Q3 2020 ChemoCentryx Inc Earnings Call
Good afternoon, and all consider Chemocentryx third quarter. Its many tiny thing natural results conference call. At this time, all participants I know listen only mode. Later, we will conduct a question and answer session.
During this conference call will be recorded I would know like to turn the call over to Steve class. That's Burns Mcclellan Mr Class. Please go ahead.
Thank you operator, good afternoon, and welcome to the Chemocentryx third quarter 2020 financial results conference call earlier.
Earlier this afternoon the company issued a press release, providing an overview of its financial results for the third quarter ended September Thirtyth 2020. This.
This press release is available on the Investor Relations section of the company's website at Www Dot Chemocentryx dotcom.
Please note there is a slide deck to accompany this call, which can also be found on the company's website.
Joining me on the call today is Dr., Thomas Schall, President and Chief Executive Officer of Chemocentryx, who will review the Companys recent business and clinical progress follow.
Following his comments Susan can I executive Vice President Chief financial and administrative officer will provide an overview of the company's financial highlights for the third quarter before turning the call back over to Tom for closing remarks.
During today's call, we will be making certain forward looking statements. These forward looking statements are based on current information assumptions and expectations.
That are subject to change change and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward looking statements. These risks are described in the company's filings made with the Securities and Exchange Commission, including the company's annual report on form 10-K filed on March Times, 2020, and quarterly report on form 10.
Q filed on November nine 2000 funny, you are cautioned not to place undue reliance on these forward looking statements and Chemocentryx disclaims any obligation to update such statements.
In addition, this conference call contains time sensitive information that is accurate only as of the date of this live broadcast November 9th 2020, Chemocentryx undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances. After the date of this lives conference call I will now turn the call over to Tom.
Thank you Steve.
And good afternoon to everyone listening.
Thank you for joining us on our third quarter 2020 conference call.
I am pleased to report to you today and we continue to accomplish the goals that we laid out at the start of this year. Despite the subsequent arrival of a global pandemic.
As this grim challenge, whereas on our deep sympathy goes again to those who have lost loved ones or who had been otherwise affected by COVID-19.
And our admiration and gratitude increases daily for those that are meeting the challenges in the clinic.
In the laboratory and in our community.
Our resilience as a society will eventually prove to be the key to victory in this battle.
For Chemocentryx, we're now at a very important time of accomplishment.
A time when we have our very first ever new drug application under review for a Buck a pan and Anca vasculitis attack.
The time, where we have results in hydro not a super achiever that defined a clear development and registration paths forward and a time, where top line data will be soon available in a third of occupying indication as well.
So today I will cover in Greek three main topics I will add some clarity and additional insights on the hydro not a super Tivo RHS result.
Where there is evidence of clinical benefit and a clear fruitful path forward for Avago Pat.
I will discuss the accolade trial of Avago Pan in C. Glomerulopathy on which we expect top line data before the end of this year and how we propose to look at that trial and I'll conclude with an update on where we stand on a buck a pen in Anca vasculitis as we approach potential commercialization and Twentytwenty one.
I'll start first by talking about next steps following topline data we reported very recently at the end of October from the Aurora sales to clinical trial of Avago Pan in Hydro night, a super Akiva four H S.
H S is a chronic disabling.
Painful disfiguring, Kansas could skin disease described in brief on slide three.
The sole FDI approved drug is viewed as only moderately effective requires infusions or given injections, but nevertheless accounted for more than a billion dollars in sales for this indication last year.
This is a clear sign of the unmet need indeed, some would say desperate need for innovative new therapies NHS.
And yet I.
Hydro nicest hydrant that is super Tivo isn't area that poses questions for many.
Yes, even some consternation.
It is probably fair to say that this is not an attractive indication to many in the investment community.
To this I respectfully disagree.
I would like to explain briefly my conviction for Avago pen in this space and that that conviction is high and clear away. Some extraneous items that may cloud the opportunity the view of the opportunity I'll.
I'll focus on some simple and emerging concepts on the path of biology of this disease that helps me see a clear path forward for Avago fan.
There is ample independent research demonstrating that complement activation and it's actually the terminal complement fragment C. Five day is implicated in hydrant that is superior tivo.
Hence the relevance of Avago Pan since its mechanism of action is designed to stifle the activation of neutrophils via selectively targeting and activating the cfivea receptor.
Aside from other outside reports we at Chemocentryx also presented data at the recent fifth annual symposium, a hydro not a super cheap advances our S. H S. S. Eight conference with our colleagues at Stanford University showing evidence for complement this regulation.
In the blood and skin of Hs patients all of that is summarized on slide four.
Now the Aurora clinical trial has extended our knowledge as to how avago pen might benefit Hs patients.
In fact in my view.
Aurora has given us so far.
The three most important things a phase two trial can yields.
One we have found an effective dose of the Buck okay too.
Two we have defined the precise patient population and three we have demonstrated safety.
Safety.
Those who seem clearly to benefit from a backup plan are the early stage three population.
The sickest of the sick, if you will NHS for lack of a better term and those who have virtually no effective treatment options.
The evocative hidden benefit in this group is evidenced by the data reprieved in slide sides, a snapshot of the Fuller topline data picture that we provided very recently.
And the basis of our now clear going forward path and H S.
But the key question is yes.
Why Hurley Threed.
Why is the clinical signal with a bottle pan there.
What is the opportunity in that group.
And what will be required to realize that opportunity.
In fact, a major distinction between these most severely afflicted hurley three patients and the far less severe frequently far less severe but certainly less severe hurley too and of course early one patients.
Is the extent of the network.
Durnell dermal tunnels.
Also known as sinus tracks or fiscally.
That connect the abscesses nodules and lesions in the affected areas of the body in H S.
In Hurley three these tunnels our extensive.
And also there was little to no space among the interconnected skin disruptions that are in evidence on the surface of the body.
German totals our structures unique to hydro night is super T., but they have not been identified in any other inflammatory systemic skin disease.
And the presence of tunnel is associated with a more aggressive course of early stage three disease.
Slide six refers to some features of advanced H S. That we think are pertinence to avago Pan and it's motive action in hydro that is super cheap.
Dermal tunnels are laden with plus.
Hi, This is primarily neutrophils and neutrophil nets or neutrophil extra cellular traps that form when activated neutrophils to granulate.
In her early stage three there is also more tunnel associated infiltrated proliferative gelatinous mass or I P. G M.
Which has a distinct active inflammatory set of characteristics.
Hi, GPM is no pay could whites reddish or violent jelly like material found in the lumen of Hs tunnels and it contains a mixed population of potently highly pro inflammatory cells, such as neutrophils and macro.
His cells, which I will add and reiterate express the cfivea receptor.
There is evidence for increased C pathway terminal activation products in early stage three disease as the multiple stores.
Ted neutrophils, and Pos components intensify the cycle tissue disruption tissue remodeling and opening exposure to external environmental pathogens and insults as well.
A classical formula Formula for complement activation.
We have seen in our own work.
And exuberance of neutrophils and Hurley three skin biopsies some of which are one example of which is on that same slide.
And researchers such as John through and colleagues in New York in Sydney have recently published elegant studies such as in the clinical and experimental Dermatology Journal just the September demonstrating that these sinus tracks and tunnels and Hurley three.
Our strongly correlated with a decreased responsiveness to anti TNF therapy, as well as more rapid loss.
Anti TNF therapeutic effect.
We believe that the t. activation and depletion of neutrophils the reduction of neutrophil nets and other neutrophil activation products occurs as a consequence of Avago Pan therapy.
Yes, the Pos laden tracks and chambers dry up much like LABA, leaving the magnet chambers magma chambers in a rumbling volcano and the surface manifestations of H S sport clinically by such instruments as high score.
Okay, and I Hs for et cetera in proof.
Or to put it another way I think of a backup and Hurley stage three hydrant that is super achiever as the lights at the end of the tunnel.
Aurora has fulfilled the promise of a phase two clinical trial.
Enabling us to identify a clear path forward.
Armed with data from a raw on dose.
On patient selection and on excellent sales, we will discuss the roared data with regulatory authorities and we are planning for a pivotal phase three trial in early stage three Hs patients and recall again that these are the sickest of the sick and this disorder for whom.
Treatment options are de Minimis.
Our plan is to assess evofuel panned against placebo at 12 weeks primary endpoint using the high score as the primary endpoint.
Since frankly that is the only regulatory path to approval to date.
[noise] Aurora evidence shows that this should be eminently achievable.
We will also include secondary endpoints, such as I H S. Four et cetera, depending on agency book.
We will likely need.
As few as 100 450 patients in each arm.
In two arms.
One study should suffice.
You can see from slide seven that Hurley stage three represents a considerable market opportunity for us early.
Early stage three prevalence is estimated at anywhere between 35000 to 60000 patients in the United States alone.
And while preparing for the phase three trial, we plan to file with the FDA for orphan disease designation chest on her early stage, three enabling a potentially more streamlined path to market.
I would invite you to do the math on how many patients would be required to reach $1 billion in the U.S. alone in Hydratight as seat Super Tivo alone in annual sales using the typical orphan drug price of sales.
Somewhere between 100000 and $200000 per year.
There is a clear unmet need pace.
Patients have few treatment options and represent a large underserved population.
In summary evidence confirms that HHS represents a huge opportunity sort of awkward pan which in our view requires an extremely modest investment when weighed against a striking potential upside of mark.
Terence for patients.
And investors.
Turning now to another potential indication for Avago pad, we expect to release top line results.
In the phase two accolade trial in C equal to marry a lot the fee or C. G. Before at the end of the year.
C G as a potentially life threatening affliction with no FDA approved therapy, an overview of which is discussed on slide eight.
Our approach to C. G. My view has been unique in the industry.
Generally other clinical studies have been small single digit numbers of patients is not uncommon.
Frequently they are open label.
And they typically measure only biomarker endpoints, such as protein noria, tiering threatening EG, a far and the like.
This is not a knock on other studies. It is essentially a necessity of the rare nature of this disease, which is only somewhere between 1005 thousand people with this inflection if affliction into U.S.
At this time, so clinical trial subjects are limited.
Nevertheless, we took a different routes at Chemocentryx, we were determined to do a large at least for this indication trial.
We designed this trial to be a randomized controlled and blinded trial for the primary endpoint period, and we collected and measured kidney biopsy at baseline and it six months to determine the primary endpoint.
Slide nine depicts how we went about this.
It shows the design of the accolade trial I'm sorry, it shows that the design of the accolade trial.
As I mentioned is a randomized blinded controlled trial the original and still core design of accolade is on this slide.
The enrolled subjects.
Our intended to have high levels of circulating C. Fivea through nine complexes in their blood. This is a stable marker of complement activation down the C five pathway.
These individuals are presumed to have see threeg from kidney symptomatology and then they have to be proven to have active inflammatory C. G by biopsy at baseline and in fact this group of high C. Fivea through nine subjects enrolled at a fairly good run.
For such a rare disease and the group near fully enrolled they biopsy confirmed at the time of biopsy.
So while we do turning to the now slide 11, there was a second strategy that we added after the after the start of this trial.
And the second stratum was based on the hypothesis that some individuals with actual normal levels of circulating circulating C. B through nine might also have active C G and insect might be confirmed as such by kidney biopsy.
Interestingly.
After many months indeed years, we now know generally that these normal C. B through nine individuals do not biopsy confirmed as active C. G. When they go through this year.
So while we do have some patients in the second stratum it would take an additional decade or more at this rate to enroll the full complement of this normal peripheral complement stratum.
Since we will proceed with the data analysis as originally envisioned in the stats analysis plan and we will present data on all patients both the high and the normal peripheral complement strata who have passed the 26 week primary endpoint the termination.
As summarized in slide 11 look for 26 week biopsy based primary endpoint data from accolade before the end of the year accompanied by the the traditional biomarkers of such things as proteinuria in each year far.
Turning now to a backup and the treatment of Anca associated vasculitis.
As summarized in slide 12 in Q3, we hit an historic milestone when the FDA notified us in September of their acceptance for review of our new drug application.
The FDA instead of PDUFA date goal of July 720, 21.
As for the question of an Advisory Committee, we intend to provide an update following the mid cycle review meeting of the FDA.
And we are preparing for one nevertheless.
The FDA acceptance for review was followed by the announcement just last week of the European Medicines agency's acceptance for review known as validation of the marketing authorization application for Avago pen in Anca vasculitis with a decision expected in the second task of 2021.
As many of you know the cornerstone of our submissions that regulatory agencies has been the data from the pivotal phase three advocate clinical trial, which demonstrated stupid statistical superiority of the backup in group and sustaining remission at 52 weeks compared to the Prednisone group.
The results of the advocates study were presented last month in an oral abstract session. During the American Society of Nephrology kidney week Twentytwenty re imagined meeting they were presented by the renowned Nephrologist, David Jayne MD Professor clinical offshore community at the University of Cambridge in England.
Dr. James presentations highlighted.
The potential of Avago Pan to offer new hope to patients who suffer from this incurable orphan disease.
And just listen last Friday, no lesson expert than professor Peter Merkel and D. The chief of Rheumatology at the University of Pennsylvania gave a plenary session.
On the advocate results at the American College of Rheumatology convergence 2020 meeting.
[noise] Professor Merkel delved into many important aspects of the Avago Pan dataset, including highlighting some important features at both weeks 26 10 weeks 52 in the trial result.
As Dr., Mark we'll put it.
And I'm alluding now to slide.
The next slide in the deck that you can see with the week 26, and 52 data as Dr. Merkel put it.
There are some intriguing findings to explore in the subgroups pace.
Patients, who had relapsing disease that even better benefit from Avago Pan at 26 and week 52.
However, this should not imply that patients with newly diagnosed disease did not benefit from avago path, because while readmission rates with avago Pan in newly diagnosed were about the same as the prednisone group remember that patients receiving a backup and achieved this benefit without receiving daily blue coat.
Corticosteroids and they're negative consequences. Similarly said professor Merkel there were findings that patients who were NPO positive received extra benefit.
And the patients who received right Texan Matt.
Background therapy.
Seem to receive extra benefit as well.
One more note on developing it was heart warming to consider very recently, a newly published case reports.
In the British Medical Journal case reports of a now young Lady who had struggled since the age of nine years old with bank Anca vasculitis for over seven years at that time.
As she explained in her own words after multiple surgeries loss of most of my sinuses loss of my left lung.
And multiple long term side effects from medication.
I survive.
I finally graduated from Toronto Sick Kids Hospital, where she had spent the as she puts it the majority of her evenings her of her life as a child.
I finally graduated from Toronto Sick Kids Hospital and moved to the adult World at Mount Sinai Hospital in Toronto.
At this point she is about 16 years old and her story.
At Mount Sinai, She was given a vacco pad on a compassionate use basis and the case documents that since then she has been free of relapses.
For 35 months and counting.
On continuous dosing of about Copan and is on the verge now of getting her degree now a woman in her very early twenties.
[noise] a duration of three years relapse free with Avago Penn is a notable achievement.
There had been a growing there has been a growing awareness and the clinical community of the fact that patients in the advocate trial initially treated with Avago Pan and write Texan Mab as a background Medicaid.
Medication, we're receiving in fact only of Opco pen essentially during the last 48 weeks of treatment. Following their initial I touched him as background medication dose in this stratum patients who did not receive right tuck up Reitox MEP thereafter that is after the first four weeks indeed had a sustained remission rate at week 52.
As alluded to by Professor Merkel in his presentation of 71% in the Avago Pan group compared with 56% in the same comparator. The prednisone group that had right tux Nat this background therapy and by the way. These are all I T T intent to treat analysis numbers. So.
It's important to note here that we were not setting out in the advocate trial to test Dibacco pen as a monotherapy, but it is nonetheless, an interesting observation that could have future implications in terms of the duration of therapy.
And potentially the lack of need for continued immunosuppression.
In Anca vasculitis.
While our regulatory submissions are under review on both sides of the Atlantic We are building our commercialization infrastructure in preparation for a potential launch in the United States and we are coordinating closely with our partner Vifor pharma in their preparations ex us in international markets and I would remind you that vifor would pay us royal.
Fees and the teens to mid Twentys.
That's percentage on net sales in one aggregate net sales line outside the U.S. as well as potential milestone payments linked to anchor regulatory events in their territories up to about $75 million. The data presented at San and HCR included impressive data from the advocate trial.
On a backup in its ability to preserve kidney function as well as you know as measured by estimated glomerular filtration rate or Egypt, SAR, which is a well known protect predictor of long term kidney survival.
I'll remind you that in the chart on the right side of slide trip solve the Avago Pan group is represented in the Red line and the active comparator Prednisone group by the day lie at the Grey line. The chart shows again the sick this turtle of patients all screen pre specified in the analysis those with an EG fr. When they started the trial below 30 me.
Per minute in fact this sub group had an average you have far of about 21 mill per minute evenly balanced between the two groups that's fairly close to the 15 mill Permian rate that with tag someone as a candidate for dialysis. So those people are not that many months away if their current rate of decline continue from being.
Dialysis today candidates, however, 52 weeks later.
There was an overall improvement in the Apocalypse and group of nearly 14, Milt permit significantly better than the predators on standard of care group.
The improvement in the Avago Pan group increased to nearly at the end of that trial 35 mill per minute effectively moving the average patient from the stage for to a stage three chronic kidney disease.
Really quite a striking improvement.
And that really reflects where we may go next with the Buck repair and the next kidney indication we have targeted as lupus nephritis system alluded to on slide 14, LNG carrier shares many characteristics with bank of vasculitis.
It is a complement mediated disease poorly controlled with broad immunosuppression, leading to the deterioration of kidney and the risk of progression to end stage renal disease and transplant.
With the prevalence estimated at between 65000, and 100000 U.S., the clinical and economic burden of lupus nephritis are indeed severe.
We believe the improvement seed with the advocate trial in terms of width of occupant in terms of each CFR and renal function has the potential to translate to Ellen and other kidney disease, and we plan to initiate a trial and lupus nephritis and the first half of 2021 five.
Finally ticked.
To conclude looking beyond Dibacco pad, which has obvious potential to be a pipeline and the drug itself. We are on track to introduce our small molecule orally administered PD one PDL one checkpoint inhibitor for cancer into clinical development in the first half of this coming year 2021 are.
Our preclinical data suggest that ccxfive five not maybe.
May be able to penetrate the tumor micro environment better than antibody based checkpoint immunotherapies among other advantages over antibody therapeutics and Ccxfive Fivenine has in our view the potential to be a next generation cancer treatment used alone or in combination.
With other oncology therapies.
The momentum we have generated in recent quarters is in my view only the start of our path to become a fully integrated pharmaceutical enterprise preside providing novel therapies in critical diseases.
Our unique platform has the potential and indeed has generated multiple drug candidates in multiple disease states.
We will follow where the science leads us.
And focus on the areas of greatest promise greatest need and.
And greatest opportunity.
I will now turn the call over to Susan Kanaya to outline our third quarter 2020 results and our financial strength.
Susan.
Thank you Tom our third quarter 2020 financial results were included in our press release today and are summarized on slide 12.
Revenue was $5.1 million for the third quarter compared to 10.6 million in the same period in 2019.
Revenue is recognized proportionately based on actual cost incurred as a percentage of total budget cost has.
As we complete our performance obligations under our agreements with five floor as.
As such the revenue decrease was driven by lower cost incurred in 2020 due to the completion of the vocal advocate phase three trial.
Research and development expenses were $18.6 million for the third quarter of 2020 compared to 18.1 million for the same period in 2019.
The increase in R&D expense was primarily due to professional fees associated with the Avago Pan India submission for the treatment of Anca vasculitis, and higher research and drug discovery expenses associated with those with the advancement Ccxfive fivenine out or.
Early administered small molecule checkpoint inhibitor.
These increases were partly offset by lower expenses in 2020 due to the completion of the faculty advocate phase three pivotal trial.
CCX one tool even no one phase two clinical trial.
General and administrative expenses were 10.4 million for the third quarter of 2020 compared to 6.1 million put the same period in 2019.
The increase from 20 like 19 to 2020 was primarily due to higher employee related expenses, including those associated with our commercialization planning efforts.
Higher professional fees.
[noise] DC do results produced a net loss for the third quarter of 2020 of 24.1 million compared to 12.9 million put the same period in 2019 so.
Total shares outstanding at September Thirtyth, Twentytwenty for approximately 69.1 million shares.
Cash cash equivalents and investments totaled 485.8 million at September 32020, and we expect to end 2020.
Cash and investments at death for 60 million.
Tom.
Well thank you Susan.
To summarize as you can see in slide 13, we.
We are forging ahead with our lead candidate at Avago Pan in three distinct orphan diseases, each of which has a market opportunity in the hundreds of millions of dollars and beyond.
The FDA is reviewing our India for a buck and in Anca vasculitis and the Europeans Medicines agency is reviewing the M. A.
We plan to conduct a pivotal phase three trial of a backup and severe hydro not a secret tivo patients. Following the clear signals, we saw in the Aurora data to.
To make an orphan drug application for her early stage three disease NHS, we expect to report topline data from our equity trial of about Japan, and C going Merial apathy before the end of the year.
And we faced the prospect of another banner year for Chemocentryx and 2021, perhaps our most significant one gets with the potential that the approval for a buck a pandemic of vasculitis.
The PDUFA date set for July of this coming year and the EMEA approval expected in the second half of the total of 2021.
The potential launch of a buck a pan and Anca vasculitis.
And the next cycle, a pipeline advancements, which begins with two more clinical programs and orally administered checkpoint inhibitor.
Of.
The PD, one PDL, one pathway, ccxfive, fivenine and Avago Pan and lupus nephritis.
Frankly, we have the funding to accomplish all of this and we see this virtuous cycle repeating in the future given our unique discovery platform, which has proven potential to produce multiple drug candidates for multiple diseases.
Ladies and gentlemen in my view Chemocentryx has never been stronger than now.
And with that I will turn the call back over to the operator, and we will look forward to your questions operator.
Yes, Sir.
Ladies and gentlemen, if he would like to ask a question press star one on your telephone again, if he would like to ask a question from star one on your telephone and just a reminder, we will then have a Christian ulbrich consumed praise.
For our first question you had from Joseph Schwartz from the S. The Leerink Joseph your line.
Hi, Andrew dialing in for Joe. Thanks for taking my question. My first one is on it so.
Thank you for the introduction of a possible differences patrol fairly extreme conditions allow their patients had a question about your knowledge. How homogeneous are the fair amount of tunnels test Polson Hurley stage, three and how you are difficult to the point that will be the play Duncan fishing.
[music].
Well I I do agree.
That the dermal tunnels and I think this was this would be a widely held view look there durnell tumbled tunnels are extremely prevalent and Hurley stage Street, yes. They occur in early stage, two but far greater than three.
They are not always perfectly easy to identify but by the time someone isn't a early stage three condition again with very little normal skin space between the overt lesions on the surface of the body.
I think that Oh that is fairly certain that Hurley three stage diagnosis is made with the inclusion of these dermal sinuses in mind. So just as the way that the net is cast in Hurley. Three you are going to capture more journal thermal tunnels now the question about would we be better off to.
See if we can devise a method actually looking for tunneling.
I think there is some pretty good literature on this recently I've really been impressed again with the kind of new wave of thinking around Hs Ah I mentioned dr. through and his colleagues at Rockefeller and Sydney, there are others as well Dr. Krenz in Europe has done some interesting work with his colleagues.
You know, it's harder to actually say, let's include certain number of tunnels are certain width of tunnels I think that's just not the nature of the beast, yet, but these are far from scarred over vessel.
Vessels, frankly, I think there is a lot more going on why are these dermal tracks, so filled with neutrophils dead and dying so filled with Pos so filled with these infiltrate a collaborative masses.
There's a lot more activity going there than we may have thought even two or three years ago. So I'm pretty convinced that crude as the Hurley designations are.
That we will capture a more severe disease with Hurley three diagnosis and de facto we're going to capture a lot more tunnels I think that's going to be to an advantage for avago pan and and by the way you know there has been analysis that that add a live event again with more tunnels corresponding roughly.
Lee with severity and Hurley cthree, but more tunnels means less efficacy at illumina that seems to be better with the less severe patients.
So I think theres, a super important niche for Avago Pan and I do believe that crude is our methodology is now with both Hurley three and yes high score, but FDA insist on it so far we're in a great position to capture the signals that we need to capture.
I think other emerging science will help us define that as we go along but we're certainly going to be mindful of it as we design. This phase three and think about inclusion exclusion criteria.
Okay, great. Thank you and then for me I was just wondering how does your intriguing add with that subgroup analysis data at week, 2600, 52 potentially impacting on a regulatory path.
Before it possibly impacting how physicians current news.
Block upon or.
Well I was just wondering you know what.
Let your view was on on the possible impact.
Well you know.
I hate to even presumed to think about what the agency might think or say and certainly don't want to do.
I think I did to discuss any discussions with them until those are all done, but let me put it. This way look fundamentally this is the longest randomized trial ever done in Anca vasculitis right. The randomized blinded trial 52 weeks continuous dosing and falling look thats not been done before so we've got the biggest dataset.
By six months, that's important 'cause it informs a lot of discussions so without thinking yet about what the agency may or May I say they'll look at the data in their own way, obviously, but the data kind of speak for themselves. What I will tell you. This it sounds like we're already in forming new discussions in the physician community.
Because the fact of the matter is if you have a evidence that the hardest people to treat the NT you know the ante NPL relapse years are pretty are notoriously difficult to treat to treat the NPK diagnosis, which goes along more or less with NPL positivity really difficult to get a handle on is it.
Especially with relapse yours, but fundamentally I think that the more subtle and for me the more profound point.
Is that my goodness when you look at the fact that Avago can not only had a really just a general improvement in relapse.
Relapse risk, reducing relapse risk by some 54% and.
And those were two charts shown in these meetings as Kaplan Meier graphs, whereby kopin was clearly advantageous in the population and part of that comes from that.
Really interesting advantage that Avago Pan has with when given with REIT Texan mabus background therapy versus daily Prednisone with right took some mabus background therapy, 71% still in remission at week 52 versus 56%.
With the prednisone important point here is we ran this trial according to Writeups and Mabs label at the time and it was fully enrolled under the old Writeups Med label, which was you don't give right touch the mab except for that first course of therapy, That's four weekly infusions space by a.
So they get up to four weeks you don't top 'em up after that under the original label. This data. Some people have criticized us for that like we had the choice to begin with which we did but in fact, the more enlightened discussions I've heard, especially recently are no the data actually show you.
You don't need to keep immuno suppressant people with Reits XMM, that's a large and hundred seven people per group were falling because they didn't get writeups, they're totally matched except for prednisone versus tobacco Pan they didn't get any additional write tux, Matt. So a backup plan was kind of monotherapy right.
They didnt get A's attire green or anything else. After the attacks and people are really really markedly in remission at the end of 52 weeks. So that's an important discussion to have so.
I don't know how that will play out.
And again, I don't want to make too much or too little of that observation, but I think it's compelling and I think it's starting to inform some new discussions.
Okay. Thank you very much.
Again for instance, as a reminder, we will limit his questions perfect.
Our next question, it's from Steve seat Count from Raymond James Your line is open.
Hey, good afternoon. Thanks for the question I have one very quick one on them.
Part two of the question. The first one is just wanted to get your updated current thoughts on pricing this drug in Anca vasculitis market.
And then.
Given your confidence in that you just highlighted mostly intevac kopin as a potential therapy.
You know to prevent a relapse, even without Rituximab I'm curious about your view of using of ACA Pan and patients that are just currently in remission. So not in a post induction setting, but just using it outright to prevent relapse is it a study that you would ever consider doing.
And is there a reason to believe that that would be effective.
Would or could do so if the study thanks.
Thank you Steve you know I was impressed by some of the research done by one of your other eminent colleagues in your community the analyst community and she mentioned to me.
You know when we do our work it seems like as many as 30% of the total ankle population in the United States never gets off of some sort of.
Maintenance therapy to try to keep them in remission. So in other words.
These people in this community of Anca vasculitis, they are really out there they're kind of always in my opinion subclinical frankly, they're always got a disease, it's just under the surface probably causing.
Accumulated vascular damage and so on and frankly, yes, 30% as many as 30% of those people in the United States are walking around on some sort of broadly immunosuppressive therapy right with its own very good consequences.
That's because remission in this disease does not mean disease free by the way remission in this disease historically does not mean.
Walking around well and having a reasonable life.
No far from it I hope a backup and will change that and I think the evidence from advocates as it might so the answer to your question is yes, I think that.
Pending in this first tranche and hopefully we will get our license of course, that's up to the FDA, but should we get a license and if we get a label that does not talk about time or then I think that there will be a movement in the field to use of ACO Pan.
As a long term therapy to keep people quiescent or prevent again, the an overt flare flares can mean literally having a life threatening organ threatening episodes. So it's pretty serious which is why again, 30% of this of the population approximately are walking around with some fairly toxic air.
So yes, I think that's an important consideration if our label is for whatever reason more constrained in the first step we will certainly investigate this clinically and in due course and sooner rather than later I would say, so I believe fundamentally that because.
Because we are so mechanism base because our our motive action is so targeted we can provide.
The advantages to people to literally I would believe keep them out of flaring state.
Indefinitely with chronic therapy, and I think we can do that safely absolutely. So that's somewhere where we're going.
You talked about price, but I would love to give you a.
Total and more comprehensive update.
I'm, a little bit constrained I will tell you. This the advantages not just with the.
Certain things we've seen in the data from advocate the superiority and keeping people quote in remission and again remission as defined by that narrow.
The Birmingham vasculitis activity with a backup hand, but in a superior way to glucocorticoids, which has pharmacoeconomic economic implications, but in addition, when we talk about the broader total burden of disease.
We added quality of life, we added.
Measurements of reduced glucocorticoid toxicities. It does appear that we're making people better well to some degree with the backup plan, where they're not having that in the standard of care and then finally, the kidney implications of improving the renal function steadily over 52 weeks those had profound effects. So I would.
I'd say this.
We've always guided towards a normal orphan pricing corridor upwards of $200000 per patient per year at the lower end $100000 per patient per year, I think our demand research and our pay or primary research to date.
It's supporting what certain correspondents have been telling us the dataset might support something more towards the top end of that on the lower end, but we're just sticking for the moment with the normal orphan pricing corridor and I think that provides enough raw material to build some really important models given the numbers.
Yes, thanks, though.
Thank you Steve.
For the next question, we have added like from H.C. Wainwright. Your line is open.
Good evening, Thanks for taking my questions.
So Tom you panic quite the picture of Hurley stage, three patients in lesions, but I'm going to stay away from that with my two questions.
And perhaps focus the first question to Susan.
You had mentioned that the commercial.
Planning efforts are underway and one of the reasons for DNA to accelerate in the quarter I just wanted to get your thoughts on where you are in your commercial planning efforts that the number of people that have been hired and your thoughts on cash burden and building the team.
Where the cash burn will be for 2021, if its not too early for that and then the second question Tom would just be on 55.
Hi, Fivenine.
Your your your.
Going into oncology, but we always think of you as an orphan drug company and I just want to get your thoughts on how you're approaching.
The oncology indication and perhaps is this something that.
You will only take to a certain level before perhaps partnering it off or what is your strategy with that one thank you.
Thanks.
Right.
Sure. Thank you so yes, indeed on commercial planning efforts are coming along quite nicely and.
Hiring play rapidly add so including the head of commercial lives you know.
A lot of effort in our market access.
Commercial analytics.
Quite a few of our medical affairs Coke hired.
Well as our head of sales and even at the regional level, bringing on the regional sales folks too so making tremendous progress and success for that launch.
In terms of birds eye for 2021, and we Havent provided guidance, yet, but we will certainly.
Give you some indication for that but I think it's fair to say, though given the strength of our balance sheet.
Well, we are projecting to end 2020 460 million.
Very well position to you know prepare for circuits.
Circuits launch of a Buck a penny Anca vasculitis.
Well as support key.
Indications behind to focus on as well as our pipeline programs.
And that you were asking about cancer. So we're gonna flesh this out a bit more in upcoming calls so I'm not going to go into all the details right now other than to say suffice it to say with this kind of mechanism.
First entre into cancer, there are some very super high value.
Niche indications, which are you know frankly, not yet separated with other checkpoint inhibitor approaches that.
That we might explain as the first foray into cancer, keeping the potential indication numbers, rather more modest and maybe even in the orphan range I believe the way to build the highest value for this program is to continue to push forward building that value with clinical data. We've got some really you know.
Very striking preclinical data and I think the off clinical studies are really very very supportive of a potentially very big product here. So two partnership look I never go out prematurely to partner with them something I'm always looking for the right doctrine in terms of.
Control of development of the asset and of course, the the right to return on the investment for for for Us and our investors. So.
Always have eyes and ears open but what.
What weve done really successfully before his proven stuff in the clinic and show the signals and only then think about what the right kind of partnership is with us in the driver seat. So that's our doctrine for the moment, we'll keep you posted on any updates around the clinical development path and I hope very.
Early in the new year to be able to lay out some of those plans in more detail. Thanks.
Thanks, Tom Thanks.
Our next question, it's from Ted Tenthoff from Piper Sandler Tech Your line is open.
Great. Thank you very much I wonder could go into a little bit more detail.
Let me give my congratulations to the true look with respect to the commercial crop.
Maybe you can tell us a little bit more about kind of.
Hello.
Ricky.
Physician sooner.
So with jumpstart it gets us because it is such a focus community there will come a spillover will there be between sort of build out for.
He has them.
Potentially between GE and ultimately each Oh, I'm, just trying to get a sense for sort of really where these diseases are critical thinking.
Well, thank you Ted.
We do have somewhat of an advantage because these are very tight knit communities in anca vasculitis, both in rheumatology nephrology and in fact, they cross communicate quite extensively.
The fact that there's really been little to date to L. selective ocho Pan.
Has caused a lot of buzz as we mentioned even at recent meetings like the us and in the HCR. There's just a lot of discussion and a lot of curiosity.
We will have a paper out in a top tier journal soon I don't know the exact date, but I will just say watch for that in not too distant future that will again catalyze more discussions around.
Anca vasculitis, and our commercial and marketing team is and our Med affairs teams.
You know have integrated some of the efforts as well they've launched a recent campaign for medical education called rethink Anca. That's been a spectacular I think achievement beautiful look and feel of that it's it's not about a backup plan of course, but it's about anchor.
Anca vasculitis, and what happens there and you know physicians do need to be brought up to speed on this that the specialists are pretty expert although not.
As impeccable always but you know the fact is there is a big patient population larger than we thought out there in the community as well and those practitioners are very thirsty for knowledge and they're very quick on studies. So we've been gratified already with how they're absorbing the information, we'll see three g. again, because big partner for.
Allergy.
There will be a lot of overlap from the anchor nephrology community to the C. G community, one hopes and further into the lupus nephritis community and we've already seen some of that so those are unifying threats, which are very gratifying. The derm community is going to be a little bit different and in but in fact again, it's a fairly small.
A consortium of investigators that start disseminating bigger message much more widely and I think we know a lot of these individuals and are getting to know more of them by the weak, particularly with the Aurora data, which has been embraced with great interest and enthusiasm by the derm community so far.
Or at least the ones that have reached out to me and I'm getting some really excellent ideas from these folks so that may be a preparations to come at the level of our corporation.
Our education, there, but again, we've got a great head start with some of the stuff we've already built and in the other indications Susan do you have anything to add to that by the way.
No I think you've done an excellent job in capturing that Tom.
No Oh, well say great. Yeah, we've made a big investment we've made a big investment the company today.
Thank you very much im looking forward to the C data.
Good.
Thank you Ted.
For the next Sunday hasn't shown gilson from Canaccord.
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Michelle Your line is open.
Hi, Tom Hi, Susan Thanks for taking my question Tonight.
You can't just turn up could you maybe give us a little bit of color around your.
Andy acceptance for Bakken scan.
Good DFT indicate any review issues and or is there any update around the agency's view.
Around around an AD com, it's a it's a question that keeps coming up in our discussion so I figure I cause it to you.
All of our interactions with the agency so far again without going into any real detail. Because we are under review, but to my mind had been straightforward unexpected and I think we have ready access and have had ready access to all the answers so far for the queries. So I have not seen.
Personally.
Anything unusual or anything that again, we did not.
Fundamentally anticipate and for which we have been quite frankly ready. So I think it's going forward in a very reasonable straightforward logical way.
Again, I won't say anything more than that because I'm sensitive to making sure. We're we're not talking too much about a file under review AD Com, we expect to know something more definite after that.
Mid cycle meeting.
And I think probably the public calendars will tell you what that is as soon as we know we will let the community you know we have always even before we filed the NDA been presuming and preparing for an AD com why is that number one this is a new medical entity, it's not been reviewed.
Or approved for any other indication already kind of putting you into the presumptive AD comm bucket at least in my view historically second we're dealing with an orphan indication in Anca vasculitis and frankly, the agency has only truly reviewed and anchor registration package, but once.
Four and that was when Writeups and mab given in combination with the daily Glucocorticoids was offered as an alternative to cyclophosphamide given in combination with daily glucocorticoids and that was some time ago. So.
It's not as if it's a garden variety indication, where it's formulaic in terms of how to review and application. So again oftentimes that will trigger an ad com.
When cobot hit we also realize the permit pragmatic into unit revenue pragmatic asked aspects of further burdens on the agency.
Might also.
Want to potentially gather outside expert opinion all of those have been just speculation.
And we will let you know when we hear back from the agency, presumably after their mid cycle meeting about.
What the had come details will be when it will happen if it will happen, but we're preparing for it. Nevertheless, we're presuming that we will have an outcome.
Okay and one more for me what is it what is the bar for success for accolade.
You, what's clinically meaningful here and also from a competitive standpoint.
What are you looking for from needs.
From these data that would indicate that evocative again would be competitive with other programs move into the clinic.
For for C. Jake well I'll say as I alluded to in the presentation I think our data package will be much more expense extensive.
Their extensive than any other sponsor today I think we'll have more blind the data will have a hard endpoint in histology match with proteinuria matches VGF are another kidney markers. So I just fundamentally believe we're going to have a bigger richer data package than in your sponsor.
Now the thing is and I mentioned this to in their remarks, and others have mentioned that other sponsors.
Hi, there its what this is one of those areas, where we're again, we're we're blazing a new trail. There is no defined regulatory path. There is no precedent if you will for lack of a better word.
It's really is an area, where you kind of bring all the data the FDA and say here's what we see here is our interpretation.
You know, let's talk about what this means clinically there are a number of reasonable papers about histology and what.
Sales decreases in histology in terms like the inflammatory infiltrates the decrease in the size of the go merrily basement membrane. The NDAA Capelli proliferation decreases you know where if you compare two groups in or you compare onetime point versus another and see something like a 20% reduction in some of those acute.
Find metairie indices in and around the go marry lie that is significant clinically it's been correlated with as much as 18% extension in time to end stage renal disease or dialysis, so stuff like that matters, but it's just not a well trodden path yet so true to form your friends at Keno.
Centrix are out there.
Area, a new territory and we're trying to do some really definitive clinical science I, just think that the breadth and depth of our data. If we get some signals is just going to be just that much greater than the next.
Teams and frankly.
There is a there is some fatigue in this area I mean, it's just not going to be possible to do additional.
Blinded trials that takes 567 years.
I just don't think sponsors are going to go there and it'll be interesting to see what the agencies feel.
Feeling is with data from any sponsor about giving conditional license us, but I think it will be key to innovation for the agency to to be in more of a discussion mode around that because again there is no precedent at this point.
It is it is a big opportunity, though I mean, it's look it if you have a thousand people again, let's just say even in this quite rare disease, but if you can treat a thousand people added a normal orphan drug price again, you're going to add incrementally a fairly substantial piece of revenue to the top line and of course the obligation to pay.
Patients, who really have very little else in this incredibly.
Ability being quite expensive piece, both for society and for them and their families. So it's not trivial. This opportunity. That's why people are interested in it it's something that needs to be done I'm glad that people like chemocentryx and some of our colleagues and other sponsors in this space are doing it so.
So we'll see how it turns out but I think the FDA and other agencies are really going to have to be in dialogue mode about how to give conditional licenses in this indication.
Okay. Thanks, Tom Thank.
Thank you.
For the next me have yen ensue from Wells Fargo Securities and you your line came from.
Hi, Thanks for taking the last question I'll limit to two questions. The first one is on.
The.
It's on the HF study so thanks for elaborating on the potential ROE if I back a penny reducing draining fist Julie can you talk about how that factors into the high score response rate.
I understand that high score response criteria only tracks changes in Alberta sees any inflammatory nodules for training fish acuity. So the high score response criteria.
Only requires no increases in training fish to eat so it seems.
Not very straight forward for a reduction in training fish acuity to contribute into increasing high score high score response rate and also when you are talking about this could you maybe talk about what you saw in your data.
So far that okay.
Okay help make the case.
For Greenpeace Judy impact thanks.
Yeah. Thank you again and Thats, a very insightful question, you're absolutely right for the uninitiated initiated the high score really takes the sum of total number of Abscessus total number plus total number of inflammatory nodules that.
That's so that can be short hand, as the end count as well and the number of draining fiscally at baseline and then you're looking for a 50% reduction in the A. encounter and you're quite right no increase in the number of draining sisterly. So I'm.
In a strange way, you're asking well gosh, Tom how would the drying up of these the tunnels really help on this in two ways I think again and I'm thinking about it a little bit more than just each of these specifics, but in two ways I think number one if you're driving up these big chambers of interconnecting.
Sinus tracks, right, which are percolating up and around and under and connecting the abscesses and lesions.
Number one you're not going to have a likelihood of increasing a new draining sisterly because in fact, you are drying up the ones that are either subdermal or getting close to the surface to become draining right and you're try and you're actually getting rid of the plus which is going to become draining anyway. So it helps high score at the aspect.
Contributing to no increase in the number of drugs as Chile, and in fact, I again think of it as a network and underlying sales.
Interconnecting set of chambers, which are probably percolating and pushing up if you will for lack of a better image. The in the other lesions and nodules, which are comfortable on the surface of the skin. So I think once you start draining those.
Those magma chambers, it's like a bit like walking through volcanoes National Park and on the Big Island of Hawaii. These Bubbling surface features will also regress and that may well lead to a decrease in a in count of 50% or greater in the early stage three so.
Thats, a sort of general and kind of vary.
Crude way of looking at it but I think not not an imprecise way frankly, given the crudeness of the high score itself.
So I think that's one way, we see with the Harley stage three this very nice and clear signal and I'm I would remind everybody look this is a randomized controlled study we intentionally made it big and powered to see differences in these various groups. We you know we did it in a very blinded way and we're using quite crude to.
Sales high scores crude Hurley designations classifications are also fairly crude but we're seeing a signal pop out very very significantly the secondary observations to your other point and are also supportive of the fact that these early stage three people are showing a nice improvement in I HM.
For which does to some degree taken that draining fistula factor and that is a continuous variable not a categorical one.
We see different you know again changes from baseline in the present median change in a encountering lesion counts et cetera. So all the signals point in exactly the same direction. That's why we were encouraged by this I have other data were beginning to analyze around things like you know subset lesion counts.
Consistently and other severity indices we.
We don't have that all analyzed yet, but we'll be presenting that.
I think in future calls such as this and that's had some meetings I hope in the near future and again the preliminary read in my view is that they support they support this idea that the tunnels whats happening. These tunnels is.
As important in early stage three and a backup plan is alleviating that so that's why I think we're seeing these big picture improvements in that severe most severe patient population.
Thanks, Tom that's Super helpful and my second and final question is on the Threeg.
From a mechanistic perspective, it's the reduction of complement deposition expected for the accolade trial and all and also is it necessary to achieve clinical benefit. Thank you.
Wow, so complement deposition I don't think necessarily we will reduce the deposition.
Of say C. For example, because we are downstream of C would see three depositions be relevant I think that's the big question. You know we have this general idea of complement deposit sort of coming up kidney function, but ultimately it's I think it's not mechanics.
I think it really is an inflammatory event and I think see three may be more a marker right upstream of C. Five pathway activation ultimately leading to the activation of C. Five athree Sci Fi they receptor on destructive granular sites neutrophils bays ability is and if those maybe even on some other cells.
In nickel merial or environment, that's still under investigation, but theres. Some good preliminary evidence for it but I think it is an active describe destruction and I think thats, what biopsies tell us when you look at C. G. You see a lot of active inflammation and I don't want to get into the differences between inflammation and chronicity, but.
Frankly time and time again, when we look at these things, it's things like well Mary and her Crescent formation as a consequence of infiltrating.
Inflammatory cells.
Things like Endo capillary put endocrine pillory proliferation thickening of the glomerular basement membrane. These are all classical kind of things that happened to destruction as a consequence of information So I think no.
No one knows C. G is again kind of uncharted frontier, but a really super important medical question and a medical science question.
I believe will dampen down the inflammation I do think that that will have a real good chance of reducing glum area or destruction and therefore converting to.
Going merial or enhancement function.
Proteinuria reduction should be exemplified and helping each fr starts to stabilize.
And I don't know about the deposition I'm kind of not caring about C or C. I don't even care that much about the Mac complex because we're downstream of all that and Weve showed by the way in Anca vasculitis that in terms of soluble Matt complex, that's not inhibited which was by design by the way we didnt.
Want to predisposed to infection with such things is called Mary I'm, sorry in the Syria meningitis. So.
All of that is to the good with our design and our hypotheses.
Clinical benefit again.
The FDA will decide how much the extrapolation data that's come from the field in terms of improvements in glomerular histology proteinuria reduction and even short term stabilization of VGF bar is needed to suggest that you have a clinical benefit but I think the data are pretty good so far from long term follow studies in that analyses, we'll see where that goes.
Great very helpful. Thank you Tom.
Thank you.
For the next me have.
I knew and Rome from JP, Morgan and new pump your line is open.
Hi timing season. This is Pat on the consummate training Pam Thanks for taking our question.
So we've been thinking about some of the regulatory dynamics around about the panel maybe and we were wondering if youre able to comment as to why you think you got standard review.
Got a priority review and we were a bit surprised just given the unmet need.
Second quick question would be on the lupus program for embark upon what are the gating factors here that im not into the clinic. Thanks, so much.
No standard of you didn't surprise me very much at all and I think a lot of other sponsors again once co bid came into play.
We found pragmatically speaking many burdens on an agency who is doing that's actually a very good job dealing with those burdens, but frankly I think that that may may I, just can't say for sure but it seems as if priority review has gone down in most divisions other than.
Of course outside oncology, which still seems to be moving along at a reasonable clip with priority reviews versus standard reviews. So again, we had fairly early on.
Once we realize what what was going on covert world.
Thought that standard review is a real possibility and in fact, it just accepted that was likely outcome and indeed it was.
I will again stress that yes, the unmet need is high.
But this is also not a garden variety indication there the FDA needs time to to understand how anca vasculitis is treated and again they have not reviewed and anchor registration package and 10 years merely so.
Again, I'm not I'm not entirely surprised I read very little if anything into it frankly.
And I can I can screen I can say.
Most of it I just put off to the pragmatic.
Demands on the agency in this present era.
You had a second question I'm, sorry, I blamed on the second question.
Yes, no problem, Tom that's helpful. I guess, just a quick one just on what are the gating factors and forgetting that lupus program for a lock that into the clinic. Thank you.
Yes, no we want to we want to make a definitive statement in lupus nephritis.
The tight potentially that we did with Anca vasculitis and there are so many similarities in those two maladies and how they've been treated historically there have been some advances at the agency and regulatory path.
Clearly there have been some other very nice drugs that have come along.
That will add to the armamentarium.
And that's all to the good.
Glucocorticoids are still fundamentally a part of the equation and in the press and tried to so we're trying to develop with our experts and one helps with the blessing of the FDA at whatever level that can come we want to be able to have the most definitive trial that can.
Tributes.
Sunday immensely to an advancing carrying the cost nephritis that can be done as expeditiously as possible.
And of course safely as possible so.
Theres a lot of different threads.
Threads of the opinion that you have to pull together and we've been to a tapestry of consensus here. So that's that's where we are there we could be in lupus nephritis. They know a month from now so we wanted to take that.
The sort of traditional steady tried and true past and you and I would be having a similar discussion to this.
10 years about what are the gating items to getting approved I.
I don't want to be in that position I think we have shown such dramatic kidney benefit in Anca vasculitis I think we've shown we can eliminate essentially the need for daily glucocorticoid, we need to find a path and lupus that allows us to take that data.
Safely incorporated into a loop this development path that matters and that is for patients that's meaningful for us as a sponsor and meaningful for our.
Our investor base, while also being palatable to regulatory agencies. So.
That is what we are doing and I'll have more to say about that as we get into the new year no doubt.
Again for instance, if you would like to ask the question first one on your telephone.
We don't have any further questions at this time.
Oh please continue.
Well. Thank you very much it has been such a pleasure to talk to you all today and update you on our program. It's been a pleasure again to share with you My view that Chemocentryx has never been stronger and I very much. Thank you for all the great questions and discussion I look forward to talking to you again.
And our next quarter conference call. Thank you and have a great evening I know.
Thank you all for joining our today's call.
Foreign kept fading you to our top line data from accolade trial in the coming weeks you may now disconnect.
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Yeah.
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