Logo of jester cap with thought bubble with words 'Fool Transcripts' below it

Image source: The Motley Fool.

Aimmune Therapeutics, Inc. (NASDAQ:AIMT)
Q1 2019 Earnings Call
May 8, 2019, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen and welcome to Aimmune Therapeutics first quarter 2019 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will be given at that time. If anyone should require assistance during the conference, you may press * then 0 on your touchstone phone. As a reminder, this conference is being recorded.

I would now like to introduce your host, Erik Bjerkholt, Aimmune's Chief Financial Officer. Please begin, sir.

Eric Bjerkholt -- Chief Financial Officer

Thank you, Norma. Good afternoon and thank you for joining us today to discuss Aimmune's first quarter 2019 financial results and recent operational highlights. Today's call will be archived and a replay will be available on our corporate website, www.aimmune.com. Joining me on the call today are Dr. Jayson Dallas, President and Chief Executive Officer, Dr. Dan Adelman, Chief Medical Officer, and Andrew Oxtoby, Chief Commercial Officer. After our remarks, we will open the call for questions.

Before we begin, I would like to remind you that during today's call, we will be making forward-looking statements.

These forward-looking statements include Aimmune's expectations regarding the potential benefits of AR101, including the potential long-term immunomdulary effects of AR101, Aimmune's expectations regarding the potential approval and commercial launch of AR101 in the United States, Aimmune's ability to build a commercial field force, Aimmune's expectations on the needs of payers, physicians, and patients in the US if AR101 is approved, Aimmune's expectations on the submission timing of a marketing authorization application for AR101 in Europe, Aimmune's expectations on the timing to begin the Phase 2 study of AR201, Aimmune's expectations regarding future clinical trials, Aimmune's expectations on the safety and efficacy profile of AR101, Aimmune's ability to access an additional $130 million from its credit facility, and Aimmune's expectation that its cash position will fund the potential launch of AR101 in the United States and Europe and advance the pipeline of treatment for other food allergies.

These forward-looking statements are based on assumptions and are subject to risks and uncertainties that can cause actual results to differ significantly from those projected during the call. Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements.

Please refer to the company's quarterly report on Form 10-Q for this quarter ended March 31, 2019 for some of the important risk factors that could cause actual results to differ materially from the forward-looking statements made on this call. Except as required by law, Aimmune disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. Finally, I would like to point out that Aimmune's food allergy treatments are investigational and are not FDA-approved.

Now, I will turn the call over to Jayson.

Jayson Dallas -- President and Chief Executive Officer

Thanks, Eric. Good afternoon, everyone and thank you for joining us. Today, we'll provide a recap of our achievements in the first quarter and review our expected milestones for this year. Dan will provide a clinical update, Andrew will give an overview about commercial preparations, and Eric will provide a review of financial results for the first quarter. After that, we'll open up the call for questions.

I'll open by saying that it's astounding in this day and age that there is no approved treatment whatsoever to address food allergy. Remarkable when you think about the many advances that we've seen from biopharma across a number of therapeutic areas. With a very large unmet need and a very large population of patients and one that is growing all the time, food allergy is an enormous public health concern.

From its founding, Aimmune settled on two important guiding principles. The first was that the company's initial approach to treatment would be our immunotherapy due to the well-understood, well-established century-old understanding that immunotherapy is the most effective therapeutic approach for desensitization and that the oral route of administration is the most effective approach for food allergies specifically.

The second was that Aimmune would develop complex biologic projects that characterized allergen profile to enable precise dosing. Research suggests that patients with food allergy can be desensitized to food allergens by ingesting controlled increasing amounts of the allergen over a period of time.

Building on the legacy of immunotherapy research, we have leveraged CODIT and characterized oral desensitization immunotherapy, an approach that incorporates a standardized oral immunotherapy protocol with a precise oral dosing, characterized pharmaceutical product, and training and education for physicians, patients, and their families. The CODIT platform applies not only to peanut allergy, but it can be extrapolated to numerous other food allergies.

Since 2011, we have a tremendous amount to show for our work, including groundbreaking data from our landmark PALISADE, RAMSES, and ARTEMIS Phase 3 trials of AR101 in peanut allergy. These are the largest, most rigorously conducted and statistically powered trials for any peanut allergy treatment. The PALISADE is also well-known, having been published in the prestigious New England Journal of Medicine last year. Recall that the PALISADE trial was selected by the New England Journal editors as one of the most articles published in the journal in 2018.

The RAMSES Phase 3 trial population mirrored the PALISADE population but without an allergy food challenge and the Phase 2 results were very consistent with what we saw PALISADE. RAMSES confirms that allergens are able to accurately identify and diagnose peanut allergy, as they do every day in clinical practice without having to conduct a food challenge.

The ARTEMIS study from which topline results were reported last month further underscored and validates the safety and efficacy profile of AR101 in peanut allergy. We will be presenting the full data from the ARTEMIS study in an oral presentation at the European Academy of Allergy and Clinical Immunology Conference or EAACI on June 2nd, which is less than a month from now.

The strength of the ARTEMIS data takes us one step closer to commercialization in Europe, where up to 2% of children in many countries are affected by peanut allergy. With results from the ARTEMIS study, the last of our Phase 3 programs to report out, we are on target to submit a marketing authorization for AR101 to the European Medicines Agency in the middle of 2019.

Food allergy is an extraordinarily large issue worldwide and is increasing in prevalence over time. In the US alone, 1.6 million children between the ages of 14 and 17 are affected by peanut allergy. Approximately 8 in 10 of these children will not outgrow their allergy. Remarkably, a quarter of these children are admitted to the emergency room every year. These unfortunate statistics illustrate that peanut avoidance in the real world is very difficult and an ineffective way to manage peanut allergy.

With no treatment options, the discussion between clinicians, parents, and patients at the time of a peanut allergy diagnosis is frustrating. Patients that hope to avoid ingesting or even coming into contact with peanuts are simply given a prescription for an EpiPen. The median dose of peanut protein that triggers a clinically meaningful allergic reaction due to an accidental exposure in the real world is about half a peanut or about 125 milligrams.

Without a prophylactic therapy, parents live in constant worry and fear that their children will be exposed to peanut protein and that that may result in a life-threatening anaphylactic reaction. If you're a parent yourself, then I ask you to consider that. This worry threatens any number of social and developmental activities and has an impact on the entire family dynamic.

Against the backdrop, I'd like to take a moment to strongly oppose the notion that attempting to simply avoid peanuts or food containing peanuts is the best intervention strategy in the real world. We have seen this notion surface before and most recently in a metanalysis published in The Lancet which fails to provide any patient-focused perspective.

Remember, patients with peanut allergy have no approved treatments options to date. They and their families deserve a full picture of what therapeutic options can mean for them based on the results of comprehensive and rigorous scientific study. To that end, I have asked Dan to address this further in some detail on this call.

Aimmune's goal is to help make certain that when children with peanut allergy have an accidental exposure in the real world -- regrettably, this seems to be inevitable for many children -- then instead of having a life-threatening and potentially fatal anaphylactic reaction, they have either no reaction at all or a reaction that is not life-threatening. Ultimately, we want AR101 to desensitize and modulate the immune response of children with food allergy with a rigorously developed and clinically proven standardized therapy.

We want families to have peace of mind knowing that they can live their lives freely and spontaneously. As such, we have been working closely with the FDA to help facilitate the review process for biologic license application for AR101, which the FDA accepted for review in March. Based on the review timeline the FDA provided to us, the review of the review may take until January 2020.

We believe that we have a unique and significant commercial opportunity in peanut allergy and are executing on a multifaceted launch strategy designed to rapidly deliver the first-ever approached treatment option to the more than 1.6 million children and teens affected by peanut allergy in the United States. Andrew will provide more color on this strategy and our thinking about the marketplace in a few moments.

Our pipeline beyond AR101 also continues to progress, beginning with AR201 in egg allergy, which will also harness the CODIT platform. We remain on track to initiate a Phase 2 clinical trial program of AR201 in the middle of this year. Nearly 6 million people worldwide are allergic to eggs, including around 800,000 in the United States and as many as 4 million across Asia, where allergy to egg is the most common food allergy.

Lastly, we're in a strong financial position with approximately $296 million in cash and investments and potential access to an additional $130 million through our credit agreement with KKR. We expect these resources to fund commercialization of AR101 in the United States and Europe and to advance our pipeline program.

With that, I'll turn it over to Dan for our clinical and regulatory update.

Daniel Adelman -- Chief Medical Officer

Thank you, Jayson. When I updated you last, we had just reported out the topline results from our Phase 3 ARTEMIS study. This study marked yet another achievement for AR101 demonstrating that a high proportion of patients were able to tolerate the single-highest dose of 1,000 milligrams of peanut protein after nine months of treatment. To reach that point cumulatively, patients tolerated over 2 grams of peanut protein or the equivalent of approximately 6 to 8 peanuts in total, a level of desensitization that should in the real world provide an ample buffer for most patients beyond a typical inadvertent bite of a peanut-containing food.

As we reported, the trial met its primary efficacy endpoint. Well over half of the AR101-treated patients tolerated a 1,000-milligram dose of peanut protein in the exit food challenge compared to low-single digits of patients on placebo. These findings are consistent with results from the PALISADE trial, in which 50.3% of AR101-treated patients tolerated a single-highest dose of 1,000 milligrams of peanut protein compared to 2.4% of placebo patients.

The ARTEMIS trial results greatly exceeded a super superiority margin of 15 percentage points for the lower bound of the 95% confidence interval of the difference between the two treatment arms. Additionally, the median tolerated dose of peanut protein for AR101-treated patients in the ARTEMIS trial improved 100-fold from 10 milligrams at baseline to 1,000 milligrams at the exit.

You may recall that in the PALISADE trial, we also observed a 100-fold increase in the tolerated dose level. What is remarkable is that this increase was achieved after only nine months of AR101 in the ARTEMIS trial. The ARTEMIS data adds to our growing understanding of the time course of desensitization and patients' ability to tolerate relatively large challenges with peanut protein.

The safety profile and completion rates observed in ARTEMIS were also consistent with the results seen in previous AR101 clinical trials. Importantly, there were no cases of severe anaphylaxis or eosinophilic esophagitis observed in the ARTEMIS trial. We will be presenting the full results from this study in an oral presentation at the upcoming EAAIC Conference on June 2nd and we intend to submit the findings for publication soon thereafter.

Based on strong clinical results for our PALISADE, RAMSES, and ARTEMIS clinical trials, which, by the way, are the only Phase 3 efficacy trials in peanut allergy to meet their primary endpoints, we believe AR101 has the potential to become the cornerstone of care for patients with peanut allergy.

Our intent for AR101 therapy is to bridge patients from a constant state of worry about accidental exposures to the peace of mind and to help prevent severe potentially life-threatening reactions. We continue to see improvements of the benefit risk profile over time, which is consistent with what has been seen with other forms of allergy and immunotherapy.

A few weeks ago, a metanalysis of treatment for food allergy comparing oral immunotherapy to avoidance was published in The Lancet. This analysis, which showed more allergic events in the immunotherapy-treated patients during the first year of desensitization was as expected. In fact, data from PALISADE was the major contributor to the analysis and the findings of that study were previously reported by us in the New England Journal of Medicine publication back in November of 2018.

Among allergists, there had been an understanding for years that OIT can result in manageable allergic reactions. As mentioned in the accompanying editorial, with OIT, patients are trading a known, i.e. predictable population, predictable timing of reaction, predictable and mostly mild and moderate reaction for the unknown, which could include allergic reactions of unpredictable severity occurring at unpredictable times.

The Lancet article does not discriminate between the severity of the systemic allergic reactions into mild, moderate, or severe, nor does the analysis allow for the long-term effects of OIT. The reported observations are limited in both time and scope. Allergy immunotherapy for most indications requires a minimum of three to five years to fully effect the modulation of the immune response.

Earlier this year at the AAAI meeting, we presented data from PALISDADE showing that an AR101-treated patient's accidental exposures to peanut requiring treatment were reduced by 70% relative to placebo during the first six months after therapeutic dose. As such, we disagree with the authors of The Lancet article, "Despite an increase in peanut-tolerated in the exit food challenge, this quote does not translate into less reactions outside of the clinic."

Importantly, as Jason pointed out earlier, in The Lancet analysis, there are insufficient quality of life data to draw any conclusions as to the value of this therapy for patients. We continue to believe that oral immunotherapy with AR101 offers the potential of true benefit for appropriately selected and managed patients with peanut allergy.

Turning to our potential US approval, our interactions with the FDA continue to be productive. The agency informed us in March that it will convene an advisory committee for which we are preparing in earnest. Given the imminence of a potential FDA approval, we continue to place significant resources into physician education, having recently expanded our medical affairs team with key new hires in medical education and medical information.

We now have a medical finance liaison team deployed in the field and we'll continue to augment our medical affairs function with strategic new hires in advance of a potential FDA approval. In Europe, following the success of our recently announced Phase 3 ARTEMIS study, we are preparing our marketing authorization application for submission to the European Medicines Agency in mid-2019.

Our Phase 3 POSEIDON trial of AR101 for the treatment of peanut allergy in children ages 1 year to less than 4 years old is ongoing. In addition, the Phase 2 trial of AR101 with adjunctive dupilumab for the treatment of patients with peanut allergy sponsored by Regeneron also is ongoing. The trial hypothesizes that administration of AR101 in combination with dupilumab could accelerate the desensitization process and potentially lead to remission. Of course, we will learn more once the data read out.

Finally, we remain on track to initiate a Phase 2 clinical trial of AR201 in egg allergy later this year. I'll now turn it over to Andrew for a commercial update.

Andrew Oxtoby -- Chief Commercial Officer

Thanks, Dan. It's now been just over three months since I started my role within the commercial organization at Aimmune. I'd like to share an update on what we've been doing during this time as well as share a few key insights that we've gained about the marketplace.

Considering the potential for FDA approval of AR101 in the coming months, we're moving quickly. As you've heard, we expect to be launch-ready by as early as the beginning of the fourth quarter of 2019. Let me share with you where we are from a commercial launch readiness perspective. We've made a number of advances in our understanding that the US markets over the past couple of months.

First, I wanted to focus on the allergists. We've conducted analyses and research, which have deepened our knowledge of 4,400 of the approximately 5,000 practicing board-certified allergists in the US. This knowledge includes assessing the allergist clinic's current level of readiness to administer AR101 as well as the allergist's willingness to prescribe the product.

From our research, what we know is that of the allergists who have indicated a willingness to prescribe AR101 when approved, approximately 1,300 of these allergists can be characterized of having a clinic setup that is either ready or is on its way to being ready to safely and effectively administer AR101.

Further to this, an analysis of historical patient claims data tells us that approximately 70% of all patients, age 4 to 17 with a confirmed diagnosis of peanut allergy are seen by one of these 1,300 allergists, which represents approximately 30% of the US allergist populations.

This research highlights that a large percentage of diagnosed patients are seen by a relatively concentrated number of allergists, while over time, we will work with a broader population of 5,000 allergists across the US. These dates allow us to be very focused at launch on working with the 1,300 allergists who see 70% of the already diagnosed patients. We also now know that these 1,300 allergists close to approximately 800 individual allergy clinics, which allows us to have even more focused efforts.

To support these allergy clinics, we are well on track to hire our first wave of commercial field-based employees by this fall. This first wave will consist of 40 high-quality individuals who have multiple prior experiences beyond traditional pharmaceutical sales, including payer account management, marketing, and long-term care.

The focus at launch will be on the education support of these 1,300 allergists who ensure that they understand both the clinical profile of the medicine as well as the allergy practice set of the logistics that will deliver a positive initial experience with AR101 for both the patient and the allergist alike. Over time, we expect to expand the field force to a number of approximately 80 to 100 individuals.

Let me now shift to sharing some insights from our conversations with payers. In the last two months, we've had in-depth meetings with multiple payers who together cover a third of the commercial lives in the US. We set out in the beginning of the year to have discussions by launch with payers that cover 80% of commercial lives. So, we're well on track to meet or exceed that goal.

What has been clear from these discussions is that payers immediately recognize the unmet need in the market, that parents with children who have peanut allergy would actively seek out AR101 therapy. Beyond the direct benefits to patients and their families, we're also highlighting to payers the potential reduction of other costs in the healthcare system.

Research shows if you are living with peanut allergy, the absence of treatment options today means there is a one in four chance that you will end up in the emergency room in any given year. These ER visits can be expensive. A treatment that reduces the incidence and severity of allergic reactions could help to remove costs via a reduction in the overall frequency of ER visits.

We've also shared our plans with payers about how we plan to distribute AR101 and have received positive feedback about our partnering with specialty pharmacies to help manage the experience of both the patients and caregiver as well as the allergist. This approach will allow patients to either pick up the products at the allergist's clinic following their administered dose or to arrange for delivery to their home.

Although I've focused my points today on the US marketplace given the potential for FDA approval in the coming months, we're also making progress on the European opportunity for AR101. Specifically, we're continuing to deepen our knowledge of the individual markets, particularly Germany, France, and the UK, and to staff our organization with high-quality individuals in medical affairs, marketing, and market access.

As was previously mentioned, we're excited about the presentation of the ARTEMIS data at EAACI in Portugal in a few weeks. We are looking forward to interacting with European thought leaders and practicing allergists.

As we look ahead to AR101 becoming potentially the first approved peanut therapy on the market, we are confident that we can deliver a successful launch based on the unprecedented strength of our Phase 3 data, the strong desire from patients, caregivers, and physicians for an approved peanut allergy therapy, and the recognition by payers of the value and need of such a therapy.

With that, I'll turn the call over to Eric to review financials.

Eric Bjerkholt -- Chief Financial Officer

Thanks, Andrew. We ended the first quarter in a strong financial position with $296 million in cash and investments. In January of this year, we had announced that we had entered into a $170 million loan agreement with KKR, of which $40 million was funded at closing and the remaining $130 million is available to draw upon satisfaction of certain borrowing conditions, including the approval of the AR101 BLA.

We expect that this loan agreement plus cash on hand will provide with sufficient funds to commercialize AR101 in both the United States and Europe and develop our coded pipeline. For the quarter ended March 31st, 2019, net loss was $54.3 million compared to a net loss of $49.5 million for a comparable period last year.

On a per share basis, net loss for the quarter ended March 31st, 2019 was $0.87 compared to a net loss per share of $0.92 for the same period last year. R&D expenses for the quarter ended March 31st were $31.3 million compared to $33.4 million for the comparable period in 2018. The decrease was primarily due to lower AR101 development costs, partially offset by higher manufacturing costs for both AR101 and AR201.

G&A expenses for the quarter ended March 31st were $23.7 million compared to $16.7 million for the comparable period in 2018. The increase was primarily due additional employee-related costs and external professional services as Aimmune continued to build its infrastructure to support the potential commercialization of AR101. Cash, cash equivalence, and investments totaled $296.3 million on March 31st, 2019 compared to $303.9 million on December 31, 2018.

With that, I'll turn the call back to Jayson.

Jayson Dallas -- President and Chief Executive Officer

Thank you, Eric. Just to recap -- 2019 has already proven to be a great year of execution for Aimmune. We are well on our way to introduce AR101 as the first ever approved therapy for the treatment of peanut allergy. We are executing on a multifaceted commercial and medical affairs strategy that will enable us to bring AR101 successfully to market shortly after approval and we expect to be launch ready as early as Q4 of this year.

The positive data from our ARTEMIS trial continues to support AR101's potential to help children, teens, and their families affected by peanut allergy and we are on track to submit a marketing authorization in Europe in the middle of this year. Our AR101 Phase 3 POSEIDON trial and Regeneron's Phase 2 trial of AR101 [inaudible] ongoing as anticipated and add depth to our pipeline.

We continue to drive depth with our CODIT platform-based pipeline as well with the initiation of our Phase 2 trial of AR201 for egg allergy in the middle of this year and we're in a strong financial position of almost $300 million in cash and investments and potential access to an additional $130 million, which allows us to scale our organization to prepare for a successful commercial launch of AR101 and drive our pipeline programs forward.

As we conclude our remarks, I would like to reiterate that we remain grateful to those who have put patient interests firsts and are helping us to serve them best. With that, now we'll open the call and take your questions.

Questions and Answers:

Operator

Thank you. Ladies and gentlemen, at this time, if you have a question, please press * then 1 on your touchstone phone. If your question has been answered or you would like to remove yourself from the queue, you may press the # key. To prevent any background noise, we ask that you please place your line on mute once your question has been stated.

Our first question comes from Ying Huang from Bank of America Merrill Lynch. Your line is open.

Aspen Mori -- Bank of America Merrill Lynch -- Analyst

Hey, guys. It's Aspen on for Ying. Thanks for taking my questions. Just first on potential EU partnership -- I think last we spoke, you mentioned that you're not openly seeking out a partner but are open to anyone coming to approach you. I guess my first question is are there any updates there? Have you been approached by anyone? And then now that you have are your global registrational data in hand with PALISADE and ARTEMIS, can you guys comment on pricing strategy? Thank you.

Jayson Dallas -- President and Chief Executive Officer

Thanks for the question. On the question regarding European opportunity, we continue to be open, as we've said, to potential partnering. We are exploring the lead markets of Germany, France, and the UK. We haven't had offers to partner on this, but we continue to be open to that. We feel that we can build an infrastructure without a huge amount of cash flow over the first few years, as you know. Europe tends to be a sequence launch across countries. So, you start with Germany and then you go from there. So, we feel we can start with that approach and continue to be open to offers as people would approach us.

Andrew Oxtoby -- Chief Commercial Officer

Maybe with that one thing -- I think I said the same thing last quarter and that is that no company that's hugely prevalent in the allergy space across Europe and I think to some extent, we'd rather build some of this infrastructure ourselves and potentially partner it later on. There's no real burning platform from a cash flow perspective to do this sooner rather than later.

Aspen Mori -- Bank of America Merrill Lynch -- Analyst

And then on the pricing strategy?

Jayson Dallas -- President and Chief Executive Officer

Yes. As we went through last time, we're not in the position to provide a specific guidance around pricing. That will be something we provide more information when we get to launch.

Eric Bjerkholt -- Chief Financial Officer

I think we've previously said don't expect specific pricing guidance from us until we get much closer to launch.

Aspen Mori -- Bank of America Merrill Lynch -- Analyst

Okay. Thank you.

Operator

Thank you. Our next question comes from Charles Duncan of Cantor Fitzgerald. Your line is open.

Charles Duncan -- Cantor Fitzgerald -- Managing Director

Hi, Aimmune team. First of all, congrats on the progress in the quarter and thanks for taking my questions. My first question is regarding the ongoing review with the FDA. I guess I'm wondering if they've notified you of any manufacturing plant inspections or conducted them. Then also with regard to the adcom, could you tell us what month you're looking to be prepared for that or have they conveyed any thoughts as to the timing of that?

Jayson Dallas -- President and Chief Executive Officer

Thanks, Charles. I'll take the second one first. Overall, the review continues as we would expect. We have been notified, as we've said before, by FDA that we do anticipate advisory committee. We have not been notified by the agency yet exactly when that will happen. Obviously, we anticipate it will happen sometime in the second half of the year and we will be ready to engage in an advisory committee from any timeline in the second half of the year. So, we're well into our preparation for an advisory committee.

We continue, as I said, to be engaged with the review division as part of the review. We continue to see information requests from them and respond to those. I think the one thing that is new information since the last call we had is that we have heard from a few investigative sites and from our manufacturing facility that the agency has indeed scheduled inspections with them over the course of the next few months. So, overall, the review continues to make progress.

Charles Duncan -- Cantor Fitzgerald -- Managing Director

Okay. That's helpful color. I appreciate that. I was also interested in a lot of the comments, but in particular Andrew's comments regarding what I see as a nugget of pharmacoeconomic value or calculus. I think Andrew, you mentioned roughly 25% of probability of an ER visit with a peanut allergic patient. I guess I'm wondering have you added u p the costs of those ER visits and the probability of real downside risk from that? I'm just really trying to perhaps understand a little bit more about the pharmacoeconomic value that may underscore the pricing that you eventually come out with.

Andrew Oxtoby -- Chief Commercial Officer

Yeah. First of all, this is something that as we had conversations with payers that they brought up proactively and actually recognize as something that was a potential benefit of a therapy that could reduce visits to the ER. So, we are actively modeling and looking at what the economic model would look like in terms of those cost offsets to be able to provide that to payers as we go through our discussions with them.

Jayson Dallas -- President and Chief Executive Officer

I think when you take these data and you put them into a plan-specific budget impact model, you can actually make it very real for the individual payers. We're working through that macro-level economic story now and then how we make it personal with the individual payer plans as we engage with them.

Charles Duncan -- Cantor Fitzgerald -- Managing Director

It seems like they're getting that. My last question was regarding the recent Lancet article. You did a good job helping to provide some understanding of that. I've got to tell you -- I was a little astonished at the article, given that one of the authors is a known peanut allergy sufferer and an allergist. I'm kind of wondering if you think that article is really maybe targeted at OIT versus CODIT or what you think motivated that article because it seems like the burden of disease versus the therapy was kind of bizarre.

Daniel Adelman -- Chief Medical Officer

Yeah, Charles. This is Dan. It's always dangerous for me to try to get into somebody else's head when I have a hard time getting into my own, but I do think that it was an exercise looking at a defined and narrow period of time of desensitization. I don't know whether it was focused on all OIT or not.

What we've heard from parents and the advocate community is that there's a lot of concern about the narrow focus of this metanalysis. In particular, the absence of really a human factor. There is a huge desire among some patients and certainly their parents to make certain that there is a safe therapeutic option available for them. They felt that this article really did that a disservice.

Charles Duncan -- Cantor Fitzgerald -- Managing Director

Okay. That's helpful, Dan. Maybe just to extend that thought and then I'll hope back in the queue, if you were to do a survey of 100 allergists, do you think that they would share your opinion relative to the burden of disease versus burden of therapy or share the opinion of the author?

Daniel Adelman -- Chief Medical Officer

It's hard for me to speculate. I live in the world of food allergy people. The people who I deal with, the investigators and the doctors who I deal with have certainly bought into the value proposition of oral immunotherapy. So, I can't really talk about the larger universe. The people who I see absolutely believe that this is a critically important option to have available for their patients.

Charles Duncan -- Cantor Fitzgerald -- Managing Director

Thanks. It seems like your target market. I'll hop back in the queue.

Operator

Thank you. Our next question comes from Kennen MacKay of RBC Capital Markets. Your line is open.

Justin -- RBC Capital Markets -- Analyst

Hi, this is Justin on for Kennen. Thanks for taking the question and congrats on the progress this quarter. I was wondering if you guys could elaborate a little bit more on the Lancet article. It sounds like a lot of the feedback you've gotten is that the article is a little bit misguided in its conclusions. I'm wondering if you've gotten any feedback from the community that's sort of agreed with those conclusions and any strategies you have to sort of address those concerns, as you prepare for launch. Thank you.

Daniel Adelman -- Chief Medical Officer

Sure, Justin. This is Dan. I just mentioned in my answer to Chad that we absolutely have heard from parents and from the advocate community and they echo a lot of our concerns. As far as changing our strategy, no, I don't think this is changing our strategy. Our data are strong. We have built a good case for the benefit risk profile of our drug and we will continue to prepare for the advisory committee and for responding to FDA questions and information requests. We are going to continue what we've been doing all along and that is preparing for a launch of the first OIT product available for peanut-allergic patients.

Jayson Dallas -- President and Chief Executive Officer

I'd maybe make one addition to that comment and Dan alluded to this earlier, but just make it more explicit -- the article does not look at what we call the human side of peanut allergy or food allergy, which is the quality of life impact of having an allergy and how that impacts the individual and the family. The reason we don't think in any way this detracts us from our strategy is kind of twofold. One, our data is robust and as Dan said, the benefit risk is something that we believe in fundamentally and we will continue to present more and more of each side of that equation as we get more data.

The second piece of it is it completely does not represent the very large numbers of patients and parents up there in the real world who continuously ask us when this treatment is going to be available and who are waiting for at least one therapeutic option out there for the treatment of peanut allergy.

Daniel Adelman -- Chief Medical Officer

Let me just add on. At EAACI this year, we're going to have a couple of presentations that will specifically address the concerns raised by the Lancet article. Specifically, we will be providing some longer-term data from our ARC04 rollover study looking at both desensitization efficacy as well as safety. Also, we have two posters that are going to address quality of life issue that really were not covered well in the Lancet paper. There just hasn't been anything published, but we will be presenting some of those quality of life data.

Justin -- RBC Capital Markets -- Analyst

Thank you very much for that. One additional one -- given the increased tolerization benefits seen when treatment is extended out past beyond a year, have you given any thought or have you had any discussions about the duration of treatment that will potentially be included in the label or how those conversations have gone at the FDA?

Daniel Adelman -- Chief Medical Officer

I am certain that those will be part of our discussions with FDA. We've not yet entered into those discussions. They're still in their review period.

Jayson Dallas -- President and Chief Executive Officer

I would however make one comment and that is we continue to observe that our immunotherapy tends to behave very, very similarly to all other kinds of immunotherapy and if you look at other immunotherapies, be they subcutaneous injections for grass or pollen or for more life-threatening conditions like bee venom allergy.

Duration of therapy is not something that is in those labels because the overwhelming data around immunotherapy does suggest that if you take a population and you treat a population for a period of somewhere between three and five years, you do start to get a sub-population going into remission from their allergy and that certainly is our hypothesis. The data will pan that out. In order to prove that, we do need a cohort of patients to continue on therapy over time.

Our own rollover studies will provide some of those data, but we do anticipate having more patients in the real world continue on therapy over time toward what is hypothetically likely based on what we know about other immunotherapies.

Justin -- RBC Capital Markets -- Analyst

Thank you very much.

Operator

Thank you. Our next question comes from Chris Raymond of Piper Jaffray. Your line is open.

Chris Raymond -- Piper Jaffray -- Managing Director

Thanks, guys. I know you guys are loathed to talk too much in detail on pricing, but if you bear with me for one second, I have a pricing-related question. I think you guys in the past have mentioned that drug costs during the up-dosing phase and maintenance phase might differ. I think you even went so far as to say the up-dosing period might be at a premium. You've done a lot of work since then. It's been a while since you commented on that. I wonder if you had any directional update on that sort of dynamic and where you think it might be. Thanks.

Jayson Dallas -- President and Chief Executive Officer

Thanks, Chris. Actually, we have done a lot of work on this, not the least of which is looking at the data we got from this recent clinical trial. Now, as we said, this is the largest database we have on the treatment of peanut allergy over time. I think that while we are clearly saying it's not something we're going to finalize until we get closer to launch, I do believe it's reasonable to say that we are more likely leaning toward flat pricing or monthly pricing for treatment at this point.

There's a very casual reason for this that comes out of the clinical data. That is that it is clear that like with many of the other immunotherapies, the amount of time that it takes individual patients to get through the up-dosing period can vary. Some patients may need seven, eight, or even nine months to get through the up-dosing as they take slightly longer on each of the individual dose levels to get through the up-dosing.

As you think that one through, it would create the reverse incentive to rush patients through up-dosing if we had a premium price on the up-dosing side of the equation. We want to make certain the patient is first in everything we do and that the ability for patients to get through the up-dosing is maximized and that many patients can get on to the therapeutic dose. I think we're probably leaning away from that strategy as we look forward.

Chris Raymond -- Piper Jaffray -- Managing Director

Okay. Maybe just a follow-on -- I think you guys talked in your press release about the egg allergy program, but I didn't see any mention of your tree nut program. Is there an update there?

Jayson Dallas -- President and Chief Executive Officer

Yeah. Obviously, we talk about eggs because they have a clinical program starting this year. You're quite right that tree nut is our next program within the CODIT platform. As much as we can, we'll again push the regulatory boundary and try to be the first approved therapy here for multiple food allergens in that originally, our plan had been to, if you like, think about doing tree nut in a serial fashion, starting originally with the walnut program. I think what's become clear to us is that because the cross-reactivity that you see with tree nuts, we would rather take a bit of a strategic pause now and figure out a way to do a combination product of all of the tree nuts together in one go.

The reason that we have to take a pause is because obviously, manufacturing and sourcing a product that is as robust as we need it to be from the characterization of the allergen perspective, which is sort of core to the CODIT concept across three different sources is a little bit more technically complicated. But that is something we will progress this year and when we get to the point that we actually are able to have a product in place, we'll start speaking about that. I do expect we'll have more information about this on the back end of the year.

Operator

Thank you. Our next question comes from Vamil Divan of Credit Suisse. Your line is open.

Roy -- Credit Suisse -- Analyst

Hi, this is Roy for Vamil. You indicated you'll have an adcom sometime in the second half of the year. I'm wondering what are you doing in terms of preparedness and what you're focusing on in general, like the type of questions you expect the FDA to ask.

Daniel Adelman -- Chief Medical Officer

This is Dan. We are working diligently preparing for this, understanding our data, doing deep dives into the data, thinking of questions and crafting responses and answers. We have our strategy laid out and we're executing on it diligently.

Jayson Dallas -- President and Chief Executive Officer

I would say the core concept of having the advisory committee is a balanced representation of both the efficacy and the safety data that we have for the product and looking at the benefit risk equation of the program over time. I think what's great for us is we prepare for an adcom is the amount of data that we have to look at and the amount of data that we have to mine, which shows us that actually, the benefit risk is relatively robust and in fact, it gets better over time.

We know this from immunotherapies. The efficacy improves over time and the tolerability profile of these products tends to improve over time as well. So, you still have a convergence on each side of the risk benefit equation, which is also more favorable as time goes by. I think this is what the crux of the adcom will be about. This is what we're preparing for both with our internal and with our external experts.

Roy -- Credit Suisse -- Analyst

Is there anything specific you guys are more focused on in terms of data? The safety data in particular -- do you think the FDA are more concerned that? Either through the interaction you currently have with the FDA, the back and forth exchange during the review process.

Daniel Adelman -- Chief Medical Officer

Up to this point, I don't think that there is any particular concern that we are focusing in on. I think our data are incredibly strong. We have a large and robust data set. We've articulated the benefits and the potential risks and how to manage them quite well in our New England Journal paper. We are prepared to engage in those conversations with the agency.

Jayson Dallas -- President and Chief Executive Officer

And we don't have, again, to the second part of your question, anything specific that we see FDA focusing on right now as we go through the information request from the agency. I do think it's pretty clear, though, that in any immunotherapy treatment, the thing the agency is going to be looking at is allergic reactions over time, the use of epinephrine over time with that and the underlying incidents of anaphylaxis.

These are things we've presented. We've said that the ARTEMIS study is very similar in most if not all and there's more data to come on that in June. We understand the profile of immunotherapies. So, that's where we're focusing our attention, to make certain that, as I said, we continue to demonstrate a strong benefit over the risk side of the equation.

Roy -- Credit Suisse -- Analyst

Okay. A second question -- in the Phase 2 egg allergy study, could you talk a bit about the study designs? Also, given that the larger population, as you indicated, in Asia, I'm just wondering whether you'll have more sites in Asia or anything in particular?

Daniel Adelman -- Chief Medical Officer

So, at this point, our plans are to run the Phase 2 in North America. We really have not gone into any detail publicly about the design of the study at this time. It is likely to be a fairly typical clinical trial of oral immunotherapy.

Jayson Dallas -- President and Chief Executive Officer

Dan's point about doing the Phase 2 in North America is simply because we have a lot of sites who we're comfortable working with and we know we can get the study done as quickly as possible. But then clearly for Phase 3, we'll think about geographic expansion of the clinical trial sites as we get to the broader population.

Andrew Oxtoby -- Chief Commercial Officer

One other overarching comment on that is we have learned a tremendous amount about how to do effective clinical trial programs in food allergy from the AR101 program. We'll apply those learnings to the egg program all the way from the beginning of Phase 2 through the very end of the Phase 3 programs to make sure we do an efficient and yet highly effective clinical trial program.

Roy -- Credit Suisse -- Analyst

Thank you.

Operator

Thank you. Our next question comes from Liisa Bayko of JMP Securities. Your line is open.

John Walden -- JMP Securities -- Analyst

Hi, John Walden on for Liisa. Thanks for taking the questions and congrats on the progress. Just a couple in commercial for me -- I'm wondering how are you going to further sub-segment or prioritize those 1,300 allergists who indicated a willingness to prescribe? Do you know how many of those are actually using homebrew OIT today, if any at all?

Jayson Dallas -- President and Chief Executive Officer

Good question. Somewhere between 200 and 300 of those 1,300 are either doing homebrew OIT today or are a clinical trial site for one of our trials with AR101. So, they have a very high level of familiarity with OIT or with AR101 if they're one of our trial sites. So, we will obviously focus on supporting them as they start with AR101 upon approval, but also working with the remaining approximately 1,000 allergists who have a high willingness to prescribe the product and whose clinics are at varying levels of being able to do it.

So, they are on the way to being able to set up and ready. They have the space. They have the staffing. They just need to understand more about the protocol to be able to adapt their clinic and logistics to be able to prescribe the product.

John Walden -- JMP Securities -- Analyst

And then how much commercial product do you think you'll have manufactured at your anticipated launch?

Jayson Dallas -- President and Chief Executive Officer

That's a difficult question. We'll have enough to be able to supply to the marketplace. Clearly, we'll focus on making sure the initial dose is an abundant supply to make sure the initial patients will be starting on the product.

Andrew Oxtoby -- Chief Commercial Officer

We don't expect any supply constraints whatsoever.

John Walden -- JMP Securities -- Analyst

Terrific. Thanks again, guys.

Operator

Thank you. Our next question comes from Paul Choi of Goldman Sachs. Your line is open.

Paul Choi -- Goldman Sachs -- Analyst

Hi, good afternoon. Thanks for taking my questions. Let me also offer my congratulations on all the progress on the regulatory front. I wanted to ask a commercial question to Andrew and if Jayson wants to chime in, that's great. Recognizing that you're approaching about 80% of the payers by year end or thereabouts, my question is could you maybe comment about what you thought the initial ISA report got right or perhaps got wrong and how has that figured or is it potentially reflected in your view of how payers are reflecting potential costing of OIT here for you guys?

Andrew Oxtoby -- Chief Commercial Officer

Let me start by saying first of all, we think it's too early for ISA to be doing an analysis of this category. There are no approved products on the market. There's no pricing data available. We are in the process of responding to their initial draft model, which they issued at the beginning of last month. We are providing comments this month and then there will be a consult or a public hearing on June the 11th, actually, in Oakland across the Bay.

As we look at their model, there are a number of flaws and things that are not reflected in the model and we've provided some data and feedback in the comments that we're providing. Notably, there's no reflection of the impact on quality of life included in the model. I think that's actually acknowledged in the 100-page report they issued.

As we talked earlier on in this call, the impact on quality of life for patients is a very important part of this product and if you're a patient suffering from this, then the ability to look at addressing anxiety and living from day to day with peanut allergy, it's important reasons to why you'd go on this product. So, to have a model that doesn't fully capture that or capture that at all seems to be flawed.

So, it has a very limited factor as we think about our pricing approach going forward, it's not something quite honestly that's come up in our discussions with payers. In fact, I think the view that this is something that was done early and prematurely is shared by other stakeholders in this, including allergists and including patient groups. We'll see what happens when we have the public hearing on June the 11th.

Jayson Dallas -- President and Chief Executive Officer

One thing I'd add is as we have our discussions with payers, we use a vastly more sophisticated and comprehensive way of looking at health economic modeling in the discussions that we have, which take into consideration a lot of the things that we find fundamentally missing from the ISA report and that allows us to have much more productive discussion.

Paul Choi -- Goldman Sachs -- Analyst

Great. Thank you for that. I have a clinical question that I also wanted to tie into a longer-term market question with regard to the dupi combination study. I think there's general agreement that the clinical rational here is pretty strong to combine AR101 with dupilumab, but I'm just wondering with regard to the trial design as we look at it, I think the cumulative dose that you're targeting is a little bit north of 2,000, which is about twice the amount in terms of the cumulative dose you sought in PALISADE.

I guess my first part of this question is it sort of a doubling given the use of two drugs here seen as a clinically meaningful bar? Then if the market over the longer-term does evolve to a combination therapy market involving two drugs or more, possibly, how do you think about pricing for the category over the longer term and what is the number needed to treat versus number needed to harm to justify the pricing?

Daniel Adelman -- Chief Medical Officer

There's a lot in there. I do want to remind everyone that this is a collaboration between Aimmune and Regeneron on the adjunctive use of dupilumab with AR101. This is a study that's being run by Regeneron. They are the ones who probably are best equipped to answer your question.

Andrew Oxtoby -- Chief Commercial Officer

To answer the question on the clinical trial design, I think the long-term commercial thing I would say is that there's a lot of thinking to do around that. Remember, the study that Regeneron was doing was an experimental study to see if there was evidence that had benefit in using the combination. It would require a follow-on study if we were ever to go for an approval. I think how we would think about designing a follow-on study really depends on the data that comes from this study. So, we're testing a very early hypothesis here.

Paul Choi -- Goldman Sachs -- Analyst

Okay. Great. Thank you for that.

Operator

Thank you. And then the next question comes from Liana Moussatos of Wedbush Securities. Your line is open.

Rebecca -- Wedbush Securities -- Analyst

Hi, this is Rebecca for Liana. Thank you for taking our question. So, you had provided guidance for submission of marketing authorization application in mid-'19. What are the steps remaining and what are the commercial efforts that you're taking for successful launch of AR101 in Europe?

Daniel Adelman -- Chief Medical Officer

So, the first part of your question is what is our timeline essentially for submitting the MAA. We are finalizing our documents at this point and we are on track for fulfilling our commitment to a mid-year submission of the MAA to the European Medicines Agency.

Andrew Oxtoby -- Chief Commercial Officer

In terms of the commercial preparation, we will be looking at an approval sometime in mid-2020 assuming the timelines that say we communicate around the MAA submission. So, a lot of what we're doing is really understanding the individual country markets in Europe. Europe is not one monolith where food allergy or allergies are treated the same in every country.

So, how it's treated in Germany is very different from France, which is different from the UK. We're deepening our understanding of those marketplaces. We're in the process of adding additional staffing and people to be able to further understanding and then begin to work on dossier submissions for reimbursement as we get closer to that launch date.

Operator

Thank you. This concludes the Q&A portion for today's conference. I would like to turn the call back to Mr. Jayson Dallas for closing comment.

Jayson Dallas -- President and Chief Executive Officer

Thank you so much, Nora. Thank you, everyone for joining us this afternoon. We look forward to providing the further updates in our progress and I wish everyone a great evening.

Operator

Ladies and gentlemen, thank you for your participation in today's conference. You may disconnect. Everyone have a wonderful day.

Duration: 60 minutes

Call participants:

Jayson Dallas -- President and Chief Executive Officer

Daniel Adelman -- Chief Medical Officer

Andrew Oxtoby -- Chief Commercial Officer

Eric Bjerkholt -- Chief Financial Officer

Aspen Mori -- Bank of America Merrill Lynch -- Analyst

Charles Duncan -- Cantor Fitzgerald -- Managing Director

Justin -- RBC Capital Markets -- Analyst

Chris Raymond -- Piper Jaffray -- Managing Director

Roy -- Credit Suisse -- Analyst

John Walden -- JMP Securities -- Analyst

Paul Choi -- Goldman Sachs -- Analyst

Rebecca -- Wedbush Securities -- Analyst

More AIMT analysis

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.

10 stocks we like better than Aimmune Therapeutics
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Aimmune Therapeutics wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of March 1, 2019