Idorsia Ltd
SIX:IDIA
Idorsia Ltd
SIX:IDIA
Price:
2.312 CHF
7.04%
Market Closed
Updated:
May 13, 2024
Section:
Earnings Call Analysis
Summary
Q2-2023
Q2-2023
Steady Growth and Market Access Improvement for QUVIVIQ
QUVIVIQ's growth trajectory remains positive, marking a 23% quarterly increase due to enhanced market access. With the upcoming lift of NDC blocks from CVS in July and a transition to a Tier 2 position by September, accessibility for insured prescriptions is expected to rise. Already covering 63% of commercial lives, the company's engagement with payers in commercial and Part D markets is ongoing. Anticipating Medicare Part D coverage in January 2024, a strategic shift from consignment to retail distribution is underway to boost insurance-paid scripts further.
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Good day, and thank you for standing by. Welcome to the Idorsia Half Year 2023 Financial Results Reporting Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised today's conference is being recorded.
I would now like to hand the conference over to your first speaker today, Andrew Weiss. Please go ahead.
Thank you, Sarah. Good afternoon, good morning, all and welcome to the first half conference call to discuss our reporting. With me on the call today are our CEO, Jean-Paul Clozel; and our Chief Financial Officer, Andre Muller. They're both here to give additional granularity to the reporting that we did this morning and we'll be hosting the prepared remarks. Further, we'll be hosting a Q&A session where our General Manager and President of the U.S. organization, Patty Torr; and our President of European and Canadian Regions, Jean-Yves Chatelan will be joining us.
Next slide. As customary, before handing over the microphone, I need to remind everybody that we will be making forward-looking statements. You have therefore been appropriately warned about the risks and opportunities of investing in Idorsia shares.
With that, I hand over to Jean-Paul. Jean-Paul the floor is yours. Next slide.
Good morning, good afternoon, everyone. Many things are happening today at Idorsia. We are working very hard with the FDA and the EMEA to have aprocitentan approved. But today, I will first focus on the Sosei deal that we announced just last week, the cost reduction initiative, and then I will describe to you the progress we are making with QUVIVIQ, then Andre will take you through our financial results.
Next slide. Just last Thursday, we announced the sale of our operating businesses in the Asia Pacific ex-China region to Sosei Heptares for a total consideration of CHF400 million. The transaction includes the acquisition of Idorsia affiliate in Japan and South Korea, the assignment of the license for PIVLAZ in the Asia Pacific region, and the co-exclusive license for Daridorexant in the region, together with the assignment of all potential milestones in connection with the license granted to Mochida.
The transaction also includes an option for Sosei Heptares upon payment of separate auction fees to license cenerimod and lucerastat for the development and commercialization in the territory. The transaction created value for both companies while maintaining our ability to develop our drugs for patients in the region. Importantly, it brought cash that has given us some breathing space to adapt our company.
Next slide. In order to give us the time we need to realize commercial success, any forms that are secured must be prioritized for activities that maximize their return in the near-term. To this end, we are launching a cost reduction initiative with a target of reducing cash burn at headquarters by approximately 50%. This will then become fully effective in early 2024. I'm very sorry to say that in order to achieve the required savings up to 500 positions at headquarters, mainly in research and development and the associated support function could potentially become redundant. The cost reduction initiative is dependent on the full portfolio review, potential out-licensing deal and an entree representative consultation in Switzerland.
Since our immediate objective is to maximize the time the company has to deliver commercial success. Now let's take a look at the progress being made with QUVIVIQ. So let's start with the summary -- next slide, sorry. Let's start with a summary of the U.S. performance by looking at what has been achieved in the insomnia market and focus on the immediate priority for the team. Our approach at launch was to drive demand for QUVIVIQ. This was necessary for early product adoption and payer negotiations.
In January, ESI added QUVIVIQ to the National Preferred Formulary. This was followed by CVS National Coverage as announced in July, which significantly increases affordable access to QUVIVIQ for the 20 million lives that CVS covers. To begin, QUVIVIQ is in Tier 3, but we expect QUVIVIQ will be in Tier 2 at parity with the other orexin receptor antagonist by early Q4. And as our access continues to improve, this means more prescription will be coming through the retail channel and will be paid prescription.
Now that we have the product demand and solid commercial coverage, we are moving away from the consignment model and accelerating our retail dispensing. You will see this in the next slide. We anticipate Medicare Part D Access in Q1 2024. This would open 33% of the overall insomnia markets allowing us to compare more broadly in the entire market. The elderly population is also a very important patient group for QUVIVIQ as the rates of insomnia are higher than in the general population and our product efficacy and safety data is consistent in this population.
Next slide. So let's look at the demand for QUVIVIQ. QUVIVIQ demand has continued to grow quarter after quarter since launch. There are about 60 -- in 2022, there were about 65,000 QUVIVIQ prescription. While in just the first half of this year, there were approximately 125,000 prescription dispense representing an increase of more than 85%. The right-hand chart is showing the channel where the prescription are dispensed. In the last quarter, we see a shift from a consignment model, which we used to drive demand to a retail model. This movement represents an important trend that we expect will accelerate as our market access position continues to grow and will enable us to pursue more paid scripts.
Next slide. Importantly, we see our refills increase validating that patients have a positive experience with QUVIVIQ. As insomnia is a chronic conditions for many, strong refill rates are fundamental to positive patient outcomes and long-term growth of the product. We will continue our educational efforts for both physicians and patients and specifically, we are working of setting the right expectations, really explaining to the patient that they have to take it -- take QUVIVIQ every night to get the maximum benefit. We are going to explain safety profile of QUVIVIQ and of course, the specificity of the unique pharmacokinetic profile of QUVIVIQ.
We continue to evaluate our sales force footprint and we have moved from approximately 400 sales representative at the start of the year to 325 as July 1 -- as of July 1. And we have now crossed 30,000 total writers of QUVIVIQ since launch. While we have opportunity to further expand the number of new writers, we are focusing on transitioning current QUVIVIQ trials to loyalists driving more depth in prescribing.
Next slide. Now let's move to Europe and look at the great progress being made with the launch -- of the launch preparation as well as with securing access and reimbursement. As you know, we launched in both Germany and Italy in November 2022. In Germany, we are engaged with authorities in two parallel processes. First, the AMNOG pricing and reimbursement process for the first four weeks of treatment. And we are expecting the outcome of this first negotiation by the end of the year.
But in parallel, as you know, prescriptions of shipping medication in Germany are limited to four weeks and we are -- there is a GBA review to allow QUVIVIQ for chronic use more than four weeks. And we should hear about this process at the end of Q3 this year. If this four weeks limitation for QUVIVIQ is lifted, we plan to submit the second AMNOG this year for the treatment of chronic insomnia beyond four weeks, reflecting the indication in chronic insomnia disorder granted by the EMEA in 2022.
In Italy, QUVIVIQ was launched in the self-pay market, noting that no sleep therapy is reimbursed in Italy with prescription limited to neurologists, psychiatrist and specialists from sleep centers. Reimbursement and general practitioner expansion dossier was submitted in Q2 2023. In Switzerland, the reimbursement dossier for QUVIVIQ was submitted in November '22 and the review is ongoing. While we are waiting for the reimbursement, which is anticipated for the end of this year, QUVIVIQ was launched in the self-pay market.
In the U.K. The NICE review is in progress, and we expect to launch QUVIVIQ by the end of 2023. And in Spain, we will make QUVIVIQ available in the self-pay market, also by the end of this year. And we are currently evaluating the best way to demonstrate the value to payers in this market. In France, the Transparency Commission recognized through an ASMR IV rating that QUVIVIQ brings an added value to the current treatment landscape of patients with chronic insomnia after CBTI -- for patients who do not have access to CBTI, QUVIVIQ will be the only available and recommended treatment for chronic insomnia disorder.
In France, in addition with the rating of the clinical benefit, which has been granted by the Transparency Commission, this rating will lead the reimbursement without co-pay for 95% of patients covered by public and private health insurance in France. We anticipate the commercial launch in the first part of 2024. And last but not least, following approval by Health Canada in April, we plan to submit QUVIVIQ for reimbursement by private payers by the end of the year with the commercial launch anticipated in the first part of 2024.
Next slide. Let's look a little closer to the demand dynamics in the European market. After a little more than six months on the German market, we are pleased to see a constant growing demand for QUVIVIQ. Our [indiscernible] teams or reps are coding on both the specialists and the primary care physician. We pay particular attention to the specialist such as sleep scientists, psychiatrists, neurologists, who have more time for their patient and we can -- where we can set the right expectation for gaining the best experience and the benefits of QUVIVIQ. This strategy brings greater depth of prescription as well as more repeat prescription. We are also, in Germany, bidding on the experience of the 20 expert centers who have contributed to the enrollment of more than 800 patients in the registration study.
Next slide. We see the same constant growing demand for QUVIVIQ in Italy after six months in the market. Here, we call on specialist only (ph) and we are making sure to explain to this patient, the benefits of QUVIVIQ and really the need for chronic treatment. This is extremely important to have this explanation since the drug is fully paid by the patient. We are happy with the engagement of -- our Italian team has been able to build with the community of specialists in such a short time. That brings me to the end of the overview.
And now I will hand over to Andre to walk you through the financials. Next slide.
Thank you, Jean-Paul. Good afternoon or good morning to everyone. As Jean-Paul alluded to it, we are happy that -- we are more than happy that we managed to close this transaction with Sosei regarding the APAC ex-China business because it extends actually our runway too early 2024. And to be very clear, we do not want to be in the same position, I would call it, back to square one by the end of the year. And to this extent, there are several initiatives, which are ongoing to raise additional cash in the second half of 2023. One of them, and also, as Jean-Paul mentioned it, is to reduce our cost base. The reason for it is that we won't set any amount of cash that will be -- needs to last a longer moving forward in 2024.
Next slide, please. So we are on Slide 14. Here, you have the breakdown of the net sales over Q1 and Q2 for the first half. As you understand, the PIVLAZ has still been consolidated CHF32 million sales because the transaction closed post of June 30. But moving forward, the whole business in Japan and South Korea will be deconsolidated, i.e., the net sales and operating expenses and corresponding financial and tax expenses, relating to the APAC ex-China regions, will no longer be reported in the P&L. They will be reported in a dedicated line on results from a discontinued operation and of course, again on discontinued operations. So moving forward, what you will see, starting with Q3, fourth year first half, our only QUVIVIQ sales of CHF11.7 million.
Next slide, please. So here you see and I will come back to the non-GAAP operating expenses, how the P&L came about net revenues of CHF51 million, CHF44 million sales because here PIVLAZ is included, other contract revenue of CHF7 million. We see a non-GAAP OpEx of CHF393 million leading to a non-GAAP operating loss of CHF342 million with the usual depreciation and amortization, stock-based compensation, this leads to a U.S. GAAP operating loss of CHF375 million and below EBIT, mainly financial expense, you end up with a U.S. GAAP net result of minus CHF405 million.
Next slide, please. Not spending too much time on OpEx. You see here how they compare to last year. As one would expect research and development, we try to limit the OpEx and we succeeded with CHF54 million compared to CHF60 million in preceding H1 2022. CHF99 million with developments and an increase in SG&A mainly driven by the U.S. But also we see a launch or launch preparation across EU five -- with fourth year first half CHF235 million.
Next slide, please. Here, just to give you a sense of what is the scope we operate and how it will be reflected moving forward. We have reported non-GAAP operating results of CHF342 million. If you exclude the CHF5 million positive impact of Japan and South Korea. It means that moving forward, the H1 non-GAAP operating results are or will be CHF346 million. If you exclude the D&A and share-based compensation it will be CHF377 million.
Next slide. Cash flow. As you know, we started the year with CHF466 million and if we want to reconcile, we see just non-GAAP operating results, I showed previously, which includes Japan for CHF5 million. We've had a significant working capital requirements, CHF70 million. You will see a proceeds from borrowings. I will come later on the CHF30 million other items, which led to a liquidity of CHF33 million.
Next slide, please. So coming to see liquidity, and this CHF33 million. They include CHF10 million, which was the payment made by Sosei in June at the signing of the nonbinding term sheet, CHF10 million and also a CHF20 million bridge loan funded by Jean-Paul Clozel. So it's a bridge loan of CHF75 million of which we had first drawdown of CHF20 million by the end of June and which has been actually repaid last Friday, when we got the additional payment from the closing of the Sosei Heptares [indiscernible] of CHF386 million.
It is a CHF400 million deal, and there will be an adjustment normally within 90 days following closing. So around mid-October where approximately we should get CHF4 million, plus or minus. What the liquidity does not include, what it excludes is the cash held in Japan, CHF11 million because this is reported separate item by -- in our financial results, so-called asset held for sales relating to Japan and South Korea.
So next slide, my last slide. We want to reinforce operating year guidance of CHF650 million non-GAAP, CHF735 million U.S. GAAP operating loss, but on the new scope of transaction. So excluding the impact of the Sosei deal. And as you've seen, actually, we have spent CHF346 million in H1, so to achieve this guidance, it implies that we will spend less around CHF300 million in the second half of 2023.
And with this, I will hand over to Andrew again.
Thank you, Andre. So we have come to the end of our prepared remarks and are ready now to take your questions. Please play by the rule and ask only one question at a time and then jump back into the queue.
Operator, could you please queue the lines? .
Thank you. [Operator Instructions] Thank you. We will now go ahead with the first question. Please standby. First question is from the line of James Gordon from JPMorgan. Please go ahead.
Hello, James Gordon, JP Morgan. A lot of questions, so I’ll keep to one and get back in the queue. So in terms of -- there's a few different moving parts in terms of divestments, et cetera. But as I understand it, you would still only have funding to take you through to early next year and there was a comment about initiatives to extend the runway. So is that more likely to be divesting pipeline assets? And are you already in any discussions with anyone about divesting assets in the pipeline or is it more likely that you would raise equity? What's the most likely there? And where are you with discussions with other avenues, please?
Thank you, James. So on funding avenues, I think, Andre, you'd be best to address this.
Yeah, it seems so. Thank you, James for questions. Let me just give you some backdrop on what happened in Q2. Yes, we were [Technical Difficulty] be able to close this transaction with Sosei, but we were also ready to go for an equity raise just in case we will not be able to close a deal. So moving forward, yes, we have some ongoing discussions. First, we see a [Technical Difficulty] that’s ongoing discussion, meaning that we will look for some potential partners on some of the pipeline assets. And I hope we have a few [indiscernible] here, and hopefully, we'll be able to catch one or several set of one.
And as I told you, prospectus was ready, banks were appointed, lawyers were appointed. So we -- if need be, we will pull a trigger for an equity raise. I want to start -- I was always with the same objective. Of course, obviously, not the case right now. But -- and obviously, not the case early 2023. But I would like to start 2024 with cash covering the next 12 months cash burn. The cost reduction initiative again is important to the extent that any cash that we will raise as I just said will also need to last longer. So it will be a combination. It's not one deal in isolation. It's several potential deals in connection with equity or equity-linked deal. We see a cost initiative and a portfolio review that hopefully will bring us there by the end of 2023.
Thank you.
Thank you, Andre. Operator, next question please.
Thank you. Yes, we will move to the next question. Please standby. This is from Peter Verdult from Citigroup. Please go ahead.
Thank you. This is Peter Verdult. I’ll keep to one as well. Jean-Paul forgive the bluntness of the question. But as you said yourself in the opening remarks, the viability of the Idorsia business model is brought into question in the absence of QUVIVIQ becoming a commercial success. So I suppose my simple question for you is, is there a point in time in, let's say, 2024 where you might consider alternative options for the Group as a whole or U.S. interest in QUVIVIQ, whether you look for partners to bring onboard. I just want to know if that is in your thinking at all at the moment? Thank you.
Thank you, Pete. So more strategy point of view, Jean-Paul, do you want to address that?
Yeah, exactly. No problem. Yes. I think that we have a fantastic drug with QUVIVIQ. It's just the launch has happened one year ago, more -- just a little bit more than a year in the U.S. We are basically in terms of prescription, we are nearly as -- have as many prescriptions as Belsomra new prescription at least as Belsomra, which is seven years, we need to transform the demand into sales and into revenues. It just has taken longer than what we expected, but we need to make and I think we are on the track to make QUVIVIQ a success. It just is a timing and the timing is, of course, the financial consequences that has had -- as you have seen, that we have partially solved with Sosei.
What you have to know, we have a 15-year patent life with this drug, which is exceptional. We need to grow this drug and to make it a success. Now we have to be realistic with the timing. And of course, with Andre, with the Group, we have to adjust our expectations for -- from the difficulties we are seeing in the market, but the feedback is excellent. And I think in Europe, people will be surprised because the problem in Europe once we will get reimbursement in countries like France, in England, in Germany is going to be very different from the problem we are facing in U.S. where the access has been an issue. So I think that we need and we would make QUVIVIQ a success.
Now we are also developing aprocitentan, and we have many other assets. And my question is really what for the other assets than aprocitentan of course, what do we do with these other assets. And this is where more of the strategic question will rely, what do we keep, what do we partner? And -- but frankly, I think that as a six-year-old company, if aprocitentan is approved end of this year as it should be, I do believe that very few companies within five years or six years, let's say, will have -- and if we count clazosentan, which has now been sold to Sosei, but within five years, has registered three drugs, this would have been a fantastic success. So we need to really -- to benefit from this effort, and we need to find the financial solution to do it. But I think that QUVIVIQ is an important asset and will remain an important asset for Idorsia.
Thank you. I’ll get back in the queue. Thank you.
Thank you, Pete. Operator, next question please.
Thank you. We will now take the next question. Please standby. This is from the line of Sachin Jain from Bank of America. Please go ahead.
Thanks for taking my questions. More on liquidity, if I may. As for Andre, on the redundancy program, what's your best guess on what the cash severance charge would be in typical programs, that are typically onetime future savings, so it implies sort of low CHF100 million and how that impacts the timing and size of any funding. So that's my first question. My second one, if I may, just to follow on from James'. How close to the end of the year will you run pipeline monetization options before progressing with equity?
Sachin, you've been less disciplined than James and Peter, you asked two questions, but I will answer both. We have an ongoing consultation with the employees representative in Switzerland, so that's ongoing. And the number of redundancy will also depend on this portfolio review that we have said we are doing with Jean-Paul and the team. So I would not expect a significant impact regarding headcount for year -- second half of 2023, but more -- full effect starting 2024. So that is the first one.
To your point, the savings, yes, it's the fixed cost base and we need to reduce the fixed cost base at headquarter, which is mainly in R&D. And also, to a lesser extent, in support functions to G&A, but it's also the portfolio review. And here, either we find a partner and there is some discussion ongoing, I do not want to count my chickens before they hatch. So let's see what comes out of this discussion because the other way to reduce the cash burn is to find a partner, not so much with the upfront, but also taking over some cost notably for [indiscernible] Phase III. So mainly [indiscernible] and Selatogrel.
To the funding options, yes, we mentioned our licensing (ph) deal. We mentioned equity raise or issuance of a new convertible equity linked. And the other one, you're right, is or could be a royalty monetization type deals. We're exploring all avenues right now and we need to implement some of them in the course of the second half.
Okay. Thankyou.
Thank you, Andre. Thank you, Sachin. Operator, next question please.
Thank you. We will take the next question. Please standby. This is from the line of Thibault Boutherin from Morgan Stanley. Please go ahead.
Yeah. Hi. Thank you for taking my question. Just could you have an update on the situation right now for lucerastat and what is the next step that will allow you to make an assessment on this one, please?
Thank you, Thibault. Jean-Paul, do you want to take that one on lucerastat?
I think -- for lucerastat, we are in discussion with the FDA to find a solution because we have very, very interesting results and we are in discussion. We -- it's not yet decided. So what we do. And in Japan, as you have seen, I think that Sosei and I cannot speak in their name, but we had -- we were in discussion with the Japanese authority for Japan. So I think that this is what is ongoing and of course, if we do not find a solution for lucerastat, we might partner it.
And I think there have been some people interested in lucerastat. This is a very active drug. Unfortunately, I think we didn't have a positive primary -- the primary endpoint was not positive in our study. So we will see, but I'm convinced that lucerastat is a very good drug. And -- but I can tell you, we will not spend ourselves -- if we don't find a solution with the FDA, we are not going to spend more money, but rather maybe partners is great.
Thank you.
Thank you, Jean-Paul. Thank you, Thibault. Operator, next question please.
Thank you. We will now take the next question. Please standby. And this is from Rajan Sharma from Goldman Sachs. Please go ahead.
Hi and thanks for taking my questions. So just on the cost reduction at the minute, it feels like it's kind of focused on R&D and headquarters. But just thinking about the level of investment behind QUVIVIQ, is there anything that you could do there? And I guess, at what point would you think about kind of rightsizing the investment if you don't see the inflection in the revenue trajectory?
Andre, do you want to take that question on cost savings beyond the announcement of Friday?
Yeah. I'm volunteering, Andrew. It’s a very good question. I had just came two weeks ago, I was actually in the U.S. discussing with Patty and team. There are a lot of initiatives ongoing in the U.S. also to adapt the model converting free prescription into sales -- and -- but you're right. On one side, we need a few more quarters to see the uptake because it's less than why it's 12 months since launch with limited coverage. And again, CVS will really kick in only in September with a Tier 2, i.e., at parity with Belsomra, no priors, no step edit.
And of course, we submitted the bids for Medicare Part D. We should hear in the next few months from CMS and hopefully get Medicare Part D coverage, which is a significant chunk of the volumes of the insomnia market in the U.S. in Q1 2024. So it's a question of time and money because it's a primary care drug and time and money are two resources, which are obviously scarce -- very scarce at Idorsia right now. So we want to be -- to remain nimble and to be able to adapt to the situation, not only in the U.S., it's the same in Europe by making sure we have the right balance between how much we invest and what we can expect in terms of volumes, but volumes converting into net sales.
Thank you, Andre. Operator, next question please.
Thank you. We will now take the next question. Please standby. And this is from Brian Balchin from Jefferies. Please go ahead.
Hi. Thanks. Just in terms of QUVIVIQ success, it looks like you've got better conversion from consignment to paid scripts. You said QUVIVIQ being Tier 2 early 4Q, but isn't it still the case that treatment-naive patients have to go through a benzos or zetia (ph) prior to DORA -- and if so, do you [Technical Difficulty]
Hello. Brian.
We lost Brian, Andrew.
Brian Balchin from Jefferies. Your line is open. If you could please ask your question again. It looks like the line has disconnected. Should we move to the next one.
Yes, please. And then we'll take it later.
Thank you. Your next question is from the line of Harry Sephton from Credit Suisse. Please go ahead.
Brilliant. Thanks. So just back to the cost savings. To what extent do you think you can achieve part of the cost savings through out-licensing your late-stage assets -- so maybe to put another way, what percentage of your cost savings could you achieve from out-licensing cenerimod and selatogrel. Thank you.
Andre, do you want to take that question on distribution of savings?
Yes, happy to take your question. It's premature area to figure out what we can do because by definition, getting a collaboration or partnership or out-licensing requires two parties. So to get both. If you're looking at the non-GAAP OpEx in H1 [indiscernible]. We have CHF362 million if you exclude Japan, okay? CHF185 million in commercial, and we will address it. CHF144 million in R&D of which two-third roughly is a fixed cost base and one-third is study costs. As a remainder, it's around CHF33 million, H2 G&A. So of course, we need to work on all levels, i.e., headcount, so fixed cost base and hopefully get some good partners for some of the assets. And -- but right now, it's premature to speculate of what can be the outcome. Also on the headcount because it also depends on the ongoing consultation, we see employees representatives.
That’s very helpful. Thank you.
Thank you, Andre. Thank you, Harry. Operator, do we have any more questions?
We do. Please standby for the next one. Next question is from the line of Stefan Schneider from Vontobel. Please go ahead.
Yes. Thank you for taking my questions. My question is why the scripts are not -- there is no inflection point. For instance, as the CVS deal in spring or in January, beginning of the year. It seems like it's a continuous linear increase but no inflection point. Can you elaborate on why that is and what to expect from CVS?
Thank you, Stefan. Patty, do you want to take a question on how you're -- you see the inflection points and how these additional insurers pull through and how does that generate in volumes?
So great. Thanks, Andrew. I think maybe first, we had ESI in January, right? Just to qualify, I think you said CVS. As you're aware, just removing the NDC blocks does not provide immediate access for patients to get a covered prescription. The payers deny access unless a patient failed one or in some cases, two generics within a 180-day look back period. But we are seeing within our book of business with ESI, in particular, since they've come on board in January, the conversion of consignment to paid scripts and we believe that will continue.
Now if you look forward to our current situation with CVS, as noted in July, the NDC blocks will remove. And then as Andre and Jean-Paul mentioned earlier, later this quarter, early quarter 4, we will be moving into a Tier 2 position consistent with the other branded competitors in the door class. It is an inflection point of paid scripts that we believe will continue, and our sales force will -- is focused on pulling through these CSI and CVS wins.
Okay. Thank you.
Thank you, Patty. Operator, next question please.
Thank you. We will take the next question. Please standby. Next question is from the line of James Gordon from JPMorgan. Please go ahead.
Great. James from JPMorgan. Thanks for taking the question. Just continuing the theme on QUVIVIQ. If I understood correctly, you've made some real progress with coverage, but you don't see a benefit easily when that [indiscernible] product. Am I following correctly that really, it's not that Q3 or Q4, we should expect to see a big inflection. It's really more like Q1 because that's [indiscernible] you see the effect coming through?
Thank you, James. Your line was a bit breaking up there. I understood that your question is going in the direction is when do you think that the inflection point is to happen? Does it happen already with CVS in -- when it passes September and is at high level with Belsomra. Patty, do you care to elaborate on that, please?
Sure. Thanks, Andrew. First, aligned to our demand-driven strategy, as you have seen, QUVIVIQ continues to grow quarter-over-quarter with the latest quarter being 23% increase over the prior quarter. Market access has been a primary factor why physicians have said they will wait to write the product with increased coverage now with CVS, we believe we will send -- it will send a strong message to physicians increasing their willingness to write QUVIVIQ converting to paid scripts. And we believe this will translate into continued growth.
As of today, we have 63% of all commercial lives covered, and we continue to engage with all payers, both in the commercial and Part D spaces. As was mentioned earlier, we anticipate Medicare Part D Coverage in January 2024. We have begun to see a switch from consignment to retail with the opportunity to realize more insurance paid scripts, and we believe this will accelerate as our access continues to improve. Our co-pay programs will also be aligned to our strategy to drive and shift away from the consignment model to retail. As I mentioned earlier, our sales organization is very focused on pulling through ESI and CVS wins, and we anticipate to continue to drive quarter-over-quarter growth.
Thank you, Patty.
Thank you. [Operator Instructions] We will now take the next question. This is from the line of Peter Verdult from Citigroup. Please go ahead.
Yeah. Thanks. Pete Verdult, Citi. Patty, sorry to label the point, just to repeat of James' question. I mean when you put everything together, what's your best guess when you think we'll see the revenue inflection on QUVIVIQ. And then maybe just another way of thinking about it. I think the run rate right now is about, what, CHF8 million a quarter, the current scripts were under a successful retail model versus consignment model, what would the revenue uplift be if that was the case? Can you give us some ballpark to underlying revenues that would be under that sort of scenario? Thank you.
Thank you, Pete. Patty, do you care to elaborate a bit more on what your expectations would be on volume? I don't think that we should go beyond in giving revenue guidance at this point in time.
Yeah, I think -- thank you, Andrew, and Pete, for the question. I do believe we will continue to see our volume growth. Again, with the NDC blocks coming off for CVS in July and then a Tier 2 position with CVS in September will help drive and be able to realize insurance paid claims. And then another significant milestone we anticipate is the Medicare Part D in January of 2024.
So I think those are inflection points we have various models of what that looks like. But while that's happening, we are winding down our consignment model, our free drug model program and co-pay program and offering. So the combination of the enhanced coverage for paid claims as well as the winding down of the consignment model will help accelerate, we believe, our quarter-over-quarter growth.
Thank you, Pete. Thank you, Patty. Operator, next question please.
Thank you. We will take the next question. Please standby. And this is from Sachin Jain from Bank of America. Please go ahead.
Thanks very much. Just another one back on funding for Andre. Whenever we just go back to the pipeline monetization. It seems like lateral or sooner to sort of partnering the most advanced options. So why don't you just give us a bit more color on that as to how long discussions have been ongoing, whether for each asset you have more than one party on the table and between assets, do you have a higher confidence in one versus the other? What I'm just trying to get a sense of what those questions is were those discussions ongoing pre the sale of the APAC business or they started post that because pipeline monetization has been a topic for quite a long time now? Thank you.
Thank you, Sachin. Andre, do you want to offer any additional granularity.
Sachin, I'm afraid I will disappoint you with my answer. Contrary to what we did we see undisclosed party for the APAC business ex-China. Here, I don't want to speculate on the outcome of the ongoing discussions. We have a few [indiscernible]. We'll see if we manage to catch one, but we will announce it once we have a deal that will close. Yes, working hard, I am not speculating whether giving a probability of success [indiscernible], it's a binary, either it's a 1 or it's 0.
Fair enough. Thank you.
Thank you, Andre. Thank you, Sachin. Operator, next question please.
There are no further questions at this time. So I will hand back to Andrew now. Thank you.
Thank you, Sarah. Okay. So we're just about at the top of the hour, so very convenient. So thank you very much for your ongoing interest. This will conclude our webcast for today. Operator, you may close the lines.
Thank you. This does conclude the conference for today. Thank you for participating and you may now disconnect. Speakers, please stand by.