at one stage to say what next after daridorexant. One day, people will ask what next because it will be very big, and we will need to grow.
And then we have cenerimod. And of course, selatogrel are coming.
This is the second wave of growth, and this should really ensure the growth of the company for the many years to come. So I think that's for the strategy.
The other question was?
Graig Suvannavejh
The other question was, what looks good for cenerimod and lucerastat?
Jean-Paul Clozel
Yes, sorry. I think that for lucerastat, if we have a clinical effect, if we have a significant effect, that means I think that I don't know by heart, but we have a very meaningful -- this has been statistically calculated.
We have a meaningful, clinically meaningful improvement of the PRO. The PRO was designed with the FDA.
So was approved with the FDA. The FDA worked with us to define in patients with Fabry which type of question we should ask about this pain.
And we have agreed of a level of improvement, of course, which would make sense. I cannot give you by heart because it's a scare.
But if we have a significant, if we have statistically significant effect, it will be clinically relevant. Of course, all the secondary endpoint being effect on gastrointestinal symptoms, effect on the renal function, effect on cardiac function, all these elements are evaluated.
And the beauty is, of course, COVID has sometimes some advantages as we say because we have been delayed by COVID for this study, but all the patients were continuously treated by lucerastat. Therefore, we will have an incredible, the biggest study ever in Fabry with more than 100 patients sometimes followed for 2 to 3 years.
So it's going to be a mine, a gold mine if the study is positive of long-term evaluation, which has never been done, never been seen. And I think it's not tomorrow that you will see such a study.
So this is why we are so excited to have finished the recruitment of more than 100 patients with Fabry. For cenerimod, we are not only having -- we want to see, it's not only efficacy.
It's the safety also, which is going to be very important. We think that we have a very effective drug, but we want to look at the safety, and we want to really know what is the optimal dose.
And that's going to be our view. I think that it's difficult to compare one study to the other.
So I will not say that with our study we are going to know if we have a better drug than venglustat, but we are going to get a really clear view if the drug is effective and safe.
Operator
The next question is from Jo Walton, Crédit Suisse.
Jo Walton
I'd like to ask a little bit about the timing of how these expenses are coming in, particularly as we're moving into the extra expense on SG&A. So I wonder if you can just help us as we go through this year and how we sort of exit the end of the year?
And if you can also give us some idea if you got any on the launch cost as we begin to model 2022? Clearly, the expenses that we need to model for '21 are a little bit higher than people have been looking for.
And I just wonder whether we should carry that on and really look for a stonking great launch cost just to make sure that daridorexant gets a fantastic send off into the U.S.?
Andrew Weiss
Yes. André, I think that one's for you.
André Muller
Yes. Thanks for this very good question, Jo.
The operating expenses, especially in SG&A, will increase over time over the next quarters. That's very clear.
So second half will be more heavy than first half. 2022, even for us, it's difficult to predict, not so much the expenses that we could have in SG&A, at least in the U.S.
and in Japan for daridorexant and clazo, but maybe in other countries, depending on the strategy in Europe, in China as asked by James previously. But the point in 2022, yes, you can reason we expect that the SG&A will go up just also because we have the medical reps of Syneos in the U.S.
But of course, what we will also have is growing revenues and starting with daridorexant then clazosentan. Here, we need to have more visibility also on the label, interacting much more with payers in order to better assess what could be the speed of uptake for the drugs and namely daridorexant this year in the U.S.
So you have to wait for 2022, but increased spend but also increased revenues. We are not launching daridorexant not to be a blockbuster.
Jo Walton
And can I then just follow-up on daridorexant. Looking at the other similar new launches in that market, to what extent do you think that this is a market where you have to spend a lot of time giving away free product to start with so that the GPs are happy with it?
I know that the prescription numbers are light for some of these other products, but is that because of very heavy sampling?
Andrew Weiss
Simon, I think that one's for you.
Simon Jose
Sure. Thanks, Jo.
I think sampling will be important because one thing we know in this category is that the way that the patient responds is going to be critical for the long-term success and growth of the product. So we do expect to sample.
I don't think that we can at all look at suvorexant or lemborexant as benchmarks because they, really, the problem they had was that the products didn't deliver against the promise. So with suvorexant, actually, as I said earlier, 28,000 scripts in 6 months.
They got off to a good start, but then it just went flat because patients weren't getting the benefit of the product that they were expecting, principally because the FDA, when they got the approval, they had to go down to a dose that wasn't even studied in the Phase III program as their start dose, which didn't differentiate from placebo in Phase II. So patients were starting on a low dose because of the AE profile at the higher doses and just didn't get the feeling.
So we're absolutely clear that patients are going to need to have a good experience, and we're very focused on both sampling, but also the way that we communicate expectations with patients that they experience a good first sort of few days and week of daridorexant. And in that context, the 50 milligram, we believe, is also going to be critical to ensure that does happen.
Operator
We have one more question from Thibault Boutherin, Morgan Stanley.
Thibault Boutherin
A couple. The first one on the launch of daridorexant in the U.S.
market. Our conversations with sleep specialists in the U.S.
indicate that they were facing quite a lot of prior authorization barriers to prescriptions for the DORA class. So just if you could comment on that and how you expect to overcome this, in particular, since you, I think you said you are targeting marketing to primary care physicians.
That's my first question. And second question, I mean, it's about ponesimod.
I know you obviously out-license this drug to J&J, but when I look at consensus expectation for the Bristol drug, for example, Zeposia, ozanimod, I mean, they still forecast that it will have $2.5 billion peak, looks like there is at least $500 million for MS. And it looks like expectations for the J&J drug, I mean, for ponesimod is not there.
And when I look at ponesimod, obviously, I mean, you had good efficacy data against an active comparator. Safety profile looks good.
So just if you could comment on what emphasis is missing here.
Andrew Weiss
Thank you, Thibault. I think we'll kick it off with Simon on the launch of dari and prior auth and step edits and priority in payment, I guess, would be all in that same category of questions.
Simon Jose
Yes, certainly. So thanks for the question.
I think what, going back to suvorexant's profile. What's happened in the U.S.
is that when you launch a new primary care drug, it's very common, as you well know, that you have step edits if you're launching into generic markets. It's very common that branded products are a Tier 3 co-pay.
And I think that in itself isn't necessarily a problem if the product delivers. We know that suvorexant has 90% access.
But obviously, there's 2/3 of that go through a step edit. Patients and doctors will go through the step edit relatively easily because most of them have been cycling through benzos, Zs and trazodone over the last few years.
So the step edit requirement can be met relatively easily. Then you come to Tier 3 co-pay.
And if you then go to a Tier 3 co-pay, you're asked to pay $30, $50 maybe. And that's okay if the product works.
But if the product doesn't work, then the patient will walk away from it rather quickly. Clearly, access in the U.S.
in the generic market is something that we're very thoughtful about, but it's not solely an issue of access. It's actually about the profile of the product and whether it delivers.
And we believe that step edit won't be a barrier. We also believe that if the product works as well as we expect, and we've seen in our clinical program, then patients will pay $30, $50 for a Tier 3 co-pay, and our research does support that.
Jean-Paul Clozel
And just to go back on your very good question about ponesimod. I think that what we have done and what we believe and with our clinical, Guy Braunstein, our Head of Clinical Development, it's really and everybody believes that in Idorsia and in Actelion, is what is very important is to show the benefit of any drug to the patient.
And really, if they can show subjective improvement, if the patient feels better, it's going to be very important. This has been our strategy for daridorexant.
This has been the strategy also for ponesimod because not only we wanted to show with ponesimod that we have the same relapse rate like other drugs or decrease of relapse rate like the other drugs, but that we could change the main symptoms of multiple sclerosis, which is fatigue. 50% or 60% or maybe even more than 60% of the patients with MS suffer from fatigue.
And we have been, I think, the result, and it's public. Johnson & Johnson has been able to say that the study was ponesimod was better than Aubagio on fatigue.
So I think this is going to be very important, and I cannot speak about numbers, and this is a question to Janssen. But I think that in, like we do for lucerastat, like we do also for cenerimod because I didn't mention, but we have a PRO for pain and fatigue into cenerimod.
We want to show that the patient feels better. And I can tell you, if the patient sleep better, he is going to continue to take the drug.
If it feels better, he is going to want to get to ponesimod. If he's less tired, he will like to stick with ponesimod.
And if he has less pain, he will choose first-line lucerastat in Fabry disease. And I think that this is really in contrast with a lot of people like BMS who have chosen as a comparator -- no, it was not BMS, but it was at this time Receptos.
But the comparator was a drug which is nearly not used anymore, which is interferon. It's very rarely used in MS.
And they choose relapse rate as an endpoint, while we are really looking not only at the relapse, but how people feel. And that can make a huge difference.
Andrew Weiss
Great. Jean-Paul, thank you very much.
Thank you, Thibault. So before we close down the call, I actually did get one question coming in from an investor through the e-mail concerning strategic positioning of daridorexant going forward in other indications, Jean-Paul.
What do you think about how we're going to develop daridorexant in the future over time?
Jean-Paul Clozel
Yes, I think the strategy of daridorexant was to get the umbrella of all type of insomnia in a way. So people were asking us why you don't go to insomnia, into depression, insomnia and insomnia into neuropsychiatry or whatever.
And of course, when you discuss with the FDA of such an approach, they would tell you, what is different into insomnia of depression versus other type of insomnia and show us. Then if you want to have an indication, you really have to show an effect on depression in addition that you have an effect on insomnia.
So we agreed with the FDA, so let's go to insomnia. And then what is more important is in Phase 4.
Since we will have the big indications, the largest indication that I think we can have, which is insomnia, basically, then we can start to look at the benefits into subclass. But I don't think we will need to get a label change, but we can really demonstrate the benefit, maybe having it included in some subpart of the label, certainly not in the indication.
And we can look at some class of patient, being depression, patients with insomnia and depression, patients with insomnia and sleep apnea, patients, of course, we think...
Andrew Weiss
Jean-Paul, you're muted. Jean-Paul, we can't hear you anymore.
Operator
I believe we lost the line. I can try to get him back in.
Andrew Weiss
Okay. Well, I think that concludes our comments anyway.
So I think we've come to, well, we're 20 after 3. So we will exceed our time.
So thank you very much for your interest in Idorsia. We've come through all the questions that we're going to be asked today.
So next time release is going to be the first quarter '21 results on the 22nd of April. So that leaves you with, just stay tuned, expect more.
We will be progressing through 2021 with this very exciting story. Operator, close down the lines, please.
Operator
Ladies and gentlemen, thank you for your attendance. This call has been concluded.
You may disconnect now.