Renee Gala: Yes. And then, Balaji on your other question…
Bruce Cozadd: Kim or Renee?
Renee Gala: Yes, I was just going to ask Kim to jump in there.
Kim Sablich: Yes, sure. I think your question was about what we see the long-term mix being between narcolepsy and IH for Xywav. Overall, we see it as a very durable franchise, and we do expect Xywav to provide substantial value in both the near and the long term. And we expect that Xywav will both grow and remain the oxybate of choice in 2023. And that in addition to this, IH is a very meaningful growth opportunity as the only FDA-approved treatment for IH. So, it’s really a combination of the two contributing very meaningfully moving forward.
Renee Gala: And maybe I’ll just jump in quickly then on the royalties. I think that may have been an aspect of your question as well. So, I’d mentioned during the prepared remarks that with respect to the royalties on authorized generics of Xyrem, you should think about those being higher in the second half versus the first half of the year. And recall, the way that the royalties work, the first six months we just have Hikma on the market, and we have tiered wide-ranging royalties, which are essentially low, where they are selling a low percentage of the overall oxybate volumes, and then, those increase as those volumes increase. That royalty rate ranges from 10% all the way up to 90%. Now, the second — and recall, they’re exclusive.
The second six months of this year, we expect the royalties to be higher because the royalty rate with Hikma increases to a fixed rate where both we and Hikma have substantial economics. And then, we have the expectation of three other extremely volume limited AGs coming in with low fixed-rate volumes and royalties to Jazz. As we go forward, recall that after the first year, then the royalties with Hikma exceed — sorry accelerate to a much higher double-digit rate to Jazz and remain at that through the duration of the royalty period.
Operator: Thank you. Our next question comes from Gregory Renza with RBC. Your line is open.
Gregory Renza: Great. Thanks. Hey, Bruce and team. Thanks for taking my question. Maybe, Bruce, just one for me. How is the current commercial performance across your products and segments really feeding back to the early pipeline selection that you, Rob, and the team are doing, the no-go decisions there and the risk tolerance? And just maybe thinking about the commercial products, how that actually is affecting or influencing what you see as diversification of the portfolio? Of course, as Renee mentioned that with the pipeline being four times the size, now are there particular areas where you’d like to see greater pipeline output from? Thanks so much.
Bruce Cozadd: Yes, love the question. I would say that we keep learning the same lesson over and over, which is if you have great products that really meet an unmet patient need that are differentiated from other products, those continue to have high value in the marketplace and get preferentially adopted. And I think the ways in which Xywav and Epidiolex and Rylaze and Zepzelca have all filled unique needs and are differentiated from other products has made a big difference in their success thus far and their future success. And I would say the same thing about the programs we have in the pipeline. We think the ones we’re investing most heavily in, particularly in later stage where we have more data, fall into that category of meet significant unmet patient need and are differentiated from other currently available or expected to be available therapies.
