Alder BioPharmaceuticals, Inc. (ALDR) Q2 2019 Earnings Call Transcript

Alder BioPharmaceuticals, Inc. (ALDR)
Q2 2019 Earnings Call
Aug. 6, 2019, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good afternoon and welcome to the Alder BioPharmaceuticals Second Quarter 2019 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Following the formal remarks, we will open the call up for your questions. Please be advised that the call is being recorded at the Company's request.

At this time, I would like to turn the call over to Michael Horowicz of Stern Investor Relations. Please proceed.

Michael Horowicz -- Stern, Investor Relations

Thank you, operator. Good afternoon and thank you for joining us. Just after market close today we filed our Form 10-Q for the second quarter of 2019 with the Securities and Exchange Commission and issued our financial results and corporate highlights press release, both of which are available in the Investor Section of our website at www.alderbio.com. You may listen to a live webcast and listen to a replay of today's call on the Investor section of the website. Today's speakers are Bob Azelby, Chief Executive Officer; Dr. Paul Streck, Chief Medical Officer; Nadia Dac, Chief Commercial Officer; Carlos Campoy, Chief Financial Officer; and Erin Lavelle, Chief Operating Officer will also be available during the Q&A portion of today's call.

Before we begin, I would like to caution you that during today's conference call we'll be making forward-looking statements regarding future events or the future performance of the Company, including the statements about possible future developments regarding clinical regulatory, commercial, financial, and strategic matters. Actual events or results, of course, could differ materially. We refer you to the documents that Alder files from time-to-time with the SEC and, in particular, the Company's Form 10-Q for the quarter ended June 30th, 2019, which was filed today with the SEC, August 6th, 2019. These documents, which are available on the SEC's website, contain and identify under the heading Risk Factors important factors that could cause actual results to differ materially from those contained in any forward-looking statements.

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

Robert Azelby -- Chief Executive Officer

Thank you, Michael, and welcome everyone. My colleagues and I are excited to continue our mission to forever change the migraine treatment landscape, with the potential launch of our first product in a little over six months. Assuming FDA approval of eptinezumab, our investigational monoclonal antibody inhibiting CGRP, Alder will be ready to competitively launch in the US migraine prevention market during the first quarter of 2020.

We have now hired all of our commercial leaders in sales, marketing, and market access and they are applying their extensive experience to sharpen our go-to-market strategy and to secure additional talented team members. We have also made significant progress in building our operational and distribution infrastructure to enable a seamless experience for physicians to prescribe epti for migraine patients. We continue to produce commercial supply through our manufacturing agreement with Sandoz as we have discussed previously. This agreement will enable Alder to meet forecasted demand not only in the US at the time of launch, but also globally beyond 2023.

What really drives the team sitting here with me is knowing that if approved, our differentiated product candidate will provide patients debilitated by migraine with the opportunity to get back to daily living. We recently presented new data further supporting epti's potential to do this at two medical meetings, the American Academy of Neurology and the American Headache Society Annual Meetings. Paul will review the data in more detail in a moment.

Turning now to how epti will fit into the migraine prevention landscape. As we have discussed in the past, migraine is far more than just a headache. It's a serious debilitating neurological disease with far-reaching effects. Those with migraine often experienced sensitivity to light, sensitivity to sound, suffer from gastrointestinal issues, sleep disorders, and they have impaired cognitive abilities. All of which may lead to anxiety and depression. Essentially these individuals are living with the constant reality of migraine every day, not just during a migraine attack.

In fact, according to the Chronic Migraine in America survey results, 34% of them have lost their job due to migraine. 66% say migraine attacks have affected their professional advancement and 63% say migraine affects their ability to maintain relationships. We have found through our market research that most bothersome symptom relief and quality of life measures are extremely important to migraine patients and that nearly 90% of patients surveyed would choose a product based on its effectiveness and 80% of them would choose a product based on speed and prevention effect.

Our market research also supports our belief that many patients would prioritize relief of the disabling symptoms over the convenience of administration. In fact, over half of the patients we surveyed, when given the choice would choose an infusion product with epti's clinical profile. We are encouraged to see how the anti-CGRP market is growing with 21% quarter over quarter growth in terms of total prescriptions. And with nearly 75% of those prescriptions being paid for based on recent competitors against all. In fact, over 383,000 new brand RXs had been written as of July 19. While this is encouraging, we believe this doesn't capture the full market potential of epti. We believe epti will offer a unique and differentiated value proposition to patients, providers, and payers and our market research continues to suggest that we will capture 20% to 30% of the anti-CGRP prevention market.

Additionally, through our life cycle management prioritization program, initiated last fall, we determine that there is a significant opportunity for epti, leveraging its 100% bioavailability and rapid onset of prevention to be utilized as an acute treatment for migraine in those patients eligible for prevention. We reached this conclusion, following a clinical trial feasibility study and a rigorous commercial assessment as well as through expert clinical consultations.

We continue to plan to initiate a Phase III clinical trial of epti in the second half of 2019 to investigate this opportunity clinically. If approved for the prevention of migraine and its successful in treating an active migraine and clinical testing, Epti would be the only anti-CGRP monoclonal antibody indicated for the treatment and prevention of migraine.

In our commercial assessment, a treat and prevent label showed substantial increases in the market share in the prevention marketplace. This research was further corroborated by first world therapy trends that indicated an anti-CGRP med with a treat and prevent label would be a strong driver of brand choice. And as we continue our focus on becoming a fully integrated company transforming migraine treatments, we hope you can see our excitement about ALD1910, our preclinical asset, which has the potential to address another subset of migraine patients who may not respond to anti-CGRP therapy.

ALD1910 is our high specificity, high affinity neutralizing investigational monoclonal antibody with reactivity to PACAP or pituitary adenylate cyclase-activating peptide. PACAP has emerged as an important signaling pathway in the pathophysiology of migraine and is believed the be distinct from CGRP. As such, we believe PACAP represents an attractive novel target and we are very encouraged by our preclinical work to date, which suggests that ALD1910 prevents the signaling of PACAP for all three known receptors. The preclinical program is on track for completion this summer and we expect to initiate a first in human clinical study by the end of 2019.

In summary, we are very excited about the near and long-term potential for epti and are working hard to ensure its commercial success, while also pursuing a portfolio of additional indications and new therapies that could potentially help migraine patients in the future.

With that, I will turn the call over to Paul.

Dr. Paul Streck -- Chief Medical Officer

Thanks, Bob. Many of you are familiar with our positive Phase III trial data from PROMISE 1 and PROMISE 2. But adding to their importance is the further evaluation of our data, which sheds more light on the impact eptinezumab has on the lives of migraine patients in our study. Specifically, we presented new data from post hoc analyses from these trials at the American Headache Society Annual Meeting in July and at the American Academy of Neurology Annual Meeting in May, which reinforce eptinezumab's differentiated clinical profile and the clinically meaningful benefits in patient-reported outcomes measures.

At AAN, we demonstrated the consistency of results across four clinical trials. It was routinely observed that eptinezumab with 100% bioavailability, showed a rapid onset of migraine prevention beginning day one after treatment and sustained each week through Month 1. Additionally, we showed the rapid response observed on both day one and through Month 1 in PROMISE 1 and PROMISE 2 was also sustained through the first quarter following a single eptinezumab infusion and was maintained for further increase through subsequent infusions. At AHS, we presented data on migraine-free months, showing that 18% to 25% of episodic migraine patients and 14% to 19% of chronic migraine patients experienced no migraine days in at least half the study months compared to 12.6% and 4.9% in placebo, respectively.

Imagine a chronic migraine patient going from averaging 16 migraines a month to zero migraines for three or more months over a six-month period. The feedback from physicians on these data at AHS suggested a paradigm shift in their expectations on outcomes for their patients. What's equally important is that it's not just about reducing the number of monthly migraines. It's also about the ability to show clinically meaningful changes in a patient's mental and physical wellbeing.

We conducted analysis on a number of patient-reported outcomes measures, specifically the SF-36, HIT-6, and the MITA. In both PROMISE 1 and PROMISE 2, we consistently saw clinically significant improvement starting at month one in both the mental and physical domain that correlate with migraine reduction as compared to placebo. More specifically, analysis in chronic migraine also demonstrated clinically meaningful improvements in the most bothersome migraine symptoms and patient global impression of change in their migraine status at month one after treatment with improvement sustained or increased through the first three months, and after the second quarterly infusion.

It's important to note that the earliest time point we can measure the quality of life was at month one. Having such meaningful changes in the quality of life at month one for patients with this recurring disabling neurological disease, which historically has taken months to years to see change, if a change was possible at all, represents a potential paradigm shift in outcomes. Finally, from a safety perspective, longer-term exposure has demonstrated no change in the overall safety profile for eptinezumab.

Now let me turn it over to Nadia to discuss how eptinezumab clinical profile aligns with our commercial strategy.

Nadia Dac -- Chief Commercial Officer

Thanks, Paul. The more insights we gain from advisory boards and our market research, the more I join my colleagues in their excitement about epti's differentiated profile. I'm thrilled to be able to bring my depth of commercial launch experience from multiple specialty therapeutic areas including neurology to prepare for the launch of epti. Let me share some of the insights that have me so excited and why we know we can successfully compete in this market.

We have received consistent feedback from physicians on epti's differentiated profile, citing fast onset of prevention as early as day one as a key differentiator compared to today's prevention landscape. They've shared with us that epti's 75% and 100% responder rates are the new efficacy benchmark in their opinion. They have consistently shared with us that patients suffering with migraine do not want to wait multiple months to see if their treatment is working. Based on a survey done by Spherix Global Insights in the second quarter with neurologists and headache specialists, 83% plan to prescribe epti to their patients.

Additionally, we conducted quantitative and qualitative market research that demonstrates epti consistently outperforms other prevention options. Specifically, it does so on attributes listed as most meaningful to prescribers including fast onset and depth of response that doesn't wear off between cycles and quarterly IV or otherwise stated less frequent administration than current options.

The bottom line of the insights we've collected to date is that epti is seen as a potent anti-CGRP because of its powerful prevention that is fast and sustained in a simple 30-minute IV. Even though current competitor sales footprints in the migraine market are broad, we know that the business is quite concentrated when you look at prescriber data. Going forward, we will be speaking about accounts versus individual prescribers, which is more in line with the business model of treatment in the medical benefit category.

Specifically, based on the March IQVIA data, approximately 2,000 accounts drove 80% of the anti-CGRP's subq business and as a result, these accounts will be the focus of our launch for epti. They could be reached effectively with our planned specialty-sized sales force of 75 to 100 representatives, which we are actively recruiting and expect to have in place by year-end. Our focused execution through a smaller footprint is appropriate in this market. We just completed an extensive account profiling market research project analyzing the 500 accounts generating about 50% of the total anti-CGRP subq business to understand specific details such as numbers of prescribers of each account, onsite infusion capacity, and infusion referral patterns.

While some of this analysis is still ongoing, let me tell you what we know about these 500 accounts today. 80% of these accounts already have infusion capabilities on-site at their centers. The majority are Botox prescribers with procedure logistics already in place. Almost 2/3 of these accounts are medical group practices or headache clinics, which value procedures. The remaining 35% of the accounts are academic and community hospitals. These 500 accounts represent the highest value segments and epti aligns with their business model, both clinically and operationally. Therefore, they will be the foundation of our commercial strategy. Among these accounts as well as the broader market, we firmly believe these practitioners are waiting for epti's launch because it fits well into their treatment protocols for the following reasons.

First, they require a powerful solution with high responder rates. Second, they value fast prevention the begins as early as day one, so their patients are not required to wait for prevention. Third, they tend to see their patients at least quarterly because they believe this improves patient outcomes. Lastly, they embrace having treatments in their hands and have the procedure logistics in place.

In addition to fitting well into healthcare providers protocols, payer coverage is a critical success factor. The initial feedback we've received from payers to date is that they value epti's fast day-one prevention that correlates to improvements in patient-reported outcomes at month one, epti's 50%, 75% and 100% responder rates as compared to placebo, epti's potential for enhanced compliance due to quarterly administration. Furthermore, payers like that epti will be reimbursed only when it is administered to the patient.

With this in mind, we've already brought in our national and regional payer account team. This seasoned team has significant depth of experience and well-established relationships with top payers. This month they will begin account-level engagement with payers with the objective of introducing Alder and sharing epti's clinical data in partnerships with our field medical team. We feel confident that at the time of launch, payers will make epti widely available for their covered lives. In summary, we firmly believe that epti represents a paradigm shift in migraine prevention, which will be successful in a growing market.

With that, I will turn the call over to Carlos to review our financials from the quarter.

Carlos Campoy -- Chief Financial Officer

Thanks, Nadia. As a preliminary note, I will only provide a very brief overview of our second-quarter results and refer you to our period over period results in this afternoon's press release and the Form 10-Q filed with the SEC for more detail. Our second quarter of 2019 financial results continue to reflect the importance of our epti program, which drove a significant portion of our R&D and G&A expenses in support of our commercial readiness activities.

As of June 30th, 2019, we reported $440.7 million in cash and cash equivalents, short-term investments, and restricted cash, compared to $412.4 million as of December 31, 2018. In the second quarter, R&D expenses totaled $34.1 million, G&A expenses were $21.6 million, our net loss was $59.9 million or $0.73 per share. These results generally reflect our planned expenditures to advance the epti program and to position the company for commercialization.

With respect to our financial outlook, we continue to expect that our full-year 2019 net cash used in operating activities and purchases of property and equipment, will be in the range of $285 million to $315 million. Much of this spend is focused on ensuring that we are prepared for the potential launch of epti in the first quarter of 2020 including advancing its supply chain, building commercial inventory, continuing to build out our commercial footprint, and other pre-launch market readiness activities. We expect that our available cash, cash equivalents, investments, and restricted cash as of June 30, 2019, will be sufficient to meet projected operating requirements through the anticipated launch of epti and into the latter part of 2020.

With that, I will turn the call back to Bob.

Robert Azelby -- Chief Executive Officer

Thank you, Carlos. In closing, I'm really proud of the way the whole of the team is executing, and we are well poised for a successful US launch of epti early next year. The clinical profile epti addresses the unmet needs of migraine patients, as well as the needs of our target accounts. Our commercial manufacturing activities are proceeding according to plan with supply available for launch and beyond, and we are continuing to build the internal and external infrastructure needed to successfully launch epti. Additionally, we are excited about the progress we are making with epti's lifecycle management as well as moving ALD1910 into the clinic.

With that, we'd like to open the call to your questions, Operator?

Questions and Answers:

Operator

Thank you. Ladies and gentlemen, if you have a question at this time, please press * then 1 on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the # key. To prevent any background noise, we ask that you mute your line once your question has been stated. As a reminder, ladies and gentlemen, that is *1 for questions.

And our first question comes from Brian Abrahams from RBC Capital Markets. Your line is now open.

Brian Abrahams -- RBC Capital Markets -- Analyst

Hey, guys. Thanks very much for taking my questions. I really appreciate the additional color on the commercial strategy. I guess, first off, I was wondering if you had any updated views on the current market dynamics among the CGRPs, the types of patients being put on, overall access and discounting in the space? Beyond just gaining share, how much room for overall market expansion do you see from here and what are the types of steps that you need to take to help build that out? And then I have one follow-up. Thanks.

Robert Azelby -- Chief Executive Officer

Sure. So, to relate to the market dynamics, basically what we're seeing is, first of all, we just had market research come back and that 85% of doctors see all the subqs as being the same, so commoditized. But what we're seeing in the marketplace is from new to brand share perspective, Lilly and Aimovig have about 40% share and AJOVY about 20%, but it's hard to assess AJOVY because of its Q3 administration. As it relates to access, we are not hearing a lot of noise on access, the PBMs are making them choose between two of the three, but as it relates to the ability of patients to get access to the product, we haven't been hearing a lot of noise on that. In fact on the pricing situation, Brian, that has really seemed to have quieted down, so I don't have a lot more insight on what the net discounts are occurring now, except for the ones that we discussed on the last earnings call, which was around 40%.

And then finally on expansion, this market is totally untapped, right. It is about 14 million patients eligible before the launch of the anti-CGRP, about 27% of them are being treated. What we hear from clinicians is that people are coming back into the healthcare arena to actually get the product. In fact, you hear academics saying the wait times have gone from four months to six months, where private offices are adapting more quickly by adding more nurse practitioners to meet the additional demand. So overall, this marketplace is shaping up very well.

Brian Abrahams -- RBC Capital Markets -- Analyst

That's really helpful. And then maybe just shifting from the US dynamics to Europe. Just curious, your latest go-forward plan for Europe, how the dynamics, commercial requirements, and pricing may be a difference there versus the US? And is there any timetable for filing your application there or would that be something that would await a potential partnership? Thanks.

Robert Azelby -- Chief Executive Officer

Sure. So, number one, as we've said in the past, Brian, is we're open to an ex-US partner to help take epti around the globe. And obviously, when we look at the epidemiology, the disease afflicts as many people over in Europe as it does in the US, so it's non-discriminatory as it relates to the impact on patients. And we were pleased with the uptake the Board has released the other day, about $24 million worth of sales in the second quarter and it hasn't been on the market that long. And so, the uptake there is has been quite good. And then finally, to your question about us filing at the EMA. We were very, very active in terms of making sure, we're repackaging our BLA in terms of the needs required by the European agencies. So, we're active on that, but we haven't given the timetable on that, but we continue to progress it. And the reason we don't give a timetable on it is the BLA in the US is still our priority. So, we're actively engaged with the FDA. But we're very, very active on that end of the spectrum.

Brian Abrahams -- RBC Capital Markets -- Analyst

Thanks so much, Bob.

Operator

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

Yuko Oku -- JP Morgan -- Analyst

Hi, this is Yuko on the call for Jessica. Thank you for taking our questions. Regarding epti in the acute setting, how big would you anticipate that study starting in the second half will be? And would you walk us through how we should think about the commercial opportunity in that setting?

Robert Azelby -- Chief Executive Officer

Sure. So, we haven't provided any guidance on the size of the study as of yet. And the reason why is we're going with the FDA. We're going to speak to the FDA to make sure we're aligned on the outcomes because this is slightly different. We're taking an opportunity to treat acutely in the prevention marketplace. So, we want to make sure that we're aligned with the FDA on what that structure of the study would look like. So, stay tuned for that. But we do still anticipate initiating that study at the back end of 2019. As relates to the commercial opportunity, just to be clear, the biggest opportunity we see is to treat and prevent opportunity in the prevention marketplace. So, the same marketplace we hope to launch in February of next year.

But what we hear from clinicians is that if you had both a treat and prevent in your label, we get a substantial uptick in market share. Because that's clearly differentiated and here's why. If you are a chronic migraine patient, you're suffering greater than 15 headache or migraine days a month. That means that on every other day you go to see your clinician, you're suffering from symptoms of the migraine. And if you assume each migraine is between 4 hours and 72 hours, you will be suffering at a much greater percentage of the symptom of the migraine.

And so, when these chronic migraine patients come in, they're looking for relief. And when the doctor says you have a prevention therapy that could not only prevent migraines over the next three months but also treat that patient in the chair within a couple of hours, that gives you a much greater opportunity in terms of brand choice. That is the largest commercial opportunity of the elements. We do think there's an opportunity in the ER, which we have more work to do and then there is an opportunity with patient suffering between one and three migraines a month. But the vast majority of the commercial opportunity is in the prevention marketplace in terms of clinical differentiation and branch here.

Yuko Oku -- JP Morgan -- Analyst

Okay. Thank you.

Operator

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

Alex Puthumana -- Stifel -- Analyst

Hi. This is Alex on for Paul. Just a couple of quick questions here. First one on epti, given the trend in the other CGRP launches, do you expect sampling to be a major part of your launch and how would that work with an IV?

Robert Azelby -- Chief Executive Officer

So, obviously, when we step back, we get that question as a fair bit. Nadia, you can feel free to jump in here as well. First of all, we're very grateful for the work that the Amgen team did, the Lilly team did and AJOVY team did in terms of giving out all those free products over the first year. That allowed for over 700,000 new RXs 386,000 new to brand patients, and over 30,000 docs or approximately 30,000 docs writing the product. And that has kind of really set the tone in the marketplace in terms of setting up payer coverage. So, for us when we come to the marketplace, we don't anticipate doing a product program as large as that and we think that the payers are now accustomed to the anti-CGRPs. The fact that we're a medical benefit product will fit into the standard processes as we move forward. So obviously, we'll have some samples, but it wouldn't be a program like you see with all that free product over a year, but we're still working through what is used and how we'll do that as we get closer to the launch. Nadia, anything there?

Nadia Dac -- Chief Commercial Officer

The only thing I'll add is also the other piece that we look at is to make sure that patients aren't overburdened with out of pocket costs and of course, we're looking at programs to make sure that we help them with those out of pocket costs. That's separate from samples altogether and something that you're seeing in the market as well.

Alex Puthumana -- Stifel -- Analyst

All right, that's helpful. And then quickly on 1910, can you talk a little bit about -- sorry, on the, what was that other trial? On the pay cap study. How do you expect that to be going?

Robert Azelby -- Chief Executive Officer

Yes, sure. So, it is ALD1910, so you're correct. We've executed the preclinical work here. We're just dotting the i's and crossing some t's, and we expect to be first in human here in the second half of 2019. We're very, very optimistic. The preclinical data and the animal data looks really, really exciting. However, we now have to put it in humans and see the outcome. But keep in mind, we view this as a big commercial opportunity and we're really excited by the eptinezumab and we get about 60% of patients to a 50% response, but that means 40% of patients still need new therapies. And so, the marketplace for ALD1910, if we're successful, is quite large.

Alex Puthumana -- Stifel -- Analyst

Great. Thanks.

Operator

Thank you. And our next question comes from Charles Duncan from Cantor Fitzgerald. Your line is now open.

Charles C Duncan -- Cantor Fitzgerald -- Managing Director

Hi, Bob and team. Congrats on the progress in the quarter and thanks for the granularity on the account characterization. That's helpful. I was wondering if you could just provide a little bit more color? I think you mentioned in your prepared remarks that you kind of projected possibility of epti garnering call it 20% to 30% of the CGRP prevention market. And 20% in a market of call it four products is not as impressive as 30%, although both would be nice to have. And I guess I'm wondering what are the key swing factors that you see in getting 20% to 30%? Do you feel like you need that treat and prevent label to get to the 30% or would that be upside to that estimate?

Robert Azelby -- Chief Executive Officer

So, first of all, Charles, let me just clarify. When we say 20% to 30% that's the market research that we're getting back. We haven't expounded on what share we think we're going to get. We're working through that as we speak. So, that's from the market research. To your second question on would the acute study be an uplift to that 20% to 30% share? It would be, right. So, it's not included in that 20% to 30% share. And then lastly, I'm just going to go to the point that Nadia made today that 2,000 accounts represent 80% of the anti-CGRP prescription. If we just go down because we've done account profiling on the top 500, right, 80% of them have infusion capabilities in-house, 2/3 are private offices, they are big Botox users. 80% of them write Botox.

What we also see is that the Botox sales are not declining and when we ask those physicians why they say, hey, we like the quarterly treatment. We like to have the procedure in our hands. We like the fact that it's procedure-oriented and it adds economic value to our practice. So, it's been very sticky on the chronic side. Eptinezumab, when it launches, we believe it's going to be very attractive to those particular sites for all the same reasons, especially in the episodic migraine space where they're actually writing prescriptions going out through CVS versus having it in their hand in the practice. So, we're very, very optimistic about the uptake of epti, not only in those 500 accounts but going out of the 2,000 accounts that represent 80% of the business. And so more to come as we start getting into what we believe the share uptake will get from an organization versus what we tell you what the market research says.

Charles C Duncan -- Cantor Fitzgerald -- Managing Director

Okay. That's helpful. I appreciate the added color. With regard to the sales experience that you're getting in terms of the resumes you're evaluating, it would seem to me that there is a major player that has recently had an acquisition bid. They sell this drug called Botox and I'm just kind of wondering if you see there being a real experience in neurology and specifically with headache specialists that are coming across your desk in terms of the resumes?

Robert Azelby -- Chief Executive Officer

So, Charles, I'll defer that to Nadia. We won't comment on the particular company that you are speaking to, but Nadia, if you can share some thoughts on the type of resumes. But more importantly, the description of the candidate that we think best suits our needs?

Nadia Dac -- Chief Commercial Officer

Yes, happy to. Thanks for the question. We're being very selective with the type of sales leaders and representatives we're bringing on. Buy and bill experience is critical for this group along with neurology and/or experience in specialty focus diseases, in addition to track records of success that really has to be in place. Our national account directors also have deep experience and relationships with key payers. So overall, I'm extremely encouraged and proud of the level of talent we've been able to attract and continue to attract to Alder. So, I wouldn't say it's from one competitor only, it really needs to be a talent that meets that kind of formula.

Charles C Duncan -- Cantor Fitzgerald -- Managing Director

Okay. That makes sense. The last question is, I know the US strategy is your focus, but just going back to an earlier question. If you consider the kind of information and how you've characterized the strategy here in the States, how does it compare to the ex-US markets? Are the account dynamics similar, infusion suites, etcetera?

Robert Azelby -- Chief Executive Officer

So, Charles, you know what Erin is our Chief Operating Officer and leading all things operationally including our discussions ex-US. So, Erin why don't you take that?

Erin Lavelle -- Chief Operating Officer

Sure. I think we definitely see significant disease prevalence across the globe. In terms of account dynamics, each country really has a different dynamic. A lot of single-payer systems, a lot of different budget impacts across those countries. So, there is no simple answer when it comes to account dynamics. What I would say is that the epti profile is still very compelling to doctors across the globe. So, when we see the depth of response you see the 75% and 100% responder rates as well as the fast onset of prevention, all of those really carry a lot of weight in every market really.

Charles C Duncan -- Cantor Fitzgerald -- Managing Director

Does that suggest that when a partnership is signed, it could involve multiple players or multiple different partnerships depending on the geography?

Robert Azelby -- Chief Executive Officer

Yes. Charles, well, we've said in the past, we're looking for those that are a good strategic partner from a reputation perspective, with good relationships, and they have the ability to take epti globally. That would be great. So, if you could find one partner and all the other pieces of the deal played out that would be preferred to having two partners. But we're not opposed to having two. It all depends on how all those pieces lineup.

Charles C Duncan -- Cantor Fitzgerald -- Managing Director

Thanks for taking my questions. I look forward to some news following in the near-term.

Robert Azelby -- Chief Executive Officer

Thank you, Charles.

Operator

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

Jim Birchenough -- Wells Fargo -- Managing Director

Hi, guys. Congrats on all the progress. A few questions. Just first on the payer side, could you maybe describe the formulary decision or the positioning within the formularies you'll be seeking? Do you think you'll have to displace an existing CGRP, displace Botox, or do you think there'll be a distinct position for an IV CGRP under the medical benefit?

Robert Azelby -- Chief Executive Officer

So, Jim in the conversation we've had today with payers, as Nadia said, we have an account team that's just about to go out and hit the payers on an account-specific level. We will give more details on it. But we don't see us being the second line to the currency GRPs at all. What we've been told by the payers is they like the depth of response, the speed of response. They like the compliance element. They love the fact that they only pay for the product when it's actually infused into the patient. And based on the fact that it's an IV and different mode of administration makes it very, very attractive. And they like to make different modes of administration available to the patient. So, we don't anticipate us having to displace or being up in front. We think we're going to fit right in with the current landscape with more to go.

Jim Birchenough -- Wells Fargo -- Managing Director

And would you expect on day one, if an account wants to purchase eptinezumab, they'll be able to purchase it with the comfort that it will be reimbursed? I'm just trying to get a sense of whether there is some precedent on how quickly reimbursement will be in place and what you do to limit the account's exposure to buying it and not having that certainty?

Robert Azelby -- Chief Executive Officer

Sure, Jim. Yes, basically we will launch with a miscellaneous J-code and we'll put all the programs similar that you would see in a medical benefit programs such as dating for the clinicians, product replacement for the clinicians if they're told that it's going to get reimbursement, it doesn't. We're going to have a help services hotline, help them walk through it. Miscellaneous codes used to be a real challenge back in the early part of 2000. So, the payers have gotten much better. It's not like having a standard J-code which flows through the system, because it has to be pulled out. But overall, we don't anticipate a huge delay and we expect to do nice wraparound services that you would see in any medical benefit launch products.

Jim Birchenough -- Wells Fargo -- Managing Director

And then just one final question, maybe just on capacity. If you think about the 500 centers or accounts that are trading 50% of the CGRP patients right now, do you have a sense of how many beds that is or what patient capacity there is? And I'm just wondering, this could be a big new product in their hands. Are you seeing any efforts right now to start expanding capacity?

Robert Azelby -- Chief Executive Officer

So, what we don't have yet, we're still working through the account profiling to go account by account to understand how many IV chairs they actually have. So, more to come on that. But anecdotally there is not a meeting we go to, whether there is a private office, saying, hey we are going to add chairs and we're going to build new IV capabilities and then in the academic centers, they talk about bringing in nurse practitioners and extenders to help manage the increased demand. So far, it's all been very, very encouraging. Nadia?

Nadia Dac -- Chief Commercial Officer

I just wanted to add a couple of things. So, the thing I think about is it's a 30-minute quarterly IV. So, it's simple. It's not a bed or in the infusion center like you would think about for chemotherapy. So, when we do engage with physicians in these centers, they're not looking at this as something that would be difficult, particularly those that already have infusion capabilities. We're actually impressed with the numbers of physicians that are also inquiring whether they should be increasing their capacity and starting to infuse in their centers.

Jim Birchenough -- Wells Fargo -- Managing Director

Great. Thanks for taking the questions.

Operator

Thank you. And our next question comes from Evan Seigerman from Credit Suisse. Your line is now open.

Evan Seigerman -- Credit Suisse -- Analyst

Hi, all. Thanks for taking my questions and congrats on the progress. One quick question on the ongoing lawsuit between Amgen and Novartis regarding the manufacturing of epti. Do you foresee this as a potential risk to commercial supply? Then I have a follow-up question.

Robert Azelby -- Chief Executive Officer

Sure. So, we don't see that as a risk. As you know, we signed this agreement in December of 2018 and went live in January of '19. That was after Amgen notified Novartis of the potential breach in their contractual terms. Sandoz does not have a clause for termination of convenience and more importantly, we've had a long-standing relationship with Sandoz. Our relationship, every day we work with them. They're making a commercial product for us right now. We're partnering in our engagement with the FDA and so I don't lose an ounce of sleep on that particular item because our engagement has been so good with them and we understand the issues that are going on.

Evan Seigerman -- Credit Suisse -- Analyst

And then when you're thinking about the commercialization of epti, do you envision that as a buy and bill situation for physicians or will the product be procured from say a specialty pharmacy and shipped to the physician's office where they infuse it? I'm trying to understand some of the commercial dynamics and some of those nuances?

Robert Azelby -- Chief Executive Officer

Sure. I think the way I would use an analog would be the way Botox is used today, right. There is a large percentage that buy and bills for the products. So, you go, acquire that product through specialty distribution, but then some clinicians who don't want to take the risk for buy and bill, but they do like the procedure. So that would be dropped off through specialty pharmacy and so we anticipate that we'll be using both specialty distribution and specialty pharmacy at the time of launch.

Evan Seigerman -- Credit Suisse -- Analyst

Okay. Great. Thanks for taking the questions. I appreciate it.

Operator

Thank you. And our next question comes from Marc Goodman from SVB Leerink. Your line is now open.

Rudy Li -- SVB Leerink -- Analyst

Hi. Thanks for taking the question. This is Rudy on the call for Marc. So, two quick questions for the acute study. I know you're still discussing the trial with the FDA. Just wondering what will be the enrollment criteria to make sure that you're enrolling the right patients who are the candidates for prevention therapy? And what kind of efficacy data should we expect for the acute treatment, especially for the onset of treatment effects as every infusion is here? Thanks.

Robert Azelby -- Chief Executive Officer

So basically, for an acute study, the way we would recommend people doing, Paul jump in whenever you deem appropriate. A good analog would be the way Allergan and Biohaven have done their acute studies in terms of the patient populations. Now again, we still have to go and confirm this with the FDA. But if you were asking us today that would be more in the episodic round, maybe bleeding a little bit into the chronic round of people suffering between 4 and 12, let's say, migraines per month. And so that's what we'd be looking at. And then from an efficacy data perspective, the way the current oral CGRPs have gone after it is the standard FDA endpoint is relief of two-hour pain and two-hour most bothersome symptom. So, we're engaging with the FDA on would that be the hurdles that we would have to jump over as well, knowing that we not only want to treat, but we want to prevent for the next 90 days? Paul, anything to add?

Dr. Paul Streck -- Chief Medical Officer

No, Bob. I think you highlighted it very well. The only thing I would say is we want to ensure that we put forth a trial that is appropriate from a regulatory perspective to ensure that as we move forward with potential label update, with the new indication that it would check all the boxes that the regulators require related to a slightly expanded population from what they've seen in the acute space.

Rudy Li -- SVB Leerink -- Analyst

Great. Thanks. That's very helpful.

Operator

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

Alexander Lim -- Mizuho -- Managing Director

Hi. Good afternoon, guys. This is Alex on for Difei. I have a question on potential competition from oral CGRPs and specifically in the prevention setting. Do you think oral CGRPs will eventually compete directly with subq and potentially eptinezumab?

Robert Azelby -- Chief Executive Officer

Yes. So, we get asked that question a lot, all the time. I think the verdict is still out, right. So when we sit here and say we'd like to see the 50%, 75% and 100% responder rates, what's the rapidity or the speed of which that onset actually occurs in terms of prevention? Obviously, these folks are going to have to take a pill every day or maybe two times a day and so we'd like to see the persistence and compliance. And then a little bit on the safety side over a longer-term period rather than doing acutely, but doing it chronically. What does the adverse event profile look like? It is receptor-based. There is some noise that receptors and constipation. So overall, I think the verdict is still out and so we're very encouraged by epti's clinical profile in terms of the speed and the depth of response and we think we've set a very, very high bar.

Alexander Lim -- Mizuho -- Managing Director

Great. Thank you.

Operator

Thank you. And our next question comes from Matthew Luchini from BMO. Your line is now open.

Na Sun -- BMO Capital Markets -- Analyst

Hi, this is Na Sun on for Matthew. I have a question based on what we're hearing most payers make patients choose between Botox or an anti-CGRP. And with physicians being more familiar and comfortable with the safety profile of Botox, do you anticipate anti-CGRPs to continue to mostly treat patients who are refractory to Botox? And if so, what are some strategies to overcome that hurdle? Thanks.

Robert Azelby -- Chief Executive Officer

Yes. So, two comments there. I think the first comment, you got to realize is, Botox is only indicated in chronic migraine, right. So, they are on the far end of the spectrum, where the anti-CGRPs including eptinezumab, we expect to go from an episodic migraine all the way through chronic migraine. So, Botox is a smaller element. We estimate Botox having about 250,000 patients on the product. We already know that the anti-CGRPs and that's after eight years or nine years now, the anti-CGRPs are approaching 400,000. So, we don't think we're going to be a niche there. As it relates to eptinezumab competing against Botox, we're very encouraged by our profile in terms of the depth of response and the speed of response, especially against Botox in the chronic migraine space. So, we think we're going to be quite well there.

And then the last point I would say to you and I think it was the first point you were making was they're making them choose. The reason they're making them choose is doctors because there is free subq CGRPs available. With Botox, many doctors were adding the anti-CGRPs on top of the Botox because it was free. But now payers when they're saying the free product went away, the payers were saying, hey is no data in combination, you need to choose. So, I think there are slightly different topics that is going on now as it relates to why payers are doing that. It's more of a cost perspective. Nadia?

Nadia Dac -- Chief Commercial Officer

And just to add a little bit about that. Of course, the physician choice is critical in this. They are key decision-maker, but the patient's choice is equally important, and the patient will be a part of that decision as well. What we hear very often from our patient market research is less frequent administration is something that's very appealing to them. So, if they are on subq plus Botox, and they're taking that monthly or if the orals are added in simple treatment regimens are something that could be very appealing to the patients.

Na Sun -- BMO Capital Markets -- Analyst

Thank you.

Operator

Thank you. And our next question comes from Jeff Hung from Morgan Stanley. Your line is now open.

Jeff Hung -- Morgan Stanley -- Analyst

Thanks for taking the questions. Can you remind us of any direct to patient initiatives you're considering and how they might better educate patients on eptinezumab versus the other CGRPs?

Robert Azelby -- Chief Executive Officer

Nadia, do you want to take that, what we're thinking about from a direct patient perspective?

Nadia Dac -- Chief Commercial Officer

Yeah, we haven't necessarily talked about this previously, but of course, we're in the process of analyzing and not only the HCP market, but as well as the patient market to understand what levers to press and what's going to be most influential, let's say, in terms of empowering the patient. But what we do know is that a seamless onboarding is critical for the patients when they start on epti. So, we are evaluating what's the best service models to provide to those patients to make it simple, both on the provider as well as the patients. And we just finished extensive patient journey work to really understand the time of treatment decision, their experience on current treatments, and where are the places that we can communicate with those patients. So we're not ready to say whether we're going to do mass-market promotion, but you could assume that at launch we would have a focused effort similar to our healthcare provider efforts to make sure that we're targeting the right patients, those that would prefer less frequent treatment options, that want to treatment in their physician's hands, may not want to self-inject or actually are quite tired of having to do that at home, and want to be involved in their care with the physician as well.

Robert Azelby -- Chief Executive Officer

And just to add, in the market research that's been very, very consistent is the biggest driver and the biggest differentiator of eptinezumab is the speed and depth of response. And when we share that clinical profile with patients, they get excited by the fact that they may get prevention much earlier and get really, really deep response rates. And so, I don't want to leave that piece off. The messaging will still be based around the speed and depth of response.

Nadia Dac -- Chief Commercial Officer

Absolutely.

Jeff Hung -- Morgan Stanley -- Analyst

Okay. Great. And then can you remind us what's needed to build out health services and any update on the progress toward that effort?

Nadia Dac -- Chief Commercial Officer

So, we have our team as of this week in fact. The leadership team is on board and working on all of those aspects as well. So, we'll have a partnership in place and to make certain that we have an approach to make the onboarding simple, but ongoing infusions as well. So, any kind of barriers that may be there that we can be addressing appropriately along the treatment journey.

Robert Azelby -- Chief Executive Officer

And Jeff, the team we have is we're tracking, we're executing very well. We'll be ready to go with all those services come the first quarter of 2020.

Jeff Hung -- Morgan Stanley -- Analyst

Okay. Great. And maybe one last one. Any advantages or challenges you faced in building out the sales force given prospective candidates familiarity with CGRPs? Like for those who have had experience with one of the other CGRPs any feedback you've heard from them that was surprising? Thanks.

Robert Azelby -- Chief Executive Officer

Nothing that surprising, but I would say, we're getting a lot of resumes and lot of knocks on the door, and we're very pleased with the sales leadership people we put in place, not only from a sales perspective but also from a payer perspective. And so, we think the same dynamic is going to take place when we start to hire out the salesforce.

Jeff Hung -- Morgan Stanley -- Analyst

Thank you.

Operator

Thank you. And our next question comes from Carter Gold from UBS. Your line is now open.

Andrew McQuilling -- UBS -- Analyst

Hi, guys. This is Andrew in for Carter. Thanks for taking our questions. I have a couple. If I can just quickly ask another on your market research, it's 20% to 30% CGRP share. Do you see this as more new patients, therefore expanding the broader class or stemming more from patient switch? And secondly, on your acute study -- Yeah. Go with that first.

Robert Azelby -- Chief Executive Officer

If we take the first one, right, 20% to 30% would be a combination. We do believe when we launch the product in the first quarter, there's going to be a bolus of patients that had not done well on the other anti-CGRPs and they're looking for the next opportunity. But that's not going to be our focus. Our focus is going to be on new to CGRP therapies, just because of the clinical profile that we provide, not only for the patients, we think will be differentiated. But the feedback we've garnered from the clinicians, especially the 2,000 that we're targeting, that they really like the epti clinical profile. So, we think we're going to get more than our fair share of new patient starts as well.

Andrew McQuilling -- UBS -- Analyst

Got it. Understood. And secondly, on your acute study. I guess I wanted to understand the expected pace of enrollment for the study. Specifically, do you see challenges in keeping patients from treating their migraine at the onset with triptans, NSAIDs or the like instead of holding out so they could be treated at the center? I guess I just wanted to understand the dynamics there, particularly given the acute nature of the migraine.

Robert Azelby -- Chief Executive Officer

So, I'll let Paul go in the detail, but I will let you know, that's a great question because we have to get someone with the migraine from their home into the account to get the infusion. Obviously, we did all that work through the feasibility work we did before we decided to move forward with the trial. But Paul, any other things to add?

Dr. Paul Streck -- Chief Medical Officer

Yes, certainly. Bob, as you mentioned with the feasibility trial, we looked at the logistics of when does the patient begin to understand that they're developing a migraine? How to appropriately move them into the clinic so we can infuse the CGRP and follow them over the course of the appropriate period to ensure that they've been relieved of migraine pain as well as most bothersome symptoms. So the short answer is, yes, we've evaluated the appropriate way to identify the migraine at its onset, move them, identify the centers that can get them there, appropriately evaluate them, and ensure that they are able to be returned to the home. So, all the logistics of that working through. So, we feel very good about that as we plan to get it off the ground by the end of the year.

Andrew McQuilling -- UBS -- Analyst

Got it. And one more if I could. I wanted to just get your thoughts on how you're viewing BD at this juncture, specifically is their appetite to expand further into migraine or diversify into other neurological areas?

Robert Azelby -- Chief Executive Officer

Can you repeat the question, I missed the first part of it? You broke up on me.

Andrew McQuilling -- UBS -- Analyst

I guess I was just trying to understand how you're viewing BD at this moment, at this juncture? Is there any appetite to expand further into migraine or diversify into other neuro areas?

Robert Azelby -- Chief Executive Officer

First of all, from a CGRP perspective, we think there may be many more indications to pursue and so we're working through them. The acute was the one that came to the top when we did our lifecycle management discussions last fall. When we put that on the top of the list, right? So, we're going to execute that, but they're still other opportunities to expand epti into other particular indications that may be associated with CGRP, not only in headache types of diseases but other diseases as well. We're also excited about pay cap and the different pathway that proposes and if there are other indications to pursue there. And then obviously, Erin, who leads our BD efforts, we're always open to potentially find a good partnership. We will have our commercial footprint established. So, if we could ever find another product to put in the bag, we will be open to that as well, if all those particular elements fit together.

Andrew McQuilling -- UBS -- Analyst

Okay. Great. Thanks, guys. I appreciate the color.

Operator

Thank you. And our last question comes from Danielle Brill from Piper Jaffray. Your line is now open.

Nirav Shelat -- Piper Jaffray -- Analyst

Hey, everyone. Thanks for taking my questions. I just have a couple. This is Nirav on for Danielle, by the way. You mentioned you will have miscellaneous J-codes. I was wondering if you could elaborate on the process of actually getting one and how long it will take?

Robert Azelby -- Chief Executive Officer

Sure. It's in flux right now, but we're going to stay with the old process because if the new process kicks in, we may get a permanent J-code quicker. But if we assume the old process, we'll file for J-code in the fourth quarter of 2019. And as long as we get approved by March 30 of 2020, so in the first quarter of 2020, we would get a permanent J-code, January 1, 2021. That's the process.

Nirav Shelat -- Piper Jaffray -- Analyst

Got it. Okay. Thanks. And the other question I had was the pay cap study. I was wondering and I'm not sure if someone's already asked this. I had to hop on a little late, but have you decided between sub1 or IV for the pay cap study?

Robert Azelby -- Chief Executive Officer

We have not. Both of those options are on the table for us. We want to see how this product operates in patients and so we still have time to make that decision. So, we haven't decided on that yet.

Nirav Shelat -- Piper Jaffray -- Analyst

Got it. Thank you so much for the color.

Operator

Thank you. And this does conclude today's question and answer session. Ladies and gentlemen, thank you for your participation in today's conference. This does conclude today's program. You may all disconnect. Everyone, have a great day.

Duration: 58 minutes

Call participants:

Michael Horowicz -- Stern, Investor Relations

Robert Azelby -- Chief Executive Officer

Dr. Paul Streck -- Chief Medical Officer

Nadia Dac -- Chief Commercial Officer

Carlos Campoy -- Chief Financial Officer

Erin Lavelle -- Chief Operating Officer

Brian Abrahams -- RBC Capital Markets -- Analyst

Yuko Oku -- JP Morgan -- Analyst

Alex Puthumana -- Stifel -- Analyst

Charles C Duncan -- Cantor Fitzgerald -- Managing Director

Jim Birchenough -- Wells Fargo -- Managing Director

Evan Seigerman -- Credit Suisse -- Analyst

Rudy Li -- SVB Leerink -- Analyst

Alexander Lim -- Mizuho -- Managing Director

Na Sun -- BMO Capital Markets -- Analyst

Jeff Hung -- Morgan Stanley -- Analyst

Andrew McQuilling -- UBS -- Analyst

Nirav Shelat -- Piper Jaffray -- Analyst

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