ZGNX (2019 - Q4)

Greetings. And welcome to the Zogenix’s Fourth Quarter and Full Year 2019 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce our host, Brian Ritchie. Please go ahead. Brian Ri

Thank you, Operator, and thank you all for joining us this afternoon. With me on today’s call are Chief Executive Officer, Dr. Stephen Farr; Chief Commercial Officer, Ashish Sagrolikar; and Chief Financial Officer, Michael Smith. In addition, Chief Development Officer, Dr. Gail Farfel will also be available during the Q&A session. This afternoon, Zogenix issued a news release providing a business update and announcing financial results for the fourth quarter and full year ended December 31, 2019. Please note that certain information discussed on the call today is covered under the Safe Harbor provision of the Private Securities Litigation Reform Act. We caution listeners that during this call, Zogenix management will be making forward-looking statements. Actual results could differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with the company’s business. These forward-looking statements are qualified by the cautionary statements contained in Zogenix’s press release issued today and the company’s SEC filings, including in the annual report on Form 10-K and subsequent filings. This conference call also contains time sensitive information that is accurate only as of the date of this live broadcast March 2, 2020. Zogenix undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call. Now, I’d like to turn the call over to Steve.

Thank you, Brian, and good afternoon to everyone who’s joining us on today’s call. It’s a very busy and exciting time, and 2020 is a pivotal year for our late development programs in the company. Starting with FINTEPLA in Dravet syndrome, late in the fourth quarter of last year, the FDA accepted our NDA filing with a six-month priority review. Last week, the FDA decided to extend the review period for the NDA by three months to June 25, 2020. The new PDUFA target date allows the FDA time to review additional information submitted by Zogenix in response to our recent request from the FDA. The additional information was provided to FDA with data sets to conduct sensitivity analysis on the efficacy outcomes from the two pivotal studies completed in Dravet syndrome. Our own analysis is showing that the Phase III data are very robust to these sensitivity analyses. In addition, the FDA’s request was not related to FINTEPLA’s safety profile. Moreover, there has been no mention of a possible advisory committee from the FDA during the NDA review process. As a reminder, our NDA applications was based on data from two pivotal Phase III trials in Dravet syndrome and our interim analysis from the ongoing open-label extension study or OLE, Study 1503, which at the time included 232 patients treated for up to 21 months. Both of the pivotal trials met the primary endpoints and all key secondary measures with high statistical significance. FINTEPLA at all doses resulted in rapid, clinically meaningful reductions in convulsive seizures when added to patients’ stable antiepileptic treatment regimens. During the fourth quarter, the results from these pivotal Dravet studies were published in full in two prestigious journals, The Lancet and JAMA Neurology. We remain very confident the data is supporting our NDA submission and look forward to continuing to work with the agency, as they complete their review along this new timeline. Importantly, the robust reductions in convulsive seizures observed in the randomized controlled trials were also sustained in the long-term, open-label study in Dravet syndrome, which as I noted earlier included patients on therapy for up to 21 months. Results from an interim analysis of the same OLE study with a cut-off date in Q1 last year includes a total of 330 patients with a median treatment duration of 445 days with a range of seven days to 899 days. In 222 patients treated to one year, there was a 77% decrease in median monthly convulsive seizure frequency when comparing treatment effect at months 10 to 12 versus, baseline and for the 52 patients treated for two years, the median decrease in convulsive seizure frequency at that time point was 83% compared to baseline. These impressive data along with a portion of patients with clinically meaningful and profound season reductions in seizure frequency will be presented at the American Academy of Neurology Annual Meeting in Toronto in April. Other presentations at this meeting will also feature FINTEPLA, including reports of the real-world effectiveness in our ongoing U.S. expanded access program and preliminary results from an open-label pilot study of fenfluramine’s safety and efficacy in Sunflower syndrome. As we look ahead to the PDUFA target date, we are continuing with our pre-commercial activities and planning for a potential launch in the United States in the third quarter of this year. Ashish is excited to tell you more about our plans in a moment. Before that though, let me also add that we are also focusing on the MAA for FINTEPLA in Dravet syndrome. The review process is continuing in Europe, as we assist to reviewers in their assessment of our application toward a final opinion this year. With that, let me go ahead and share the call over to Ashish to highlight our commercial readiness activities. He will be followed by Mike who will cover our fourth quarter and full-year 2019 financial results and then I will provide an update on the rest of our development pipeline before opening up to Q&A. Ashish?

Thank you, Steve. Good afternoon, everyone. We have been able to ensure that commercial programs are in place and I am pleased to report that we intend to be ready to launch shortly after the approval is granted. We have our entire U.S. commercial team in place and have recently hired and onboarded key account managers in national accounts team and the customer support team that will deliver comprehensive patient services through our hub, which is called Zogenix Central. These are experienced professionals who have considerable experience in the rare diseases, epilepsy, and specifically Dravet syndrome. We have been discussing with payers and educating them on the significant unmet need that exists in the Dravet community. In conversations to-date, we have received a very positive reception and we will continue to engage with payers through the first half of the year and beyond. Product manufacturing, supply, and distribution partners are ready to launch in July, if approved. These partners are uniquely positioned to ensure the most efficient access to FINTEPLA for the greatest number of patients at launch. We are committed to ensuring patients who need FINTEPLA are able to access it if approved. Zogenix Central will offer personalized service to FINTEPLA patients, caregivers, and physicians. Zogenix Central is a single location providing a robust service and support system for families and healthcare providers throughout the treatment and fulfillment process. Specifically, it will include a hub that is led by care coordinators who will work with the caregivers and healthcare professionals through the start and continuation of therapy, reimbursement support team to help healthcare professionals and caregivers, REMS administration including health with the ECHO process and specialty pharmacy. We continue to engage with the members of rare epilepsy communities, especially Dravet community to better understand their needs. We are grateful for their continued support and encouragement for our efforts and programs, as we await the potential approval of FINTEPLA. In 2019, we also launched our disease education portal draveturgency.com to educate and raise awareness to the needs of the rare patients. Let me turn now to Europe, where similar activities are under way at the Pan European and country level to prepare for the potential launch of FINTEPLA. We have built a team with considerable experience in rare diseases and epilepsy in areas such as market access and marketing. We have initiated discussions with healthcare authorities to develop country specific health economic models. So far we have had very positive engagement and feedback from regulators in all major European markets and we will continue these conversations in 2020. We already have experienced medical and regulatory teams in place all across Europe and we have recently set up country offices and local leadership in United Kingdom, Germany, Italy and Ireland. In summary, we are prepared and ready to launch FINTEPLA when approved, so that we can bring this potentially transformational therapy to patients who so desperately needed. With that, let me hand over the call to Mike for the financial review. Mike?

Thanks, Ashish, and good afternoon, everyone. Today, we issued a press release summarizing our business and financial results for the fourth quarter and full year ended December 31, 2019. We recognized $1.9 million in revenue during the fourth quarter of 2019 and this is a result of our March 2019 collaboration with Nippon Shinyaku for FINTEPLA in Dravet syndrome and LGS for Japan. Zogenix recognized no revenue for the corresponding period of 2018. Total R&D expenses for the fourth quarter were $35.8 million, an increase of -- from $23.6 million in the corresponding period of 2018, largely attributable to the expanded clinical trial activities related to the ongoing Phase III development of FINTEPLA and LGS. SG&A expenses for the fourth quarter ended totaled $18.7 million and this compares with the $11.3 million for the fourth quarter of the prior year. This increase was driven by continued investment in preparation to prospectively launch FINTEPLA for the treatment of Dravet syndrome in the U.S. and in various countries in Europe in the coming years. Net loss for the fourth quarter ended December 31, 2019 was $56.1 million or $1.26 per share. This compares with a net loss of $22.4 million or $0.53 per share in the fourth quarter ended December 31, 2018. Net loss of the year was $419.5 million or net loss of $9.74 per share, compared to a net loss of $123.9 million or net loss of $3.27 per share in the prior year. We ended the fourth quarter with cash, cash equivalents and marketable securities totaling $251.2 million, which assuming approval we believe are sufficient resources for us to execute on our launch of FINTEPLA in Dravet syndrome in support of planned operations for at least the next 12 months. With that, I will turn the call back over to Steve.

Thanks, Mike. As you have heard, we are actively advancing all aspects of our FINTEPLA program in Dravet syndrome and look forward to the target action date for the NDA of June 25th this year. Last month, we were delighted to announce positive topline data from our third pivotal Phase III clinical trial for FINTEPLA, Study 1601, a global Phase III clinical trial in 263 patients with LGS. The study included patients between the ages of two and 35 years whose seizures remain uncontrolled, while on one or more anti-epileptic drugs or AEDs. The study met its primary endpoint of showing a highly statistically significant reduction from baseline in the medium percent change in monthly drop seizure frequency compared to placebo. As we have mentioned before, LGS is a rare and severe forms of epilepsy arising from multiple different causes, making it notoriously difficult to treat in which seizures often highly resistant to existing therapies. Importantly, they make all LGS patients well at some point have tried and failed multiple AEDs. Therefore, there continues to be a significant unmet need in LGS. Based on the results from Study 1601, FINTEPLA has shown an efficacy effect size comparable to many of the currently approved LGS treatments. Therefore, we believe that FINTEPLA with its differentiated pharmacology and unique mechanism of action has the potential if approved to become a meaningful therapeutic option for physicians who treat patients with refractory LGS. From a regulatory standpoint and under the assumption of an approved NDA for FINTEPLA for Dravet syndrome, we do not anticipate any further pivotal safety and efficacy studies will be required for a supplemental NDA or sNDA from expanded label indication in LGS. To support this supplemental submission, we have currently completed or well under way in conducting several Phase I clinical studies and non-clinical toxicology studies. We intend to meet with the FDA later this year to confirm the content of the sNDA, which will determine the timing of our submission. In addition to LGS and Dravet syndrome, we have initiated an exploratory Phase II study to understand the characteristics of additional rare epilepsy disorders in separate cohorts and evaluate whether FINTEPLA is safe and effective versus placebo in these patient populations. The study protocol has been finalized and we are currently seeking IRB approvals and proceeding with opening study sites in the United States. We now expect to roll the first patient in this Phase II basket study in the second quarter and on targeting topline data from the fastest enrolling cohort by the end of the year. In addition, we are sponsoring investigator-initiated studies in several open epilepsy syndromes, two of which are now up on clinicaltrials.gov for the treatment of Sunflower Syndrome and CDLK5 deficiency disorder. Next, I would like to switch to MT1621, our investigational therapy for the treatment of a devastating and frequently fatal mitochondrial DNA depletion disorder, thymidine kinase 2 deficiency or TK2d. MT1621 is an oral fixed-dose combination treatment of deoxycytidine and deoxythymidine that serves as substrate enhancement therapy to restore mitochondrial DNA to overcome deficits caused by this disease. Enrollment in the Study 102, a prospective open-label study involving patients from the RETRO trial was completed at the end of January. Good progress is also being made toward completing the non-clinical NDA enabling studies and finalizing the product manufacturing requirements for the NDA. MT1621 has Breakthrough Therapy designation in United States and PRIME designation in Europe. We have a meeting scheduled with the FDA in early Q2. I look forward to providing an update regarding future plans on the regulatory submission timeline, once we have obtained the appropriate feedback from these discussions. We continue to expect to hold a similar meeting with the EMA later this year. So, with that, we can now begin the Q&A session. Operator, can you please open up the line for questions.

Certainly. [Operator Instructions] Our first question today is coming from Paul Matteis from Stifel. Your line is now live.

Great. Thanks very much for taking the questions. I wanted to ask one in the PDUFA extension and then one on some of the data you just shared. On the PDUFA extension, can you clarify what types of sensitivity analyses you think the agency wants to perform on the Phase III trials and maybe you can just give us a little bit of context as to why you are confident that this isn’t really a big deal for approvability and maybe secondarily why you are comfortable that the agency, I think, can arrive at any sort of different conclusion as it relates to the differentiated effect size you appear to have in Dravet? And then, second, on the long-term extension data you just presented, I was wondering if you could just give a little bit of color on the retention rates you are seeing at one year and two years in your extension study and any additional color just as it relates to safety and how that’s holding up? Thanks so much.

Thanks, Paul. I appreciate your questions. On the sensitivity analysis, there are several analyses that we have conducted I am sure which the FDA want to conduct as part of the sensitivity work as well. What I will say is that the data are incredibly robust to any sensitivity analysis we have conducted to the point where we are not seeing any shift in P-values and very, very small, very small differences in endpoint estimates. So we don’t think there is really anything that the FDA is going to uncover here, but we have not already seen and we have been able to establish that our data set are very robust. So, I think, that probably addresses your first question. On the second question, the retention in our Phase III open-label is still very, very good. We are seeing the majority of patients still remain in open label. As you know, we are moving patients over to Study 1901, which is another label extension study where there’s less study there, it’s around 85% retention. So we feel good about that. Now from a safety perspective, we have really seen nothing in the open-label extension that’s any difference what we have seen in the randomized controlled trials reported or indeed in the safety. I think to cut that we presented last year at AES, which forms the basis of our integrated summary of safety in the NDA, and that also includes no patient has valvular heart disease or pulmonary hypertension.

Great. Thanks so much, Steve. Appreciate it.

Thank you, Paul.

Thank you. Our next question is coming from Marc Goodman from SVB Leerink. Your line is now live.

Yeah. Can you just give us a sense from the commercial spending what was done in the fourth quarter and how we should expect 2020 to play out given you don’t have approval yet? And then, second, I will just come back to Europe for a second and just tell us, what exactly, where are we on that, can you define the time a little bit more carefully than what you had mentioned is just happening this year? Thanks.

Yeah.

Go ahead, Mike.

Yeah. Hi, Marc. Yeah. So in terms of the activities that were conducted in this past quarter, we’ve continued to do a lot of research and hold a lot of discussions with the communities, the physicians, the payers. We are ramping our dialog with payers, obviously, because we were initially anticipating kind of midyear launch, so there were a lot of those activities inside that six-month launch window that we are executing on. We have also been fortunate to be able to dial-up a fair amount of participation in EAP, which resulting activities downstream to SG&A in the context of hub activities and other things that we are preparing for with respect to how will distribute the product through specialty pharmacy in the United States and Europe, so getting a lot of test runs there. So there’s a lot of the additional spend. We have, as Ashish mentioned, onboarded our core group of patient-facing physicians in this coming -- in this 2020 year, we have kind of set plans for that and are expanding and subsequently finalizing our infrastructure there. So, I think, it’s one of the -- we have talked about this market, it’s one of these things where it’s a rare disease launch. It’s a net 50 people plus in the United States across inside and outside 20% to 25% external facing sales force. So it fundamentally costs that would be similar for that kind of structure that we would be anticipating for the year. And then for Europe, where our base case is right now, off of a timeline that is similar to Epidiolex’s timeline there, and so we do a lot of prep activities organized in the big countries that we want to go to. But in earnest since we are not going to be expecting a decision until later in the year -- this year, those are mostly activities from a commercial product perspective and providing product that will start up in the early 2021.

Of the 50 people, can you give us a sense of how many have been hired already, how many were in the fourth quarter, how many are going to be in the fourth quarter -- first quarter?

So, Marc, let me address that. In the U.S., the entire commercial team has been hired and is in place. So that we were preparing for launch in the early part of the Q2, and that team is already in place and we will be deploying the team as we get the approval toward the end of Q2.

Thanks.

Your line is now live.

Great. Thanks. Thanks for the questions, guys. So a couple, I guess, a follow-up to Marc’s first, for the EMA and CHMP decision. If I remember correctly, you had indicated at one point that the decision could come this quarter. Can you remind me why it’s not expected now until later this year, what the go? And then, sorry, can you also talk about your approach in the U.S. with your 20 field based reps, who I think are targeting 1,500 docs, how did you identify those and what gives you confidence that you can fully address the market with that number of people? Thanks.

Thank you, Danielle. I will ask Ashish to take the second part but before that I can sort of take you through the EMA. As you know, there is no PDUFA equivalent in Europe with respect to the review of an MAA under various clock stops along the way. Where we are at right now with the -- with MAA is that we are anticipating that they want to make key questions coming up toward the end of this quarter. So that will be the next time where we will see the feedback from the reviewers and then we will have a better estimate of what the timing would be around a finalization, if any at that time. The reviews in Europe do take. We think a little bit longer than they have in the United States historically. We think that’s our time frame that we are on is really no different to a number of other drugs that have been approved recently, including one in Lennox-Gastaut and Dravet syndrome. And Ashish, could you take the next one?

Yeah. Danielle, I think, the -- in terms of the number of targets that you talked about, taking the step back, you want to look at it as a Dravet syndrome focused activity, which is rare condition, yeah, and we have done over the last 18 months multiple research, as well as profiling work in the U.S. And what we learned from the community, as well as on the physician is the majority of the patients who are being treated for Dravet and who are diagnosed are in these have epilepsy centers and these major community centers and that’s how we came to this particular list of 1,500 that you mentioned. What we have also done at the same time is looking at this based on some of the newer approvals that have happened in the last one and a half years. We have looked at how the patients have been found and treated in any of these places and that gives us confidence that at launch at least in the first year to 18 months, we will be able to connect with all the patients who have been identified and are being treated making our product as an offer. And as time goes by, we will be expanding this to see because there are a lot of patients who have diagnosed or who are misdiagnosed and we believe that a lot of those are in the U.S. and we will be focusing our effort on those, as we move into the large process. Hope that answers your question.

It does. Thanks very much.

Thank you, Danielle.

Thank you. Our next question is coming from Serge Belanger from Needham and Company. Your line is now live.

Hi. Good afternoon. A couple of questions for me, on the update of the NDA review for Dravet syndrome that was delayed, you talked about the FDA request for additional data. But can you provide us an update on the CMC component of that review, has there been an inspection in the manufacturing side at this point? And then, my second question is related to the upcoming supplemental filing for LGS, if you can elaborate on some of these additional Phase I and non-clinical trials that will be required for filing? Thanks.

Yeah. Thanks, Serge. I will ask Gail to take your second first. With respect to the CMC elements of the review, we have certainly had and addressed CMC questions. The same -- the peer review process has not occurred at this moment but is scheduled to be very soon.

And hello, this is Gail. I will take the second part. We -- for the LGS filing, we are completing some of the typical profiling. So specifically hepatic and renal dysfunction profiling, the clearance of the drug, as well as some of the preclinical studies where deferred for the Dravet filing, specifically long-term carcinogenicity and the developmental and reproductive toxicity studies and so those have been ongoing and will be included in the LGS filing.

Thank you. Our next question is coming from Jason Butler from JMP Securities. Your line is now live.

Hi. Thanks for taking the questions. I just wanted to come back to the 1900 open-label extension study, can you give us a sense of how many -- what proportion of patients you have now transitioned over from 1503, and then, just in terms of getting IRB approvals for that study. Can you talk about the experience with the move to less frequent echo monitoring? Thanks.

Thanks, Jason. I will ask Gail to talk about the less frequent monitoring and how the IRBs to address that. But in terms of the open-label extension, we are moving patients over once they have completed the Study 1503. And if you look at the numbers in total between 1900 and 1503, it’s over -- approximately 219 Dravet patients in both those studies and around 100 of those currently in 1900. So we are moving them over as they sort of end Study 1503.

I’d like to follow-up, I am not aware that we have had any -- we may have questions, which were addressed, I am not aware that we have had any concerns that have prevented the transition from patients from 1503 to 1900. It’s a large process. There are many sites in many countries involved. So it’s proceeding step by step.

Great. And then just one more from me, on 1621, could you just layout scenarios for us from both -- from the plan regulatory meetings in the U.S. and Europe?

Yeah. It’s tough for me to layout scenarios right now, Jason. I really would like to get the other side of the meetings with the FDA. But our assumption going into the meeting is that we have generated sufficient clinical data with respect to the efficacy. We are continuing to collect safety data in Study 102, as I mentioned earlier. And then, we also need to understand the level of non-clinical data, as well as CMC data was required for the NDA submission. So, I think, we feel a lot better about giving some guidance on that when we get the other side of the FDA meeting.

Okay. Great. Thanks for taking the questions.

Thank you, Jason.

Thank you. Our next question is coming from Yatin Suneja from Guggenheim Partners. Your line is now live.

Hey, guys. Thank you for taking my question. Just a couple, on the preclinical side, could you maybe talk about the preclinical studies, especially with regard to the carcinogenicity studies whether they have been submitted for Dravet? What would be the gating factor from preclinical perspective for LGS, do those -- do you have to complete those studies prior to the submission and what the status is, and then, I have one more follow-up.

Yeah. Thank you. And so the cost studies that we started were in relation to assuming that these studies may be required for original and supplemental NDA for LGS. The FDA, we are prepared for these to be deferred for an approval in Dravet. So we are not required for the Dravet NDA as you know. We have conducted two CARC studies. Well, one’s just completed. The other is still ongoing. One is in a six-month transgenic mouse and the other is a two-year CARC in rodent. When we discussed with the FDA, we are really trying to determine exactly what information around this CARC studies needs to be submitted as part of the supplemental, not just whether or not you could just submit with one rather than two CARC studies whether or not the FDA would accept. For example, a draft audited report as opposed to the final report plus n data. So those type of questions, the response to those questions will help us sort of narrow down what is the timing for an sNDA for LGS.

Okay. That’s helpful. And then on the balance sheet side, I mean, it looks like, I think, you raised maybe about $50 million in Q4. Can you maybe confirm, is that true, was there -- is there an ATM and then talk about your comfort with the balance sheet now, what level do you need to maintain going into the launch? And also if you can talk about the pricing range that we should be thinking about now that you have both Dravet and LGS data in hand?

I will hand over to Mike.

Hi, Yatin. Yeah. We raised around $42 million to $43 million in Q4 through our an ATM that we -- shelf that we had active and most of that or all of that activity after we had got assurances of acceptance of the NDA. We have financials say about $0.25 billion on inter-bank account at this point and given the size of the launch team and the infrastructure needed being somewhat efficient, we are very confident that we have got the resources we need to put to that for that and our other operations for the coming year. We got the data on LGS and it confirmed a lot of the things that we have seen in Dravet with respect to getting some robust response with a number of different patients that have a disease that’s classified in that syndrome. We didn’t have the same level of responder rate that we saw in Germany. But we did see some really significant responses in the context of a very, very difficult to treat disease that doesn’t have a lot of options and isn’t necessarily your broad refractory epilepsy market. So our pricing strategy is kind of remained consistent to-date and that we are looking to price the product off of the value and is being informed on an ongoing basis with our discussions with payers in the community.

Okay. Thank you.

Thank you. Our next question is coming from Difei Yang from Mizuho Securities. Your line is now live.

Hi. Good afternoon and thanks for taking my questions. Just a couple, now that you know the durability of efficacy in Dravet syndrome, could you comment on what would -- how should we think about the durability of efficacy for the LGS patients? And then follow that with a quick financial question with regards to why should we assume the R&D run rate in 2020?

Thanks, Difei. I will take the first part of your question and hand over to Mike for the run rate question. But we don’t have -- we have not reported any data yet, long-term data in LGS. So, it will be something that we will talk about when we see those data over time. So we are very excited about the data we are showing for long-term efficacy in Dravet and how durable the response is and I think that’s emphasized by the latest cut that we actually talked about today. So we obviously don’t know what it is in LGS at this moment in time. But we will certainly report on that as we have the data moving forward. Mike, go ahead?

Yeah. We haven’t given any specific guidance with respect to the line item operating costs for the coming year today. We will not have the material changes in those, context those, there won’t be any large swings up or down with respect to our offering this year.

Okay.

I can say that.

Yeah. Thanks. Yeah. Thank you.

Yeah.

And then final question on the, for the LGS study, when should we be looking for additional data or additional detailed breakdown analysis for the Phase III results? Where are you going to or where do you plan to present?

And that’s something that we would like to do this year and I think AES at the end of the year is probably the most realistic conferences to consider, Difei.

Okay. Thank you for taking my questions.

Thanks.

Thank you.

Thank you. Our next question is coming from Tom Lugo from William Blair. Your line is now live.

Hey. This is Lachlan on for Tim. Thanks for taking the questions. I was just wondering in the FDA interactions you have had thus far has the REMS program at all been solidified or if you made progress there and what does that look like at the moment? What are you expecting the REMS program to look like? And then, in light of all the current events, I believe you only have one supplier of fenfluramine in the U.K. So can you just talk about how you are thinking about sort of supply chain risks moving forward?

Yeah. Thanks for your questions. With respect to REMS, we did propose REMS in the NDA and I think based upon the fact that the PDUFA date has been extended to June 25th, we anticipate those REMS discussions actually picking up over the next month or so would be our guess. In terms of the supply chain, yeah, we have a supplier manufacturer of fenfluramine in the United Kingdom is using our patented method of actually producing a highly pure form of fenfluramine, we are mitigating our risk around a single supplier by ensuring we have capacity, another site with that supplier and we also have some risk mitigation going around the drug product as well. So what you would expect the Company to do is looking not only to mitigate risk in supply chain, but ensure it has the adequate capacity for future indications, we are doing all those things today.

Great. Thank you.

Thank you.

Thank you. [Operator Instructions] Our next question is coming from Michael Higgins from Ladenburg Thalmann. Your line is now live.

Thank you for -- hi, guys. Thanks for taking the questions. Just to follow up on earlier one about the CARC studies. When you talk with the FDA about the two-year CARC studies, did they say the results would need to be included in the sNDA or was that not discussed directly?

It was not discussed directly. It was deferred for the Dravet NDA and for LGS based on the timing, we -- well, at least for the six months and we assume for the two-year we will be able to include it.

Okay. And then just a follow-up on some of the questions earlier regarding the efficacy analysis by the FDA, has that had an impact on the European review, not quite sure from what you said? Thanks.

No. We do not believe it has an impact on the European review. We have actually conducted the sensitivity analysis for both European regulators, as well as for U.S. FDA likes to do their own analyses and we have conduct with some intermediate data assessments to do that.

Okay. Thanks. And then last one, any feedback from the payers on how Epidiolex has fared and how they see FINTEPLA’s role in those Dravet patients?

I will hand over to Ashish.

Yeah. Mike, I think, the feedback we have received based on our discussions is very positive for the clinical profile and the efficacy that FINTEPLA has shown in the Dravet syndrome. We are also focusing our discussion on the unmet needs in the Dravet syndrome and how a therapy like FINTEPLA approved, can really fulfill that need. In terms of other products, I think, it won’t be appropriate for us to comment on that -- those feedbacks. But what we do understand not only from the payers, but also from the community is that given the refractory nature of this condition and given the seizure burden, there is a need for different therapies and we expect that when we launch it will get used and approved.

Great. Appreciate it. Thanks guys.

Thank you.

Thanks.

Thank you. We have reached end of our question-and-answer session. I’d like to turn the floor back over to Dr. Farr for any further closing comments.

Thank you, Operator. And thank you for joining us on today’s call. We are very pleased with milestones we have achieved in 2019 that allow us to further FINTEPLA and start to transform Zogenix into a more diversified rare disease company through the acquisition of MT1625 -- 21. Looking forward to an exciting year ahead as we work toward becoming a commercial stage company focused on providing therapeutic solutions to patients and their families. So thank you all again for joining us on our call today. Enjoy the rest of your day.

Thank you. That does conclude today’s teleconference. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation today.