Anupam Rama: Hey, guys. Thanks so much for taking the question. Maybe a broader question actually. You guys have talked a lot about private pay and supplemental insurance. What portion of revenues are currently reimbursed with this mechanism? And what does that look like as you model out to 2025 and 2030 timeframe? And which products do you see with the greatest portion being reimbursed by private pay and supplemental insurance? Thanks so much.
Harald Reinhart: Hey, Anupam. Josh, do you want to take this one?
Josh Smiley: Sure. Hi, Anupam. Thanks for the question. I’d say first, we’re pleased with the overall reimbursement environment in China and its development over the last few years. Certainly on the supplemental insurance side, we’ve seen number of people covered grow from about 40 million at the end of 2020 to 150 million at the end of 2022. We expect that number to grow over the next few years to somewhere between 200 million and 300 million, so a quite sizable population, if you start to look at that compared to other countries around the world. So that’s certainly positive and we see the benefits of that, most directly now in Optune. So in terms of percentages, while we don’t break it out, I think just looking at our 2022 results, ZEJULA has covered through NRDL, the other three products weren’t.
So just at a very macro level, about 70% or so of our sales were through some NRDL mechanism, the rest through a combination of commercial, supplemental insurance and private pay. I think as we look forward, though, certainly with the growth in supplemental insurance that provides a really important option at launch for our innovative products for a sizable number of patients to have access to the innovation and for physicians to get experience. But our strategies going forward for the kinds of drugs that we are developing, either in our internal pipeline or with partners, we think they are ultimately going to be NRDL opportunities. And Billy alluded earlier that even on the medical device side, we see some really important progress there. So I think, Anupam, our strategy is to bring great innovation, as it relates to China great innovation to Chinese patients.
And we want to do that as broadly as possible. So our lead strategy will be to leverage NRDL opportunities. We’re quite pleased with the three products we now have on NRDL and the economics associated with them. In other words, the net price we now have relative to the patient opportunities, we’ll continue to pursue that for innovative drugs, like efgartigimod this year, but certainly the multi layered system we’re seeing now in China, develop in a robust way provides a lot more flexibility and a lot more options for early access for some sizable amount of patients over time. Thanks for the question.
Anupam Rama: Thanks so much.
Operator: Thank you for your question. We are now taking the next question. The next question from Yigal Nochomovitz from Citi. Please go ahead. Your line is open.
Yigal Nochomovitz: Hi. Thank you for taking the questions. Billy, I think you said that you’re basically flat year-on-year on R&D upfront and maybe marginally higher year-on-year on SG&A. Just if you could just clarify is the spend basically going to be flattish going forward to drive to overall corporate profitability with the top line growth by the year-end ’25? Or might you have some flexibility to accelerate OpEx and still navigate to profitability with the top line growth by the end of ’25? Thanks.
Billy Cho: Yes. Hey, Yigal. So you’re right, you heard that correctly. In terms of core R&D, it was pretty much at the 250 level. So roughly flat year-over-year ’21, ’22. This year, you can expect a very modest increase. And as you know, we have a pretty active development calendar, given the anticipated approvals and launches over the next 3 years, I think we have around eight, at least in the queue. So — but I think we should expect that to be at that range. Now for SG&A, so we have with the we have said that this year, we’re going to be commercially profitable, or we target to be commercially profitable, even as we build a new sales team for efgartigimod launch. So that’s a great place to be. You can expect to see that operating leverage continue to increase as the revenue increases and as we launch additional products.
