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Medicines Co  (NASDAQ:MDCO)
Q4 2018 Earnings Conference Call
Feb. 27, 2019, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Greetings and welcome to The Medicines Company Fourth Quarter 2018 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Mr. Krishna Gorti, Vice President, Investor Relations. Thank you, you may begin.

Goutham Krishna Gorti -- Vice President, Investor Relations

Thank you, Michelle. Good morning everyone, and welcome to The Medicines Company's fourth quarter 2018 conference call. I'm joined today by our Chief Executive Officer, Mark Timney; our Chief Financial Officer, Christopher Visioli; and our Chief Development Officer, Peter Wijngaard. Earlier this morning, we issued a press release reporting our fourth quarter 2018 financial and operating results. The press release is available in the Investor Relations section of our website.

Before we begin, I'd like to remind you that our discussion during the call will include forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those indicated by those forward-looking statements. Additional information regarding these risks and uncertainties is discussed under the forward-looking statements legend in this morning's press release, as well as in our periodic reports filed with the Securities and Exchange Commission which can be obtained from the SEC, or by visiting the Investor Relations section of our website.

During today's call, we will also discuss certain financial measures that were not prepared in accordance with the U.S. Generally Accepted Accounting Principles. Please refer to this morning's press release for a reconciliation of these non-GAAP measures to the most directly comparable GAAP financial measures.

With that, I'll now turn the call over to Mark. Mark?

Mark Timney -- Chief Executive Officer

Thank you. Krishna. Good morning everyone and thank you for joining us. Let me begin by saying it's truly a privilege and an honor for me to be selected by the Board to lead The Medicines Company. It's an organization with a proud tradition of leadership and strong commitment to patients with cardiovascular disease. I'd like to thank the opportunity also to thank Clive for his leadership of the Company. We have worked closely together during these past few months of transition and I look forward to continuing our shared mission as we pivot toward realization of the potential of inclisiran. I've met many bright and committed employees and I've gotten to know and appreciate the talent here over the last few weeks. I've been particularly moved and impressed by their dedication to science and their drive to help patients.

Throughout its nearly 20-year history, The Medicines Company has been at the forefront of both developing cardiovascular medicines and treating cardiovascular diseases. Today, we aspire to transform the treatment of hypercholesterolemia and addressing the urgent and significant unmet need. In its recent update, the American Heart Association said that nearly one-third of American adults had high levels of LDL-C, or bad cholesterol. We have a singular focus to bring forward an innovative solution for these patients.

2019 is a momentous year for inclisiran. It's a first-in-class siRNA cholesterol therapy with the potential to deliver potent, durable, and consistent lowering of LDL-C levels via twice a year dosing. My goal is simple, to position the Company to realize the intrinsic value of inclisiran and generate shareholder value. I plan to maintain a disciplined focus on near-term execution, while laying the groundwork for Medicines Company's long-term success. We strive to be nimble, focused on a highly efficient organization.

In the near term, our priorities are clear; successfully complete ORION-9, 10 and 11 trials, to release top line data in the third quarter and to file an NDA and MAA with the U.S. and EU regulatory authorities, respectively. The countdown to Phase III results has begun. I'm passionate about inclisiran and maximizing the true value of this next generation therapy in cardiovascular medicine. I come to The Medicines Company with significant experience in cardiovascular medicine through building brands like Vytorin, Zetia and Zocor, and I have to say that inclisiran is one of the most promising medicines I have ever encountered.

We have a very exciting and busy year ahead of us and the clock is ticking. I'm excited, I am humbled and I'm ready to go. I look forward to working with you all as we continue the next phase of this exciting journey.

Let me give you a quick update on our clinical progress and safety. During the fourth quarter of 2018, we continued our strong momentum on execution of the inclisiran development program. We successfully advanced inclisiran through Phase III trials and other key development steps. In early January, the Independent Data Monitoring Committee reviewed unblinded safety data and efficacy from the Phase III trials for the fifth time, just as planned, and recommended continuation of the trials without modification. To-date, all randomized patients have been treated with three doses and substantially all patients have completed a follow-up visit 60 days after the third dose of study medication. As of last week, more than 2,750 patient years of inclisiran safety data have been accumulated in the ORION program.

Our ongoing review of blinded data to-date from the Phase III trials, as well as data from the ORION-1 Phase II extension trial showed no material safety issues and data that are at least as favorable as those generated and published from the ORION-1 Phase II trial. While the IDMC fits its own schedule, we do anticipate further reviews in 2019, as we continue to accrue inclisiran safety data at the rate of five-patient years per day. In the expansion of the large ORION-1 Phase II trial, 273 patients have received a total of four to six doses of inclisiran to-date.

In summary, the inclisiran development program is the industry's largest siRNA program, targeting atherosclerotic cardiovascular disease. Inclisiran has the potential to be the leader in lowering LDL-C in high risk ASCVD patients. It's moving quickly through Phase III trials. We're encouraged by the overall clinical safety profile and expect Phase III data to read out in the third quarter. In parallel, pre-commercialization work is also ongoing and it affirms the highly competitive profile of inclisiran.

Let me touch on ORION-4. The enrollment of patients into the ORION-4 cardiovascular outcomes trial is ongoing. As a reminder, we plan to enroll 15,000 eligible atherosclerotic cardiovascular disease patients within one to two years. ORION-4 is being conducted together with Oxford University in the U.K. and the TIMI Study Group here in the U.S., and it's designed to demonstrate the potential 25% cardiovascular disease risk reduction in the primary endpoint of major adverse cardiovascular events.

Now, let me touch on ORION-8. We've commenced start-up preparations for the ORION-8 study. This is the long-term extension study of the pivotal Phase III studies; ORION-9, ORION-10 and ORION-11, in which all patients will receive inclisiran for three years to provide further long-term safety data. The study will stop once the first patient completes the 18 months follow-up in the pivotal Phase III studies. This will occur early in the next quarter.

As I'd said, our ongoing robust pre-commercialization work has further increased our excitement about inclisiran's profile and potential. Let me talk a little about the unmet need. The opportunity to help people simply and dramatically lower LDL-C and live healthier lives and the magnitude of the unmet need and the health challenge speaks to the potential market opportunity for inclisiran. CV disease is the leading cause of death globally and in the U.S. with 17.3 million Americans succumb to this disease every year, and elevated LDL-C is conclusively the leading cause of cardiovascular disease. In the U.S. alone, 67.5 million individuals are estimated to have sufficient cardiovascular risk to warrant lipid lowering therapy. Of these, 27.5 million are at a significantly elevated risk, either because of confirmed CV disease or LDL-C levels above 190 mgs per deciliter.

Inclisiran will potentially be indicated for use in a very large population of secondary ASCVD patients and some risk equivalent patients who are not reaching their LDL-C goal with statins, or ezetimibe. We estimate that at least 12.7 million Americans with confirmed cardiovascular disease, or LDL-C levels that are double or higher than the recommended threshold, will be candidates for inclisiran. That said, we are very confident that inclisiran will address two significant unmet needs. The first is to lower LDL-Cs of people who despite current treatment options are not getting to target. The second unmet need is lack of adherence to current treatments. We believe that inclisiran's projected twice a year dosing by a healthcare professional, not only delivers enduring control of LDL-C, we believe it could also fundamentally change ASCVD treatment. We believe that provider and patient preference will be high for an injection given by a healthcare professional, as part of routine twice a year appointments that are the standard of care for ASCVD patients.

In the American Heart Association's recent presidential advisory call to action, the office identified significant missed opportunities at every stage in the prevention and treatment of cardiovascular disease, including the failure of up to two-thirds of patients to use proven first-line treatments after one year. Importantly, 43% to 67% of patients were found to be non-adherent to statins at the end of one year and four out of five patients on lipid-lowering therapies is still not reaching their goals.

Inclisiran has multiple other advantages, ranging from LDL-C lowering consistency to relatively simple lower cost manufacturing and supply chain. We are very confident in the promise of inclisiran to significantly lower LDL-C and address the long-standing adherence challenges for millions of people.

I'll now turn the call over to our Chief Financial Officer, Chris Visioli, who will cover our financial results for the fourth quarter. Chris?

Christopher J. Visioli -- Chief Financial Officer

Thank you, Mark, and good morning everyone. During the fourth quarter of 2018, the Company continued to realize the results of our restructuring efforts and as the clock winds down to data, we made significant progress in advancing inclisiran through clinical development, key manufacturing activities and preparation for NDA, MAA filing.

Research and development expenses were $29.6 million, including $841,000 in stock-based compensation expense in the fourth quarter of 2018, compared to $55.6 million, including $556,000 in stock-based compensation expense and a $20 million expense related to a milestone owed to Alnylam for the same period of 2017. R&D expenses for the quarter included continued cost associated with the pivotal ORION Phase III clinical programs, inclisiran and manufacturing development work, the start-up activities and beginning of enrollment in the ORION-4 CVOT program and headcount associated with R&D.

SG&A expense was negative $4.6 million, including $3.8 million in stock-based compensation expense in the fourth quarter of 2018, compared to $29.6 million, including $6.3 million in stock-based compensation expense in the same period in 2017. Included in SG&A expense for the fourth quarter of 2018 was recognition of a $21.6 million gain on the sale of preclinical products associated with our infectious disease business to Qpex Biopharma. On an adjusted basis, SG&A for the quarter was $11.4 million, down over 45% from adjusted SG&A during the fourth quarter of 2017 on a comparable continuing operations basis.

In the fourth quarter, we completed a convertible notes offering netting proceeds of $157.5 million in December and an additional $9.2 million in early January. Our cash and cash equivalents at the end of 2018 was $238.3 million.

This is a very exciting year for The Medicines Company with many key milestones in inclisiran value creation and we are well positioned to capitalize on them. We anticipate that our existing cash will enable us to fund operating expenses into 2020, allowing for data readout of pivotal Phase III programs, continuation of the Phase II and III extension studies, manufacturing validation, pre-commercial planning work and filing of our NDA and MAA to their respective agencies. We will continue to exercise the same fiscal discipline we worked through in 2018 and look forward to the pivotal Phase III data readout in Q3.

With that, I'll turn the call back over to Mark. Mark?

Mark Timney -- Chief Executive Officer

Thanks, Chris. So as you can see, inclisiran is moving quickly through Phase III trials. We're very encouraged by the overall clinical safety profile and expect Phase III data to read out in the third quarter. In parallel, pre-commercialization work is ongoing and affirms the highly competitive profile of inclisiran.

The Board and the management team are fully aligned and committed to maximizing the value of inclisiran for its shareholders and ultimately people who would benefit from this unique therapy. As a reminder, The Medicines Company has full unencumbered commercial rights to inclisiran in all markets and market exclusivity to mid-2034 with expected extension into 2035. And as Chris has just outlined, the Company has secured cash to fund operating expenses into 2020.

We firmly believe inclisiran could be a game changer in the CV care and help to overcome many of the existing barriers in the fight against cardiovascular disease, the world's leading cause of death.

With that, we thank you all for listening and turn the call back over to the operator, so we can take some questions.

Questions and Answers:

Operator

(Operator Instructions) Our first question comes from the line of Jessica Fye with JPMorgan. Please proceed with your question.

Jessica Fye -- JPMorgan -- Analyst

Hey there. Thanks for taking my questions. I wanted to follow up on one of the comments in prepared remarks where you said there were no material safety issues in the ongoing Phase IIIs and the data are at least as favorable as the ORION Phase II. Was that a comment with respect to safety or does that comment include efficacy as well?

Peter Wijngaard -- Chief Corporate Development Officer

Hi, Jessica, this is Peter. No, that comment was related to the blinded safety review that we do from the ongoing Phase III trials, as well as the information we get from the extension study from the ORION-1 study. So it's blinded information, it refers to safety information only.

Jessica Fye -- JPMorgan -- Analyst

Okay, great. Can you also talk about the disclosure plan for ORION-9, ORION-10 and ORION-11? Should we expect to run those results one by one, or perhaps together, given the slightly different kind of timing for enrollment and completion of the various trials?

Peter Wijngaard -- Chief Corporate Development Officer

Hi, this is Peter again. It's a little early to be very exact on that one. As you may remember, the ORION-11, ORION-9 and ORION-10 studies completed enrollment in January, February and March of last year. So they are very -- in close (ph) rapid succession, but when the exact data becomes available, depends a little bit on when the last patients return for the schedule visit and the database is all cleaned and subsequently locked. So they come around about the same time, but whether they are exactly the same time, or exactly the sequence we will know later.

Jessica Fye -- JPMorgan -- Analyst

Okay, great. And thanks for taking my questions.

Operator

Your next question comes from the line of Umer Raffat with Evercore ISI. Please proceed with your question.

Umer Raffat -- Evercore ISI -- Analyst

Hi, thanks for taking my questions. Mark, I realize it's your first call, so I want to ask two or three things just to sort of level set how we should all be thinking about some of the top two or three things investors are so focused on from a priority perspective for you. So, the first is, as we think about the prior data as it's kept coming in, I've noticed the Company has continued to use the word no material safety observations to date. Could you just give us some color on what exactly that implies and the choice of that word, and what that entails? One.

Secondly, so we've heard the Company opine several times in the past that it wasn't comfortable with the price points at which Amgen and Regeneron came in and that the right price point might actually be materially lower than where they came in. Do you agree with that as well? And then finally, would you consider running a formal process of sorts after the data, or the Company will continue business as planned and not run a formal process per se? Thank you very much.

Mark Timney -- Chief Executive Officer

Thanks, Umer. Let me take the last question first and then I'll take the pricing question and then I'll ask Peter to comment on the safety one for you. Obviously, we're exploring all opportunities, the one thing I can say with regards to any sort of strategic optionality is that the Board and the management are fully aligned with creating and maximizing shareholder value. As you can imagine, I'm unable to comment on any strategic matters, but we do believe firmly inclisiran will be a game changer in cardiovascular care with significant blockbuster revenue potential. And we are very excited about that opportunity. So no comments at this time any further than that about any type of process or any type of partnering.

With regards to price points, philosophically, the way I think about price is that you begin with patient affordability and then you work backwards on that with payers. It's very early days for us. We're just beginning our payer research. So we'll have more to think about as that research comes into our hands. But with regards to how the competition is priced, I think we're seeing in the market that there are changes afoot and we would expect that patient affordability is at the center of those discussions. Peter, would you like to comment on safety?

Peter Wijngaard -- Chief Corporate Development Officer

Yes, I will be happy to, Umer. Material safety means we are reviewing the Phase III data in a blinded fashion, as you know. So we have no insight in the distribution between the arms (inaudible). Material means, in this context, what we observe is in line with what we've seen in previous studies in this type of patient population and what is known as the sort of the backlog (ph) rate of events of cardiovascular patient with ASCVD, or in our case ASCVD and risk equivalent and FH patients. So we don't see supplies (ph) with backlog rates and backlog types of events.

Umer Raffat -- Evercore ISI -- Analyst

Thank you very much.

Operator

Thank you. Our next question comes from the line of Chris Shibutani with Cowen. Please proceed with your question.

Chris Shibutani -- Cowen -- Analyst

Yes, thanks for taking the question. Good morning. Perhaps for Chris, some financial question, some cross-currents with the Company operationally with the restructuring and now, once we talk about pre-commercialization efforts. Can you talk about how Q4 spending levels on the operating expense front might help us -- inform us about what the trends could be like as we progress through 2019? And then related, could you help remind us if there are any other assets that perhaps you haven't reported yet that you could perhaps monetize, for instance, you described the preclinical product sale that was a gain that was recorded in Q4? Anything else remaining that could also be there that we could see coming up? Thanks.

Christopher J. Visioli -- Chief Financial Officer

Yes. Thanks, Chris. Thanks for your question. On the SG&A front, on the operating expense guidance, we maintain our guidance that we laid out for the R&D plans over the two year period that we set out early last year. On the SG&A front, we worked hard to restructure the business in 2018. And we're going to continue to maintain that same disciplined expense management. We won't be giving detailed SG&A guidance, but obviously we would expect modest increases in our SG&A run rate, as we do begin the pre-commercial planning work this year. That work is assumed in our operating plans and was part of the cash runway that we outlined on the call.

In terms of other assets to monetize. We monetized quite a bit over the years. I think we may have exhausted items that we have. We're always looking for ways to bring in non-dilutive capital, but I think we've been through most of it.

Chris Shibutani -- Cowen -- Analyst

That's great, helpful. And Mark for you, perhaps, how do you think about the need to partner in U.S.? Is that a market that you think that you could go at alone? Is that something you would envision? I know there is a global opportunity here and there's a lot of logic to partnering outside the U.S., but in particular for the U.S., what's your frame of mind as far as approaching that market?

Mark Timney -- Chief Executive Officer

Thanks for the question, Chris. As we've previously said, I'm open to exploring all options to maximize value creation. While I'm unable to comment on any strategic matters, again, I'll reiterate, management and the Board are fully aligned. We're committed to doing what is in the best interest of shareholders. It's a significant opportunity that we do have, and obviously any decisions that we do make, especially in relation to markets like the U.S. will be taken very carefully, but the filter will be value creation and shareholder value.

Chris Shibutani -- Cowen -- Analyst

Great, thanks for the response.

Operator

Thank you. Our next question comes from the line of Adnan Butt with Guggenheim Securities. Please proceed with your question.

Adnan Butt -- Guggenheim Securities -- Analyst

Thanks. I'll ask two of mine together. Maybe one for you, Mark. Since you were a Big Pharma head not too long ago, what do you think is a tipping point for a Big Pharma in terms of recognizing inclisiran's value? Is it sort of post Phase II, is it the post outcomes? Any color there. And then secondly, will you fine-tune how much data will be out and when? So, for instance, if 11 and 9 will be reported together, maybe in the third quarter, followed by ORION-10, would that be updated maybe on the next earnings call? Thanks.

Mark Timney -- Chief Executive Officer

Thanks Adnan. I'll take the first and then again I'll hand over to Peter, because he is dealing with the studies on a daily basis and questions that I ask him daily too. So Adnan, the first one is, obviously it's difficult to hypothesize. I think when you are thinking about large pharma, thinking about the opportunity, I think first and foremost, they're focused on -- again like us -- value creation for their shareholders. And there are different inflection points and different timings for different companies when that needs to be driven and exposed. So, I think, as certainly as we think about it, our focus is very clear, we're focused on what we can do ourselves in terms of generating value and that is the clear focus on execution and the execution at the moment is around our pivotal studies. And then the beginning of the pre-commercialization work. We will be prepared to review any strategic options at any time, and again, with that lens of value creation and shareholder value. Peter?

Peter Wijngaard -- Chief Corporate Development Officer

Yes, thanks Adnan for the questions. So let me remind again, ORION-11, 10 and 9 studies, they completed the enrollment last year in sort of late January, late February and early March of 2018. The difference between those three studies finishing enrollment is six weeks, which is a fairly short period of time. The follow-up period of these studies in OP (ph) is 18 months, which is a fixed observation period, but of course they went through in the same rate for all of these three studies. But we revised the timelines to having the data in our industries (ph) than the database driven by database cleaning and analytics. So it's a bit early to be very exact and very precise if those studies run out at exactly the same time or in sequence, and how we go to report that exactly out, but we do expect to have top line results in Q3 of this year.

Operator

Thank you. Our next question comes from the line of Biren Amin with Jefferies. Please proceed with your question.

Biren Amin -- Jefferies -- Analyst

Yes, hi guys, thanks for taking my questions. Just a question on the DSMB and the review of the safety data. What are we tasked with in terms of guidelines and any imbalances in the day would have to -- that they would know, and what's the stop criteria are on those imbalances, if you could share some of that detail with us? Thank you.

Peter Wijngaard -- Chief Corporate Development Officer

Hi Biren, this is Peter again. The IDMC is an independent Data Monitoring Committee. So they have this question themselves, how to evaluate the data and how to make those decisions on those criteria. We don't really dictate that in any particular way, form or shape. We got a recommendation from them. And in this case, it has been five times, continue the programs, continue the trials without any changes to the protocol. What underlies the specific deliberations of the IDMC, we do not know and we cannot comment on that.

Biren Amin -- Jefferies -- Analyst

Got it. And then just a question on the $238 million cash on hand, how far do you think that this cash would take you going forward?

Christopher J. Visioli -- Chief Financial Officer

Thanks Biren. As we stated, it takes us into 2020. It gets us through all the key milestones and inflection points, it gets us through NDA filing and MAA filing.

Biren Amin -- Jefferies -- Analyst

Great. Thank you.

Operator

Thank you. Our next question comes from the line of Paul Choi with Goldman Sachs. Please proceed with your question.

Paul Choi -- Goldman Sachs -- Analyst

Hi, thank you for taking our questions. Maybe first with regard to commercialization, and -- in the U.S., starting there, can you maybe comment on how you're thinking about the initial tiering for inclisiran and what sort of payer access might look like and maybe any early discussions you've had there as the outcomes data will take a little while? And so if you could maybe start with that.

Mark Timney -- Chief Executive Officer

Hi Paul. Thanks for the question. Yes, still it's very early days. We're just beginning our payer research. We think that, that it's -- we do believe it's -- we're going to have access for large patient populations through a variety of means, but it's too early to start thinking about tiering and where we will fit. That will start to become clearer over the next couple of months as that research starts to come back in for us and that's good timing. We are still-- we are sort of just under two years out from launch. So it's perfect timing for us to get there. But again, I'd still come back to -- my philosophy is quite simple and it is patient affordability, that's critical. And if we begin there, hopefully, we can certainly generate significant access for the patients who need this.

Paul Choi -- Goldman Sachs -- Analyst

Okay. Thank you for that. And then maybe just on the clinical side, as we think about the dissimilar, but slightly different ORION-9, ORION-10 and ORION-11 populations, how do you think about, as you think about the NDA and MAA, would you want to focus strictly on the ASCVD population or would you also want to go for potential specific claims in the heterozygous population?

And then in terms of potential future development, are there any thoughts about maybe going to an upstream population, as you think about potential value creation and realization with inclisiran?

Mark Timney -- Chief Executive Officer

Yeah. Peter?

Peter Wijngaard -- Chief Corporate Development Officer

Very good questions, Paul. Obviously we designed three different trials into the three different patient populations inside of these new geographical regions of the world, to reflect the opportunity of getting the broadest possible label in these patient populations. So while we can't comment on what the regulators ultimately will improve this for, but that is the plan to have indications in these populations that were studied in the three pivotal trials.

And with respect to opportunities beyond that, that's sort of the life cycle planning. Yes, we have lots of ideas and lots of discussions about it, but at the moment we haven't started any activity yet on any of those ideas, including the ones which you highlighted.

Paul Choi -- Goldman Sachs -- Analyst

Okay. Thank you for taking our questions.

Operator

Thank you. Our next question comes from the line of Joel Beatty with Citi. Please proceed with your question.

Joel Beatty -- Citi -- Analyst

Hi. Thanks for taking the questions. Could you discuss the outcomes trial a little bit, including the current status of it? What should I expect from enrollment over the course of the year and what's unique about the trial design that allows it to be a lower cost compared to where you might expect from some comparable studies?

Mark Timney -- Chief Executive Officer

Peter?

Peter Wijngaard -- Chief Corporate Development Officer

Thank you, Joel. Good questions. As we have commented, the ORION-4 is a cardiovascular outcome studies in ASCVD patients, which is the high-risk patient populations. We will enroll 15,000 patients as dictated by the protocol and we anticipate with a median four to five years follow-up that we have planned for this study that we have the potential to show a 25% risk reduction in MACE, which is a reflection of the (inaudible) that has been seen in absolute LDL-C reduction relation to cardiovascular outcomes benefits for MACE.

In terms of the enrollment updates, as we said, we have initiated enrollment in the studies. We anticipate to have the enrollment completed in one to two years from initiations. We are not planning to give vaccular updates concretely at this point in time how enrollments exactly go, but we will come back to you once we are completing the enrollment and we'll announce that.

Joel Beatty -- Citi -- Analyst

Great, thank you.

Operator

Thank you. Our next question comes from the line of Jay Olson with Oppenheimer. Please proceed with your question.

Jay Olson -- Oppenheimer -- Analyst

Hey guys. Thanks for taking the questions. And welcome to Mark, we're looking forward to your leadership. Could you maybe describe for us your vision for The Medicines Company and especially, any differences between your vision and the previous leadership and then if any changes that you would like to make? And then as a follow-on, could you maybe talk about any diligence that you did prior to taking on your new role and any industry contacts you may have reached out to and what sort of thoughts they may have shared with you? Thank you.

Mark Timney -- Chief Executive Officer

Thanks for the question. Jay. Yeah, let me talk. I think that the vision for The Medicines Company has been clearly laid out by management and the Board for some time, and that is that singular focus on the development of inclisiran, which I think is a wonderful vision, not only for shareholders and value creation, but also for patients in need. There is -- I don't have any change for that, but if you think about my profile of coming in, which is essentially a commercial, general management, business development type profile, this is obviously the timing, two years prior to launch means that we will have more of a focus on being ready with pre-commercialization activities and how to do those in a much -- a very structured way.

So it's -- there's a fine balance here of managing what we spend on pre-commercialization. So -- but also doing work that would be done similar to the way that a large pharma would do this type of work. So I think that's fundamentally the change and it's sort of a natural change as you sort of move from Clive to myself. But again, we keep reiterating, we're very much focused on value creation for shareholders, and that's the focus and that has not changed.

With regards to work that I did prior to coming in, yeah, as you would imagine, I did lot of extensive diligence, I spoke with a number of opinion leaders about the asset. And what I heard from them was sort of unanimous, in that it's differentiated and a game changer and a work horse in the LDL cholesterol. They were the common themes that I picked up. And then I spoke with six pharma companies to really assess whether cardiovascular medicine was still at the forefront of their thoughts. And I was pleasantly surprised with what I heard in those discussions without going into details, but it was very positive and there is still a significant amount of research, due to, primarily, that the high unmet need and the fact that even though we've got wonderful products like statins for first-line treatment, it's still not getting the job done. And therefore, there was still significant questions about, OK, how do we go further and how do we really fill the gaps around adherence and provide solutions. So, very excited. Obviously, the diligence was positive for me, because I'm sitting here now. So thank you for the question.

Jay Olson -- Oppenheimer -- Analyst

Thank you.

Operator

Thank you. Our next question comes from the line of Akash Tewari with Wolfe Research. Please proceed with your question.

Akash Tewari -- Wolfe Research -- Analyst

Hi, thanks for taking my questions. Given that inclisiran is going after such a large patient population using siRNA approach, would the team be surprised if the FDA required an adcom for this asset? And then also given the FDA's guidance on (inaudible) cases, is it fair to say the DSMB review would be alerted -- I would have alerted management if there is a 3x increase in ALT and with the corresponding 2x rise in bilirubin levels. Thanks.

Peter Wijngaard -- Chief Corporate Development Officer

And the answer to your first question, first about the Advisory Committee, it's hard to comment on that, because it's in the discretion of the FDA to make that decision. We've seen advisory committees often and major products being -- going through a review (ph) for cardiovascular drugs, but whether we specifically, because we are an siRNA, it's very hard to give that comment, yes or no. We don't really know. We'll have to wait and see.

Remind me of your second question? (Multiple speakers) Again, as I said earlier, the IDMC sets their own criteria when they decide to inform us on their findings on the DSMB. So far they have commented on -- continue the trials as planned with no modifications to the protocol. So it's very hard to intervene what exactly they have seen. If they had significant concerns with liver function tests, obviously, you would expect them to require to make derivations (ph) for changes to the protocol. But other than that it's very hard to give you more specifics on that, because we are not part of these discussions.

Akash Tewari -- Wolfe Research -- Analyst

Thanks so much.

Operator

Thank you. Our next question comes from the line of Mayank Mamtani with B. Riley FBR. Please proceed with your question.

Mayank Mamtani -- B. Riley FBR -- Analyst

Thank you for taking my question. And welcome aboard, Mark. I just have two quick follow-ups, mainly on commercialization, two parts, perhaps. Does it really matter as you think about launch scenarios at pre and post outcomes, if you have one or two PCSK9 antibodies in the market and how do you think about sort of the scenarios relative to competition? And then on the payers usage, I was really curious about -- that you've kicked off. How are you thinking about the key variables, the two that you highlighted as part of the unmet need, specifically, the adherence part? And also as we understand the shifting landscape in Part B and Part D in DC, how are you -- when you think about affordability, how do you factor in the out-of-pocket cost as you walk forward in the next two months in you payer research? And then very, very minor question to Chris. When do you expect the next Alnylam milestone, if there is any? Thank you.

Mark Timney -- Chief Executive Officer

Let me -- thanks for your questions. Let me address sort of the payer one. I think you've hit on the key issue, Mayank. I think there's so much change or suggested change in the payer environment. The good thing for us that we have enough time and therefore, we can explore possibilities in terms of what we do in commercialization. But again, the idea of beginning with the philosophy of patient affordability, allows you to focus on what is that out of patient cost, first and foremost. And so, therefore, where those patients come from, whether it's Part B, Part D, it starts to become irrelevant if you are really focused on what is the impact on the patient, and that will allow us to construct our thinking, but still early days and we do obviously envisage that there is a significant amount of change taking place in that environment.

The first question was with regards to commercialization. Just remind me, Mayank, so I answer the right...

Mayank Mamtani -- B. Riley FBR -- Analyst

Yes, I'm just curious, if in your launch scenarios does it really matter if you have one anti-PCSK9 antibody or two in the market, or one sponsor versus three, as you think about the next two to five years?

Mark Timney -- Chief Executive Officer

Yes. Thank you. This is a great question for me, because it really allows me to answer what I think I am truly passionate about, because we're viewing inclisiran as a market of one. I do think we're highly differentiated. PCSK9 is obviously the target, but we obviously prevent the production. We don't clean it up, similar to the antibodies. And therefore, we do have significant opportunities and differentiation which come about through the dosing. So people say, well, it's just -- instead of 26 injections or self-injections, you're dosing twice a year, is that just a dosing advantage. But that also allows it to be given by a healthcare professional in current standard of care when we know 90% of these patients are seeing their healthcare practitioner every six months. So it already fits into a great sort of treatment pathway for us.

So there is no change. It's very simple to administer. And with that you get the built-in adherence. We know that four out of five patients didn't want to go (ph) on their statins for a number of reasons and up to two-thirds of people are not taking their statins after a year, even in this high-risk population and that's a real concern. So you have a built-in adherence opportunity. And then obviously we have COGS opportunities as well, because of our supply chain, which makes it very attractive for us and gives us a lot of flexibility. But I do believe those points of differentiation mean that I truly believe that when we launch -- even when we first launch and when we have outcomes data that will be truly differentiated. Chris, would you like to comment on Melinta?

Christopher J. Visioli -- Chief Financial Officer

Yeah, the next Alnylam milestone is approval, which we will be happy to pay.

Mayank Mamtani -- B. Riley FBR -- Analyst

Okay, great, thank you guys. Thank you.

Operator

Thank you. We have reached the end of our question-and-answer session. I would like to turn the call back over to The Medicines Company's Chief Executive Officer, Mr. Timney for any closing remarks.

Mark Timney -- Chief Executive Officer

Thank you very much and thank you for your well-wishes and for all of your questions. As you can probably tell, I'm super excited to be here. This is the countdown year for inclisiran, it's moving very quickly through Phase III trials. We're really encouraged by the clinical and safety profile and expect the Phase III data to read out in this third quarter. In parallel, our pre-commercialization work is ongoing, but it really just affirms the highly competitive profile that we have with inclisiran. As a reminder, and I'll keep emphasizing, the Board and the management team are fully aligned and committed to maximizing the value of inclisiran for its shareholders and ultimately the patients who would benefit from the unique therapy.

We do have enough cash to get us through to 2020 and we're very excited about the year ahead. So with that, I'll close the call and wish you all a very good day. Thank you.

Operator

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.

Duration: 48 minutes

Call participants:

Goutham Krishna Gorti -- Vice President, Investor Relations

Mark Timney -- Chief Executive Officer

Christopher J. Visioli -- Chief Financial Officer

Jessica Fye -- JPMorgan -- Analyst

Peter Wijngaard -- Chief Corporate Development Officer

Umer Raffat -- Evercore ISI -- Analyst

Chris Shibutani -- Cowen -- Analyst

Adnan Butt -- Guggenheim Securities -- Analyst

Biren Amin -- Jefferies -- Analyst

Paul Choi -- Goldman Sachs -- Analyst

Joel Beatty -- Citi -- Analyst

Jay Olson -- Oppenheimer -- Analyst

Akash Tewari -- Wolfe Research -- Analyst

Mayank Mamtani -- B. Riley FBR -- Analyst

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