And as we mentioned in this call we plan for this and we are making solid progress in the year.
Maurice Raycroft: Got it. Thanks for taking my question.
Peter Heerma: Thanks, Maurice.
Operator: We will take our next question from the line of Tim Lugo with William Blair. Tim Lugo, your line is now open.
Tim Lugo: Thanks for the question and congrats on the good quarter. With the bile acid portfolio being carved out, how should we expect gross margins to trend over the next few quarters during the launch? And then maybe what will gross margins be trending at maturity?
Eric Dube: Chris, why don’t you take that question? Thanks for, Tim.
Chris Cline: Yes, happy to do that. Thanks for the question, Tim. In terms of specifics for gross margins it will be easier for us to be able to comment on that once we’ve closed the transaction and we have some of the pro forma and carve out statements that will be available. But what I can point you to is that we do expect to see a reduction in expense related to the bile acid portfolio. That will come in both SG&A and R&D. And when you think about SG&A you’ve got a small sales force that is supporting CHOLBAM and you’ve got promotional efforts that go into that. So that would transition. And then from an R&D perspective, we do have a small Phase 3 study that’s ongoing to support Chenodal as well as some biostats and regulatory work.
And so we do expect that those expenses will transition as we move forward and we’ll be able to go in a bit more detail as to the specifics on margins there as we go forward. In terms of margins for the launch, we’ve commented historically that we expect thus far you get to a stable state of mid- to high teens and really there at least on a gross to net perspective and everything we see thus far is in line with obtaining that.
Tim Lugo: Okay. Fair enough. And there were some comments about seasonality in the summer, but then also some destocking in Q2 and reorders which I assume would impact Q3. Can you kind of put those together it sounds like you mentioned consensus is assuming in line with the other rare renal launches. Are you pretty comfortable with what Q3 consensus is?
Eric Dube: So Tim, what I can characterize it in the second half of the year, we do expect to see a ramp in our revenues. And I think in Q3, we do expect to see a pull-through of the demand that we were able to generate in patient start forms in Q2. And as we’ve seen a meaningful improvement in payer access, we think a lot of that will convert to paid scripts. But in the first part of a launch it is variable and there still is some time even with great access to be able to really tighten that correlation between demand and revenue. So we think that that’s going to really start to play through in the third quarter. And then really by the end of this year we should start to see the patient start forms and revenue really tie closely together.
The other thing that I will mention is that with many of the other launches within this space in their first year of launch, close to 50% of the revenues are generated in the last quarter of the year. We fully expect that that is something that we could see here. But taking a step back, I think we’re very confident in our ability to meet those expectations and we’re off to a strong start but we still have to continue to execute lay that foundation that Peter talked about and continue to deliver on the strong demand that was generated in the first half of the year.
Tim Lugo: Understood. Thank you so much.
Eric Dube: Thank you.
Operator: Our next question comes from the line of Mohit Bansal with Wells Fargo. Mohit Bansal, your line is open.
