Q3 2020 Retrophin Inc Earnings Call

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Operator: Ladies and gentlemen, this is the conference operator. Your conference is scheduled to begin momentarily, and at that time, your lines will once again be placed on music hold. Thank you for your patience. [inaudible] Ladies and gentlemen, thank you for standing by, and welcome to the Retrofin Third Quarter Financial Results and Corporate Update Call. All lines are in a listen-only mode.

Ladies and gentlemen, this is the conference operator your conference is scheduled to begin momentarily incident time your lines will once again be placed on music hold thank you for your patience.

Operator: After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press Star 1 on your telephone. I would now like to turn the conference over to your speaker today, Mr. Chris Cline. Please go ahead. Thank you, Federica. Good afternoon, and welcome to our TROFIN third quarter 2020 financial results and corporate update call. Thank you all for joining us. I hope you all and your families remain well. Today's call will be led by our Chief Executive Officer, Dr. Eric Dube. Eric will be joined for the prepared remarks by our Chief Medical Officer, Dr. Noah Rosenberg, Peter Heerma, our Chief Commercial Officer, and our Chief Financial Officer, Laura Clegg. Dr. Bill Rote, Senior Vice President of Research and Development, will join us for the Q&A session.

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Ladies and gentlemen, thank you for standing by and welcome to the Retrophin third quarter financial results and corporate update call.

All lines are in listen only mode. After the speakers presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone.

I would now like to turn the conference over to your Speaker today Mr., Chris Cline. Please go ahead Sir.

Thank you better eager good afternoon, and welcome her Tropin third quarter 2020 financial results and corporate update call.

Thank you all for joining us I hope you all and your families remain well.

Today's call will be led by our Chief Executive Officer, Dr., Eric today, Eric will be joining for the prepared remarks by our Chief Medical Officer, Dr., Noah Rosenberg, Peter Harmon, Our Chief commercial officer, and our Chief Financial Officer look like.

Dr. Bill wrote senior Vice President of research and development will join us for the Q and a session.

Operator: Before we begin, I would like to remind everyone that statements made during this call regarding matters that are not historical facts are forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of performance. They involve known and unknown risks, uncertainties, and assumptions that may cause actual results, performance, and achievements to differ materially from those expressed or implied by the statement.

Christopher Cline: Please see the forward-looking statement disclaimer in the company's press release issued earlier today, as well as the risk factors section in our Forms 10-Q and 10-K filed with the SEC. In addition, any forward-looking statements represent our views only as of the date such statements are made, November 5, 2020, and Retrofin specifically disclaims any obligation to update such statements to reflect future information, events, or circumstances. With that, let me now turn the call over to Eric. Thank you, Chris. And good afternoon,

Eric Dube: At the outset of this year, our organization came together with a clear focus on the key objectives that we believe would strengthen our position as a leader in the rare disease community and further our mission while delivering innovation and hope to patients. I am very pleased to report that, as a result of our strong execution throughout the year and in the third quarter, we are currently on pace to meet or exceed our key objectives for 2020. Our highest priority has been ensuring that our continued development efforts will best position Sparsantan, if approved, to shape the treatment paradigm for people living with FSGF and IgA neuropathy. Our Pivotal Duplex and PROTECT studies continue to advance, and we are maintaining high quality conduct.

Eric Dube: Specifically, I am pleased to report that the duplex study of sparsentin and FSGS is progressing well and according to plan. Of note, the preplanned sample size reassessment for the confirmatory EGFR analysis has been completed, and we will be continuing with the original plan to enroll approximately 300 patients in the duplex study. Noah will provide additional detail on this shortly. Based upon recent strength in duplex enrollment trends, we anticipate completing enrollment in the study this year, and we are well positioned to be able to report top-line data from the proteinuria analysis in the first quarter of next year. The Pivotal PROTECT study in IJ nephropathy is also making sound progress.

The reassessment for the confirmatory Egfr analysis has been completed and we will be continuing with the original plan to enroll approximately 300 patients and duplex nobody will provide additional detail on the shortly.

Based upon recent strength and duplex enrollment trends, we anticipate completing enrollment in the study this year and we are well positioned to be able to report topline data from the <unk> analysis in the first quarter of next year. The pivotal protect study and I J Nephropathy is also making sound progress during the quarter we have.

Eric Dube: During the quarter, we achieved enrollment of the 280th patient in the study. This is an important milestone, as it now puts us on track to report top-line data from the proteinuria analysis during the third quarter of next year, well ahead of our original schedule. Another key objective for us in 2020 is building upon our commercialization capabilities to drive organic growth of our approved products and lay the early groundwork in preparation for a successful launch of sparsentin, if approved. In the third quarter, our commercial teams extended their track record of delivering year-over-year organic growth across all products.

<unk> enrollment of the 200 and atheists patient in the study. This is an important milestone as it now puts us on track to report topline data from the proteinuria analysis during the third quarter of next year well ahead of our original schedule.

Another key objective for us in 2020 is building upon or commercialization capabilities to drive organic growth of our approved products and Lady early groundwork in preparation for a successful launches are sent and if approved.

In the third quarter, our commercial teams extended its track record of delivering year over year organic growth across all products as a result.

Eric Dube: As a result, we anticipate exceeding our guidance for mid-single-digit growth in net product sales for 2020. This is a testament to our foundation built upon earning and keeping the trust and respect of the patient communities and to our philosophy of maintaining a deep understanding of the needs of our patients and their families and where they are on their treatment journey. This performance provides confidence in our position to ultimately be successful in delivering Sparsantan, if approved. The final objective that we outlined at the outset of this year was diversifying our growth potential through disciplined business development. Our recent agreement to acquire OT58 meets all of our key criteria.

We anticipate exceeding our guidance for mid single digit growth and that product sales for 2020.

This is a testament to our foundation built upon earning and keeping the trust and respect of the patient communities and to our philosophy of maintaining a deep understanding of the needs of our patients and their families and where they are on their treatment Jerry.

This performance provides confidence in our position to ultimately be successful in delivering spar sent that if approved.

The final objective that we outlined at the outset of this year was diversifying our growth potential through disciplines business development Ah.

A recent agreement to acquire O T 58 meets all of our key criteria.

Eric Dube: As we laid out on the OT58 announcement call two weeks ago, there is a significant unmet need in classical homocystinuria, or HCU. Strong Science and Clear Rationale support the OT58 Development Program, and there is a clear fit with our late-stage development and commercialization capabilities. Based on closing conditions, we expect the transition to close during the fourth quarter of 2020.

As we laid out on the O T 58 announcement call two weeks ago, there was a significant unmet need and classical home assist in your area or H C U.

Strong science and clear rationale supporting the O T 58 development program and there was a clear fit with our late stage development and commercialization capabilities.

So closing conditions, we expect to transition to closed during the fourth quarter of 2020.

Eric Dube: We look forward to OT58 expanding our pipeline of potential first-in-class programs targeting rare diseases and bringing exciting growth potential to Ritrofen. Let me now turn the call over to Noah for his clinical update.

We look forward to O T 58, expanding our pipeline a potential first angel first in class programs targeting rare disease, and bringing exciting growth potential tuber Trofim, let me now turn the call over to Noah for his clinical update Noah.

Thank you Eric we're entering exciting Perry for the pivotal <unk> programs, both the duplex study and after she asked and to protect study, arguing acropathy continue to progress despite challenging environment presented by the ongoing COVID-19 pandemic are.

Noah Rosenberg: Thank you, Eric. We're entering an exciting period for Pivotal's first-hand programs. Both the duplex study in FSGS and the PROTECT study in IV nephropathy continue to progress despite the challenging environment presented by the ongoing COVID-19 pandemic. Our clinical and operations teams are maintaining contact and actively collaborating with study sites, principal investigators, and CRO partners. In doing so, we are reinforcing a focus on the key priorities we've used to navigate the ongoing pandemic. These include patient safety, ensuring continuous drug supply, and preserving data integrity and documentation in alignment with FDA and EMA guidance. We also continue to see a remarkable dedication from patients and their families, as well as the investigators and site staff that make up the global clinical network supporting our program. This has translated into continued progress in both pivotal studies of Sforzantan.

Clinical and operations teams are maintaining contact and actively collaborating with study sites principal investigators and Ciara partners.

In doing so we are reinforcing a focus on the key priorities we've used to navigate the ongoing pandemic. These include patient safety insuring continued stroke supply preserving data integrity and documentation in alignment with F. D. A L E M a guidance.

We also continue to see a remarkable dedication for patients and their families as long as the investigators and site staff that make up the global clinical network supporting our programs. This.

This is translated into continued progress in both pivotal studies of <unk>.

With regard to our phase three duplex studying I pushed yes, I am pleased to report that it continues to advance. According to plan as Eric mentioned, the Prespecified sample size reassessment for the confirmatory Egfr portion of the trial has been completed the process was overseen by the independent data monitoring Committee.

And we remain blinded to the study based upon the review of the results. The recommendation was no increase in sample size. The independent Datamined Committee also concurrently completed before scheduled meeting to assess safety in both duplex and protect I am pleased to report that the D. M C recommend.

<unk> Bold studies proceed as planned based upon their safety review.

We also continued our ongoing dialogue with F. D. A with the objective of ensuring that we are aligned on a path to generating a strong data package is duplex that can support an accelerated approval filing if the top line results from 36 week interim analysis are successful.

Noah Rosenberg: With regard to our Phase 3 duplex study in FSGS, I am pleased to report that it continues to advance according to plan. As Eric mentioned, the pre-specified sample size reassessment for the confirmatory EGFR portion of the trial has been completed. The process was overseen by the Independent Data Monitoring Committee, and we remain blinded to the study.

<unk> remain a line with the F D. A on the use of the 36 week F. S. Yes, partial emission a pro area and point or F. PRT as a surrogate endpoint in pursuit of a potential accelerated approval as well as analyzing egfr for confirmatory approval the age.

<unk> has requested and we were adopting a measurement of Egfr from baseline two week one O eight instead of the original management for me six two week, one way as the confirmatory analysis. This measuring it can be easily thought it in our 90% power in the study remains.

Noah Rosenberg: Based upon the review of the results, the recommendation was for no increase in sample size. The Independent Data Monitoring Committee also concurrently completed the fourth scheduled meeting to assess safety in both duplex and per tech. I am pleased to report that the DMC recommended both studies proceed as planned based on their safety review. We also continued our ongoing dialogue with FDA with the objective of ensuring that we are aligned on a path to generating a strong data package with duplex that can support an accelerated approval filing if our top-line results from the 36-week interim analysis are successful. Of note, we remain aligned with the FDA on the use of the 36-week FSGS Partial Emission of Protein Area Endpoint, or FPRE, as a surrogate endpoint in pursuit of a potential accelerated approval, as well as analyzing EGFR for confirmatory approval. The agency has requested, and we are adopting, a measurement of EGFR from baseline to Week 108 instead of the original measurement from Week 6 This measurement can be easily adopted and has 90% power in the study group.

Notably the completed sample size reassessment that resulted in no increase in sample size included both of these egfr measurements and its analysis.

As a result, we are continuing as originally planned with total enrollment of approximately 300 patients with doctor She us to support the confirmatory analysis in the study.

We have seen in encouraging rate of activity and do classic recent months and we are now anticipating completion of enrollment before your and we.

We will continue to monitor for any changes related evolving COVID-19 pandemic.

Based upon the current positive momentum enrollment.

As well as the cleared supersede as plan with the current sample size.

We have confidence in our ability to deliver topline results from a poor area and point in the first quarter of next year as the approach this milestone or cheese will continue their parallel preparation for N D. A N C M. A submissions moving to Igene acropathy the pivotal protect study <unk>.

Again Ah she's enrollment of the 280, a patient during the quarter. This is notable as it now positions US report hotline data from the 36 week procuring hallucis from the first 280 patients in the third quarter of next year well ahead, our original schedule.

Is successful the 36 week partner analysis, accompanied by a strong data package from the first 180 patients is expected to support accelerated approval filings in the U S and Europe I would like to recognize the efforts of our teams partners investigators on site staff as well as the ongoing dedic.

Noah Rosenberg: Notably, the completed sample size reassessment that resulted in no increase in sample size included both of these eGFR measurements in its analysis. As a result, we are continuing as originally planned with total enrollment of approximately 300 patients with FSGS to support the confirmatory analysis in the study. We have seen an encouraging rate of activity and duplex in recent months, and we are now anticipating completion of enrollment before year end. We will continue to monitor for any changes related to the evolving COVID-19 pandemic. Based upon the current positive momentum in enrollment, as well as the clearance to proceed as planned with the current sample size, we have confidence in our ability to deliver top-line results from the Port Maria endpoint in the first quarter of next year.

Noah Rosenberg: As we approach this milestone, our teams will continue their parallel preparation for NDA and CMA submissions. Moving to IGNephropathy, the pivotal PROTECT study of sports antigen and IGAN achieved enrollment of the 280th patient during the quarter. This is notable as it now positions us to report top-line data from the 36-week per year analysis from the first 280 patients in the third quarter of next year, well ahead of our original schedule. If successful, the 36-week partner analysis, accompanied by a strong data package from the first 180 patients, is expected to support accelerated approval filings in the U.S. and Europe. I would like to recognize the efforts of our teams, partners, investigators, and site staff, as well as the ongoing dedication of patients and their families that have enabled us now to be in position for top-line readouts from both pivotal studies in 2021.

Ill turn the call over to Peter for a commercial update Peter.

Thanks, a lot.

Our commercial organization is maintaining a clear focus and dedication to understanding the needs of our patients and the ability to deliver important treatment options.

For the third quarter of 2020, we reported a 15% organic growth over the same period last year.

This growth was driven by new patients initiating therapy across all of our approved products as well as a moderate increase in patient compliance spin.

Specifically, we are seeing steady demand for failed SC.

As we outlined previously.

Our market research prior to launch suggested that approximately two thirds of the existing urea patients will ultimately choose to SC formulation because it provides the potential for freedom of administration and the potential to reduce the number of tablets necessary to manage the cystinuria.

Earlier this year, we exceeded this mark and in the first quarter, we continued to see demand for firewall SC from all segments of patients, including those that previously had discontinued for the original failed a formulation.

Noah Rosenberg: Listening to the nephrology community, there is strong enthusiasm for our programs, and we continue to believe that if our studies are successful and SporSan10 is ultimately approved, it has the potential to become a new standard of care for people living with FSGS and IgA nephropathy. During the quarter, we also completed initial exploratory efforts around SPAR-SANTAN and Alport syndrome. Following a thorough feasibility analysis of the clinical, regulatory, and operational considerations, we will not be initiating a late-stage program in Alport at this time, but rather continue to focus our current development efforts for SPAR-SANTAN on FSGS and IGAN. We recognize the unmet need that the Alcor community faces and plan to explore potential alternative approaches.

This serves as a good testament to our ability to be effective in listening to the needs of our patients and providing new treatment option.

It also gives us a high degree of confidence that we can leverage our robust foundation as relative to effectively support the launch of Sparsentan if approved.

Our bile acid portfolio also had a strong performance in the third quarter.

Peter Heerma: Overall, in the third quarter, we maintained solid execution and advanced our clinical programs. The sample size reassessment duplex was completed, and we now have clarity that the study will move forward according to our original plans and without any adjustment to the number of patients enrolled. We had an additional regulatory interaction that confirmed our path for potential accelerated approval filing. We maintained momentum in duplex such that we are nearing completion of enrollment, and we reached a key milestone of enrolling the 280th patient in PROTECT, which now puts us on track for a readout from the 36-week courtnear analysis in the third quarter of next year. Let me now turn the call over to Peter for a commercial update. Okay, Peter?

Peter Heerma: Thank you, Noah. Our commercial organization is maintaining a clear focus and dedication to understanding the needs of our patients and their ability to deliver important treatment options. For the third quarter of 2020, we reported 15% organic growth over the same period last year. This growth was driven by new patients initiating therapy across all of our approved products, as well as a moderate increase in patient compliance. Specifically, we are seeing steady demand for Sciola EC. As we outlined previously, our market research prior to launch suggested that approximately two-thirds of the system urea patients would ultimately choose the EEC formulation because it provides the potential for freedom of administration and the potential to reduce the number of tablets necessary to manage cystinuria. Earlier this year, we exceeded this mark.

In order to strengthen our confidence in the organization, so ability to deliver important therapies people living with rare diseases.

I will now turn Nicole over tomorrow for the financial update.

Laura.

Thank you Peter.

During the third quarter net product sales from our commercial portfolio proved to 51.5 million a 15% increase over the same period in 2019.

We reported a GAAP net loss of 22.5 million for the third quarter of 2020.

After adjusting for non-cash expenses and income tax.

Poor did a non-GAAP net loss of 569.

On a GAAP basis, R&D expenses were 32.2 million for the third quarter of 2020.

The decrease compared to the same period in 2019 is attributable to the discontinuation of the apartment until Tonight development program in the fourth quarter of 2019.

On and adjusted basis, R&D expenses for 29.5 million for the third quarter.

Relevant non-cash expenses for the third quarter, including 2.8 million, a stock based compensation and amortization on a GAAP basis.

Peter Heerma: And in the third quarter, we continued to see demand for phylola EC from all segments of patients, including those that previously had discontinued the original phylola formulation. This serves as a good testament to our ability to be effective in listening to the needs of our patients and providing a new treatment option. It also gives us a high degree of confidence that we can leverage our robust foundation in neutrality to effectively support the launch of Sparks M-Bomb, if approved. Our bioasset portfolio also had a strong performance in the third round. This is driven in large part by the collaborative efforts of our Columb team to educate pediatric geneticists on the importance of treating the hepatic involvement of cell vector spectrometry drugs, as well as our commitment to provide genetic screening for colostatic patients.

General and administrative expenses for the third quarter or 32 known.

The increase over the same period in 2019 is largely attributable to hire professional fees.

On and adjusted basis SG&A expenses for the third quarter was $22 90 million.

Significant non-cash adjustments for the corner consisted of nine 1 million and stuff based compensation and depreciation and amortization for.

The balance of 2020, we anticipate that are operating expenses will increase modestly if you continue to advance or two physical studies of Sports Center Importantly, our financial Foundation remains strong.

We ended the quarter with $456.3 million in cash and cash equivalents.

Which includes receipt of approximately 6 million out of the 19 nine tests benefit accrued from the chairs that legislation in the first quarter.

This cash balance enables us to send the recently announced agreement to acquire O T 58, including the 90 million upfront payment that would be due upon closing in the fourth quarter.

Will also support are expected operations beyond the duplex and protect weed out and allow us to invest in please commercialization planning activities.

I will now here on the call back over to Eric clothing common Eric.

Thank you Laura.

I'm incredibly pleased with our organization's efforts through the first nine months of this year.

Peter Heerma: This commercial team's ability to educate and drive awareness amongst geneticists also provides confidence that we can ultimately be successful in delivering OT58 to patients with HCU if approved. Overall, our teams, as well as the patients and families we serve, continue to show resilience in navigating the challenges of the COVID-19 pandemic. This is evident in the uninterrupted supply of our therapy, Steady Support and Access for Patients, and the increase we have seen in patient compliance. Looking ahead, we will continue to monitor for any impact from potential shifts in patient insurance costs, as well as patient ability to see their physician. We have not seen a meaningful change in either today.

One of our team members continues to approach their work with resilience kind of clear dedication to improving the lives locations in the rare disease community <unk>.

<unk>, our progress has positioned us to meet or exceed our key objectives for 2020, and finishing be here with strong momentum.

We will channel this momentum to deliver high quality readouts from our spur sunken studies beginning in the first quarter of next year.

Build upon the strength of our commercial cute adults.

Laura Kathryn Chico: Importantly... Our commitment remains that all patients will have access to the medications they need. And based on current trends, we believe that demand for our products will likely remain stable through the balance of the year. Through excellent execution and performance, our commercial organization has put us on track to exceed our original four-year guidance of mid-single-digit growth over the last year and has further strengthened our confidence in the organization's ability to deliver important therapies for people living with rare diseases. I will now turn the call over to Laura for financial updates. Laura

Laura Kathryn Chico: Thank you, Peter. During the third quarter, net product sales from our commercial portfolio grew to $51.5 million, a 15% increase over the same period in 2019. We reported a gap net loss of $22.5 million for the third quarter of 2020. After adjusting for non-cash expenses and income tax, we reported a non-GAAP net loss of $5.6 million.

Disease progression and so while there may be some read through we want to be cautious that we're gonna need to wait until the third quarter of next year to see the protein area and safety data N I J nephropathy.

Got it that's helpful and I think I heard you say that you hadn't interaction with regulators regarding sparse sentence uhm. So I'm just wondering it have you had any discussions with them or or maybe you've thought through on what happens if the data in the duplex study or ultimately mixed in you have significance in proteinuria, but not in a G F.

Laura Kathryn Chico: On a gap basis, R&D expenses were $32.2 million for the third quarter of 2020. The decrease compared to the same period in 2019 is attributable to the discontinuation of the FOSMET-Pantotenate Development Program in the fourth quarter of 2019. On an adjusted basis, R&D expenses were $29.5 million for the third quarter. Relevant non-cash expenses for the third quarter, including $2.8 million of stock-based compensation and amortization. Onike Ape. Selling General and Administrative Expenses for the Third Quarter were $32 million.

<unk> vice versa.

Well certainly we we continue to have conversations with regulators and I I would caution on on any kind of interpretation our expectation for what the results may be we were focused on ensuring clarity of the end points and as we mentioned that the results of our.

<unk> sample size assessment, Alaska, Uhm Bill wrote to share any further insight on your question.

And Bill I think you might be on mute Yep Yep.

Uhm, it's it's an interesting question Scott the.

We'll have the full proteinuria data at the interim analysis, but the egfr component of that dataset will not be mature.

So the agency is going to be looking at not just what the drug did relative to comparator on reductions in proteinuria, but are the egfr data at that point in the study trending in the right direction.

Laura Kathryn Chico: The increase over the same period in 2019 is largely attributable to higher professional fees. On an adjusted basis, SG&A expenses for the third quarter were $22.9 million. Significant non-cash adjustments for the quarter consisted of $9.1 million in stock-based compensation and depreciation and amortization. For the balance of 2020, we anticipate that our operating expenses will increase modestly as we continue to advance our two pivotal studies at Scar Center. Importantly, our financial foundation remains strong. We ended the quarter with $456.3 million in cash and cash equivalents, which included receipt of approximately $6 million out of the $19 million tax benefit accrued from the CARES Act legislation in the first quarter.

With any surrogate endpoint evaluation for accelerated approval, it's uhm incumbent upon the agency to look at the surrogate and say okay. This close all the to get does that predict positive results at the confirmatory endpoint. That's the way that we expect the agency will look at that.

Got it thanks guys.

Thank you Scott.

And your next question comes from the line of Michelle Gilson with Conicoid, you know <unk>.

Hi, Thank you guys for taking my question and congrats on the corner.

Yeah.

Eric Dube: This cash balance enables us to fund the recently announced agreement to acquire OT58, including the $90 million upfront payment that would be due upon closing in the fourth quarter. It will also support our expected operations beyond the duplex and protect readouts, and allow us to invest in pre-commercialization planning activities. I will now hand the call back over to Eric for his closing comments. Thank you, Laura. I'm incredibly pleased with our organization's efforts through the first nine months of this year.

Clean meaningful changes in Egypt are what we understand is anything beyond a one milliliter per minute change annually.

Eric Dube: Each one of our team members continues to approach their work with resilience and a clear dedication to improving the lives of patients in the rare disease community. Collectively, our progress has positioned us to meet or exceed our key objectives for 2020 and finish the year with strong momentum. We will channel this momentum to deliver high-quality readouts from our Sentence Studies beginning in the first quarter of next year, further build upon the strength of our commercial capabilities, and integrate the OT50A program to expand our promising pipeline. I will now turn the call back over to Chris to open it up for Q&A. Chris?

Would confer.

Benefit in the long term renal outcomes for patients with with school now your other diseases and so that certainly would be the threshold that we would be looking at we certainly.

Powered for a clinically meaningful difference that.

Certainly.

We would assume to be statistically different as well. So you can assume that there.

Second we sized.

Powered the study to ensure that we would show those those separations. After two years Bill do you want to give a little bit further detail on the regulatory timelines.

Certainly and the show I don't I think you are the first to ask about our timing for per filing we expect to have data from the interim analysis to announce to the world in Q1 of this year looking forward to that sorry, Q1 at 21.

Christopher Cline: Great. Thanks, Eric. Erika, can we go ahead and open up the lines for Q&A, please? Sure. As a reminder to ask a question, please press star then the number one on your telephone keypad. That's star one to ask a question.

And looking forward to that.

With.

The work that needs to be done to analyze that we're anticipating filing in the second half of the year.

Operator: And your first question comes from the line of Scott Puck Harbor with Bank of America. Hey guys, thanks for taking my question and congrats on the sample size news. So as we get closer to duplex top-line readout, maybe you can give us your view on potential read-throughs on PROTECT. I know we haven't had too much data from that program yet, but what we should be looking for when that reads out, and then I have a follow-up. Sure, Scott, thanks for the question. So with regard to the duplex readout in quarter one, you know, that certainly is going to reinforce or support, assuming positive results, the hypothesis and the mechanism of action that sparsentin addresses the common pathway for proteinuria in these glomerular diseases, specifically with duplex and FSGS. And, you know, the efficacy profile as well as the safety and tolerability profile will be very important in our understanding of the potential for that disease. Now, the readthrough to protect, I'd say certainly that there is some type of readthrough as we think about the role that sparsentin plays in the reduction of proteinuria.

Eric Dube: But I do want to caution that these are two different studies, and they are different patient populations with different disease progressions. And so, you know, while there may be some readthrough, we want to be cautious that we're going to need to wait until the third quarter of next year to see the proteinuria and safety data for IgA nephropathy.

Hi, there being developed currently has a potential for complementarity. So I think that's the first key point I think clearly as I mentioned got an advantage in terms of being a non immune suppressive therapy. Once today oral so there's some advantages to <unk> I think it's partly how we've really had.

Such.

Positive results and Covid and recruitment because of that but I I think that's the main thrust of my thought there I don't know if Peter if you want to speak to the market.

Eric Dube: That's helpful. And I think I heard you say that you had an interaction with regulators regarding sparse sentin. So just wondering, have you had any discussions with them?

Yeah, certainly no and that's a Christmas celebration of Christian.

Yeah, I think it's good to take one step back and look at the.

And <unk> is really high both ssgss, but also an IGN publicly to your person.

Eric Dube: Or maybe you've thought through what happens if the data in the duplex study are ultimately mixed and you have significance in proteinuria, but not in EGFR or vice versa? Well, certainly, we continue to have conversations with regulators, and I would caution against any kind of interpretation or expectation for what the results may be. We're focused on ensuring clarity of the endpoints and, as we mentioned, the results of our sample size assessment. I'll ask Bill Rote to share any further insights on your question. And Bill, I think you might be on mute.

William E. Rote: Yep, yep. It's an interesting question, Scott. We will have the full protein urea data at the interim analysis, but the EGFR component of that data set will not be mature. So the agency is going to be looking at not just what the drug did relative to comparator on reductions in proteinuria, but are the EGFR data at that point in the study trending in the right direction? With any surrogate endpoint evaluation for accelerated approval, it's incumbent upon the agency to look at the surrogate and say, okay, this plus all the data, does that predict positive results at the confirmatory endpoint? That's the way we expect the agency will look at that. I got it.

Would you like to take that one.

Certainly.

So.

Let me just take a step back on that question one of the keys in understanding this disease state, whether it's <unk> or I again.

Is that especially in fics, you've got highly demonstrations.

In a in the hands of Nephrologist that are very well versed at.

Scott Puck Harbor: Thanks, guys. Thank you, Scott. And your next question comes from the line of Michelle Gilson with Connecort. Hi, thank you guys for taking my question and congratulations on the quarter.

Michelle Gilson: You know, just following up on Scott's question, do you anticipate, I guess, what is the timing that you anticipate around the EGFR readout and, I guess, the timing of your potential regulatory submissions through the entire regulatory process? And then, is there a clinically meaningful benefit that you're looking for in terms of EGFR as well as a statistically, I guess, statistically significant benefit? Thank you, Michelle, for your questions. The first couple with regard to the timeline of the eGFR readout, I think that would be best informed when we announce the complete enrollment of about 300 patients, which, as Noah mentioned, we're starting to near that enrollment milestone.

Eric Dube: And once we have that 300 patients or the final patient enrolled, then it really is going to be two years approximately after that when we would have the eGFR data. I'll ask Bill to talk a little bit about timelines for regulatory submissions thereafter. But before I hand it over to Bill, just a little bit on the expected treatment effect. I mean, with regard to clinically meaningful changes in eGFR, what we understand is anything beyond a one milliliter per minute change annually would confer a benefit in long-term renal outcomes for patients with glomerular diseases. And so that certainly would be the threshold that we would be looking at. We certainly have power for a clinically meaningful difference that, you know, certainly, we would assume to be statistically different as well. So you can assume that there are.

To have standards of care, where fixed us combinations are are essential for patients.

Areas like diabetes.

Eric Dube: We sized and powered the study to ensure that we would show those separations after two years. Bill, do you want to give a little bit further detail on the regulatory environment? Certainly, and Michelle, I don't think you're the first to ask about our timing for profiling. We expect to have data from the interim analysis to announce to the world in Q1 of this year looking forward to, sorry, Q1 of 21, and looking forward to that, with the work that needs to be done to analyze that we're anticipating filing in the second half of the year. So that'll be the filing under subpart H with the FDA. Subsequent filing with the EMA will follow closely thereafter. It won't be simultaneous, but it's going to be as close as we can get it.

William E. Rote: Got it. And just one follow-up as well. Obviously, there are quite a few IgA nephropathy studies currently ongoing, and I'm just curious.

The just the effect that we expect to see that as well.

Net.

Michelle Gilson: You know, if you have any plans to evaluate Sparcentin in combination with any of those agents, at some point, if others are approved, and how you kind of think of Sparcentin within the IgA nephropathy landscape, I guess these patients are primarily managed with blood pressure control. And so maybe how you imagine kind of that switching process, or are you mostly targeting newly diagnosed patients? I guess, could you just give us kind of an overview of how you're thinking about the market as it evolves? Sure, so I'll ask Noah to share a little bit about our thinking on evidence generation and combination, and then Peter can certainly add anything further with regard to how we see the IGN apropathy market evolving. No.

Noah Rosenberg: Yeah. Sure. Great question, Michelle.

Noah Rosenberg: You know, in terms of the agents that are currently out there being studied, IGAN, the majority have some immune suppressive component. And so, and then there are also the FGLT2s, right, as well, that have been looked at. And so regardless of the mechanism, there really is no particular reason to believe that we wouldn't be additive or be able to add scorcentatin to those based on the mechanism of action and the data that we've seen. So we think that whatever is out there being developed currently has the potential for complementarity. So I think that's the first, you know, key point. I think clearly, as I mentioned, we've got an advantage in terms of being a non-immune suppressive therapy, once a day, oral. So there are some advantages to scorcentatin, and I think it's partly why we've really had such, you know, positive results in COVID in recruitment because of that. But I think that's the main thrust of my thought there. I don't know, Peter, if you want to speak to the market. Yeah, certainly, Noah.

But now in particular in this in the circumstances.

Patients want to stay away from the hospitals I think that there's also a component there that could fit into the additional compliance and then little bit I wanted maybe is more patients are being at home right now due to working from home, which failed its advice to have 24 hour assist.

Peter Heerma: And thanks, Michelle. Thanks for that question. Yeah, I think it's good to take one step back and look at the unmet need. And the unmet need is really high, both in FSGS but also in IGN, which probably answers your question.

Peter Heerma: Listening to our thought leaders, we are very pleased that they all often mention that they see SparkSymptom as a new potential standard. Other development programs could also be promising, but they are more in the immunosuppressive therapy component or in complement, which is more downstream in information. And we believe that those modules could be complementary to SparCenter, but I think with SparCenter, the profile of the product, and the mechanism of action, we have the opportunity to position this as a new standard. Okay, thank you guys so much for taking my questions. Thank you, Michelle. Thanks, Michelle. And your next question comes from the line of Laura Chico with Wetbis Security. Good afternoon, Thanks for taking the time to answer the question. I've got one on sparsity and tolerance.

The supportive of the potential for Sparsentan.

For protective ability.

We when you also mentioned.

The.

Baseline imbalance in steroid use and I just want to highlight a point there which is that was the percentage of patients at baseline on steroids and so the question was which gets or in fact, the results that was kind of my read through for your question and we did actually do that analysis, we look at your call two years ago to 84 week.

Laura Kathryn Chico: So congrats on having the fourth, The Review. I was just wondering if you could delve a little more into expectations around the adverse event profile. So one question we've gotten is around the impact of edema specifically in subjects as we're looking ahead to the duplex readout. So maybe help us understand how we should be thinking about what would be considered manageable versus clinically meaningful. And then I have one quick follow-up. Great. Thank you, Laura. No, would you like to take that one?

Noah Rosenberg: Certainly. So, you know, what? Let me just take a step back on that question. One of the keys in understanding this disease state, whether it's FSGS or IGAN, is that, especially in FSGS, you've got highly veminous patients in the hands of nephrologists that are very well versed in treating patients with edema. So I think when you look at some of the baseline levels of edema, for instance, in duet, you can, you can see that. And so I think it's important to recognize that within the realm of the drug-related, you know, edema, you know, it's a small percentage overall. The next thing that we have is we now have a data set for the open-label extension out to six years. We've got patients followed for a median of 42.5 months.

From the line of Tim logo with William Blair.

Thanks for saving me and I was interested by the preclinical data on airports syndrome can you just maybe discuss about.

What do you think they do a lackey mechanism will show as an improvement over eighth and have vision and clinically.

How you can expect especially I guess the auditory benefits that you saw these preclinical <unk>, how that could I translate into the clinic.

Sure Tim Thanks for the question.

Noah Rosenberg: So, you know, we've got a pretty strong data set, a long-term data set, and we don't see dose-related effects on edema per se. But again, our two-plex is a larger study. We're going to, we're going to explore that there. We're not seeing, all we're seeing is really the mild to moderate category, so it isn't really significantly impacting to

Noah Rosenberg: And again, you know, so that doesn't seem to be a major concern. It's certainly something we're monitoring and we're following. But again, we've got this long, large, long-term data set within this disease state. Okay, that's helpful.

Laura Kathryn Chico: Thank you. And maybe one last one, just, you know, you mentioned doing market research. I'm curious, what do they think about the benefits of an agent kind of having a fixed dose dual mechanism compared to administering single agents and having the ability to titrate?

So thank you for that I I definitely Miss Allied seven calls after the close here [laughter].

Eric Dube: I guess, any reactions thus far, either positive or negative? Yeah, thank you. Sure. I'll share a little bit about my, my perspective on that.

Eric Dube: And I'll ask Peter to share any insights that he has gained from speaking with nephrologists in the market research. So, Laura, I've worked in a number of therapeutic areas with specialists who have standards of care where fixed dose combinations are essential for patients. Areas like diabetes, COPD, asthma, and HIV, all of which have, again, fixed dose combinations as the standards of care.

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Eric Dube: There are often these questions about whether, and I think it's more academic, whether physicians like to up and down titrate different combinations that are not part of a fixed dose combination. Now, of course, you know this, but I'll remind you that sparsentine is not a fixed-dose combination. It's one molecule with dual mechanisms.

Eric Dube: But regardless, we know that there are questions about whether some physicians would want to use a different ACE or an ARB. But we see that, and I've seen that, not really play out in the commercial success of products. And in fact, once you have an effective and safe therapy, oftentimes, convenience is a critical part of how that disease is managed. Peter, I'll ask you to share a little more insights and perhaps some thinking on specifically the role that ACEs or ARBs play in this disease. Yeah, very good. And thank you all for that question. I mean, speaking to physicians as well as listening to market research. Physicians seem to be quite comfortable with the dual mode of action that the SPAR Center provides.

Peter Heerma: As Eric mentioned, loss inhibition has been the standard of care for a long time. But we also know that a large amount of those patients are currently not being managed. In fact, out-of-market research, we see that over 90% of the FSCS patients are not optimally being managed.

Peter Heerma: And I think this is where Spirocentin comes into the game. I think that the additional mechanism of underfeeling, receptor antagonism, I think that really provides the additional power to bring patients down to the level that the physician would like to see. So, it's building on the RAS component, but adding that underfeeling part, that synergistic effect that we expect to see there as well, that makes physicians feel quite comfortable with that dual mode of action, and, as I said, endothelial and receptor antagonists are currently not available, so I think this is a combination that makes sense. I think they are synergistic, and we haven't got any concern that it's a fixed tool mechanism.

Peter Heerma: I think, on the contrary, physicians actually feel actually as a part of it. Great. That's really helpful. Congratulations on the progress, guys. Thank you, Mara. And your next question comes from Elaine Omari Raycroft with Jeffery. Hi everyone. Congratulations on the progress and not having to resize it as well. And thanks for taking my questions. I guess I'll ask a question on the commercial side, if you can just provide any more specifics on the commercial growth you're seeing with Iola EC and maybe comment on how compliance, new starts, or other variables are contributing.

Maurice Thomas Raycroft: Thanks, Maury. Peter, I'll turn that one over to you. Thanks to them. Yeah, we have been very pleased with the uptake of FIOLA and FIOLA-CDC in particular. As you would expect, the EEC formulation allows for better compliance because it has more flexibility for the patients. They can take it with and without food intake.

Peter Heerma: And more importantly, I think the reduced pill burden really makes a difference for patients. So I think from that element, you could have expected an improvement in compliance, and that's in fact what we see. Additionally, I think within the current environment of COVID, it's never good to have a kidney stone, but now, in particular under these circumstances, patients want to stay away from hospitals.

Peter Heerma: I think that there's also a component there that could feed into the additional compliance. And then, a little bit ironic maybe, more patients are being at home right now due to working from home. With FIOLA, it's advised to have a 24-hour urine test every three months.

Maurice Thomas Raycroft: I think with more patients at home, I think you see an increase there, and that also allows for early dose adjustment if needed. Got it. That's very helpful. And then I had a question about the ASN, Sparsant, and post hoc analysis that you reported on, where you showed that patients who received a complete response at any visit had UPC of 1.7 versus 3.6 for patients who did not achieve a complete response. Then you also had some data on background immunosuppressives as well.

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Noah Rosenberg: And so I'm just wondering if you can contextualize the data in respect to the ongoing phase three duplex study and how the post hoc data factor into your expectations based on the type of patients that you've enrolled. Sure, Maury. Noah, would you like to take that one?

Noah Rosenberg: Sure, Maury, great question. So just to remind everyone, the ASN post hoc analysis essentially is looking at the duet opal label extension and the percentage of patients on sports antenna who were able to achieve complete remission or less than 0.3 UPCR. You know, we previously, as you are aware, published the FPRE data. And this was at the request of the academic nephrology community. And I think that the key message there is that a substantial proportion of patients were able to achieve complete remission, and I think that's extremely supportive of the potential for sparsantan necroprotective ability. When you also mentioned the baseline imbalance in steroid use, and I just want to highlight a point there, which is that was the percentage of patients at baseline on steroids. So the question was, did steroids affect the results?

Noah Rosenberg: That was kind of my read-through for your question, and we did actually do that analysis. We looked, if you recall, two years ago at the 84-week data, and we were able to show that regardless of steroid use, whether they were on steroids or not, there still wasn't an impact on the results in terms of sparsantan's effect. I'll add one more quick point: many of these patients, because they had to be stable on their steroid dose, were on low-dose steroids. And so there may have been a few, but not likely a significant impact on our overall result there.

Noah Rosenberg: So, in summary, Maury, I would say you asked about read-through to duplex. You asked a lot of questions. Sorry, I'm going on. I just want to make sure I nail all of them. The read-through to duplex. I think it's directly supportive of the expectation of the beneficial impact thus far, but just be cautious not to directly compare. Remember DUET was 200, 400, or 800, double the goals to get to the 800 milligram dose, so there's no control, but I would just say that, you know, we saw a dose-related effect on the proteinuria reduction, and I think that that's, it's plausible to expect the same from the EGFR as well, and I think that that goes well.

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Noah Rosenberg: Again, post hoc analysis, we don't make too much hay out of it, but it's a really great data set and directionally supportive of our duplex studies. Hopefully, that answered your multiple questions there, Maurice. Well, well, well thought out. Great. Yeah, yeah, that's very helpful.

Maurice Thomas Raycroft: Thanks for taking my question. And your last question comes from the line of Tim Lugo with William... Thanks for squeezing me in. I was interested in the preclinical data on Alport syndrome.

Timothy Francis Lugo: Can you just maybe discuss what do you think the dual acne mechanism will show as an improvement over ACE inhibition and clinically, you know, how you can expect, especially, I guess, the auditory benefits that you saw at least preclinically, how that could translate into a clinic? Sure, Tim. Thanks for the question. So Noah, I'll ask you to cover some of the thinking with regard to preclinical, but also some of the thinking that your team had in ultimately making the decision not to pursue a phase. Yeah, while the preclinical data was quite impressive, Tim, to your point, and we did see benefits in the structure and function of the Alport model with regard to both kid renal as well as hearing impact.

Timothy Francis Lugo: I think, you know, again, that's preclinical data, exciting, fits into the big picture of the common pathway, but I think the read-through, you know, to get from there to a clinical study, and this is really where we came up with our analysis for Alport, and Tim spent a great deal of time trying to figure out a way or path to a regulatory late clinical study, and I think the challenge was that in proteinuria, the progression of proteinuria in Alport is much slower than in FSGS and IgA, and as a result, the link between proteinuria that we have, the strong link in Eftersen and IgA, two outcomes, is simply not there with Alport, and so that's really why we decided not to pursue a late-stage study.

Noah Rosenberg: You know, again, an incredibly important community; there's a common pathway across these diseases. We'll continue to maintain engagement with that community and look for other paths, but we'll maintain our focus going forward on our Q1 readout for FSGS and our Q3 readout for IgA respectively next year. Understandable. Thank you for that. I definitely missed that.

Timothy Francis Lugo: I had seven calls after the close here. Thank you for circling back on that. Thanks for the opportunity. That was a busy day. Thanks for the question. No problem at all.

Operator: Thanks, everyone. And this concludes our Q&A session. Do you have any further closing remarks?

Christopher Cline: Thank you, Federica, and thank you all for joining us this afternoon. As Federica mentioned, this concludes our call for today, and we look forward to sharing additional progress with you as we move through the balance of this year and into an exciting 2021. Thank you all, and have a great night.

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