Great. Hi, good afternoon, everyone. Thank you for joining us. I'm Edward Nash, one of the senior biotech analysts here at Canaccord Genuity Equity Research. I'm pleased to have Verona Pharma with us today. Joining us is David Zaccardelli, President and Chief Executive Officer, and Chris Martin, Chief Commercial Officer. We actively cover this name with a buy rating. Thank you for joining us. We appreciate it. Happy to be here. So to start with, just like to maybe, I'd like to thank everyone, we've talked about this earlier, that everyone knows that you guys now have a recently approved product, but maybe you could just kind of give us this, the general overview of Verona Pharma and, the- ensifentrine, also known as Ohtuvayre, which was recently approved for the maintenance treatment of COPD. COPD, as many of you know, is a chronic disease, progressive in nature, that has had relatively little pharmacologic innovation over the past 20 years or so, especially by the inhaled route, where the treatment landscape has been primarily long-acting muscarinic antagonist, or LAMAs, long-acting beta agonists, LABAs, and/or inhaled corticosteroids. That's been pretty much the treatment paradigm for the past 20 years or so. With Ohtuvayre, which is a phosphodiesterase 3 and 4 inhibitor, it's the first inhaled mechanism to come to market in quite some time. As a PDE3, PDE4 inhibitor has very specific pharmacology, which includes it's a bronchodilator, improves lung function. It's been demonstrated very clearly in many studies, including two large phase 3 trials, as well as anti-inflammatory effects, which has been associated with, of course, improving symptoms, quality of life, and very importantly, has reduced the exacerbation rate and risk by about 40%, in the trials. So we're very excited about its profile, its benefit to risk, its recent approval, and now, the recent launch of Ohtuvayre, in the US, which is literally just, several days, old, and, very excited about, the take-up, which I'm sure we'll be talking about today. Great. Can you talk a little bit just about your the initial target that you're gonna be going after, which type of patients? We've— Is it the patients because you talked these about these patients already being on a LAMA or LABA, in some cases, ICS. Is it gonna be those patients who have already have tried those failure pa— those treatments and are still having breakthrough symptoms? Or, I know you've talked more and more about the fact that the— because these patients are visiting physicians more often, they have a chance to maybe be— the drug has a chance of being moved upstream sooner. Yeah, I think... Let me kind of walk through kind of what we know about the market today. There are 8.6 million treated COPD patients in the market today, and about half of those patients complain about persistent symptoms. The most common persistent symptom that these patients have is dyspnea. So, when we speak to physicians, we're really now agnostic to what they're on from a background medication. It really goes back to, if you have a patient that's persistently symptomatic in your practice, how do you treat this patient, and how do you modify their treatment? What we know from all our market research and our early discussions in the field is that doctors make therapeutic changes when they have a patient complaining about persistent symptoms, especially dyspnea, or lack of activities or decreasing activities. So as we continue to talk to physicians about that, it becomes less about what they're on and more about their symptom burden and what they're dealing with. What physicians have told us over the course of the last two years in market research is that when they start to get experience with Ohtuvayre and ensifentrine, they are very interested in using ensifentrine as they get experience earlier and earlier in the treatment paradigm, so that they can start to push ICS or inhaled corticosteroids later and later in lines of therapy. And I wanna say that that's not a day, that's not potentially a day one thing, but that is something that physicians, as they get experience with, are very open to that idea. They understand the risk of inhaled steroids. They also understand that inhaled steroids don't work broadly in the patient population, and they believe Ohtuvayre's data provides the first time they've had this opportunity of bronchodilation, non-steroidal anti-inflammatory, that can be used across all their patient types. Do we have an idea of how, what% of patients are on a steroid? Oh, if you look today, like, just look at LABA/ICS. LABA/ICS, I mean, of that 8.6 million patients, 50% of the patients are on a LABA/ICS today. And then if I add triple to that, it's probably another million, 1.5 million patients. So you're talking about two-thirds of the patients today are on an ICS product. If you compare that to the guidelines, though, the guidelines are not that liberal in how they say ICS should be used. They're specifically talking about where ICS should be used in high eosinophil count patients. They talk about how, if a patient doesn't have exacerbations over a period of time, how they should be down, de-escalated off ICS. The reality is, while that's listed in the guidelines, the doctors today have no other treatment. Until Ohtuvayre's approval in June 26th, they had no other option. So this gives them now this option that they've never seen before in the marketplace. Do most physicians, when a patient's already on a LAMA and a LABA, before they'll start an ICS, do they try to add another LAMA or LABA, and is that usually effective? They usually. So the way they typically start, let's say, you know, most patients will start on a single LAMA or LABA. If they have increasing symptoms like dyspnea, in today's world, before Ohtuvayre, they'll add another bronchodilator. So if they're on a LAMA, they add a LABA. If they have a exacerbations, which means they showed up in the hospital, they had some sort of ER event, something that required an escalation of antibiotics or oral steroids, they might add ICS in that patient more frequently, and not add another bronchodilator, but add the non-steroidal anti-inflammatory or the anti-inflammatory at that point. Yeah. With the 120-person sales force, can you talk a bit about how those are being distributed and how you guys feel that that is really the right number near term? Because I know you've said that you really feel that is the right number, and I know you've done a lot of work for a long time prior to this launch on this. So just wanted to kind of get a better idea of how you—why you feel so comfortable with that number. Yeah. Our 120-person sales force includes our sales reps, our sales management team, our virtual sales team, we do have a virtual sales team, and also our field reimbursement managers that support in the access continuum. You know, when we looked at sizing the sales team for the Ohtuvayre opportunity, we wanted to look at what the potential was across COPD and who was the biggest writers within COPD. And what we saw across the spectrum was that, you know, while COPD is a very. If you just said, how many doctors write one prescription of a COPD drug? It's about 400,000 doctors, but you're never gonna put a sales force against 400,000 people. So the next question is, okay, well, of those 400, how many write the majority? What you actually see is that list becomes very consolidated, and it comes down to about 15,000 doctors that are writing the majority of these, these prescriptions. With that size of a HCP opportunity, you only really need about 100 reps, 100, 100 reps to reach the opportunity. I think we're even more comfortable in the 100 rep size when we look at who writes the majority of recently launched products. The first product we always start with is Trelegy, which is, you know, almost a $5 billion-$6 billion run rate, asthma and COPD indication. When we look at their who writes 70% of that volume, it comes from about, about 15,000 doctors within COPD. So, but that's in year 7. That's not year 1. That's 7 years post-launch. And then if I go to another analog, which is Breztri, which launched in 2020, they have about 11,000 doctors doing 70% of their business. So really, that 15,000 number is a sweet spot for us. It's a mix of pulmonology, nurse practitioners and PAs in pulmonology offices, and primary care doctors that act like pulmonology in a community where they don't have pulmonology access. Do pulmonologists, as a group, tend to have a short learning curve with new drugs, or does it take time for adoption? I think it's physician dependent. Within each within all physician segments, there are doctors that are very quick to adopt and doctors are very slow. That's not a pulmonology phenomenon. That's. When I was in GI and hepatology, that's a GI and hepatology phenomenon. When I was in CNS, it's a CNS phenomenon. So, I think what we've done from a work perspective is we've done a really nice job, the team have, of identifying. Like, we have prescribing behaviors, which is how doctors write, but we wanted to understand attitudinally why they make those choices. So we've been able to segment our physicians attitudinally as well as prescribing, to be able to drive maybe differentiated messaging through the reps or even digital tactics. So if someone is slower, they're slower because maybe they worry more about safety, and so we emphasize maybe a safety message to that doctor instead of the efficacy message early on, so that they get comfortable about what maybe makes them a, quote, "slower doctor." And we're able to do that digitally, and we're able to do that through a rep as well. So, I know you touched on this a bit on your earnings call, talking about... A question was asked on abandoning scripts, abandonment scripts. And just wanted to understand specifically the patient group that you're kind of going for are already on multiple therapies- Yeah ... and are having breakthroughs. So I would think that that would be a much smaller number because it's they're, they're the ones who are driving the need for the drug. It's not the doctor who wants to try it out, it's the patient needing it. So just wanted to understand, can we look at historical abandonment scripts in pulmonology and get an idea of what we could potentially expect for Ohtuvayre? I think you have to use historicals because that's all we have today. And you remember, when a doctor writes a script, there are two components of it getting filled. There's rejection rate from a payer, and then there's abandonment from the patient. So rejection is the payer says: "No, I'm not covering it." And abandonment is they get "It's covered," and then the patient's like: "The copay is too high, and I just don't want it." What you see in COPD is as you change channels. Let's talk about the first part, rejection rates. In COPD across all therapies, Medicare Part B has very low rejection rates, almost zero, but there is a little bit in there. But as you move to Medicare Advantage, you move to Medicare Part D, you move to Medicaid, those rejection rates get higher based on the payer controls that they have across all COPD therapies. On the abandonment side, it works related to copays. Really, what we see in the marketplace is when you have a low copay, $0 out-of-pocket cost, one would assume there's no abandonment by patients. Well, reality is there's even abandonment at $0 copays. And so some patients just don't fill, because of their behaviors, don't fill scripts. But that's very low within the Medicare Part B space. In fact, when we look at it, the average copays of what we see in Yupelri, in Brovana, and Perforomist are about 80% of these patients pay $0. So that abandonment at $0 is very low. But as you move copays up past $50, and when you're talking about commercial and Medicare Part D, it's plan dependent. And every plan you may see one plan that's a higher copay and one plan that's a lower copay. But our goal is to try to make sure that the out-of-pocket costs are as, as reasonable as possible for the patient so that they have access. ... So do you have any idea of what the number of touches that a rep has to touch with the pulmonologist before we actually see a script getting written? Or are we, is that also a factor of it's gonna take time to tell because a launch is obviously a very different animal than when you were at normal run rate of the drug? I mean, let's talk about what we've seen today. So what we've seen today is we've had reps in the field a few days, as Dave talked about last week on our earnings call. We talked about we've done about 2,000 doctor visits, over 2,000 doctor visits. What we've seen in that is a rep can interact with a doctor, and a doctor immediately writes a prescription and has a patient. We've also seen doctors write prescriptions without no rep interaction. So we've engaged digitally almost 7,000 doctors in a high capacity with digital engagement over the last month and a half, and those doctors have converted into writing in these over 100 writers that Dave talked about. So I think early on in launch, you see a bit of both dynamics. I want to emphasize, though, that, you know, the rep interaction is really important. We wanna make sure that doctor has the right experience. We wanna make sure they understand what the drug does, what the novel mechanism does, and we also, more importantly, wanna make sure they understand the reimbursement pathway and the pathway to distribution. So that is something that's really critical as we think about how the launch cadence goes and what we're going to do with the field. So I mean, Edward, to your question, we've seen both, like, very short. I think over time you'll see that a rep needs to interact with a doctor and make... But I, I'm confident that our digital abilities can drive, will drive, adoption as well. Got it. And then with regards to guidelines for COPD, can you talk a little bit about how often those tend to be updated, and would you expect to see Ohtuvayre being incorporated now that it's commercially available? Yeah, sure. So the, the GOLD guidelines are updated with, I would call it, some frequency, including, they're next up for review in November. We do know Ohtuvayre is being presented at the meeting. We know who's presenting it, and so I think that it's going to get great visibility and clarity. We expect it to be integrated into the GOLD guidelines. I think there's multiple places it can be integrated, both on the dyspnea side of the guidelines, as well as on the exacerbation side. Of course, they look at the totality of the scientific evidence, when looking at the GOLD guidelines, and I think it'll be very interesting in how they view Ohtuvayre and how to characterize it in the guidelines with regard it being a non-steroidal anti-inflammatory. They're very clear that, steroid use, inhaled steroid use should be limited to those patients that require it. They've not had a chance to use anything else since then. The guidelines are much clearer about its limited use compared to how it's used in general practice. So now, with Ohtuvayre being available as another option, as a non-steroidal anti-inflammatory, it'll be very curious to see how they put that in the guidelines. So we look forward to that near the end of the year. Okay. And I know that this is a question you get asked a whole lot, which is—but it's an important question, and I think believe you've mentioned you're starting off using a general J-code, but you'll have a specific J-code likely the beginning of 2025. Could you just talk and just briefly just explain why that's important, what that specific J-code will allow for, that the general does not? Yeah. The non-specific J-code that we're using is an inhalation J-code that exists. We're the only, we believe, the only drug that's using that J-code today. So it's really for the reimbursement or adjudication back to the pharmacy, who's getting the ASP plus. So during a non-specific J-code, it requires a manual adjudication, which takes a little bit more time. When you get a product-specific J-code, that adjudication is instantaneous, and it's tied back to your ASP. So it just turns that adjudication process into a couple, let's just say, a week or two to 10 days, to almost instantaneous for the pharmacy. And the other important thing, just so that everybody knows, is we did submit the J-code application on June 27th, and we submitted the update to the Local Coverage Determination on June 27th, right after PDUFA. We have confirmation from CMS that those are under review, and as you said, Edward, we anticipate that we would have a functioning J-code at the beginning of 2025. Great. Then the two things we always hear a lot about is FEV1 and exacerbations when it comes to COPD. Mm-hmm. Can you talk a little about the importance of having an effect on exacerbations and what Ohtuvayre has shown on this front? Sure. You know, in the ENHANCE phase 3 program, of course, which was the first time we assessed exacerbation rate and risk as they were 24-week studies. So, you know, it demonstrated an incredible effect, reduction of 40%, rate and risk, which again, I think is incredibly clinically relevant, and important for a physician to understand. I think that data, of course, is in the publication. It also has been, you know, provided extensively through our medical affairs efforts over the past year. And I think it's an element that is important. With that said, and you mentioned FEV1 or parameter drawn lung function, what physicians are dealing with on a day-to-day basis, and patients are, more importantly, is dyspnea or, you know, heart... You know, inability to breathe effectively and/or inability to actually conduct normal daily activities, what has to do with lung function. So actually, you know, improvement in an FEV1 or improvement in lung function is a very important practical matter, and I think it first of all drives use as physicians are treating dyspnea primarily on a day-to-day basis. Exacerbation reduction is of course important. I would say on a day-to-day basis, sort of a nice to have. But I think combining the fact that we improve lung function and we also improve exacerbation rates really is a nice combination. ... And can you talk a little bit about you started talking more—you've obviously been doing work on the combo, combo treatment with ensifentrine Ohtuvayre? Mm-hmm. Can you talk a little bit about that combo treatment and why you've picked that specific combo? Yeah. Yeah, sure. We're very excited about our pipeline, including the combination of a LAMA glycopyrrolate with ensifentrine as a nebulized product. Combination product would be the first time ever as a nebulized product, you know, two bronchodilators and of course, a non-steroidal anti-inflammatory would be available. I think it's a great life cycle management and an extension of ensifentrine's use. Combination therapy in COPD is incredibly frequent, so I think it sets up well with how patients are treated, adding a LAMA with ensifentrine. We also know from the ENHANCE program that ensifentrine works very well with a LAMA. That is, the combination is incredibly powerful from a lung function improvement, and we also believe from an exacerbation rate and risk reduction. So, I think it sets up well from many aspects. Of course, there's additional IP around that takes us into the early 2040s. It also resets an IRA clock. So there are other advantages outside just clinical medical aspects. The current status of that right now? Yep. So we're starting phase two trials as we speak. First, we have to do some dose-ranging work with glycopyrrolate as a nebulized product. Then we'll move to the combination dose ranging, beginning in 2025, and then based on making sure we have the dose for both of those correct, move on to the more definitive trials of looking at each component separately, along with the combination. You currently have a partner in China, and, you know, we obviously think Europe makes a lot of sense, the next step, but maybe, maybe you as well. But just wanted to understand, first of all, is the prevalence of COPD, is it consistent throughout the world, or does it differ by territory? Well, it is prevalent throughout the world. I think there are... You know, it's very well described, you know, in Europe, there are plenty of patients, unfortunately, but there are, you know, at a frequency that is similar to the States. Of course, China has a quite large population that has COPD for various reasons. So I think that, there's that evenness, if you will, of the opportunity from a patient perspective that exists in many of the major territories, and Europe being one of them. Clearly, there's an opportunity for Ohtuvayre. We will be meeting with the EMA as we turn into 2025. We'll be looking at scientific advice from them, reviewing the phase 3 data we have already, and understanding that regulatory pathway there. The market size is substantially less than the US. That's primarily driven around price. That's true for all COPD drugs, which is approximately tenfold lower than the US. So, all of that will come into place, and I think that that's what drives also our strategy of partnering in Europe with somebody who has a commercial footprint, also production capabilities, manufacturing, product, as well as development capabilities around DPI and MDI, for example, which also may be more advantageous, commercially in Europe than in the US. You currently are using one manufacturer? Yes, for both API and drug product, we have a single manufacturer. We've worked with them for extensive periods, and both of them are in very good standing with the agency. We've scaled up the product at both of them at a commercial level. And of course, we've been building inventory on both, including, you know, multiple year inventories around API, as well as continuing to build our inventory on drug product. So we feel very comfortable where we are at the moment. As we expand globally, we would add, you know, additional commercial sites to make sure that we manage it both from a supply redundancy as well as a cost perspective. As I mentioned, various regions, and China being one of them, also need product at different price points as well. Great. And then my final question is just one IP, which you alluded to, given that the combo therapy would obviously give you a nice extension on the patent life. Mm-hmm. But right now, where does the patent stand for Ohtuvayre and the implications for IRA as well? Yep. So our IP core IP is around two patents, which one is the polymorph patent of ensifentrine, as well as a formulation patent. Keeping in mind that Ohtuvayre is a suspension, so you do give it in the solid form, and that's very important for its pharmacodynamic response. So those two patents we have been describing that that gets you through the mid-2030s. We also have submitted multiple patents based on the phase 3 data. We expect those to issue over the next 12-18 months. We expect at least five or six to be in the Orange Book as well, in addition to our current patents listed in the Orange Book. So, we think that'll create and be a fact pattern of quite a barrier for others. With regard to IRA, you know, based on our projections, I think we would be subject to IRA. Of course, that's nine years from now. And as I mentioned, the combination product allows us another avenue for a different product that would be outside ensifentrine's IRA. Well, I wanna thank the whole team for being here. This is obviously an extremely exciting time, but also an extremely busy time for you guys. So, I really appreciate you taking the time to come out, and I would encourage everyone, if you haven't taken a look at the story, to absolutely take a look at the story. It's a great one. And again, thank you for joining us. Thanks so much. Thank you.