Operator: Thank you. Your next question comes from the line of Emily Field from Barclays. Please, go ahead. Your line is open.
Emily Field: Hi. Thanks for taking my question. I just wanted to ask a question about Iptacopan. All this US filing in the first half of this year include both PNH trials. And then — because I know you mentioned that you’re running the SWITCH study for the frontline patients as well. Just trying to get a sense of commercialization strategy across the PNH spectrum. And then, just, I know you have BTD for this asset, just how long of a regulatory review you might be expecting? Thank you.
Vasant Narasimhan: So with Iptacopan, yes, we’ll be following both studies, both the refractory and frontline study as part of the package, and that’s aligned with FDA. We do have used a priority review voucher as well for this asset to really ensure that it’s approved in a rapid time frame. Even though we had breakthrough therapy designation, we don’t want to take any risks with respect to this particular filing to make sure that it happens as fast as possible. With respect to our overall strategy with Iptacopan, when you look at this market, we believe that it’s 60% to 70% of patients who, on current anti-C5 based therapies, are not adequately controlled, and those patients could be switched to Iptacopan based on the data we presented at ASH and assuming the final label supports it.
And so, that’s a substantial opportunity for the medicine. We know that potentially up to 60% to 70% of diagnosed PNH patients are not on a therapy today. And they come on, I think, in a few different categories. Some are subclinical or not quite clinically severe enough. And the question is, with a twice a year safe oral, is there an opportunity to get more of those patients on therapy, because it may be physicians or patients were holding off wanting to be on regular infusions. So could an oral therapy open up that market. I think there’s a set of patients also who have gone back to taking transfusions, having now failed prior therapies. That’s another opportunity. And then there’s probably a set of patients as well that are just in the watch and wait mode.
So that will be an opportunity for the medicine as well. So we think there’s multiple places. It will take us time to drive this launch. So this will not be fast, given the strength of the incumbent position. And then, also that this — a significant group of patients not on therapy has to get mobilized. And we believe over time with the compelling data that we have and the recognition that a twice-a-day oral could be a really compelling option. We can build a very significant medicine on PNH, then expand into C3, IgAN, AVOS, IC-MPGN and then subsequent indications thereafter. Next question operator.
Operator: Thank you. Your next question comes from the line of Richard Vosser from JPMorgan. Please go ahead. Your line is open.
Richard Vosser: Hi. Thanks for taking my question. Just going back to Kesimpta and obviously, very strong. We’re going to see another launch for another CD20 this year and coming around now from TG Therapeutics, obviously an IV, but lower price. How do you see that impacting Kesimpta this year? And maybe also we’re going to see subcutaneous KRAS data, how do you see that as well in the future around the launch? Thanks very much.
Vasant Narasimhan: Yeah. Thanks, Richard. So the way we look at the MS market, the one, as I mentioned, you have 50% of patients that are not on B-cell therapies and 50% on B-cell therapy. So there’s a substantial market opportunity just to get more patients in the first-line, first-switch setting on to high-efficacy B-cell therapy. So there’s plenty of room for growth just for Kesimpta and getting some more of those patients. The second thing based on our understanding of the market is that there are sets of facilities and health systems that prefer infused medicines, and there are those that prefer providing patients subcu medicine. And we see those as very stable. So really, this market is a split market. You have a market of physicians who want to give infused medicines and there is a large proportion of the market who want to give patients the opportunity to have at-home subcu administration.
Within that subcu, we don’t see any at-home administration relevant competition for the coming years, and that’s very much our focus area. Within the IV segment, there is now competition and I think that competitive dynamic will be an important one for us to observe. And I think to your point, Richard, will the opportunity of having subcu physician-administered medicines expand the number of centers that might be interested in a physician administered approach, we don’t know. Nonetheless, the market opportunity ahead of us, with the 50% of patients not on B-cell therapies and the substantial number of physicians who prefer providing an at-home administration, that’s the opportunity for this medicine, and that will give us plenty of room to grow over the coming period.
Thank you Richard. Next question operator.
Operator: Thank you. Your next question comes from the line of Simon Baker from Redburn. Please go ahead. Your line is open.
Simon Baker: Thank you for taking my question. Just going back to Leqvio. Vas, you briefly touched on buy and bill. I just wonder if you could give us a little bit more detail on the progress you’re making there. I ask because, on one hand, there was a fairly negative article earlier in the month on . But we on the other hand, we see in September and December last year, quite a significant uptick in traffic to the Leqvio-access website. So I just wonder if you could give us the latest picture there? Thanks so much.
Vasant Narasimhan: Yeah. Thanks, Simon. Look, there’s no question that buy and bill is a new approach that cardiologists need to understand and get implemented to their office. That said, we know there are many specialties that have successfully done that; ophthalmology, oncology, rheumatology, neurology. So this is something that can be done. Is it — does it take time? Yes. Do you have to work through many hurdles? Yes. Do you have to get office staff to understand a new approach? Yes, absolutely, but it can all be done. And as I noted, now that we have over 7,000 physicians that have taken action on Leqvio, 1,800 facilities ordering Leqvio, a steady increase in conversion from facilities that were previously using alternative injection centers to now implementing buy and bill in their facility for Leqvio.
I think we’re getting to a place now where physicians are getting more and more comfortable with the concept. And what we generally see is, once a physician has one patient go through the process and they understand that it is something that’s manageable, then it becomes something relatively straightforward for their office and then they take it on relatively quickly. So we have to get up that curve, but we’re seeing, I think, positive trends. And we’ll just keep working through it, keep also hopefully having clinics be able to educate one another about the experience of how buy and bill ultimately works and get that further implemented. So I wouldn’t read too much. And you can always find probably a physician to tell you any process is onerous and terrible.
But I think, broadly, when we look at a large-scale data set, we see steady progress on this front. Next question, operator.
Operator: Thank you. Your next question comes from the of Michael Leuchten from UBS. Please, go ahead. Your line is open.
Michael Leuchten: Thank you. A question for Harry, please. Just going back to the Sandoz operating expenses into 2023. I mean, that’s the biggest delta that your consensus really looking at the composition of numbers for this year. Harry, how much of these expenses are standup costs? And how much is sort of prepping for manufacturing shift as well? This just seems a meaningful amount that is coming into the P&L. Is that purely just separation costs, or is that already including sort of longer-term expenses that already hit 2023? Thank you.
Harry Kirsch: Yes. Thank you, Michael. So, overall, I would say, if we take out these standup and transitionary costs, the co-op inc Sandoz in 2023 would be flat. So a slow double-digit decline comes from that. If you think about, right, Sandoz delivered $1.9 billion co-op inc in 2022, so we talk about roughly plus/minus $200 million of cost block. Out of that $200 million, about $70 million to $90 million will be real standup costs, corporate costs and so on that Sandoz needs to operate as a separate public company. And the other half, if you will, will go away over time, as the fully transition to a public company. That would naturally go away as these transition costs are not any more needed after a couple of years. Of course, also the corporate cost — there will be corporate costs.
But clearly, Sandoz has plans to reach in the mid-term the mid-20s margin by then streamlining the overall operations, SG&A structures as they are a stand-alone company. So I hope that gives you a bit more flavor on that guidance for this year, which really should be a trough year. And then after the separation, relatively quickly come off that, including, of course, taking over transitional service costs, like for IT over time, quite quickly, usually maximum two years on such services.
Vasant Narasimhan: Thanks, Harry. Thanks Michael. Next question, operator?
Operator: Thank you. Your next question comes from the line of Emmanuel Papadakis from Deutsche Bank. Please, go ahead. Your line is open.
Emmanuel Papadakis: Thank you for taking the question. Perhaps, I’ll take one on Kisqali. You’ve reiterated the over $3 billion pre-sales potential for the end of an indication. So perhaps you could just help us understand how important do you think a clinically meaningful benefit in both of the two key subpopulations in the trial as intermediate risk and higher risk in terms of realizing that potential deal is steady positive? And how would you define clinically meaningful in terms of the absolute relative iDFS benefit in that population? And indeed, is that something you actually disclose with the headline or have to wait until details are presented? Thank you.
Vasant Narasimhan: Yeah. Thanks, Emmanuel. So the trial right now is overall designed for an endpoint across both patient populations. And so there — in order to hit the primary endpoint, we need to hit across all populations. Now the question would be would FDA parse the data and say that it was driven by the high risk population and then potentially take a different approach, we can’t judge. But the way designed and powered the study is across the entire group. And so from a pre-specified analysis on the primary endpoint, it would be for both the intermediate and the high risk, of course, with the relevant secondary end points. I’d also note that we’ve aligned with FDA that key for us is to show no detriment in OS, as long as we can demonstrate no detriment in OS at the time of that readout, that would be the case.
So I think you could expect a headline on, whenever it comes, on the iDFS. And then if relevant OS or not relevant the — we would not say anything on the OS. And then we’d have to have the discussion with the agency to determine how they would like us to cut the data. From our competitor data, there was a threshold that was applied for a certain subpopulation Ki-67 and then later adjusted. So these are all things that we’ll have to determine as part of the review process. Next question operator. Thanks, Emmanuel.
Operator: Thank you. Your next question comes from the line of Mark Purcell from Morgan Stanley. Please go ahead. Your line is open.
