Q3 2021 FibroGen Inc Earnings Call

Hello, Thank you for standing by and welcome to the five Virgins third quarter of 2021 financial results Conference call. At this time all participants are in a listen only mode. After the speaker presentation there'll be a question and answer session to ask a question during the session you'll need to press star one on your telephone please.

He advised that today's conference is being recorded if you require any further assistance. Please press star zero I would not like turn the conference over to you Speaker today Doctor Michael Tongue. Please go ahead.

Thank you Josh good afternoon, everyone and welcome to fibers, 20th 21 third quarter Conference call Ah, Michael <unk>, Vice President of corporate strategy and Investor Relations at five Virgin joining.

Joining me on today's call our <unk>, our Chief Executive Officer, Dr. Mark Eisner, our Chief Medical Officer, one Gram, our Chief Financial Officer.

Dr. John Hunter, our Chief Scientific Officer thing Wedig are cheap commercial officer, and Chris Cheung, Our senior Vice President of China operations.

Format for todays call. It will include prepared remarks from and regain one after which will open up the call for Q&A I.

I would like to remind you that remarks made on today's call with forward looking statements based on five origins current expectations. Such statements may include statements regarding but not limited to our research and development activities. The initiation enrollment design conduct and results of clinical trials.

Ah regulatory strategies and potential regulatory results anticipated FDA interactions.

Commercialization of results of operations risks plans market opportunity and strategy related to our business Ah collaborations with Astrazeneca Astellas financial guidance and certain other business matters.

Such forward looking statements are subject to significant risks and uncertainties that could cause actual results to differ materially from those anticipating such statements.

For discussion of these and other material risk and factors that could affect our future financial results and business. Please refer to the disclosure today's press release reporting our fiscal 2021 third quarter financial results in business update our most recent forms 10-K and 10-Q.

Well of course that we may fall on form 8-K, with the Securities and Exchange Commission.

Although statements are made as of today November 9th 2021 based on information currently available to us and far Virginia doesn't does not undertake any obligation to update publicly any forward looking statements, whether as a result of new information future events or otherwise except as required by law.

Today's press release reporting our fiscal 2021 third quarter financial results in business update and a webcast of today's conference call. It can be found on the investors section of beverages website at Www Fibrogen Dot com would that I would like to turn the call over to read get can turn arceo Enrique.

Very good thank you Mike.

Good afternoon, everyone and welcome to our third quarter 2021 earnings call.

Today, I would like to provide a high level summary of important accomplishments have developments in recent months.

I would also like to welcome and introduce our newly appointed CFO.

One gram.

Who would review the financials.

We will then open the call for your questions.

I also want to think quicker now.

Who stepped down to see a full in September.

And who work that Fibrogen for 21 years.

Under his leadership.

Coverage in transition from a private to.

Public company.

From a development stage two commercial stage company.

But that would serve as executive adviser through March 2022 to ensure a smooth transition.

This call will include an update of the regular started the regulatory status of books that <unk>.

On a continuous strong performance in China.

So why don't we get started let's get started with books to do start on slight three.

In August.

The European Commission approved the breath, so for the treatment of symptomatic anemia associated with chronic give you this chronic kidney disease.

Ah Philip.

Has launched Germany.

The United Kingdom, Netherlands.

In Austria.

And nearly feedback from healthcare providers is positive.

The anemia of <unk> opportunity to Europe is significant and the rest of that's an important first mover advantage relative to other <unk>.

The recent FDA complete response letter we receive for us to do that for the treatment of anemia of chronic kidney disease. However represents a major setback.

We on our partner Astrazeneca are in discussions when a potential path forward and anemia, CVV and we have an additional meeting with the FDA scheduled.

In China, we reported another strong quarter over because it's the performance.

Finally.

Week.

We and our partners a filler and extra Seneca presented 15 poster presentations.

Related to <unk>.

<unk> kidney week 2021 virtual Congress.

Moving not dislike for the.

The recent.

Reorganization.

Given the uncertainty regarding Brooks at this does put forward in the U S.

We have developed than nerdy, beginning the implementation of a comprehensive plan.

Which includes a cost reduction effort.

That would enable us to focus on our strategic priorities of development of bedroom up rocks and advancing our pipeline.

Our plan.

Is to reduce projected projected expenses by approximately $100 million per year.

For each of the next three years.

We are eliminating approximately 100 positions in the U S.

Of which 70% are open positions 30.

30% of our existing positions.

We thank all the employees whose positions were eliminated.

They're meaningful contributions to five or 10.

Moving to slide five.

500, and continues to be position to create significant value for patients and shareholders.

By executing on our three areas of focus.

Number one.

Accelerating the development of umbrella mapping three indications with significant unmet medical needs.

Idiopathic Bunairee fibrosis.

Luckily advance unresectable pancreatic cancer.

And <unk> muscular dystrophy.

Number two ensuring commercial success of rocks at those studying patients with chronic kidney disease outside the U S.

While exploring a passing the U S.

With a potential for expansion into additional therapeutic indications.

Number three <unk>.

Increasing our research productivity.

Glenn Vance novel programs, the leverage in terms of expertise and.

An existing next early innovation for additional.

Replied opportunities.

As you can see on slide six.

We're pleased to report total rocks at this said net sales to distributors in China or.

57 $8 million for the third quarter.

And $154.1 million a year to date for 2021.

We continued to see increase risks.

Looks at this that adoption.

Pathogen reported $13.4 million in China.

Suddenly put of revenue for the third quarter of 2021.

$42 2 million year to date.

As you can see on slide seven.

That market growth has accelerated since the inclusion of Brooks at this that.

And our deal.

In fact, he saw revenue.

Over the last eight months.

As shown meaningful growth over the same periods in the prior year.

Moving to slide eight.

Rocket boosters has driven decks.

Dec Spansion of the anemia of Cqb category.

And these capturing sure and then expanded markets.

Because of this drug coverage captured 74% of the kind of go to growth.

For the eight months and that August 2021 over the same period in 2020.

Finally, as shown on slide nine.

Looks to do studies the number one brendan treatment for anemia, <unk>, China for the past eight months.

Cheap enough value share of 33% in the most recent months within the segment that includes all Esa products on rocks.

Currently the only big.

On the market.

By year, and we expect to finalize.

The revised reimbursement price for rocks at this studying China.

Which will be lower.

And are prepared to ensure continued growth year on year.

We look forward to keeping you updated this with events are long term goal of making broke the <unk>.

The standard of care and treated Chinese China, <unk> anemia patients.

Moving now to a clinical development program some slight 10.

They we are reiterating are timeless reported last quarter.

And we continue to make progress on.

On the license Hi, Fi bile therapeutic asset.

To evaluate the other program opportunities available under Disclosive option agreements.

I will now turn the call over to our CFO, one gram for the financial uptake Kwan.

Thank you Enrique and appreciate the welcoming words as I joined the team.

Before jumping in let me start by stating how excited I am to be joining fibrogen.

I am looking forward to supporting the organisation in our vision of developing in commercializing innovative medicine scenarios, a significant unmet needs in addition to delivering value towards shareholders.

I also want to extend my thanks to path Cotroneo for his leadership and contributions to the organization for the last two decades.

Now getting into our results for the quarter as we announced today total revenue was $156 million for the third quarter of 2021.

Compared to $44 million for the same period in 2020.

Speaker: $44 million for the same period in 2020. Before diving into our revenue performance, and as a reminder, we record four sources of revenue. First...

Before diving into a revenue performance and as a reminder, we record for sources of revenue.

First lie.

Speaker: Licensed revenue, which is allocated from licensed payments and milestones earned or deemed probable to be earned in the period. Second, development and other revenue, which is revenue from development expense, reimbursement, and revenue from other development activities. Third, net product revenue, which is revenue from direct sales to distributors and sales to our joint distribution entity, or JDE, in China, from which we recognize a transfer price. And fourth, drug product revenue, which includes transfer price payments from our collaboration partners for a commercial-grade API for bulk drug product shipments made to them.

License revenue, which is allocated from license payments and milestones earned or Dean probable being earned in the period.

Second development and other revenue, which is revenue from development expense reimbursement and revenue from other development activities.

Net product revenue, which is revenue from direct sales to distributors and sales toward joined distribution entity or J D E in China from which we recognize that transferred price.

And fourth drug product revenue, which includes transferred price payments from where collaboration partners for a commercial grade API or bulk product shipments made to them and.

Speaker: In the third quarter, revenue includes a total of $120 million in milestone payments from Astellas related to the European Commission approval of Roxadustat, or Abrenzo, for the treatment of adult patients with symptomatic anemia associated with CKD. This amount is allocated at $108.4 million and $11.6 million between license revenue and development revenue, respectively.

In the third quarter.

Revenue includes a total of $120 million in milestone payments from Astellas related to the European Commission approval of rocks adduce that or if renzo for the treatment of adult patients with symptomatic anemia associated with C. K D.

This amount is allocated at $108.4 million and $11.6 million between license revenue and development revenue respectively.

In the third quarter, we recorded $14.6 million in development and other revenue in addition to $8 million upfront payment related to illuminate out license transaction recorded at the license revenue.

Enrique: In the third quarter, we recorded $14.6 million in development and other revenue, in addition to $8 million as an upfront payment related to a Luminex outlicensed transaction recorded as licensed revenue. During the quarter, and as stated earlier by Enrique, we recorded $13.4 million in net product revenue for Roxadu set sales in China. This includes $10.3 million from our sales to the Joint Distribution Entity, or JDE, and $3.1 million of direct sales FibroGen made to distributors.

During the quarter and a state it burn to Europe by Enrique we recorded $13 $4 million net product revenue for Roxy do set sales in China.

This includes $10.3 million from our sales to the just joined distribution entity or J D.

And $3.1 million of direct sales fibrogen made to distributors.

Enrique: As we have previously disclosed, starting the first quarter of 2021, the distribution entity jointly owned by AstraZeneca and FibroGen, or JDE, began selling Roxodustat to distributors and paying for AstraZeneca's commercialization efforts in China and its portion of the profit share. Previously, FibroGen was responsible for these items.

As we have previously disclosed starting the first quarter of 2021, the distribution and Italy entity jointly owned by Astrazeneca, and Fibrogen or J D. E began selling rocks, a boost that to distributors and paying for astrazeneca commercialization efforts in China and Astrazeneca portion of the profit share.

Previously fibrogen with responsible for these items.

For the third quarter of 2021, the J D E accounted for over 94% of the total China Rucks adduced that sales volume with the remaining 6% occurring to Viper against direct sales to distributors.

Speaker: For the third quarter of 2021, JDE accounted for over 94% of the total China RoxaDustat sales volume, with the remaining 6% occurring through FibroGen's direct sales to distributors. To provide context for the operating results of our RoxaDustep business in China, total RoxaDustep net sales, including sales through the JDE to its distributors and FibroGen China's direct sales to our distributors, were $57.8 million for the third quarter of 2021, which represents 155% growth compared to $22.7 million for the third quarter of 2020. We are encouraged by the growth of our Chinese operations, and we expect continued strong market performance in the future.

To provide context for the operating results over a rock that newstead business in China total wreck, so do step net sales, including sales through the <unk> to its distributors and Fibrogen China's direct sales to our distributors.

<unk> 57 $8 million for the third quarter of 2021.

Which represents 155% growth compared to $22.7 million for the third quarter in 2020.

We are encouraged by the growth of our China operation and we expect continued growth continued strong market performance in the future.

Fibrogen from that transfer price from the sales to the J D. E was $19.1 million for the third quarter consistent with the 30% to 45% range of the Jd's Ruxin do step net sales to which we have previously guidance.

Speaker: FibroGen's net transfer price from the sales to JDE was $19.1 million for the third quarter, consistent with the 30% to 45% range of the JDE's RoxaDustat net sales to which we have previously guided. From this net transfer price, we defer a certain portion for revenue recognition purposes under U.S. GAAP. After this deferral, FibroGen recorded $10.3 million in net revenue for the quarter from Roxadustat sales to JDE. And finally, for the third quarter, we did not record any revenue related to drug product sales.

From this net transfer price, we differ a certain portion for revenue recognition purposes, and there you have the gap.

After the deferral Fibrogen recorded $10.3 million in net revenue for the quarter from rocks at this ticket sales to the J D.

Finally for the third quarter, we did not record any revenue related to drug product revenue.

Now moving down the piano during the third quarter.

Creating costs and expenses were $105 million compared to $11.7 million a year ago.

Speaker: Now moving down to P&L, during the third quarter, operating costs and expenses were $105 million compared to $11.7 million a year ago. To put this in context, roughly around 80% or $74.8 million of the operating expense net increase during this quarter is related to the Q3 2020 comparator of China's SG&A expenses. In the third quarter of 2020, driven by the China Amendment between FibroGen China and AstraZeneca, a portion of the historical unpaid co-promotion expense was suggested to reduce the amount owed by FibroGen China.

To put this in context, roughly around 80% or $74.8 million off the operating expense net increased during this quarter is related to the Q3 2020 comparator of Trina SG&A expenses and.

In the third quarter of 2020, driven by the China Amendment between Fibrogen, China in Astrazeneca.

A portion of the historical and paid co promotion expense was suggested to reduce the amount owed by Fibrogen trainer.

This one time adjustment totaled $84.4 million offset by charges or Q3 2020 under the amendment amended agreement, hence driving the variance versus the third quarter of 2021.

In addition in the third quarter, R&D costs increased by $17.4 million or 30% compared to prior year.

Primarily driven by phase III clinical trial expenses, including drug supply costs associated with our regular map programs.

During the third quarter, net income and EPS with $49.8 million or 54 cents, both for basic and diluted shares raw.

Speaker: This one-time adjustment totaled $84.4 million, offset by charges for Q3 2020 under the amended agreement, hence driving the variance versus the third quarter of 2021. In addition, in the third quarter, R&D costs increased by $17.4 million, or 30% compared to the prior year, primarily driven by phase 3 clinical trial expenses, including drug supply costs associated with our Pumrevala Map Program.

Respectively.

Compared to net income of $33 million.

436 cents per basic and 35 cents per diluted shares for the third quarter last year, respectively.

At September 30th.

At September 30th we accounted for $665 million in cash cash equivalents investments and trade receivables.

Looking forward based on our latest forecast, we estimate or 2021, ending balance of cash cash equivalents investments and trade receivables to be in the range of $580 million to $610 million.

The increase in our 2021 ending cash range from our previous guidance of 482 $490 million is primarily attributable to the timing of certain one time payments as well as net cost savings expect it to be realized in the remainder of this year.

Speaker: During the third quarter, net income and EPS was $49.8 million, or $0.54 both for basic and diluted shares, as compared to net income of $33 million, for $0.36 per basic and $0.35 per diluted shares for the third quarter of last year, respectively. As of September 30th, we accounted for $665 million in cash, cash equivalents, investments, and trade receivables. Looking forward, based on our latest forecast, we estimate our 2021 ending balance of cash, cash equivalents, investments, and trade receivables to be in the range of $580 to $610 million.

With that I would now like to turn to call back over to when we get.

In closing.

We continued to look to maximize the value of a portfolio and reduce expenses.

Which will enable us to focus on our strategic priorities and development Redwood mob Brooks at do set in advancing our pipeline.

Better ways of potential first in class medicine in phase III, developing three indications with significant unmet medical needs.

CTO, Pat equivalent fibrosis, Luckily advance resectable pancreatic cancer and <unk> muscular dystrophy.

Looks at this tech continues to perform very well in China and commercialization cause now commenced in Europe.

As shown on slide 11, we.

We continue to have a strong financial position with approximately $665 million in cash.

And expect to end the year.

582 $610 million in cash.

Speaker: The increase in our 2021 ending cash range from our previous guidance of $480 to $490 million is primarily attributable to the timing of certain one-time payments, as well as net cost savings expected to be realized in the remainder of this year. With that, I would now like to turn the call back over to Enrique.

We are well capitalized to meet our goal of delivering innovation two areas of unmet clinical needs.

Now.

I would like to turn the call back to the operator for questions Josh.

Thank you as a reminder to ask a question you will need to cross star one on your telephone.

Withdraw your question press the pound key police involved proposed CUNY roster.

Enrique: We continue to look to maximize the value of our portfolio and reduce expenses, which will enable us to focus on our strategic priorities and the development of PAM Redwood Map, Rockset Dewstead, and advancing our pipeline. Fibrolova is a potential first-in-class medicine in Phase III development for three indications with significant unmet medical needs. Idiopathic Pulmonary Fibrosis, Locally Advantaged and Dissectable Pancreatic Cancer, and Euchene Muscular Dysfunction.

Our first question comes from animals. So let me with sequels. You May proceed with your question.

Hi, Thanks for taking my question.

I was just wondering if you had had discussions astrazeneca on what is that okay, and what is a non starter as far as additional clinical work for.

For rocks in the U S.

And.

To that drive a change in the U S agreement and would they be willing to continue investing.

Given that that.

Altering competitive landscape.

Catch up that competitors are having on you and then.

Secondly, and since this TRL have you noticed whether enrollment in any of the studies, namely.

That Matterhorn study has slowed down.

Enrique: Roxa Tusta continues to perform very well in China, and commercialization has now commenced in Europe, as shown on slide 11. We continue to have a strong financial position with approximately $665 million in cash and expect to end the year with 580 to 610 million dollars in cash. We are well capitalized to meet our goal of delivering innovation to areas of unmet clinical needs. I would like to turn the call back to the operator for questions.

You know.

Have any of the new therapies that are are picking up in the space.

Complicated that as well thank you.

Very good.

Thank you. Thank you very much for your question I think on.

Astrazeneca and.

Potential Buffalo, what I would say and I'm going to ask Mark Eisner to compliment.

Nice is we.

Not only do we have do have in a life plan with Astrazeneca, but of course, we need to ensure that whatever path forward basically.

Is.

It's discussed and align with the FDA.

So there is there is no question that we continue to believe in the product.

Operator: Thank you. As a reminder, to ask a question, you will need to press star 1 on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Our first question comes from Annabel Samimy with People. You may proceed with your question. Hi, thanks for taking...

And the.

The question is really how can we ensure that we can go back to trial the meats.

The complete response later for us to be able to have commercial axis and the U S and anemia <unk>.

And at the same time be able to do that in an expeditious manner, but I'm going to ask.

Mark to comment provider may have a bit more color and then I'll.

Annabel Eva Samimy: And then, secondly, since the CRL, have you noticed whether enrollment in any of the studies, namely the Matterhorn study, has slowed down, and have any of the new therapies that are picking up in the space complicated that as well? Thank you.

So your questions on the collaboration agreement.

Mmk, so as Enrique said, we are collaborating very closely with astrazeneca to determine the best path forward. We are planning to join me meet with the FDA to discuss this in the very near future and were highly aligned with easy on on doing that.

Speaker: Thank you. Thank you very much for your question.

You asked a question about the Crlf and has it affected enrollment in the Matterhorn study or other studies, we we haven't noticed any slowdown after the Ciara all I think.

Enrique: I think on AstraZeneca and the potential path forward. What I would say, and I'm going to ask Mark Eisner to compliment me, is that we... Not only do we have to have an aligned plan with AstraZeneca, but, of course, we need to ensure that whatever path forward is discussed and aligned with the FDA. So there is no question that we continue to believe in the product. And the question is really, how can we ensure that we can conduct a trial that meets the complete response letter for us to be able to have commercial access in the U.S. in an email CKD. And at the same time, be able to do that in an expeditious manner. But I'm going to ask Mark to comment, provide a bit more color, and then I'll answer your questions about the collaboration agreement.

Okay.

Clinicians and investigators seem to be still very interested in those studies and enrolling in the study so back to you in return.

Yeah and.

Clearly.

Our discussion we'd give da will be key.

You know when it comes to.

How do we think about.

This potential path forward.

Here here in the U S and as far as the.

Relationship with us for Seneca the relationship is healthy of course, we suffered.

Significant setback here in the U S. But we're trying to have in a life, but slower than the teams are collaborating Ah I think very closely.

Thank you.

Thank you. Our next question comes from Edwin Zhang with H U in rank you May proceed with your questions received any questions.

Hi, Thanks for taking my questions.

Question on <unk> in China, We know last year, you amended your agreement with any kind of home China operations.

Mark Eisner: Thanks, Enrique. As Enrique said, we are collaborating very closely with AstraZeneca to determine the best path forward. We are planning to jointly meet with the FDA to discuss this in the very near future. And, you know, we're highly aligned with AZ on doing that. You asked a question about the CRL and whether it affected enrollment in the Matterhorn study or other studies. We haven't noticed any slowdown after the CRL. I think, you know, the clinicians and the investigators seem to be still very interested in those studies and enrolling those studies. So, back to you, Enrique. Yeah,

One of the major appropriate of the amendments.

Look for <unk> to be profitable sooner in China.

Can you talk about this business go a bit further give.

Given the current real close deals and growth in China, when do you expect to achieve appropriate ability there.

Yeah very good.

Clearly.

We are very excited about our profitability our performance overall progress when it comes to profitability in China, I think it's fair to say that the protocol Scott significant.

Success.

And I think this is demonstrated this quarter again.

Since the.

We've got.

Gotten reimbursement from the <unk>, we see continued increased adoptions.

Enrique: Yeah, and clearly, our discussion with the FDA will be key, you know, when it comes to how we think about this potential path forward. The relationship with AstraZeneca is healthy, of course; we suffered a significant setback here in the U.S., but we're trying to have an aligned path forward, and the teams are collaborating, I think, very closely.

As we mentioned in the past.

Hospital listings.

It used to be a big driver we are now.

Luxury listed in about 80%, though.

Universe, or the or the opportunity for anemia <unk>, China. The question really know increasing the adoption within dose listed hospitals are nice I think it's fair to say things are going very well we did.

Edwin Zane: Thank you. Our next question comes from Edwin Zane with HCUN Rec. You may proceed with your question.

Amend the.

Agreement with us.

<unk> I think for Fibrogen. This as you will point out meant more predictable.

Speaker: Hi, thanks for taking my questions. A question on ROXA in China. We know last year you amended your agreement with AstraZeneca on Chinese operations. One of the major purposes of the amendment was for FibroGen to be profitable sooner in China. Can you talk about this business goal a bit further? Given the current ROXA sales and growth in China, when do you expect to achieve profitability there?

On a profitable business.

So I.

And I think we've made huge huge huge progress at the other day I think.

The overall performance of the product mix.

A very important difference in that regard I'm going to ask now Kwon, maybe make a few.

Additional comments sure Enrique.

I think Edwin apart from what Enrica have just mentioned the other component around China is that we are in a good trajectory as I mentioned earlier around the growth of the product or the.

Enrique: Yeah, very good. Clearly, we are very excited about our profitability, our performance, and overall progress when it comes to profitability in China. I think it's fair to say that the product has had significant traction. And I think this is demonstrated this quarter again. We've gotten reimbursement from the NRDL. We see continued increased adoptions. As we mentioned in the past, hospital listings. It used to be a major driver.

A product.

We are I think well on our way for.

P&L profitability at this point in time in addition to in 2023 being able to start as well repeat tree and some of that.

Cash that but we haven't China, which is tied to us while our profitability. So I think overall, we are well on track too.

To continue on that path and being able to to continue to fund operations as well within within the Chinese business.

Good also.

Juan: We are now largely listed in about 80% of the universe or the opportunity for anemia of CKD in China. The question is really now increasing adoption within those listed hospitals. And I think it's fair to say things are going very well. We did amend the agreement with AstraZeneca. I think for fibrogen, this, as you will point out, meant more predictable profits for a profitable business. So, and I think we've made huge, huge, huge progress. At the end of the day, I think the overall performance of the product makes a very important difference in that regard. I'm gonna ask Juan now to maybe make a few additional comments. Sure, Enrique.

I think <unk> you mentioned two drugs is becoming the standard of care for <unk> patients in China can you provide some color on it also officially included in the clinical guidance in China.

Or is it a recommendation the first line treatment for USA, while anemic patient. Thank you.

Yeah. This is an excellent question.

Indeed, rucksack has been including.

A number of the clinical guidelines.

In China. It is included.

Together with <unk>.

Another treatments.

But you know I think for a new product Desync Lucia becomes critical I think.

Enrique: Enrique. I think, Edwin, apart from what Enrique has just mentioned, the other component around China is that we are on a good trajectory, as I mentioned earlier, around the growth of the product. We are, I think, well on our way to P&L profitability at this point in time, in addition to, in 2023, being able to start, as well, repatriating some of that cash that we have in China, which is tied to, as well, our profitability. So I think, overall, we are well on track to... Continue on that path and being able to, you know, to continue to find operations as well within Chinese business.

Rock size describe.

We are very pleased with that they mentioned that we made related to becoming the standard of care relates to basically just looking at the share performance that we're having.

When we look at the last few months.

Basically.

Now.

<unk> is the largest Brad by value in China has about a 33, 34% sure by value and just continually increasing.

Clearly.

Our aspiration is still higher.

I think what's important I think is when we look at the market is not just that we're capturing sure but since we're up to do so it was launched.

Speaker: Good. Also, I think, Enrique, you mentioned that Roxa is becoming the standard of care for CKD patients in China. Can you provide some color on this? Is Roxa officially included in the clinical guidance in China? Or is it recommended as a first-line treatment over ESA for anemic patients? Thank you.

Reimburse we've seen them expansion of the market.

In fact, I am expansion.

You know even <unk> are growing faster rates. So there is.

The increase promotion of Brooke's Adduce dead on anemia, <unk> clearly there is a lot of handmade need that we basically we have seen that reflected in.

Market based in China. So.

Enrique: Yeah, this is an excellent question. Indeed, ROXA has been included in a number of clinical guidelines in China. It is included together with ESAS and other treatments, but as you know, I think for new products, this inclusion becomes critical. I think how Roxa is described, and we are very pleased with that. The mention that we made related to becoming standard of care relates to basically just looking at the shared performance that we're having.

We are very pleased in terms of where we are and.

Studied the protest.

Today in.

Kinda.

Very helpful. Thank you.

Thank you. Our next question comes from Michael <unk> with Jeffrey May proceed with your question.

Hi, guys good afternoon.

I have two questions.

Following up on.

Scenario tree with.

And with Astrazeneca can you maybe lay out some of the various scenarios that you see.

Enrique: When we look at the last few months... Basically, now Roxadusta is the largest brand by value in China, has about a 33-34% share of my value, and it's continually increasing. Clearly, our aspiration is. And I think what's important, I think, is when we look at the market, it's not just that we're capturing share, but since RoxasDustia was launched and reimbursed, we've seen an expansion of the market. In fact, an expansion out of, you know, even ETHs are growing at faster rates.

And when you would be in a position generally speaking to update us on what happens.

Presumably the goal is to run another study with the FDA show is that this case and the alternative which would include not doing that and rejiggering. The whole partnership maybe you could just make some comments on that and the timing of when you think this is reasonable industry. Thank you.

Yes. Thank you.

Yes the.

The meeting with the schedule with the FDA is coming up shortly.

Enrique: So there is the increased promotion of RoxasDustia and Anemio CKD; clearly, there's a lot of animal need, and we basically have seen that reflected in the market base in China. So we are very pleased in terms of where we are and standing in the protest today in China.

The beating of course is critical I think our basis given the complete response letter is that given.

Given the discussion we have with the Fda's that we would need to conduct a trial.

Two.

Be able to bring rocks at this debt.

Speaker: Very helpful. Thank you.

Michael Jonathan Yee: Thank you. Our next question comes from Michael Yee with Jeffrey. You may proceed with your question.

You know to market in the U S for anemia.

Once we basically have.

Speaker: Hi guys, good afternoon.

On a line.

Speaker: I had two questions. Following up on the scenario tree with the FDA and with AstraZeneca, can you maybe lay out some of the various scenarios that you see? And when would you be in a position, generally speaking, to update us on what happened? Presumably, the goal is to run another study with the FDA, so is that the base case? And the alternatives would include not doing that and rejiggering the whole partnership. So, maybe you could just make some comments on that and the timing of when you think it is reasonable to update the street. Thank you.

Fast forward with the FDA I think at that point and that would be in a better position to provide an update to the market I don't want to speculate on the different types of scenarios here in terms of.

How how how to think if that's not the case right now I think that's.

To make sure that we have.

Meeting.

We.

We have I think.

Ah.

Good proposal, we'd like to make two to discuss with you if da and see where we go from there.

Okay. Thank you.

Thank you and our next question comes from Jeffrey Forges with SBB, There and you May proceed with your question.

Speaker: Yeah, the meeting with the schedule with the FDA is coming up shortly. That meeting, of course, is critical. I think our basis, given the complete response letter, is that, given the discussion we have had with the FDA, we will need to conduct a trial to be able to bring Roxas d'Usta to market in the U.S. for anemia of CKD. Once we basically have... [inaudible] I want to make sure that we have the meeting. We have, I think, a good proposal we would like to make to discuss with the FDA and see where we go from there.

Thank you very much for a couple of questions with a diet coke.

Just wanted to be clear on the expense guidance and the restructuring.

<unk> highlighted $100 million reduction in 2022, and then again in 2023.

I think you said it was against what you are planning to spend should we be modeling $100 million reduction versus.

The hundred $5 million expense run right in Q3 or the $450 to 500 for the full year. So should we literally do fine Yeah 350 for next year or 300 for next year and the 200 via after or is it a reduction against a hypothetical increase that you would otherwise have incurred in support of the product launch.

Jeffrey Borges: Thank you. Our next question comes from Jeffrey Borges with SBB Learning. You may proceed with your question. Thank you very much.

So it'd be helpful. If you could really clear about that.

Yeah Yeah.

Speaker: guidance and the restructuring. You highlighted the $100 million reduction in 2022 and then again in 2023. But I think you said it was against what you were planning to spend. Should we be modeling a $100 million reduction versus the $105 million expense run rate in Q3 or the $450 to $500 million full year? So should we literally be paying $350 for next year or $300 for next year and then $200 for the year after?

Yes, correct.

And the other question.

Would you consider monetizing the J D E and China as a source of capital to fund your internal warranty investments.

And then lastly.

Be interested in your comments that you haven't seen all of the competitive side.

Yeah.

Do you believe the signals that you spoke yesterday identified in your studies, where a molecule effects or philosophy.

Very good. Thank you let me first strike to address your first question I'm going to ask one to also comment and then we'll go.

To the other two questions that you basically.

Had Iran, China monetization.

And then whether some of the signals are.

Speaker: Or is it a reduction against a hypothetical increase that you would otherwise have incurred in support of the product launch? So it would be helpful if you could be really clear about that. Second, can I get to the other question? Would you consider monetizing JDE in China as a source of capital to fund your internal R&D investments? And then, lastly, I'd be interested in your comments on whether, having seen all the competitors' data for their hits, do you believe the signals that the FDA identified in your studies were molecule effects or class effects?

Product or more general to the class.

First I think the.

What we.

Basically provided.

There are some guidance today was guidance around.

Cuts relative to projected expenses now having said that we are eliminating.

Position. So our head company is going to be lower on that by definition basically be that we are.

Lowering.

Expenses, but but yes, I think the $100 million relative to projected expenses keep in mind that as we get ready to him up closer to.

To the Readouts to a potential launch.

Speaker: Very good, thank you. Let me first try to address your first question. I'm going to ask Juan to also comment, and then we'll go to the other two questions that you basically had around China's monetization and then whether some of the signals are product or marginal to the class.

We basically we will have some additional expenses that we have to.

Accounts for our aim today's to be able to launch.

In the USS Fibrogen.

And we want to make sure that we have the resources to be able to to to be able to do that.

Juan: First, I think what we basically provided, in terms of guidance today, was guidance around cuts relative to projected expenses. Now, having said that, we are eliminating positions, so our head count is going to be lower, and that, by definition, basically means that we are... [inaudible] to the readouts and to a potential launch. We basically will have some additional expenses that we have to account for. Our aim today is to be able to launch PAM in the U.S. as FibroGen.

Kwon do you want to make any additional comments on on on the first point, we're not providing.

<unk> when it comes to operating expenses at this stage, but do inappropriate any more color on that and I think I think you explained it well Enrique I think.

Jeffrey is Enrique mentioned.

This is against our forecast that been given of where do we have planned prior to the CRM. So so that's I think.

How how to think through base in terms of our future expensive and but I have been reconvention. There is also some element of reduction of costs.

Those are actual dollars alright related to.

The number that he highlighted earlier around.

Juan: And we want to make sure that we have the resources to be able to do that. Juan, do you want to make any additional comments on the first point? We're not providing guidance when it comes to operating expenses at this stage, but do you want to provide any more color on that?

Some job eliminations terminations.

In the United States.

To give you just.

Just to give you a sense I think we said.

We are eliminating 100 positions right.

30 of those.

Positions, where are currently fields, but clearly over the last few months, we've been managing positions not feeling them and we're not replacing position. So all in all I think we are expecting to Vista V. The.

Speaker: And I think you explained it well, Enrique. Jeffrey, as Enrique mentioned, you know, this is against our forecasted spend, you know, given what we had planned prior to the CRL. So that's, I think, you know, how to think through this in terms of our future expenses. But as Enrique mentioned, there is also some element of reduction of cost versus our actual dollars, right, related to the number that he highlighted earlier around, you know, some job eliminations or terminations in the United States.

Expect the position that we have is basically a for elimination of 100 positions you probably have also seen.

Jeff that we have.

Our cash guidance for the year has increased some of it is timing, but about $15 million of increasing that caused your guidance.

It relates directly to.

Expense reduction.

So that's of course very recent so that's that's that's already having a.

An impact on.

For the rest of the year.

Speaker: Just to give you a sense, I think we said... We are eliminating 100 positions, right? 30 of those folks.

When it comes to.

When it comes to.

China clearly, we always think about all of the options to we're continually thinking about how to.

Speaker: All in all, I think we are expecting to, vis-a-vis the expected positions that we have, it's basically a full elimination of 100 positions. You probably have also seen, um... [inaudible] So that's already having an impact on the rest of the year. When it comes to... China.

Maximize the value of all of our assets.

And what is it that we could do with it and a China operations.

That's that's something that we're always.

Thinking about exploring.

Win whether it's China or whether it's thinking about I know I get a lot of questions about partnering.

Clearly I think that the the aim for.

Speaker: Clearly, we always think about all of the options. We're continually thinking about how to. [inaudible] Clearly, I think the aim is always: how can we basically maximize the value of the asset? And if partners, for example, in the case of PAM, provide... [inaudible] but, but clearly, we are always thinking about what we could do to ensure that the value of all of our assets is basically...

He's always had how can we basically maximize the value of the asset niche partnering for example in the case of farm provides.

More value.

The Plaza and does something that.

That we would pursue of course as I mentioned, our aim is to launch.

In the U S S.

As fibrogen.

But but but clearly we are always.

What is it that.

We could do to ensure that the value of all of our assets as maximize.

Speaker: Finally, on your question about some of the additional data. I think it's always very difficult to say whether the signals were just a matter of chance, events are low, and you start seeing different signals in different products. These are large trials, but in any large trial... You are going to see basically... [inaudible] against you. But my take right now is that it's very difficult to say whether what we're seeing in some cases, some of those signals go across products or not.

Finally on your.

On on your question on the.

On some of the additional data I think it's always very difficult to.

To say, whether the signals were just a matter of you as soon as a matter of chance when.

Events are low and you start seeing different sickness and different products.

These are large trials, but in many large trial.

You are going to see basically.

Some some adverse event that basically go against you some are going to go.

For you are clearly the safety seeing those are the ones that are going.

I guess you.

Speaker: And I think at the end of the day, I think more data needs to be released. I know, and time will basically tell. I'm going to ask Mark also to provide some additional comments. No, thanks, Enrique. I mean, I think the difference

But my my might take right now I think it's very difficult to say.

You know, whether what we're seeing in some cases some of those signals.

Go across products or.

Or not and I think the other day I think.

More data needs to be released I know.

Time would basically I'm gonna ask Mark also to provide some additional comments.

Mark: Yeah, thanks, Enrique. I think the differences in trial designs, dosing strategies, choice of competitor, for example, roxiducedat was compared to placebo in a non-dialysis population versus doproducedat compared to an active comparator. It makes it very difficult to draw generalizable principles there about the class versus the molecules. And there's also a lot we don't know yet, just based on the very top-line data we've seen in presentations and publications. So, very interesting question, but I don't think we have a full answer to it yet. Right? Okay. Thank you.

Thanks, Amy care I mean, I think the differences in trial designs dosing strategies choice of competitor for example, rock seduced dog was compared to placebo into nondialysis population versus top reduced out compared to an active comparator. It makes it very difficult to draw generalizable.

I suppose there about the class versus the molecules and there's also a lot we don't know based on.

Top line.

We've seen and presentations and publication so very interesting question.

But I don't think we have a full answer to you.

Right. Okay. Thank you.

Jason Matthew Gerberry: Thank you. Our next question comes from Jason Gerberry with Bank of America. You may proceed with your question.

Thank you. Our next question comes from Jason Go very with Bank of America May proceed with your question.

Hi, This is Perry on the line for Jason Thanks for taking our questions.

Perry: Hi, this is Perry on the line for Jason. Thanks for taking our questions. First, I'd like to understand your impression of the Roxas CRL. What were your main takeaways related to the details of the CRL, and, I guess, how has that informed the potential path forward for Roxan and CKD in the U.S. market? Could there be a potential for a trial focused on either dialysis-dependent or non-dialysis-dependent patients, focused on ESA hyporesponders, and then just have one follow-up question?

First of all I understand your.

Impression of the rocks is Ciara what were your main takeaways.

<unk> two details this euro and.

How has informed the potential path for for Roxanne.

<unk> in the U S market.

Could there be a potential for trial focused on.

Either dialysis dependent or nondialysis dependent patient focused on Esa hypo responders and.

And then just have one follow up question.

Yeah, I'm going to have mark could directly address this.

Question.

Mark: Yeah, I'm gonna have Mark directly address this question.

Yeah. So good question.

Mmk said, we're still working through the path forward.

Speaker: Yeah, so good question. As Enrique said, we're still working through the path forward and are going to be meeting with the FDA soon. As you recall from our advisory committee, we proposed that a lower starting dose and a different dosing strategy could be a path forward for the molecule. So that's something we're clearly going to explore with the FDA. In terms of the specific populations that we need to study in order to achieve a broad label, I mean, we are still intending to achieve a label that includes both DD and NDD. That's still a point of discussion with the FDA about exactly how we can achieve that.

Are going to be meeting with the FDA soon as you'll recall from our Advisory Committee we have proposed.

Lower starting dose.

And a different dosing strategy could.

Could be a path forward for the molecule. So that's something we're clearly can explore with the FDA and.

In terms of the specific populations that we need to study in order to achieve abroad label I mean, we are install intending to.

<unk> a label that includes both Didi and Indeedy, that's still a pointed discussion with the FDA exactly how we can achieve that.

Okay. Thanks.

And then just one other related to.

Adoption trends for rocks and <unk> in China.

Is I guess, where is the growth coming from.

Speaker: Okay, thanks. And then just one other related to adoption trends for Roxa and CKD in China, I guess where's the growth coming from at the indication level? Is it, you know, around 50-50 between dialysis-dependent and non-dialysis-dependent? Is it predominantly one over the other? Any color would be helpful.

At the indication level is it.

Around around 50, 50 between dialysis kind of Nondialysis dependent.

Is it predominantly one over the other.

Any any color will be helpful.

Yeah, we are seeing clearly.

When if you are referring to market growth alright, clearly market growth is.

Is that where you're coming from both but.

Clearly we are seeing a lot more.

Speaker: Yeah, we are clearly seeing when if you're referring to market growth, all right, clearly market growth is likely coming from both, but clearly we are seeing a lot more NDD market expansion. Most patients, you know, with DD are actually treated for anemia. So, that's a point I would make at the market level. If you're asking about ROXADU studies specifically, most of our revenue, as we said before, is coming from DD, maybe about 65 coming from DD and 35 coming from NDD at the revenue level.

Indeed, the market expansion.

Most patients.

Oh, Dear actually treated for with the patient with anemia are being treated.

So that's.

That's.

When we made the market level, you're asking about drugs to do studies specifically.

Most of our revenue as we said before.

Coming from Vd, maybe about 65 coming from the 35 coming from Indeedy.

The revenue level.

We do see NDS.

Huge significance opportunity longer term.

On.

That's that's something that I think is going to be.

Speaker: We do see NDD as a huge, significant opportunity longer term, and that's something that I think is going to be playing out. The opportunity for continued market expansion and for ROXADU to play a leading role in that, I think is still very significant in China.

Now the opportunity for continued market expansion on for us to do that to play a leading role in that I think is still.

Very significant in China My views, we are in the first innings of.

Of.

Ah.

The opportunities that we have we've looked at the street China.

Speaker: Great. Thanks.

Great. Thanks.

Thank you. Our next question comes from Paul Charlie Goldman Sachs. You May proceed with your question.

Paul Choi: Thank you. Our next question comes from Paul Choi with Goldman Sachs. You may proceed with your question.

Hi, Thank you and good afternoon, and thank you for taking our questions.

Enrique: Hi, thank you, and good afternoon, and thank you for taking our questions. My first question is about Europe, and can you, please, Enrique, update us on how you and your partner Estella are thinking about the cadence of establishing reimbursement in the key geographies and just, you know, how you're thinking about the launch trajectory over the next one to two years, given that that's a potential gating factor there in Europe? And then I had a pipeline follow-up question.

My first question is on Europe, and can you maybe just.

Enrique update us on how you and your partner Astellas aren't thinking about the cadence of establishing reimbursement into key geographies and just seeing how you are thinking about the launch trajectory over the next one to two years given that potential gating factor there in Europe, and then I had a pipeline follow up question.

Yeah.

I'll make a general comment I think the specifics when it comes to Europe I think those question needs to be ask or tell us. So we've agreed that they're gonna be answering those questions directly.

But as you know in Europe, just generally what you basically have is you are launching a market that allow you to launch with the with the call a temporary prize like Germany.

Speaker: Yeah, I'll make a general comment. I think the specifics when it comes to Europe, I think those questions need to be asked of Astellas, so we've agreed that they're gonna be answering those questions directly. But as you know, in Europe, just generally, what you basically have is you are launching in markets that allow you to launch with what is called a temporary price, like Germany and other markets. And then I think you are launching in markets once you get basically actual reimbursement.

Other markets.

And then I think you are launching markets once you get basically actual reimbursement.

So.

In Europe.

The reimbursements of course grunted at the country level.

And that basically tends to.

Be staggered and.

I I.

I know that Astellas is now launching.

The foreign markets.

Four countries that I just mentioned.

Speaker: So, in Europe, reimbursement is, of course, granted at the country level, and that basically tends to be staggered. I know that Astellas is now launching in the four markets, and the four countries that I just mentioned, Germany, the UK, the Netherlands, Austria, but in addition to that, of course, they are working diligently to ensure that they can have reimbursement across Europe.

Germany.

The UK, Netherlands, Austria, but.

In addition of that too.

That of course, they are working diligently to ensure that they can have reimbursement.

Across Europe.

Okay. Thanks for that Enrique and then the second as a follow up just on the pipeline and can you maybe just update us on where you are with the app or how are you thinking about the developed a rock so that's set for CIA.

Didn't see it mentioned here in your three Q slides and is that just something an indication that sandy.

Speaker: Okay, thanks for that, Enrique. And then second, as a follow-up, just on the pipeline, can you maybe just update us on where you are with or how you're thinking about the development of Roxa DustNet for CIA? I didn't see it mentioned here in your 3Q slides, and is that just something, an indication that it's been deprioritized?

Prioritize.

No it's <unk>.

Thank you. Thank you for your question isn't that amount of the prioritization, but I think.

We are looking forward to getting the insights from the discussion with the FDA and write that even <unk> because that also informs how we think about.

CIA and.

That that program the data for CIA.

Positive data, but we went to ensure that we are on solid footing as we think about that trial mark anything else, you're not much to I don't really care I mean, as you said our main thrust right now is establishing the path forward for <unk> in and CIA is under discussion with a Z in parallel and we're.

Mark: Thank you for your question. It's not a matter of de-prioritization, but I think we are looking forward to getting the insights from the discussion with the FDA around anemia of CKD because that also informs how we think about CIA and that program. The data for CIA is positive data, but we wanna ensure that we are on solid footing as we think about that trial. Mark, anything else? Yeah, not much to add, Enrique.

Trying to find the path forward for that one as well.

Okay. Thank you very much.

Yeah.

Thank you. Our next question comes from Andy who sang with William Blair. You May proceed with your question.

Great. Thanks for taking my question so.

<unk>.

Enrique or.

Mark: I mean, as you said, our main thrust right now is establishing the path forward for CKD, and then CIA is under discussion with AZ in parallel, and we're trying to define the path forward for that one as well.

Can you kind of highlight the strength of your internal R&D and how is that differentiating.

We're just trying to understand or or reconcile between the.

The desire to obviously seek internal.

Speaker: Okay, thank you very much.

Andy Isag: Thank you. Our next question comes from Andy Isag, with William Blair. You may proceed with your question.

Pipeline quoted is sort of external collaborations and also the the reorganization expense reduction plans that you have.

Enrique: Great, thanks for taking my questions. So, one is Enrique, or... Can you kind of highlight the strength of your internal R&D and how is that differentiating? We're just trying to understand or reconcile between the desire to obviously seek internal, you know, pipeline candidates or external collaborations and also the reorganization expense reduction plans that you have.

Yeah very good.

Very good question I'll I'll start them, then I'm going to ask John hundred to two.

To complement that question.

I think your focuses.

If I answer.

The focus of your question is more of the art then on the D.

But.

Clearly I think as part of this exercise we've taken a very close look look at.

Every single area in the company.

Every line item by light items tried to think about how do we.

John J. Hunter: Yeah, very good. A very good question. I'll start and then I'm going to ask John Hunter to.., to complement that question. I think your focus is, if I answer, the focus of your question is more on the R than on the D. But clearly, I think, as part of this exercise, we've taken a very close look at every single area in the company and every line item by line item, trying to think about how we can run more efficiently.

Sure that we can run more.

More efficiently.

Of course that is that is.

Hugely important process, but as part of that we also had we've raised the hurdle.

When it comes to innovation, including on as we think about research.

And as we think about our preclinical program. So we've basically.

Great.

Certain number of program that we believe had the best chance to make it to the clinic.

Within the next.

Few years those are the ones that were basically.

John J. Hunter: And, of course, that is a hugely important process. But as part of that, we've raised the hurdle when it comes to innovation, including as we think about research and as we think about our preclinical programs. So we've basically targeted a certain number of programs that we believe have the best chance of making it to clinic within the next few years, and those are the ones that we're basically investing in. There is a mix of products, from our HiFiBio collaboration, which as you mentioned is external, but then there are also internal programs that we are moving forward with, and we're investing in. I'm going to ask John if he'd like to make some additional comments. Sure.

Invest in behind there is some mix of products there are products.

From a high five by a collaboration with just you mentioned as external but then there are also internal program that we are.

Moving forward, we're investing behind.

I'm going to ask.

John If you would like to make some additional comments sure I would only.

I would only add that.

There are areas of expertise that have been developed over the years. It fibrogen and we're really looking to take full advantage of them with the existing preclinical programs.

And with the Hi Fi bio programs clearly that brought in a new set of projects.

That I think were initially outside of the expertise area of the company, but we have been building up around them as well and we're really looking to move forward by kind of.

Expanding out expertise, where we need it but also consolidating the programs around our therapeutic focus areas. So that we have a coherent path forward with the new clinical programs.

Speaker: Sure, I would only add that there are areas of expertise that have been developed over the years at FibroGen, and we're really looking to take full advantage of them with the existing preclinical programs. And with the HiFiBio programs, clearly, that brought in a new set of projects that I think were initially outside of the expertise area of the company, but we have been building up around them as well.

Great. Thank you I have a follow up question related to the price negotiation with the Chinese government coming up.

Toward the year end period.

I'm just curious if you could educate us on how they are thinking when it comes to.

Renegotiation on price that they look at real World evidence do they look at renewed valley proposition just just curious about how they.

Speaker: And we're really looking to move forward by kind of expanding expertise where we need it but also consolidating the programs around our therapeutic focus areas so that we have a coherent path forward with the new clinical programs.

Think about this process and maybe things that you can.

Prepare.

Heading into the process to really positioned fiber Jean.

At.

Speaker: Great, thank you. I have a follow-up question related to the price negotiation with the Chinese government coming up towards the year-end period. I'm just curious if you can educate us on how they think when it comes to renegotiation on price. Do they look at real-world evidence? Do they look at a renewed value proposition? I'm just curious about how they think about this process and maybe things that you can prepare, heading into the process to really position FibroGen. Pencil, you know, LeveragePoint.

Pencil.

Leverage points.

Yeah clearly.

It is the case in China It is the.

The case with any pay around the world when it comes to negotiating.

For pricing I think.

The interest is too of course lower the price.

Reimbursement price the price of the government, Spain for.

Four products in China. These happen as you know across the board.

Two years right. So every product every two years has.

Broken.

And our deal Hussey.

Burst mint.

Re negotiation and a new price basically is set.

Speaker: Yeah, clearly, um... It is the case in China and it is the case with any payer around the world when it comes to negotiating. For pricing, I think the interest is, of course, to lower the price, the reimbursement price, the price the government is paying for products. In China, this happens, as you know, across the board, every two years, right?

There are a number of factors that basically.

Are brought into the mix as part of this discussion.

Everything from the clinical value of the product.

Two the number of competitors.

Whether they are direct competitors in the same class or function function of competitors.

Neighboring countries prices.

Speaker: So every product, every two years, The product in the NRDL has a reimbursement renegotiation, and a new price basically is set. There are a number of factors that are basically, are brought into the mix as part of this discussion. Everything from the clinical value of the product to the number of competitors, whether they are direct competitors in the same class or functional competitors, neighboring countries, prices. And then also, I think it's, you know, how successful the product is being, meaning products that have significant success just because of the impact on the budget tend to garner more attention.

And then also I think it's how so how successful the product is being meaning products to have.

Significant success, just because of the impact on the budget then too.

So there are no more attention. So there's a combination of factors I think.

It is.

Extremely important right for products to be.

<unk>.

And.

I think that's something that the industry is going to go across basically this month's in terms of all all the discussions including us right to.

To ensure that the products are basically.

Reimbursed going forward. So that's maybe the frame that I would that I would provide.

Speaker: So, there's a combination of factors. I think it is extremely important, right, for products to be in the NRDL. And I think that's something that the industry is going to go through basically this month in terms of all the discussions, including us, to ensure that the products are basically. [inaudible] I'm not sure I can add much more to that. I don't know if that answers your question.

I'm not sure I can add much more to that I don't know if.

To your question.

Yes, that's helpful. Thank you very much.

Thank you and as a reminder to ask a question you will need to press star one on your telephone. Our next question comes from your own wherever with talent. You May proceed with your question.

If your line is on mute please on mute.

And I would like to now turn the call back over to Enrique for any further remarks.

Speaker: Yeah, that's helpful. Thank you very much. Thank you, and as a reminder to ask a question...

No. Thank you. Thank you for your questions, we very much.

Operator: Thank you, and as a reminder, to ask a question, you will need to press star 1 on your telephone. Our next question comes from Yaron Werber with Calend, you may proceed with your question. If your line is on mute, please unmute. And I would like to now turn the call back over to Enrique for any further remarks.

Shade your participation in today's investor call under interesting Fibrogen enjoyed the rest of your day. Thank you very much.

Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.

Oh.

Enrique: Thank you for all your questions. I appreciate your participation in today's investor call and your interest in FibroGen.

[music].

Speaker: Enjoy the rest of your day. Thank you very much. Thank you, this concludes today's program.

Operator: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

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