Alder Biopharmaceuticals (ALDR) Q4 2017 Earnings Conference Call Transcript

Alder Biopharmaceuticals (ALDR)
Q4 2017 Earnings Conference Call
Feb. 26, 2018 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good afternoon and welcome to Alder Biopharmaceuticals' Fourth-Quarter and Year-End 2017 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Following the formal remarks, we will open the call up for your questions. Please be advised that the call is being recorded at the company's request.

At this time I'd like to turn the call over to Ashwin Agarwal, vice president of corporate strategy. Please proceed.

Ashwin Agarwal -- Vice President Corporate Strategy

Thank you, operator. Good afternoon and thank you for joining us. Just after the market closed today, we filed our Form 10-K for the full year 2017 with the Securities and Exchange Commission and issued our financial results and corporate highlights press release, both of which are available in the Investors section of our website at www.alderbio.com. Today on our call we have Randy Schatzmann, president and CEO; Elizabeth Sandoval, chief financial officer and EVP, corporate strategy; Larry Benedict, EVP and principal accounting officer; and Mark Litton, chief business officer.

Before we begin, I would like to caution you that during today's conference call, we will be making forward-looking statements regarding future events or the future performance of the company, including statements about possible future developments regarding clinical, regulatory, commercial, financial, and strategic matters. Actual events or results, of course, could differ materially. We refer you to the documents that Alder files from time to time with the SEC and in particular, the company's annual report on Form 10-K for the year ended December 31, 2017, which was filed with the SEC today, February 26, 2018. These documents, which are available on the SEC's website, contain and identify under the heading 'Risk Factors' important factors that could cause actual results to differ materially from those contained in any forward-looking statements including, without limitation, risks and uncertainties related to initiation, conduct, and results of clinical trials; the availability of data at the expected times; the clinical, therapeutic, and commercial value of Alder's drug candidates; risks and uncertainties related to regulatory application, review, and approval processes and compliance with applicable regulatory requirements; risks and uncertainties related to the manufacture of Alder's drug candidates; Alder's ability to obtain and protect intellectual property rights and operate without infringing on the intellectual property rights of others; the sufficiency of Alder's capital and other resources and market competition.

With that, let me pass the call over to Randy.

Randy Schatzmann -- President and Chief Executive Officer

Thank you, Ashwin, and welcome, everyone. This past year was very successful here at Alder. We achieved significant milestones toward our goal of transforming the treatment paradigm for migraine prevention with our lead product candidate eptinezumab. Notably, we announced very positive Phase 3 pivotal data in June of 2017 for our PROMISE 1 trial in episodic-migraine patients and in January of 2018 for our PROMISE 2 trial in chronic-migraine patients.

We also recently announced the patent settlement and license agreement with Teva and strengthened our capital position through two financing events at the start of this year. We now have clear, worldwide freedom to operate and the cash position to support the development of eptinezumab through approval and commercialization. Importantly, these accomplishments have put us in a strong position as we enter the next phase of Alder's growth, focusing on achieving regulatory approval and the commercialization of eptinezumab and building a broad migraine franchise, and we remain on track for our BLA submission in the second half of 2018.Today, I'll begin by reviewing highlights of our two pivotal clinical trials for eptinezumab, PROMISE 1 in episodic migraine, PROMISE 2 in chronic migraines, and then touch all the milestones that we're advancing toward in 2018 and beyond. Following my remarks, Elizabeth will discuss the commercial value proposition of eptinezumab, how we view Alder's target market, both from a patient and the physician perspective, and what we're doing in 2018 in terms of commercial-readiness activities.

Finally, Larry will provide a review of our fourth-quarter and full-year 2017 results and provide guidance around 2018 cash and associated cash investment in our programs.Moving to our clinical trial results, data from both PROMISE 1 and PROMISE 2 studies further underscore our belief that eptinezumab's clinical profile is highly differentiated and sets a new standard for what could be achieved in migraine prevention. Following a single quarterly administration in both episodic- and chronic-migraine patients, eptinezumab consistently delivered predictable results for rapid, effective, and sustained migraine prevention across the spectrum of migraine disease. The first of eptinezumab's differentiating characteristic is the high efficacy achieved Day 1 post-infusion. This was sustained through three months following a single administration.

Specifically, for both episodic- and chronic-migraine sufferers, the risk of having a migraine was reduced by greater than 50% versus baseline within the first 24 hours. We believe this characteristic has the potential to be a compelling benefit to patients if eptinezumab is approved, possibly allowing them to experience control of their debilitating migraine symptoms within one day of treatment versus waiting weeks or even months to achieve relief. Eptinezumab's rapid efficacy could also enable physicians to quickly determine whether a particular patient is responding to eptinezumab therapy, thereby allowing early decision-making regarding further treatment. The second key differentiator that PROMISE 1 and PROMISE 2 trials demonstrated was the ability of eptinezumab to achieve levels of efficacy that went beyond the current standard for successful response for a migraine-preventive treatment, which currently is the 50% responder rate.

Approximately one in three patients achieved a 75% response rate, meaning they experienced 75% or greater reduction in monthly migraine days by Month 1 that was sustained for three months. And further, an average of 17% of patients in PROMISE 1 and 15% of patients in PROMISE 2 had a 100% response, or zero migraines for months 1 through 3 after a single administration of eptinezumab. These results demonstrate a level of efficacy far beyond the current standard while maintaining a safety and tolerability profile consistent across all eptinezumab studies and consistent with placebo. We look forward to sharing additional data from these studies in the first half of this year, including the six-month data from the PROMISE 2 study, which covers a second eptinezumab infusion in chronic-migrant patients and the 12-month data from PROMISE 1 study or, more specifically, the results from four quarterly infusions of eptinezumab in episodic-migraine patients.Looking ahead, we remain on track to submit the BLA for eptinezumab in the second half of the year.

This submission will include data from both the pivotal Phase 3 trials and our one-year open-label safety study, which is now fully enrolled. We're also on track with key CMC and manufacturing activities, including an ongoing PK-comparability study to ensure the commercial readiness of supply upon launch. Taken together, eptinezumab's emerging differentiated clinical profile and our progress to date leave us well-positioned to capture what we believe is a $1.5 billion to $2 billion U.S. market opportunity for eptinezumab, which is a distinct segment from both patients and physicians that will be served by the subcutaneously administered anti-CGRP therapies.

Beyond eptinezumab, and consistent with our commitment to building a broad migraine franchise, we continue to advance our second product candidate, ALD1910. ALD1910 is a monoclonal antibody targeting PACAP-38, or pituitary adenylate cyclase-activating peptide 38. Like CGRP, PACAP-38 is a neuropeptide understood to be a key factor in the initiation of migraine, though via a separate pathway from CGRP. We believe that targeting PACAP-38 holds significant potential, particularly for people living with migraines who may have an inadequate response to agents targeting CGRP or its receptor.

We're continuing to advance ALD1910 through IND-enabling studies, which include GOP toxicology and GMP manufacturing. In January, we announced an IP settlement and licensing agreement with Teva in which we received a non-exclusive license to Teva's CGRP patent portfolio, clearing our freedom to develop, manufacture, and commercialize eptinezumab in the U.S. and globally. The agreement includes one-time milestone payments when we reach $1 billion in annual sales and again at $2 billion in annual sales, underscoring our own and what we believe is Teva's confidence in eptinezumab's substantial market opportunity.

Overall, the agreement resolved any previous uncertainty around Alder's worldwide freedom to operate and ability to commercialize eptinezumab. Finally, we strengthened our balance sheet through the execution of two recent financings in early 2018, resulting in a strong cash position of more than $600 million today. As always, we remain focused on being disciplined and prudent with our deployment of capital in support of our activities ahead of launch, as you'll see when Larry discusses our financials. As such, we are confident that we have sufficient cash to meet projected operating requirements into 2020, including BLA filing, FDA approval and the commercial launch of eptinezumab.I'll now turn the call over to Elizabeth Sandoval, our chief commercial officer and executive vice president of corporate strategy, who will discuss how we plan to maximize the full commercial value of eptinezumab.

Elizabeth?

Elisabeth Sandoval -- Chief Commercial Officer and Executive Vice President Corporate Strategy

Thank you, Randy. To begin today, I'd like to revisit what drives us here are Alder, that migraine is a highly symptomatic and debilitating disease for millions of people across the globe. We estimate that of the 13 million prevention candidates in the United States, there are between 5 million and 7 million episodic- and chronic-migraine patients who are highly impacted by the disease and are underserved by preventive therapies. Treatments currently available and others under development take weeks or even months to achieve maximum benefits, and their efficacy is often limited by safety and tolerability.

As we've previously communicated, the largest volume of the highly impacted migraine patients are managed by approximately 3,000 high-value, procedure-oriented headache specialists who seen an average of 150 to 200 of these migraine patients each month. We continue to receive strongly positive feedback from many of these physicians, whose patients are suffering from the significant impact migraine has on their daily lives. We continue to hear that eptinezumab is uniquely differentiated and has the opportunity to change the paradigm for migraine prevention. Because of this and based on our interactions and market research, we believe this segment of physicians has a strong preference for eptinezumab's infusion therapy over subcutaneous anti-CGRPs for several reasons.

Rapid, Day 1 suppression of migraine risk that's sustained for three months following a single administration. The high number of 75% and 100% responders seen in eptinezumab's studies gives physicians the ability to offer migraine freedom to their patients, far beyond the current standard. And these physicians currently utilize other types of in-office procedures to manage their patients, as they value the important adherence benefits associated with supervised medication administration. As such, 94% have previously prescribed infusion for migraine or other conditions and approximately 65% have in-house infusion capabilities, further supporting our strategic decision to develop eptinezumab as an infusion procedure.

It's important to note that these physicians represent a specialty market that we estimate can be adequately addressed by a sales force of approximately 75 to 125 representatives.Heading into 2018, we've been ramping up our commercial-readiness activities in support of our launch and are confident in our ability to successfully execute on our commercialization strategy. We're building out on an experienced commercial team focused on readiness activities, including medical affairs and physician-scientific education. We plan to deploy a medical-scientific liaison team this year as we continue to ramp up marketing and market-access initiatives. As part of our commercialization-readiness activities, we're focused on ensuring that infusion access is not a limitation to eptinezumab uptake and success for physicians or patients regardless of the geographic location or site of service.

We look to the MS market, which has successful and newly launched infusion products, to leverage established infusion-center networks to supplement physician in-house capabilities, and meet the needs of physicians who would prefer not to undertake infusion procedures within their practices. We're focused on capturing the full commercial value of eptinezumab globally. As we stated earlier, we are confident in our ability to execute independently and capture what we believe is a $1.5 billion to $2 billion U.S. market opportunity for eptinezumab.

We also recognize the potential for strategic partnerships and other arrangements that bring additional capabilities, infrastructure, as well as value to the program. Thus, as a key component of our commercial-readiness activities, we are actively reviewing options both globally and in the U.S., that will allow us to realize the full commercial potential of eptinezumab beyond what we can achieve on our own.With that, I'll turn the call over to Larry to review the financials.

Larry Benedict -- Executive Vice President and Principal Accounting Officer

Thank you, Elizabeth. During the fourth quarter and full year 2017, our eptinezumab program drove a significant portion of both our R&D efforts and certain aspects of our G&A expenses in support of commercial-readiness activities. As of December 31, 2017, we recorded $286.2 million in cash, cash-equivalents, short-term investments, and restricted cash, compared to $240.9 million as of September 30, 2017, and compared to $351.9 million as of December 31, 2016. We'll only provide free fourth-quarter results on this call and refer you to our period-over-period operating results detailed in this afternoon's press release and 10-K filed with the SEC.

In the fourth quarter, R&D expenses totaled $44.7 million, G&A expenses were $10.3 million, and our net loss was $54.4 million, or $0.80 per share. These figures represent increases over the same period last year, reflecting our commitment to advance the eptinezumab program and position the company for commercialization. As always, we are focused on prudent spending and making very efficient use of our capital, and our results reflect those efforts.In January 2018, we raised $97.7 million in net proceeds from our committed financing with the investors affiliated with or managed by Redmile Group, LLC. In February of 2018, we raised approximately $277.7 million in net proceeds from our public offering of 2.5% convertible senior notes due 2025.

In addition, in January 2018 we made a $25 million upfront payment to Teva under our settlement and license agreement. As a result, we estimate our available cash, cash-equivalents, short-term investments, and restricted cash, together with the net proceeds of the two finances in 2018, will be sufficient to meet projected operating requirements into 2020. These projections assume a BLA filing and approval by the U.S. FDA and the commercial launch of the infusion formulation of eptinezumab in this time period.

Accordingly, we anticipate increased expenditures to support our commercial-readiness activities and expect that expenditures will fluctuate from quarter to quarter because of the uncertain timing of these activities. However, we anticipate that the full-year 2018 cash investment will be in the range of approximately $275 million to $300 million and will be more heavily weighted to the first half of the year, reflecting the Teva upfront payment of $25 million and certain critical development and manufacturing activities planned for early this year.Now, I'd like to turn the call back to Randy.

Randy Schatzmann -- President and Chief Executive Officer

Thank you, Larry. 2018 will continue to be an important year for commercial preparation for Alder and we're confident in our ability to successfully execute on the initiatives we've discussed today. With the positive pivotal data we reported in 2017 and in 2018 -- and the additional that we'll provide during 2018, we believe that eptinezumab, if approved, will be a significant paradigm shift for the 5 million to 7 million highly impacted migraine patients in the United States, of which at least 3 million are chronic sufferers represented by the PROMISE 2 trial patients. We're excited for the future and are confident that we're well-positioned to capture the large U.S.

market opportunity for eptinezumab. Finally, I'd like to thank the dedicated efforts of our employees, the financial support of our investors, and the commitment of our investigating physicians, who worked tirelessly to advance eptinezumab to this stage, as well as our patients who've been instrumental to our success. With that, we will now open the call for your questions. Operator?

Questions and Answers:

Operator

Thank you. Ladies and gentlemen, if you have a question at this time, please press *, then the number 1 on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the # key. Again, that's *, then 1 to ask a question.

To prevent any background noise, we ask that you please place your line on mute once your question has been stated. And our first question comes from Charles Duncan with Piper Jaffray. Your line is now open.

Sarah Weber -- Piper Jaffray -- Analyst

Hi, this is Sarah on for Charles. So, first off, with the PROMISE 2 data in hand, how's your outlook on the pharmaco-economic value of eptinezumab been evolving? And then, while perhaps this is a bit premature how's payer discussion been progressing as well? Thanks.

Randy Schatzmann -- President and Chief Executive Officer

Thanks for your questions, Sarah. Maybe what I can do is ask Elizabeth to step in and provide some color there.

Elisabeth Sandoval -- Chief Commercial Officer and Executive Vice President Corporate Strategy

Thanks for your question, Sarah. It's early, as you say, for us in our discussion with payers, and also and now that we've got the completion of the PROMISE 2 data, we're obviously actively working on our pharmaco-economic strategy and execution. With that said, though, we have confidence that eptinezumab will have a very strong value proposition with payers that reflects the clinically differentiated profile. As we described in our earlier remarks that includes the Day1 reduction in migraine risk, the early 75% and 100% response that are sustained following a single administration.

As per also Randy's earlier remarks, we believe this early response and efficacy associated with eptinezumab could allow both physicians and payers to determine after a single administration whether a patient is a responder and should go on to further treatment and we believe this will be of value to the payer community.

Sarah Weber -- Piper Jaffray -- Analyst

Great. Thank you. And just one follow-up. Can you remind us -- any segments of the migrant population that are maybe better or worse candidate for eptinezumab versus some of the other antibodies out there and any market research you've done around that to date?

Randy Schatzmann -- President and Chief Executive Officer

Thanks, Sarah. I think the way we're thinking about eptinezumab is it's really, we believe, as the data suggests, will be the drug of choice for patients that are what we call most heavily impacted and these are in particular represented by the chronic-migraine patients that we studied in PROMISE 2 but also the more severe heavily impacted end of the episodic-migrant population, many of which we studied in PROMISE 1. I think that, as Elizabeth was saying, for these patients, particularly those in PROMISE 2 where they were averaging 16 migraine days per month that they were suffering, for them this Day 1 and early efficacy is important to them. If you're suffering that many migraines per month, your suffering four or five per week, and for you, your interest is in having rapid relief from your migraines.

I think the other thing that's going to be really important for these more severe patients is they've been living a decade or more of their lives with this large number of migraines, and I think the promise of being one of these 15% or 17% of patients that could be completely migraine-free after that single dose is going to be really key.

Sarah Weber -- Piper Jaffray -- Analyst

Great. Thanks for taking my questions and congrats on the quarter.

Randy Schatzmann -- President and Chief Executive Officer

Thanks, Sarah.

Operator

Thank you. Our next question comes from Brian Abrahams with RBC Capital Markets. Your line is now open.

Brian Abrahams -- RBC Capital Markets -- Analyst

Hi. Thanks very much for taking my questions and congrats on all the progress. As we think about the upcoming six-months follow-up data for PROMISE 2 and the one-year data on PROMISE 1, can you talk about what we should be looking for with respect to potential deepening of efficacy? What types of signals you might be looking for to further potentially differentiate eptinezumab?

Randy Schatzmann -- President and Chief Executive Officer

Thanks for that, Brian. I will refer you back to the data we've been talking about from PROMISE 1. And you'll recall that the first administration of eptinezumab in those episodic-migraine patients allowed on average about 17% of those to be migraine-free during the first three months of the study. And then you'll also recall that with the second administration that effect deepened to about 26% or 27% of patients who were migraine-free for the second dosing period in that case.

I think our hope would be, with PROMISE 2 and looking at now what will be the four-, five-, and six-month data from that study, that we would see a deepening of effect beyond the 15% of patients that were migraine-free in the first dosing period, and, again, would be -- these are levels being migraine free that go far beyond what any of the other programs have reported to date.

Brian Abrahams -- RBC Capital Markets -- Analyst

Great. And then just a follow-up question. Some of your competitors have had hiccups with respect to manufacturing, so I guess two questions on that front. First off, with respect to the scale-up and the comparability study that's ongoing, anything different with respect to scale-up using your novel technology, any information that the Claza experience could maybe teach us? And then, secondly, can you confirm as to whether there's any sort of ongoing inspections or outstanding warning letters at the facilities that will be producing eptinezumab? I'll hop back in the queue.

Thanks.

Randy Schatzmann -- President and Chief Executive Officer

Thanks for that, Brian. Right now our manufacturing efforts and building our commercial supply chain are completely on track. As you know, we've had dialogue with the FDA all along and we have an agreed pathway forward for what we need to do to fulfill their needs for our BLA and establish that commercial supply chain. We do have outstanding experience with the process that we're using with the manufacturers that we're working with today.

You refer back to our Claza experience and while that taught us some important things early on, we've been manufacturing eptinezumab now for over five years with just huge consistency from batch to batch. And, again, I think that gives us a great confidence moving forward that we're going to be able to have the right supply chain to establish the sizable $1.5 billion to $2 billion marketplace that we see for eptinezumab.

Brian Abrahams -- RBC Capital Markets -- Analyst

Thanks, Randy.

Operator

Thank you. And our next question comes from Jessica Fye with J.P.Morgan. Your line is now open.

Jessica Fye -- J.P.Morgan -- Analyst

Great. Thanks for taking my questions. I have a few, if that's OK. Maybe first, curious what you thought about the recent Allergan update on their acute-migraine data and what it might suggest, if anything, about the chronic use of oral CGRPs for migraine prevention, in your view, recognizing that what they provided was not in that setting.

Second, to the extent there are step-edits or products patients will have had to fail, when you think about that pool of patients that are more heavily impacted and most likely to use eptinezumab, what proportion do you think have tried beta-blockers and Topamax and what proportion do you think have tried Botox? Presumably, the frequent episodic patients won't have to step through that, given it's not labeled there but in the chronic setting, do you know what that number is and do you expect that Botox may be a step for some of these patients? And then lastly and probably most importantly, you mentioned that you're actively reviewing options to allow you to fully realize the value of the eptinezumab beyond what you could achieve alone. What does a partner need to bring to the table? Thank you.

Randy Schatzmann -- President and Chief Executive Officer

Thanks for those, Jessica. Let me comment on the first couple of these and then I'll turn it over to Elizabeth to comment a little bit more. So in terms of the Allergan data, we've always said that we felt that the orals had an important place particularly in the acute treatment of migraine patients. As you know, today, many patients that are taking triptans to treat their migraines acutely, are intolerant of those triptans or they have cardiovascular complications that mean they're contraindicated for those patients, and in that case, a different biology is really needed to be brought to bear to help those patients out and I think this is the promise of what those orals have.

I think it's early days in terms of both the level of efficacy and the safety profile for those agents, and we're going to have to continue to watch, particularly as they think about more chronic dosing and maybe a more preventive type of application, and we're just going to have to see where that goes. In terms of the step-edits, I think one of the things that, if I look at the PROMISE 2 study that we conducted, the average patient duration experience with migraine among those patients was over 18 years and interestingly, here we have patients with 18 years of migraine that have probably tried everything that's out there and here they are in clinical studies subjecting themselves to investigational drugs to find something that will address their migraines. So I think, coming back to your question, I believe all of those patients have tried everything that there is to try. And therefore, they are not just candidates but the front line for treatment with any of the anti-CGRPs including eptinezumab.

Again, I suspect that many of those have also taken Botox. I don't know if we know what that percentage is, but I suspect it's actually fairly high. In terms of partnering, maybe I can ask Elizabeth to elaborate on that a little bit.

Elisabeth Sandoval -- Chief Commercial Officer and Executive Vice President Corporate Strategy

Thank you, Randy. So as I said in my prepared remarks, we're confident in our ability to execute independently and capture what we believe is the $1.5 billion to $2 billion U.S. market opportunity and we're looking at a partnership as a key aspect of our commercial-readiness activities. We're actively reviewing options both globally and in the U.S.

that are going to allow us to realize the full global commercial potential of eptinezumab and I stress that because that's an important part of the consideration for us and also that it allows us to realize the full commercial potential of eptinezumab beyond what we can achieve on our own. Beyond these remarks, I'm not going to provide any further details associated with these activities or comment on ongoing dialogues.

Jessica Fye -- J.P.Morgan -- Analyst

Great. Thank you.

Randy Schatzmann -- President and Chief Executive Officer

Thanks, Jess.

Operator

Thank you. And our next question comes from Paul Matteis with Leerink. Your line is now open.

Jeffrey Lin -- Leerink -- Analyst

Great. Thank a lot. This is Jeffrey Lin on for Paul Matteis. I guess my question is, you've already given guidance on [Inaudible] settings and long-term safety data in the first half of '18.

Do you have a sense of -- can you perhaps comment on like what have you seen in terms of safety profiles to date? Perhaps comment more on the line of what the [Inaudible] you have seen.

Randy Schatzmann -- President and Chief Executive Officer

Yeah, I can comment on the statements that we've made with respect all of our studies, and that is the safety profile has been incredibly consistent across all of our studies and not different from placebo in that respect. And, I think, interestingly, if you think about the field itself, more than 10,000 patients have been treated to date, many of those exposed well beyond two and three years, again, with very consistent safety profiles overall. And other than that, in our studies, there are no new findings beyond that.

Jeffrey Lin -- Leerink -- Analyst

OK, great. Thanks for taking our question.

Randy Schatzmann -- President and Chief Executive Officer

Thank you, Jeffrey.

Operator

Thank you. And our next question comes from Danielle Brill with Needham. Your line is open.

Danielle Brill -- Needham and Company -- Analyst

Hi, guys. Thanks for taking the questions. First, I was just wondering what kind of data can we expect at the upcoming conferences this year and will we see anything or have you looked at the biology of patients who had 100% response rate? Did you see anything different there and have you evaluated that? And then I'll have a follow-up.

Randy Schatzmann -- President and Chief Executive Officer

Yeah. Danielle, I think what you can expect this year, there's three important meetings coming up in 2018 -- AAN in April, AHS in June, and the IHS in September -- and you can expect Alder to be at all of those meetings with a significant presence, both further details of data from PROMISE 1 as we continue to get behind the key primary and secondary endpoints that are there, and in addition, further data from PROMISE 2 as we gather that, as we roll along here. In terms of, I'm sorry, what was the second question?

Danielle Brill -- Needham and Company -- Analyst

I just wondered if you had -- have you evaluated or [Crosstalk].

Randy Schatzmann -- President and Chief Executive Officer

Sorry, the biology of super-responders, sorry about that. Yeah. I mean, to date, obviously, this is something that's of intense interest for us and I think all of the programs in terms of identifying who those highest responders are. I think what's clear to us is that this is a polygenic disease and that those responders that are getting the higher degree of efficacy from this, their disease is primarily CGRP, as we mentioned in our remarks.

We also believe that for patients that are probably under-responders, their disease is involving other genes in addition to CGRP. We think PACAP-38 is one of those that we're also targeting, so that Alder ultimately would be able to treat all of the patients across the spectrum of migraine in an adequate way. But today there is no single, I'll call it biologic marker or biomarker, that we've identified in these patients but we're going to continue to look.

Danielle Brill -- Needham and Company -- Analyst

OK, that's helpful. And then just one last question. You mentioned that you are moving forward with PACAP-38 program. Is this taking a priority for you over a subq formulation of eptinezumab?

Randy Schatzmann -- President and Chief Executive Officer

No. I mean, PACAP-38 is an important investment for us, again, for the future broadening of our migraine franchise overall. With respect to our thinking on the subq side of this, one of the things that we're focusing on today obviously is getting infusion across the finish line. We think that's a winning proposition of obviously a substantial market that we've elaborated on a little bit today.

And I think once we've had a chance to get that filed and move toward our approval on that, the consideration we're doing is what's the best way to maximize the value of the program overall. Subq is obviously one of those opportunities but there are other things that we're considering that may be a good return on our investors' investment as well. And at that point, I will come back and provide a bit more detail in terms of what our thinking is on that.

Danielle Brill -- Needham and Company -- Analyst

Great. Thanks, Randy.

Operator

Thank you. And our next question comes from Jim Birchenough with Wells Fargo Securities. Your line is now open.

Reporter

Hi. Thanks for taking the question. This is Yannin [Inaudible] for Jim. The first question, you mentioned the U.S.

peak commercial opportunity between $1.5 billion to $2 billion. I was just wondering would you mind sharing your assumptions for pricing and penetration in the peak opportunity estimate?

Randy Schatzmann -- President and Chief Executive Officer

Yeah, thanks for that. I'm going to ask Elizabeth to elaborate a little bit more in terms of how we're thinking about this at this point.

Elisabeth Sandoval -- Chief Commercial Officer and Executive Vice President Corporate Strategy

It's early for us to be speaking regarding pricing and penetration assumption [Inaudible] with our modeling, as you can imagine, particularly from a competitive perspective but, in general, I'll share that our modeling exercise considers the segment of physicians that we described as procedure-oriented and we consider that there are approximately 3,000 of these, the numbers of patients they see and we've also shared that they see the highest number of these highly impacted patients. We've estimated it could be between 150 to 200 of these patients a month. And from our market research, the percentage of these patients which they said they would likely prescribe eptinezumab over alternative therapies. And then, of course, we included assumptions around price and launch [Inaudible].

Reporter

Great, that's very helpful. And then a question with perhaps a focus on Teva's CGRP drive [Inaudible] comparison to eptinezumab because Teva also has a frequency of [Inaudible] quarterly. So when you look at the two drugs' profiles, what do you think of positioning in terms of efficacy and delivery?

Randy Schatzmann -- President and Chief Executive Officer

This is Randy. I'll take that one. Obviously, in their trial, they did test a quarterly administration regimen which required three injections at each of those time points. I think we also, at the time we announced the PROMISE 2 data, did a nice comparison of the various endpoints, the primary endpoint and key secondaries, that we and others had used.

And I think if take the eptinezumab data from PROMISE 2 and compare that with the best data across the board from all the programs that has been published to date, you'll see that eptinezumab is at the very top end of the class, and I think, in that sense is a true standout. And particularly for the most heavily impacted patients, we think that what they're interested in is 1) it's that rapid Day 1 efficacy, it's the high levels of efficacy, in particular, the ability to be migraine-free and then it's the ability to have that sustained for a very long period of time, single infusion for three months.

Reporter

Got it. That's very helpful. And the last question. Given the strong efficacy profile of eptinezumab in chronic migraine in PROMISE 2, I was just curious if other companies are also thinking about developing their subq formulation into an IV formulation, what would the clinical development hurdle for those kind of attempts -- those kind of plans be? Would that require a full-blown Phase 3 or could they do more kind of bridging study?

Randy Schatzmann -- President and Chief Executive Officer

To be honest, I think that's a question for each of the programs that are out there and then each of those programs will probably require something slightly different. I think what's clear to us today is that the efficacies that we see with eptinezumab delivered by infusion is both due to the specific properties of that antibody, which we think are distinguished from the other entities that are out there with that mode of infusion that delivers 100% bioavailability. Clearly, substantially cuts down the biology quite, quite quickly and is responsible for that high efficacy in these most heavily impacted patients.

Reporter

Got it. That's helpful. Thank you, Randy.

Operator

Thank you. And our next question comes from Sumant Kulkarni with Canaccord. Your line is now open.

Sumant Kulkarni -- Canaccord Genuity -- Analyst

Thanks for taking my question. First on 1910, at what point do you expect to file an IMB for that product?

Randy Schatzmann -- President and Chief Executive Officer

So, that study is currently in GOP toxicology studies and, I think, what we'd like to do is to see what the results of those studies are and more accurately project when we'll be in people but, I think, the eye right now would be toward sometime next year.

Sumant Kulkarni -- Canaccord Genuity -- Analyst

I think Elizabeth used the term "ongoing dialogue" in one of your answers. So is it correct to assume that partnering discussions have taken place after PROMISE 2 data and Teva settlement news came out?

Randy Schatzmann -- President and Chief Executive Officer

Well, I think, we've been interacting with potential partners all along that have interest in this space and in particular interested in eptinezumab. I think, without question the data from PROMISE 2 being as positive as it was certainly sparked some interest across the industry among a number of groups that would like to be in the space.

Sumant Kulkarni -- Canaccord Genuity -- Analyst

Sure. And the last one on clazakizumab, I noticed in the 10-K that you have an option agreement with CSL. What does that mean in terms of the potential for a meaningful source of [Inaudible] financing? Any ballpark numbers there if CSL exercises the purchase option for Vitaeris?

Randy Schatzmann -- President and Chief Executive Officer

Yeah, let's be clear. Clazakizumab which is an antibody to IL-6, we out-licensed to a small company in Vancouver by the name of Vitaeris. It's a group of very talented drug developers that did [Inaudible] and had some success there. The Vitaeris team was able to partner that drug with CSL in Australia on some very favorable terms to get both the drug development financed in an outstanding way.

The two, there is an option there for CSL to acquire that asset pending certain successful milestones in those clinical trials, and we'll have to see where that goes. Yes, as we out-licensed that to Vitaeris, we retained a nice piece of that and, hopefully, there will be an opportunity to bring some of that value back to Alder investors.

Operator

Thank you. Our next question comes from Matthew Luchini with BMO Capital Markets. Your line is now open.

Matthew Luchini -- BMO Capital Markets -- Analyst

Great. Thanks for taking the questions. So, I guess, regulatory questions from me. On the U.S.

side, obviously, we have the rest of the PROMISE data coming, the PK study and the open label. Are there any other sort of box-checking things that need to be done before the BLA can be filed? And then, on the European side, I think you've said before that discussions with EMA have been sort of ongoing or you've had them and your belief is that the existing data package should be sufficient for approval in Europe. So, I guess the first question will be if that's still the expectation or still the case and relatedly, given all this talk about partnering, should we view that as a key [Inaudible] step before any potential partnership could be announced?

Randy Schatzmann -- President and Chief Executive Officer

OK. So, a couple of questions there. In the U.S., I think where you're going is, is what do we need to have our BLA completed and that is, as you mentioned, there are four ongoing studies today -- PROMISE 1, PROMISE 2, the one-year open-label safety study, and then the PK-comparability study, which all will complete during 2018 and be part of that package. The last thing that is a significant component of that package obviously is the CMP side of that and, as I mentioned earlier, we're in complete agreement with the FDA in terms of what we need to accomplish there and we're completely on track for having that in place and having an adequate commercial supply chain.

In terms of the EMA, we have had and continue to have a dialogue with the Europeans on what would be required. Now that we have a more complete data set with PROMISE 2, we can have a better discussion with them in terms of what their expectations would be for filing. Is this a gating factor for a European partnership? I don't suspect so. I think we've seen the top-line data today and understand what eptinezumab can deliver for patients and that has gotten potential partners interested in some dialogue with us and we'll just have to wait and see where those go, and we'll come back and advise as things move along.

Matthew Luchini -- BMO Capital Markets -- Analyst

OK, thank you.

Operator

Thank you. And our next question comes from Difei Yang with Mizuho Securities. Your line is now open.

Difei Yang -- Mizuho Securities -- Analyst

Hi. Good afternoon. Thanks for taking my questions. Just a couple of quick ones.

So, for PROMISE 1 data, how should we think about the longer-term impact? We see deepening of effect. Should we assume that'll be flattening out over time or do you expect to see more deepening?

Randy Schatzmann -- President and Chief Executive Officer

I think that's a great question. We're going to have to see the data to understand that. Again, the first part of PROMISE 1 where we gave the first dose and saw a definite deepening of effect with the second dose, I think, obviously we would hope that that trend might continue but regardless, even if it doesn't deepen significantly, these are efficacy numbers particularly for migraine-free relief in a large percentage of patients that are beyond what any of the other programs have demonstrated to date and I think that's put eptinezumab in a very transformative, unique place.

Difei Yang -- Mizuho Securities -- Analyst

OK. So, moving on to the next question on the oral CGRPs relative to either subq or IV, how do you think about pricing? Would you assume orals will be discount priced relative to the other two route of administration? Thank you.

Randy Schatzmann -- President and Chief Executive Officer

Yeah, let me hand that over to Elizabeth for a little bit more color.

Elisabeth Sandoval -- Chief Commercial Officer and Executive Vice President Corporate Strategy

Thank you, Randy, for your point. I think as it relates to pricing, just in general, I think it's too early to think about that right now particularly as it relates to oral sources versus other anti-CGRPs. Pricing is going to have to be in consideration of what the profile looks like, both from an efficacy perspective as well safety and tolerability and it way too early to understand what that could mean as it relates to the oral therapies.

Difei Yang -- Mizuho Securities -- Analyst

Thanks, Elizabeth, for sharing your thoughts. That's all I have. Thank you.

Operator

Thank you. And we do have a follow-up question from Sumant Kulkarni with Canaccord. Your line is now open.

Sumant Kulkarni -- Canaccord Genuity -- Analyst

Hey, thanks for the follow-up. I have a question on your potential subcutaneous formulation, or potential subcutaneous formulation. Given that IV seems to have much better bioavailability and more instantaneous bioavailability, what would differentiate your subcutaneous formulation from the others that are out there? Is there anything special that you can do?

Randy Schatzmann -- President and Chief Executive Officer

Well, I think that, again, the things to remember, Sumant, is is the reason we see efficacy that we see is from two aspects of the drug. One is the basic, intrinsic biophysical properties that eptinezumab has in terms of both what we call the high affinity and the very slow off-rate and the long half-life that allows this to really shut down biology quickly and be persistent. The second is that delivery by IV infusion, as you've mentioned, allows 100% bioavailability. And, therefore, again, combines both biophysical properties to really do that rapid shutdown of the biology that's there.

I think if you look back on the data that we've had with subq data that we've presented previously, one of the beauties of eptinezumab is that it does have high bioavailability associated with it. I think that it's going to require some additional studies to tease out the best way forward with that. As I mentioned earlier, I think right now what we need to do at Alder is focus on the infusion strategy. It's a winning strategy that has high value and after that we'll come back and advise our investors and others in terms of the best way forward to maximize the value overall, whether that's an additional subq approach or other ways of expanding the label for eptinezumab to get that best bang for our buck is something that we will come back and advise in the future.

Sumant Kulkarni -- Canaccord Genuity -- Analyst

Got it. Thanks.

Operator

Thank you. And I'm not showing any further questions at this time. I would now like to turn the call back over to Randy Schatzmann for any further remarks.

Randy Schatzmann -- President and Chief Executive Officer

Thank you, operator, and thank you, everyone, for your attention today. We're looking forward to sharing our continued progress with what we believe will be an exciting 2018 at Alder and look forward to speaking with you in the near future. Thanks again.

Operator

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program and you may all disconnect. Everyone, have a wonderful day.

Duration: 55 minutes

Call Participants:

Ashwin Agarwal -- Vice President Corporate Strategy

Randy Schatzmann -- President and Chief Executive Officer

Elisabeth Sandoval -- Chief Commercial Officer and Executive Vice President Corporate Strategy

Larry Benedict -- Executive Vice President and Principal Accounting Officer

Sarah Weber -- Piper Jaffray -- Analyst

Brian Abrahams -- RBC Capital Markets -- Analyst

Jessica Fye -- J.P.Morgan -- Analyst

Jeffrey Lin -- Leerink -- Analyst

Danielle Brill -- Needham and Company -- Analyst

Reporter

Sumant Kulkarni -- Canaccord Genuity -- Analyst

Matthew Luchini -- BMO Capital Markets -- Analyst

Difei Yang -- Mizuho Securities -- Analyst

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