I think we also have really good data on several others that are not yet approved like KarXT and aficamten, seltorexant that — those we view as very high probability of approval. But the point is that this is sort of a moving average suggestion because the $9 billion reflects the cumulative. And what happens is that several of those get approved and it gives us the capacity, the opportunity to actually continue to invest significantly in unapproved. And as the business grows, I think maintaining that balance of around half in approved and half in unapproved is probably a good target for us. But Marshall, back to you.
Marshall Urist: Great. And then, your — the last part of your question was on the 2025 Medicare Part D Redesign. And so I think like a lot of the world, the specifics of that on a product-by-product basis are something that we’re still thinking through. But just to remind everyone, the Royalty Pharma portfolio doesn’t have at a high level, a lot of exposure to Medicare Part D. And we’ve highlighted 3 products in the context of certainly the potential for IRA negotiation, Xtandi, Imbruvica and Trelegy that are significant products in our portfolio. But I think specifically but the same conclusion, I think, holds for the Medicare Part D Redesign which is which is that we don’t think there’s going to be a significant impact on our portfolio.
And certainly, we have a balance there of products that are higher priced and something like Trelegy which is lower priced and obviously, we’ll see very different dynamics and puts and takes within the Medicare Part D Redesign. But I think the important thing is the — there isn’t a lot of exposure right now. And as we continue to invest and build the portfolio with products like frexalimab, we will continue to add more and more diversity to the portfolio.
Operator: The next question comes from Peter Verdult with Citi.
Peter Verdult: It’s Peter here from Citi. Just a few questions, please. Just kicking off with frexalimab. We like this asset a lot, so you might see a deal. Just to be clear, Marshall, is this still — is it all valued and structured around MS? Or have you put in any sort of placeholder value for lupus and type 1. That’s question number one? Number 2 is lots of good stuff going on in terms of development pipeline but there have been some, should we say, recent setbacks. So I would be interested to hear how you’re thinking about the risk profile around pelabresib, in light of the emerging safety concerns anything you’re able to say right now. And then lastly, Marshall, just a clarification. Sorry to be gnarly but when I look at the ImmuNext press release, they’re stating that frac sales exceed €2 billion, the royalty goes from having all the royalties to a minority share.
So I just want to make sure, does that still — is your comment earlier in the presentation about getting $400 million royalties of €5 billion. Does that chime with what is in that ImmuNext press release?
Marshall Urist: Pete, welcome to the call. So just to make sure I hit all of those. So first on frexalimab, the core of our thesis was definitely centered on MS. So our kind of base view is an MS driven one. Certainly, we — one thing we really like about the transaction is the potential for further indications to come along for Sanofi invest in those which would drive further sales as well. So not part of the base case but we definitely like investments like this, where there are — there is optionality on indication expansion. The second question was on pelabresib. So not much to say beyond what’s in the public domain. We’re following the same thing you guys are but I would just recommend — I would just remind everyone that to think about pelabresib in the broader context of the MorphoSys investment.
So, pelabresib was a — is an interesting product. We’re excited to see what happens with it but was a small overall part of that transaction which was really focused on the great royalty on Tremfya that we acquired there. And then, your third question was the royalty structure. So no. So the way it works is we always have a majority of royalty a significant majority of the royalty. Once sales exceed $2 billion, there is some sharing with the former shareholders of ImmuNext but no. We still maintain the majority of the royalty which is a structure that, that sort of sharing and that structure is something we’ve used in the past in other transactions.
Operator: Our next question comes from Umer Raffat with Evercore.
Michael DiFiore: This is Mike DiFiore in for Umer. Congrats on the deal. A few for me on frexalimab and then one follow-up. On frexalimab, would you be able to quantify the minority share of royalties? Like what percentage you get above $2 billion? And also the total amount of milestone payments and the cadence of them. And also on Slide 11, regarding the unmet need, it implies that there is significant opportunity after patients discontinue anti-CD20s which also implies that either patients are still not too far along in their disease after they can discontinue or they had entered the nonrelapsing SPMS phase and that frexalimab can be efficacious in this setting. What gives you confidence that this may be the case? And I have a follow-up.
Marshall Urist: Sure. So just to make sure I hit all of those. So Mike, we haven’t quantified what — we haven’t quantified the amount of sharing. But I think just to reiterate the answer to Pete’s question is that we maintain a majority of the royalty above $2 billion. And then on the milestones, we haven’t given a lot of detail there.
Terrance Coyne: Mike, we did say though in the press release that — just to give you some context that — or sorry, we said it in the slides that nearly half of the purchase price could potentially be returned in what we view as higher probability milestones. So that gives you a little bit of a context of the scale. And then, that — I hope that helps. And then the last piece was on the unmet need. So what we were trying to say was not and your question is a good one, was not that we’re taking a view on secondary progressive MS at this point. But that when we look into our claims data closely, what we see is that patients are on CD20’s for a very long time. They’re great drugs but we do see that patients do come off over time and that population is at least one that will be pretty significant by the time by the time frexalimab launches.
