TVTX - NASDAQ

Good afternoon, and welcome to the Travere Therapeutics Fourth Quarter and Full Year 2025 Financial Results Conference Call. Today's call is being recorded. At this time, I would like to turn the conference call over to Nivi Nehra, Vice President, Corporate Communications and Investor Relations. Please go ahead, Nivi.

Thank you, operator. Good afternoon, and welcome to Travere Therapeutics Fourth Quarter and Full Year 2025 Financial Results and Corporate Update Call. Thank you all for joining. Today's call will be led by Dr. Eric Dube, our President and Chief Executive Officer. Eric will be joined in the prepared remarks by Dr. Jula Inrig, our Chief Medical Officer; Peter Heerma, our Chief Commercial Officer; and Chris Cline, our Chief Financial Officer. Dr. Bill Rote, our Chief Research Officer, will join us for the Q&A. Before we begin, I'd like to remind everyone that statements made during this call regarding matters that are not historical facts are forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of performance. They involve known and unknown risks, uncertainties and assumptions that may cause actual results, performance and achievements to differ materially from those expressed or implied by the statement. Please see the forward-looking statement disclaimer on the company's press release issued earlier today as well as the Risk Factors section in our Forms 10-Q and 10-K filed with the SEC. In addition, any forward-looking statements represent our views only as of the date such statements are made, February 19, 2026. and Travere specifically disclaims any obligation to update such statements to reflect future information, events or circumstances. With that, let me now turn the call over to Eric.

Thank you, Nivi. Good afternoon, and thank you all for joining us today. 2025 was an incredible year for Travere, one that was defined by achieving a new high in the number of patients we were able to reach with our approved medicines and clear advancement of our pipeline. This success was driven by focused execution against our strategy, strong commercial performance and an unwavering commitment to bring new medicines to communities that have been waiting far too long. In IgA nephropathy, we saw record demand and strong revenue growth in the fourth quarter, even as additional therapies entered the market. Physician confidence in FILSPARI continues to build as real-world experience reinforces our long-term clinical data and its role as a foundational nonimmunosuppressive therapy that can be used chronically and in combination. These results reflect growing use of FILSPARI in clinical practice, supported by strong execution across access, fulfillment and patient support. We remain confident in our ability to deliver continued growth in IgA nephropathy and reach more patients in 2026 and in the years ahead. We also continue to advance the next phase of growth for Travere. In FSGS, patients face a rapidly progressive disease with no FDA-approved medication today. The acceptance of our sNDA for an FSGS indication for FILSPARI last year marked an important step towards our goal of delivering the first approved medicine for this community. In January, we received notification of a major amendment to our sNDA following additional information requests received before the holidays. As a result, our new FDA PDUFA target action date is April 13, 2026. While the date for an action by the FDA has shifted, our conviction in the clinical profile of FILSPARI as a potential FSGS therapy and the benefit it could provide to the FSGS community remains unchanged. We will continue to work with the agency as they advance their review and with our expanded commercial team fully established, are ready to execute with excellence, if approved. Beyond FILSPARI, we are also advancing pegtibatinase for classical homocystinuria, or HCU, which we believe has the potential to become an important contributor to growth beyond FILSPARI. Pegtibatinase has the potential to be the first disease-modifying medicine to address the underlying cause of the disease. Notably, we have recently resumed site activation for our pivotal Phase III HARMONY study to enable enrollment globally. As we look ahead, our priorities are clear: solidify FILSPARI's foundational role in IgAN; successfully deliver the first approved medicine for FSGS, if approved; advance enrollment in our Phase III HARMONY study; and continue to build a durable growing rare disease company grounded in execution and scientific rigor. We entered 2026 with focus, discipline and confidence in our path forward and most importantly, with a continued commitment to delivering meaningful progress for patients. With that, I'll now turn the call over to Jula to talk more about the advancement of our programs. Jula?

Thank you, Eric. We are pleased with the consistent nephrologist feedback about the critical role of dual antagonism of endothelin and angiotensin as part of the foundational treatment paradigm to preserve kidney function in patients with IgA nephropathy. As we continue to generate FILSPARI data across a broad spectrum of patients with IgA nephropathy from early after diagnosis to recurrent post-transplant as well as in combination with other therapies, we are hearing consistent feedback from nephrologists that they are aligned with KDIGO and that FILSPARI has the potential to replace the historic role of RAS inhibitors and provide long-term nephroprotection for patients with IgA nephropathy. This support is rooted in data such as our recently published secondary analysis of PROTECT, which demonstrated that achievement of complete remission of proteinuria to less than 0.3 grams per day, of which 80% were treated with FILSPARI, was associated with an annual eGFR decline as recommended by KDIGO of less than 1 milliliter per minute per year, reflecting meaningful preservation of kidney function. Importantly, we believe the convergence of physician conviction and robust clinical evidence positions FILSPARI as foundational care in IgA nephropathy as we look ahead. Turning to FSGS. We continue working towards our new PDUFA date of April 13, and look forward to working with the agency as the review advances. We remain confident in FILSPARI's clinical profile and its potential, if approved, to meaningfully advance treatment for patients with FSGS by protecting podocyte health. This confidence is based on the strength and consistency of the data generated across our Phase II DUET and Phase III DUPLEX studies, which together represent 2 of the largest interventional clinical trials ever conducted in FSGS. Across these studies, FILSPARI consistently reduced proteinuria, a well-established driver of long-term kidney outcomes in this disease. Importantly, the trial data demonstrate consistent proteinuria reduction across a heterogeneous patient population, including both primary and genetic forms of FSGS as well as in pediatric patients. And the magnitude of treatment effect on proteinuria observed with FILSPARI versus active compared to irbesartan translated into a clinically meaningful reduction in kidney failure events, both within the DUPLEX trial and when extrapolated based on external data such as RaDaR. In our ongoing engagements with the nephrology community, we continue to hear strong alignment around the clinical relevance of the DUPLEX data, which is even more compelling given the absence of any FDA-approved medication indicated for FSGS today and the urgent need for earlier, more effective interventions relative to historical standard of care. Many clinicians emphasized the importance of proteinuria reduction as the primary treatment goal and recognize the consistency of FILSPARI's antiproteinuric effect across patient subgroups. Taken together, the totality of the data and the feedback we continue to hear from the FSGS community reinforce our belief in FILSPARI's potential to meaningfully change the treatment paradigm for patients living with FSGS, and we look forward to the FDA's upcoming review decision. Let me now turn to pegtibatinase in classical homocystinuria. Classical HCU is a serious genetic metabolic disorder with limited treatment options. These patients are born with a deficiency in their CBS enzyme that would normally help to metabolize certain proteins in their diet. This deficiency results in a toxic buildup of homocysteine, which can lead to serious and life-threatening thrombotic events such as stroke and pulmonary embolism or deep vein thrombosis in addition to vision and skeletal abnormalities and developmental delays. To put this into context, if untreated, approximately 25% of these patients have an ischemic event before they become a teenager and 50% experience an ischemic event before they turn 30. Pegtibatinase is an investigational enzyme replacement therapy designed to address the underlying CBS enzyme deficiency that drives toxic homocysteine accumulation rather than managing downstream consequences alone. The Phase I/II COMPOSE data demonstrated clinically meaningful reductions in total homocysteine, including normalization for one patient, a clear dose response and a favorable tolerability profile, supporting advancement into Phase III development. In 2025, we achieved key manufacturing process optimizations, an important milestone that positions the program for late-stage development and future potential commercialization. We have now resumed activating clinical trial sites for the Phase III HARMONY study and the long-term extension study ENSEMBLE, which are designed to evaluate sustained total homocysteine control and explore outcomes that matter to patients, including the potential for greater dietary flexibility. HARMONY is a randomized double-blind study of pegtibatinase versus placebo. The double-blind period will follow patients for 24 weeks, which includes the primary endpoint measuring change from baseline in plasma total homocysteine averaged over weeks 6 through 12, with durability of treatment measured as a secondary endpoint to week 24. There's also a 4-week screening period and following initial screening, there is a pretreatment diet stabilization period of up to 6 weeks to help minimize protein intake variability. The total study duration can range up to 38 weeks prior to entering into the ENSEMBLE extension study. We believe pegtibatinase has the potential to become the first disease-modifying therapy for classical HCU and, importantly, to meaningfully improve the day-to-day lived experience for patients and families. Our focus is now on building momentum as the trial resumes, and we expect to reinitiate dosing of new patients in the near future. Across our programs, we're looking forward to presenting new data at medical congresses this year. In IgAN, these efforts are intended to further support FILSPARI's role as foundational therapy. While in FSGS, they're focused on deepening the understanding of FILSPARI's clinical profile and its potential role in addressing the high unmet need in these patients. With that, I'll now turn it over to Peter for a commercial update. Peter?

Thank you, Jula. I am pleased to share that the fourth quarter of 2025 marked a strong finish to the year for FILSPARI with continued momentum driven by growing physician adoption, robust demand and increasing confidence in FILSPARI's role as a foundational therapy in IgA nephropathy. During the fourth quarter, we saw record demand of 908 new patient start forms for FILSPARI. Notably, we are seeing a strong level of demand continue into the first quarter. The demand in the fourth quarter was driven by both new prescribers and increasing use among established prescribers. Importantly, we continue to see an increasing number of practices treating multiple patients with FILSPARI, which we view as a meaningful indicator of physicians' confidence and experience in the therapy's effectiveness, tolerability and long-term utility. The strong demand translated into robust growth to the end of the year. In the fourth quarter, FILSPARI generated approximately $103 million in net product sales and approximately $322 million for the full year of 2025, representing a 144% year-over-year growth. We believe these results underscore the momentum and the significant growth opportunity for FILSPARI and its ability to continue to perform strongly as the IgA nephropathy treatment landscape evolves with new entrants. We believe FILSPARI's continued success in the fourth quarter was driven by its differentiated profile, simplification of the REMS monitoring requirements and the publication of the KDIGO guidelines. As a once-daily non-immunosuppressive oral therapy, FILSPARI provides a proven and convenient option for chronic use in a disease that requires long-term nephroprotective treatment. In addition, FILSPARI's ability to be used in combination with other therapies provides flexibility for nephrologists as they tailor treatment strategies to individual patients. We are also seeing broad utilization of FILSPARI across the full spectrum of adult patients with IgA nephropathy with increasing adoption in patients with elevated proteinuria levels, but below 1.5 gram per gram. This trend is consistent with the direction of the KDIGO guidelines as they emphasize a lower treatment target and earlier intervention. It is important as while FILSPARI continues to be used in patients with higher levels of proteinuria, we are seeing accelerating adoption in those below 1.5 gram per gram, which represents approximately 2/3 of the addressable IgA nephropathy population. From the patient perspective, feedback indicates that satisfaction with FILSPARI and our patient support services remain high with strong patient compliance and sustained persistence observed over time. Patients frequently cite the convenience of a once-daily oral medicine and the nonimmunosuppressive and nephroprotective profile with long-term kidney preservation as important factors in their treatment experience. In parallel, we have continued to build commercial readiness in anticipation of a potential approval in FSGS. Given the rapidly progressive nature of FSGS and the lack of approved therapies today, we believe our existing relationships, experience in IgA nephropathy and commercial infrastructure position us well to support patients and physicians in this setting. Based on the feedback from the FSGS community, we believe this indication, if approved, could be an even larger opportunity with a more rapid uptake compared to IgA nephropathy, and we stand ready to deliver for this patient community. In summary, the fourth quarter of 2025 demonstrated exceptional commercial execution and performance, evidenced by record demand and revenue. Building on our established commercial foundation and the strong performance amidst additional treatment options becoming available, I am confident in FILSPARI's ability to deliver sustainable growth and long-term leadership in rare kidney disease care. I couldn't be prouder of our commercial team and the impact they make on patients' lives on a daily basis. And I'm excited about how they will continue to support patients and physicians in 2026. Let me now turn the call over to Chris for the financial update. Chris?

Thank you, Peter, and good afternoon all. We ended the year in a strong financial position. This was bolstered by continued net product sales growth, focused investment in key priorities to support our current performance and sustainable growth potential and strategic partner milestones that added to our balance sheet strength. Beginning with revenue. For the fourth quarter, we reported U.S. net product sales of $126.6 million. And for the full year 2025, total net product sales were $410.5 million. This marks significant year-over-year growth in our revenue base. FILSPARI generated $103.3 million in U.S. net product sales for the fourth quarter, resulting in $322 million in net product sales for the full year 2025. Thiola and Thiola EC contributed $23.3 million in U.S. net product sales during the fourth quarter and $88.5 million for the full year 2025. For the fourth quarter and full year 2025, we also recognized $3.1 million and $80.3 million, respectively, in license and collaboration revenue. Moving to operating expenses. Our research and development expenses for the fourth quarter of 2025 were $57.9 million compared to $62.1 million for the same period in 2024. On a non-GAAP adjusted basis, R&D expenses were $54 million compared to $58.6 million for the same period in 2024. Selling, general and administrative expenses for the fourth quarter were $101.7 million compared to $69.5 million for the same period in 2024. And on a non-GAAP adjusted basis, SG&A expenses were $76 million for the fourth quarter compared to $51.6 million for the same period in 2024. The increase in SG&A is primarily attributable to investments in preparation for potential launch in FSGS, including the first full quarter with an expanded sales force, increased amortization expense related to FILSPARI royalties as FILSPARI continues to grow significantly as well as increased investments to support commercial efforts for FILSPARI in IgA nephropathy. Total other income net for the fourth quarter of 2025 was $11.4 million compared to less than $1 million for the same period in 2024. The difference is largely attributable to approximately $10 million in proceeds received as a result of the Renalys acquisition by Chugai that was completed in the fourth quarter. During the fourth quarter, we also recognized approximately $25 million of income from discontinued operations. This resulted from Mirum Pharmaceuticals achieving a sales-based milestone of $25 million that is expected to be paid to Travere in the first half of this year. Net income for the fourth quarter of 2025 was $2.7 million or $0.03 per basic share compared to a net loss of $60.3 million or $0.73 per basic share for the same period in 2024. On a non-GAAP adjusted basis, net income for the fourth quarter of 2025 was $33.3 million or $0.37 per basic share compared to a net loss of $39 million or $0.47 per basic share for the same period in 2024. As of December 31, 2025, we had cash, cash equivalents and marketable securities totaling approximately $322.8 million. This balance reflects the proceeds of the $40 million milestone payment received from CSL during the quarter as well as approximately $10 million from the Renalys acquisition by Chugai. Looking ahead in 2026, we expect meaningful net product sales growth from FILSPARI and IgA nephropathy to continue strengthening our financial position. While we anticipate modestly higher gross to net discounts compared to last year, as Peter mentioned, underlying demand remains strong, and we expect FILSPARI to deliver robust growth as foundational therapy. If approved for FSGS, we believe this represents a meaningful opportunity to build on our momentum from IgA nephropathy and further support potential top line growth. And from an operating expense perspective, we will continue to invest thoughtfully to advance both our current performance and long-term growth potential. We expect moderate operating expense growth versus 2025, primarily driven by the restart and execution of the global Phase III HARMONY study as well as supply for pegtibatinase, continued evidence generation for FILSPARI and commercial investment to support the potential FSGS launch. Importantly, we do not anticipate a near-term need for additional capital to support our current priorities. Our strong balance sheet, coupled with expected revenue growth and a focused investment approach position us to drive near- and long-term value. I'll now turn it over to Eric for his closing comments. Eric?

Thank you, Chris. In closing, Travere is well positioned as we enter the next phase of growth with strong commercial momentum in IgA nephropathy, a meaningful potential opportunity in FSGS as FILSPARI advances through the regulatory review process and a pipeline advancing with purpose. Our strategy is focused. Our teams are executing with discipline, and our balance sheet provides the flexibility to deliver on our priorities. Most importantly, we remain driven by the urgency felt by the patients and families we serve and by our responsibility to deliver meaningful progress on their behalf. Now let me turn the call over to Nivi for Q&A. Nivi?

Thank you, Eric. Operator, we can now open up the line for Q&A.

[Operator Instructions] We will now take the first question from the line of Vamil Divan from Guggenheim Securities.

Great. So just want to dig a little deeper into the IgAN performance. Obviously, strong new patient start forms. I'm wondering now that you've been in the market for a little bit. We also have some new competition obviously in the market over the last year or so. If you can give a little more detail in terms of how and where the product is being prescribed in IgAN, so more of a breakdown between community-based nephrologists and those that may be more academic centers and then also in terms of the treatment paradigm. So where is it being added on? And specifically in combination, are you seeing any issues with providers trying to use 2 branded products at the same time in terms of payers pushback and getting providers to prioritize one over the other?

Vamil, thanks for the question. Peter, I will turn that over to you, and I'll make sure that we capture all the kind of questions that Vamil asked there. Go ahead, Peter.

Yes. Thank you, Eric, and thanks, Vamil, for that question. And I did capture several components. So let me try to unpack that. And Vamil, let me know if I answered your question to your satisfaction. But first of all, to your point on like what was driving the demand in Q4 and to your point, like a very strong demand quarter with 908 new patient start forms, which was mainly driven by the modification of our REMS requirement as well as the publication of KDIGO and the education of the broader community really allows for the growth opportunity of the market and of FILSPARI in particular, which kind of like built into your second part of your question, like where do you see most of the utilization community relative to academic prescribers. And as we mentioned in the past, I mean, the vast majority of those patients reside in the community and our utilization is reflective of that. So we have more use in the community, consistent to where the patient community resides. I think the last component of your question was regarding in a changing treatment landscape, what is the payer situation. Well, as we have discussed in the past, we have a very strong position in payer formularies. We -- our objective was always to have broad utilization, and we have accomplished that with like over 96% of the patient population have a pathway to reimbursement for FILSPARI. And that remains unchanged in this evolving landscape with new competition coming in. I think I did answer all 3 of your questions, but Vamil, please add if you -- if I didn't.

No, that's helpful color. I'll jump back in the queue and...

Vamil, one thing that maybe I can just add is that we see a robust level of growth that's coming not just from the dynamics that Peter talked about, but also from new and repeat prescribers. When I think about sustainable growth in terms of the longer-term potential, this is exactly what we would hope to see that we're seeing new physicians start to prescribe as driven by the modification of REMS, KDIGO and the comfort that they're hearing from their peers, but we're also seeing physicians find new patients as repeat prescribers. That is very encouraging and particularly as new treatment options come to these patients, we're very encouraged and I want to emphasize one thing that Peter mentioned in his prepared remarks, which is these trends for strong demand continued in the first part of this year to start out this year very strongly. So we're very excited about the future potential growth for FILSPARI and IgA nephropathy.

Our next question comes from the line of Tyler Van Buren from TD Cowen.

Great to see the progress during the quarter. Can you tell us if you've had more significant data requests from the FDA following the last disclosure in the new year? And if so, what the nature of them were? And maybe just as a kicker here, given the ALIGN IgAN study data with 2.5 years of follow-up that Novartis reported for the Vanrafia last week, can you help us put that into context and compare it to what you've all reported for FILSPARI?

Tyler, thanks for the questions. I'll take the first one on FDA, and then I'll ask Jula to comment on the IgA nephropathy data. So we are continuing to have FDA engage and review our file. Our practice is not to comment on ongoing reviews. We did provide comment on the information request that we got at the end of last year just based on the unusual timing of those. But at this point, I'd say we provided FDA what they've asked for, and we're on track for the April 13 PDUFA date. Jula?

Yes. And with regards to the ALIGN trial data, we can't really make cross-trial comparisons given there's different trial designs and different time points for the endpoints. But I want to reiterate, FILSPARI was studied for 2 years against a max dose active comparator, which we know also preserves kidney function versus atrasentan was studied against the placebo with an endpoint at about 2.5 years. But let me reiterate what we demonstrated in PROTECT with FILSPARI. First, there was a 3.7 milliliter greater absolute preservation in eGFR at 2 years versus an active control. And this effect was nominally statistically significant. Importantly, we saw an accrual of benefit on kidney function over time, such that at 1 year, there was a 1.8 milliliter greater preservation in eGFR. And as I mentioned, at 2 years, this grew to 3.7 milliliter difference. Lastly, our primary endpoint of total eGFR slope in the preferred FDA analysis, which we have in our label, that was statistically significant with a treatment effect of 1.2 milliliters per minute per year versus active comparator. So in totality, we're confident in the data to support FILSPARI provides superior long-term nephroprotection versus a max dose irbesartan in PROTECT and that's what provides support for its first-line placement in the KDIGO guidelines.

Our next question comes from the line of Laura Chico from Wedbush Securities.

For the FILSPARI sNDA, I'm sorry if I missed this in the earlier response. I'm wondering if you could further elaborate on some of the specific aspects of clinical benefit characterization the agency is focused on. I guess I'm just trying to understand whether this signals any change in the agency's receptivity to proteinuria as an endpoint for FSGS. And then just a separate follow-up for Peter. What proportion of the new 4Q PSFs came from patients with proteinuria less than 1.5 gram per gram? It sounds like it's an increasing proportion. I'm just wondering if you could kind of contextualize that versus the earlier days of launch.

Laura, thanks for the questions. I will take the first one on the sNDA, and then I'll hand it over to Peter on the PSFs. We've not provided the level of detail on the types of information requests that FDA provides. That's our practice just not to comment on that level of detail. What we have said is that all of the information requests we received late last year were focused on clinical benefit. And what I would say is that from what we've seen throughout our engagements with the FDA as well as what other sponsors have commented on in their discussions around proteinuria as an endpoint, we believe that this is the endpoint that could be used as a validated surrogate endpoint for full approval. So we're on track for the PDUFA date, and there's nothing that we've seen that would suggest that they're questioning or walking away from proteinuria as an endpoint. And with that, I'll turn it over to Peter.

Perfect. Thank you, Eric, and thank you, Laura, for that question. To clarify your question, we still see demand also with patients with proteinuria levels of 1.5 and higher. But if you look at the totality of patient start forms that we are receiving, you see more and more patient start forms with proteinuria levels below 1.5. And if I look at the median, it continues to go down and it's well below 1.5, but we haven't split it out like in percentage-wise. So I can't comment on that.

Our next question comes from the line of Anupam Rama from JPMorgan.

This is Priyanka on for Anupam. Can you remind us of the sales infrastructure for IgAN and how this will need to be expanded for an FSGS approval?

Priyanka, thanks for the question, and I will hand that one over to Peter.

Yes. Thank you, Priyanka. So first of all, I think it's good to realize that the prescriber base for FSGS is very similar compared to IgA nephropathy. I mean in the past, I've called out there is like an over 80% overlap between IgA nephropathy and FSGS. The only real different prescriber base would be pediatric nephrologist. But to the point that you're making, we want to make sure that we continue to deliver for IgA nephropathy patients while also really optimizing the opportunity for FSGS. And so we have expanded our field team for that, and that is fully operational already.

That's right. And we previously commented that we had about 80 field-based personnel and we have expanded that to more than 100 in the field. We've not broken down that, but I think that certainly provides us with a very strong infrastructure to be able to realize strong growth in reaching patients with IgA nephropathy and FSGS, if approved.

Our next question comes from the line of Joe Schwartz from Leerink Partners.

I was wondering if you could elaborate on your commentary earlier regarding gross to net and give us some insight into how we should expect that to evolve over the balance of the year?

Joe, thanks for the question. I will hand that one over to Chris.

Sure. Thanks for the question, Joe. So just in terms of the mechanics for gross to nets, we anticipate the flow of them to be similar to what we've seen in previous years. That being that we would expect that in the first quarter, you're going to see the highest differential in gross to nets or the largest discount, and then you'll see that lessen in the second and third quarters. So a very similar dynamic. I think the thing that is a little bit different this year is that our gross to nets are expected to increase modestly. So this year, we're expecting to be in the mid-20s -- mid-20 percentages for the full year for FILSPARI and that's up a little bit from last year where we ended the year right around 20%.

Our next question comes from the line of Prakhar Agrawal from Cantor.

Congrats on the strong quarter. So I had 2. Maybe firstly, on FSGS. Given that externally, we have limited information on the nature of these information requests from the FDA. What is your confidence level in getting FILSPARI approval for FSGS based on FDA's level of questioning? And what is driving that conviction? And secondly, on IgAN with the Otsuka's launch of their APRIL blocker in 4Q. It seems like they have got 500 patient start forms since launch. Where are they gaining new patient starts versus FILSPARI? And how much impact from Otsuka's drug and future BAFF/APRIL drugs are you incorporating in 2026?

Prakhar, thanks so much for the questions. I will take the first question on FSGS, and I'll hand it over to Peter for the discussion on the evolving treatment landscape. So with regard to FSGS, again, we've provided information on the nature of the questions, but not specifically. What I can say is that our confidence has only increased in the profile of FILSPARI as a potential treatment in FSGS because not only do we see the data that we've presented and published as part of the New England Journal of Medicine, but all the work that we've done to be able to contextualize in the context of the PARASOL analysis showing how proteinuria has an independent predictive value of longer-term kidney -- risk of kidney failure further strengthened through our review and through our further analyses, some of which was presented at ASN in the fall. So again, our confidence remains very high in the profile. And as Jula mentioned, 2 of the largest studies ever done in PROTECT -- in FSGS, now reflective of some of the conclusions that we saw coming out of PARASOL. Jula, is there anything else that you'd want to add on the data?

No. Just we continue to feel quite confident in the data that we presented, as you mentioned, as well as what we submitted in our file and presented at ASN. FILSPARI clearly reduces proteinuria, as I mentioned in my prepared remarks, across a broad spectrum of patients with FSGS and we have strong conviction that it should be available for treatment for the high-risk patient population that really has very little other treatment options.

Thanks, Jula. And Peter, why don't you take the question about the Otsuka launch?

Yes, happy to do so. I think the 500 patient start forms that you were referring to from Otsuka is really indicative of the overall IgAN market growing and the urgency to intervene earlier is reflecting that. And I think KDIGO is really outlining that this is a 2-pronged approach. You need to have kidney-targeted therapies that historically was done with ACE and ARBs and now with FILSPARI as novel superior alternative. They had historically generic steroids and now you have B-cell therapy that could replace that. And what we are hearing so far is that physicians act accordingly. They really see this as replacing steroids in the higher proteinuria patient population. And maybe good to articulate to my earlier comment in the prepared remarks, we see a very nice continuation of demand -- strong demand in the first part of the year, which indicates that we are not seeing any signs of switching and we're not seeing any signs of sequencing B cells before FILSPARI. So I'm very encouraged by what we are seeing right now, and it's very consistent to how we were anticipating the marketplace and very consistent also to the KDIGO guidelines.

Yes. Thank you, Peter. Prakhar, the way that I like to think this -- about this as we take a step back is this is going to be a marketplace that is going to have a real acceleration of growth as there are new treatment options for these patients. And certainly, the KDIGO guidelines outline why that's going to take place. We expect to see therapies that are immune targeted like the Otsuka compound grow in parallel to the growth that we expect to see as we look to replace the traditional role of RAS inhibitors just as they will be replacing the traditional role that steroids play. So there's going to be evolution of innovation that really is going to fuel growth for both sides of the treatment algorithm.

Our next question comes from the line of Mohit Bansal from Wells Fargo.

This is Sadia Rahman on for Mohit. So you've been seeing really good traction in the market recently and it sounds like you expect robust growth this year. So just wondering if you can comment on how penetrated the U.S. market is today and how you view FILSPARI's potential, how much further you think this can grow? I think The Street's expectations currently imply that penetration could double over time from current levels, which still seem low. So just wondering if you think that's appropriate given the new competition that's coming? Or do you think FILSPARI's expansion potential might be underappreciated?

Thanks, Sadia. Very insightful and great questions. Let me first start before I hand it over to Peter in saying we're not -- I don't want to provide any type of guidance. But I think what we can talk about is some of the potential and some of the dynamics. And I think, Peter, if you can start with what are we seeing with the estimated penetration, I think then we can reflect on what is the real potential for further growth in our segment of this market.

Yes. I think that's a good way to start. I think overall, you have to realize this was a market that historically was treated with generic medicine. And if you look at proxies in other disease areas, you see there is a substantial opportunity for branded superior treatment options. And with our data, I think we have a very strong opportunity. I mean if you look at our cumulative amount of patient start forms, we don't even hit yet 10% of the addressable patient population. So I think that allows a very strong growth opportunity ahead of us. I mean if I think about the amount of patients that are still treated with ACE inhibitors or ARBs for IgA nephropathy, while there is a superior treatment available, that's the opportunity we have. And to provide a finer point on that, I think there are 3 categories how I would classify continued growth. I think the first one, to my earlier point, innovation matters. We have that opportunity with a superior product to replace generic RAS inhibition with FILSPARI. The second point is, as we mentioned earlier in the prepared remarks, and Eric was mentioning that in the -- answering the earlier question as well, with KDIGO and with the recognition to treat those patients earlier and more aggressively, we have an opportunity to further build that market and expand the patient population that are yet untreated. And I think the guidelines really allow us to move into that segment as well. And then the third category, building on what Eric said earlier on the Otsuka question, we are expecting that you will see increased combination therapies, in particular with like a more ambitious treatment target. One treatment category may not bring you there, and that's why we are anticipating that you will see a continuation of use of novel foundational therapies like FILSPARI as well as immunosuppressive -- novel immunosuppressive treatment agents like, for example, the B cells or the complement inhibitors. All in all, I feel that this market is going to grow. I think with FILSPARI, we are very well positioned in that foundational treatment category. And I think this -- you will see that this market will continue to grow.

Yes. Thank you, Peter. And just to round out, Sadia, the other aspect is that we have shared that at peak, we believe that IgA nephropathy alone for FILSPARI will be well above $1 billion potential. So real opportunity for further growth in the years to come.

Our next question comes from the line of Gavin Clark-Gartner from Evercore.

I was just wondering what your plans are for communicating with the investor community more broadly as we approach the FSGS PDUFA over the next 2 months or so.

Gavin, thanks for the question. I will hand that one over to Chris.

Thanks, Gavin. We're going to approach this very similar to how we did the last time around, and we're going to enter into a quiet period here at the end of the month. And then once we have a material communication from the FDA on their decision for the PDUFA action, we'll provide an update and make sure everybody is on the same page. But it will be done very similar to before where we'll go into a quiet period, and you shouldn't expect to hear much from us on an incremental basis between now and then.

Next question comes from the line of Maury Raycroft from Jefferies.

You've commented a few times on the demand going into your first quarter. Can you set expectations for first quarter as it relates to new patient starts and how insurance resets or other variables could influence your sales number relative to fourth quarter '25? And then for FSGS, have you had any discussions with FDA on the label yet? And what are your latest expectations on what the label could look like?

Maury, thanks for the questions. Peter, I will have you talk about demand in Q1. And then Bill, if you can take the question on the FSGS label.

Very good. Well, thanks, Maury, for that question. And yes, indeed, we are very happy with the very strong demand exceeding 900. I think it's too early to say if that would be our new baseline, but I'm encouraged with what we are seeing so far in the beginning of the year. Having said that, I also want to make sure that we realize this is rare disease and that you may see variability quarter-over-quarter. But most importantly, I'm confident to deliver sustainable growth and long-term leadership in IgA nephropathy with FILSPARI.

And I'll tackle the label question. We're about 7 weeks out from our action date, which is a little bit early for us to be getting the initiation of label negotiation. We expect that to begin as we get a little bit closer. As to what the label should look like, we believe that FILSPARI has broad applicability in FSGS and should be used across all forms. We've submitted a label that matches that intent. And we have seen across all patients used very broad efficacy with a consistent safety profile. So that's the expectation that we have around the indication on the label.

And Maury, maybe just to add one thing on the revenue side on 1Q to answer your question fully. I mentioned earlier on the call that we expect higher gross to nets for the year. But in the first quarter, you see the biggest effect of that. So 4Q going to 1Q, you will see an increase in that discount. So I want to make sure that everybody is taking that into account for their model. Again, same as what we've seen in previous years, but we will see a higher discount in 1Q relative to the other quarters.

Our next question comes from the line of Jason

Congrats on the progress. Peter, one for you, if I may. Can you speak to the potential of a halo effect if FILSPARI receives approval in FSGS for IgAN? I know you said the prescriber base overlaps about 80%. But I guess, any opportunities for increased awareness or I don't know, potentially a lowering of some of the friction points that might cause an IgAN prescriber some pause or, I don't know, underlying inertia?

Thanks, Jason. Peter?

Yes. Thank you, Jason, for that question. And I think it's a very good point that you bring up. Is there a halo effect once you get an FSGS approval and would that have a good reflection on IgA nephropathy as well? Well, to your point, I mean, given that this is largely the same prescriber base, I think you're absolutely right. There will be a halo effect, and there will be some crosstalk between the 2 indications. And yes, I think even more reason to be very excited about the FSGS opportunity, not only for serving this patient community that has been without an approved treatment for far too long, but also how that could reflect then on further confidence in the profile of FILSPARI for IgA nephropathy patients.

Got it. Any idea of kind of magnitude or...

Tough to say. I think directionally, we absolutely expect there to be a synergistic effect between the 2. And certainly, as you point out, simplifying the process for these offices that are incredibly busy, particularly community nephrology offices. But I'd say it's too early for us to be able to quantify. But directionally, absolutely, we would expect there to be a synergistic effect.

Our next question comes from the line of Alex Thompson from Stifel.

Maybe again on FDA interactions over the last few months related to the FSGS filing. Could you comment on the consistency of interactions among members of the cardio-renal division? Has it been the same group throughout this process? And does it continue to be the same group?

Thanks, Alex. Bill, I'll turn that one over to you.

Sure. Recently, we've been made aware of some changes within the review team, but I think it's important to note that we also see continuity through the team, especially in those folks that were involved in the PARASOL project, looking at proteinuria as an endpoint for FSGS. Importantly, our recent interactions have also included the division level of leadership, and that leadership has remained consistent and engaged throughout the process.

Our next question comes from the line of Yigal Nochomovitz from Citigroup.

I had one on FILSPARI and then one on pegtibatinase. So I was just curious, looking at the quarter-on-quarter trends from 3Q to 4Q, you were up 13% and on revenue and you were up just almost twice that on start forms. So I wonder if you could expand a bit in terms of the lag between the strong growth in the start forms of 25 -- 24%, 25% and the quarter-on-quarter revenue growth? And then secondarily on pegtibatinase. With regard to the study that you're conducting, can you just describe what the -- what you would need to see in terms of reduction in homocystine levels to be Statsig on the primary endpoint? And also, are you looking at some responder analyses, for example, percent of patients that get below, say, 12 micromolar or even lower, say, below 10 micromolar for those part of the analysis?

Yigal, thanks for the questions. Peter, why don't you take the one on demand versus revenue? And then, Jula, if you can take the question on our endpoints.

Absolutely. Thanks, Yigal. Yes, over the last few quarters, we actually had the opposite. We had strong revenue growth relative to patient start forms. I think the most important point is to the point that you made. There's always a time lag between patient start form generation and revenue recognition. And we saw that same phenomenon after our full approval in September 2024. Too specifics to call out here. One, December was our strongest month. So they will carry over into Q1 revenue recognition. And the second part is something that we highlighted in the Q3 earnings call is that our gross to net will be higher in Q4.

And then I'll talk about the HARMONY study. We haven't stated externally what treatment effect we need to reach statistical significance, but I'll point back to our COMPOSE study, where we had about -- between 5 and 6 patients per cohort, and we saw a 67% reduction in total homocysteine, which was highly statistically significant with a small number of patients. We're obviously going to a larger sample size. We have about 70 patients that we're planning to enroll for this and are well powered to achieve statistical significance if we even reach something comparable to what we saw or less. And I'll reiterate that we have already looked at long-term durability of treatment effect. Our primary endpoint is 6 to 12 weeks, which is where we saw that 67% reduction in total homocysteine in our Phase I/II study, but we've also seen a durability when we follow these patients from COMPOSE out to even 1 year, where they still maintain a greater than 50% reduction in total homocysteine out to 1 year. So we feel very confident in our study design to be able to achieve our primary endpoint. In addition, you've asked about some secondary endpoints or other things. We certainly will look at clinically meaningful thresholds. I would say you asked about -- a little bit about a responder. Importantly, what we've seen to date with pegtibatinase is everyone has a reduction in total homocysteine based on the mechanism of action and in our study. So we feel comfortable with our study design and that we'll be able to show both a clinically meaningful treatment effect and then different thresholds that we will look at.

Ladies and gentlemen, this concludes the question-and-answer session of today's conference call. I'll hand the call over back to Nivi.

Thank you, everyone, for joining today's call. Have a great rest of your day.