ZGNX (2021 - Q2)

Good day, and welcome to the Zogenix, Inc. Second Quarter 2021 Financial Results Conference Call. Today�s conference is being recorded. At this time, I would like to turn the conference over to Brian Ritchie, LifeSci Advisors. Please go ahead. Brian Ri

Thank you, operator. And thank you all for joining us this afternoon. With me on today�s call are Chief Executive Officer, Dr. Stephen Farr; Chief Commercial Officer, Ashish Sagrolikar; and Chief Financial Officer, Michael Smith. This afternoon, Zogenix issued a news release providing a business update and announcing financial results for the 3 and 6 months ended June 30, 2021. Please note that certain information discussed on the call today is covered under the safe harbor provision of the Private Securities Litigation Reform Act. We caution listeners that during this call, Zogenix management will be making forward-looking statements. Actual results could differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with the company�s business. These forward-looking statements are qualified by the cautionary statements contained in Zogenix� press release issued today and the company�s SEC filings, including in the annual report on Form 10-K and subsequent filings. This conference call also contains time-sensitive information that is accurate only as of the date of this live broadcast, August 5, 2021. Zogenix undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call. Now I�d like to turn the call over to Steve.

Thank you, Brian, and good afternoon to everyone. I�m delighted to be here with you today to provide updates on what continues to be an exciting and productive period for Zogenix as we further round commercial activities for FINTEPLA in Dravet syndrome and advance our development programs for FINTEPLA in other areas of our pipeline that I will update you on later during today�s call. First, I�d like to provide a brief update on our commercialization of FINTEPLA. We continue to achieve significant progress around the launches of FINTEPLA for Dravet syndrome in the United States and Europe, where we see continued meaningful quarter-over-quarter growth in the number of prescribers, patients on FINTEPLA as well as net sales revenue. FINTEPLA addresses a large unmet need of the Dravet community by enabling more patients to achieve significant and lasting seizure reduction. With physician interest remaining strong, we expect these positive trends to continue. As expected from our previous clinical trial experience, patient adherence to FINTEPLA therapy continues to be very high, and discontinuation is low. Our first annual report submitted to the FDA confirmed that the FINTEPLA REMS process is working exceptionally well and that regular echo monitoring continues to show no evidence of other heart disease or pulmonary arterial hypertension in any patient taking FINTEPLA. During the second quarter, as COVID restrictions began to lift in many parts of the U.S., our field-based teams have more face-to-face physician visits, but at any time since launch, leading to more physicians and their staff educated about the benefits of FINTEPLA under REMS process. To this end, June represented the highest monthly number of new patients referred to the REMS program. This success in commercializing our first rare disease therapy, coupled with active preparations for our next phase of growth, has led to more complex demands in our business. I�m pleased, therefore, to announce the promotion of Ashish Sagrolikar to Executive Vice President and Chief Operating Officer. Ashish has been a critically valuable member of our executive team and has established and grown our commercial teams for the launch of FINTEPLA in the United States and in Europe. In this newly created role, he will be responsible for leading the company�s commercial growth trajectory and global commercial strategic planning as well as overseeing pharmaceutical operations, which includes our CMC manufacturing and quality functions. We look forward to further leveraging Ashish�s expertise and talents as we pursue new markets and indications for FINTEPLA and prepare to bring MT1621 to market. With that, I�ll now hand the call over to Ashish for further commercial update.

Thank you, Steve. I�m thrilled to assume these new responsibilities and look forward to continuing to work with the exceptional team at Zogenix to advance our mission of transforming the lives of rare disease patients and their families. With that, I�m pleased today to provide additional color on our commercial team�s progress on commercializing FINTEPLA in both the U.S. and Europe. In the second quarter of 2021, we achieved $17.5 million in FINTEPLA net product sales, representing 42% growth over the first quarter of 2021. This includes FINTEPLA net sales of $15.5 million in the U.S and $2 million in Europe. This significant sales growth reflects the enduring desire within the Dravet community to initiate and continue treatment with FINTEPLA. As Steve noted, with the more serious COVID restrictions easing in the U.S. and Europe during the second quarter, our sales and other customer-facing teams were able to steadily increase in-person visits with health care professionals. Towards the end of second quarter, our team was able to meet in person with approximately 45% of their target accounts, up from less than 20% in the first quarter. Our experience in the field is consistent with the recently reported figures in available industry data for the neurology sector as of June 2021. In the later part of the quarter, we saw a direct correlation between these visits and new patients starting therapy. By the end of second quarter, over 860 patients have been prescribed FINTEPLA and referred to the REMS program. This reflects 160 new patients referred to the REMS program in the second quarter. During the quarter, more than 125 patients began receiving reimbursed commercial therapy. The retention rate for patients remaining on FINTEPLA has been consistent with our experience in clinical trials and the expanded access program for Dravet syndrome with approximately 90% of patients remaining on therapy by the end of June 2021. The number of unique prescribers increased by 22% to 290 over the first quarter. Consistent with prior quarters, it took approximately 2 to 4 weeks to fill a prescription from the time of patients enrollment in the REMS program. Collectively, these are compelling metrics that indicate significant interest in FINTEPLA from physicians and patients as well as its durable benefit for patients and their families. Going forward, we expect steady growth in each of these key indicators, especially if the impact of COVID continues to decline. We also continue to be extremely pleased with the payer coverage for FINTEPLA. By the end of second quarter, sales covering over 84% of U.S. lives had published a formal policy that covers FINTEPLA as per label and on parity with other antiepileptic therapies. Having completed 3 full quarters since the launch of FINTEPLA in Dravet syndrome and reviewing the prescribing trends, we have decided to expand our prescriber call list to include majority of neurologists who treat refractory epilepsies in the United States. Our analysis indicated that almost 1/4 of Dravet patients who have started FINTEPLA are treated by these neurologists in this expanded list. To cover the broader target list and further accelerate the adoption of FINTEPLA to treat Dravet syndrome, we have begun an incremental expansion of our sales and other customer-facing teams in the U.S. In anticipation of submitting the supplemental NDA for LGS mid of this quarter, we are also finalizing our preparations. We are conducting various market research studies and advisory boards to best understand the evolving needs of the LGS community in order to refine our programs and go-to-market strategies. We are also in the process of finalizing our health economic models and value strategies for LGS to help facilitate discussions with payers beginning in the fourth quarter. We anticipate that our launch preparation and the previously discussed sales and field team expansion will position us to launch FINTEPLA in LGS immediately upon approval in first half of 2022. Now transitioning to Europe. Our first European launch of FINTEPLA in Dravet syndrome in Germany is progressing well. More than 150 clinicians are now eligible to prescribe FINTEPLA, and all clinical trial and expanded access patients have been transitioned to commercial therapy. In France, patients continue to prescribe -- be prescribed FINTEPLA under the Temporary Use Authorization or ATU until the ongoing reimbursement negotiations are finalized. We have made significant progress in our pricing and reimbursement negotiations in France and other major European markets, including Germany, the United Kingdom, and Italy. In conclusion, we are very pleased with our strong sales growth in the United States and continued substantial progress in Europe and the expanding access of FINTEPLA in other countries. We anticipate continued growth in all geographies and look forward to updating you further as the year progresses. Now I�ll turn it back to Steve for an update on our recent pipeline advancements.

Thank you, Ashish. Reinforcing the importance of FINTEPLA as a new treatment option, we were pleased to see a recent editorial in the journal, Epilepsy & Behavior, recognized FINTEPLA as setting new treatment standards with Dravet syndrome. Dr. Joseph Sullivan from UCSF and Dr. Helen Cross from the U.K.�s UCL Institute of Child Health and President of the International League Against Epilepsy highlighted that the profound seizure reduction and positive facts on executive function achieved with FINTEPLA have also raised the bar for assessment of future therapies for refractory epilepsy syndromes. This brings me to an update on the progress of our late-stage development programs for FINTEPLA on MT1621 following a busy period of 3 highly positive Type B meetings held with the FDA in June and July. Most importantly, our pre-NDA meeting with the FDA for FINTEPLA in LGS was successful and collaborative in discussions around the details of our plan submission. We are on track to file a supplemental NDA by the end of this quarter. And as agreed by the agency, we will include the results from our single randomized controlled trial on 2 open-label extension studies to establish the safety and efficacy of FINTEPLA in LGS. In addition, our submission will include clinical pharmacology or pharmacokinetic studies and nonclinical studies relating to carcinogenicity and chronic toxicology. The FDA also stated that the supplemental NDA may be eligible for priority review because it is part of the response to a written request under the Pediatric Research Equity Act or PREA. The agency will decide on priority review classification following submission of our supplemental NDA. Looking at additional potential indications for FINTEPLA, we recently held a positive pre-IND meeting with the FDA for our newest FINTEPLA program in CDKL5 deficiency disorder, or CDD, to finalize the design and propose endpoints for an upcoming pivotal trial. The FDA agreed that we should conduct a 2-arm fixed dose Phase III trial to investigate the efficacy and safety of FINTEPLA in controlling convulsive seizure frequency at a dose of 0.7 milligrams per kilogram per day versus placebo. As a reminder, all of our prior Phase III trials in Dravet syndrome, LGS were conducted as 3-arm studies as per agreement with the FDA. The FDA also agreed that a single randomized controlled trial could be sufficient to support a supplemental NDA in this indication and no other pharmacokinetic or nonclinical studies are needed at this time. The IND has been submitted to the FDA, and we are advancing rapidly with the initiation of the Phase III trial, which will include 40 patients per arm. We anticipate commencing enrollment later this year. This encouraging regulatory progress regarding our programs in LGS and CDD highlight the broad potential of FINTEPLA to have a meaningful impact on seizure burden in several severe infant and childhood-onset epileptic syndromes. We are truly excited by the prospect of bringing this therapy to these additional patients in need. Finally, in July, we held a very successful meeting with the FDA regarding the planned NDA submission for MT1621 in the mitochondrial disorder thymidine kinase 2 deficiency or TK2d. FDA agreed with our submission strategy, including no new additional studies, clinical or preclinical, are needed for the NDA. All studies for our regulatory submission are either completed or will be completed by the end of the year. Regarding our filing in the EU, we are working towards a regulatory meeting by the end of 2021. We are currently planning for an investor event in October where we look forward to providing more detailed information on TK2d, the disease, and new MT1621 clinical data, which continues to demonstrate a highly significant survival benefit and meaningful improvements in motor milestones, respiratory function and eating ability in patients. In conclusion, I want to reiterate that this has been a tremendously effective quarter for Zogenix as we further run commercial activities for FINTEPLA in Dravet; advance our larger indication, LGS; and explore new applications for FINTEPLA such as CDD. In parallel, we�re excited about the potential of MT1621, which expands our pipeline to address another rare often fatal disease with no approved treatments. With that, let me hand the call over to Mike for his financial review.

Thank you, Steve, and good afternoon, everyone. Today, we issued a press release announcing our business and financial results for the second quarter ended June 30, 2021. We recognized $18.8 million in total revenue during the second quarter of 2021, an increase of 37% compared to $13.7 million recorded in the first quarter of the year. This was a result of $15.5 million in product sales of FINTEPLA in the United States, $2 million in product sales of FINTEPLA in Europe and $1.3 million related to our Japan partnership. Total net product sales of FINTEPLA of $17.5 million were an increase of 42% versus $12.3 million reported in the first quarter of 2021. We recognized $1 million in total revenue for the 3 months ended June 31, 2020, which consisted solely of the Japan collaboration revenue. R&D expenses for the second quarter were $36.6 million, an increase as compared to the $34.4 million recorded in the corresponding period of the prior year. SG&A expenses for the second year -- quarter -- excuse me. SG&A expenses for the second quarter ended June 2021 totaled $33.9 million compared with $24.4 million for the second quarter of 2020. The increase of approximately $9.5 million was primarily driven by the continued investment related to the launches that are ongoing for FINTEPLA in the United States and in Europe. Net loss for the second quarter ended June 30, 2021, was $58.9 million or $1.05 per share. This compares to a net loss of $53.3 million or $0.96 per share in the second quarter ended June 30, 2020. We ended the second quarter with a strong balance sheet with cash, cash equivalents and marketable securities totaling $393 million. And with that, I�ll now turn the call over to the operator to start our Q&A session. Operator, can you please open up the line for questions?

[Operator Instructions] And we�ll take our first question from Paul Matteis with Stifel.

Great. Appreciate it. So a couple on the commercial side and then one follow-up on this REMS safety analysis, if you don�t mind. On the commercial side, it looks like this quarter, the actual patient adds on reimbursed drug lagged slightly the patient adds to the REMS funnel, which I think those really were a little bit closer or very close to each other in the past couple of quarters. Is there anything to that as it relates to kind of reimbursement delays or anything like that? And then, separately, I was wondering if you could comment a little bit more on these trends you saw in June being your best month and whether or not that continued into July as well? And then I have one follow-up.

Paul, this is Ashish. I�ll take both these questions and then wait for the second. So in terms of the patient adds, the lag is purely because they are in the funnel, and they are going through the process of either finishing vehicles or getting their insurance approval. So I hope that gives you the color. And can you please repeat the second question again?

So you commented on June being the -- or I think Steve commented on June being the best month in terms of adding patients to the REMS funnel. I was wondering if you could just say a little bit more about that and then whether or not that dynamic continued into July, if you�re comfortable.

Yes. So I think the dynamic purely depends on the COVID environment. And what we have seen in July is a steady increase in the patient numbers. And as you know, in July, we had at least a couple of weeks of COVID-related closures and restrictions, and that has had a direct impact. So what we had was a steady add to the patient numbers. And we are expecting that as the COVID restrictions continue to ease in various parts and we start seeing physicians face to face, we will see that direct impact in future weeks and months.

Okay. So July was better than June? Is that the point you are making?

It was steadier than June is what the point I�m making.

Okay. Very good. And then on that REMS safety analysis, that was really interesting. I guess, one thing that it seems like has slowed the adoption among practices that may have not prescribed the drug yet is still kind of lingering uncertainty surrounding cardiac safety. Is there any way you can kind of use these data and publish them given that you now have hundreds and hundreds of patients on drug and still are seeing clean echos?

It�s a great point, Paul. Yes, we are doing that in terms of moving ahead with further publications as we expand, not only the number of patients who are on therapy, but the duration they are on therapy. And as I said, we�ve not seen any evidence of PHT or pulmonary arterial hypertension. In addition, we are getting patients who are very willing to talk about their experiences on FINTEPLA and also if there are any lingering concerns about cardiovascular safety to have that discussion with families who may be considering FINTEPLA. So we are seeing that on Facebook and other media. And we will continue to reinforce the safety of FINTEPLA and the fact that we�re not seeing anything with respect to cardiac toxicity.

Moving on, we�ll go to Marc Goodman with SVB Leerink.

Last quarter, Ashish, you gave us a flavor for how much usage you were getting on Dravet versus some of the off-label. If you could do that again, that would be helpful. And then also, can you give us a sense of the pricing dynamic in the U.S. as well as what�s happening over in Europe just separately. Just kind of curious the pricing in the U.S. this quarter versus last quarter. Just what�s happening there?

Yes. So, Marc, I think, from the DS versus LGS, I think the dynamic stays the same. I mean, last time, we said we had around 15%. And by the end of Q2, we are around now 20% of the prescriptions that are in the indications other than Dravet. And the component of that is almost similar to what I said earlier in terms of the LGS as well as other refractory epilepsies. That is the -- that is by end of the -- end of June. From a pricing perspective, I think the pricing has stayed the same because it is dependent on the dose. And our average dose is still at 0.5% by end of Q2. So for a patient, you will have the similar price. And in Europe, at this point in time, we are still at the German price, which is around 50% of the U.S. and that is both in Germany as well as in France where we are getting patients under the ATU. And those are reimbursed at the German price. As the negotiations continue, we are in very advanced stage of negotiations in all these countries, that is France, Germany, U.K. as well as Denmark. And we are hoping to conclude them. But again, it takes anywhere between 9 to 12 months. And then I�ll be able to comment on what we end up after those negotiations.

And next, we�ll go to Yatin Suneja with Guggenheim.

This is Eddie on for Yatin. Can you give us a sense of what you�re modeling the cadence of the European launch to be? Seems like you�re still in Germany and France for now, but it�s been a while since we�ve got any update on sort of what -- when those other countries can be expected to come online. And then sort of separately, do you anticipate sort of a COVID impact in the second half to be different in Europe versus the U.S.? And then can you just remind us how the gross to net is tracking?

Let me take the first one around the cadence of other launches in -- launches in other European countries. So as Ashish said, we will be launching in countries until we have reimbursed and agreed to reimburse price. And those discussions are proceeding very well. And so if we sort of assess where we�re at today, we would assume that we will be able to move forward with the launch in France with a reimbursed price, although we are really are in France, albeit with the German price, in the United Kingdom, in Scandinavia and Italy. I think that�s the cadence which we would see move forward either later this year or into early next year. Ashish, do you want to take the gross to net?

Yes. From the gross to net, I think it�s consistent with what we have indicated earlier, Eddie, because eventually, we will be somewhere in mid-20s. But at this point in time, we are in mid-teens from a gross to net perspective.

Ashish, there is one question about...

And then can you just remind us about COVID, yes. And the Delta variant.

Oh yes. So with the COVID, I think, with the Delta variant, we have started just like we saw some closures and restrictions coming up in July. That happened in both U.S. as well as in Europe. And in Europe, actually somewhere in -- I think in the month of May, we actually had a complete shutdown in Germany for a few weeks. And in July, we have started seeing things open. But again, it depends on the region and is depending on the individual institutes policies. But I would say at this point in time, it�s mixed, but we have started seeing the restrictions coming up.

Moving on, we�ll go to Jason Gerberry with Bank of America.

I guess just as you bring unique prescribers on board, just curious if you can talk to the efficiency of the new prescribers. And how quickly once you�re getting new docs in the REMS certification, these are becoming high prescribers for you? And then as a follow-up, just on TK2d, maybe just a little color on what you�d expect for end of year follow-up in terms of, obviously, a very high unmet need indication, I guess, in terms of what�s sort of the key outstanding questions, be it either the extension study or the renal impairment data that you�re going to want to help clarify with the agency.

Ashish, do you want to take the first question?

Yes. I�ll start with the unique prescribers. So Jason, we are focused on getting as many prescribers onboard as possible, getting them REMS-certified and getting them to start prescribed for their Dravet patients. The timing depends on the individual prescribers, but also a decision between the prescriber and the family. And they have an equal say in deciding whether they want to go on a new therapy or not. And as you know, in epilepsy, especially in this childhood refractory epilepsy, the patients and the families don�t want to tinker anything that�s going on at this point in time until they are fully on board. But at the same time, they feel comfortable that, hey, they can manage that transition because any transition you do has a potential of getting the patient into status epilepticus or worsening their situation. And I think that does take time for us to -- and again, that�s what we are seeing for them to get on to the therapy. But in terms of physicians, when we get them REMS certified, I think they get REMS certified primarily because they have either 1 or 2 patients that they want to prescribe to and then they start talking to the patient about that. And in terms of high prescribers, as you can imagine, usually, it�s always the thought leaders who have a lot of patients who see more than 10, 20 patients. And I will say, majority of them are already at the high prescriber side. And as we bring in more prescribers, those are the ones who have seen anywhere between 3 to 7 Dravet patients and it�s going to take step by approach to get the patients on therapy. And you want to take on TK2d?

Yes. Thanks, Ashish. Jason, I�ll take your question on TK2d. So 1 thing to bear in mind here is that MT1621 has Breakthrough Therapy Designation, which we�ve been able to utilize to have fairly frequent meetings with the review division at FDA. In fact, it�s -- a review division likes to be sort of kept updated as we make various decisions on our program. So it�s been very collaborative and very successful. So with our last meeting in July, we were able to clearly articulate what would be really stake to packages that would go into the NDA. So as I said in my prepared remarks, the majority of the work is complete or is nearing completion. The 2 activities that are really driving the whole time line is, number one, we want to do an interim analysis of Study 102, which is our ongoing long-term safety extension trial of patients who were originally on MT1621 from other studies moved over into the industry-sponsored perspective study. We�ll do a data cut in early next quarter in order to have as much information in the NDA to support safety as well as efficacy. And then if you recall from prior discussions, FDA�s asked us to also to go out and ensure that we can identify as many treated or untreated patients that may be out there that were not part of our studies. And we�ve done that. We�re continuing to do that, and we have a time where we will basically say we have completed that study. And in other words, we�ve given a reasonable period of time for these patients become identified. We do expect that all that will be wrapped up by about the end of the year. And those are the 2 sort of critical pieces -- critical path activities required for the NDA. The second study I mentioned, which is us going out and looking for other patients, is really to inform the integrated summary of efficacy and summary of safety. It�s not there to change the data from Study 101, which will be our adequate well-controlled trial for the NDA submission. That�s already completed.

Moving on, we�ll go to Difei Yang with Mizuho Securities.

The first question is related to LGS. Assuming approval sometime first half of next year, because of the groundwork you have laid on Dravet syndrome, should we expect potentially accelerated uptake? Or do you think this will be just a normal launch? And second question is around cash runway. Would you remind us where things are?

Ashish, take the first question, then, Mike, cash runway.

So Difei, thanks for the question. I think in terms of LGS, as I said in prepared remarks, we are preparing for the launch. And with our recent incremental expansion that we did to call on other neurologists who treat the refractory epilepsies along with Dravet syndrome kind of positions us very well to launch immediately upon the approval. And as you know, the LGS patient population is at least 4 to 6x bigger than the Dravet. And we do anticipate that when we launch at -- when we get the approval and launch in LGS, we will see accelerated uptake for FINTEPLA because there will be more patients who will benefit from it. And we�ll be able to go and talk to more physicians, and we would have prepared for that prior to the launch. Mike?

Yes. I think, Difei, your question on cash runway, reminder. We have roughly $400 million at this point. So we are well capitalized to run our base business and get through a successful LGS launch through next year with no issues. And we don�t have any foreseeable plan yet at this point, if at all, to capitalize the company further.

Just a follow-up question on CDD. And how do you think about the competitive dynamics? And how do you think FINTEPLA might be used?

Yes. Perhaps I�ll take that. CDD is very much like Dravet and LGS and as much as it�s a high refractory epilepsy where patients take numerous antiepileptic drugs and still don�t derive complete benefits. So they are uncontrolled with respect to having breakthrough seizures, many seizures per month. So to some extent, Difei, we see FINTEPLA as being a drug that will be used among sellers for CDD. I think it�s worth noting today there are no approved drugs in CDD, so the general antiepileptics are used, but there�s no specifically approved drug. We do know that Marinus has put forward an NDA for ganaxolone in CDD. That�s actually the first drug that�s under review for the FDA. I think where we see FINTEPLA working is really being able to, at least on the basis of the open-label trial data that Dr. Devinsky generated in his investigator-initiated study, really profound impact on generalized tonic-clonic seizures as well as other convulsive seizures. So we have designed our study. We�re assuming there will be a fairly large effect size -- same effect size as Dravet because the open-label data that we�ve seen in CDD reflect what we saw in Dravet when we first started our Phase III programs with FINTEPLA. So in other words, we do think that there�s a potential for FINTEPLA to have a big impact on seizure control within CDD.

Next, we�ll go to Danielle Brill with Raymond James.

I guess first one, I just -- I think I missed the numbers. So what was the net number of patients on paid drug at the end of the quarter? And then in prior conference, you also provided the number of total docs enrolled in REMS. Curious what that number is as well. And then, finally, Mike, you -- for the expansion of the sales and customer-facing teams, how should we think about modeling the step-up in SG&A going forward?

Go ahead, Ashish.

So in terms of net number of patients at the end of the quarter, I think net of discontinuations, that patient number would be around 650. And when you look at the total number of starts and total number of starts are well over 740. And we have -- like as you know, we have around 10% discontinuations, so 90% retention rate. And most of these have been happening after 5 months, trying the product for at least 5 plus months. In terms of total number of docs, the total number of docs who are prescribing is what we have said is around 290, and that was a growth of 22% over the first quarter. I hope that answers your question.

Yes. I�m wondering how that differs from the total number of docs enrolled in the REMS program. I think it was 570 last quarter. Is it 290 in addition to that or?

Yes. So I�ll say it�s half. So we have around 50% of these physicians who are enrolled in the REMS program are prescribing.

Okay. Got it.

And so yes, as we said, this expansion, it�s, first off, just a little bit in front of where we would otherwise extend. We�re really just taking an opportunity that we�re seeing in the Dravet market. Second is that we would have candidly expanding this sales force as we approach hopefully in the first half of the year launch in LGS if we�re able to go ahead with a 6 months review and March 31 approval time line. And then so it�s a little bit in front of that, but not a material amount. It�s 20 people -- 20, 25 people more so than we have currently. We�ve got all the other activities ongoing anyways. Not going to changing how we�re approaching and marketing and putting together campaigns and could access teams. So it�s nothing substantially material.

[Operator Instructions] Next, we�ll go to Tim Lugo with William Blair.

This is Lachlan on for Tim. So I just was wondering, in terms of the persistency, it sounds like it�s obviously very high at about 90%. But Ashish, I think you just said that most of the patients that have discontinued have done so after about 5 months. So are there any kind of trends that you see in terms of why they�re discontinuing or any more kind of color you can provide there? That would be really helpful. And second of all, not to belabor the point, but obviously, COVID restrictions are sort of coming back to the floor. And as you expand or broaden the commercial reach to the new clinics, how should we think about the sort of potential growth trajectory in the back half of the year?

Yes. So Lachlan, thanks for the question. And in terms of persistency, you�re right. It�s 90%. And this average is 5 months, but we see the differences anywhere between -- on a low side 5 and high side up to 8 months patients stay on therapy before they discontinue. And that trend is as expected because with FINTEPLA, as you know, it works when it starts working. And usually takes anywhere between, say, 3 to 6 months for the titration in the real world. So what we see is that patients start at 0.2, go all the way to 0.7 to the maximum dose and they try it out for a couple of months. And if they are not seeing any effect, then they will discontinue, which is consistent with what we saw in our clinical trial also that we had around 12% of the patients discontinued because they did not see any benefit. So that�s, I think, in line with what we were expecting. As for your second question on the COVID restrictions, as we see more of them, we will continue to make efforts, and our team continues to make efforts to get in front of that. And with this expansion, which we hope to complete in this quarter and have that expanded team onboard by the starting of the Q4, we will have more opportunities to go in front of the physicians, and we will have more kind of concentrated areas where we�d be able to approach in some of the large areas because some of these restrictions can take into effect and go out of effect pretty rapidly. And the response time will also decrease for us because the territories will be little smaller, so the traveling time will be a little less. So we expect that by that expansion, we will be able to reach out to more people in person as we start expanding and many people are onboard.

Moving on, we�ll go to Jason Butler with JMP Securities.

It�s Roy on for Jason. Just a couple questions. I guess -- and I missed most of the call, so sorry if this has been covered, but the Phase III in CDD, did you guys have to make any allowances due to the expanded access program for ganaxolone. And just the Tevard Biosciences gene therapy collaboration, what�s the status of that? If you covered it, just tell me to listen to the replay.

No, we haven�t covered that. So thank you, Roy, for your good questions. First with respect to CDD. We haven�t made any combinations for the expanded access for ganaxolone. No, we�ve been working very closely with the patient advocacy groups and experts in terms of which sites to go to and which -- and to identify patients. So we don�t expect the presence of that to have a major impact on our ability to be able to enroll this trial. And you may have missed that this is a 2-arm trial, 40 patients per arm, so a total of 80 patients in our Phase III program. So we feel confident we�ll be able to enroll that successfully. And with respect to Tevard Biosciences, as you know, this is an early-stage collaboration looking at really novel gene therapy approach for rare genetic epilepsies. It�s -- we�re still in the discovery mode in terms of doing the appropriate cell as well as animal-based studies to come up with what we think is an appropriate lead for IND-enabling studies. Things are going well. We have a great collaboration with them. Our team here is very excited about it. And we will be even more excited to talk about it as we move into later this year, early next year when we have some meaningful experiments conducted. So thank you for that question and raising Tevard Biosciences.

And next, we�ll go to Neena Bitritto-Garg with Citi.

So just regarding some of the discontinuations so far. Can you talk about whether those are still kind of mostly coming from patients who were FINTEPLA naive prior to coming on to commercial drug versus patients who rolled over from a clinical trial or expanded access program? And -- yes, that�s all.

Yes. Thanks for your question, Neena. These are all FINTEPLA-naive patients. So new patients in other words have not been exposed to FINTEPLA. All of the clinical trial expanded access patients are still on therapy. So I think it gets back to what Ashish said earlier. That if patients are finding benefit from FINTEPLA and the vast majority do, then that benefit is sustained for a long period of time. And we�ve seen that clearly in our clinical trial program, and it looks like it�s being mirrored in our commercial experience as well.

Great. And then actually, sorry, 1 more follow-up. I believe you did take a 10% price increase during the quarter as well. And I guess, just thinking about kind of the gross to net discount moving forward, how much of that should we expect to kind of factor into the net price per script? Thanks -- or per patient.

Yes. Neena, I�ll take that. I think the price increase was 9.5%. And in terms of what that will get into gross to net, I think it�s going to be minimal, primarily because, as you know, our gross to net has been trending fairly positive direction compared to what we are expecting. Eventually, we will catch up there. But as you know, with that price increase, we will have some Medicaid-related rebates. And -- but that number is going to be pretty small based on our analysis.

I�d like to turn the conference back to Dr. Farr for any additional or closing comments.

Thank you very much, operator, and thanks to all of you for joining our call today. Very excited to report another highly productive quarter for Zogenix as we advance our mission of bringing transformational therapies to critically in need rare disease patients. So I look forward to providing additional updates on our further activities for the second half of the year. Thanks again for all of you for joining us on the call today, and enjoy the rest of your day. Bye-bye now.

This concludes today�s call. Thank you for your participation. You may now disconnect.