Kiniksa Pharmaceuticals Ltd. Class A Stock

Thank you for standing by, and welcome to the Kiniksa Pharmaceuticals Second Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, today's program is being recorded.

And now I'd like to introduce your host for today's program, Jonathan Kirshenbaum, Investor Relations. Please go ahead, sir.

Thank you, operator. Good morning, everyone, and welcome to the Kiniksa Pharmaceuticals Second Quarter 2026 Earnings Call. A press release highlighting our financial results and recent portfolio execution can be found on our website under the Investors section.

As for the agenda, our Chief Executive Officer, Sanj K. Patel, will start with an introduction that will be followed by Mark Ragosa, our Chief Operating Officer, who will provide an update on ARCALYST commercial execution. From there, Kiniksa Chief Medical Officer, Dr. John Paolini, will review our KPL-387 development program and the ongoing Phase II/III clinical trial in recurrent pericarditis.

After that, Mark Ragosa, our Chief Financial Officer, will review our second quarter 2026 financial results. And finally, Sanj will share closing remarks and kick off the Q&A session.

Before getting started, please note that we will be making forward-looking statements today that are subject to risks and uncertainties that may cause actual results to differ materially from such statements. A review of these statements and risk factors can be found on this slide as well as under the caption Risk Factors contained in our SEC filings.

These statements speak only at the date of this presentation, and we undertake no obligation to update such statements, except as required by law.

With that, I'll turn it over to Sanj.

Thanks, Jonathan, and good morning or good afternoon, everyone. Kiniksa is in a strong position more than halfway through 2026 as we continue to execute across our portfolio. We continue to make excellent progress with ARCALYST and have advanced the [ KPL-387 ] program into the pivotal stage with the initiation of the Phase III trial, which we have named PASTORALE.

Additionally, KPL-1161, which is our Fc modified IL-1 alpha and beta inhibitor with a target profile of quarterly dosing, is progressing well and the program remains on track to initiate a Phase I study by the end of this year.

Importantly, we continue to maintain a robust financial position, which together with strong commercial momentum and key advancements in our development pipeline positions the company with multiple value-creating drivers in both the near and long term.

Our ongoing execution of the ARCALYST commercial strategy resulted in a meaningful increase in the number of patients on therapy. Robust revenue growth of more than $29 million over the previous quarter drove sales of $243.6 million in the second quarter. And we continue to build on our strong commercial momentum, and we've raised our full year 2026 revenue guidance from $930 million to $945 million to between $980 million and $995 million.

On the clinical side, just this morning, we announced data from the dose-focusing portion of the KPL-387 Phase II/Phase III study in recurrent pericarditis. On the basis of the Phase II data, I'm happy to report that we are moving forward with the target profile of a monthly dose into the pivotal Phase III portion of the trial.

Today, we also announced that this Phase III study has already started and is now enrolling and dosing patients. The ongoing Phase III study [indiscernible] marks a key milestone in bringing additional treatment options to patients suffering from recurrent pericarditis.

This trial follows RHAPSODY. The successful Phase III program with ARCALYST, with both trials having the same registrational endpoint of reduction in the risk of pericarditis recurrence. John will share additional details about the Phase II data in a moment as well as provide an overview of the design of this Phase III study.

We anticipate a potential commercial launch of [ KPL-387 ] in the 2028 and 2029 time frame, extending our leadership in the recurring pericarditis market so it can help many more patients.

And with that, I'll turn it over to Ross to review our commercial execution. Ross?

Thank you, Sanj. In Q2, the Kiniksa commercial team continued to drive strong growth with ARCALYST. Our net revenue was $243.6 million, which is more than $85 million growth versus Q2 of 2025 and more than $29 million growth compared to Q1 2026. This represents the largest quarterly net revenue increase since our launch more than 5 years ago and is a direct result of the execution of the strategy that we laid out at the beginning of this year.

Our commercial approach has helped to change the treatment paradigm for recurrent pericarditis, and we are focused on continuing to unlock future growth for ARCALYST. Over time, we have made disciplined value-driven investments across our sales infrastructure as well as innovative strategies that have enabled us to reach more patients.

Firstly, we've been diligently ensuring that prescribers have a positive prescribing experience, which encourages deeper prescribing as well as peer-to-peer education to other health care professionals. Additionally, we've been investing in machine learning and the use of AI to provide our sales team with insights on not just who to target but importantly, when to visit and what messages should be delivered.

Secondly, in April of this year, we launched our targeted DTC campaign called Heart's Home. This campaign is aimed at educating and empowering patients who are suffering from recurrent pericarditis to visit their health care professional and ask for ARCALYST.

So far, the campaign has reached thousands of patients who are suffering from recurrent pericarditis. While it's still in the early stages, we are starting to see encouraging signs of engagement with our campaign and patients visit in their health care professional to discuss ARCALYST.

Thirdly, our teams have been highly focused on disseminating the 2025 ACC concise clinical guidance for recovered pericolitis. The understanding of this guidance and the recommendation of moving ARCALYST earlier in line after NSAIDs and colchicine and ahead of corticosteroids has helped to expand the utilization of ARCALYST.

Since our focus on disseminating this publication, we've seen an increase in doctors who have changed their treatment approach and are now using ARCALYST earlier in the disease course.

Finally, the commercialization is underpinned by ARCALYST's highly efficacious and well-tolerated profile, along with robust compliance, growing persistence and an excellent payer approval rate. As of the end of Q2, our penetration into the multiple recurrence population had grown to approximately 21% compared to around 18% at the end of 2025. This demonstrates both strong growth as well as the substantial opportunity ahead.

As mentioned on the last slide, we are seeing continued momentum in the breadth and depth of ARCALYST prescribing, which in Q2 led to a significantly higher number of new patient enrollment compared to any quarter since our launch. Approximately 450 additional health care professionals wrote their first ARCALYST prescription in the second quarter, bringing the total prescriber base to more than 5,000 launch to date.

As a reminder, there are more than 25,000 health care professionals across the country who manage recurrent pericarditis patients. Therefore, the opportunity for continued growth is evident.

Additionally, the number of health care professionals who have written multiple prescriptions increased by approximately 150 compared to Q1 of 2026, meaning that around 29% on of the prescriber base have written ARCALYST for 2 or more patients.

The dual acceleration in both new and repeat prescribing led to an increase in patient enrollments, which resulted in a substantial increase to the number of patients on therapy and illustrates the demand for a highly efficacious treatment that protects patients from suffering unnecessary additional flares.

As you can hear, we are pleased with the Q2 performance. But we continue to be even more excited by the opportunity that's ahead.

And with that, I'll turn the call over to Dr. John Paolini to share more information on our KPL-387 program in recovering pericarditis. John?

Thank you, Ross. As Sanj mentioned, the pivotal Phase III trial of KPL-387 in recurring pericarditis has now been initiated and is already enrolling and dosing patients. Before that, I'll provide a brief overview of the Phase II dose focusing portion of the trial, data from which affirmed the dose level for Phase III.

As a reminder, for the Phase II/III study, we have combined both portions into a single integrated protocol in order to maximize operational efficiency, thus allowing the Phase III portion to begin even while the Phase II trial is still ongoing.

Phase II is designed to define the PK/PD relationship and provide information on the cadence and magnitude of initial response as well as the durability of effect of defined subcutaneously administered KPL-387 dose levels.

Up to approximately 80 participants presenting at screening with a pericarditis recurrence despite treatment with NSAID and colchicine are randomized equally into 4 arms to receive subcutaneously administered KPL-387 at 100 milligrams or 300 milligrams dosed biweekly or once monthly. Concomitant treatment with conventional oral therapies is linked and discontinued within 2 weeks to attain KPL-387 monotherapy.

The primary endpoint of the Phase II dose focusing study is time-to-treatment response through 24 weeks, defined as an NRS score of less than or equal to 2 on the 11-point daily pericarditis NRS pain scale and normalization of C-reactive protein, a marker of pericardial inflammation.

The data we announced today show that the KPL-387 300-milligram monthly dose level demonstrated rapid and sustained onset of action with durable efficacy throughout the monthly dosing interval, affirming the 300-milligram monthly dose being evaluated in the Phase III study PASTORALE.

Specifically, in this analysis, median time to treatment response was 4 days with a 95% confidence interval of 3 to 6 days. Median time to pain response was 4 days with a confidence interval of 3 to 6 days. And median time to CRP normalization was 8 days with a confidence interval of 7 to 9 days.

The cadence and magnitude of these reductions in pain and inflammation are consistent with prior studies, which supported ARCALYST approval in recurrent pericarditis. KPL-387 was generally well tolerated, consistent with the well-known safety profile of IL-1 pathway inhibition.

Regarding the other dose levels in the study not selected for Phase III, the 100-milligram subcutaneous biweekly and monthly dose levels showed some effect but not at the level to support further study. The KPL-387 300-milligram biweekly dose level was efficacious without incremental benefit above the monthly dose level. The totality of data available supported the initiation of PASTORALE with the 300-milligram subcutaneous monthly dose level.

The PASTORALE design sugar familiar based upon our prior work in RHAPSODY. This pivotal Phase III trial is a placebo-controlled and event-driven randomized withdrawal study, designed to measure the reduction in risk of pericarditis recurrence as the primary demonstration of KPL-387 efficacy for the label. The primary efficacy endpoint is time to first adjudicated pericarditis recurrence during the randomized withdrawal period.

The trial will enroll up to approximately 85 participants experiencing a pericarditis recurrence despite conventional oral therapies into a single-blind run-in period, during which KPL-387 is initiated and oral therapies are weaned and discontinued. Participants are blinded to the duration of the running period.

Subsequently, participants who respond to KPL-387 in the running period then enter the randomized withdrawal period, in which they either continue receiving KPL-387 300 milligrams once monthly or switched to placebo. Upon closure of the randomized withdrawal period, participants may be eligible to continue into a long-term extension. As we have mentioned, our goal is to bring this potential new additional treatment option to patients in the 2028 to 2029 time frame.

I will now turn the call over to Mark to cover our second quarter financials.

Thanks, John. This morning, I'll walk through our second quarter 2026 financial performance and highlight the key drivers behind the results. As always, detailed financial information is available in today's press release.

The quarter reflected strong execution with continued momentum across our commercial business, advancement of our development pipeline and further strengthening of our financial position.

Starting on the left-hand side of this slide with the income statement, ARCALYST revenue grew 55% year-over-year to $243.6 million in the second quarter. As you've heard from Ross, this growth was driven by continued expansion in new and repeat prescribers as well as patient enrollments.

Operating expense growth year-over-year was driven by several factors: Higher cost of goods sold due to ARCALYST revenue growth, increased collaboration expenses aligned with higher ARCALYST revenue and collaboration profit, higher R&D, primarily due to the increased KPL-387 clinical trial costs as well as manufacturing costs; and also increased preclinical development investment and lastly, additional SG&A, primarily driven by investment associated with the commercialization of ARCALYST.

Together, these factors contributed to year-over-year increases in operating income and net income, which were $27.2 million and $25.4 million, respectively.

The calculation for ARCALYST collaboration profit drives total collaboration expenses is on the right-hand side of the slide. Here, we continue to leverage disciplined commercial investment as ARCALYST's collaboration profit grew faster than sales on a year-over-year basis, increasing 68% to $176.1 million.

Turning next to cash. At the bottom of the slide, we ended the second quarter with a $525.9 million cash balance, representing approximately $58 million of net cash generation for the period. Looking ahead, we believe our operating plan enables us to continue helping patients while creating additional value over both the near and longer term.

With that, I'll turn the call back to Sanj for closing remarks.

Thanks, Mark. As you've heard, Kiniksa is well positioned to build significant future value as we grow our IL-1 alpha and beta inhibition franchise. We are dedicated to helping as many patients as possible with ARCALYST and to advancing the development of our clinical portfolio in order to bring additional therapies to patients.

With that, I'll now turn the call back to the operator for questions.

[Operator Instructions] Our first question comes from the line of Nick Lorusso from TD Cowen.

Congrats on the very strong quarter, guys. So as you guys mentioned, this was the strongest quarter of ARCALYST absolute sales growth since launch. So just wanted to drive into what drove this growth specifically in Q2? And could this level of growth continue throughout the rest of the year and into next year?

Thanks, Nick. I'll say a few comments and I'm sure I'll move over to Ross to dive into some detail. But look, as always, it's continuing to execute across the entire commercial strategy and overall growing the adoption of IL-1 pathway inhibition as the preferred treatment for recurrent pericarditis. And that continues to happen every quarter.

Certainly, this quarter, Ross will dive into the number of new unique prescribers we've had this quarter. as well as the number of new repeat prescribers and the new enrollments. But ultimately, it's a matter of just continuing to penetrate into the total population, which we're doing.

And obviously, the total duration of therapy is very important. That's about in line really with the median duration of the disease, about 3 years, but ultimately penetrating into that. As we just reported, we're now around 21% penetrated into the multiple recurrence population. But that, to me, represents a meaningful opportunity ahead. And so that's what we're focused on. So very excited about it.

Ross, why don't you dive into some of the drivers and the actual numbers across those metrics? But it's -- the special sauce is just continuing to execute.

Thanks for the question, Nick. And I think that's absolutely right. I mean this is culmination of a lot of work across all our commercial and cross-functional teams at this point and where we got to really understanding the recurrent pericarditis market and really just generally executing flawlessly across the board. So really kudos to all of the team that have been able to help so many patients throughout Q2.

Ultimately, we've seen a substantial uplift in the number of both new prescribers and new repeat prescribers, as Sanj said, we have more than 450 new prescribers come into the total prescriber base more than 150 new repeat prescribers, meaning they've prescribed for 2 or more patients in the quarter.

And ultimately, that's kind of grown the number of patients that are on therapy, which led to both the results in Q2 being the highest number of new revenue -- incremental revenue that we've had in any quarter since launch as well as the highest number of new prescribers.

Ultimately, some of the driving factors underneath that as well as some of the actions that we put into place around investing in AI and machine learning, trying to make our field team even more effective than they historically have been, knowing just not only kind of who to call upon in a very traditional targeting approach, but more importantly now, seem when to call upon doctors and some of that through claims analysis alerts, but importantly, predictive alerts as well as when patients may be coming into flared visit in particular health care professionals.

As you know, we've also invested in the DTC campaign, and that's starting to show some early signs of success driving patients into the clinic to ask specifically for ARCALYST.

And I think the third point that's worth mentioning is around the dissemination of the ACC concise clinical guidance, which actually was published in August of last year. But generally speaking, because these recurrent pericolitis patients are very widely dispersed around the country, many of the general cardiologists are not familiar with the ACC concise clinical guidance for recurrent pericarditis.

So our dissemination efforts in really explaining what that guidance document means and how IL-1 inhibition is now placed after NSAID and colchicine use and prior to corticosteroids has been a key part in the transformation of really changing the treatment paradigm and being able to help many more patients.

So I think all said, it's really rolled up to just ongoing solid execution across the team and acknowledging that even now 5 years plus into the launch, there remains very significant opportunity for ARCALYST moving forward.

And our next question comes from the line Eva Fortea from Wells Fargo.

Congrats on the quarter. Two quick ones from us. So on your prepared remarks, you mentioned a higher number of new patient enrollment for ARCALYST this quarter. Is there a specific patient profile that you're seeing coming at this stage of the launch? And the follow-up was, can you comment on the gross to net for the quarter?

Well, Ross, why don't you start with the bring part and Mark, if you can comment on the [ GTN ].

Yes, absolutely. Let's do -- thank you, Eva, for the question. We haven't really seen any changes in the actual patient profiles as such, whether that's through kind of demographics of the patients for what -- to what level we know about that all the type of institutions, the health care professionals that are prescribing is still really across the board kind of academic centers, more rural centers. The opportunity, I think, is still very, very broad across the country.

So we haven't really seen a change in patient profile or phenotype to what we've seen. I think this is really more through just a greater understanding of recurrent pericarditis, greater efforts from the cardiology community to really differentiate between the first index pericarditis episode and actually when this becomes recovering pericarditis.

As you know, historically, the misdiagnosis and underdiagnosis rate is pretty substantial and patients go through seeing many health care professionals before getting the recurrent pericarditis diagnosis. So we've seen that, I think, improve over time. And I think that's really everything. There's no major changes and just happy to see more patients getting the help that they really need and deserve.

I guess, Eva, to your second question regarding gross to net in the quarter, historically, gross net does move lower sequentially in the second quarter. That was the case again this year. Year-to-date. gross to net is 7.2%, down from 8.6% in the first quarter with the main driver being lower co-pay due to the changes that we made to our support program at the beginning of the year. .

I think, as you look throughout the rest of the year here, we don't provide specific gross to net guidance, but we do anticipate a co-pay support to continue to be favorable to gross to net on an annual basis, with the majority of the impact having taken place in the first quarter.

And additionally, we do expect sort of the normal pattern to hold here. So absent any prior-period reserve adjustments, our gross net historically has been highest in the first quarter, lower in Q2 and Q3 and then works a little bit higher in the fourth quarter as industry dynamics begin to play a factor to play a factor there. I'll leave it there.

And our next question comes from the line of Geoff Meacham from Citi.

Congrats on the data in the quarter. I just have a couple. So the first on 387, now that you have the Phase II data in hand and with commercial knowledge of the market, is there anything you guys have embedded in the Phase III, perhaps to further differentiate the profile of 387?

And then second question, I know I usually ask, but wanted to check on demand trends from the first recurrence population for ARCALYST. Is there maybe some element of that driving this quarter?

Yes, I'm not sure if you want to come up on the Phase III study. But essentially, obviously, we're pretty excited about the Phase II results we've seen. We're obviously now moving into Phase III. As we've said, we're excited about the target profile of KPL-387, potential for monthly dosing liquid formulation. That, I think, is very exciting.

But obviously, the data will be the data from the Phase III. So we're just focusing on really getting through the rest of the enrollment on the Phase III study and hopefully seeing the results and being on the market in the '28-'29 time frame.

But John, any comments from the Phase III study?

No. I mean I would say that the profile, as Sanj mentioned, of KPL-387 that we're taking into the Phase III study is one that we're very excited about, rapid onset of action, durable efficacy throughout the monthly dosing interval that's being studied in Phase III in PASTORALE. So that sets us up in an excellent position for the pivotal Phase III trial.

The design of the Phase II trial is one that we understand well and then as well understood they're in the scientific community is a rather withdrawal study design. And so we are prepared to execute on that and to bring the trial forward.

Thanks, Geoff. I appreciate your questions. I just answer your question on ARCALYST, thinking about the demand in the first recurrence population, and we've seen that physicians are continuing to utilize ARCALYST broadly across the very broad label that we have, which is, as you know, is agnostic to the number of recurrences that the patient has suffered from.

There's around 40,000 patients in any given year that fit within the recurrent pericarditis label. When you break that down, we have about 80% or new patient prescribing happening in the 2-plus recurrence. So that's about 80% of new prescriptions that are coming in, in a quarter are for patients are on their second or more recurrence, and that's 14,000 patient population.

And based upon that population, that's where we mentioned that we're now penetrated around 21% into that opportunity. And that's not accounting for the patients to your question directly that are on their first recurrence and again, fitting within the label. That's a larger patient group. It's around 26,000 of the 40,000 patients. And we see about 20% of the ARCALYST prescriptions in Q2 within that patient group. And that's been growing over time.

And I think some of that reflects the acknowledgment of the board label, the increasing confidence of using ARCALYST and ultimately, the ongoing opportunity that is ahead.

And our next question comes from the line of Anupam Rama from JPMorgan.

Congrats on all the progress. Just wanted to follow up on Geoff Meacham's question here. On KPL-387 300-mg dose, when I look at sort of time to response, pain, CRP and compared to sort of the RHAPSODY New England paper, the run-in period for ARCALYST; it looks very in line-ish, plus or minus a day or so. Is that a fair assessment? And can you remind us what your market research suggests a monthly regimen could mean commercially?

John, why don't you start [indiscernible] you can jump in?

Sounds great. Thank you, Anupam, for the question. yes, we would concur that the data that we have shown from the Phase II trial in terms of time to treatment response, time to pain response and time to see normalization are very robust and are consistent with what has been seen previously in trials that supported rilonacept approval in recurring pericarditis, especially when one takes a confidence interval approach to looking at the numbers with your point estimates.

Ross?

Yes. Thank you, Anupam. Yes, we did previously shared some market research around thoughts from patients and health care professionals on the target profile of KPL-387 versus kind of current commercial and other investigational therapies.

And really, that showed both to a high degree for both the patients and the health care professionals, they were pretty excited about the KPL-387 target product profile with around 75% of patients saying that they would prefer the KPL-387 target product profile over current commercial or available -- or investigational therapies. And around 92% of health care professionals indicated a high likelihood to prescribe for new patients in the context of the target on our profile.

Additionally, the potential availability of another IL-1 therapy could also expand the pool of patients for IL-1 inhibition overall with the monthly target product profile.

Our next question comes from the line of Paul Choi from Goldman Sachs.

Congrats on the quarter and progress. My first question is on the commercial side. And I was just curious if you're thinking about adding incremental headcount to your sales force at this point, just given the commercial momentum? Or is the plan to continue to leverage AI and the advancement of the ACC clinical guidelines?

My second question is on KPL-387, specifically the transition study for patients who are stable. Can you maybe highlight what you're trying to show there and how you think what data are needed to support a potential switch strategy from ARCALYST down the road?

Maybe I'll come in. John, if you can take the rest. Thanks, Paul. So look, we're always looking at our sales force analytics and working out the best way to reach these physicians and health care professionals. That's an ongoing basis for us. So I don't if there's anything to report really on that side.

As Ross mentioned, we continue to leverage the AI and machine learning and digital marketing, which has been really helpful. But again, it's just really one part. There are a multitude of ways that we've got to continue to keep working to continue to penetrate into the total population, which we're doing.

So it's really a matter of no one size fits all. You've got to continue to execute across all those functions. So we'll continue to crack on. Clearly, the 21% penetration so far tells you there's an awful lot more work to do, and that's what we're geared up to do. So we'll do it to the best where we can across all those different areas and hopefully continue to report information to you going forward.

Thank you, Paul, for your question. So yes, the KPL-387 transition to monotherapy dosing administration study, there was a Phase II study designed to provide supplemental information for the label and to assist and provide basically the information to assist clinicians as they move across different therapies, if you will, from recurrent pericarditis.

And so that trial is designed to -- with different dosing regimens to test that efficacy and safety as patients move from regimens of NSAIDs and colchicine or corticosteroids or IL-1 pathway inhibitors, including anakinra and rilonacept. And so at the end of that study, with these different dosing paradigms having been tested, that enables the writing, if you will, the dosing administration section of the label in order to allow patients to move smoothly across therapeutic lines.

And our next question comes from the line of David Nierengarten from Wedbush.

I had one on 387, maybe two. First, just what was the kind of median follow-up. Was it the full 6 months for these patients or something else? And then if you saw any recurrences in the population in the study, in the 300-milligram arms or any of the other ones actually?

Yes. Thank you, David, for the question. So the data that were obtained for this analysis, it was an interval analysis of the ongoing study. And as such, the disclosure is limited. And so what we can say is that we have harvested this information to affirm the 300-milligram monthly dose certainly beyond the monthly dosing for [indiscernible] an order to just show that at the trough, if you will, is the monthly dosing interval, the treatment effect is robust. And other than that, that is the limit of what we have said.

What we have also said though, is that the 300-milligram biweekly dose level, which, of course, delivers more drug did not provide incremental benefit above the 300-milligram monthly dose.

This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Sanj for any further remarks.

Thank you, operator. Well, we better crack on. Thank you for the questions today joining the call. We look forward to the remainder of the year and providing additional updates in the future. Thank you.

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

Okay. We'll continue with the next session. I'm Paul Choi, and I cover the SMID-cap biotech sector here at the firm. It's our pleasure to have Kiniksa here on stage with us for this session. To my immediate left is Ross Moat, Head of Commercial; and then to my far left, John Paolini, Chief Medical Officer. Maybe what we'll do is what we've done in earlier sessions, and I'll let either Ross or John kick it off maybe with some high-level comments sort of on what are the company's strategic priorities for the remainder of the year and going into 2027, and then we can go into Q&A.

Great. Well, thank you very much, Paul. Really appreciate it, and thank you for the invite to be here today and to all of the Goldman team for hosting us at this event. It's a pleasure to be here. And thanks to everyone in the audience and those listening online. Before we go further, I would just mention that today, both John and I will be making forward-looking statements, which are subject to risks and uncertainties, a copy of which can be found in our SEC filings and on our website. So a pleasure to be here. I'm Ross Moat, Chief Operating Officer at Kiniksa Pharmaceuticals. I'm joined by John Paolini, our Chief Medical Officer, and we're happy to go through the Q&A.

Maybe to start off with, for those that are not as familiar with Kiniksa Pharmaceuticals, we are around 10 years from the inception, about 5 years out from our commercialization. So we are a commercial stage biotech organization based in Boston. We have ARCALYST in recurrent pericarditis, which was approved from the FDA 5 years ago with a very broad label in recurrent pericarditis. That commercialization has been going incredibly well over the last 5 years since launch up until the Q1 as we most recently reported, which was very strong growth in Q1 of this year, which we can go into in more detail throughout the the Q&A.

We actually increased our revenue guidance for full year 2026 from between $900 million to $920 million in net revenue for the year, up to between $930 million and $945 million. We have also been building a robust pipeline, particularly around KPL-387, which you may know is in Phase II/III clinical studies right now. We have several catalysts coming up throughout the rest of the year, including for the Phase II dose finding portion of the study, we're expecting results in the second half of this year. And we've also said that we anticipate moving into the Phase III clinical study by the end of this year also.

Additionally, another asset in our pipeline, which is KPL-1161, which is a longer-acting Fc-modified drug which inhibits interleukin-1 alpha and beta, which is also the mechanism for KPL-387 as well that we anticipate moving into the clinic in a Phase I study by the end of this year. Additionally, we're an organization with very robust financials. We're a profitable company, and we have cash reserves of around $468 million as of the end of Q1. So maybe with that, I'll pause and go through the Q&A that you have for us, Paul.

Sure. Thanks, Ross. When I talk with investors, I call ARCALYST was the blockbuster hiding in plain sight that no one seems to sort of recognize, but it's grown and your guidance is approaching blockbuster status for this calendar year. You should comfortably exceed the $1 billion mark next year at the rate you guys are growing. But what I'm curious is that given your label, can you maybe talk about how the evolution in patient behavior has been since ARCALYST has been introduced for RP? And what are you seeing in terms of the mix of new versus repeat prescribers at this stage of the launch 5 years post approval?

Yes, absolutely. So yes, certainly, on one hand, we're very pleased with the commercial progress we've made over the last 5 years. Clearly, we're growing this into a meaningful asset and helping many patients suffering from a very debilitating disease, recurrent pericarditis. But we're actually even more excited by the opportunity that we have ahead. So as you said, we really have line of sight to blockbuster status for this drug. We announced that as of the end of last year, we were around 18% penetrated into the portion of the market, which is those patients that have 2 or more recurrences. So if you imagine that the totality of the target addressable population is about 40,000 patients that suffer in any given year from recurrent pericarditis. That can be broken down into the number of recurrences people suffer. ARCALYST has a very broad label, which covers all 40,000 patients. But if you look at those that have 2 or more recurrences, those that suffer the highest burden of the disease, we -- at the end of last year, we were around 18% penetrated into that patient population, meaning that, obviously, that's driven pretty substantial growth on the commercial side. But the opportunity that is there [indiscernible] more patients in the future is obviously very significant. And that's without even recurrence, which equally are really suffering from the disease or within label of ARCALYST.

And in fact, over time, and as physicians have become more and more comfortable and more familiar with prescribing biologics and understanding of interleukin-1 alpha and beta being key cytokines that really drive this disease and the need to control the disease by blocking or trapping those 2 key cytokines has really transformed over time. And we've had more and more use in that first recurrence group. So clearly, that's a big upside population, which is an additional 26,000 out in the 40,000 patient population. So we're pleased with how that has been growing over time. But clearly, we've got a lot of work to do to really fully address the patient population and the opportunity.

Certainly, both patient and physician behavior, I think, has changed a lot over the last 5 years, one in terms of the understanding of the disease and what really drives the disease, as I talked mechanistically about interleukin-1 alpha beta. But I think also in how people see the disease from a longevity perspective that this is actually a chronic multiyear disease in the vast majority of patients. And I think historically, before ARCALYST was approved, physicians really used to identify and treat this disease episodically and would treat the flare of the disease. But now I think the understanding has really shifted and the literature has shifted that in recurrent pericarditis, this has really become quite a long disease with the median in the natural history of the disease is 3 years. And 1/3 of the patients -- if patients have 2 or more recurrences. 1/3 of the patients are still suffering from the disease at 8 years -- sorry, at 5 years and 1/4 still suffering from the disease at 8 years when that particular data set finishes. So we know this is generally a multiyear disease and the physicians that have to treat this disease nature through to just treating throughout the natural history of the disease, which is really how ARCALYST was designed to be used. So we think some of those kind of fundamental shifts in how people view the disease, diagnose the disease and treat the disease has really transformed over the last few years.

It really seems like it's evolved, as you said, from acute treatment to more of a maintenance/prevention type model here in terms of the treatment paradigm.

With your last quarter's earnings, you also identified a -- called out a pickup in new prescribers. I guess this many years, I guess, into the launch, can you maybe tell us who are these new prescribers? Where they sort of rank, I guess, in your hierarchy or tiering of prescribers? And what is sort of bringing them into the fold? Is it experience with a colleague? Are they in just sort of areas you haven't targeted before? Any color there would be great.

Yes, it's a great question. Really, what we've seen is new prescribers coming in really across the board, across all the different deciles, if you like, or kind of ways of targeting through a variety of institutions, whether it's office-based, community-based academic centers, One thing about this disease is that the patients are pretty widely dispersed across the U.S. And right now, there's a lack of real key centers of excellence for treating this disease. There has been some growth of that over time, but still, generally speaking, is really looked after by a large degree of cardiologists and rheumatologists around the country. So the need to switch on more and more and the ability to be able to switch on more and more doctors is very much there to this new way of treating the disease. So yes, in the Q1 earnings call, we said a couple of things. One, yes, we're 5 years out from the launch. But in Q1, we saw the highest number of new prescribers in any quarter since the time of our launch and the highest number of enrollments, meaning new patients with a new prescription of ARCALYST. So I think that's quite something 5 years out from launch, but I think it really speaks to the opportunity that's there and kind of where we are on the trajectory and the potential that we have ahead for helping more patients. Maybe to give you another metric to think about is that when you look at the total number of prescribers of ARCALYST in recurrent pericarditis, at the end of Q1, we had just more than 4,550 total prescribers, but that's out of a prescriber base of around 25,000 physicians who see a recurrent pericarditis patient in [indiscernible]. So again, clearly, good growth, wonderful that we had the highest number of new prescribers and new patients ever in Q1 of this year and a huge amount of work to do, which is why we're so excited about how many patients we can help in the future.

I am sort of curious, I guess, this is something that hasn't looked at it in a while, but just as you look at your mix of prescribers, how many are sort of cardiologists versus maybe rheumatologists? And are you also starting to see utilization in primary care? I'm just sort of curious of what that might look like.

Yes. So not so much in primary care, but certainly in the specialty setting, the majority is cardiology and to a lesser extent, rheumatology. And I think that's changed a little bit over time where historically, it was rheumatologists that had the bulk of experience of prescribing biologics and cardiologists would often refer to a rheumatology to either rule out underlying etiology of autoimmune conditions and so on or to investigate that further before prescribing a biologic or just through maybe a lack of familiarity and experience for prescribing biologic for the disease. But what we see now is while the rheumatologists are still important and do still prescribe a decent amount of ARCALYST and see these patients for various reasons, the vast bulk really is cardiologists. And I think we've seen a substantial growth in the willingness and the ability for cardiology to really manage this disease with our fair [indiscernible] and look after these patients.

As you look forward, how do you think about what will be sort of the core growth driver in the prescriber base? Will it be these existing prescribers who become repeat prescribers? Or is it going to be finding more and more new prescribers here? And just how do you sort of see that, I guess, ultimately at steady state as you look forward?

Yes. It's a super question. And I think the positive nature of this is that I think really the answer is both and the potential is there for both. As I said, we have around 4,550 total out of a base of 25,000. And then if you take the -- so clearly, we can grow the breadth of prescribing substantially in the future if we continue to execute in the way that we have over the time since launch. So clearly, there's an opportunity there. And then when you look at repeat prescribers, out of the 4,550, we've got around 29% of those physicians now who have prescribed for 2 or more patients. And clearly, that's been growing in both in size and percentage numbers over time. But again, 29%, I think, tells you that there's substantial room for growth.

Because this is a rare and flaring disease, we do acknowledge that it takes some time for a physician to see these patients, particularly with how dispersed they are across the U.S. So we see that there's sometimes that lag in how they move from being an initial prescriber through to a repeat prescriber. But it's very, very important to us, one thing that we've been very careful and mindful of since the time of our launch is to make sure that physicians have a very good prescribing experience, meaning that, one, they know how to diagnose the patients accurately and really understand this as a recurrent pericarditis patient rather than just another pericarditis flare or the first index episode. And once the diagnosis is there and they make the decision to prescribe ARCALYST on, they know how to prescribe it. And biologic prescribe it is still relatively new for many cardiologists, maybe outside of the PCSK9.

And then very importantly, that they see the patients get on to therapy and they see the type of effects that ARCALYST has. So that means that they see the very strong payer approval rates that we have for ARCALYST. They see the patients get on to therapy and do incredibly well on therapy, which in the main, anecdotally, we hear the type of feedback of the results that we saw in the clinical trials of RHAPSODY, which are really very compelling with a highly efficacious and well-tolerated for ARCALYST. And generally, we hear very good feedback, kind of directly through patients and vicariously through the health care professionals of how well patients feel when they're on therapy.

And the importance is really to the 2 sides of the ARCALYST label, which one is how quickly the drug can work to reduce the symptomology of a flare that a patient is suffering and most patients are in a flare when they are prescribed ARCALYST, although not all patients. But then very importantly, the preventative nature over the duration of the disease and patients suffering from this disease really live in fear of another episode happening. So it really impacts their life in a meaningful way, not wanting to travel, not being able to do daily activities. So the need to kind of provide them with the assurance that when they're on drug that they will prevent future recurrences happening is incredibly neat.

So if all of those things work incredibly well and then a physician gets a great experience of having prescribed ARCALYST and they hear good feedback from the patients, we believe that encourages them to look and become repeat prescribers and look for the next patients, but as well as the importance of peer-to-peer education. And really, what we've been doing over the last 5 years is creating a new wave of how you treat this disease. And we've really completely changed the treatment paradigm. And we've got a lot more work to do on that. But I think all of the metrics that we share show that we're making pretty strong progress up until the end of Q1 at least.

Kiniksa has been in the fortunate position of not having any near-term immediate recent competition in the RP space. But as you sort of look out there, there are some companies working on assets in development. I think the #1 question that comes up in that category is Ventyx and the recent acquisition there. So maybe, Ross, just from a competitive perspective, who are you monitoring? And for John, as you look at sort of these different mechanisms and different approaches like MLRP, et cetera, sort of what are the pros and cons of these clinical stage approaches?

Yes. So maybe I'll start by just saying we clearly monitor everything. We really kind of established and have been building this marketplace to help patients suffering from recurrent pericarditis. We have other ongoing clinical trials within this disease, which are also of the interleukin-1 alpha beta inhibition mechanism as well. We think that is incredibly important. And we acknowledge that ARCALYST has a very, very high efficacy and tolerability profile of dealing with this disease. That said, clearly, we monitor and we look at competition very carefully. And maybe, John, you might want to make some comments kind of mechanistically on how we think about that.

Absolutely. Thanks, Ross. And yes, Paul, thanks for the question. Yes. So obviously, any innovation in the space is always good, but it needs -- we always think about these things grounded in the fundamental biology. And if you think about the mechanism of recurrent pericarditis, it's driven by the self-perpetuating cycle of autoinflammation that begins with the release of IL-1 alpha localized in the tissue and then the recruitment of the systemic inflammatory response with the role of IL-1 beta. And so what our data have shown and where the science sits is that there's the need to be able to control both interleukin-1 alpha and interleukin-1 beta fully in order to control the disease to its fullest extent over the long duration of the disease. And so some of these strategies that, for example, focus on inflammasome inhibition and the inflammasome is one of the drivers or mediator drivers of IL-1 beta production, that's very far downstream. And it's really for that reason that for our work, as Ross mentioned, we've really doubled down on the concept when we're thinking about how to extend our leadership in the space, is to focus on that dual blockade of interleukin-1 alpha and IL-1 beta, and that's really the inception of the KPL-387 program.

Great. John, maybe you can remind us of what is the Phase II design for your KPL-387 study? How are the doses selected? And how many doses are you testing? And then remind us on sort of what are potential time lines for your dose-finding study to read out here?

Sure. Happy to do that. So as we've talked to -- as Ross mentioned, we're in a Phase II/III study. So the dose focusing portion is the portion that's ongoing now. It's a 4-arm study, and it's designed to really establish the PK/PD relationship of KPL-387 in the disease space. And so it's designed to deliver us development stage appropriate data that inform the PK/PD relationship, but specifically looking at the cadence and magnitude of the initial response as well as the durability of the effect. And that's actually very similar to the work that we did with rilonacept back in Phase II back in 2018. So that trial is ongoing, as you know. And what we've previously guided to is that we expect data in the second half of this year.

Great. Maybe you could just remind us of the dosing cohorts and intervals that you're testing versus the weekly version available with rilonacept here.

Yes, happy to do that, right? So the pharmacokinetics of -- about the long-term nature of this disease. And so the target -- and so a dose-focusing study in that regard is really designed to hone in on the dose and interval that works best. So when you look at our Phase I data, the 300-milligram subcutaneous dose provided coverage above the C efficacious threshold for over 56 days, which is well suited for a 28-day dosing interval with buffer. And so when we designed the dose focusing study, we anchored it on that 300-milligram subcutaneous dose level and then looked -- and the hypothesis then, if you will, is to say, well, making sure that more drug, meaning 300 milligrams biweekly does it deliver more. And then to look at the dose levels that are below, you're looking at the 100-milligram biweekly and the 100 milligram monthly and to see where there is weakness in the coverage. And by doing so, that allows us to affirm to the regulatory authorities that we've identified the dose level that supports the ultimate registration.

Can you maybe remind us of some of the -- it might be a little bit subtle, but some of the differences into how KPL-37 works versus rilonacept. Investors often focus on receptor targeting versus interleukin targeting and just sort of what that might mean in terms of a clinical implication.

Sure. This is a canonical question in any receptor ligand kind of situation, targeting the receptor versus targeting the ligand. As you know, ARCALYST is a decoy receptor cytokine trap. And so it binds interleukin-1 alpha and beta in solution and prevents them from engaging the receptor, whereas -- as we were thinking about how to move forward into the once-monthly target profile and most importantly, in a liquid formulation that would enable self-injection, self-administration in an auto-injector, that really opened up the door to monoclonal antibody technology and targeting the receptor. And so KPL-387 is a monoclonal antibody that targets IL-1R1 or the first chain of the IL-1 receptor. And so therefore, it prevents the binding of IL-1 alpha and IL-1 beta and prevents the assembly of the receptor into a signal competent entity. So importantly, that's kind of how it works. But from an overall perspective, if you actually really think about it, the original work that was done, the seminal work was actually done with an IL-1 receptor antagonist, anakinra, which binds the receptor and does those things. So what was novel actually at the time was that we proved that a cytokine trap would also provide that same effect. And so in the sense, the story has come full circle now, but using a more durable and robust way of targeting the receptor and blocking it over that course of the monthly dosing interval, that really represents the new innovation that we hope to bring forward to patients.

Earlier, you referenced that you have evolved the study into a seamless Phase II/III study. You're currently working on the dose focus -- dose finding sort of portion of the Phase II. But can you maybe walk us through what in your regulatory interactions gave FDA comfort to change this to sort of a seamless trial design? And is it based on established biology here in the IL-1 landscape, your own success in development with RHAPSODY? What just sort of allowed this transition versus sort of a separate stand-alone pivotal study?

Sure. And so one point of clarification. From its inception, this trial was always a Phase II/III clinical trial. So from the point that we brought the protocol forward, even conceived of it for operational efficiency and to move the program forward as quickly as possible. It was designed from the beginning to be a trial that included the dose focusing portion as well as the Phase III pivotal portion and it was all put together into one integrated protocol that was filed at the beginning of the program back some time ago. And so in that sense, this program is rolling out in sequence. And so the Phase II dose focusing portion is the part that we have discussed. But an important element of the design is that the Phase III portion of the study can actually -- we can initiate that independently of the ongoing activity of the Phase II trial. And so as Ross mentioned, we've previously disclosed that we aim to begin the Phase III portion of this trial by the end of this year. And in terms of those regulatory interactions, course that was all filed in one complete package. And so our intent and our belief from those interactions is that the Phase III portion of the trial can, in fact, be pivotal in nature as a single trial and can support the registration of KPL-387 in...

Can you maybe highlight for investors how your Phase III program for 387 differs in what regards versus your prior RHAPSODY study? The landscape has changed, right, since rilonacept has been on the market for several years now. But either in terms of baseline characteristics, any sort of trial specifics, whether it relates to the tapering or anything like that, what would you call out for investors or underscore here?

Yes. that's a great question. So first, just a brief word about the design. And then yes, I appreciate your question because this is really an opportunity for us to continue to innovate and advance the practice of medicine. I want to walk you through a little bit of our thinking there. So in terms of the basic design, what we've already disclosed in our previous packages is that the Phase III portion of the trial is a double-blind, randomized withdrawal placebo-controlled trial, which in a sense, draws on that long experience that we've had in this disease area almost a decade as well as from the RHAPSODY experience. And so in that sense, it goes through the similar segments of the trial where flaring patients are brought into the trial on a range of background therapies. They go through a run-in period where KPL-387 is added on and those oral medications are weaned off. And then the clinical responders are then randomized to either continued KPL-387 or placebo. And then that's an event-driven trial with a primary efficacy endpoint, which really focuses on reduction in risk of recurrence, but it's measured using a time to flare analysis. And so in that sense, that's the package that also then includes other elements.

But in terms of the thinking about this, it's actually really important to reflect upon the fact that, again, going back almost a decade when RHAPSODY was designed, the current thinking at the time, which is really based on the 2015 European Society of Cardiology guidelines, which really put corticosteroids in second line after NSAIDs and colchicine. And the science of IL-1 pathway inhibition or the IL-1 pathway really wasn't totally well understood at the time. And so IL-1 pathway inhibition was relegated to essentially third line. And so when we were thinking about how to advance the practice of medicine at the time, we really wanted to kind of work through that transition and break the mold. And so in fact, in its inherent design, RHAPSODY not only -- it was really focusing on that steroid-sparing paradigm. So not only taking patients who are on corticosteroids and trying to get them off, but also even thinking -- and that's the third-line paradigm, but also thinking second line, how do you take patients that are on NSAIDs and colchicine and actually obviate the need for them to even go on corticosteroids altogether.

And so that's what RHAPSODY proved is that, that could be done and that, that could be done as a monotherapy. So that's what then became the trigger point in April of 2021 with the availability of rilonacept that changed the practice of medicine towards -- moving forward towards second-line use of IL-1 pathway inhibition, specifically rilonacept. And the RENS registry has chronicled that advancement over time. And then ultimately, that was affirmed by the 2025 American College of Cardiology concise clinical guidance, which positions IL-1 pathway inhibition in that regard. So that's kind of where we are right now, which is actually ideally positioned then with the KPL-387 program to continue to innovate. So it reflects and recognizes that existing population, but then it allows us because of our global reach, where there's a range of different clinical practices across the different geographies and planting -- and putting the trial in all of those different geographies allows us to collect data and inform the practice of using now what is potentially a once-monthly IL-1 pathway inhibitor now in both flaring patients in both second [indiscernible] across a range of different currently available therapies for treating [indiscernible] since the KPL-387 program is positioned to really move the clinical practice of recurrent pericarditis forward into the 2030s, and we're very excited about that.

I want to ask a little bit more on patient baselines. Ross earlier spoke about how ARCALYST is being increasingly used in first recurrence patients but when you guys ran the RAPSODY study, I think you can correctly assume most of these patients were second or third recurrence type patients. So with more sort of first recurrence patients coming into the fold here, does that potentially change or to some degree, the outcome of your Phase III study if more first recurrence patients are enrolled in your Phase III portion?

Yes. So it's important to recognize the fact that when RHAPSODY was designed and run, the use -- the thought process around second -- patients with 2 or more recurrences was not necessarily because of any particular practice element. But it was really about the design of the randomized withdrawal portion of the trial and to make sure that patients came in meeting certain criteria with regard to the NRS score and the CRP elevation and to make sure that when they withdrew from drug that they would be able to briskly reach that same spike and go on to bail out therapy. And those are the fundamental principles of a randomized withdrawal clinical trial. It's also important to note that while that was the way that the trial was conducted when the time came for the labeling of rilonacept, rilonacept was granted -- or ARCALYST was granted a broad label. So it didn't necessarily -- it didn't require having 2 or more recurrences. It just required the disease recurrent pericarditis. And so the use of ARCALYST in patients who are at their first recurrence and coming right off of their incident episode, that is totally on label. So it doesn't necessarily require a clinical trial to study that. What we have done is we've studied that, for example, in the [indiscernible] registry and demonstrated that the benefit of first-line use versus second or third line use, it's all the same because the goal is to maintain disease control. And so in that sense, it's not necessary to include randomized withdrawal clinical trial, but we do have other ways that we study these things and clinicaltrials.gov is always -- as we talk about the specifics of the design of the novel trial, it's a great place to look for the elements of the inclusion/exclusion criteria and endpoints both now as well as going forward.

Great. We're coming up on time here. So I want to touch briefly on 1161. You guys have said not much on it, but maybe can you address how maybe at a high level, it differs from 387 or ARCALYST, sort of what could it do in terms of addressing unmet need in this patient population for convenience, a better dosing interval, more on the company side in terms of scalability and manufacturing? Just maybe what are some of the high-level characteristics here...

Maybe I'll deal with at least the mechanistic attributes of that. So 1161 is a program we're very excited about. There's a great opportunity to do better for patients. And it is also an IL-1 receptor antagonist. So it targets IL-1R1. It has -- and it's also, therefore, designed to be in a liquid formulation. The additional attribute is that it has Fc modifications that increase the circulating half-life. And so the target product profile then becomes ostensibly once quarterly dosing rather than the once-monthly dosing, again, with self-administration in the auto-injector. And so that really opens the door to a range of auto-inflammatory diseases, as you know, that are mediated by interleukin-1. And so this is a highly competitive space, though. And we've talked about the fact, and Ross actually mentioned that we're starting Phase I expect to start that at the end of this year. And so given the competitiveness of the space, we have -- we are yet to disclose what exact indications we're thinking about for 1161, but we do want to highlight the enormous potential that this has for patients.

Great. Maybe sort of last question here in the minute we have left, Ross, as you sort of think about the catalyst path and the story for Kiniksa that you want to promote with -- address to investors in the next year, what would you highlight?

Yes. Well, thank you, Paul. It's great to be here and to be on the stage with you and addressing the audience. So thank you again for inviting us here today.

Kiniksa is an organization, one that never rests on our laurels. We have huge potential ahead, and we are very excited about the future, both commercially and what we can do across our pipeline. We've spent the last few years really laying very solid foundations for the business. You say now we are a profitable organization. We have strong cash reserves, a good financial profile, a growing commercial assets and a healthy portfolio of drugs that we're progressing as rapidly as possible through the clinic. So we're incredibly excited about the future. We remain very focused on value creation and having the optionality across our business to go in different directions to really focus on where we believe we can create value for all of our stakeholders and including patients. So we're pretty pleased with where we are right now, but we're even more excited about the future.

Great. We'll end it on that note. My thanks to Ross and John for joining us today. Thank you.

Thank you. Appreciate it.

Good day, and thank you for standing by. Welcome to the Kiniksa Pharmaceuticals First Quarter 2026 Earnings Conference Call. [Operator Instructions]

Please be advised today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jonathan Kirshenbaum, Investor Relations. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining Kiniksa's call to discuss our first quarter 2026 financial results and recent portfolio execution. A press release highlighting these results can be found on our website under the Investors section. After the agenda, our Chief Executive Officer, Sanj K. Patel, will start with an introduction. From there, Ross Moat, our Chief Operating Officer, will provide an update on ARCALYST commercial execution. Then Kiniksa's Chief Medical Officer, Dr. John Paolini, will review our KPL-387 development program and the ongoing Phase II/III clinical trial in recurrent pericarditis. After that, Mark Ragosa, our Chief Financial Officer, will review our first quarter 2026 financial results. And finally, Sanj will share closing remarks and kick off the Q&A session, for which Eben Tessari, our Chief Strategy Officer, will also be on the line. Before getting started, please note that we will be making forward-looking statements today that are subject to risks and uncertainties that may cause actual results to differ materially from such statements. A review of these statements and risk factors can be found on this slide as well as under the caption Risk Factors contained in our SEC filings. These statements speak only as of the date of this presentation, and we undertake no obligation to update such statements, except as required by law. With that, I'll turn it over to Sanj.

Thanks, Jonathan, and good day, everyone. Kiniksa continues to build strength across the business, which is driven by both our commercial progress with ARCALYST and the advancement of our pipeline programs, including KPL-387 and KPL-1161. On the commercial side, the end of the first quarter marks the fifth anniversary of the FDA approval for ARCALYST in recurrent pericarditis. Through our consistent and effective execution over those past 5 years, we've established and developed the market for this debilitating disease. This has enabled a fundamental shift in the treatment paradigm for patients and led to significant growth for the ARCALYST franchise. Within our clinical portfolio, we continue to advance the KPL-387 Phase II/Phase III study in recurrent pericarditis. Data of the Phase II dose focusing portion of the study are on track for the second half of this year. We also expect to start the Phase III portion of the program by the end of this year. In addition, we are advancing KPL-1161 closer to the clinic. This is our Fc-modified IL-1 alpha and beta inhibitor with a target profile of quarterly dosing. And as we've previously shared, we plan to start a Phase I study by the end of this year. Our robust financial position, together with profitable ARCALYST revenue growth gives us the ability to invest in value creation across the business. Commercially, ARCALYST continues to be on a robust trajectory 5 years from launch, and we intend to capture the additional opportunity that remains across the recurrent pericarditis market. Adoption of long-term IL-1 alpha and beta inhibition with ARCALYST is expanding in the approximately 40,000 patients each year in the United States who experience recurrent pericarditis flares. In the first quarter of this year, this expanding adoption contributed to ARCALYST sales growing to $214.3 million. Looking to the rest of the year, the marked increase in both the breadth and depth of prescribing we observed in the first quarter provides momentum going forward. As a result, we've now raised our full year 2026 revenue guidance to $930 million to $945 million from our previous guidance of $900 million to $920 million. In summary, Kiniksa is a well-capitalized growth-orientated company that is well positioned to maximize the substantial ARCALYST commercial opportunity that is available to us. The company's portfolio of programs have numerous milestones throughout the rest of the year and that also have the potential to create meaningful value. And now Ross Moat.

Thank you, Sanj. Our continued commercial execution has driven strong revenue growth in Q1, leading to an ARCALYST net revenue of $214.3 million, which represents an increase of more than $76 million compared to the first quarter 2025 and approximately $12 million over Q4 of last year. This revenue growth was driven by strong underlying commercial metrics, which outpaced the Q1 industry-wide headwinds related to co-pay resets and changes in insurance plans. In particular, growth was achieved by 2 key commercial dynamics.

Firstly, we saw an acceleration in the growth of new prescribers through the quarter, which resulted in the highest quarterly increase in new patient enrollments since launch. This bodes particularly well for the rest of the year as the new larger prescriber base, along with the durability of average duration of therapy has enabled us to increase our full year revenue guidance from between $900 million to $920 million to between $930 million and $945 million.

Secondly, in Q1, our gross to net increased compared to the prior quarter as expected. However, it was lower than Q1 of 2025. This was mainly driven by changes to our co-pay support program where we made enhancements to our assistance program design, which reduced the average co-pay payout per patient relative to prior Q1s. With the momentum created early in the year, combined with our strong underlying commercial foundation, we believe we are well positioned to continue driving ARCALYST growth through the rest of the year and believe there is substantial opportunity ahead to support many more recurrent pericarditis patients. In Q1, thanks to the strong execution from our team, approximately 400 new prescribers wrote ARCALYST for the first time, representing the highest quarter-on-quarter increase launched to date. This brings the total number of prescribers to more than 4,550. As a reminder, with more than 25,000 health care professionals seeing recurrent pericarditis patients in a given year, there is substantial opportunity ahead. We also saw growth in the number of health care professionals who became repeat prescribers during Q1, resulting in approximately 1,320 prescribers in total who have now prescribed ARCALYST multiple times.

The acceleration we've seen in both the breadth and the depth of prescribing reflects our continued commercial execution as well as the growing understanding and adoption of interleukin-1 alpha and beta inhibition as the treatment choice following the prior use of NSAIDs and colchicine, as recommended in the 2025 ACC Concise Clinical Guidance. Earlier this month, we announced the initiation of our highly targeted direct-to-consumer campaign, Heart's Home. This campaign is designed to identify and target patients who may be suffering with recurrent pericarditis and not currently taking ARCALYST with the aim of empowering them to discuss ARCALYST with their healthcare provider. Through digital innovation, including the use of AI, we are able to deploy DTC in a way that's cost effective, highly targeted and ultimately applicable for a rare disease market.

We have focused on utilizing our existing patient database and added search optimization and machine learning models informed by de-identified claims, demographics, and consumer market data to define an enriched population of potential recurrent pericarditis patients to deliver tailored content, opposed to a traditional DTC approach of broad-scale and high-cost marketing. The centerpiece of our campaign is a connected TV commercial that is directed to potential patients through their individual streaming accounts on platforms such as YouTube and Hulu, as well as across social media channels. This campaign is informed by our market research, which demonstrated that when a recurrent pericarditis patient inquires about ARCALYST to their provider, the healthcare professional is receptive to the inquiry, and it results in ARCALYST being prescribed in around 80% of cases. As previously mentioned, our ARCALYST franchise is growing, is profitable and has significant opportunity ahead, and this has allowed us to make disciplined investment decisions to expand our reach to capture the opportunity and help more patients. With that, I'll turn the call over to John to cover our KPL-387 development program.

Thank you, Ross. As a brief refresher, we leveraged our extensive clinical experience with the IL-1 signaling pathway when designing the integrated development program for KPL-387 shown here, broken down by phase of development. The core component of the program is the Phase III placebo-controlled event-driven randomized withdrawal study. Just as in RHAPSODY, the pivotal study, which supported ARCALYST approval in recurrent pericarditis, the primary efficacy endpoint for Phase III will measure the reduction in risk of pericarditis recurrence as the primary demonstration of KPL-387 efficacy for the label. We believe from our regulatory interactions that this study will be sufficient to support registration as a single pivotal study.

As a reminder, to maximize operational efficiency, we combined the Phase II dose-focusing trial and the Phase III pivotal trial into a single integrated Phase II/III protocol so that Phase III could initiate independently of Phase II execution, and we added long-term extensions to all trial activities. We previously guided that we expect data from the dose-focusing study outlined here in red in the second half of this year. And today, we guided that we expect to initiate the Phase III portion of the study by the end of this year. The Phase II dose-focusing study builds on insights from previous clinical trials with rilonacept, and it is designed to define the KPL-387 PK/PD relationship as well as to support the data-driven approach for affirming the dose level for the Phase III pivotal trial.

Looking at the rilonacept Phase II precedent in the left panels, the single active arm study demonstrated that IL-1 pathway inhibition with once-weekly rilonacept resulted in rapid and sustained reductions in reported pain and inflammation in patients with active recurrent pericarditis and elevated C-reactive protein over the initial 6-week treatment period as well as the subsequent long-term extension through 24 weeks. Now looking forward, the KPL-387 Phase II dose-focusing study, which is assessing four dose levels in up to 20 patients per arm mirrors the rilonacept Phase II study in terms of study population, number of patients per arm and the primary endpoint, which is time to treatment response. The study framework has been adjusted for the specific attributes of the long-acting pharmacokinetics of KPL-387.

Thus, development stage appropriate data, which are expected in the second half of this year, are designed to provide useful information on the cadence and magnitude of initial response as well as the duration of action of KPL-387 dose levels, affirming the dose level for Phase III and informing Phase III outcomes measures. I will now turn it over to our Chief Financial Officer. Mark?

Thanks, John. This morning, I will cover our first quarter 2026 financial performance. As always, you can find our detailed financial information in today's press release. In the first quarter of 2026, we continue to build strong momentum across the business, advancing ARCALYST, progressing our clinical portfolio and maintaining a strong financial position. Starting on the left-hand side of this slide with our income statement. As you've heard from Sanj and Ross, ARCALYST revenue grew 56% year-over-year to $214.3 million in the first quarter. This growth was driven by strong expansion in new prescribers and new patient enrollments, which more than offset the impact of industry-wide seasonal headwinds. Operating expense growth year-over-year was driven by several factors. Higher cost of goods sold due to ARCALYST revenue growth, increased collaboration expenses aligned with higher ARCALYST revenue and collaboration profit, higher R&D primarily due to increased clinical and manufacturing costs associated with the development of KPL-387 and additional SG&A, primarily driven by investment associated with the commercialization of ARCALYST, including personnel and leveraging new technologies to enhance our targeting strategy and reach additional patients and HCPs. As a result of the strong revenue growth against more moderate expense growth, net income increased significantly to $22.6 million in the first quarter of 2026 compared to $8.5 million in the first quarter of 2025. Turning to the right-hand side of the slide, you'll find the calculation for ARCALYST collaboration profit, which drives total collaboration expenses.

In the first quarter of 2026, ARCALYST collaboration profit continued to grow faster than sales on a year-over-year basis, up 73% to $151.2 million. Finally, at the bottom of the slide, we ended the first quarter with a $468.1 million cash balance, representing $54 million of net cash generation for the period. We expect to remain cash flow positive on an annual basis under our current operating plan, enabling us to continuinue to help patients while creating additional value in both the near and long term. With that, I will turn the call back to Sanj for closing remarks.

Thanks, Mark. As you've heard, Kiniksa is well positioned to build significant future value as we grow our IL-1 alpha and beta inhibition franchise. We are dedicated to helping as many patients as possible with ARCALYST and to advancing the development of our clinical portfolio in order to bring additional therapies to patients suffering from debilitating diseases. With that, I'll now turn the call back to the operator for questions.

[Operator Instructions]

Our first question comes from Nick Lorusso with TD Cowen.

Congrats on the strong quarter. Can you discuss what you have seen in terms of increased demand from the early days of the DTC campaign, acknowledging that it is still pretty early on? And what other plans do you have to accelerate demand in the future, either via patients or prescriber targeting?

Yes. Nick, this is Ross. I'll take a part of that. So thank you very much. It's -- yes, as you said, it's early on for the DTC campaign. We just announced it pretty recently that we're focusing on DTC in a very targeted way in order to go and try and reach patients who we believe are recurrent pericarditis patients and in order to kind of inform them and educate them in how to go and speak with their healthcare providers about the potential of ARCALYST and recurrent pericarditis.

So it's early days. One thing that I share with you is that while we also understand that when patients go in and speak to their healthcare professionals proactively about ARCALYST, it gets prescribed. The patients get prescribed ARCALYST in around 80% of the cases. It's also true that there's only around 14% of recurrent pericarditis patients who are actually unaided aware of ARCALYST. So we know that there's a big awareness gap out there with patients. We know patients are very widely dispersed across the country. So this is our approach of ours of going out, trying to identify those patients and serve up appropriate, very targeted, very tailored messages that can help appropriate patients to be empowered to go and speak to their healthcare professionals about ARCALYST. So we're excited about the campaign. But as you said, it's early days. We are focused on many different initiatives to accelerate the growth.

As a reminder, last announced, we were around 18% penetrated into the 14,000 patient population, not accounting for patients that are even in their first recurrence. And as you know, we've seen a strong growth in patients on their first recurrence as well over time. So the opportunity is very significant. We're focused on continuing to execute incredibly well across our commercial organization. We're focused obviously on digital marketing, of which the DTC campaign is a part of that, a much broader umbrella of digital marketing. And we're also focused on peer-to-peer education and growing this new wave of how to treat recurrent pericarditis patients, which has been really transforming over the last five years of the availability of ARCALYST on the market. So we're very excited about the future. We have a multifaceted approach to how we're going to continue to grow the breadth and the depth of prescribing and help more and more patients.

One moment for our next question. Our next question comes from Anupam Rama with JPMorgan.

And congrats on a strong quarter here. For KPL-387 and the second half dose focus update, John, I could -- I was wondering if you could comment a little bit as when you look at the totality of the range of endpoints and assessments that you're going to be looking at in Phase II, how do you think about which ones are most important in sort of the ultimate dose selection moving to Phase III?

Anupam, thank you for that question. Yes. So with regard to the Phase II trial, which is currently ongoing, -- the value, I think of Slide 13 is that it shows you what kind of data we had generated in the past in the Phase II program with rilonacept in terms of three critical elements, which is, of course, the -- what we call the cadence and magnitude, which is basically the time of onset of action and the degree of suppression of pain and the inflammation with C-reactive protein. And then the additional element of durability of response. And that's what we showed previously with rilonacept, and so carrying that forward to the KPL-387 program. Again, with that initial dose of KPL-387, what we've shown in our models, regardless of the dose level selected, we expect to see high drug levels, which would be modeled to have a rapid cadence in terms of onset of action and magnitude of effect in suppressing the initial inflammatory response. And then the additional scientific question that we intend to glean by looking at the different dose levels is that duration of action of the four different dose levels that we take forward that we look at in the trial. And then from that, we integrate all three of those elements to build the PK/PD relationship and affirm the -- what we believe to be the therapeutic concentration as well as the dose level that we would carry forward into Phase III. So it's really the integration of those three critical elements.

Our next question comes from David Nierengarten with Wedbush Securities.

Just a couple of quick ones for me. First off, on the DTC ad, is it fair to model in the incremental spend year-over-year on marketing as the DTC component? Or is there some additional sales guys or other folks that you hired or other expenses going in there? And then the second one on 387. On the transition study, the treatment duration is 16 weeks, which is different than the 12 or 24 weeks that you've looked at in Phase I or Phase II. Is there any reason you picked 16 weeks versus having a little bit more apples-to-apples duration comparison, at least for patients who are moving from ARCALYST to 387.

Maybe David, on the first one, I mean, I think as you heard us talk about on the call, SG&A did go up as a result of sort of personnel related expenses as well as sales and marketing initiatives, which Ross has sort of covered. I mean I think we continue to invest responsibly in the commercialization of ARCALYST as shown by collaboration profit continuing to grow faster than revenue. And so I think as we -- we haven't really guided to spend, but I think it's worth sort of noting that on a percentage of sales basis, SG&A has been fairly consistent over the last year.

And then with regard to your question, David, thank you for that question about the transition to KPL-387 monotherapy dosing and administration study. So yes, the 16-week treatment duration for the posology portion of the study is, in fact, appropriate for this type of study. This study is really designed to look at well-controlled patients as they move from their prior therapies to KPL-387. And in this study, patients are transitioning from regimens of NSAIDs and colchicine from corticosteroids and IL-1 pathway inhibitors, including anakinra and rilonacept. And so what we have seen previously with regard to rilonacept was a time to monotherapy of under eight weeks in the RHAPSODY program.

And so this program is designed to basically move patients off of those other therapies on to KPL-387 and achieve monotherapy within that time window. And then, of course, there are additional doses that are administered to achieve steady state by the week 16 time point. But then importantly, patients transition to a long-term extension where they can continue to receive KPL-387 for up to two total years. So it's a well-designed study to inform that element of the label, if you will, clinical practice for transitioning patients to KPL-387.

Maybe a quick follow-up. Is there -- obviously, you look at the patients by prior treatment to determine if anyone has a new attack of pericarditis, of course, you'll know which prior treatment they're on and you'll stratify accordingly? Or how are you thinking about the differences in prior treatments for the transition?

That's a very reasonable statement. And if you look at, for example, the ARCALYST label, it covers all of the different therapies that patients can transition from. So it talked about NSAIDs and colchicine, it talked about corticosteroids. And then we didn't do the study specifically for recurrent pericarditis for anakinra, because that had already been done for DIRA. And so what we reported in that trial was how patients responded across the different treatments and the time to monotherapy. So similarly, in this trial, of course, you would look at each one of those different types of dosing regimens that patients came from and then look to make sure that the transition to KPL-387 is robust. It's important to point out that the onset -- that the duration of action of KPL-387 with our anticipated Phase III dose level is once monthly dosing, which covers most of that initial transition period depending on the therapy.

Our next question comes from Edward Nash with Canaccord Genuity.

Really great quarter. Congratulations. So I wanted to ask, I know, obviously, the DTC program is relatively new. And you -- I just want to kind of understand with regards to what's driving the biggest change in new patient starts. You said that on awareness, the awareness gap has shrunk and that you've seen increasing physician adoption. What effect has reimbursement or referral patterns had into this new patient starts?

Thanks, Ed. Appreciate your question. So yes, there are lots of different things driving the increases that we've seen, not just in Q1, but over time as well. But of note, Q1 was the highest ever quarter-on-quarter growth that we've had in terms of new prescribers. It's also the highest ever since the time of our launch five years ago, the highest ever number of new patient enrollments or new prescriptions coming in for ARCALYST. So clearly, we're at a stage, five years out from our launch where we're growing very nicely with a substantial opportunity ahead.

The reimbursement continues to be very strong across all the different payer mixes, and that's both for new patients coming on as well as the revalidation of the scripts usually after a one-year time period. So that continues to really be very positive. In terms of referrals, I think certainly, there are some centers out there around 18 centers that are centers of excellence, if you like, or whole pericardial disease-specific clinics, and they're acknowledged partially under one program, which is the AHAs addressing recurrent pericarditis, of which we are a sponsor of -- and that's been a helpful initiative, I think, to grow the expertise and share expertise in how to diagnose and treat recurrent pericarditis over time among those 18 groups.

But it also remains the case that recurrent pericarditis patients are broadly dispersed across the country. We have to touch many touchpoints across the country in order to educate physicians. We focus on peer-to-peer education to do that as well as, of course, our sales team and digital marketing initiatives such as the new DTC campaign, which we're excited about.

But as I mentioned earlier, with only around 14% of patients that suffer recurrent pericarditis having an unaided awareness of ARCALYST clearly, putting the power in the hands of the patient and the knowledge in the hands of the patient of their disease, acknowledging that many patients go through multiple physicians and multiple misdiagnoses before they get the recurrent pericarditis diagnosis, we think can play a substantial role in helping the awareness and empowering patients to go and ask their physicians about recurrent pericarditis, about ARCALYST and ultimately could play one of the roles amongst many things that we're doing in continuing to seize the opportunity that we have ahead.

Our next question comes from Paul Choi with Goldman Sachs.

Congratulations on the strong quarterly results.

I was wondering, first, if you could maybe elaborate a little bit more on the co-payment commentary for the quarter. Is this going to be something just specific to this particular quarter? Or could it be more potentially structurally favorable to gross-to-net over the long term? And my second question is on KPL-387. Just with regard to the transition to the switch study that's ongoing. Can you comment if the implication here is that you have a fairly confident view on the dose going forward for the Phase III? Or are you still testing multiple doses there?

Might take the first on the gross to net. So I think, Paul, we haven't provided specific guidance on gross-to-net. So we still do not expect major fluctuations relative to 2025, but we do anticipate now that co-pay support will be favorable to gross-to-net on an annual basis with the majority of the impact having taken place in the first quarter. And I think as we sort of take a look at gross-to-net over the course of the year, I'll kind of say what we've said before here, but we do expect to return to our historical pattern where absent any sort of prior period reserve adjustments, we do expect gross-to-net to be highest in the first quarter to work lower in the second and the third quarter and then begin to shift higher again in the fourth quarter due to industry dynamics as they begin to play a factor again. I don't know if there's components of the co-pay that you want to discuss further than that, but at least that's the impact on gross-to-net.

Yes. That's why I made Mark, thank you for that. I'll just maybe add a little bit more flavor on to the co-pay dynamics, Paul. So we did make enhancements to our co-pay assistance program at the beginning of this year, which ultimately reduced the average co-pay payment per patient and subsequently had the knock-on effect to the more favorable gross-to-net versus Q1 of last year, albeit higher than Q4 of last year. And that's driven by a couple of things. Firstly, reducing the maximum amount of co-pay payments that we make per patient.

And secondly, we also implemented a machine learning solution to proactively identify patients who are on non-traditional payment plans such as maximizer plans in order to kind of pick up those patients, which you may know a lot of these plans are designed to take the cost to the manufacturers all the way until funds are exhausted before the insurance companies pick up on it. So by lowering that co-pay amount for those non-traditional plans, it reduced the maximum amount that we paid per patient before the patients got full coverage under their insurer. So that had the knock-on effect into the gross-to-net. So thank you for the question, Paul.

Paul, thank you for your question about the transition to monotherapy study. So the details of the study design that we've shared so far can be found in clinicaltrials.gov. And what you will see there is the overall architecture of the study, but the disclosure does not include specific information of the dose levels that are being -- dose level or dose levels that would be studied. So we will have more to say at a later date about the design of the study.

Our next question comes from Geoff Meacham with Citi.

Just had two quick ones. Ross, on the commercial side, is there a tipping point for adding more patients to the first recurrent segment? I wasn't sure maybe if you wanted to wait a little bit longer on the awareness and DTC visibility? Or do you feel like you have to navigate maybe reimbursement hurdles in that more upstream segment? And then the second one for Sanj. -- with the positive cash flow, you have consistent profitability, how do you think about maximizing value from here? Would you want to be in the Phase III for 387 before you take another look at BD? I wasn't sure how you thinking about it.

Thanks very much, Geoff. I appreciate the question. So yes, as mentioned earlier, we're -- the last reported, we were around 18% penetrated into the 2-plus recurrence group. About 20% of prescriptions that we have now are in the first recurrence group that's grown over time. We think the 2025 ACC Concise Clinical Guidance is also helpful towards that as it places the use of IL-1 inhibition prior to the use of corticosteroids, so moving ARCALYST further upstream, if you like, early on in the disease. So we think those things are all important and acknowledging that ARCALYST really has a very broad label, which is agnostic to the number of flares that a patient has suffered. And we have broad patient coverage really across the labeled indication for the majority of plans. So we're in a pretty good situation there, which is why we feel that the opportunity that we have ahead is still very significant when you take those metrics around the 2-plus recurrences and the first recurrence group.

Geoff, this is Sanj. Thanks for the question as well. As you know for many years, this team is very much focused on creating value. We also have to execute. So to your point on 387, clearly, there's a lot of focus right now on getting through this Phase II study in the second half of this year and starting our Phase III study this year, which I think is very exciting.

Clearly, we're very much focused on capturing further growth with ARCALYST very important continued effort for us. But then as we said, 1161 also should enter the clinic this year. So a number of milestones for us. And we balance all that consistently looking at how there are other ways to create value. And as you said, we continually look at BD opportunities. We have a very, very high bar, though. So we try to be as pragmatic as possible, looking at all the value of internal creation from internal value drivers, but also looking at business development. So we'll continue to do that. But Capital allocation is very important to us. Being efficient is very important to us. We've done that very nicely, I think, through this digital DTC effort and looking at AI ways to really do it very efficiently. So trust us when we say that we'll continue to think about value creation over time and balance it well going forward.

Our next question comes from Roger Song with Jefferies.

This is Fiona on for Roger. Congrats on the strong quarter. Maybe just a quick one on KPL-387. Any meaningful difference in terms of formulation versus ARCALYST? And do you plan to use an autoinjector? And maybe just down the line, if 387 gets approved, how do you plan your commercial strategy around incorporating to potentially transition to 387?

Yes. So thanks for that question. I'll handle some of the biophysical characteristics of the molecules to maybe lay a little bit of groundwork and then turn it over to Sanj with regard to next steps. So yes, there is a difference with regard to KPL-387 in that it is a liquid formulation. And so that liquid formulation allows for the total dose, if you will, of KPL-387 to be delivered in a single syringe subcutaneously. And we anticipate that with the extended pharmacokinetics, which we've shown previously in Phase I that, that would support once monthly dosing. And so once you have that profile, it then does set up a situation, if you will, that is quite favorable for the development of an autoinjector. And we have not discussed that in detail at this time. But I'll turn it over to Sanj.

Yes. And nothing really to add. Obviously, we'll continue to execute on the ongoing clinical trials -- we talked about those today, Phase II, Phase III study, starting Phase III this year, obviously, but nothing else to add other than that we plan to do them as fast as humanly possible and as well as possible.

Our next question comes from Eva Fortea with Wells Fargo.

Congrats on the quarter. Two quick ones from us. First, how should we be thinking about R&D expense for the rest of the year and into 2027 as 387 Phase III and 1161 Phase I are initiated? And the second question is you've guided to initiating the Phase III pivotal portion for 387 by year-end '26. Are there any key steps or milestones you need to clear to initiate the study? Or is it just a matter of seeing the Phase II data before moving forward?

Thanks, David, for the question. Maybe just to touch upon the R&D question first here. Similarly to an earlier question, we haven't provided explicit guidance. But that being said, I think on a percentage of sales basis, R&D has been fairly consistent over the last year. And really with R&D, it's timing of our clinical trials and manufacturing of clinical supply that are the key variables. And so we've disclosed several ongoing investments that we plan to further advance in 2026, including the development of 387 into Phase III and KPL-1161 into Phase I. And so obviously, the longer trials go on, they tend to get a little bit more expensive. But I think keeping in the context of where sales growth has been and where we've been fairly consistent on R&D to sales over the last year is an important metric to keep in mind.

And then, Eva, thank you for your question with regard to the Phase II/III transition. So with Phase II data expected in the second half of 2026, we're on track for receiving dose level confirmation data in that time framework. And because the Phase II dose focusing portion and the Phase III pivotal portion have been integrated into a single Phase II/III protocol, the Phase III pivotal trial can begin independently of Phase II execution.

And I'm not showing any further questions at this time. I'd like to turn the call back over to Sanj for any further remarks.

Thanks, operator. Thank you for all the questions and joining the call today. We look forward to the remainder of the year and look forward to providing additional updates in the future. Thank you.

Thank you, ladies and gentlemen. This does conclude today's presentation. We thank you for your participation. You may now disconnect, and have a wonderful day.

Thank you for standing by. Welcome to the Kiniksa Pharmaceuticals Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] As a reminder, today's program is being recorded.

And now I'd like to introduce your host for today's program, Jonathan Kirshenbaum, Investor Relations. Please go ahead, sir.

Thank you, operator. Good morning, everyone, and thank you for joining Kiniksa's call to discuss our fourth quarter and full year 2025 financial results and recent portfolio execution. A press release highlighting these results can be found on our website under the Investors section. As for the agenda, our Chief Executive Officer, Sanj K. Patel, will start with an introduction. From there, Ross Moat, our Chief Operating Officer, will discuss our IL-1 inhibition franchise and provide an update on ARCALYST commercial execution.

Then Kiniksa's Chief Financial Officer, Mark Ragosa, will review our fourth quarter and full year 2025 financial results. And finally, Sanj will share closing remarks and kick off the Q&A session, for which Dr. John Paolini, our Chief Medical Officer; and Eben Tessari, our Chief Strategy Officer, will also be on the line.

Before getting started, please note that we will be making forward-looking statements today that are subject to risks and uncertainties that may cause actual results to differ materially from these statements. A review of such statements and risk factors can be found on this slide as well as under the caption Risk Factors contained in our SEC filings. These statements speak only as the date of this presentation, and we undertake no obligation to update such statements, except as required by law.

With that, I'll turn it over to Sanj.

Thanks, Jonathan, and good morning or good afternoon, everyone. I look forward today to reviewing Kiniksa's fourth quarter performance and key highlights across our portfolio over the past year. Diligent execution across our commercial and clinical organization throughout 2025 has put us in a strong position to further advance our business. ARCALYST revenue continues to grow, driven by the expanding adoption of IL-1 alpha and beta inhibition across the recurrent pericarditis population.

Since the launch in 2021, we have delivered this transformative therapy to thousands of patients, enabling a fundamental shift in the treatment paradigm and driving sustained revenue growth. On a year-over-year basis, ARCALYST product revenue grew 65% to $202.1 million in the fourth quarter and 62% to $677.6 million for the full year 2025. Importantly, ARCALYST revenue growth has been profitable since the fourth quarter of 2021. This has allowed us to make strategic investments across sales and marketing with the aim of capturing additional long-term growth. Ross will cover this in a moment.

Kiniksa's robust financial position gives us the ability to create additional value by investing in R&D and advancing internally discovered and developed assets such as KPL-387 and KPL-1161 as well as pursuing strategic business development. Focusing on clinical, this time last year, we announced our development program for KPL-387 in recurrent pericarditis with plans to initiate a Phase II, Phase III clinical trial in the middle of last year. That was achieved, and we are continuing to enroll and dose patients in the Phase II portion of that program, and we are on track for data in the second half of this year.

Together with continuing ARCALYST growth, the development of KPL-387 positions Kiniksa to extend its leadership of the recurrent pericarditis market. In particular, we believe KPL-387 could address key patient needs and expand penetration into the addressable market by potentially enabling monthly dosing with an auto-injector. In addition to KPL-387, we also recently announced that we plan to be in the clinic with KPL-1161, which is our Fc-modified IL-1 alpha and beta inhibitor by the end of this year. As highlighted, we made important progress across our commercial and clinical portfolio in 2025, and we are working diligently, some would say like the clap to continue that strong trajectory in the year ahead.

And with that, I'll turn it over to Ross to review our commercial execution.

As we shared earlier this year, Kiniksa's robust execution over the first 5 years of our commercialization has established the recurrent pericarditis market and put ARCALYST on a path to future blockbuster status. Our full year 2025 net revenue was $677.6 million, which is an increase of more than $260 million compared to 2024 and represents the highest year-on-year growth to date. The primary driver of this growth has been the expanding adoption of interleukin-1 alpha and beta inhibition with ARCALYST as a second-line treatment immediately after the failure of NSAIDs and colchicine.

In 2026, we expect to continue expanding the utilization of ARCALYST in recurrent pericarditis and reiterate our previously announced full year net revenue guidance of between $900 million and $920 million. Historically, Q1 faces some seasonal headwinds in the specialty drug sector associated with payer plan changes and co-pay resets. And as a reminder, in Q1 of last year, we benefited from a onetime bolus of patients who transitioned to commercial therapy associated with the IRA and Medicare Part D changes.

As you've heard from Sanj, our ARCALYST franchise is profitable, which over time has allowed us to invest in our commercial infrastructure and digital marketing efforts to maximize our opportunity in recurrent pericarditis by reaching additional health care professionals and patients. In 2026, our focus is to unlock the next phase of growth for ARCALYST by driving further physician awareness of the 2025 ACC concise clinical guidance, advancing our digital marketing initiatives to empower patients to discuss ARCALYST with their physician as well as utilizing AI and machine learning to efficiently and effectively target the right physicians at the right point in time and to explore ways to expand the impact of pericardial disease centers where the growth in ARCALYST prescriptions has outpaced growth at other sites.

At the end of 2025, more than 4,150 prescribers had written a prescription for ARCALYST. Of those, around 29% or more than 1,200 prescribers have written ARCALYST for 2 or more recurrent pericarditis patients. This continued growth in both total and repeat prescribers illustrates how we are evolving the treatment paradigm in recurrent pericarditis by updating the approach for treating the disease with targeted interleukin-1 pathway inhibition. Additionally, we've built a strong foundation to our commercialization with the average total duration of therapy approaching 3 years, robust payer approval rates and strong patient adherence, all of which has created solid commercial fundamentals.

With increasing penetration into the multiple recurrence target market and additional upside with ARCALYST being used earlier in the disease course, we continue to see meaningful opportunity ahead. The combination of an effective commercial engine with robust safety and efficacy data for ARCALYST means we are well positioned to continue expanding our reach into both the multiple recurrence and first recurrence populations. On the left-hand side of this slide, you can see that our penetration into the 2-plus recurrence target market has increased over time, most recently up to approximately 18% at the end of 2025 compared to around 15% in the middle of last year and 13% at the end of 2024.

As we've previously stated, approximately 20% of ARCALYST prescriptions have been written for patients following their first recurrence, demonstrated increased use earlier in the disease course. Overall, we are seeing physicians more readily turn to targeted interleukin-1 alpha and beta inhibition with ARCALYST after the failure of NSAIDs and colchicine.

In 2025, this evolution in treatment paradigm was ratified by the publication of the ACC concise clinical guidance, which now recommends interleukin-1 pathway inhibition as a second-line approach immediately following the failure of NSAIDs and colchicine in patients suffering from recurrent pericarditis. As you've heard, we are pleased with our solid execution and progress. But far more importantly, we are excited about the opportunity ahead to support significantly more recurrent pericarditis patients with ARCALYST.

And with that, I'll turn the call over to Mark to review our financial results.

Thanks, Ross. In 2025, we advanced both our commercial business and our clinical portfolio while maintaining a strong balance sheet, positioning us to continue to help patients and grow in 2026 and beyond. This morning, I will walk through our fourth quarter and full year 2025 financial results. You can find our detailed financial information in today's press release. There are a few items of note. First, starting on the left-hand side of this slide with our income statement. As Sanj and Ross noted, broader adoption of IL-1 alpha and IL-1 beta inhibition as a second-line treatment drove strong ARCALYST product revenue growth in 2025. ARCALYST product revenue grew 65% year-over-year to $202.1 million in the fourth quarter and 62% to $677.6 million for the full year 2025.

Second, operating expenses grew year-over-year in both the fourth quarter and the full year 2025, driven by higher cost of goods sold due to ARCALYST growth, increased collaboration expenses aligned with higher ARCALYST collaboration profit and additional SG&A expense with investment to further support ARCALYST commercialization.

Third, net income was $14.2 million in the fourth quarter of 2025 compared to a net loss of $8.9 million in the fourth quarter of 2024. And net income was $59 million for the full year 2025 compared to a net loss of $43.2 million for the full year 2024. Fourth, the right-hand side of the slide provides the calculation for ARCALYST collaboration profit, which largely drives total collaboration expenses.

On a year-over-year basis, ARCALYST collaboration profit grew faster than sales, up 83% to $140 million in the fourth quarter and up 96% to $459 million for the full year 2025. Lastly, regarding our balance sheet at the bottom of the slide, we ended 2025 with $414.1 million in cash, representing $170.4 million of net cash generation for the year, and we expect to remain cash flow positive on an annual basis under our current operating plan.

With that, I'll turn the call back to Sanj for closing remarks.

Thanks, Mark. As you've heard, Kiniksa continues to execute both commercially and clinically and is well positioned to build significant future value as we grow our IL-1 alpha and beta inhibition franchise. We've got a brilliant team that is dedicated to helping as many patients as possible with ARCALYST and to advancing the development of our clinical portfolio in order to bring additional therapies to patients suffering from debilitating diseases.

With that, happy to turn it back to the operator for questions.

[Operator Instructions] And our first question for today comes from the line of Nick Lorusso from TD Cowen.

So you guys have reported continuing increased penetration in the multiple recurrent setting. So I'm kind of wondering what do you think the peak penetration is for ARCALYST in this setting? And how could that evolve with the potential approval of KPL-387?

Thanks, Nick. Maybe I'll start. This is Sanj Patel. I'm happy to pass over to the team or Ross, Nick for the comments. So at this point, we have not commented on the peak penetration. Suffice to say that as I think Ross mentioned, we do believe there's still an awful lot of growth that we can capture with ARCALYST. And obviously, a lot of the work that we're doing both through our sales force, through marketing, digital efforts are making a lot of inroads there. So we continue to crack on penetrating into that market. How far it will go, time will tell, but it really is an axis of how much work we put into it and how smart we work. Ross, any comments?

No, I think that's great. I mean maybe just to add that we feel like we're relatively nascent in the opportunity. We've got a huge opportunity left ahead. We announced we're around 18% penetrated into the target population of patients with 2 or more recurrences. That's a 14,000 population at the end of 2025. And that's without taking into account those patients that are earlier on in the disease on their first recurrence, which is a much larger group of patients, around 26,000 patients in any given year. So the opportunity is there for us to do much more, albeit that we're happy with where we are at this stage, but we're very excited about the future.

Our next question comes from the line of Eva Fortea from Wells Fargo.

Congrats on the quarter. A quick one from us. You've mentioned several times now that 20% of ARCALYST patients are in first recurrence versus 80% in 2 plus. And I guess my question is, is the pace of growth in these 2 different patient populations the same in terms of like ARCALYST? And does your market research suggest potential changes to the 20:80 ratio?

This is Ross. So I'll start to answer that. And John, if you've got anything to add, please feel free to do so. But you're right in stating that the percentage of patients that we have in the first recurrence has grown over time. It's around 20% of all ARCALYST prescriptions that seem to be in the first recurrence group at this stage. So we view that as a positive change as we've evolved the treatment paradigm and as physicians get more and more comfortable both with prescribing ARCALYST but also seeing the effect of having their patients on ARCALYST and what that does to them over the long term for dealing with this kind of multiyear chronic disease in most patients.

That creates familiarity and confidence to go and prescribe earlier on in the disease and help more patients. So we think that's great. How that will evolve over time is to be seen. But we think it's kind of a positive stage for where we are right now. When we think about those patients in the first recurrence group, there are certainly patients there that are more high risk for longer duration of disease and suffering future recurrences, particularly those patients that have other risk factors or they're suffering from a significant effusion or even cardiac tamponade or constriction and that those patients could be helped within label for ARCALYST, which obviously covers recurrent pericarditis overall and is not -- is agnostic to the number of flares a patient has suffered.

So the opportunity to help those patients as well and to avoid them going on and suffering future detrimental effects of this disease is very much there for the health care professionals to decide to prescribe within that population. So we're happy that more and more people so far seem to be doing that.

And our next question comes from the line of Geoff Meacham from Citi.

Congrats on the quarter. Just have a couple. The first on the pipeline, so 387 or even 1161, what's the extent of FDA interactions of late? It does seem that the agency is maybe more open for novelty on design or maybe adding analytics just to speed up the development and maybe down the road, the review process. Just curious your thoughts on that and maybe how you could take advantage of that. And the second one, another one on first recurrence versus second or later. Are there differences in persistent rates between those 2 populations? I wasn't sure how any commercial metrics tease out between those 2 populations.

Yes. Good to hear your voice, Jeff. Thank you for the question. Maybe I'll take a quick start and then John, pass over to you for the remainder of the interaction with the FDA and then Ross for you on the recurrences. So as always, we approach our development plans with absolute rigor no matter what we see in the agency. And I think a lot -- it's not lost on us that there have been some changes.

But I think in the history of Kiniksa and even before, we've always took great pride in having a lot of thought, diligence, quality and putting really robust development packages together. That changes no matter what. But you're obviously right, we are quite excited about the new development of 387 and 1161, believe there's a lot of potential there. But I think no matter what John is about to say in terms of interactions with the FDA, we treat it the same, and we put together very robust development packages with well-thought out protocols. John?

Thank you, Sanj. And thanks, Geoff, for your question. Yes. So we very much value our interactions with the FDA and have found them very productive. As I think we mentioned when we announced the program that we had with regard to KPL-387, that we have had interactions with the FDA that laid out the development program. It's important to note that we have already kind of laid out the entirety of the integrated development program, which includes not only the Phase II work that is ongoing, but also the subsequent Phase III trial that is planned as well as the long-term extensions.

So that totality of the package has certainly been assembled. And the communications that we've had have affirmed, if you will, our belief that the Phase II trial would be sufficient and pivotal for registration in the U.S. Now that said, we are always looking for opportunities to move the program faster in order to develop what we believe will be potentially transformational and additional therapy for patients and an additional treatment option. So we'll, of course, be looking for ways to do that. With regard to 1161, of course, this program is still in its preclinical development activities. And so we'll have more to say about that as we progress. So thanks for the question.

Thanks, John. And Geoff, thank you for the questions. This is Ross. So to the part of your question around any difference in persistence rates between the 2 populations, we haven't seen anything meaningfully different between those 2 populations, whether it's those patients that have been suffering for 2 or more recurrences or on their first recurrence, but with additional risk factors signaling potentially longer disease duration, which is, I guess, as expected, we know that these groups of patients generally suffer from chronic multiyear disease. So we haven't seen any meaningful difference between those groups.

And I think moreover, what we're seeing is that health care professionals have moved their mindsets in how to treat this disease, not only with the utilization of interleukin-1 alpha and beta inhibition opposed to reaching for steroids or other ways of trying to manage this disease, but also in their mindset shift around that this is actually a chronic multiyear disease in most patients and rather than treating for the short term, as used to be the case, particularly with the toxicity and the effects of trying to get patients off corticosteroids treating throughout the duration of the disease with interleukin-1 alpha and beta inhibition is really the goal for the management of these patients. So hopefully, that answers that part of your question as well. Thanks, Geoff.

[Operator Instructions] Our next question comes from the line of Anupam Rama from JPMorgan.

This is Joyce on for Anupam. Maybe just a follow-up on the previous question. For KPL-387, once you've completed the dose focusing Phase II portion, how are you thinking about enrollment curve for the Phase III? And then are you seeing any differences in the types of patients you're enrolling relative to RHAPSODY now that ARCALYST is on the market?

Thank you for those questions. They were quite excellent. So with regard to the latter portion of your question about the types of patients, what we've described in the study is bringing in patients with recurrent pericarditis. It's important to realize that this is a global study as well. So it's enrolling patients not only in the United States, but also globally. And at this point in time, ARCALYST is available in recurrent pericarditis only in the United States. And so it's a very robust study in terms of the types of populations that it's enrolling. And so the design is very straightforward in that regard.

With regard to the transition to the Phase III study, so at this point, what we've guided to is that we would have data from the Phase II portion of the trial in the second half of 2026. And we've commented that we anticipate bringing this drug to patients in the 2028, 2029 time frame. So we have yet to provide guidance on the initiation of the Phase III study. And so in that sense, that will -- in clinicaltrials.gov is certainly a very reliable place to look for updates as well as any updates that we provide ourselves.

And our next question comes from the line of Roger Song from Jefferies.

Congrats for the quarter. Also a question related to the 387. Just given the current Phase II/III and this Phase II transition from the standard of therapy, those study design and the planned studies, will this -- the label and then the potential reimbursement test will be similar to the ARCALYST when 387 launched? And then ultimately, when it's available, basically led the physician -- patient to choose between 387 versus ARCALYST? Is that the base case here?

Thanks, Roger, for the question. Maybe I'll deal with the regulatory question and then hand it over to Ross in terms of market penetration. So yes -- so with regard to the regulatory program, so as you remember, the ARCALYST program, which was an sBLA at the time, with RHAPSODY, supported a label that was agnostic to a number of recurrences in prior therapy. So it simply states for the treatment of recurrent pericarditis and reduction in risk of recurrence. And so that is a very solid label, which gave us the foundations to grow and evolve the treatment paradigm.

So the KPL-387 program, as you know, is designed in a very similar way in that except with the difference that it is a full BLA package, meaning that this is the first -- this would be the first labeled indication for KPL-387. And so in that sense, it carries with it a slightly larger base program in terms of some of the initial Phase I and Phase II work that's being done as well as the larger long-term extensions to provide the safety package.

But importantly, the core of the study is the Phase III pivotal study, which, as you can see on clinicaltrials.gov, bears a remarkable resemblance to the RHAPSODY study design. And of course, we always bring forward new innovations. But the goal of the program is to support a similar type of indication statement, if you will, in terms of the population of being able to treat all patients with recurrent pericarditis regardless of prior line of therapy and number of recurrences as long as they have that -- meet that diagnosis of having recurrent pericarditis. So that's the regulatory framework.

I'll now turn it over to Ross to talk about the practice environment.

And Roger, thank you for the question. So maybe just best to start off by saying we believe that ARCALYST has a substantial future left to help many, many more patients suffering from recurrent pericarditis. But also as we progress with KPL-387, this program is aimed to address key patient needs and to expand the market for interleukin-1 alpha and beta inhibition with a target product profile of being less frequent dosing and a streamlined preparation and in a patient-friendly administration format there being the potential to go into an auto-injector.

So we believe that all those things could be important future treatment option choices for patients. And based on the market research that we have at this stage and what we've shared is that when you look at both patient and health care professional preferences, around 75% of all recurrent pericarditis patients that we shared the target product profile with for both KPL-387, but as well as current commercial and other investigational therapies in recurrent pericarditis, around 75% of those patients said that they would prefer the target product profile of KPL-387.

And when you look on the health care professional side, greater than 90% of health care professionals say that they are highly likely to prescribe KPL-387 for new patients suffering from recurrent pericarditis. So we think that all bodes well for the future, but we continue to be highly focused on ARCALYST as well as the work that we do across our pipeline and portfolio.

This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Sanj Patel, CEO, for any further remarks.

Thanks, operator, and I appreciate all the questions and all of you for joining the call today. Obviously, we look forward to providing additional updates in the future. I'm sure you can tell from today that we are very energized as we head into this year, and we are going for brilliance as always. So thank you very much for joining.

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

All right. Let's go ahead and get started. Welcome, everybody to the 44th Annual JPMorgan Healthcare Conference. My name is Anupam Rama. I'm one of the senior biotech analysts here at JPMorgan. I'm joined by my squad, Priyanka Grover, [ Joyce Jo and Rati Pinhe ].

The next presenting company is Kiniksa and presenting on behalf of the company, we have CEO, Sanj Patel. Sanj?

Thank you, Anupam. It's always a pleasure, and thank you to JPMorgan for hosting us today. I was just thinking Anupam, we've been doing this for quite a long time together. I think it's almost 20 years, at least 18 years. And I still think we're pretty sprightly in chipper. What do you think?

Yes, I think so. I think so.

Brilliant. I agree. I agree. I am so excited to share our immense progress that we've made this year at Kiniksa, particularly with ARCALYST in recurrent pericarditis. And we have a number of other value-creating opportunities in front of us. We've got a compelling program in KPL-387. This program is now enrolling and dosing patients as part of a Phase II, Phase III study in recurrent pericarditis.

I'm joined today by Ross Moat, who's our Chief Corporate and Commercial Officer. I know he's chomping at the bit to tell you all about the excellent commercial execution with ARCALYST and the revenue growth. Also today, we have Dr. John Paolini, who's our Chief Medical Officer. John will be joining us for the Q&A session.

And it's thanks to the entire team that Kiniksa is now a well-capitalized growth-orientated company, and we've made significant progress of our goal of making a generational impact on the lives of patients. As we start this year, as usual, we have massive goals, but we're squarely focused on creating value.

Before we crack on, please note that we will be making forward-looking statements today are subject to risks and uncertainties. A review of those statements and risk factors are found on this slide as well as under the heading of Risk Factors in our SEC filings.

The team at Kiniksa has a successful track record of execution across all stages of drug development. We've got proven experience in discovery, clinical, commercialization and business development, particularly in rare and specialty diseases. In the 4.5 years since we launched ARCALYST in recurrent pericarditis, we're now a thriving commercial organization, and we're delivering significant revenue growth. And in fact, changing the treatment paradigm for this debilitating disease.

Just this morning, we announced our full year 2025 unaudited net revenue that was $677.5 million. And we also provided guidance for the full year 2026, which was $900 million to $920 million. At Kiniksa, we're advancing our clinical portfolio through a very careful and thoughtful data-driven decisions. And we've got extremely disciplined capital allocation and a strong commercial mindset. And pertinently, we have a robust financial position that gives us the ability to invest in ARCALYST, our pipeline and do strategic business development.

Kiniksa has created and proven the market in recurrent pericarditis with the growing franchise with ARCALYST. But for us, that's just the beginning. We're focused on expanding and advancing our leadership in this disease. And aside from ARCALYST, KPL-387 could be an important advancement and treatment option for patients with recurrent pericarditis. And also, this molecule could potentially expand penetration into the addressable market by enabling monthly dosing with an auto-injector.

The KPL-387 development plan builds on the extensive experience we have in recurrent pericarditis. And the team is drawing upon our expertise from the successful RHAPSODY study, which was the Phase III pivotal study that enabled the sBLA for ARCALYST. This program consists of a pivotal study and supplemental studies designed to provide a robust data package for both physicians and patients. And we expect to have data from the dose focusing portion of the Phase II, Phase III study in the second half of this year. And we ultimately aim to have this molecule commercialized and approved [ on 2 ] patients in the '28 and '29 time frame.

This slide gives you an overview of our commercial and clinical stage portfolio. You see ARCALYST at the top. We still believe there's an awful lot of growth and revenue that we can capture with our ARCALYST in recurrent pericarditis. But we're also focused, as you've heard, on getting KPL-387 to the market as fast as humanly possible. This morning in a press release, we announced that we plan to be in the clinic with KPL-1161 by the end of this year, and that's our Fc Modified IL-1 alpha and beta inhibitor.

So as I hand it over to Ross, I think and I hope you'll see the sheer energy and excitement we have about Kiniksa's future. We certainly know we've got the right strategy. We are focused. And most importantly, we've got a team that knows how to execute.

With that, Ross.

Thank you, Sanj. And I certainly share your excitement for what we've achieved so far at Kiniksa. But we have got so much more work to do. And what I'm going to share with you in the slides ahead is why we are even more excited about the future.

The ARCALYST commercialization continues at pace, and we have significant opportunity ahead with a clear line of sight to future blockbuster status. We have established the recurrent pericarditis market and so far delivered around $1.5 billion in cumulative net revenue launch to date, by introducing ARCALYST as a transformative steroid sparing treatment option, targeting the key drivers of the disease, and we have built an effective commercial engine to identify patients and to change the treatment paradigm.

As Sanj said, in 2025, we delivered a full year net revenue of $677.5 million, which is a 62% year-over-year, and this morning, we guided to 2026 net product revenue of between $900 million and $920 million. In 2026, we are aiming to unlock the next phase in growth for ARCALYST, by positioning ARCALYST as the second line standard of care immediately after the failure of NSAIDs and colchicine for recurrent pericarditis and to increase the utilization in the multiple recurrence patient population as well as driving greater adoption in the first recurrence patient group.

As the knowledge and experience of prescribing ARCALYST has increased over time, we have seen growth in market share as well as the use of ARCALYST earlier on in the disease. We've seen steady growth into the multiple recurrence population. At the end of 2025, we'd reached around 18% penetration into the 14,000 multiple recurrent patient group. That's up from around 13% at the end of 2024, which shows good growth, but more importantly, significant opportunity ahead.

On top of the initial target population of patients, we have an additional opportunity with patients in their first recurrence of the disease, which is around 26,000 patients in any given year, and a sizable portion of this patient group could be appropriate for biologic treatment. In fact, around 20% of patients on ARCALYST say that they were prescribed ARCALYST when they were on the first recurrence of the disease.

So ARCALYST is evolving the treatment landscape for recurrent pericarditis. On the left-hand side of this slide, you can see data from residents, which is our real world evidence disease registry, which demonstrates ARCALYST has increasingly become the second line treatment option at expert centers across the U.S. And that year-on-year growth has been matched by a decline in the utilization of corticosteroids as the second-line treatment choice.

On the right-hand side of this slide, you can see that we now have the ACC concise clinical guidance, which is the first U.S. formal guidance publication, which places Interleukin-1 pathway inhibition, such as ARCALYST, as the second-line treatment choice, after NSAIDs and colchicine and prior to corticosteroids in the autoinflammatory disease that is recurrent pericarditis.

So with growing utilization of ARCALYST at expert centers as well as now the ACC concise clinical guidance in place, we aim to replicate this new treatment paradigm nationwide. And we have built a robust commercial engine to do just that. We have built a well-established cardiovascular focused field team and utilize continuous optimization of our field territories based upon where we know recurrent pericarditis patients interact with the health care system. We've also used innovative targeting techniques, particularly around the utilization of AI-driven field alerts to share with our teams not just which physicians to be calling upon, but importantly, when to be calling upon those physicians. And we're in regular communication with many recurrent pericarditis patients who we know have the ability to self advocate to their health care professional for targeted treatment.

Additionally, we've seen the increase in pericardial disease centers, up from just 2 at the time of our launch to now 18 centers nationwide, providing specialist care for recurrent pericarditis patients. And we've seen substantial growth in ARCALYST prescriptions at those pericardial disease centers, which is outpacing the growth at other sites across the country. So overall, our deep experience in this market sets a solid foundation for our future growth.

As I move to KPL-387, one of our pipeline programs, this program aims to address key patient needs and to expand the interleukin-1 inhibition market for recurrent pericarditis. With a target product profile of KPL-387 of a highly efficacious, well-tolerated drug in a streamlined presentation with reduced dosing frequency and in a patient-friendly administration. This target product profile has been very well received by both patients and health care professionals.

On the patient side, around 75% of all recurrent pericarditis patients surveyed say that they prefer the KPL-387 target profile over current commercial and investigational therapies. Additionally, around 75% of ARCALYST naive patients state an increased willingness to take an injectable therapy if it's presented in an auto-injector format. And on the health care professional side, greater than 90% of health care professionals say they are highly likely to prescribe KPL-387 in the context of available commercial and current investigational therapies.

So you can see that Kiniksa is poised to continue our growth by helping many, many more recurrent pericarditis patients in the years to come. Hopefully, you've heard from the presentation that Kiniksa is well positioned for both future success and value generation. We are focused on maximizing the current commercial opportunity. And we provided our net revenue guidance this morning for 2026 of between $900 million and $920 million. We are also focused on advancing our clinical portfolio by progressing KPL-387 through both mid-stage and pivotal trials. And for KPL-1161, as you heard earlier from Sanj, this is now expected to enter the clinic by the end of this year.

We are also focused on maintaining a strong financial profile. And with growing ARCALYST revenue and with a year-end cash reserves of around $440 million, this enables optionality for investments in additional value creation opportunities for the business. Hopefully, you've heard from this presentation how excited we are about the future that we are building at Kiniksa. I'd like to thank everyone in this room for attending today and those listening online and hand back to Anupam to moderate the Q&A session. Thank you.

Thank you, guys. I'll ask the first couple of questions. And then obviously, if there are questions in the audience, feel free to raise your hand and I'm happy to call on you. I wanted to dig in a little bit on the guidance, which was ahead of consensus for this year. If you could really drill in on what's driving the strong guidance in terms of patient starts, duration, moving the product upstream. What are the levers that we should be thinking about?

Thanks, Anupam. So maybe I'll take this. This is Ross again. So yes, we provided the revenue guidance this morning. I think it was a strong revenue guidance of $900 million to $920 million, showing a pretty significant growth year-on-year coming off the back of another year of very good growth in 2025. So it shows our optimism for the future. As you said, it was ahead of the analyst expectations and the consensus. There are many things that obviously go into the guidance, but we provide guidance in a way that is to the best of our knowledge at the time and what we believe the market is shaping up to be for ARCALYST. So that includes everything from new starts to duration of therapy, and the trajectory that we've either been on and expect to be on throughout the year.

The thing that we are really focused on this year as we kind of kick into the year is that -- there's been a little bit of a shift from talking about the number of recurrences that a patient has suffered before they then get access or prescriptions for ARCALYST more towards actually the place in therapy of where ARCALYST is utilized. And I think what we've seen from both the RESONANCE data, our real-world evidence data. And then also now from the ACC concise clinical guidance is really placing it solidly as the second line therapy which is a completely new standard of care. And it's something that we've really been promoting to for some time, but the data is starting to move in that direction as are the national publications and making sure that we disseminate that data and really change the paradigm for these patients moving forward is incredibly important.

How have the guidelines in this RESONANCE data changed over the course of the last few months? What are you seeing in terms of second line update -- uptake since these updates, even if the anecdotal?

Yes. Thank you. So clearly, we were pleased with the guidance that came out and that was back in August of 2025. And it's something that really we've been messaging to for quite some time. But the factors here in recurrent pericarditis, so these patients are looked after by a wide degree of cardiologists and rheumatologists, but mainly cardiologists across the country. So disseminating data to a significant number of physicians takes time to work its way through, particularly in a rare flaring disease like recurrent pericarditis but we were very pleased with the guidance. Clearly, we're using our promotional efforts to try to emphasize the guidance across the country. And while there has been somewhat of a growth in pericardial disease centers around the country, the fact is that this message needs to get out to many, many physicians to really change the treatment paradigm.

So that takes some time. Our medical affairs team play a huge role in disseminating data as to, obviously, our promotional commercial team, both in person and through digital marketing. So these are all things that we've been very focused on. But we know it takes some time to come into a marketplace and really change what's historically being done within this market. I think we're making good progress but really to the tone of the presentation that we just have a significant opportunity ahead. And we -- even though we've had a good year in 2025, this is not an organization that rests on its laurels as we move forward.

What makes a pericardial center and like what defines that like? And you're saying it's growing. So like what's driving that growth? Like is it you guys? Is it the community coming together like what's driving this growth in the actual centers that treat this?

Sure. It's multifactorial. So when the program started to dial all the way back to the '27, '28 time frame, there are only 2 centers that were focused on pericardial disease. And it was the process of running the clinical trials, not only globally but expanding within the United States, the number of centers that we're enrolling these patients that was the first step. And then from there, as we launched the RESONANCE registry, there are actually 29 -- up to 29 centers that were focused on doing research, collecting information about clinical practice in recurrent pericarditis. And that creates a special mindset or focus in the eye in the mind of the clinician about how to approach this disease and importantly, how to be evidence-based or data-driven in the treatment of disease, which means going back to the actual clinical trials. And the clinical trials, which as you remember, in RHAPSODY, where half of the patients that entered the trial were, in fact, in a second-line treatment paradigm. And that was an intentional step that we took when we designed the program to move the treatment paradigm forward.

So from there, then becomes the initiative with the American Heart Association, et cetera, where -- as an organization, they took up the concept of building awareness and training clinicians in terms of how to treat this disease. And so it started off with 15 centers, grew to 18 centers. And now these groups are really contain the necessary expertise in the diagnosis and management of pericardial disease. And that then sets the tone. It sets the example for other centers to follow because as they see the improved outcomes that come from centers like that, they want to have those kind of outcomes for their patients as well. And that's the snowball that builds the momentum and changing the paradigm of the disease as Ross and Sanj have mentioned.

Questions from the audience? Maybe we could talk a little bit about treatment duration. When I think about RHAPSODY, right, like that data was pretty evident that symptoms came back if you went off drug and so there was a view that it could be more of a chronic treatment. You've [ grown ] duration all the way up to 3 years, but it is also an episodic disease. So like how do we think about duration from 3 years, right? Like...

Sure. So a couple of things. First about the epidemiology and maybe second about the cadence of pericarditis recurrence. So in terms of the epidemiology of the disease, we have published data that shows that the median duration of disease in patients who have 2 or more recurrences is 3 years, 1/3 of patients suffering at 5 years, 1/4 of patients still suffering at 8 years. And the data set ends at 8 years, so that's the median. We have orthogonal data that point to a 3.8 years, for example, in the [ Italian ] population. So that tells you about how long this disease can last. And patients who have significant risk factors are usually pitched over towards those longer disease durations.

Now when -- for example, when RHAPSODY was starting, you point to how those patients flare. That was, of course, after only 12 weeks of treatment. And in fact, the median duration of treatment in RHAPSODY -- large was 9 months in the primary study, which, as you mentioned, we started to expand ever increasingly outward showing, for example, that at 18 months, there's still a high flare rate because the disease is still present. So if you withdraw therapy, the disease comes back. And then that was shown again in an Italian cohort and after 23 months of treatment. And that's all layered on top of patients having had 1.5 years of disease even before entering the trial. So what you're hearing is this is a well-studied population that we're 5 years out into their disease duration and still needing even more therapy.

So what does that mean with regard to the treatment duration? It really points to the concept that if you maintain treatment. So for example, as you looked at the long-term extension, as long as patients remained on continuous therapy and there were no interruptions, the flare rate in the clinical trials was essentially 0, and we even showed that at a recent analysis at the European Society of Cardiology.

On the other hand, if you take the older way of treating, which is treat episodically, this is where you get the multiple recurrences. And in fact, patients who are managed with corticosteroids because you can't stay on them continuously have to go through serial tapers. And it was published in 2 groups, both at the Cleveland Clinic as well as by an Italian group that, that is actually the driver of why these patients have so many recurrences. It's the iatrogenic aspect of serial steroid tapers and being sub therapeutic on treatment that then exposes the underlying disease. And that's why, as Ross was saying, the fundamental treatment paradigm shift is not only to use its second line, but also then to maintain therapy throughout the treatment duration so that the flare rate can be really brought down to the minimum level possible. And I think that's kind of how you redefine what patients can expect when they're on an effective suppressive therapy.

Ross, I know you're probably saving a few things for the earnings call. But usually, you have some commentary on trends with new prescribers, repeat prescribers. What are you seeing in 4Q? And probably more importantly, where do you see this going? And one of the things I've struggled with is like what -- if you're a first-time prescriber like what makes you a repeat prescriber, right?

Yes. It's a great question, Anupam. So we did share in the press release this morning that we did see substantial growth in the number of new prescribers in quarter 4 last year, around 325 additional new prescribers coming in, in the quarter, taking the total to more than 4,150 total prescribers. And I guess the way to place that in context is that there were around 25,000 to 30,000 physicians potentially seeing a recurrent pericarditis patient in any given year. So we're making good progress, switching on additional 325 new prescribers in a given quarter is good progress, but there is just so much more to do in this disease area. And we've got the right team who are up for the challenge of doing just that.

Out of that 4,150-ish prescribers, we now have around 29% of those physicians who have prescribed for 2 or more patients. So a big part of what becomes a -- we're going from a first-time prescriber to a repeat prescriber is ultimately on one hand, this is a rare flaring disease. So often, it's a matter of time waiting for the next patient to come to that particular physician to have the opportunity to prescribe again. But I think the most important thing that we are very focused on is making sure that physicians, one, they know how to prescribe the drug and how to differentiate recurrent pericarditis from the index first episode of pericarditis and then you recognize that this is a time where the patient needs to have a different treatment modality to help with their disease over the years to come. And then making sure that they have a good experience, they know how to prescribe the drug. They know how to go through the prior authorization. They see their patient gets on to the drug. And then very importantly, they see the type of effect that the patient has on therapy. And by gaining that positive feedback loop and that halo effect, enables physicians, one, to be very confident that their patients will get on to drug and have a great effect. They will look for the next patients that can be supported with ARCALYST. But also, it has an element of peer-to-peer education. And when we are trying to create this new wave of how to treat the disease and now with the ACC concise clinical guidance back in a similar treatment regimen. These are all really important steps for how we educate general cardiologists now of how to identify the patients and what the new way of treating the disease is. So one by one, we are switching more and more physicians on. They are becoming repeat prescribers on ever-increasing rates. But the opportunity ahead to continue to go much, much further on both the total prescribing level and the repeat prescribing level is very much there for us.

Final questions on ARCALYST before we move to 387. So maybe on 387, just remind us what the size and scope of the Phase II dose focusing portion is? And what we would anticipate to learn there in the top line?

Sure. So KPL-387, the Phase II program is ongoing is a dose focusing study. And what that means is that it's intended to define the dose level that will be carried forward into the Phase III pivotal trial. So the way that we've approached that is in a 4-arm study, enrolling approximately 80 patients. And these 4 dose arms are really around trying to identify or clarify that dose to go forward. So it's centered on or anchored on the 300-milligram, once-monthly dose level given the fact that the Phase I data showed that a 300-milligram subcutaneous dose administered carry forward serum concentrations above the target concentration for about 57 days. So that creates sufficient buffer for once monthly dosing.

Then the scientific question is to ask if you give more drug than that. So in other words, giving the 300 milligrams every 2 weeks, what -- do you get any additional benefit or not by having done that? Then it also asked the scientific question if you give less drug than that, where are the weaknesses? And how does that help you understand the PK/PD relationships of drug concentration and disease activity. And so that's done not with all of the arms, but certainly with 100-milligram biweekly dose level and the 100-milligram monthly dose level.

Importantly, there's no placebo in this arm. And that's because for flaring patients, it's important for the trial to provide a treatment opportunity, if you will, for those patients. And so both the 100- and the 300-milligram dose levels are intended to give initial drug levels that could -- should be sufficient to suppress disease activity. And of course, that's part of the trial in order to define all of those elements of dose response. So what you see that I'm pointing to is a totality of evidence approach. It's not about any one particular arm, but rather looking across all of the arms of the study as a way of demonstrating to the regulatory authorities that the dose level that we have taken forward or plan to take forward into Phase III represents the minimum effective dose level, if you will, that would be sufficient for treating this disease long term. So the data that would come forward from that, as Sanj and Ross mentioned, in the second half of 2026, would be focused on that objective.

Once -- given your experience with RHAPSODY as well as what you're experiencing in the dose binding portion, once you identify a dose and go into the pivotal, how do you think about that enrollment curve?

So -- the advantage of how we have set up the Phase II/III study is, in fact, part of our strategy to move as fast as humanly possible to bring the program forward to patients. So once the dose level has been identified and we pull the trigger on the Phase III program, the program in its totality is already -- will already be in all of those centers around the world. And so that enables us to really catapult forward into the Phase III program and drive enrollment into the pivotal study in a way that's really different than if you try to build a Phase III program from the ground up, which is the usual way of doing it where there's like a year, 1.5 years lag between the Phase II and Phase III. So that's one of the innovations that we've brought with this program to the ultimate goal of bringing KPL-387 forward.

John, you talked about enrolling this trial as fast as humanly possible, and I'm looking at a screen that says, "Your motto, every second counts." Thank you guys so much for -- Sanj and team.

Thank you, Anupam.

Thank you for standing by. Welcome to the Kiniksa Pharmaceuticals Third Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Jonathan Kirshenbaum, Investor Relations Officer. Please go ahead, sir.

Thank you, operator. Good morning, everyone, and thank you for joining Kiniksa's call to discuss our third quarter 2025 financial results and recent portfolio execution. A press release highlighting these results can be found on our website under the Investors section.

As for the agenda for today's call, our Chief Executive Officer, Sanj K. Patel, will start with an introduction and overview of our business. From there, Ross Moat, our Chief Corporate and Commercial Officer, will discuss our IL-1 inhibition franchise and provide an update on ARCALYST commercial execution. Then Kiniksa's Chief Financial Officer, Mark Ragosa, will review our third quarter 2025 financial results. And finally, Sanj will share closing remarks and kick off the Q&A session, for which Dr. John Paolini, our Chief Medical Officer; and Eben Tessari, our Chief Operating Officer, will also be on the line.

Before getting started, please note that we will be making forward-looking statements today that are subject to risks and uncertainties that may cause actual results to differ materially from these statements. A review of such statements and risk factors can be found on this slide as well as under the caption Risk Factors contained in our SEC filings. These statements speak only as of the date of this presentation, and we undertake no obligation to update such statements, except as required by law.

With that, I'll turn it over to Sanj.

Thanks, Jonathan, and good morning, everyone. Year-to-date, in 2025, we've continued to execute and meaningfully advance our commercial business and clinical development portfolio. The use of IL-1 alpha and beta inhibition with ARCALYST has increasingly become the preferred treatment for recurrent pericarditis, driving significant ARCALYST revenue growth and positioning our franchise for long-term success, both with ARCALYST and KPL-387. We continue to be excited about the potential of our IL-1 inhibition franchise and fully intend to remain the market leader in recurrent pericarditis.

Given the fact that as last reported, we were only 15% penetrated into the multiple recurrence patient population, we expect to continue to grow ARCALYST revenue. To this point, as announced this morning, we've raised our full year net sales guidance to between $670 million to $675 million from our previous guidance of $625 million and $640 million. We also believe KPL-387 could be an important advancement in the treatment of options available for patients, potentially increasing penetration and growing the recurrent pericarditis market.

We remain on track to report data from the Phase II dose focusing portion of the Phase II, Phase III trial in the second half of next year. Additionally, we are pleased to report that early this month, the FDA granted KPL-387 Orphan Drug Designation for the treatment of pericarditis, which includes recurrent pericarditis. Importantly, we have maintained a robust financial position while continuing to create value without relying on the capital markets.

Turning to the growing adoption of IL-1 alpha and beta inhibition with ARCALYST, we've introduced and advanced a fundamental shift in the treatment paradigm for this disease. Ross will share more details about this in a moment.

In the third quarter, ARCALYST revenue grew to $180.9 million, which represents a growth of approximately $24 million over the previous quarter and approximately $69 million compared to the third quarter of 2024. While we're pleased with this growth, we continue to believe in the significant opportunity for additional growth ahead. As of the end of the second quarter, we were only 15% penetrated into the multiple recurrence opportunity, and we continue to see ARCALYST utilized earlier in the course of the disease.

As previously stated, approximately 20% of ARCALYST prescriptions have been written for patients following their first recurrence. For patients who failed NSAIDs and colchicine, physicians are more readily turning to targeted IL-1 alpha and beta inhibition with ARCALYST rather than risk on an unnecessary flare by treating patients again with a previously unsuccessful treatment. Overall, the progress we've made reflects the medical community's growing adoption of IL-1 pathway inhibition and speaks to the future value creation of our IL-1 inhibition franchise.

With that, I'll turn it over to Ross.

Thank you, Sanj. The growing understanding of recurrent pericarditis being driven by the cytokines, interleukin-1 alpha and beta has been a key driver behind the growth we've seen in the adoption of ARCALYST. As an increasing number of health care professionals update their approach to how to treat recurrent pericarditis with targeted IL-1 immunomodulation, we've seen a substantial increase in the number of active commercial patients on ARCALYST.

Specifically, this is a result of our team driving increases in 2 key areas. Firstly, in Q3, new patient enrollments grew by their highest level in a quarter since launch. This is represented in the growth of prescribers of more than 350 in the quarter, leading to a total prescriber count launched to date of more than 3,825, including around 28% or more than 1,000 prescribers who have written ARCALYST for 2 or more patients.

Secondly, once on treatment, patients are staying on ARCALYST for longer, which speaks to both the duration of the disease and patient satisfaction on ARCALYST. At the end of Q3, the total average duration of therapy increased to approximately 32 months. These two levers increased the number of active commercial patients and contributed to our ability to raise our revenue guidance for the full year 2025.

Our commercial organization has been highly focused on evolving the treatment landscape for patients suffering from this chronic, highly debilitating disease by increasing education and driving the utilization of interleukin-1 alpha and beta inhibition towards becoming the new standard of care for recurrent pericarditis. We have built a highly effective commercial infrastructure and built upon many years of established relationships with the recurrent pericarditis community to improve the care for patients.

In the 4.5 years since the launch of ARCALYST, we've continued to hone our messaging and we've improved our effectiveness through utilization of AI and digital marketing to inform which physicians to visit and importantly, when they're most likely to see a recurrent pericarditis patient.

Thanks to the compelling clinical and real-world data generated in RHAPSODY and RESONANCE, our payer approval rate remains very high, and we continue to be focused on delivering excellent support to patients through Kiniksa OneConnect, our patient services program. This combination of robust data, access and support enables health care professionals to feel confident that their patients will get on to therapy, be well supported and receive the type of efficacy we've seen in the published literature.

As a result of the continued growth in patients on ARCALYST, today, we raised and tightened our full year 2025 ARCALYST net sales guidance from between $625 million to $640 million to now between $670 million and $675 million, which is a $40 million increase in guidance between the midpoints. Our increased guidance reflects the robust trajectory of ARCALYST revenue in 2025, while also accounting for typical year-end industry dynamics, which is consistent with our historical fourth quarter performance.

As you've heard, we're pleased with our solid execution and progress and are incredibly excited about the opportunities we have ahead. As we continue to focus on maximizing the growth of ARCALYST, we are also excited about the opportunity to advance the care of recurrent pericarditis patients in the future with KPL-387, our development program. This is our fully owned monoclonal antibody antagonist targeting the IL-1 receptor to inhibit both IL-1 alpha and beta. The totality of data show that inhibiting the activity of both of these key cytokines is a core component of delivering a highly efficacious treatment for recurrent pericarditis.

With this program, we're advancing a validated mechanism with the potential to address key patient needs and expand penetration into the addressable market by enabling a convenient monthly subcutaneous dose in an auto-injector. Surveyed patients and health care professionals have indicated a preference for a highly efficacious IL-1 alpha and beta inhibitor with this target profile. Specifically, approximately 75% of all surveyed recurrent pericarditis patients report that they would prefer the KPL-387 target profile over those of available commercial and current investigational therapies.

On the physician side, more than 90% of health care professionals stated a high likelihood of prescribing KPL-387 for new patients as well as being receptive to switching current patients upon a patient's request. It's also worth noting that health care professionals broadly agree that the introduction of KPL-387 would expand the IL-1 alpha and beta inhibition market overall. As we've previously announced, the dose focusing portion of the Phase II/III development program of KPL-387 is currently underway, and we expect those data in the second half of 2026.

With that, I'll turn the call over to Mark Ragosa to review our third quarter financials. Mark?

Thanks, Ross. This morning, I will cover our third quarter 2025 financial performance. Our detailed results can be found in the press release we issued earlier today. There are several items on this slide that I'd like to call your attention to.

Starting with our income statement on the left-hand side. First, ARCALYST revenue grew 61% year-over-year in the third quarter to $180.9 million with adoption of IL-1 alpha and IL-1 beta inhibition for recurrent pericarditis continuing to drive significant gains in active commercial patients and duration of therapy.

Second, operating expenses grew 29% year-over-year in the third quarter to $156.8 million, primarily due to collaboration expenses, which were driven by continued strong ARCALYST collaboration profit growth. And third, due to strong revenue growth against more moderate operating expense growth, net income was $18.4 million in the third quarter of 2025 compared to a net loss of $12.7 million a year ago.

Next, the right-hand side of this slide provides the calculation of ARCALYST collaboration profit, which drives collaboration expenses. ARCALYST collaboration profit grew a significant 118% year-over-year to $126.6 million in the third quarter as profit split eligible COGS as well as commercial and marketing costs held steady against higher sales.

Lastly, at the bottom of this slide, we continue to expect our current operating plan to remain cash flow positive on an annual basis. And in the third quarter, our cash balance increased by approximately $44 million to $352.1 million. As you've heard from Sanj and Ross, we further advanced our commercial business and clinical portfolio as well as maintained a strong balance sheet in the third quarter. As a result, Kiniksa added to its significant momentum and remains well positioned to continue to help patients as well as to create additional value in both the near and long term.

With that, I'll turn the call back to Sanj for closing remarks.

Thanks, Mark. As you've heard, Kiniksa continues to execute both commercially and clinically, and we are well positioned to build significant future value as we grow our IL-1 alpha and beta inhibition franchise. As ever, we are committed to bringing additional treatment options to patients that are suffering from debilitating diseases with unmet need.

I'll now turn the call back to the operator for questions.

And our first question comes from the line of Geoff Meacham from Citi.

This is Mary Kate on for Geoff. So you're seeing duration increase here for ARCALYST, which is encouraging. Could you comment on maybe the patient and physician feedback you're hearing from these longer users?

John, do you want to take that?

Sure. So in general, what we're seeing certainly in terms of the academic literature is an appreciation of the duration of disease and therefore, the necessity of treating to that duration of the disease in order to minimize the amount of recurrences that patients experience. So what we know from the literature is that the median duration of disease is 3 years with 1/3 of patients still suffering disease at 5 years and 1/4 at 8 years.

And so the other data that we have, in fact, which we recently showed at the European Society of Cardiology meetings is that continued treatment without interruption resulted in a 99.5% reduction in event rates post treatment compared or on treatment compared to pretreatment. So that creates a very powerful message, if you will, for clinicians that treating to the duration of the disease is the best way to manage the disease.

Thanks, John. And maybe just to add on top of that as well in terms of the health care professional patient feedback that we get, generally, we received very positive feedback for those patients that have been on therapy for quite some time and a growing amount of time up to now 32 months and an average total duration of therapy. What we see on the health care professional side is generally due to the high access rates that we get, the health care professionals see their patients get on to therapy reasonably quickly and easily, thanks to that higher approval rate. So that kind of provides confidence that their patients are going to get on to therapy and helps them to then look for future patients, knowing that their patients will get on to therapy.

And then for the patients themselves, the fact that they've been on therapy for longer, I think, is also part of the evidence of doing well on therapy. We continue to hear very high satisfaction from patients on therapy. And I think that backs up what we've seen both in the clinical world and the real-world evidence of how highly efficacious and well-tolerated this drug is.

And as a reminder, it's been designed to be used over the course of the treatment -- the duration of the disease and to match that duration of the disease with the treatment duration. So this has really been designed as a long-term therapy to address what is a chronic multiyear and highly debilitating disease for most patients. So the feedback has really been very good from both health care professionals and patients overall.

And our next question comes from the line of Anupam Rama from JPMorgan.

Congrats on the quarter. Can you talk a little bit how you guys have sort of incorporated the updated ACC guidelines into your sort of marketing efforts? And what the early innings -- what you've learned from the guideline update? Because I think that was just a couple of months ago, right, in August of this year.

Anupam, thanks for the question. I'll start off with a brief summary of the concise clinical guidance and then hand it over to Ross regarding your question about incorporation of the guidance into the field work.

So specifically to the concise clinical guidance, yes, this is really -- this came out in August and represents an affirmation of what we've seen from the literature and actually driven by the data that we've helped to generate, which is positioning IL-1 pathway inhibition as second line after NSAIDs and colchicine, which is a real advance in the treatment paradigm to be truly steroid-sparing. And so that was driven by the initial data from the RHAPSODY program, where half the patients were treated second line after NSAIDs and colchicine. And then that was then picked up from our RESONANCE registry showing year-on-year after the approval of ARCALYST, a reduction in the use of corticosteroids and a rise in IL-1 pathway inhibition led by ARCALYST in the treatment of these patients.

And so that was then picked up by JAK advances and JAK imaging in the thought leader literature. But then ultimately, it culminated, if you will, in the concise clinical guidance, which is a real affirmation from a practice entity to provide guidance to clinicians. So that creates that strong foundation that Ross and his team have been building on. So Ross, over to you.

Yes. Thank you, John. So I think it was really much needed guidance that we were pleased to see given that this is really the first U.S.-focused guidance publication that's really out there. We're utilizing it certainly within a promotional perspective and incorporated it within promotional materials. And as John said, it's really an affirmation of the type of messaging that we've really been providing since launch, so it's wonderful to have further publications from experts in the field, affirming the type of approach and a new approach to managing this disease compared to historic available drugs and in particular, around the utilization of corticosteroids, which we've always promoted ARCALYST as really a steroid-sparing agent and a drug which should be utilized ahead of corticosteroids.

And having this type of publication out there, say, which we have incorporated within our materials now as well from a promotional perspective is a huge help, knowing that the use of corticosteroids is probably not the most advanced way of treating this condition now that there is a targeted immunomodulation approach, specifically looking at the key driver of this disease, which is interleukin-1 alpha and beta and being able to inhibit that, we really see as the modern way of treating this disease, and we hope will become the new standard of care.

And our next question comes from the line of Roger Song from Jefferies.

Great. Congrats for the quarter. My question is related to the first recurrence. It seems your revenue is driving very well, penetration continue to be very good. And then how should we think about the first recurrence if that's a population you will start to think more about it? And then what could drive further penetration into that population?

Yes. Thanks, Roger. This is Ross again. Yes, as you noted, we have seen an increase over time in how physicians are utilizing ARCALYST within the first recurrence of recurrent pericarditis. And as a reminder, that really is the breadth of the label. The label is completely agnostic to the number of flares a patient must have gone through and suffered from before they become eligible for this targeted immunomodulation therapy.

So we have promoted it to recurrent pericarditis overall. But certainly, early on in the launch, we did see that physicians were utilizing it more within the 2-plus recurrence group, which is a 14,000 patient population in any given year. We've seen a lot of utilization there. But I think as physicians become more and more comfortable and familiar with how to prescribe the drug and then going back to the first question that the physicians and patients have a good experience when they're on the drug despite they get access to therapy and see the type of results that we've seen in the clinical world, that provides greater confidence of using it earlier on in the disease. And I think what we're seeing is physicians taking mindset of why should we let patients continue to suffer from additional flares before they become eligible for this targeted treatment.

So we have seen now around 80% of our patients that have prescribed ARCALYST within the 2-plus recurrence group and around 20% of all of those that have prescribed ARCALYST within the first recurrence group. And obviously, that has grown in percentage terms over time. But as we said in the prepared remarks, we are incredibly excited about the future opportunity, knowing that we announced midway through this year that we were around 15% penetrated into the 2-plus recurrence group without even taking into account those patients in the first recurrence.

So the opportunity ahead to serve many, many more patients while we're happy with our current commercialization, the future is certainly there for us to address and help many more patients in the future.

And our next question comes from the line of Eva Fortea-Verdejo from Wells Fargo.

Congrats on the quarter. Two from us. First on ARCALYST, can you discuss the gross to net dynamics for the quarter? And second, on KPL-387, what are the -- what will be the drivers of your decision on the Phase III dose given that, if I recall correctly, the Phase II is powered to demonstrate a statistical difference?

Thanks. I guess first on the gross to net for the quarter year-to-date, it was 8.9%, down from 9.5% year-to-date in the second quarter. So lower and in line with our historical pattern where we see it highest in the first quarter due to industry dynamics such as benefit plan resets and co-pay support and then lower in the second and the third quarter and then moving slightly higher in the fourth quarter as industry dynamics begin to play a factor again.

And Eva, thanks for the question about KPL-387 dosing. So importantly, the Phase II portion of the study is a dose focusing type study rather than a formal dose-ranging type study. And that is because our modeling has shown that the 300-milligram subcutaneous dose, which in healthy volunteers last for almost 2 months, should provide sufficient coverage for monthly dosing. And so therefore, the Phase II study is designed really anchored on that 300 milligrams subcutaneous every month dose and then looking to see that 300 milligrams given every other week, so does not provide additional efficacy and that lower doses exhibit weakness, which would then all affirm the use of the 300-milligram subcutaneous dose level. And so that's how we will look at that information and move forward into Phase III.

And our next question comes from the line of Nick Lorusso from TD Cowen.

Congrats on the great quarter. Can you discuss what drove the strong increase in the number of prescribers this quarter compared to last quarter and what the plan is to continue this uptake? Also, what proportion of recurrent pericarditis patients do the 3,800 current ARCALYST prescribers actually see?

Sorry, Nick, can you just repeat the last part of the last question? I just.

Yes. What proportion of recurrent pericarditis patients do the 3,800 prescribers see?

Okay. So thanks very much. Let me answer the question, and please come back if he doesn't answer it fully. Yes, so we've seen that there's been a significant increase in the number of prescribers. This is actually in Q3, the highest increase that we've seen in any quarter launch to date, and that's more than 350 new prescribers coming in who have never prescribed ARCALYST before prescribing it for recurrent pericarditis that takes the total to more than 3,825 and about 28% of those -- of that total group have written for 2 or more patients.

I think the things that lead into that is just more confidence, more awareness of ARCALYST as a treatment choice. I'm sure the ACC guidance has also been somewhat of a help towards that, just providing more validation, if you like, of the way of how to treat this disease. But our team have been very targeted in their approach, both our sales team in the field calling upon health care professionals. We've done a lot of work to really try to understand where the patients are presenting into.

And as a reminder, this is a disease space where it's actually the patient population is pretty widely dispersed. So there's the opportunity to go into many physicians. There's the opportunity for recurrent pericarditis patients to go into many physicians. So I think we're getting better at both honing our messaging as well as understanding the patient throughput and not only which physicians these patients are going into, but also using more innovative technology to play through when we believe those patients are going to be visiting health care professionals. So we're using a lot of kind of AI and digital innovation approaches to guide our field team.

On the other side of that, we're also very focused on digital marketing and making sure that our messaging around ARCALYST and recurrent pericarditis goes far and wide across the population outside of our in-person resources. So there's a lot of tactics that we have to try to drive that. I mean we've seen some substantial growth, and that's certainly a big part of the Q3 results that we've seen. But as we know, there's still a significant opportunity ahead for us.

So we're very focused on continuing the breadth -- growing the breadth of prescribing as well as being very focused on once someone has prescribed once, helping them to support and find the second patient and the third patient and onwards because we know there's a significant population out there who unfortunately still get a very high level of either underdiagnosis or misdiagnosis as evidenced in our Harris poll, which showed that there was an average of 2.7 misdiagnoses before patients end up with a correct diagnosis of recurrent pericarditis. So we have an awful lot of work still to do, but the opportunity to grow the breadth and depth is pretty significant.

And our next question comes from the line of Paul Choi from Goldman Sachs.

Congratulations on the quarter. I have a few questions. My first is for Ross, and thanks for all the details on the slides. For the 45% of patients who restart versus the other sort of half or 55% who don't, can you maybe walk us through why they're not restarting and just sort of what the commercial efforts are to chase these patients?

My second question is for Mark. Both the collaboration expense and tax rate came in higher than I think the Street we were modeling. Can you maybe just remind us if there are any one-offs on both those line items for this quarter? And if that should be the sort of the run rate going forward in terms of our modeling?

And my third, maybe for John is a competitor will have Phase II proof-of-concept data in RP in the not-too-distant future. Can you maybe just remind us of how you're thinking about this? Are you assuming clinical success and how you think the data might compare to Rhapsody?

Thanks very much for those questions, Paul. I'll make a start on the first one then hand over to Mark and then to John for the final question. So thank you very much for that. So your initial question on ARCALYST is around the 45% restart rate in those patients that are not restarting and why is that? Actually, we have a slide that provides a bit of detail on the duration of therapy on our corporate deck as well. And this ultimately shows that the average time of the initial treatment is now around 17.5 months, up from 17 months at our last earnings call. The median is around 12 months.

So the fact is that depending upon when a patient starts on therapy and how long they've suffered -- suffered with the disease prior to the initiation of ARCALYST is one of the several factors that goes into a health care professionals' judgment call on how long a patient needs to be on therapy for. So when patients stop, as I say, on average initially of 17.5 months, there's around 45% of those patients that come back on to therapy.

As a reminder, when patients do come back on to therapy, it's generally very quick in terms of around 8 weeks or within an 8-week time period for the vast majority of the patients that restart, which makes perfect sense when you think around the washout time and the tenacity of the underlying disease. For those patients that don't restart therapy, obviously, we don't collect very much data on that. So it's difficult to know precisely why patients don't come back on to therapy other than to make assumptions on that, which could be around the fact that they are just through the disease and they stop and don't suffer from symptomology again and don't come back on to therapy.

But the good news is when patients do come back on to therapy, whether it's within the 8-week time period or indeed much longer, which is for a minority of patients. But when they do come back on to therapy, it's generally a very easy and quick process for them to do so. Generally, there's a payer approval already in place. It's quite easy to get the next shipment of ARCALYST ready. And we know that when patients go back on to therapy after suffering symptomology again, they come back under control very quickly with ARCALYST. So that's what we've seen around the initial and the restarts. And obviously, that's the totality of adding up the treatment periods, which for some patients is several stops and restarts over time. That's what takes us to the average total duration of therapy now of 32 months, up from 30 months last reported. Mark?

Great. Yes. And thanks, Paul, for the question. As it relates to sort of your P&L questions, we don't provide specific guidance, but clearly, collaboration expense was up quarter-over-quarter and year-over-year and largely due to ARCALYST sales growth. As we kind of detailed in the prepared comments, collaboration expenses are largely driven by continued ARCALYST sales growth, which is very strong in the quarter. I would say regarding tax, the drivers remain the same as they have in past quarters as well. So tax on income earned in the U.K., Switzerland and the U.S., net of [indiscernible] , R&D and stock-based comp credits.

And Paul, this is John. Thanks for your question about the competitive landscape. So yes, the field is awaiting data from an inflammasome inhibitor Phase II data. And so in that sense, not so much Rhapsody, but rather those data are structured in some way similar to the Phase II data that we had reported for rilonacept back in 2019 at the beginning of the program, which is relatively short-term therapy and mostly single active arm. And so in that sense, yes, you would expect with near-term short-term therapy, especially if you have an inflammasome inhibitor and an inflammasome is, of course, the driver of IL-1 beta, which then causes IL-6 production, which goes to the liver, which is where the C-reactive protein comes from, you might expect to see a good inflammasome inhibitor, just like colchicine should bring C-reactive protein down.

But the point is that the inflammasome is relatively downstream in the pathophysiology of recurrent pericarditis. So as you know, when the pericardiocyte is injured, IL-1 alpha is released as a preform cytokine as an alarming. And that sets off a localized inflammatory response, which itself causes pain and damage. It does then trigger the inflammasome, which then causes the recruitment of that broader inflammatory response.

But that's why we're really focused on blocking both IL-1 alpha and IL-1 beta in order to control the disease. And that's what we showed in RHAPSODY in a longer Phase III program where you have continued treatment initially over 9 months, but ultimately over 18 months and then ultimately out to 3 years, where we showed a 99.5% reduction in events once patients were on treatment. And that the only events that occurred were during the setting of brief study drug interruptions. And so in that sense, a drug like ARCALYST is designed to be given long term, and it remains to be -- to control the disease, and it remains to be seen whether other strategies could be successful. But that kind of sets the bar, if you will, for what effective therapy looks like.

And our next question comes from the line of David Nierengarten from Wedbush Securities.

I had one on the transition arm of the 387 study. And I was just wondering if you were biasing the study to different prior therapies. So are half the patients going to be previously treated with steroids? Or is it just an even split among prior therapies?

Thanks, David. I appreciate the question. So your question is about the transition to monotherapy dosing and administration study, which is a supplemental study as part of the total filing package. Yes, so this study is designed to help inform clinicians how to move patients on to KPL-387 from other prior therapies. And so that includes really the totality of therapies that are available, so NSAIDs and colchicine, corticosteroids and other IL-1 pathway inhibitors. And it's a global study.

So it covers those practice patterns across the world. And so how the study is designed is to capture that information and to test the efficacy and safety of those dosing paradigms that are used in order to make that transition to KPL-387 monotherapy and is designed to capture the necessary information for each one of those types of transitions in order to provide critical information, if you will, for the label to advise clinicians. But there is not necessarily nor does there need to be any type of prespecified hypothesis or specific population balance other than giving the necessary information to inform regulatory authorities, physicians on how that works.

This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Sanj Patel, Chairman and Chief Executive Officer, for any further remarks.

Thanks, operator. Thanks, everybody, for joining the call today and for the questions, of course. We look forward to the remainder of the year and providing additional updates in the future. And in the meantime, we will crack on. So thank you.

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

Welcome to the second day of the Citi Biopharma and Back-to-school Conference. This is our 20th annual. Last year, we didn't do it, and we opted to put all the biotech companies in the Global Healthcare Conference in Miami. And this year, we're doing both. And hopefully, you guys do both as well.

So Kiniksa is with us. We're thrilled to have Sanj Patel, CEO; Ross Moat, CCO, Commercial; and John Paolini, Chief Medical Officer, [ Kiniksa ]. Thanks, guys, for joining us. The usual football banter. I don't know when is Liverpool going to lose a game? Never.

Well, so let's talk about ARCALYST. You guys -- it's been a home run for you guys commercially. It's helped build the company, build commercial, build the R&D organization. I guess the bigger picture question is in the RP, the recurrent pericarditis market, what's the -- is there sort of a tipping point in terms of awareness, like patient advocacy? Like I'm trying to think if you can prime the pump ahead of the next-gen launches. Are there patients that are not -- that are diagnosed and maybe not willing to go on and they're waiting for kind of a next gen? Is that a potential bigger picture, right, on the market?

[indiscernible] Before we can start, I'll say that we be making forward-looking statements today that are subject to risks and uncertainties [indiscernible]. Geoff as you highlighted, we are really excited about the commercialization of the [ launch ] so far. It's been -- it only just been -- just over 4 years since the launch and we're already moving into the great traction and get more value and certainty and [ relating ] into that public [indiscernible] is very, very well. Last reported in Q2, we just highlighted there are [indiscernible] $14 million for the full year and in the effect it's only just 4 years since the launch so we believe there is an awful lot of opportunity ahead of us with ARCALYST still to be gained. And we're certainly continuing to execute and penetrate into the target patient population. Last reported, we said we're about 15% penetrated into the population. We tell you there's still an awful lot for us to do going forward. We've certainly got some great momentum. You've seen that from the growth we've had so far. We've steadily increased the sales force size. But importantly, we're focused on some of the key drivers like the duration of therapy.

Compliance has been very strong, over 85%. Our payer approval rate has been very strong, over 90%. But most importantly, the blocking and tackling, and as you mentioned, the disease education has been very, very important. And it's allowing us to have the growth rate that we've had so far. That said, we still believe there's a lot of opportunity. So we are continuing to look at the different territories, how we split the territories. We're looking at potential overlays in our field force territories. And so we think there's an awful lot more to be done.

Despite that, as you mentioned, at some point, there will be competition, I'm sure. We are the leader in the recurrent pericarditis space. We intend to fully intend to be -- continue to be the leader. We do have KPL-387, which is a very exciting development program. That's now in a Phase II, Phase III study. That we've worked with the FDA on, and that's potentially a monthly liquid formulation subcu injection. Ross, I think, will talk a little bit about some of the market research that we've just this morning described in our corporate presentation and provided in an SEC filing. So there's an awful lot of opportunity ahead. Maybe, Ross, you want to talk about some of the more tactical things that we're doing to make sure that we maintain that leadership position.

Yes. Thank you, Sanj. I hope you can hear me okay. So thank you for the summary and the overview. And just to echo, yes, we feel like we made good progress launch to date. Things have been growing nicely. In Q2, we had a strong quarter of $156.8 million in net revenue, which is a 52% year-over-year growth, and we were pleased to increase our revenue guidance from the year for the full year 2025 from $590 million to $605 million, up to $625 million to $640 million. But I think the important thing is that while we're making good progress, we remain even more excited about the future.

We are around 15% penetrated into the 2-plus recurrence group, which is a 14,000 patient population that have suffered for 2 or more recurrences in any given year. And that's not to mention those patients that are in the first recurrence group, which is still within label, the broad label that we have assigned by the FDA, just broadly 4 recurrent pericarditis. And we're making inroads into that patient population as well on top of the 14,000. That's an additional 26,000 patients that are on their first recurrence, making 40,000 patients in totality. And now around 20% of all the patients that are prescribed ARCALYST are actually on their first recurrence so that's also been growing nicely.

But as Sanj mentioned, we're around 15% penetrated into that 14,000 group versus this time or the same time last year at the end of Q2, that was 11%. So that's been growing reasonably well. But we have a huge opportunity ahead to continue to grow ARCALYST continue to switch on more and more prescribers. As you know, this is a patient population that's quite widely dispersed. And maybe later we go into the more recent advent of pericardial disease centers and kind of what's happened to that treatment landscape. But the patient population is very broad, seeing any one of the 30,000 or so cardiologists and rheumatologists around the country. And in Q2, we had one of the highest growth we've ever had in terms of new patient enrollments, but also the number of prescribers. So we had more than 300 additional total prescribers, new prescribers coming in that's taken the total prescriber about to just more than 3,475. And around 27% or 940 of those are written for 2 or more patients.

So continuing to make sure that those prescribers as well as new ones coming into the mix have a positive prescribing experience is incredibly important. And that means that they know how to identify the patients, how to separate recurrent pericarditis patients from those that are just suffering the first index episode of pericarditis and to treat it as a distinct disease acknowledging that it's an interleukin-1 alpha and beta mediated disease and the growing literature has been supporting that. And as people become more and more comfortable with prescribing it, knowing how to prescribe it, go through the prior authorization, seeing their patients get on to therapy, of which we have an incredibly high payer approval rate and seeing how their patients do on therapy all goes into the good experience that encourages them, one, to share with other physicians, but also to identify and prescribe for more patients. So maybe I'll stop there, Geoff, and happy to go in any other direction.

Yes. Can I follow up on that? So you have a drug that's over $600 million. You have only 15% to 20% penetration depending on the denominator. I mean it's -- you have a lot of head space. So I guess that's the sort of the obvious question is, well, why is that not 50. If this was such an urgent disease, does it mean that there are logistical challenges in onboarding patients on identification and reimbursement? Or does it mean that there are therapies out there that patients are pretty comfortable with and they have to get to more recurrence before they're comfortable onboarding. Does that make sense?

Yes, it does, Geoff. And this is one of the challenges of the marketplace that we've been addressing since launch and continue to do so where this is the fact of a rare and flaring disease and a disease which is very widely spread across the U.S. in terms of not having historically kind of centers of excellence looking after these patients. And unlike in some other rare diseases, particularly genetic diseases and so on, where all patients are identified or looked after by key centers, that's just not the case in recurrent pericarditis.

The other factors, I think, are the fact that this is a disease which physicians have historically reached for something like a corticosteroid to try to control the disease, which can have a pretty significant impact on inflammation pretty quickly and maybe make the patient feel better, although I think the growing wealth of evidence is that there's probably not the most modern approach or the right approach to treating this patient population, understanding there's an interleukin-1 alpha beta mediated disease. And in fact, we started to see many more publications now most recently, I think, with the American -- the ACC Concise Clinical Guidance publication just in the last prior weeks acknowledging that interleukin-1 alpha and beta should be utilized ahead of corticosteroids for patients that -- recurrent pericarditis patients with this auto-inflammatory phenotype.

So again, this is really publications that are starting to come into play and change the treatment landscape, which are very much aligned with how we've been promoting and trying to educate on recurrent pericarditis and ARCALYST over time. But it takes time, given that it's a rare flaring disease and the whole landscape is changing and patients are widely spread.

Would you say now that you're over $600 million in revenue, you probably have popped on the radar, right, of I don't know, payers, just given the magnitude of the opportunity. And obviously, I'm sure Regeneron is kind of like we didn't think this would be this big of a drug and had this kind of growth. Does that add any additional sort of risks to you guys from a reimbursement or from maybe a positioning standpoint within the standard of care for RP?

I mean, most importantly, we have a phenomenal data set from -- primarily from the RHAPSODY study, the pivotal trial that we use. And that data set is obviously a very, very important tool as we talk to payers. And as we talked about earlier on, the payer approval rate continues to be very high, over 90% since launch. So I think end of the day, when you're talking about value-based medicines and you've got a drug like ARCALYST, which has the evidence that it has, we really haven't seen the barriers that you've been talking about. That doesn't mean that we don't obviously do an awful lot of work to educate obviously, physicians as well as payers in terms of the evidence that we have so far. And that's a constant effort, and we have a very strong payer group that works with those people. So it's a matter of just continuing to explain that.

In addition to the pivotal study, we've had great data from the registry as well as the long-term extension studies, which only continues to bolster the benefits of ARCALYST. And so that's been our real key effort for us internally, but it's worked very well and continues to do.

Yes. And maybe just to add, I mean, the payer landscape has continued to, I think, reflect the value that this drug brings to these patients that are suffering from a very debilitating disease, which dramatically affects their quality of life and has really reflected, I think, the more modern way of treating the disease, which I think goes to your prior question a little bit as well. And in terms of the costs to patients, I think it's worthwhile noting the eligible commercial patients generally have a 0 co-pay where we're able to buy down the co-pay to remove that kind of access or co-pay barrier, if you like.

But I think that goes back a little bit to your last question in terms of some physicians believe that this can be an expensive therapy, that patients may not get on to therapy, that it's going to cost too much. And they haven't had cardiologists, in particular, have not had the best prior experience with biologic prescribing, particularly around [ PCSK9 ] inhibitors, which are a much larger patient population with many payer barriers historically that have been in place. So I think there's a little bit of a legacy effect from that. But as payers kind of -- as physicians start prescribing for ARCALYST and they see that the payers approve it, the patients get on to therapy, the co-pays are very low, if anything, for eligible patients. And then with the Medicare Part D patients and the IRA changes, there's caps on co-payments and so on.

So patients are generally getting on to therapy pretty easily. So we're pleased with what the payer landscape looks like and how it reflects the value that ARCALYST brings to these patients. But of course, it's always a change in environment. It's something that we keep an eye on, and we continue to have those payer conversations to try to make sure that they really do see this as the way for treating the disease for the future.

Makes sense. Well, let's talk a little bit about 387. So maybe to start, just give us kind of the context or history here. What is the -- was this something that was strategically important to you guys to have a longer-acting, less frequent dosing interval? And then when you thought about what you could add to the ARCALYST clinical profile in terms of maybe higher efficacy, better tolerability, I mean, it seems to be a pretty good drug on its own. But what do you think you could add to even further differentiate sort of aspirationally when you look to the Phase II/III.

Yes. I mean, obviously, as I said, we are the leaders in recurrent pericarditis and important that -- we felt important that we remain that way. Obviously, as we've said, we still believe there's an awful lot of room to grow with ARCALYST, but having potentially a monthly liquid formulation subcutaneous injection, I think, would be beneficial. Ross can talk a little bit about the market research that we just put out this morning, which shows you that there's significant interest potentially in patients for that treatment modality. And I'm sure there'll be some patients that prefer to stay on ARCALYST as well. But providing that potential treatment option, we felt was very, very important.

Obviously, the data remains to be seen from the Phase II and Phase III study. We'll have data in the second half of next year from the Phase II dose focusing portion. And we intend to be in the market with 387 in the '28, '29 time frame. But maybe, Ross, you can talk about the market research done so far. And then John, just a little bit about the clinical trial and what we hope to see there.

Yes. Happy to do so. Thank you. So we did update the corporate deck, the corporate investor deck this morning with a slide around market research that we've recently been working on and interviewing both patients and health care professionals with the target product profile of KPL-387, which is being a highly efficacious interleukin-1 alpha and beta inhibitor with a monthly -- potential monthly treatment paradigm in potentially an auto-injector. And I think those results are quite compelling. So while we feel that the opportunity left for ARCALYST is significant, and we are very focused on making sure we continue to help patients with ARCALYST, continue to grow ARCALYST.

Of course, we're a company that focuses on execution, but we're also a company that focuses on innovation and providing greater value for the future for patients and all stakeholders. So we were pleased with the target product profile market research results that we had out, which was ultimately showing that physicians believe that an introduction of KPL-387 to the market would expand the interleukin-1 alpha and beta market overall. And then when you break it down by patients and health care professionals, around 75% of the patients said that they would prefer the target product profile of KPL-387, if indeed that comes through to fruition through our clinical trials. 70% of the patients said that KPL-387 would likely to draw them towards a longer duration and better compliance rates as well.

So while we're happy with the compliance rates and the duration has been growing with ARCALYST, they felt that a monthly version in an auto-injector would help to enable that for the future, longer duration, better compliance and fewer missed doses. And then on the health care professional side, around 92% of the health care professionals stated that they are highly likely to prescribe KPL-387 if it were to come to the market for their new recurrent pericarditis patients as well as acknowledging the existing patients that are treated could potentially be transitioned to KPL-387 if patients desired that or came into a request to change to a different target product profile.

And maybe on that note, it may be helpful to pass over to John to talk around the clinical work that we're doing to support that when we come to launch.

Yes, happy to do that. Yes, we're very excited about the KPL-387 program. It's obviously a very comprehensive package of data that we're putting together for a novel asset. And so we're working our way through the Phase I program now, which is coming to an end, which has already shown actually for quite some time now. We presented data that supported that a single injection subcutaneously of KPL-387 stays above the target concentration for 57 days, so thus supporting the concept of once monthly dosing. Of course, it's a liquid formulation.

So that enabled us to move forward into the Phase II/III clinical trial, which is kind of the centerpiece, if you will, of the development program. So just -- and so what we're working through right now, we've talked about the fact that we've initiated the dose focusing portion of the trial, and that's really to confirm the dose level that we're taking forward into the pivotal trial. We've talked about the fact that those data would be available, we anticipate them in the second half of 2026. The centerpiece though, from a pivotal perspective is the Phase III portion of that trial. And so of course, that's the randomized withdrawal trial that provides the critical evidence of efficacy and safety to support registrations to pivotal data set.

In addition, we have a dosing and administration clinical trial that's also on the development package that we've outlined in our disclosures today, which basically covers some of the important information about the transition to KPL-387 monotherapy from patients who are on existing therapies. And so that its supplemental data really rounds out the package. And then the final set, of course, are all the long-term extensions that provide long-term efficacy and safety data since as a new compound in the market and especially, as Ross mentioned, the importance of aligning the treatment interval and the duration of treatment to the duration of the disease, which, as you know, is a median of 3 years, that long-term extension information will provide -- is designed to provide important safety information over that kind of a duration of treatment. So we're excited about the program, and it's -- and we're happy to talk more about any of those details.

Yes. I guess looking at the update expected next year, how should we frame the Phase II update in terms of what would be clinically meaningful for patients given that you do have ARCALYST on the market now, I guess, in terms of safety or efficacy?

Right. As Sanj said, we're the we've been the leaders in this space and leading with regard to bringing forward to patients definitive therapy for recurrent pericarditis. And that's based upon the fact that blockade of the IL-1 alpha and IL-1 beta cytokines. And so thus complete aggregation of the IL-1 signaling pathway is aligned with very powerful efficacy for patients. And so that, in a sense, can set the bar of how patients can do when you give them highly effective therapy. So we're obviously very much aware of that and the trial that we've set up enables us to understand the PK and PD relationship of KPL-387 in clinical practice in patients with recurrent pericarditis. And so that's why we are studying 4 different dose levels in the study.

We have a very firm understanding going into the study in terms of the monthly dosing pharmacokinetics at one particular dose level of 300 milligrams every 4 weeks. The idea is to look above that and to see whether more drug imparts more efficacy or not as well as to show that giving less drug or less frequent drug uncovers some of the elements of the PK/PD relationship that allow us to focus in on the critical dose level that we bring forward. At this point, we anticipate that being the monthly dose. But what that allows us to do in the Phase II study is to look for onset of action, which is the primary efficacy endpoint as well as to look at as the drug is dosed at intervals over the 6-month period of time and we look at peaks and troughs, we can understand how the inflammatory response takes place or doesn't during those dosing intervals.

So that's the critical information that we'll get from that study. It's really more around how the drug works in patients, initial safety data. And then, of course, the pivotal trial is the trial that's designed to show the kind of data that supports the registration package.

Great. I guess looking at the KPL-387 market as a whole, are you looking at similarly with ARCALYST, how you jump into both the first and multiple recurrences. Is that something that you're seeing here? Or are you looking to kind of have a different market?

Yes. So the way the trials are designed, we've come a long way in the last 10 years. And so RHAPSODY was designed to look at the recurrent pericarditis population, which at that time was heavily influenced by third-line use of drug, meaning after steroids. And so that kind of broke with that paradigm and established a new paradigm of treating second line, meaning ahead of corticosteroids and after NSAIDs and colchicine failures. What -- there are elements of the -- and so what we want with our KPL-387 program is to be -- provide critical data to support registration, but also to think about the practice of cardiology and the practice of managing recurrent pericarditis for the next 10 or 15 or 20 years. And so to establish that evidentiary base to move the field forward.

So we've disclosed certain elements of the program that you've seen so far. And there are other elements of the program that we haven't discussed. But suffice it to say, the idea of supporting not only third line, but also importantly, centering on second-line use since that's the treatment paradigm in the U.S. is of critical importance. It's also important to know that sometimes the requirement of 2 or more recurrences that you often see in a clinical trial, that's not because of the biology per se of the disease or that treating earlier in the disease IL-1 pathway inhibition would not be -- wouldn't work. The reason why we do that is mostly around the study endpoints to make sure that recurrences when they take place in the clinical trial are robust and brisk. And so therefore, we -- it provides a good measure for the efficacy of the drug.

What we've seen in the real world is that actually regardless of where you are in your disease course in terms of line of therapy or number of recurrences, we see powerful efficacy. In fact, we just showed data at the European Society of Cardiology meetings a couple of days ago, data from the RESONANCE Registry. And what the RESONANCE Registry showed was that as you looked at patients who were starting ARCALYST across -- and IL-1 pathway inhibition at large, but across any line of therapy that if you look at what their life was like before they started that, it was, on average, 4 recurrences per year, which is an awful thing when you think about that. And then when you look at how they did after ARCALYST initiation, it was 0.02 events per patient year. So a 99.5% reduction in pericarditis risk before -- after versus before. And that is regardless of line of therapy. And so that's, I think, the kind of data set that we're generating as leaders in this space that we hope will bring the best therapy to patients at the right time.

Great. And then how -- could you talk a little bit more about the opportunity for switching from ARCALYST to 387 if approved? And maybe how are you looking at balancing bringing on switch patients versus new patient starts?

Yes, happy to go through that. Thank you for the question. So I think that's in part a key part of why we announced the study that we're doing this morning, which is the transition to KPL-387 monotherapy. So at the time of launch, there's data in hand to guide physicians, if indeed that's what they want to do with their patients of moving people from an interleukin-1 alpha and beta in inhibition to another drug, which they may deem as better for the patients to be on. So that data hopefully will be in hand by the time of launch. And as John said, that's kind of a supplementary rather than part of the necessary regulatory pathway, which is the Phase III pivotal study. So we think that's important.

But ultimately, it's going to be physician and patients' experience and desire of what they want to try to manage this disease. We remain very optimistic about ARCALYST. It's making great waves in the recurrent pericarditis market. It's helping thousands of patients, and we believe that there's a massive opportunity ahead to still continue to grow ARCALYST. That's going to be our focus. But if and when we get to a launch of KPL-387, the data will be there to guide people on how to transition if indeed it's what they want to do. So what we hear from both patients and health care professionals in the market research that we announced this morning is that they reacted very well to the target product profile of KPL-387 that they deemed that as a good product profile to prescribe ahead of other therapies for both whether it's commercially available therapies or other therapies that are in the clinical realm that are known about now for new patients or if they want to transition patients, particularly if the patients request a change, then physicians were very willing to take that on board.

Great. I guess looking a little bit more into the ARCALYST market itself, you guys gave a great overview already. But just to dial in a little bit more. Could you talk a little bit about the growth in new versus repeat prescribers? I guess, could you talk about your strategy there?

Yes, I'm certainly happy to. So it has been growing very well, both new and repeat prescribers. As I say, in Q2, it was one of the highest growth that we've ever seen of more than 300 new physicians coming in and prescribing ARCALYST for the first time, which 4 and a bit years out from the launch shows that up until the end of Q3, at least, there was no signs of slowing down and the opportunity is still very much there for future growth. And I think the penetration numbers tell you the same thing as well as the prescriber numbers. So we're pretty pleased about that and 27% of those have prescribed for 2 or more patients and are getting good experiences. So we think that's very important and kind of bodes well for the future.

Just to tie it all together, I guess the question is, does the commercial success with ARCALYST or the potential profile with 387, does that change how you're thinking strategically about like the OUS market in terms of the cadence of investments and launch and sort of build-out, et cetera?

Yes. I think obviously, a lot will be data-driven as we continue to progress the 387 study. Certainly, the clinical trial is a very global focused study. But certainly, as always, we continue to look at value-creating opportunities, certainly when it comes to commercialization. And so we look very closely at outside U.S. opportunities as we've done historically. So yes, again, but data-driven.

Okay. And then with 387, given the mechanism, I wasn't sure if the related adjacent sort of rare indications outside of recurrent pericarditis like could be in play. Have you guys explored that at all like in preclinical or sort of mechanism type of studies?

Yes. I mean, certainly, we're very interested in a number of different areas and outside of recurrent pericarditis, we have looked at other rare specialty cardiovascular diseases. Certainly, we believe that focusing on IL-1 is very important. The IL-1-mediated diseases are very, very important, where both a monthly and potentially even a quarterly drug like our 1161 program could be potentially very useful. But again, we'll continue to do that work. And when it's the right time, we'll disclose where we're focusing 1161, but we are looking at a number of different indications across both those programs.

Okay. Yes. And while we're on 1161, I think when you look at a lot of the innovations in gene and cell therapy with sort of curative intent, much longer dosing intervals or disease sort of free kind of intervals. What's the -- is that a risk to you guys when you think about not necessarily cell therapy, but maybe a super long-acting like engineered antibodies that half a year annual dosing, something like that. Is that potentially in the works with 1161? Could you engineer that for even further -- or are there other kind of longer-acting -- does the disease work? Some indications don't work to have that.

Yes. It certainly is disease-specific, indication specific without doubt. Now I don't know. I don't see it as a risk. I see it as an opportunity for us to innovate. That's where 387 came about. That's how 1161 came about. I mean, for us, we don't see these as risk as much as we see these opportunities for us to maintain being the leader in any particular therapeutic area. For us, we are certainly -- we do have our own lab in Lexington, Massachusetts as well as a manufacturing facility up to Phase II. And so we continue to look at areas that we can create value, help patients. And whether they're longer-acting therapies or whether they're shorter, it all depends on the disease that we're focused on and the unmet need.

Certainly, very excited to see some of the data from these longer technologies that are there. There's been sort of ups and downs, as you can see in sort of safety and efficacy. But certainly, for us, we hope that they do well and hope that we continue to innovate. I don't know, John, if you want anything to add on that?

That's great.

And then maybe more bigger picture, Sanj, when you think about the financial performance, the top line ARCALYST growth has been fantastic and continued execution. And you guys have been profitable and cash flow breakeven. I know you're committed to being cash flow positive, but not quite bottom line. I guess the question is to what degree do you think that BD or portfolio diversification is going to be like more impactful or to play a bigger role? Or do you think just delivering on good bottom line performance will sort of outweigh in terms of the priorities?

Yes. I mean, as we're going high level, I'll tell you that we're a group that's incredibly focused on value creation, and we're a group that never gets complacent. So on the one hand, you say we're profitable and cash flow positive. For us, hopefully, what we do in the future dwarfs what we're doing now. And that does come from innovation, and it may also come from business development. So we are looking at a range of opportunities. We've always, from day 1, focused on capital allocation. And so for us to make any investment, we better be pretty darn sure that it's going to create value for the shareholders, for patients. But there's an awful opportunity ahead of us.

And certainly, the fact that we're in a great cash position, the cash flow is obviously a very strong part of the story, just makes -- gives us really nice options to look at opportunities, but our bar remains incredibly high. And rest assured, we never get complacent. And so for us, we see this as only the beginning. And obviously, we've talked about future growth at ARCALYST. We've talked about launching 387 and 1161. And for us, BD is only another part of that solid stool, that leg of that stool that we've got to continue to focus on. It's how we built the company, and I'm sure it's how we'll create further value in the future.

Yes. I think when you look at the playbook and orphan, the U.S. and Europe are the more well-established Japan regular way markets, and there's probably plenty of patients there. Is there a chance if you have the profile that you really want for 387 or 1161? Is there a partnering opportunity for other geographies that may not be worth you building out sales and marketing and infrastructure?

I mean certainly that's a possibility. And we've shown that we can partner very well. We've done that with vixarelimab, as you know, with Roche, and that was an incredibly strong deal for Kiniksa, and I think obviously for Roche as well. So -- but at the same time, we've also shown that we can commercialize drugs exceedingly well. And so we've got to look at both what we could do potentially ourselves versus what a partner could do as you say, certain regions or certain indications. We look at those things consistently. And we don't get wedded to anything. For us, it's about where can we create the most value and be incredibly discerning when it comes to that. So yes, we're very excited, but we'll certainly look at all those options to create the most value possible.

Are there pockets outside like on a look on a global basis at the disease epidemiology, are there countries that maybe you are not as well appreciated that you have a higher rate of RP or like high incidence rates or diagnosis rates, higher awareness?

No, nothing really of note there, Geoff.

Okay. All right. Awesome. Thanks guys.

Thank you very much.

Thank you very much.

Thank you.