Robert Iannone: Liver tox, yes. So we don’t think the liver toxicity is a class effect, and we think based on what has been said from the Takeda compound that it’s likely to be related to that specific structural class. And so we — even at the time that we in-licensed from Sumitomo, we were operating in a different chemical series. And so we don’t think any of that risk is carried over. In our preclinical toxicology studies, there was no concern based on liver toxicity either.
Operator: Your next question comes from the line of David Amsellem from Piper Sandler.
David Amsellem: So I also had a question on the orexin agonist, JZP-441. So we’ve seen some early tolerability data at World Sleep for the other compounds, urinary urgency being one that comes to mind, also visual disturbance. I wanted to pick your brain on how you’re thinking about those as being on-target effects or is something else going on? And just your general level of I guess, vigilance is the right word on those kinds of AEs?
Robert Iannone: Yes. So I mean, listen, the early days across these compounds, we have a lot to learn. But I would say the therapeutic index is going to be very important, whether that be to what we perceive as on-target effects like the urinary frequency that you mentioned or potential off-target like hepatotoxicity. The therapeutic index is going to be important. Part of that may relate to the half-life of the compound. I mean, if you have something that is too long a half-life, you may see residual effects into the evenings causing them insomnia, which is obviously counterproductive from the therapeutic intent. And so having a favorable half-life from being able to dose in a way that creates therapeutic index for either on-target or any potential off-target toxicity will be important.
And that’s part of what we’re doing in our healthy volunteer studies, both of the healthy — both of the single dose as well as the multiple dose is really exploring the therapeutic range and various dosing that will allow us to select them an optimal regimen to be evaluated in patients.
Operator: Your next question comes from the line of Joon Lee from Truist Securities.
Jeremy Jacoby: This is Jeremy on for Joon. How are you looking at the oxybate market evolving both in terms of Xywav and Xyrem? And has the AG impact been as expected?
Bruce Cozadd: Yes. I’ll start on that one and just say, again, the way things have played out this year has been very much in line with our expectations. Xyrem has been declining for years now, largely because we’ve been successful with Xywav giving patients a healthier lifelong treatment option. That decline has continued this year. Obviously, complemented by having new entrants in the marketplace. But that revenue stream for us is now very small relative to our total business at about 16% of our revenues this quarter if you add up Xyrem and our royalties on the AG. And we’re focused on growing Xywav. We think the product has great durability as an asset. We are very excited about the opportunity to continue growing the idiopathic hypersomnia market.
We know there are more patients to reach. We know diagnosis can improve. And as physicians gain more experience using this product and seeing the benefit in their patients, the mirrors what we saw in clinical trials, we think that’s very favorable for their intended increased use of the product. And we still think there’s growth left in the narcolepsy market. We haven’t seen much of a change in the overall growth dynamics since the Avadel launch, but it’s usually true that having multiple companies out talking about a disease that is sometimes underdiagnosed can be helpful. So we’re excited to continue to grow Xywav.
Operator: Your next question comes from the line of Gary Nachman from Raymond James.
Gary Nachman: First, can you talk about Rylaze expanding in Europe and specifically your expectations on how much that product will contribute ex-U.S. over time? What’s a reasonable target there? And then just on your point, Bruce, on Xywav in idiopathic hypersomnia, how concentrated is the current prescribing base? And what are some of your initiatives to try and expand that further? And at what pace do you think you’ll be able to do that to tap into more of those patients.
Bruce Cozadd: So two different questions. Maybe I’ll hit Xywav first and say the prescriber base for IH is very overlapping with the narcolepsy prescriber base, about 90%. As you heard in our comments on the call, we are increasing our effort behind IH to have some folks focus on that, specifically get out to some physicians who may be a little less familiar with using oxybate to support them, but the prescriber base is very similar. Renee, do you want to talk about Rylaze a little bit?
Renee Gala: Yes, I’m happy to. So we’re really pleased to be able to make this product available in Europe. And as we stated, we expect to begin that rolling launch later this year. I will stress that the market dynamics are very different in Europe versus the U.S. So in Europe, we have Enrylaze on the market as a competitor. We have quite a different pricing scheme and then certain steps to take from a market access perspective to ensure that Rylaze is secured on protocols, which will take some time. So taking all of these things in consideration, I would say, being on the market in Europe will provide growth, but characterize that as relatively small and something that would be achieved over time relative to the overall opportunity in the U.S. And then on the topic of the U.S., maybe I’ll turn to Kim to provide a few comments on what we’re seeing there.
Kim Sablich: On IH or Rylaze, I can do both.
Renee Gala: On Rylaze, yes.
Kim Sablich: On Rylaze, specific. Okay. Great. Thanks. Happy to do that. So yes, we were — we continue to be just — I’m very pleased with how this product has performed. We never really had the opportunity to understand what the peak of this market can be given there was always supply constraint. So we obviously don’t give product-specific guidance. We haven’t talked about the peak, but we’re just continuing to see strong demand which we think reflects significant patient need. I think Renee mentioned in the presentation that some of the growth drivers we’ve seen and the demand that’s being driven was expected, and some of it was a bit unexpected in this unsupplied, constrained market, we did expect this health care providers switching patients more rapidly due to hypersensitivity responses, but we are also seeing quite a bit of switching going on in terms of other types of treatment-related issues from E.coli-based asparaginase.
In addition, and again, while we don’t promote it that way, and we don’t promote the product for first-line use, we are seeing a fair amount of first-line use based on the advantages of this product having board acting profile relative to current first-line asparaginase therapies and the concern that some providers have in particularly in some patient populations like the adult patient population around the potential for treatment-related issues. And then lastly, we’ve been seeing some really nice growth in the overall efforts we’ve made this year in the adolescent and young adult market, we’re seeing this population starting to increase usage in these patients. And as I mentioned, this is one of the places where we see them using the product a little bit differently than we had originally anticipated.
So overall, the market has embraced it, especially in the pediatric market where it’s been adopted universally in pediatric protocols but really seeing increased usage of erwinia-based asparaginases in the adolescent and young adult market for Rylaze.
Operator: Your next question comes from the line of Gregory Renza from RBC Capital Markets.
Gregory Renza: Bruce and team, congrats on the update. Bruce, maybe just a more specific one on the competitive dynamics of oxybate that you’ve described this evening. Just curious how you would put into context the value or maybe the value loss of that LUMRYZ FT218 patient. I guess that is — how important has tried — trying LUMRYZ and the corresponding prescriber? How important is that patient to the market strategy that Renee laid out. Would you see, if anything, an opportunity to capture or maybe recapture such patients as that options become established in the marketplace.
