Verona Pharma plc (NASDAQ:VRNA) Q2 2023 Earnings Call Transcript

And so we will handle that as this team has been through the process numerous times previously. So early days in the submission, and so much more to come. But I think for where we are right now, I think we’re in as good a place as we can be. With that, I’ll turn it over to Mark.

Operator: We take the next question from Tom Shrader from BTIG. Please go ahead.

Thomas Shrader: Hi, good morning. Thanks for taking the question. This is really for Chris. On approval, Chris, what are the steps to get a drug through the Medicare Part B pathway? How long does it take? And is it exactly the same for Medicare Advantage? Or is there another step? And then a temporary J code, is that your price? Or is that kind of an agreed upon price for a nebulized drug. Thanks.

Christopher Martin: Yes. I’ll start with kind of the process on the Medicare Part B pathway. So if we think about the Medicare Part B pathway, we’ve that pathway as a medical benefit for these patients. So at launch, as you discussed, we get — we launched with a temporary J code. In our research and work with our consultants within CMS, we believe that ensifentrine falls under existing coverage policies or would fall under existing coverage policies for nebulized products for COPD delivered through nebulizer. So during that time that you’re working under a nonspecific J-code, you’re also working to make sure that the coverage policies are updating to ensure ensifentrine in there. We would apply for a product-specific J-code as quickly as possible.

That product-specific J-code now can be submitted quarterly. So depending on the approval date, we could have between a 3-month and 6-month lag between when we get a product-specific J-code and using that non-specific J-code. The other important thing here is that when we think about Medicare Advantage, Medicare Advantage has to follow the Medicare Part B pathway. And so they have to provide coverage for these drugs under the Medicare Advantage plans. However, Medicare Advantage can put use criteria in place unlike Medicare Part B, traditional Medicare Part B. And what I mean by use criteria is like that have simple step edits or prior authorizations that are needed before a patient could use a product. In our early discussions with the major Medicare Advantage plans, they see highly differentiated data with ensifentrine because they control both the pharmacy and medical benefit side of the business, they’re very interested in some of the data that Kathy talked about that’s being presented at ERS like health care utilization and the exacerbation data.

And that makes ensifentrine potentially attractive to them from a payer standpoint so that in most conversations that we’ve had, really a worst-case scenario is that you’d have to step through a generic LAMA or LABA before going to ensifentrine. And if we think about the patient we’re trying to target with ensifentrine, which is a patient that’s symptomatic, that’s on therapy that needs additional help. It’s a very low hurdle for many of these providers in that setting. As far as the non-specific J-code, the reimbursement is tied back to WAC pricing. So it’s more of a WAC pricing reimbursement related to ensifentrine versus a set price there. So the other process during the non-specific J-Code is a manual adjudication, which takes a couple more days than when you have your product-specific J-code.

Thomas Shrader: Okay. Great. Thanks for the color.

Christopher Martin: Yes.

Operator: [Operator Instructions] The next question comes from Boobalan Pachaiyappan from H.C. Wainwright. Please go ahead.

Boobalan Pachaiyappan: Hi, this is Boobalan. Thanks for taking my questions. So assuming the FDA accepts your NDA, and ensifentrine gets approved next year. So what are your preliminary thoughts about ensifentrine subgroup usage during the early period of launch, given ENHANCE studies were primarily conducted in gold B patients with moderate to severe.

David Zaccardelli: Chris, do you want to just talk about where we see the uptake?