Aimmune Therapeutics, Inc. (AIMT) Q2 2019 Earnings Call Transcript

Aimmune Therapeutics, Inc. (AIMT)
Q2 2019 Earnings Call
Aug. 8, 2019, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good afternoon, ladies and gentlemen, and welcome to the Aimmune Therapeutics, Second 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 follow at that time. If anyone should require assistance during the conference, please press * then 0 on your touchtone telephone. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Eric Bjerkholt, AIMT Financial Officer.

Eric Bjerkholt -- Chief Financial Officer

Thank you, May, and good afternoon and thank you for joining us today to discuss Aimmune's second-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, Andrew Oxtoby, Chief Commercial Officer, and Dr. Dan Adelman, Chief Medical 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, Aimmune's expectations regarding the potential commercial launch of AR101 including the review period of the BLA and MAA for AR101, Aimmune's expectations on the announcement of results for its Phase 2 clinical trial AR201, Aimmune's expectations regarding the timing and outcome of the FDA's APAC meeting, our expectations on the planned timing for the announcement of data from its PALISADE trial of AR101, and Regeneron's clinical trial of AR101 in combination with dupilumab, Aimmune's expectations regarding its commercial supply of AR101, the expectations regarding the sufficiency of cash and ability to access an additional $130 million from the credit facility, and Aimmune's expectations regarding potential applications of the CODIT approach to treating life-threatening food allergies and the adequacy and quality of supply of AR101.

Risks and uncertainties that contribute to the uncertain nature of the forward-looking statements include the expectation that Aimmune will need additional funds to finance its operations, Aimmune's or any of its collaborative partners ability to initiate and/or complete clinical trials, the unpredictability of the regulatory process, the possibility that Aimmune's or any of its collaborative partners' clinical trials will not be successful, Aimmune's dependence on the success of AR101, the reliance on third parties for the manufacturing of our product candidates, possible regulatory developments in the United States and foreign countries, and Aimmune's ability to attract and retain senior management personnel. 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 the quarter ended June 30, 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 over the call to Jayson Dallas.

Jayson Dallas -- President and Chief Executive Officer

Thank you, Eric. Good afternoon, everyone, and thank you for joining us this afternoon. Today, we will provide a recap of our achievements in the second quarter and review our expected milestones for the remainder of the year.

Andrew will give an overview of our ongoing commercial preparations. Dan will provide a clinical and regulatory update. And Eric will then review our financial results for the second quarter, and we'll then open up the call for questions.

As we all know, food allergy is an extraordinarily large issue worldwide and has been increasing in incidence and prevalence over the last several decades. In the United States alone, 1.6 million children between the ages of four and 17 are affected by peanut allergy. And in a recent longitudinal study, it was shown that around a quarter of children studied were admitted to the emergency room each year due to their food allergies. These statistics paint an unfortunate picture of how peanut avoidance in the real world is very difficult and for most people, an ineffective way to manage peanut allergy.

Today, I'm pleased to point out that we are approximately five weeks from our scheduled FDA advisory committee meeting and potentially months away from having an FDA approval for AR101 for peanut allergy. Approval of AR101 would mark a significant day for the entire food allergy committee as it would be the first-ever FDA-approved treatment for any kind of food allergy. In addition to our rigorous to our rigorous preparation for the September advisory committee meeting, which we believe will be an excellent forum to discuss and consider our clinical efficacy and safety data, we look forward to under scouring the potential of AR101 to meaningfully impact the lives of millions of patients and families living w peanut allergy today.

We also continue to work with the FDA to facilitate the review of our biologics license application or BLA, and we're pleased that the agency has completed all clinical site and manufacturing inspections that have been scheduled to date.

In the meantime, our organization is focused on ensuring a successful, potential launch of AR101. We have made great strides in hiring the right people, both at our headquarter and in the field, to help us deliver on this charge. Our approach to preparedness includes a thorough and thoughtful understanding of the patient, physician, and payer communities through our ongoing research. as well as developing an optimal mix of tools and resources to assist the broadest appropriate patient population to start and to stay on therapy.

Andrew will provide more color about our commercial preparations in his remarks. But I will say that from my vantage point, I'm extremely confident in our ability to successfully commercialize AR101 in the United States upon its approval by the FDA.

Turning to other updates from the quarter. In June we shared positive results from our Phase 3 ARTEMIS trial at the European Academy of Allergy and Clinical Immunology Conference or EAACI, in an oral presentation. You'll recall that the trial demonstrated safety and efficacy results that were consistent with those seen in our successful Phase 3 PALISADE trial. Incidentally, the lead author of the ARTEMIS presentation, Dr. Montserrat Fernandez-Rivas, was named an EAACI 2019 award winner for her work on the ARTEMIS trial. At the EAACI meeting, we presented the important quality of life data that assessed the psychological burden of living with a peanut allergy.

We also presented data from an analysis of patients who received daily treatment with AR101 during the open-label extension of the Phase 3 PALISADE trial, which showed that these patients experienced clinically meaningful improvements in disease-specific quality of life, as well as continued immunomodulation through daily dosing with AR101 beyond the first year of therapy. In addition, at the May meeting of the International Society for Pharmacoeconomics and Outcomes Research, or ISPOR, which is a key payer forum, we present quality of life data that demonstrated the deep psychological and emotional impact the burden of peanut allergy has on teens. This impact is profound, and it is simply heartbreaking that four in ten teens diagnosed with peanut allergy believe that they have a great or very great chance of certainty of dying from accidental exposure, despite the fact that 100% of those observed in the report were actively avoiding peanut products.

The unmet need is great, and it is real, and it is urgent both in the United States in Europe, where up to 2% of children in many countries are affected by peanut allergy. To that end, we have submitted a marketing authorization application for AR101 to the European Medicines Agency, and we did that in June. The EMA has recently validated the filing and has begun its review. Based on standard EMA review timelines, we expect a 12-to15-month review and potential approval in the EU in the second half of 2020. Dan will give some more insight into the data that I just mentioned when we get to his remarks.

Lastly, we are in a strong financial position with approximately $250 million of cash and investments and potential access to an additional $130 million following approval of AR101 through our credit agreement with KKR. We expect these resources to be sufficient to fund commercialization of AR101 in both the US and Europe and to continue progress in our pipeline programs.

With that, I'll turn it over to Andrew for a commercial update.

Andrew Oxtoby -- Chief Commercial Officer

Thank you, Jason. I'll start by echoing Jason's comments and say how exciting it is to be within months of the first potential regulatory approval of a peanut allergy therapy. To that end, we've been diligently preparing for the potential commercialization of AR101 in the US. and we expect to be ready to launch in the fourth quarter of this year. When we think about commercial readiness, we focus on three critical areas. First, research into the patient, physician, and payer communities to help us support and communicate effectively with these audiences.

Second, the tools and resources necessary to assist patients, physicians and our own field force to help support the successful administration of AR101. And third, having the best people in place to drive our efforts to successfully introduce and grow the use of AR101 over time.

First, let's focus on the patient. We've conducted many, many hours of fundamental market research to understand how peanut allergy, one of the most common food allergies in the United States, affects the lives of patients and their caregivers. Parents speak of the paralyzing anxiety that results from not knowing when or where the next accidental exposure to peanut will occur. The greatest fear of these vigilant parents is something happening when they're not there to protect their children. This fear can result in significant disruption to a family's day to day activities and result in children being excluded from social activities and having to sit at separate lunch tables from their friends at school just so that they can eat lunch safely and without risk.

We recently conducted a quantitative survey among hundreds of caregivers of peanut allergy sufferers in the US. Of those surveyed, 75% said that they had a high interest in seeking a treatment that went beyond avoiding peanuts to protect their child. And when shown the clinical profile of AR101, two-thirds of the caregivers expressed an interest in the product if it were approved by the FDA. For these caregivers, avoidance simply doesn't cut it. We also know that patients with peanut allergy are easily identifiable. Of the estimated 1.6 million peanut-allergic patients between the ages of 4 and 17, 1.25 million are already diagnosed and see a physician an average of 5 times per year for their peanut allergy and over comorbid conditions.

Turning to the allergist community, we have amassed a deep knowledge of the approximately 5,000 practicing board-certified allergist in the US, which includes a good understanding of the allergists' clinics current level of readiness to administer AR101, as well as, his or her willingness to prescribe the therapy upon regulatory approval. From our research, we know that of the allergist who have indicated a willingness to prescribe AR101 when approved, approximately 1,300 of them, or 30% of the total, can be characterized as having a clinic set up that is either ready or is on its way to be ready to safely and effectively administer AR101 therapy.

Furthermore, an analysis of historical patient claims data shows us that approximately 70% of all patients ages 4 to 17 with a confirmed diagnosis of a peanut allergy are seen by one of these same 1,300 allergists. Therefore, a large percentage of diagnosed patients are seen by a relatively concentrated number of allergists. While over time, we will work with the broader population of 5,000 allergists across the country these data allow us to be very focused at launch by targeting the 1,300 allergists who already see 70% of the diagnosed peanut-allergic patients. We also now know at least 1,300 allergists cluster into approximately 800 individual allergy clinics, which allows us to have an even more focused effort. With respect to payers, we've had in-depth meetings with multiple payers since the beginning of the year who together cover 61% of the commercial lives in the US.

You may recall we set out to have discussions with payers that cover 80% of commercial lives by launch. So, we are well on track to meet and even exceed that goal. We've also conducted additional research with a number of payers of different sizes and configurations. Everything from small regional managed care plans to large PPMs. Collectively, the payers in our research cover 178 million covered lives. The key takeaway from both this research as well as from our strategic account directed discussions is that payers immediately recognize the unmet need in the market. The parents with children with 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 within the healthcare system.

Research shows that if you're living with peanut allergy the absence of approved treatment options means that 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 very expensive. An approved treatment that reduces the incidents and severity of allergic reactions could help to reduce costs through a reduction of the frequency of ER visits. We've also shared with payers our plans to partner with specialty pharmacies to help manage the AR101 experience for the patient, the caregiver, and the allergist. The feedback that we've received from payers has been positive.

This approach will allow patients to either pick up the product at the allergist clinic following their administered dose or to arrange for overnight, reliable delivery to their homes. In addition to the patient and physician insight about which I spoke earlier, we plan to provide patients and their caregivers with practical and customized solutions to support them, including flexible distribution, reimbursement support services, and comprehensive patient and caregiver adherence support.

For example, during the dose-escalation phase, the first dose of each escalation will be administered in the allergist's office to allow for close supervision. After which point, the patient will be sent home with the dose for the next day. The folio of doses for the following two weeks will arrive the next day at the patient's home from one of our specialty pharmacies. Once the patient reaches the fixed therapeutic dose stage, he or she will receive a three-month supply of doses from the specialty pharmacy. Finally, to support the successful commercial launch of AR101 in the US, we have a regional leadership team in place that is busy interviewing candidates to build our field force of 80 individuals prior to approval. The interest in joining Aimmune is very strong. We've had over 5,000 applications for 80 account manager roles. [Inaudible] education and support of allergists to ensure that they understand both the clinical profile of the medicine, as well as, the logistics that will deliver a positive initial experience with AR101 for both the patient and the physician.

We are confident that the current size of the field force is sufficient for launch and overtime as we work to grow the market, we will maintain the flexibility to expand the field force as needed.

Finally, let me turn to our commercializing progress in Europe. Our filing of an MAA with the EMEA last month was an important step toward our efforts to commercialize AR101 in Europe. We continue to deepen our knowledge of the individual markets, particularly Germany, France and the UK, and to staff our organization with professionals in medical affairs, marketing, and market access. For example, we recently hired an experienced general manager and a medical director for the German, Austrian, And Swiss markets, and will be opening an office for our German-team in the Munich area in the coming weeks.

As we look to AR101 potentially becoming 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, a strong desire from patients, caregivers and physicians for an approved peanut allergy therapy, the recognition by payers of the value and need of such an important therapy and our investments in the resources needed to help support the adoption of and compliance to AR101 therapy. With that, I'll turn the call over to Dan for a clinic and regulatory update.

Daniel Adelman -- Chief Medical Officer

Thanks, Andrew. Starting with our potential FDA approval of AR101, we continue to work closely with the FDA. We are preparing for the advisory committee meeting on September 13th and look forward to the opportunity to discuss the strength of our clinical data in this open forum. As part of its review, the FDA has scheduled and completed six clinical site inspections to date, and it has also completed an inspection at CoreRX, our contract manufacturing partner. Following these inspections, we continue to anticipate approval by late-January 2020.

We've continued to expand our medical affairs team with key new hires in medical education and medical information, and the department is now well staffed to help provide information about oral immunotherapy including a medical science liaison team deployed in the field that is already interfacing with many allergists across the United States through both onsite visits and group meeting. With respect to Europe as both Jason and Andrew discussed we submitted an MAA for AR101 to the European Medicine Agencies in June. The MAA submission includes extensive data from the only Phase 3 clinical trial program to meet the primary endpoints in children and teens with peanut allergy. This program included over 1,200 patients enrolled in the PALISADE, RAMSES, and ARTEMIS trials.

The pivotal European Phase 3 ARTEMIS study, which represents a key component of the MAA submission reinforced the consistent clinical profile of AR101 after six months of dose escalation and a three-month therapeutic dosing phase. The ARTEMIS trial enrolled 175 peanut-allergic children and adolescents ages four to 17 from 18 sites in France, Germany, Ireland, Italy, Spain, Sweden, and the United Kingdom. Assuming a typical EU review timeline, we expect a 12 to 15- month review. As Jayson mentioned, we shared results from the positive Phase 3 ARTEMIS trial at the EAACI congress in an oral abstract presentation back in June. The results of the trial largely replicated the results observed in the PALISADE trial and demonstrated that more than half of patients tolerated 1,000 milligrams of peanut protein after nine months of treatment.

At EAACI, we presented data from an analysis of patients who received daily treatment with AR101 during the open-label extension of the Phase 3 PALISADE trial. The data in this trial called ARCO 4, showed that patients experienced clinically meaningful improvements in disease-specific quality of life as well as continued immunomodulation through daily dosing beyond one year with nearly half tolerating a single dose of 2,000 milligrams of peanut protein or over 4 grams cumulatively equal to approximately 16 times the observed 125 milligram medium dose of accidental exposures as reported in the Mirabel study.

A full two-thirds of patients who tolerated less than 1,000 milligrams at the end of the PALISADE trial, increased the amount of peanut they could tolerate after an additional six months of daily dosing. In addition, we presented important quality of life data at EAACI and at the ISPOR 2019 annual meeting back in May. At EAACI we shared results from two studies that assessed the psycho-social burden of living with peanut allergy.

Results from appeal 2, the first European multi-country qualitative evaluation of the impact of living with peanut allergy found that living in fear of a potentially fatal reaction to peanuts has a significant negative impact on the quality of life of individuals or peanut allergy as well as their families. At ISPOR, we shared results from a study that measured the burden of peanut allergy. The study of US adolescents with peanut allergy found that more than half of study participants reported a visit to the emergency room or urgent care and one-third required hospitalization as a result of peanut exposure in the prior 12 months. And this was despite the fact that 100% of those surveyed reported actively avoiding peanut products.

In addition, recruitment for our Phase 3 P trial of AR101 for the treatment of peanut allergy in children ages 1 to less than 4 years old is ongoing. And finally, the Phase 2 trial of AR101 with adjunctive [inaudible] for the treatment of patients with peanut allergy, which is sponsored by Regeneron, is also ongoing. This trial hypothesized that administration of AR101 with dupilumab, an interleukin 413 antagonist could accelerate the desensitization process and potentially lead to remission. Of course, we learn more when the data are readout. Regarding our [inaudible] we began screening patients for our Phase 2 clinical trial of AR201 in hen's egg allergy in July. The Phase 2 trial is a double-blind, placebo-controlled trial in patients ages 4 to 26, diagnosed with an allergy to hen's egg. The trial is expected to enroll approximately 84 patients at 15 clinical trial sites in the United States. I'll now turn it back to Eric for an update on the financials.

Eric Bjerkholt -- Chief Financial Officer

Thanks, Dan. We ended the second quarter in a strong When did the second quarter in a strong financial position with 250 million in Cash equivalent and investments compared to $296 million on March 31, 2019. In January of this year, we announced that we have 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 which includes the approval of the AR101 BLA.

We expect that this loan agreement plus cash on hand will provide us with sufficient funds to commercialize AR101 in both the United States and Europe and progress our coded pipeline. for the quarter ended June 30, 2019, net loss was $62.9 million compared to a net loss of $52.6 million for a comparable period In 2018 on a per-share basis net loss for the quarter ended June 30 was $1.30 compared to a net loss per share of $0.91 for the Comparable.

Last year R&D expenses for the quarter and June 30 with $32 million compared to $35.3 million for the comparable. In 2018 the decrease was primarily due to lower AR101 clinical trial costs partially offset by higher regulatory costs related to the AR101, BLA, and MAA filings and higher manufacturing costs for AR101 and AR201. G and A expenses for the quarter end of June 30 were $31.2 million compared to $18.6 million for the comparable period last year the increase was primarily due to additional employee-related costs and external professional services as Aimmune continued to build its infrastructure to support the potential commercialization of AR101. with that, I'll turn the call back to Jayson.

Jayson Dallas -- President and Chief Executive Officer

Thank you, Eric. And so, to recap we are within months of a potential FDA approval for AR101 for peanut allergy which would mark the first therapy ever to receive regulatory approval to treat any kind of food allergy, a really exciting achievement for the entire food allergy community. We are laser-focused on ensuring a successful commercial launch of AR101 executing our commercial and medical affairs plans that will enable us to bring AR101 successfully to market shortly following its potential approval. We expect the standard review for our AR101 marketing authorization application in Europe our AR101 Phase 3 [inaudible] in trial and Regeneron's Phase 2 trial of AR101 with adjunctive dupilumab ongoing and add depth to our pipeline. The AR201 Egg allergy Phase 2 trial has begun, and we remain in a strong financial position. We are on the cusp of potentially introducing the first-ever treatment for peanut allergy to a patient population that has been desperate for an approved treatment option. A day that could transform millions of lives. We are well prepared and extremely confident in our ability to Successfully launch AR 101. As we conclude, I would like to reiterate our gratitude to the many people who have been supportive of us along the way, including our investigators and their staff, our patients and their families, the food allergy advocacy community, the US and European regulatory agencies and our dedicated employees who have enabled such tangible progress in such a short period of time. We will now open the call to talk your questions.

 

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With that, I'll turn the call back over to the operator for questions.

Questions and Answers:

Operator

Ladies and gentlemen if you have a question at this time please press the * and then the 1 key on your touch-tone telephone. If your question has been answered or you need to remove yourself from the queue please press the # key. Our 1st question comes from Charles Duncan of Cantor Fitzgerald. Your line is open.

Charles Duncan -- Cantor Fitzgerald -- Managing Director

Hi Jason and Dan. Thanks for taking my question, and congrats on the progress this year, and looking forward to some interesting progress in the near term. Had a quick question regarding the September 13th meeting. I'm wondering if you've received the briefing book yet and your perspective. What are you focusing on when you're conducting the mock panels? Or what do you anticipate will be the focus of the meeting?

Daniel Adelman -- Chief Medical Officer

So, Charles, this is Dan. We have not yet received FDA's briefing book We don't expect it for a little while. The focus of the -- both our mock panels as well as what we anticipate the focus of the advisory committee will be is evaluation of the efficacy and the safety of AR101 and the overview benefit-risk profile of the therapy. And we are diligently preparing for addressing any and all of those questions

Jayson Dallas -- President and Chief Executive Officer

And I think, Charles, maybe to add one thing is that What we expect FDA to be doing and what we have been doing ourselves is to look at the data in as many different ways as we can and cutting it by as many different ways that we can think of. So, things like age, gender, baseline peanut-specific IgE, skin prick test sizes, et cetera to make certain that every population or sub-population in our population has actually benefited from therapy. And what we have found so far is that is indeed truth and that's a really encouraging thing for us as we go into the advisory committee.

Charles Duncan -- Cantor Fitzgerald -- Managing Director

Okay. That's helpful and then possibly even taking a look at the older patients that were in the trials or is that just completely not in this particular BOI

Daniel Adelman -- Chief Medical Officer

so, as you're alluding the trial was conducted in patients ages 4 to 55 years old the primary analysis population is 4 two 17 and we will be presenting data in the adult patients also when we look at overall risk-benefit in that population we also see that it is positive

Jayson Dallas -- President and Chief Executive Officer

It is important to point out though that in that population we had a hierarchical analysis planned on the adult population was the first piece of that plan but did not hit statistical significance from an intention to treat efficacy perspective with a P-value of .07. So, that's kind of where we started as we went down our hierarchy. but of course, we will present everything that was in our phase 3 programs and that are included in the BLA to the advisory committee

Charles Duncan -- Cantor Fitzgerald -- Managing Director

OK, one last question regarding the regulatory process in terms of the quality of life data as well as continued immunomodulation post a year of continued treatment that Dan referred to, how much do you believe that data will play a role in the agency's review of approvability? And then subsequently for payer pharmaco-economic value calculus how important is that?

Jayson Dallas -- President and Chief Executive Officer

So, Charles, I'll take the first part and then I'll hand the second part over to Andrew. I think the agency is going to look at the totality Of the data that are provided to them. They are going to look at everything that has been submitted in our BLA and they will take all of that including quality of life into consideration in their ultimate decision. we are confident that we have good strong data to support a positive decision.

Andrew Oxtoby -- Chief Commercial Officer

Hey Charles, it's Andrew. On the payer front in conversations with players, they have indicated interest in understanding what the profile looks like of this product beyond year 1 as we gather more data moving forward. And also understanding more about the quality of life. Clearly for the members of different payer plans the quality of life benefit associated with this product is substantial and so further defining and being able to articulate that is something that they've expressed interest in understanding further.

Jayson Dallas -- President and Chief Executive Officer

I think one other comment that is relevant clinically as well as from a player perspective, Charles, is that we continue to be encouraged as we get more and more data. And we know this now from the 18-month data set and we look forward to seeing it continue when we Look at the 2-year data set which is coming up relatively soon and that is the fact that both the benefit and tolerability profile and safety profile of AR101 improves the longer patients remain on therapy. This is completely expected. It's what we observe with other immunotherapies and immunomodulators. As you get into the immunomodulation phase of therapy it is very encouraging for us to see that this remains true after 18 months of therapy with AR101.

Charles Duncan -- Cantor Fitzgerald -- Managing Director

Excellent. Thanks for the added information

Operator

Your next question comes from Chris Raymond of Piper Jaffray your line is open

Chris Raymond -- Piper Jaffray -- Managing Director

Hey, guys thanks for taking the questions you know I think I've heard you guys describe now a couple of times they sort of 80-20 rule, or in this case I guess 70-30 rule in terms of 70% of the kids are managed by this 1300 well it looks like 30% of the allergist base that you're targeting just kind of curious 1,000 doc population. I know you mentioned that day -- I think I heard you describe them as having the wherewithal and the desire to use AR101. but is there -- can you give any more detail or color as to how you measured that, Specifically I guess the ability to have these kids coming in with the kind of frequency especially in the up-dosing phase.

Jayson Dallas -- President and Chief Executive Officer

Yeah thanks for the question, Chris. First of all from a sort of methodology standpoint we conducted an analysis first of all a large scale qualitative analysis survey of hundreds of allergists to understand the profile of their practice and at the same time what their responses were in terms of their eagerness to prescribe a product like this and how their current practices have compared to that . Then we extrapolated that to be able to say well these are sort of the 3:00 or 4 key variables which then map that level of interest and level of readiness. And then we're able to extrapolate to the broader number of practices based on that period in terms of what does that practice set up look like well there is sort of a 4S model of framework that we are thinking about which is staffing, scheduling, space, and support.

And so, from a staffing standpoint, there needs to be the appropriate staffing setup the right mixture of the allergists, nurses, and office support to be able to administer the drug as they currently do with allergy shots. From a scheduling standpoint understanding during the week how they would incorporate this into their practice. So, would it be certain times during the day, or would it be for example weekend clinics where they would set themselves up to be able to put children on this product?

From a space standpoint, do they have an area or waiting room or common waiting area or specific individual waiting area they prefer where the child can be there for the prescribed observation. And then from a support standpoint what sort of things need to be in place to make sure that they are able to -- how to talk to the patients and their caregivers so that they understand they need to take the therapy as prescribed and to stay on the product through the up dosing phase. so, that sort of 4S model is the framework that we have been thinking through. And as we put together some of the solutions that are going to enable allergists both in the initial 1300 cohort but also beyond that help children be successful that's the sort of model that we have in mind.

Jayson Dallas -- President and Chief Executive Officer

What's also interesting Chris, is that these tend to be practices where they are already doing relatively high throughput subcutaneous immunotherapy for predominantly aeroallergens and if you think about that in the initial 6 month period if you're going for subcutaneous immunotherapy for aeroallergens you're having weekly visits for injections. With AR101 it's biweekly. So, our up-dosing period requires half as many visits in that 6-month period as are required for or compared to subcutaneous immunotherapy

Chris Raymond -- Piper Jaffray -- Managing Director

That's great color thank you and I guess maybe as a follow-up, so I guess as I hear you guys describe this it seems to me like there's a very receptive market for AR101. but that would -- if you were not paying attention to what you guys were describing and just reading some of the editorials, for example, there was a Lanset piece recently and even the New England Journal letter to the editor there's seems to be at least some degree of resistance to OIT and it sounds like AR101 sort of gets lumped into that period so, I guess maybe I don't wanna put you on the spot but maybe is this just a loud minority who have seem to have somehow got a microphone with respect to this or what's your perspective fear as to why these -- we're seeing some of these higher-profile yet limited in number negative opinions on the whole concept

Daniel Adelman -- Chief Medical Officer

This is Dan. I don't know what is the motivating factor. I can tell you that some of the things that they are pointing out are not unique at all to oral immunotherapy for food. These are the types of allergic reactions that one typically sees with any immunotherapy product. Unlike any other drug, this is a drug where you are giving People the very thing that they are allergic to in order to desensitize them. you are going to provoke some allergic reactions. And those allergic reactions tend to happen at predictable times after the dosing. They are generally, 99% mild or moderate in severity. And they are readily manageable. And this is in contrast to the -- to the unpredictable nature and the unpredictable severity to accidental exposures. and so, and so I don't really know what the motivating factors are, but I think allergists who are by and large very comfortable with administering any type of immunotherapy are going to have no problem managing AR101 desensitization treatments.

Chris Raymond -- Piper Jaffray -- Managing Director

Excellent. Thank you.

Operator

The next question comes from Liana Moussatos of Wedbush Securities. Your line is open

Liana Moussatos -- Wedbush Securities -- analyst

thank you for taking my question period can you tell us the differences between treating patients for egg allergy and peanut. we've heard a lot about peanut and egg is new to us. can you talk about some differences? And has Regeneron given you any idea about data timing for the combination of AR101 and dupilumab trial?

Daniel Adelman -- Chief Medical Officer

I'll answer the second one first. Regeneron is pretty tight-lipped about giving any type of guidance. they are enrolling their study. It is an 18-month study, and it will read out whenever they are done. I can't tell you what the date is gonna be. With regard to egg allergy in contrast peanut allergy, Egg allergy is also a major food allergy certainly here in the United States and Europe. It is actually the number one food allergy in Asia. Unlike peanut allergy where if you are 5 or 6 years old and you are peanut-allergic, you will be peanut allergic for life. So, about 80% of peanut-allergic children will have it for life. In contrast with egg allergy, if you're allergic to eggs at one or two years old, by the time you're 15, 16, 17 years old, you have about an 80% chance of spontaneously resolving.

There are really two forms of egg allergy There's an egg allergy to the ovalbumin the raw egg white, and there's also allergy to baked egg products. And patients who are both raw egg and baked egg Allergic tend to be the mower severe and refractory patients. We will be enrolling both groups in our Phase 2 study and we will be looking at the ability of AR201 to confirm meaningful desensitization in either population.

Jayson Dallas -- President and Chief Executive Officer

And the clinical trial design, Liana, for our Phase 2 program is almost identical to the Phase 2 program for AR101. the only subtle difference as Dan alluded to is that there are 2 different kinds of egg allergy and so we do 2 different kinds of food challenge test at entry and exit of the study

Liana Moussatos -- Wedbush Securities -- analyst

I also have a question for Eric because you kind of went out when you were talking about cash runway. How long does your cash last?

Eric Bjerkholt -- Chief Financial Officer

Well So what we said is that between cash on hand and access to the remainder of the KKR [inaudible] [00:55:48] Assuming we are approximately correct with our internal forecast the commercial launch of AR101 in both the US and Europe and the funding of our pipeline as we currently conceive of it should be covered.

Liana Moussatos -- Wedbush Securities -- analyst

Is that, like, two years?

Eric Bjerkholt -- Chief Financial Officer

That's like, fully covered.

Liana Moussatos -- Wedbush Securities -- analyst

Thank you

Operator

The next question comes from [inaudible] of Roth Capital Partner. Your line is open.

Analyst -- Roth Capital Partner

Hi guys. This is [inaudible]. Just add a couple of questions here. So, you mentioned that 6 clinical site inspections had been done in addition to an inspection of CoreRX. So, I wanted to know if you anticipate any additional inspections

Jayson Dallas -- President and Chief Executive Officer

it's hard to know. FDA can, of course, do additional inspections if they would like to. These are all the inspections that they have, thus far, informed us about and there are no findings in those inspections that we think will impact either the likelihood or the timing of approval

Analyst -- Roth Capital Partner

And just a follow up to that. in terms of commercial or commercial capabilities or production there just kind of wanted to know do you anticipate running into any issues? Or what are your production capabilities? And how quickly can these products get to patients?

Andrew Oxtoby -- Chief Commercial Officer

We are manufacturing our commercial lots as we speak. In fact, we've already started releasing some of the lots and will have product available if and when we get approved by the FDA. And as we said will be launch-ready in the 4th quarter and that, of course, includes the availability of product.

Jayson Dallas -- President and Chief Executive Officer

Yeah maybe to just be a little bit more specific. We think it will take us two to three weeks to get product to patients Once we've got approval.

Analyst -- Roth Capital Partner

Just a last one here in your discussion with payers Are you running into issues where they still feel married too what ICER published or are they not really referencing that in their conversations.

Andrew Oxtoby -- Chief Commercial Officer

Well, let me start by saying no they're really not referencing it at all in conversations and just to add a little perspective to the ICER report. first of all, we were deemed cost affective at both 150 K per quality level and 100 K per quality threshold as an output of the report. to sort of put that into some sort of context. We looked at a recent Bernstein analysis that said that 20 out of 76 products that they had looked at across 24 different therapy areas. Only 24 of those 76 were deemed cost-effective by ICER.

So, getting to the point where the ICER considers your drug to be cost-effective at those thresholds is a very uncommon and unusual thing. to be deemed cost-effective at the output of the report was encouraging. Now that said, payers are not focusing on that in any of our conversations. and as I look at the other aspects of that report what I think was interesting was that ICER was talking about that immunotherapy needed some -- to be specific, talked about promising or inconclusive evidence ratings. And so, we said from the very beginning, as did most people involved in the food allergy sphere, that the report itself was premature.

And they seemed to have reinforced that by some of their conclusions by saying that it was still something where they need to see some additional evidence period and so we also provided, I should add, some information in confidence that was relating to some of the longer-term effects that Jayson and Dan alluded to earlier. Those were data and information that they chose not to include in their model and we're actually excluded. had they included that then it would have been interesting to see if they'd still reached some of the same conclusions. So, summary statement is, we're pleased that we're considered to be cost-effective because that's something that rarely happens when products are being evaluated by ICER. And at the same time, it's not something that payers have been bringing up in conversations with us.

Analyst -- Roth Capital Partner

Thanks for the clarity, guy. Appreciate it.

Operator

Your next question comes from Ken McKay of RBC Capital Markets. Your line is open.

Ken McKay -- RBC Regional Markets-- Analyst

Hi, this is Justin on for Ken. Thanks for taking my question. as you generate more views on the maintenance dosing data out beyond one year. I was wondering how much of a focal point you expect that to be at the advisory committee meeting in September. In addition, how much of those data, you've been detailing with payers and what some of the feedback has been there. Thank you.

Daniel Adelman -- Chief Medical Officer

Sure, today the rules of the game with the ad com is that we can only really discuss data that has been discussed in the BLA. Cortana and so we do have extended safety data that have been submitted to the BLA and we will include those in conversations with the advisory committee. we -- we're just not allowed to present data that hasn't already been reviewed by FDA.

Jayson Dallas -- President and Chief Executive Officer

In terms of the conversations with payers as we mentioned earlier the profiles of product seems to improve over time and the data looks more and more interesting with subsequent readouts. the players are interested in seeing that but also because of the fact that they're interested in understanding what our solutions are to help patients stay on the therapy period and so we've been talking to them about what it means to go through the up-dosing period. then also the importance of staying on through the therapeutic dose and beyond. So, the patients can start to realize the benefits that come through the therapy and staying on longer and longer. It's been encouraging and obviously as the data becomes more available, we'll have further conversations about that.

Daniel Adelman -- Chief Medical Officer

The thing that's intriguing folks at the moment both clinically and of course the payers the is given that we've already seen clinical evidence of immunomodulation at 18 months, most notable is the reduction in the skin prick test size, is that how long do we have to treat these patients before if it happens, some of them start going into clinical remission. And that's something that we'll see as we continue to follow this cohort over time. That is of course Extraordinarily interesting to all involved.

Operator

Our next question comes from Evan Seigerman of Credit Suisse. Your line is open.

Evan Seigerman -- Credit Suisse -- Analyst

Hi guys. This is Adrian on for Evan. Thanks for taking my question. I was wondering if you could provide any more color on what sort of co-factors you've seen in the totality of the AR101 data and is the expectation that we should expect a label with that either identifies or highlights these co-factors.

Daniel Adelman -- Chief Medical Officer

So I'm assuming that you're referring to the cofactors that are associated with some of these systemic allergic reactions If that's the case, you know, we certainly have identified those in our protocol because they are not unique 2 oral immunotherapy with a food product but are rather the same co-factors that you see for every other form of immunotherapy. I don't know. we will certainly engage in conversation with FDA. I don't know if it will be in the label or if it's just part of the general knowledge and understanding of the allergy community.

Jayson Dallas -- President and Chief Executive Officer

and when we think about indication something that I said earlier is really important is that that however we cut the data every population who was treated in our clinical trial program benefits. Our expectation is that there shouldn't be any limitation on the indication.

Evan Seigerman -- Credit Suisse -- Analyst

Thanks.

Operator

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

Paul Choi -- Goldman Sachs -- Analyst

hi, this is Karen Jenkins on for Paul we were just wondering as you approach the commercial launch if you've given any thought to a partnership or any sort of other partnering, basically.

Daniel Adelman -- Chief Medical Officer

So, we've been very clear that our plan is to commercialize ourselves in the United States and I think that we've given it a little bit more color today to show that we are very ready to do that and continue our build-out. With regards to other geographies, we are indeed open 2 partnerships we've had some external interests over time. I think our hurdles are quite high because we want to make certain that the launch prep in these countries gets the attention it needs and we certainly wouldn't want to do a partnership that puts AR101 into an existing field before it has been built specifically to launch into the allergist community.

And so what we're doing in Europe specifically at this point is initiating our own build-out of a commercial organization and if at some point it's a partnership deal that really does make sense and that addresses our unique need to be Taylor built for allergists then we would be happy to entertain that.

Paul Choi -- Goldman Sachs -- Analyst

and then on the [inaudible] pediatric trial, can you just give us an update on how enrollment is progressing and how we might think about timing, especially for a supplemental filing.

Jayson Dallas -- President and Chief Executive Officer

The study began enrolling patients and we continue to open study centers throughout the United States. And we anticipate that the study will be fully enrolled by probably the middle of next year sometime.

Paul Choi -- Goldman Sachs -- Analyst

Great, thank you.

Operator

Our next question comes from Derek [inaudible]. Your line is open.

Derek -- analyst

Hi, sorry about that. Bill on for Derek. Can you guys just quickly give us some color on what your expectations are for real-world adherence once you've launched? And then, do you have any thoughts on how physicians might handle patients who go off therapy and then decide they want to return therapy. Will they have to start the up dosing over again or will they be able to just start back on maintenance?

Jayson Dallas -- President and Chief Executive Officer

I'll take the first bit. This is Jayson, and I'll have Dan answer the second bit. In terms of real-world utilization and side effects and I think you're getting a little bit at how patients are going to be successful through the up dosing. We know in clinical trials it's 8 out of 10, or 80% of patients. It's worth noting that in our clinical trials that we have so far presented data on, that we did not allow the concomitant administration of antihistamines nor did we allow the concomitant administration of PPIs or H2 blockers to reduce gastrointestinal events.

And additionally, we had some fairly tight guidance around up dosing and trying to keep to about two weeks at each of the up-dosing levels. And all of those things will make a difference to the up-dosing period, to the severity and occurrence of GI side effect and those mild allergic reactions that Dan talked about earlier. So, we anticipate that in the real world the data should be very similar to the clinical trials or potentially maybe even a little bit better. We'll have a better answer for that when we actually get the Poseidon data because, in the younger children, we are allowing the concomitant use of antihistamines to just really in a clinical trial setting see the difference that that makes.

Daniel Adelman -- Chief Medical Officer

And as for the question about stopping and restarting. We have specific guidances built into our clinical protocols on how to adjust the dose based on how many days missed dosing one had. And we have real, I mean we have empiric data on the success of that. we intend to include that in our proposed package insert and those obviously will be the subject of discussions with the FDA as to how they show up in the package insert.

Derek -- analyst

Great, thanks.

Operator

I am showing no further questions at this time. I would now like to turn the conference back to Mr. Jayson Dallas.

Jayson Dallas -- President and Chief Executive Officer

Thank you, Maine. And thank you, everyone, for joining us this afternoon. We look forward to providing you with further updates on our progress in the future. And have a great evening everyone.

...

Operator

Ladies and gentlemen, this concludes today's conference. Thank you for your participation and have a wonderful day. You may all disconnect.

Duration: 57 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

Analyst -- Roth Capital Partner

Ken McKay -- RBC Regional Markets-- Analyst

Charles Duncan -- Cantor Fitzgerald -- Managing Director

Liana Moussatos -- Wedbush Securities -- Analyst

Evan Seigerman -- Credit Suisse -- Analyst

Paul Choi -- Goldman Sachs -- Analyst

Chris Raymond -- Piper Jaffray -- Managing Director

Derek -- analyst

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