Q3 2020 Calliditas Therapeutics AB Earnings Call
Ladies and gentlemen, welcome to the Nickolatos Summit Therapeutics Q3, Tracy Tracy today I'm pleased to present the carbonate you can kinda CFO Patrick Johnson for the first part of this call participants will be in the summer. It's early and often would still be a question and often session speak.
Operator: Ladies and gentlemen, welcome to the Calliditas Therapeutics G3 2020. Today, I'm pleased to present CEO Renee Lukander and CFO Fredrik Johansson. For the first part of this call, all participants will be in listen mode only, and afterwards, there will be a question and answer session. Speakers, please begin.
Because fleets because.
Renee Aguiar: Thank you. Thank you, and welcome to this Q3 2020 report from Calliditas Therapeutics. I'm going to start this on page 3.
Thank you.
Thank you and welcome to the Q3 2020 report I'm pleased to therapeutics.
I'm going to start on page three.
Renee Aguiar: So, Calliditas, you know, is a late-stage biopharma company focused on treatment for orphan indications. Our lead candidate, Neficon, is a novel investigational treatment for IgA nephropathy intended to be disease-modifying. We're doing that by delivering medication locally, which targets the origin of the disease, rather than systemically, as everybody else who's looking at this area.
Ah so clear to US you know is a late stage Biopharma company focused on treatments.
Orphan indications our lead candidate that's gone it's a novel investigational treatment for Jane a property.
Intended to be disease, modifying and we're doing that by delivering vacation locally which targets the origin of the disease rather than systemically.
Most everybody else who's looking at this area.
Renee Aguiar: We have, as many of you know, recently reported the successful Part A of our Phase 3 clinical trial, METAGARD, where we reached both primary and secondary endpoints. The regulatory pathway is an accelerated conditional approval pathway, both with the FDA and EMA, based on the surrogate marker of proteinuria. And as we also know, there's nothing approved in the syndication, and based on our calculations of prevalence, as well as market research, this is a significant market opportunity that is available for us with a kind of core target market opportunity that, in our view, is about $45 billion in the U.S. alone. We turn the page to page 4 to talk a little bit about the events that we saw during this quarter.
Oh, we have as many of you would know recently reported out our successful part a of our phase three clinical trial next guard.
Where we reach both primary.
Primary and secondary endpoints.
The regulatory pathway.
It is an accelerated conditional approval pathway, both with the F., Jamie a night App based on the surrogate marker of proteinuria.
And as we also know there's nothing approved in the syndication and based on.
Relations are prevalent as well as market research. This is a significant market opportunity.
'cause they level for us with the kind of core target market opportunity that in our view is about $4 billion to $5 billion into U.S. alone.
We turn the page to page four to talk a little bit about the events that we sold during this quarter.
Renee Aguiar: We wanted to give you a brief update on the Genkiatex transaction. We announced this in August, and during the quarter, there was an expert opinion, which was received by the GenQriotex board, which supported the offer price as being fair, both in terms of the tender offer as well as any potential squeeze out should we reach at least 90% in a subsequent tender offer. The offer has also therefore been unanimously recommended to shareholders by the Genkitex board. The tender offer effective clearance is targeted for November 24th, following acceptance by the AMS. We plan to launch a simplified mandatory tender offer, which would be open for 10 trading days. The board composition has also changed following these events, and at the moment, Mr. Schnee, Mr. Schur, and myself have been elected as new board members alongside Eliezer Otheodoro, who is the present CEO of James.
We wanted to give you a brief update on the gen.
That is it takes transaction.
As we announced this in August.
During the quarter there was an expert opinion, which was received by the junk trying to fix board, which supported the offer prices being fair.
Both in terms of the tender offer as well as any potential squeeze out should we reach at least 90%.
Being a subsequent tender offer.
The offer has also there for been unanimously recommended to shareholders signage and tactics board.
The tender offer spec. This clearance is targeted for November 24th following acceptance by the IMF.
We plan to launch.
In mandatory simplified mandatory tender offer which would be open for 10 trading days.
The board composition has also changed following these events.
At the moment Mr. Shang Mr Shore and myself have been elected a new board members along side, yes.
Theodore.
He was the president CEO chain Capex.
And in terms of the Genkey Your tech platform, if you turn to page five.
Renee Aguiar: In terms of the GenQ-Tex platform, if you turn to page 5, we have mentioned this briefly before. Obviously, as you may be aware, there are several enzymes in the body that are capable of producing reactive oxygen species, or ROS, and Nox inhibitors are clearly dedicated to producing ROS as their primary function. And this is an essential function in cellular signaling, and it's related to the immune response, inflammation, blood pressure, etc. However, it's obviously necessary to have this. However, in a lot of diseases, this is also true. Then when this is disturbed by an injury, for example, then actually, if we get too much ROS, it creates oxidative stress, and therefore that will lead to disorders and diseases. And if we then turn the page to page six. Here is just an example of some of the organs that we know can be affected by this amplification of NOX1 and NOX4, which are the targets of the lead compound from GenKinetics as an exit. And as you can see on the left, you basically have, if you would call it a resting kind of version, and actually so that then...
We have mentioned this briefly before obviously as you may be aware there are several enzymes and the body there are capable of producing reactive oxygen species.
So Ross.
And Nox inhibitors are clearly dedicated to producing roles as their primary function.
And this is an essential function in the cellular signaling.
And they are related to the immune response information and blood pressure et cetera.
However.
The fees and the sort of Soviet see necessary after half of this high rates in a lot of diseases. This is also true that when this is disturbed by an injury for example.
Then actually forget too much Ross it creates oxidized oxidative stress.
And therefore that will lead to disorders.
And do you see.
And if we then turn the page to page six.
Here is just an example of some of the organs.
We no can be affected by the amplification of the Nocs lawn and looks for which are the targets of the lead compound from Gentex as an exit.
And you can see on the left you basically have if you would call it a resting a trend of version.
And actually so then but then season injury of some kind.
Renee Aguiar: kind, leads to this kind of excessive ROS, oxidative stress, and then will, through a variety of pathways, create this activated myofibroblast, which will then lead to fibrosis in a variety of different organs. And so this target that setamaxib as a lead compound and other follow-up compounds are targeting is to then kind of inhibit these NOX1, NOX4 in order to try to reduce this occult We believe that this platform can be used in a variety of different indications, both renal, hepatic, and lung, and this is something which we are presently working on and will be able to share with you, hopefully, during Q1. To give you a more specific clinical development plan in terms of how we would plan to proceed with the Genkiatex platform and system access, turn to page 7, just a brief operational summary.
Leads to this kind of excessive Ross and oxidative stress and then well through a variety of paths.
Face.
Create this activated.
Hi, Fibroblasts, which will then.
Lead towards fibrosis in a variety of different organs and exceed this target that the system acted as a lead compound and other follow compound is targeting is to then China's.
When hibbett these not one looks for in order to try to.
Reduces oxidative stress that we see we believe that this platform that can be used in a variety of different indications.
Both renal hepatic and lung and this is something which we are presently.
Inking on and we'll be able to share with you hopefully.
During Q1 to give you a more.
Specific clinical development plan in terms of how we would plan to proceed with the genetics platform set them exit.
If you turn to page seven.
Just a brief operational summary.
Renee Aguiar: What we also saw during the quarter is that the company received research coverage in the U.S. by Citibank, Jeffries, and Stiefel post their IPO in early June, and since this, we have also seen coverage picked up by LifeSite. We also exercised our option related to that same IPO in July. And we also had the pleasure to announce that our Chinese partner, Everest Medicines, recruited and randomized their first patient in the Nifigard study in September. We also added to our senior team by appointing an in-house general counsel who was formerly a partner at Goodwin-Prost.
We also saw during the quarter is that the company.
Receive research coverage and the U.S. by Citibank Jefferies and Stifel Post our IPO in early June and since then we have also seen coverage picked up by like site.
And we also exercised our shoe wrote relate to that same IPO in July.
And we also had the pleasure to announce that our Chinese partner adverse medicines recruited and randomized their first patient in the method Guard study.
September.
We also added to our senior team by appointing an in house General Counsel at this.
He was formerly a partner Goodwin Procter.
We turn to page eight as some events post the periods of post Q3.
Renee Aguiar: We're going to page 8, some events that post the period, so after Q3. There was the American Society of Necrology, so ASN, which this year, like many, many other conferences, was a virtual experience. The company had a poster related to the design of the Nefigar trial, as well as some biomarker information looking at the effects of Neficon on certain levels of BAS, BCMA, and PACI in patients with IgM, which provided further support of the mode of action of the pathophysiology of IgM. We also closed the BLOC transaction, so the Controlling Interest Injuring TYPEX, which I referred to as being announced in August, we closed that on November 3rd, and we also on November 8th announced positive top-line results from our PIVL Phase 3 METAGARD trial, where statistically significant results on both primary and key secondary endpoints were achieved.
There was the Americans aside and apologies for HSN.
I wish this year as the same as many many other conferences.
It was a virtual experience.
The company had a poster related to the design win I forgot trial as well as some biomarker information looking at the effects of metric on on certain levels of box.
NBC I may in fact, he in patients with again, which provided further support the mode of action of pathophysiology of Iterating the profit fee.
We also closed the bulk transaction for the controlling interest engine types, which are referred to as being announced in August we closed on November threerd.
And we also on November eight announced positive topline results.
From our pivotal phase three method guards trial, where a statistically significant results in both primary and key secondary end points worse achieved.
Renee Aguiar: So, talking a little bit about those results, if we turn to page 9, many of you have heard before. Obviously, the trial design was very, very, very similar to our Phase 2B, which was also a very successful trial of 150 patients. That was subsequently published in The Lancet, and the major changes here were obviously that it was a larger trial population. It was twice the number of patients in each arm, so 200 patients between 60 mg and placebo. It's a global trial that was carried out in 19 countries at just under 160 sites. And if you turn to the next page for the schematic, you can see that obviously all patients came in just as in phase 2B on an optimized and stable RAS and then were randomized to active treatment and a placebo group.
So talking a little bit about those results, if we turn to page.
Page nine.
Many of you have heard before obviously the trial design. It was very very very similar to our phase two b, which was also very successful trial of 150 patients that was subsequently published in the mindset.
And the major changes here was obviously that he was alone.
A larger trial population it was twice the number of patients in each arm. So 200 patients between 60 milligrams and to see vote. It's a global trial folks carried out in 19 countries.
And just under 150 sites.
Uh-huh and if you turn to the next page for this.
Domestic you can see that obviously all patients came in just the thing face to be on optimizing stable raft.
And then were randomized active and placebo group and again in terms of it apart from the design the only other comment on the phase three would be that the patient population.
Renee Aguiar: And again, in terms of apart from the design, the only other comment on phase 3 would be that the patient population was thicker in phase 3 compared to phase 2B due to changes in the publication of the Geiger Guidelines between the commencement of phase 2B and the phase 3. As I mentioned, there was obviously one daily, nine-month treatment, orally, with Mefacon 16 mg and placebo. And that data was then read out after nine months, and if we turn to page 11, the top-line data, which we announced recently, showed that the primary endpoint, which in the trial is reduction in proteinuria, so protein in the urine, was in the treatment arm reduced by 31%.
Well sick or in.
Phase three when compared to the phase two b and due to changes in the Cotwo actually publication of tobacco guidelines on between the commencement of the phase two b and the phase three.
As I mentioned, there was obviously once daily nine month the treatment oral.
The way the Mexican 60 milligrams and placebo.
I'm not data that was then read out after nine months and if we turn to page 11.
The topline data, which we announced recently.
That showed that the primary endpoint, which in the trial is reduction.
And in proteinuria.
So protein in the urine was in the treatment arm reduced by 31%. This was actually a higher effect on that we'll see in the face to be where the equivalent number was 27% of the pie.
Renee Aguiar: This was actually a higher effect than that seen in phase 2b, where the equivalent number was 27%. The placebo group was reduced by five, and so the treatment effect of the basic treatment effect due to CR reduction with Nefacon compared to placebo over the nine months was 27%, highly statistically significant, as you can see.
FEIBA group was reduced by five and so the tree.
Treatment effect, Oh, the soda maker treatment for you to see our redemption.
Wouldn't ethicon compared to placebo over the nine months was 27%.
Highly statistically significant as you can see a in terms of the key secondary endpoint, we have been looking at the EG a far for.
Renee Aguiar: In terms of a key secondary endpoint, we have been looking at the EGFR, so this is the estimated glomerular filtration rate, which is reflective of kidney function. And what we saw here was a 7% reduction versus baseline in the placebo group, translating into just over 4 milliliters per minute, which is, again, compared to the Phase IIb. That number in the Phase IIb was 4.7 milliliters per mL per minute over the same time period in the same treatment arm, whilst in the placebos, in the placebos in the Phase IIb, whilst in the treatment arm Good tolerability, generally well-tolerated, the safety profile is in keeping with the Phase 2b, obviously so no severe infections, and we've also mentioned there was a lower withdrawal rate overall in Phase 3 versus the Phase 2b, so we are delighted with this strong data set, which clearly confirms the findings which we also saw in the Phase 2b trial.
So this is the estimated glomerular filtration rate.
Which is reflective of the kidney function.
And what we saw here with a 7% reduction versus baseline in the placebo group translating into just over 4 million liters per minute.
Which is again compared to the face to be.
Be that number in the phase two b was 4.7 millimeters per month per minute over the same time period and the same treatment arm.
Whilst the I mean, it did seem placebo.
Phebe interface to date, whilst in the treatment arm, we saw a very very very minimal to no reduction.
EG fr and so hence we saw stabilization in the treatment group.
Got to Tolerability generally well tolerated safety profile is in keeping with the face to be well because of no severe infections.
We've also mentioned there was a lower withdrawal rate overall.
In phase three.
Versus the phase two b. So we are delighted with this strong data, which clearly confirms the findings, which we also saw in the phase two b trial.
Renee Aguiar: If we turn to the last page here, this would be page 12, so with regard to the next steps, we will now be working, obviously, to submit a dossier with the FDA and with the EMA. The target is to file with the FDA in Q1 next year, subsequently followed immediately by filing with the EMA, and this would be for accelerated and conditional approval, respectively. And then, depending on the review period, we would then, and subject to approval, look to commercialize in the U.S. either Q4 2021 or Q1 2022 most likely, and a potential approval in Europe would be seen later, probably again depending on the review period, around the middle of 2022 is what we'd expect to see as the earliest possible approval there.
If we turn to the last page here. This would be page 12, so with regards to next steps.
We will now be working obviously to submit the file.
With the FDA and WIDIA may.
The target is to file with the FDA in Q1 next year.
Soon followed immediately by filing with M&A.
And this would be for accelerated and conditional approval risk.
Effectively.
And then depending on the review period.
We would then ER and subject to approval. We would then look to commercialize in the U.S. either.
Q4, 2021, or Q1 2022, most likely.
And a potential approval in Europe.
I wouldn't be seen later, probably again, depending on review period.
Around the middle of 2022 is where we'd expect to see is the earliest possible approval there.
Renee Aguiar: We also have a couple of open-label programs related to the NFAGON development program. One is a rollover from a completed NFAGARD study, so patients are able to rollover into an open-label extension where all patients, including placebo patients, are eligible to receive the study drug. And we also look to initiate a more extended dosing with NFAGON during next year. So with that kind of background, I'd like to hand over to Fredrik for the financial review.
We also have a couple of open label programs related to the Mexican development program. One is a rollover from.
Eight completed Messa Guard study so patients are able to roll over into an open label extension, where all patients include including placebo patients are eligible to receive the study drug.
And we also look to initiate a more extended dosing with a metric on.
Following next year.
So with that kind of background I'd like to hand over to Frederic for the financial review.
Fredrik Johansson: Thank you, Rene. Let's go to page 13, and I will present to you the financial overview for the first nine months of this year, and all numbers will be in million seconds, as usual. To start with, we reported very limited revenue in the 9 month period of $0.5 million, and this was the... delivery of Nefacon to China in Q1 to be used in the Chinese arm of Nefacon's trial as part of the license agreement with our partner Everest Medellin. Our operating expenses for the period amounted to $244.3 million, compared to 148.2 million for the same period last year. And out of the total operating expenses, the cost for research and development increased by $59.3 million to $167.4 million, compared to $108.1 million for the same period last year.
Ah for doing it flips the go to page 13.
But I would presume to you definitive overview for the first nine months this year and all numbers will be.
The museum strict as usual.
To start with the report the burden to review when demand for your dog 'cause your from solid medium.
This was.
Due to the deliberate myfico him to Sean into Q1 to be used in designs or must come from as part of the license agreement.
We do partner Rivers Medicine.
Operating expenses for the period amounted to 244.3 million.
Compared to 142 million for the same period last year.
And out of the total operating expenses the cost for research and development increased by this weekend.
On 3 million to $167.4 million compared to 108.1 million for the same sales last year.
Fredrik Johansson: And the increase in R&D expenses originates from the increased clinical activities in the NESCA trial as we prepare the readout of Part A in Q3 and continue to recruit the additional 160 patients for Part B. We also have made great efforts in preparations in the clinical regulatory and product development organizations as we prepare for regulatory submissions in Q1 next year. During the third quarter, we also performed preparations to start the open-label extension of the NAFIGA trial, which Renee just mentioned, which also adds some early costs to the base in Q3. The sales and administration costs amounted to $77.8 million for the period, to be compared with $39.1 million for the same period last year. The increase of 8.7 million between the periods is mainly related to increased costs for pre-commercial activities in the U.S. That's a ramp-up for all the preparations, especially, uh..., and in the third quarter, we continue to prepare for U.S. commercialization.
And the increasing.
R&D expenses originates from the increased clinical activities in Alaska trial, as we prepared to bring it up a part a.
Q3 and content.
Jimmy Choo recruit additional 160 patients for coffee.
We also have large efforts into preparations in the clinical regulatory and product development organizations as we prepare for regulatory submissions in Q1 next year.
During the third quarter, we also formed operations.
To stop the open label extension of not forget Gulf trial, which remain just mentioned.
Which also add some R&D cost to the base in Q3.
The sales and administration costs amounted to Synta center for tightening for appeared to be compare compared with 39.1 million.
For the same period last year.
The increase also at 8.7 million between the periods is mainly related to increased cost for precommercial activities, yes.
That's a ramp up poor or preparations, especially.
In the third quarter, we continue to prepare for you this commercialization.
Uh huh.
Fredrik Johansson: And from the preparation of the initial public offering and listing on the NASDAQ, and the associated costs coming with being a jubilistic company, which will be visible from the third quarter of this year. And part of the increase is also due to administration costs explained by acquisition-related expenses in the third quarter for Dungone King.
And from the preparation of the initial public offering and listing on NASDAQ.
And associated costs come with being edgy listed company, which will be visible from the third quarter. This year.
And possibly increase is also due to administration costs explained by acquisition.
Mission related.
Thanks us into third quarter for them going Canpotex peak.
Fredrik Johansson: And this leaves us with an operating loss of $343.8 million for the period compared to an operating loss of $10 million for the same period last year. But here we should remember that last year in this period, we had 138.2 million in revenue in our P&L from the China platform last year. So the cash flow we used in operating activities for the period amounted to $189.1 million compared to $25.6 million for the same period last year. The increase in the operating cash rate used for this period is mainly related to the $50 million payment we received in Q3 last year from Everett. That's for the shine up front.
This leaves us with an operating loss of 243.8 million for the period compared to an operating loss of 10 million for the same period last year, but.
But here, we should remember that last year industry to be had.
138.2 million revenue in merchant sales from the China.
China upfront.
From Chinese last year.
So the cash flow we used in operating activities for paired amounted to 189.1 million compared to quantify from 6 million for the same period last year.
The.
Increasing the operating cash reduced for this period is mainly related to the 50 million dollar payment. We received in Q3 last year from Edwards.
As for the China from.
The net cash received from financial activities was 847.9 million for the third which is mainly due to these ideal mass spec.
Fredrik Johansson: The net cash received from financial activities was 847.9 million for the period, which is mainly due to USIP and NASDAQ, where the green issue was partly exercised in the third quarter. However, parts of our USIPU proceeds have remained in US dollar positions to ensure the control of the cash freeze. Since we are building up a youth commercial organization, and this will... [inaudible] Financial expenses of 19.6 million yuan appeared due to poor unauthorized currency losses on cash. However, our cash position remains solid, as we had a cash position of $1,396.9 million at the end of the year.
We're equally greenshoe was partly exercise in the third quarter.
Parts of or use like you proceeds.
We will see have remained in the us dollar positions to ensure the control or cash breach since we build up our U.S commercial organization.
And this will.
Meaning that we made we will incur cost in the stores and having a balance sheet with the SDK as a constant currency and they didnt jump you see to assist advocate Richard we see in the third quarter.
We see now.
Financial expenses, all the Nike.
6 million during the period due to poor realized currency losses on cash accounts.
Fredrik Johansson: William at the end.
Our cash position remains solid as it had had a cash position of 1 billion 396.9 million at the end of September Beth.
Fredrik Johansson: That was all for me, and I'll be back to you then.
Renee Aguiar: Thank you. So, if we turn to the very last page, I just want to summarize again in terms of some of the investment highlights. We're obviously delighted with the data package that we recently received and the top-line readout of our Phase 3. We do believe that we are extremely well positioned as the only company to have successfully completed a Phase 3 readout, which had statistical significance on both primary and secondary endpoints in this market, where for the patients, there is really nothing approved in this disease today in terms of myogeny nephropathy. And we are hopeful that with Nefacon we will be able to be granted approval so that we can address this patient population and hold this promise of being disease-modified. So with that, thank you very much for your attention, and we will hand over for questions.
That was all for me thanks.
Thank you.
So if we turn to the very last page I just want to summarize again in terms of some of the investment highlights.
He likes it with a data package that we recently received the re topline readout of our phase three.
We do believe that we are extremely well positioned.
As the only company to have successfully completed a phase three readout, which have statistical significance on both primary and secondary endpoints in this market where.
For the patients there is really nothing approved in this disease today term, citing a profit aim and we are hopeful.
Went in Africa will be able to say.
Granted approval so that we can address at this patient population and hold this promise of being a disease modifying.
So with that thank you very much for your attention and we will hand over for questions. Thank you if you show.
Operator: Thank you. If you wish to ask an audio question, you may do so by pressing 01 on your telephone keypad. If you wish to withdraw your question, you may do so by pressing 02 to cancel. Once again, it's 01 on your telephone keypad if you wish to ask an audio question. There'll be a brief pause as we wait for questions to be registered. Our first question comes from Maurice Raycroft from Jefferies. Please go ahead. Hi, good morning, congrats on the progress and thanks for taking my question. Um, the first one is just on, uh, an epicon. IG Necropathy, what parts of the filing applications are already completed and which still have to be completed?
And what are your question you made you said Barack I sincerely one on your telephone keypad, if you wish or through your question. You know if you separate C series Choosy Council. Once again, it's everyone. Thank you passed your shopping or do your question there will be a brief pull sales you make your question sitting there just switch.
[noise].
Our first question comes from Murray Wright Cross from Jefferies. Please go ahead.
Hi, good morning, Congrats on the progress and thanks for taking my questions.
First one is just on African and hygiene property, what parts of the filing applications are already completed and.
I also would still have to be completed.
So we have been ramping up kind of preparing and obviously in terms of all of the various modules that need to be filed obviously, there's still data that we need to receive analyze review et cetera, and so I would.
Renee Aguiar: So we have been kind of preparing, obviously, in terms of all of the various modules that need to be filed. Obviously, there is still data that we need to receive, analyze, review, et cetera. And so I would just say that, in general, I think that we're very well positioned to kind of hit our target of filing in Q1. I think we're well prepared for that.
I would just say that in general I think they were very well positioned to kind of hit our target of filing in Q1, I think we're well prepared for that.
Got it Okay and then in respect to part B of the phase three or can you. Please discuss some of the evidence of.
Renee Aguiar: Got it. Okay. And then, in respect to Part B of the Phase 3, can you please discuss some of the evidence observed at three-month follow-up off-treatment in Phase 2b, and how does this influence your expectations for EGFR improvement off-treatment in Part B?
During the three month follow up off treatment in the phase two b and how does that influence your expectations for Egypt improvement after he built in part D.
So and the face to be what we saw was basically in the 60 milligram arm, we saw that the kind of stabilizing.
Renee Aguiar: So in phase 2b, what we saw was basically in the 16 milligram arm, we saw that the kind of stabilization effect in the 16 milligram arm remained despite the fact that there was no dosing over those three months. So that was what was observed in phase 2b.
They shouldn't affect in the 60 milligram arm remained.
Despite the fact that there wasn't no dosing.
Over those kind of three months or so that was what was observed in the phase change be.
Renee Aguiar: In terms of the kind of recruitment, which I believe the second part of your question related to, then obviously, you know, we are still recruiting in part b. We have said that, you know, we're hoping to still be able to complete that recruitment of these 160 patients before the end of the year. However, with COVID, as we all know, recently kind of wreaking havoc again across continents, we may see a slight delay in that kind of completion of recruitment, but as we sit here today, it's virtually impossible to have full visibility of what that might look like.
In terms of.
In terms of China.
Your treatment, which I believe that the second part of your question related to.
Then obviously, we are still recruiting and and part B. We have said that you know we're we're hoping case they will be able to complete that equipment on these hundred 60 patients before the end of the year. However, when the Cove.
Bid as we all know recently and kinda wrecking havoc again across continents.
We may see a slight delay in that kind of completion of recruitment, but as we sit here today, it's virtually impossible to have full visibility of what that might look like.
Got it.
Renee Aguiar: Got it. And maybe one last follow-up, just for the Part B part of this study, do you expect the EGFR improvement off-treatment to be broad across the group, or do you estimate it will be driven by subgroups?
Maybe one last follow up just for the part B part of this study do.
Do you expect the Egypt bar improvement off treatment to be broad across the group or do you estimate that it will be driven by subgroups.
[noise] Oh, we're not really commenting at this point in time on anything beyond the nine month primary.
Renee Aguiar: We're not really commenting at this point in time on anything beyond the nine month primary readout period. And that's also due to the fact that, you know, as I said, we're still receiving some data and looking at and analyzing that. So, for now, we will keep trying to get to nine months.
Ah read out period.
And that's also due to the fact that you know as I said, we're still receiving some data and looking and analyzing that so for now we will be able to keep to trying to get to nine month time period.
Renee Aguiar: .. .. .. .. .. ...
Renee Aguiar: understood
Renee Aguiar: Thanks for taking my questions and congrats. Thank you. Our next question comes from Annabel Samimy from Kithill. Please go ahead. Hi, thanks for taking my question. Just, again, along the lines of Part B, can you confirm that all the patients in Part A, after the review period, I guess that three-month stub, will roll into Part B? And if that's the case, do you have a percent of how many patients from Part A have already rolled into Part B?
Understood. Thanks for taking my questions and congrats again.
Thank you.
Our next question.
And some asset sales Sunny from Stifel. Please go ahead.
Hi, Thanks for taking my question.
Just again, along the lines of part B can you confirm that all the patients in part a.
After the review period, I guess that three months that will roll into the part b.
It kind of affects the case to your habits.
What kind of how many patients.
One part I have already rolled into part C.
[noise]. So yes. The design is exactly as you state. So the design is that all patients from part a after a three month kind of.
Renee Aguiar: to part. So yes, the design is exactly as you state, so the design is that all patients from part A after a three month kind of just safety follow-up, it's exactly the same design as we had in phase 2B, that they will roll over into a one year observational period. There has to date, because obviously we've just read out the nine months, the very first patients are due to kind of roll over into Part B in this quarter. So we really, we have like basic, I have no information on that, because obviously that will happen at some point this quarter, where the very first patient will do that, as the first patient was randomized in 2018.
Yeah.
Safety follow up it was it just this is exactly the same design as we had in the face to be that they will roll over into one year observational period.
They're happy to date, because obviously a deep we've just read out the nine months. The very first patients are due to kind of roll over into.
Pardon me in this quarter or.
So we really I mean, they have like basic I have no information on that because obviously that will happen at some point.
This quarter was the very first patient will do that as the first patient was randomized in 2018.
Okay.
Renee Aguiar: Okay, great. So then on the U.S. and EU pathways, obviously, it's a slightly different thing.
Great. So then on the U.S. and the pathway, obviously, it's slightly different there.
Renee Aguiar: To be clear, the EU, you're going to file in the EU, but the approval will not come until you get that to your data, correct? I'm sorry, until I get what?
Interest.
To be clear that you.
You're you're going to file in that you put the approval will not come in so you get that two year data correct.
I'm, sorry until like well I understand that.
That could lead to approval, what incremental but to your data read out the part D data reads out I just wanted to confirm that that's that's.
Renee Aguiar: The approval wouldn't come until the two-year data readout,
Renee Aguiar: I just want to confirm that that's correct, what their process is. No, that is not correct.
What they're what the processes in Europe.
No that is not correct.
Renee Aguiar: So, in terms of the pathway in Europe, it's a conditional approval, so we would file with the EMA on the same basis as we're filing with the FDA, so I think the only difference here might be, might have caused some confusion is obviously that the FDA has kind of accepted proteinuria as a surrogate marker for pivotal trials, kind of on a more general basis. Europe has actually not done that, but as we have said in a previous press release, we have advice from EMA that says that based on the information that we plan to provide them with, they can see a route for us to be approved on a conditional basis. So I think we actually have, that is the pathway that we are following in Europe based on the advice that we have received.
So in terms of the the pathway in Europe, it's a conditional approval.
So we would file with the where the M.A. on the same basis, that's we're filing at the FDA.
So I think the only difference here might be might have caused some confusion is obviously that the FDA has.
Kind of.
That did proteinuria as a surrogate marker for pivotal trials kind of want to on a more general basis.
Europe has actually not done that however, as we have said in a previous press release.
That we have a advice from M.A. that said that based on the information that we plan to provide them with.
They transceiver trust to be a proven a conditional basis and so I think we actually have that is the plot pathway that we are following and in Europe based on the advice that we have received.
Renee Aguiar: Okay, and then if I can, this might be too early for Gen-Geo-Tex, but I guess, you know...
Okay, and then if I can on this might be too early for Gen. Two attacks.
I guess.
And it's probably have asked this before but as you know now that you've got this.
Renee Aguiar: And I probably have asked this before.
Renee Aguiar: You know, now that you've got this, um... This next platform, um, in anti-inflammation, anti-fibrosis, uh, for PBC, what does that mean for your budesoni program and PBC? Are you going to prioritize Gen P?
Not platform and transformation anti fibrosis.
For PBC, but does that mean for your you definitely program in PBC.
You are you going to prioritize Gencare techs now are you going to be.
Renee Aguiar: Gentiotex now, are you going to be working with both?
Working with both in parallel if you could just give us a broader sense I know you're working on those plans right now, but you have a framework that you're thinking of here.
Renee Aguiar: So it's in parallel, if you could just give us a broader sense, I know you're working on those plans right now, but do you have a framework that you're thinking of here?
Renee Aguiar: Yeah, we are working through some of those questions internally now. You're absolutely correct, and I think this is where we will be in a position to be clearer and more specific about how we're planning to take this forward early next year. So I think in Q1 we will be able to share that information, but that is obviously part of some of the discussions that we're having at the moment.
Yeah, we are working through some of those questions internally.
And now you're absolutely correct and I think this is where we will be in a position to be clear.
Clearer and more specific about how we're planning to take this forward gain you know early next year. So I think in in Q1, we will be able to share that information, but that is obviously part of some of the discussions that we're having at the moment.
Okay. Thank you.
Renee Aguiar: Thank you. Our next question comes from Yigal Nochomovitz from City University. Please go ahead. Renee, if you could just help clarify a little bit about the design of the phase 3 trial, the methadone phase 3 trial. First of all, can you just explain the rationale for why you do the 2-week tapering and have the dose from 16 mg to 8 mg per day? And also, for part B, can you just clarify, do those patients start on 16 mg per day, or are they also starting at 8 mg per day?
Thank you. Our next question comes from a few jobs no constraints from Citi. Please go ahead.
If you could just clarify a little bit on the design of a phase three trial Berkeley's Petro Oh first of all.
You just explain the rationale for why you do the two we could bring and half ago from 16 legs to it makes per day and also for part B or can you. Just clarify are those patients start on 16 makes per day or are they also starting.
It makes per day.
[noise] Ah I think.
Renee Aguiar: So I think that this is just kind of, you know, tradition or kind of, you know, abundance of caution or whatever, I mean, in terms of doing for the patients on the 16 milligrams, that there is a two-week tapering at 8 milligrams. It's also exactly the same design that was used in phase 2b. So we're just kind of sticking with exactly the same design as we had there. I'm trying to remember your second question, so could you repeat that second question?
But this is just kind of I'm actually I think it comes from all kind of your traditional or kind of you know I'm a.
Abundance of caution or whatever I mean in terms of doing for the patients under 60 milligrams and that there was a two week tapering.
Eight milligrams, it's also exactly the same design.
That was used in the phase.
JV.
So it's just kind of sticking with exactly the same design that we had there.
In terms of.
I'm trying to answer your second question.
So can you repeat the second question.
Renee Aguiar: I'm just wondering if the Part B patients, when they are enrolled in the trial, whether they start at 8 or 16.
Im just wondering for the peak the part D patients when they are enrolled in the trial.
While they based their starting at eight or 16.
Renee Aguiar: No, no, everybody goes through exactly the same design, so all the Part B patients, if you call them the Part B patients, go through the same Part A as the patients we've just reported out on. So everybody will go through the same thing.
No the everybody goes through exactly the same design. So all the part B kind of if you call. It the part B patients go through the same.
Part eight as the patients have who we just reported out on.
So everybody will go through the same thing.
Renee Aguiar: The only dose in this trial is 16 milligrams. So the only dose is 16, and the only time that 8 milligrams is ever used is during those few couple of weeks after the nine months have been achieved. So hopefully that addresses your questions.
The only dose in this trial is 16 milligrams.
So the only dose is is 16 and the only time that eight milligrams is ever used is doing those few couple of weeks after.
After the nine months have been achieved.
So hopefully that addresses your question.
Renee Aguiar: Okay, and then after the tapering off, they're off therapy.
Okay.
And then after the after the tapering them there they are off therapy.
Renee Aguiar: That is correct.
That is correct.
Renee Aguiar: Right, right, okay. And then I had a question, can you just talk about, so I understand you're going to be commercializing yourself in the United States and looking for a partner in Europe. Can you just talk a bit about the rationale or the thinking behind why you decided to go independently in the United States and partner in Europe?
Okay.
And then I had a question can you just talk about so I understand you're going to be commercializing yourself in the United States.
And looking for a partner.
In Europe.
You just talk a bit about the rationale or the thinking behind why you decided to do to go independently in the United States and partner in Europe.
Renee Aguiar: Sure. So, for a company of our size, it might seem a little bit counterintuitive, but actually commercializing in the US is actually more efficient. It's a larger market, it's not that fragmented. We can use kind of one team across the entire country.
Sure.
So far for kind of a company of our size actually it might seem a little bit counterintuitive, but actually.
Commercializing in the U.S. is actually more efficient, it's a larger market, it's not that fragmented weak.
We can use kind of one team across the entire country. We don't have different languages different reimbursement assistance I think in Europe.
Renee Aguiar: We don't have different languages, and different reimbursement systems, I think, in Europe. Companies here find it actually becomes quite complex. It also becomes very expensive in terms of doing this on yourself in Europe.
Companies here find it actually becomes quite complex.
It also becomes.
Very expensive.
In terms of doing this on yourself in Europe and has since we only have one product that the more at the moment and it's an orphan product.
Renee Aguiar: And since we only have one product at the moment, and it's an orphan product, from a kind of financial perspective, commercializing in the US is just a far more doable thing for us to do. And in terms of trying to commercialize ourselves everywhere, again, for a company of our size, we felt that we didn't want to overreach, and we would like to do things, the things that we do, we would like to do them very, very well. And so, for that reason, we focused on the US market to commercialize ourselves. As this is an orphan disease, it does not require a significant sales force. And so, this is something that we feel that we can manage very well on our own.
The from a kind of financial perspective.
Commercializing in the U.S., it's just a far more doable.
Thing for us to do and.
In terms of trying to commercialize ourselves everywhere again for for a company of our size.
We felt that we don't want to overreach, and we would like to do things the things that we do we would like to do them very very well and so for that reason, we focused on the U.S. market to commercialize ourselves as this is an orphan disease.
It does not require a significant.
Sales force and so this is something that we feel that we can manage very well on our own.
Renee Aguiar: Great, thank you. Thank you. Our next question comes from Max Harman from Stedford. Please go ahead.
Great. Thank you.
Thank you.
Our next question comes from Max Hoffman from Stifel.
Please go ahead.
Renee Aguiar: Great, thanks for taking my question. Just as one, on Part B of the Nephigard study, just to understand what the objective particularly is. Are you looking for a disease modification? I'd like to learn from that element of the study. Just trying to dig a bit further into obviously the EGFR element to the end point there.
Thanks for taking the question just this one just on the profit the the and study just to understand what the objective, particularly is I am looking for disease modification plan.
Slide claims from from that element of the study just trying to think of.
Very further into Oh, I see the jet fuel element to the endpoint.
[music].
Renee Aguiar: Sure. So, this is, I guess, similar to a lot of other trials, particularly in oncology, for example, where there is this use of a surrogate marker. So, because we are using a surrogate marker for approval, which in this case would be proteinuria, the regulators would generally look for a post-approval confirmatory study with regard to the longer-term benefit that can then be seen, which might have been indicated by a surrogate marker. So, the purpose, really, of Part B is to look at more long-term kidney protection, if you like, clinical benefit. So, that's really the purpose of Part B, which is also why it looks at the differential between the treated arm and the placebo over that entire kind of two-year period from the start of treatment until the end of the observation period.
Sure.
And so this is I guess similar to a lot of other trials, particularly in oncology for example, where the big this there is this use of a surrogate marker so.
So because we are using.
Using a surrogate marker for approval, which in this case would be proteinuria.
The regulators would generally look for a post approval confirmatory study.
You know really gets us to the longer term benefit.
That can then be seen which might have been indicated by at circuit.
Okay. So the purpose really of the part B is to look at more long term.
That kind of kick me protection, if you like clinical benefit. So that's really the the purpose of the part B, which is also why it looks at the differential between the treated arm and the placebo over that.
Higher kind of two year period from start of treatment until end of the observation period.
Renee Aguiar: But just as a follow-up, that would necessitate a sort of disease modification element in Nefacon because otherwise, the two arms would start to, in the kind of Part B element, would sort of converge; otherwise, in order to meet the end point, you need to have some sort of disease modification. So the difference in EGFR that you've shown statistically already in Part A doesn't narrow over time.
But just as a follow up to that would necessitate sort of disease modification.
Element too difficult because otherwise the two arms would talk to in the <unk>.
Of Oh B element.
What sort of converge otherwise in order to.
To me time to meet the endpoint you need to have some sort of disease modification. So.
Difference in Egypt for all that you've shown statistically already in the.
Oh, Hey.
It does not really over the time.
But.
Renee Aguiar: That's correct. I agree with you. I think that obviously the difference that we have already shown over nine months is obviously very substantial if you look at where EMA and FDA have commented on the levels that they would consider being clinically relevant or beneficial, which are somewhere in the region of between one and one-and-a-half mils per minute per year. But yes, I agree with you.
In fact, I I wouldn't I would agree with you I think that obviously the the differential that we have already shown that over.
Over a nine months is obviously very substantial if you look to where kind of M.A.N.S.J. have commented on the levels that they would consider being clinic.
Probably relevant or beneficial.
Sure somewhere in the region of between one and one and a half mills per minute per year.
But yes, I agree with you.
Okay. So hopefully the depended on but they could you may be able to get seasonal flying claim in silver Lake will depending on.
Renee Aguiar: Okay, so hopefully, depending on the data, you may be able to get these modifying claims in the label, depending on... and the Part B element of the study.
Oh Lee Paul.
The elements of the study.
Yes, we may.
Renee Aguiar: Yes, we may.
Renee Aguiar: Thank you. Just as a quick reminder, if you wish to ask an audio question, it's 01 on your telephone keypad. Once again, 01 on your telephone keypad if you wish to ask an audio question. Our next question comes from Rami Katkhuda from Lifeline. Please go ahead. Good morning, and thanks for taking my questions. I guess looking towards the pipeline, it seems like higher doses of Fentonaxib are being assessed in the PK-PD study and the Phase 2 GKE study. Do you believe there's potential for increased efficacy in PBC at these higher doses compared to what we saw in the Phase 2?
Thank you.
Thank you just as a quick reminder, if you wish US conclude your question. It's zero, one thing and sort of thinking about once again to everyone understand I think you've got to distinguish thoughts going on to your question.
Our next question comes from Ravi cuts Cruder from my side. Please go ahead.
Good morning, and thanks for taking my questions I guess looking towards the pipeline. It seems like higher doses of setting that people are being assessed in a PK PD study and the P. Two did you study do you believe there's potential for increased efficacy in PD.
Yes, these higher doses compared to what we thought would be too.
I think that that I think that that would be a reasonable thesis I think that if they're a if the PK studies actually substantiate the the ability to use a significantly higher doses.
Renee Aguiar: I think that that would be a reasonable thesis. I think that if the PK studies actually substantiate the ability to use significantly higher doses generating, you know, higher exposure, then I think it would be a reasonable assumption to assume that you could also see significantly better efficacy in studies using such an exhibit higher doses.
Generating higher.
Your exposure than I think it would be a reasonable pieces to shame, but you could also see significantly better efficacy in studies using such an accident higher doses.
Renee Aguiar: Got it. And then, I guess, are there any updates in terms of conversations with the FDA regarding the development of AIH?
Got it and then I guess are there any updates in terms of conversations with the FDA regarding development of age.
No. Unfortunately, we have no such responses yet. So we are we're still awaiting a response from the FDA with regards to this end we still hope that we've always said this before the end of the year.
Renee Aguiar: No, unfortunately, we have received no such responses yet, so we are still awaiting a response from the FDA with regard to this, and we still hope that we will receive this before the end of the year.
Got it thank you.
Operator: Thank you. Thank you. There appear to be no further questions, so I will hand it back to the speakers for any other remarks.
Hi, good there appears to be very proud of it.
Questions. So I will hand back to the speakers for any up or more.
Renee Aguiar: Thank you very much. Thank you everybody for joining us for this Q3 report, and we'll look forward to speaking to you again next quarter.
Thank you very much. Thank you everybody for joining us and this Q3 report and we'll look forward to speaking to you again next quarter. Thank you.
Operator: Thank you very much. This now concludes our conference call. Thank you for attending. You may now disconnect. Thanks for watching!
Thank you very much. This now concludes our conference call.
Thank you for attending you may now disconnect your lines.
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E.
And.