Q4 2021 FibroGen Inc Earnings Call
Yeah.
Good day, and thank you for standing by and welcome to the Fibril Gen fourth quarter 2021 financial results conference call. At this time, all participants are in a listen only mode.
David DeLucia: David DeLucia, David DeLucia, Good day and thank you for standing by, and welcome to the FibroGen fourth quarter 2021 financial results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star one on your telephone.
After the Speakers' presentation, there'll be a question and answer session.
I ask a question during the session you will need to press star one on your telephone.
Operator: Please be advised that this call is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your host today, Mike Tung, Vice President of Corporate Strategy and Investor Relations. You may begin. Thank you, Justin. Good afternoon, everyone.
Please be advised that this call is being recorded if you have.
Require any further assistance. Please press star zero I would now like to hand, the conference over to your host today, My tongue, Vice President corporate strategy and Investor Relations you.
You may begin.
Thank you Justin and good afternoon, everyone I'm, Michael Tung, Vice President of corporate strategy, and Investor Relations that fiber Jen <unk>.
Michael Tongue: I'm Michael Tongue, Vice President of Corporate Strategy and Investor Relations at FibroGen. Joining me on today's call are Riki Contorno, our Chief Executive Officer; Dr. Mark Eisner, our Chief Medical Officer; Juan Graham, our Chief Financial Officer; Dr. John Hunter, our Chief Scientific Officer; Thane Wettig, our Chief Commercial Officer; and Chris Chung, our Senior Vice President of China Operations. Thank you very much.
Joining me on today's call are Ricky can turtle, our Chief Executive Officer, Dr. Marc Eisenberg, our Chief Medical Officer, One Graham our Chief Financial Officer, Dr. John Hunter, Our Chief Scientific Officer.
Tim <unk>, our Chief commercial officer, and Chris Chung, our senior Vice President of China operations.
Michael Tongue: The format for today's call includes prepared remarks from Enrique and Juan, after which we will open up the call for Q&A. I would like to remind you that the remarks made on today's call include four looking statements about FibroGen. Such statements may include, but are not limited to, our collaborations with AstraZeneca and Astellas, financial guidance, Initiation, Enrollment, Design, Conduct, and Results of Clinical Trials, our Regulatory Strategies and Potential Regulatory Results, our Research and Development Activities, Commercial Results, and Results of Operations, risks related to our business, and certain other business matters.
The format for today's call includes prepared remarks from Enrique one after which we will open up the call for Q&A I would like to remind you that remarks made on today's call include forward looking statements about fiber Jay such statements may include but are not limited to.
Our collaborations with Astrazeneca and Astellas financial guidance the.
Initiation enrollment design conduct and results of clinical trials of <unk>.
Regulatory strategies and potential regulatory results.
Our research and development activities commercial results and results of operations.
Risks related to our business and certain other business matters.
Michael Tongue: Each forward-looking statement is subject to risks and uncertainties that could cause actual results and events to differ materially from those projected in that statement. A more complete description of these and other material risks can be found in FibroGen's filings with the SEC, including our most recent Form 10-K and Form 10-Q. The President does not undertake any obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.
Each forward looking statement is subject to risks and uncertainties that could cause actual results and events to differ materially from those projected in that statement.
A more complete description of these and other material risks can be found in <unk> filings with the SEC, including our most recent Form 10-K and Form 10-Q .
Robinson does not undertake any obligation to update publicly any forward looking statements, whether as a result of new information future events or otherwise.
Michael Tongue: The press release reporting our financial results and business update and a webcast of today's conference call can be found in the investor section of FibroGen's website at www.fibrogen.com. And with that, I would like to turn the call over to Enrique Conterno, our CEO.
The press release reporting our financial results and business update and a webcast of today's conference call can be found on the investors section of fiber just website at www <unk> com.
And with that I would like to turn the call over to Enrique Conterno, our CEO Enrique.
Very good thank you, Mike and good afternoon, everyone and welcome to our fourth quarter and full year 2021 earnings call.
Enrique Conterno: Very good. Thank you, Mike. And good afternoon, everyone, and welcome to our fourth quarter. 24-year 2021 Erning School. Briefly, before we begin, I would like to highlight that today is Rare Disease Day, which is especially relevant to us given our Panorama phase 3 programs and our Roxadooster MDS program. As we enter 2022, we're excited about our future as we continue to advance our Phase 3 Pambrellumat Clinical Trial for three indications, continue to see strong performance with Roxas Duster in China, launch ROCKZO DOOSTER in Europe, and expand our research and development portfolio in the immune oncology and autoimmune space.
Briefly before we begin I would like to highlight that today is rare disease day.
Which is especially relevant to us given our bedroom up phase III programs.
And Ah rux deduce that MBS broker.
As we enter 2022, we're excited about our future as we continue to advance our phase III <unk> clinical trials in three indications continue a strong performer with rocks as this study in China.
Trucks are set in Europe and expand.
Research and development portfolio in immuno oncology and Oregon space.
Enrique Conterno: On today's call, I intend to cover recent developments and give in [inaudible] Beginning with Pabralum Juan Graham, our CFO, we didn't review the financials [inaudible] after which we will open up the call for your questions, starting with slide three. FibroGen is positioned to create significant value for patients and shareholders by executing on our three areas of focus to create significant value for patients and shareholders by executing on our three areas of focus on our three areas of focus on our three areas of focus on our three areas of focus, Number one. Accelerating the development of panbrevumab in three indications with significant unmet medical need. Idiopathic Pulmonary Fibrosis, locally advanced and receptable pancreatic cancer, and this scene must go this way.
On today's call I intend to cover recent developments and key events.
Beginning with <unk>.
One Gram our CFO will then review the financials.
After which we will open up the call for your questions.
Starting with slide three.
Fabric and is positioned to create significant value for patients and shareholders by executing on our three areas of focus number one accelerating the development of our bread roadmap in three indications with significant unmet medical need.
Enrique Conterno: Number two, ensuring commercial success of roxodustat in patients with chronic kidney disease outside the U.S. while continuing to explore a path forward. Number three, increasing research productivity to advance novel program delivery, internal expertise, and accessing external innovation for the addition of Pipeline OPPORT. Let's move to our clinical trials focusing on Pembrelo map on slide 4 [inaudible]. Pandrelumab is a wholly owned acid in phase 3 clinical trials for three highly important diseases sets, IPF, LAPC, and DMD.
Idiopathic pulmonary fibrosis.
Locally advanced Unresectable pancreatic cancer and.
In Duchenne muscular dystrophy.
Number two.
Ensuring commercial success of Brooklyn, do study in patients with chronic kidney disease outside the U S.
While continuing to explore a path forward in the U S.
And number three increasing our research productivity to advance novel program the leverage internal expertise.
And accessing external innovation for additional pipeline opportunities.
Let's move to our clinical trials focusing them on bread road map on slide four.
But brent would might be as a wholly owned asset in phase three clinical trials.
For three highly important indications.
He said I P F N.
L a b C.
And D M D.
Today, we announced completion of enrollment of our LAPIS phase III study of.
Enrique Conterno: Today, we announce completion of enrollment in our LAPIS phase 3 study of 284 patients with locally advanced and resectable pancreatic cancer. We have also completed enrollment in the Avalanches I Phase III study of 99 patients with non-ambulatory DMV. In the next few weeks, we expect to complete enrollment in the CFRS-1 Phase 3 study of approximately 340 patients with IPF. Our phase 3 CEPHR study is largely based on our phase 2 PRE study, which demonstrated a meaningful reduction in lung function decline. Each of these diseases represents an important unmet medical need, and collectively they constitute a significant macro. (inaudible) Respect
284 patients with locally advanced Unresectable pancreatic cancer.
We also completed enrollment of the relapse is one phase III study.
99 patients with non ambulatory DMD.
And the next few weeks, we expect to complete enrollment over the first one phase III study of approximately 340 patients with IPF.
Our phase III <unk> study is largely based on our phase II.
This study, which demonstrated a meaningful reduction of lung function decline.
Each of these diseases represent an important unmet medical need.
Collectively they constitute a significant market opportunity.
We expect multiple umbrella data readouts in 2023.
Enrique Conterno: Multiple Cambrera Data Readouts in 2023, and an interim analysis of LAPC later this year. I'd like to spend a few minutes highlighting our perspective. On the significant opportunity we see with Parveluma, in each of the three DCC states, beginning with IPF on slide five [inaudible] With a diagnosed prevalence of approximately 330,000 patients across the US, EU, China, and Japan, the two key medicines comprising the IPF market generated over 3 billion dollars in net revenue in 2020.
And an interim analysis of L. A b C. Later this year.
I'd like to spend a few minutes highlighting our perspective.
Enrique Conterno: Despite this market size, the need remains significant and may need to be preserved [inaudible] as characterized by continued disease progression and challenging tolerability. There is a sentiment in the IPF community of limitations with the current threat [inaudible] and a desire for additional therapeutic options. Given the limited number of late-stage products in development, we believe Phambrellumap, if approved, is well positioned to take advantage of this If the Phase III Cephrus program produces comparable results to the Phase II PRACE trial, we believe panbrelumab has the potential to help a sizable number of patients with IPF and be a very significant product for Pfizer. Turning now to slide six, on locally advanced pancreatic cancer.
On the significant opportunity, we see with Barnwell, who might be in each of the three D. C States beginning with IPF on slide five.
With a diagnosed prevalence of approximately 330000 patients.
The U S EU, China and Japan.
The two key medicines, comprising the IPF market generated over $3 billion in net revenue in 2020.
Despite these market size there remains significant unmet need with these two approved therapies.
As characterized by continued disease progression and challenging tolerability.
There is a sentiment in the IPF community of limitations with the current therapies and a desire for additional therapeutic options.
Given the limited number of late stage products in development, we believe umbrella map if a group is.
He is well positioned.
To take advantage of this opportunity.
These are phase III Zephyrus program produces comparable results for the phase III Grace trial.
We believe by relevant has the potential to help a sizable number of patients with a P F.
Can be a very significant product for fabry disease.
Turning now to slide six and the locally advanced pancreatic cancer opportunity.
Non metastatic.
Enrique Conterno: Non-metastatic pancreatic cancer represents one of the greatest unmet needs in oncology, given the diagnosed prevalence of almost 140,000 patients across the major regions combined with a low five-year disease-presence rate of around 10%. There have been limited treatment advances in the non-metastatic setting over the last two decades, with therapies failing to demonstrate survival benefits over the current standard of care. Similar to IPF, there's limited late-stage development activity in non-metastatic pancreatic cancer and..., which creates a meaningful opportunity for PAMBREVLU MAPF if we can demonstrate an improvement in overall survival. As we said earlier, the LAPIS Phase III trial is fully enrolled, and we look forward to seeing if Parveloma could provide an important new treatment option for patients. Turning to slide 7.
Cancer represents one of the greatest unmet missing oncology given the diagnosed prevalence of almost 140000 patients.
The major regions combined with a low five year disease free survival rate of around 10%.
There have been limited treatment advances in the non metastatic setting over the last two decades.
Therapies failing to demonstrate a survival benefits over the current standard of care.
Similar to I P F.
Limited late stage development activity in non metastatic pancreatic cancer, which creates a meaningful opportunity for pan bread roadmap. If we can demonstrate an improvement in overall survival.
As we said earlier.
LAPIS phase III trial is fully enrolled and we look forward to seeing if available that would provide an important new treatment option for patients.
Turning to slide seven.
We wrap up that barbell in my section with a snapshot of the DMD opportunity.
Enrique Conterno: We wrap up the Parvalumas section with a snapshot of the DMD opert, given the devastating nature of D&D. [inaudible] and the relentless disease progression. [inaudible] We're hopeful that the Atlanta clinical trial program can lead to an approved therapy that is so needed by the DMV community. With corticosteroids as the current standard of care, patients commonly deal with troublesome side effects as they continue to experience, Mrs. Progression and Laws of Ambulation, where the currently approved Exxon's skipping therapies produce an increase...
Given the devastating nature of Dnb.
And the relentless disease progression.
We're hopeful that the Lantus clinical trial program could lead to an approved therapy that is so needed by the DMD community.
With corticosteroids is the current standard of care.
It's commonly deal with travel some side effects of <unk>.
He needs to experience.
The disease progression and loss of ambulation.
With the currently approved exon skipping therapies produced an increase in dystrophin levels.
Enrique Conterno: Disturbing Levels, They only target a small proportion of them [inaudible] There's clearly a need for therapies that can improve muscle function [inaudible] I'm prolonged ablution [inaudible] by targeting the downstream pathological changes of DNA. We believe the anti-fibrolic mechanism of Pembrelloma may be a solution that can help this patient and their family.
They only target a small proportion of DMD patients.
There's clearly need for therapies that can improve muscle function.
Prolong ambulation bye.
By targeting the downstream pathological changes of BMD.
We believe that anti fibrotic mechanism may.
It may be a solution that can help these patients and their families.
Now, let's move to <unk> on slide eight.
Enrique Conterno: Now let's move to Roxadou Strat on Slide A. Following the European Commission approval of Evrenso for the treatment of adult patients with symptomatic anemia associated with chronic kidney disease. Astellas has launched Evrenso now in Germany, the United Kingdom, the Netherlands, Austria, and the Nordic countries. The early feedback from healthcare providers prescribing Evrenso has been positive. The anemia of the TKD opportunity in Europe is significant, and Evrenso has an important first-mover advantage relative to other HPHI.
So I don't mean that European Commission approval.
If rents though.
For the treatment of adult patients.
With symptomatic anemia associated with chronic kidney disease.
Telus has launched now in Germany.
The United Kingdom, the Netherlands, Austria, the Nordic countries.
The early feedback from health for health care providers prescribing at Bristow has been positive.
The anemia of seeking the opportunity in Europe is significant.
<unk> has an important first mover advantage relative to other Heath via choice.
Regarding Brexit this study in the U S. We and our partner Astrazeneca are in discussions on that.
Enrique Conterno: Regarding Roxas Dustin in the U.S., we and our partner AstraZeneca are in discussions on a potential path forward for anemia of CKD. In November, FibroGen and AstraZeneca met with the FDA and discussed next steps following the advisory committee meeting. At this time, we are working together with AstraZeneca to determine those next steps. Moving now to China. As you can see on slide 9,
Potential paths forward in anemia C J D.
In November five Virgin and Astrazeneca met with the FDA to discuss next steps.
Growing the Advisory Committee meeting.
At this time, we are working together with astrazeneca to determine those next steps.
Enrique Conterno: We are reporting total RoxaDustaNet sales to distributors in China of $32 million for the fourth quarter. The total network used itself to distribute in China for 2021 was $186.1 million. Significant growth over the last 72.5 million in 2020. [inaudible] As a result of the price reduction associated with the NRDL listing. The Roxodusta NET sales for the fourth quarter of 2021 reflected a one-time adjustment driven by a revaluation of channeling.
Moving now to China.
As you can see on slide nine we are reporting taller rocks adjusted net sales to distributors in China of 32 million for the fourth quarter.
The total network, who set themselves to the student in China for 2020 , one was $186 1 million.
Significant growth over the $72 5 billion.
In 2020.
As a result of the price reduction associated with the <unk> listing renewal there.
The rough reduced our net sales for the fourth quarter of 2020 , one reflected at one time adjustments <unk>.
By a revaluation of channel inventory.
<unk> portion of <unk> net product revenue in China was $5 5 million.
Enrique Conterno: FibroGen's portion of Roxadusta Net Product Revenue in China was $5.5 million for the fourth quarter and $47.6 million for the full year 2021, on a U.S. GAP basis. Juan will dive deeper into further details in the finance section. We have continued to see broad adoption across the three segments of hemodialysis, peritoneal dialysis, and non-dialysis and continue to see strong performance of rastroducer implants since the launch of Roku Doosan in mid-2019. A primary focus of our commercialization efforts has been to secure hospitalization, which is a right to be prescribed at a particular hospital.
For the fourth quarter and $47.6 million for the full year 2021.
On a U S GAAP basis.
One will dive deeper into further detail.
In the finance update.
We have continued to see broad adoption across the three segments of hemodialysis.
Paratonia dialysis and non dialysis and continues to see strong performance of roughly two study in China.
Since the launch of Rockford do study meet 2019.
Our primary focus of our commercialization efforts has been to secure hospital listings.
Which is it right to be prescribed that particular hospital.
As of the end of 'twenty, 'twenty, one where at least any hospital that represent approximately 80% of the addressable and email security market.
Enrique Conterno: As of the end of 2021, we're listed in hospitals that represent approximately 80% of the addressable anemia of CKD. Roxette-Dustat was included in the 2021 NRBL with a meaningful reduction in price. However, we do expect Rocadusta Nestle's growth for the full year in China to be driven by significant growth in volume, as you can see on slide 10.
Rockford do stats, what's included in the 2021 and our D L with a meaningful reduction in price.
However, we do expect broker boosted net sales growth for the full year in China.
Even by significant growth in volume.
As you can see on slide 10.
Enrique Conterno: Roxas Dusta continues to drive the expansion of the Anemio CKD category and is capturing share in an expanding market. We have reduced the capture; the large majority of the category grows [inaudible] for the 12 months ended December 2021 over the same period in 2020. Finally, as shown on slide 11.
This continues to drive the expansion of the anemia, CPG category and is capturing share in an expanding market.
Because of this the captured a large majority of the category growth for the 12 months ended December 2021 over the same period in 2020.
Finally, as shown on slide 11.
Enrique Conterno: Roxadusta is the number one branded treatment for anemia of CKD in China for the past 12 months, achieving a value share of 36% in the most recent quarter within that segment that includes all ESA products and Roxadusta, currently the only CFPHI. We look forward to keeping you updated as we advance our long-term goal of making Roxas Dustin the standard of caring, treating China's security and innovation. I will now turn the call over to our CFO, Juan Graham, for the financial update.
This study is the number one branded treatment for anemia of Seagate in China for the past 12 months Ashish.
She even our value share of 36% in the most recent quarter within that segment.
That includes all the all Esa products and Brooks reduced are currently the only heat BHI.
Yeah.
We look forward to keeping you updated as we advance our long term goal of making rocket boost and the standard of care in treating China's to give you any met patients I will now turn the call over to our CFO one gram for the financial update one.
Juan Graham: Thank you, Enrique. While 2021 was a difficult year due to the serial outcome, I'm inspired by the positive energy and resilience of our team. I'm optimistic about the progress made in our Pemreblumab phase 3 clinical trial recruitment and about the potential opportunity Pemreblumab represents for patients suffering from diseases such as idiopathic pulmonary fibrosis, locally advanced pancreatic cancer, and Duchenne muscular dystrophy. In addition to providing patients with a therapeutic option in these diseases, Femrevlimab also presents a very attractive commercial opportunity for
Thank you Enrique.
While 2021 was a difficult year due to this euro outcome I'm inspired by the positive energy and resilience of our team.
I'm optimistic about the progress made on our <unk> phase III clinical trial recruitment and about the potential opportunity from wherever the mab represent for patients suffering from diseases, such as idiopathic pulmonary fibrosis locally advanced pancreatic cancer and Duchenne muscular dystrophy.
In addition to providing patients with a therapeutic option in these diseases from Red Blue map also presents a very attractive commercial opportunity for fibers.
Juan Graham: I am confident we are well positioned for the future to deliver on our vision to bring innovative medicines to patients and diseases of significant medical importance. Now diving into our financials, as we announced today, full year revenue for 2021 grew by 33.5% to $235.3 million versus $176.3 million in 2020. Total revenue for the fourth quarter was $16.5 million, as compared to $65 million for the same period in 2020. As we go deeper into our revenue performance, and as a reminder, we record four sources of revenue. First...
I am confident we are well positioned for the future to deliver on our vision to bringing innovative medicines to patients and diseases with significant unmet need.
Now diving into our financials as we announced today full year revenue for 2021 grew by 33, 5% to $235 $3 million versus $176 $3 million in 2020.
Total revenue for the fourth quarter was $16 $5 million as compared to $65 million for the same period in 2020.
Juan Graham: Licensed revenue, which is allocated from licensed payments and milestones earned or deemed probably to be earned in the period. Second, Development revenue, which is revenue from development expense reimbursement and revenue from other development activities. [inaudible] Third, net product revenue, which is revenue from sales to the distribution entity jointly owned by AstraZeneca and FibroGen, or JDE, in China, from which we recognize a transfer price as well as our direct sales to distributors.
As we go deeper into our revenue performance and as a reminder, we record four sources of revenue.
Juan Graham: And fourth, drug product revenue, which includes transfer price payments from our collaboration partners for our commercial-grade API or bulk drug product shipments to them. During the fourth quarter, we recorded $10 million in development revenue from our collaboration agreements associated with co-development efforts for Roxadustat. Additionally, during the quarter, we recorded $5.5 million in net product revenue for Roxadusta sales in China.
First license.
License revenue, which is allocated from license payments and milestones earned or Dean probably are being earned in the period.
Second development revenue, which is revenue from development expense reimbursement and revenue from other development activities.
Third net product revenue, which is the revenue from sales to the distribution entity jointly owned by Astrazeneca and fiber Jim or Jason.
In China from which we recognize a transfer price as well as our direct sales to distributors and.
And fourth drug product revenue, which includes transfer price payments from our collaboration partners.
Our commercial grade API or bulk drug product shipments to them.
During the fourth quarter, we recorded $10 million in development revenue from our collaboration agreements associated with co development efforts for <unk>.
During the quarter, we recorded $5 $5 million net product revenue for <unk> sales in China.
Juan Graham: This includes $3.1 million from our sales to the JDE and $2.4 million of direct sales FibroGen made to distributors. It is important to note that, based on the NRDL listing renewal, we have updated our estimates and reflected a cumulative downward adjustment in our revenue in the fourth quarter, providing context for the operating results of our ROXADUSTAT business in China. We begin with Total Rucksaboo's fourth-quarter net sales of $32 million, which includes sales through the J.D.
This includes $3 $1 million from our sales to the J D E and $2 $4 million of direct sales right Virgin made to distributors.
It is important to note that based on the NR D. L listing renewal, we have a beta or estimates and reflected accumulative downward adjustment in our revenue in the fourth quarter.
Providing context for the operating results of our <unk> business in China.
We begin with total works have been stopped fourth quarter net sales of $32 million, which includes sales through the JV to its distributors and fiber Gen China direct sales to our distributors.
Juan Graham: to its distributors and FibroGen China's direct sales to us. It is important to note that due to the NRL listing renewal, fourth quarter total RuxaDust.net sales reflect a one-time inventory revaluation adjustment. Despite this adjustment, total RUC seduced net sales grew by 10% compared to $29.2 million for the fourth quarter of 2020. Focusing on FibroGen sales to the JDE, as we have previously disclosed, starting the first quarter of 2021, the JDE began selling Roxadusta to distributors and paying for AstraZeneca's commercialization efforts in China and AstraZeneca's portion of the profit share. Previously, FibroGen was responsible for these items.
It is important to note that due to the NRL listing renewal fourth quarter total <unk> net sales reflect the one time inventory revaluation adjustment.
Despite this adjustment total rux induced at.
Net sales grew by 10% compared to $29 $2 million for the fourth quarter in 2020.
Focusing on fiber gym sales to the J D.
We have previously disclosed.
<unk> the first quarter of 2021, J D E began selling <unk> to distributors and paying for Astrazeneca commercialization efforts in China, and Astrazeneca portion of the profit share <unk>.
Previously fiber Gen was responsible for these items.
Juan Graham: As per this agreement with AstraZeneca, FibroGen recorded a net transfer price from sales to JD, which was $12.2 million for the fourth quarter. As we have previously guided, this net transfer price lies within the 30-45% range of the JDE's Roxadusta net sales to its distributors. Of this net transfer price, $9.1 million is deferred and will be recognized in future periods.
As per this agreement with Astrazeneca cyber Gen recorded a net transfer price from sales to the J D, which was $12 2 million for the fourth quarter.
As we have previously guided this net transfer price lies within the 30% to 45% range of the J D.
<unk> net sales to its distributors.
From this net transfer price $9.1 million is deferred and will be recognized in future periods.
Juan Graham: After this deferral, FibroGen recorded $3.1 million in net revenue for the quarter from Roxaduce that sales to the JDE. We continue to be encouraged by the growth of our China operations and we expect continued strong market penetration with our renewed NRDL contract in 2022 and beyond. For the quarter, we did not have licensed revenue, and direct product revenue was not significant.
After the Pearl fiber Gen recorded $3 $1 million of net revenue for the quarter for <unk> sales to the J D.
We continue to be encouraged by the growth of our China operations, and we expect continued strong market penetration with our renewed and our deal contract.
2022 and beyond.
For the quarter, we did not have license revenue and drug product revenue was not significant.
As we wrap up with revenue, providing more texture to the fourth quarter revenue by variance versus 2020, the major drivers in order of magnitude par.
Juan Graham: As we wrap up with revenue, providing more texture to the 4th quarter revenue variant versus 2020, the major drivers, in order of magnitude, are: 1. Lower product revenue in China due to the change from FibroGen's direct sales-to-distributor model transitioning to FibroGen's sales-to-the-joint-distribution entity, which represents nearly 50% of the change. 2. Lower license revenue due to a one-time milestone payment in the prior year period, representing roughly 30% of the change. And 3.
One lower product revenue in China due to the change from fiber Jim's direct sales to distributor model transitioning to fiber Gen sales to the joint distribution entity, which represents nearly 50% of the change.
Two lower license revenue due to a onetime milestone payment in the prior year period, representing roughly 30% of the change and three lower development revenue due to substantial completion of phase III trials for <unk>.
Juan Graham: Lower development revenue due to the substantial completion of Phase III trials for RUX-A-DU-STEP. Now moving down to the income statement, during the fourth quarter, operating costs and expenses were $151.8 million, compared to $123 million a year ago.
Now moving down to the income statement during the fourth quarter operating costs and expenses were $151.8 million compared.
Compared to $123 million a year ago.
The primary drivers of the change our R&D costs, driven by an increase in phase III clinical trials, including drug supply costs associated with our <unk> programs and the hi Fi by your license.
Juan Graham: Primary drivers of the change are R&D costs, driven by an increase in phase three clinical trials, including drug supply costs associated with our Pembrelimab programs and the HiFiBioLite. During the fourth quarter, our net loss was $134.1 million, or $1.45 net loss for both basic and diluted shares, as compared to a net loss of $58.6 million, or $0.64 per basic and diluted shares for the fourth quarter last year At December 31, we reported $590.4 million in cash, cash equivalents, investments, and accounts receivable.
During the fourth quarter net loss was $134.1 million or $1 45, net loss per both basic and diluted shares as compared to net loss of $58 $6 million or <unk> 64 per basic and diluted shares for the fourth quarter last year.
At December 31, we reported $594 million in cash cash equivalents investments and accounts receivable.
Juan Graham: As we look forward, we estimate our 2022 ending cash, ending balance of cash, cash equivalents, investments, and accounts receivable to be in the range of $270 to $300 million. While we are appropriately financed, we are privileged with a wide array of options to consider as we continue to evaluate opportunities that would lead to strengthening our cash position and our balance sheet. Thank you, and I would like to turn the call back over to Enrique.
As we look forward, we estimate our 'twenty two any two ending cash ending balance of cash cash equivalents investments and accounts receivable to be in the range of $270 million to $300 million.
While we are appropriately finance, we are privileged with a wide array of options to consider as we continue to evaluate opportunities that would lead to strengthening our cash position and our balance sheet.
Thank you and I would like to turn the call back over to Enrique.
In closing.
Juan Graham: In closing... We remain committed to advancing Vandrelumab as a potential first-in-class medicine. Phase III development in three indications. [inaudible] significant unmet medical needs, videopathic pulmonary fibrosis, locally advanced and resectable pancreatic cancer, and the sheathed musculoskeletal... Roxette Duster continues to perform very well in China.
We remain committed to advancing umbrella as a potential first in class medicine.
Phase III developing three indications with significant unmet medical need idiopathic pulmonary fibrosis locally advanced unresectable pancreatic cancer and Duchenne muscular dystrophy.
<unk> continues to perform very well in China.
Our partner Astellas.
Enrique Conterno: Arne Astela, [inaudible] Moving forward with the commercialization of Roxas Duster in Europe. We have multiple regulatory submissions under review in other geographies, and a partner, AstraZeneca, are in discussions to determine next steps. As shown on Slide 12, we continue to have a strong financial position with approximately 590 million dollars in cash and expect to have 200 to 300 million dollars in cash in 2022. Additionally, we have multiple options to consider to further strengthen our balance sheet and cash position to ensure our long-term success.
Moving forward with commercialization of <unk> in Europe .
And we have multiple regulatory submissions and the reviewing other geographies.
<unk>.
And our partner Astrazeneca are in discussions to determine next steps in the U S.
As shown on slide 12, we continue to have a strong financial position with approximately 590 million in cash and expect when 2022 with $200 million to $300 million in cash.
Additionally, we have multiple options to consider to further strengthen.
Our balance sheet and cash position to ensure long term success.
Operator: Now, I would like to turn the call back to the operator for questions. Thank you. As a reminder, to ask a question, you'll need to press star one on your telephone. To withdraw your question, press the pound key.
Now I would like to turn the call back to the operator for questions Justin.
Thank you.
As a reminder to ask a question you will need to press star one on your telephone so Joel your question press the pound key please standby we compile the Q&A roster.
Operator: Please stand by. We have compiled a Q&A roster, and our first question comes from Michael Yee from Jeffries. Your line is now open. Hi, this is Sergeant 1-4 Mike Yee.
And our first question comes from Michael Yee from Jefferies. Your line is now open.
Hi, this is schedule for Mikey.
Michael Yee: Thanks for taking my question. So, I have two from here. So, first one is, how are you thinking about the plans for ROCSA in the United States? And do you have a timeline in mind for the next steps? And could you also give some color on the potential scenarios for future regulatory processes down the road? And maybe comment on the value proposition in the U.S. as well.
Thanks for taking my question, So I guess two from.
Two from.
So first one is how are you thinking about the plans for <unk>.
Rucksack in the United States and do you have a timeline in mind for the next steps and could you also give some color on the potential scenarios for future regulatory process.
On the road and maybe comment on the value proposition in the U S as well and second one could you also comment a rucksack in China.
Enrique Conterno: And second one, could you also comment on ROCSA in China, especially on recent price adjustments from NRDL, appreciating that's something that may occur every two years. So, wondering if you could comment on your strategy to drive more Chinese sales against contract pricing headwinds. And also, please comment on the patent situation expectations. And how should we think about the tail value of ROCSA in China?
Especially our.
Recent price adjustments from L. D. L. Appreciating that's something that may occur every two years. So wondering if you could comment on your strategy to drive more China sales to charter pricing headwinds and also please comment on the patent situation expectations. Please and how should we think about.
The tail value of rucksack in China. Thank you.
Very good. Thank you for your questions I'm going to first ask Mark Eisner.
Enrique Conterno: Thank you. Very good. Thank you for your questions. I'm going to first ask Mark Eisner to comment on the first question about... The U.S. and potential scenarios. Thanks for the question, Michael. It's Mark Eisner here.
To comment on the first question about the.
The U S.
Potential scenarios there.
Mark Eisner: So in terms of CKD in the U.S., we're continuing to work with our partner, AstraZeneca, and the FDA. Those discussions are ongoing, and we're continuing to evaluate our options there. In terms of timelines on that, we should be able to provide more information in the upcoming- In terms of regulatory down the road, I think I answered that one. I'll turn back to Enrique.
Yes, Thanks for the question Michael Smart guys in here so.
In terms of CK D. In the U S. We're continuing to work with our partner Astrazeneca and the FDA are those discussions are ongoing.
And we're continuing to evaluate our options there.
In terms of timelines on that.
We should be able to provide more information.
In the upcoming weeks.
<unk>.
In terms of regulation regulatory down the road I think I answered that one so I'll turn it back to Enrique.
Chris maybe you can provide a little bit about a little bit of color when it comes to China.
Enrique Conterno: Chris, maybe you can provide a little bit of color when it comes to China, including anything, you know, how we're thinking about volume growth and what we are doing to counteract some of the price decrease with the NRDL price, the new price, and then also how to provide some color also on market exclusivity. Absolutely, Enrique.
Including anything do you know how are we thinking about volume growth and what are what are what are we doing to.
Counteract some of the price decrease.
And our deal price.
No price.
And then also how.
Some color also on market exclusivity.
Chris Chung: So, as expected, the NRDR pricing happened every 24 months, so this was certainly not unexpected. And the range of price cuts was also not unexpected, so the company and Roxidus debt had plans in place to really address the price cuts with an extension of the duration of treatment. And the lower out-of-pocket price, which we left shut to expand the adoption in certain segments of the market, in particular in NDD, where affordability on an out-of-pocket basis might have been challenging for HIF as a class. So, we remained very optimistic about the outlook for 2022. We believe the increase in volume growth would offset the pricing.
Absolutely Enrique.
So a S S as was expected.
RTL pricing happens Jeffrey <unk> said this was certainly not unexpected.
The range of price cuts are also not unexpected so the company inbox deduce that had plans in place to lead.
Really address the price cut with extension of duration of treatment and the lower out of pocket price, how we leverage that to expand the adoption.
<unk> segment of the market in particular in <unk>.
D D, where affordability on the out of pocket basis might've been challenging.
Our hedge asset class. So we remain very optimistic about the outlook for 2022, we believe the increase in ASP and volume.
Volume growth, what offset the pricing and we are expecting top line growth in 2022 above 2021, despite the price cuts.
Chris Chung: And we are expecting top-line growth in 2022 above 2021 despite the NRDR. With respect to the patent situation, patent dates are also known. There are currently a couple of things going on in terms of patent regulation in China. It is still unclear in terms of what the regulations might be with patent term extension, but we are doing some scenario planning, and obviously, there are different parties who are actively discussing with the government in terms of what might make sense to continue to encourage innovation in the People's Republic of China, which is one of their major country strategies.
With respect to the patent situation. The patent dates also are down there.
There are currently a couple of things going on in terms of the patch and regulation in China.
It is still unclear in terms of what the regulations might be with patent term extension, but we are doing some scenario planning and obviously there are different.
Parties, who are actively discussing with the government in terms of what might make sense to continue to encourage innovation in the People's Republic of China, which is one of their major country strategy. So we remain optimistic in terms of what that situation.
Chris Chung: So we remain optimistic in terms of what that situation might be. Thank you, and thank you. And our next question comes from Annabelle Simai from Stiefel. Your line is now open.
Thank you.
Yeah.
And thank you.
And our next question comes from Annabel <unk> from Stifel.
Your line is now open.
Operator: Hi, thanks for taking my question. So, I just had a question about the MDS and the CIA indication. The MDS indication is still ongoing. The CIA, I guess, is still on hold. And so, have you had any further thoughts about the risk-benefit equation for that population? And is it still wholly owned, or is it something that you could potentially monetize down the line?
Hi, Thanks for taking my question.
So just had a question about.
Mds.
Indications.
And yes indication.
It's still ongoing.
Yes.
So have you had any further thoughts about that.
First benefit equation for that population.
Stifel.
Or is it something that you could potentially monetize down the line.
Annabelle Simai: And then, I guess, for Hemrev-Lumab, again, are you considering any licensing of these programs? Are you going to stick with – Paul, owning them seniors. [inaudible] Yep. Very good. Thank you very much, Annabelle. I'm going to ask, once again, Dr. Eisner to comment on MDS and, in particular, C.I.A.
And then.
I guess for.
Again are you.
Any licensing of these programs are you going to stick with.
Hello.
Owning them.
Thanks.
Yes, very good.
Thank you very much Annabel I'm going to ask.
Once again, our doctor Eisner to comment on.
Enrique Conterno: and in particular to the benefit-risk profile. Sure, so as you know, the study OA2, the MDS trial, is ongoing. We've communicated that we should have top-line results in the second half of this year, first half of next. We feel very excited about the potential there.
M D S and in particular, our CIA in particular.
But if it.
Profile sure. So so as you know the steady away to the Mds trial is ongoing.
<unk> communicated that we should have topline results.
Second half of this year first half of next.
Mark Eisner: We believe ROC reduced could be a very, very efficacious therapy, but that's why we're doing the phase three trial to evaluate that. In terms of TIA, we announced our Phase 2 completion not long ago. In terms of Phase 3 planning, those discussions were ongoing with our partner AstraZeneca in the U.S. and with our partner Astellas for Europe and their territories. I think you also asked, Annabelle, whether MDS was... Julio, or whether MDS is part of the partnership agreement between both AstraZeneca and Estela.
We feel very excited about the potential there.
We believe <unk> could be a very a.
Very efficacious therapy, but that's why we're doing the phase III trial to evaluate that and provide a more comprehensive assessment of the benefit risk in terms of CIA we announced start.
Phase two <unk>.
Completion, not long ago in terms of phase III planning that those discussions are ongoing with our partner Astrazeneca in the U S and with our partner Astellas.
For Europe in their territories.
I think you also asked on a bell weather M D S. Wes.
Julio.
Mds is part of the partnership agreements with both Astrazeneca and Astellas.
Mark Eisner: In terms of PAM, I think, as we have shared in the past, we do intend to launch PAMbreluMap in the U.S. as FibroGen, and we are considering partnering outside of the U.S., outside of Canada, and thank you. And our next question comes from Alex Ramsey from William Blair. Your line is now open. Hello, this is Alex on behalf of Andy.
In terms of Pam I think as we shared in the past, we do intend to launch <unk> in the U S. S five region.
And we are considering partnering outside of the U S outside of Canada.
Thank you.
And thank you.
And our next question comes from Alex Ramsey from William Blair. Your line is now open.
Hello, This is Alex on for Andy.
Operator: I just had one question. In the 10k, the company disclosed that it had received an SEC subpoena. I was just wondering if you could elaborate on that and give us a sense of procedurally how these inquiries will go. Yeah, we've received a request for documents from the SEC. There's not much that we can say at this point in time other than we are collaborating with the SEC, and at the appropriate time, we will basically update investors as we know more. Okay, great. Thanks so much, and thank you. And our next question comes from Jason Gerberry from Bank of America. Your line is now open. Hey, this is Perry on the line for Jason.
Glenn a question in the 10-K the company disclosed that it has received an FCC subpoena I was just wondering if you can elaborate on that and give us a sense of procedurally, how these inquiries hotel.
Yes, we've.
<unk> received a request for documents.
From the FCC, there's not much that we can say at this.
Point in time other than we're collaborating with the SEC and at the appropriate time, we will basically update investors as we know more.
Okay, great. Thanks, so much.
And thank you.
And our next question comes from Jason <unk> from Bank of America.
Your line is now open.
Hey, this is Perry on the line for Jason Thanks for taking our questions.
Operator: Thanks for taking the questions. First, I have a question about the CKB category expansion with ESA and HIFS in China. The current split is around, looks like it's around 70-30.
First of all the question about the <unk>.
<unk> category expansion with the Esa and.
Hits in China.
Current split is around it looks like it's around 70 30, how do you expect this to evolve over time do you expect it to.
Perry: How do you expect this to evolve over time? Are you expected to, you know, more become, you know, improve towards a 50-50 split? And do you expect that to happen as a result of category expansion overall, or do you expect ROCs to start eroding away at ESA directly based on clinical profile? And then just one other question on the LAPI study and the pancreatic cancer indication for PAMREV. Can you talk about the potential for an accelerated pathway submission post the EF event-free survival readout? Is there kind of a benchmark that you have to hit to really justify an accelerated pathway submission? Just want to get your thought process on that.
You know more to come.
Improved towards a 50 50 split or and.
Do you expect that to happen as a result of category expansion overall or do you expect <unk> to start eroding away at Esa.
Directly based on clinical profile.
And then just one other question on the on the LAPIS study in the Pan.
Pancreatic cancer indication catamaran.
Can you talk about the potential for accelerated pathway submission poach them.
Event free survival.
Readout is.
Is there kind of a benchmark that you have to hit to really justify an accelerated pathway submission.
I just wanted to get your thought process on that thanks.
Pretty good. Thank you for the questions I'm going to ask Sane and Chris to comment on the question about the category expansion in China.
Enrique Conterno: Thanks. Very good. No, thank you for the questions. I'm going to ask Thane and Chris to comment on the question about the category expansion in China and the split between ESAS and Roxadust and HPHIs and what we expect in the future. And then, Mark, if you could offer some color on LAPIS and event-free survival. So, what are we thinking? Should I start?
And the split between he says.
<unk>, what we expect in the future and then.
If you could offer.
Your.
Some color on LAPIS event free survival.
So.
How how are we thinking about that.
Should I start sure sustained I will start to increase.
Thane Wettig: Sure. So Thane, I will start, and please add. So first of all, if we ask ourselves, why is there a category expansion?
So first of all if we ask ourselves why is there a category expansion.
Chris Chung: The main idea here is that we believe the ISA market in China is not equivalent to the anemia and CKD market. The CKD anemia market is underpenetrated because of some of the constraints of ESA, because of its safety profile, the fact that it's an injectable, and many other constraints, you know, such as the need for intravenous ion to address inflammation. So the fact that we see Categoric Spanetrant is direct evidence of the differentiation of the hip cloth.
The main idea behind here is we believe the eastern market in China is not equivalent to the anemia in TKD market.
D C.
TKD anemia market with Underpenetrated because of some of the constraints of Easter because of the safety profile. The fact that is an injectable and many other constraints such as the need for intravenous iron to address inflammation.
The fact that we see category expansion is a direct evidence of the differentiation of the hip class.
Chris Chung: So, if you ask yourself, will the hip-class eventually take over 100% of the east of class? The question would be one price. And second, what are the subsegments of the population where ESA continues to be sufficient? And what is the equation of price versus value?
So if you ask yourself well the hip class eventually take over 100% of the Isa class. The question would be one price and second what are the sub segments of the population where he said continues to be sufficient and what is the equation of price versus value.
Chris Chung: So in terms of a terminal number, I personally expect the HIF class to continue to help grow the category and increase the share of that category. It's hard for me to guess what the terminal value would be, but I think there's significant differentiation between the HIF class in non-dialysis because of the oral nature and the fact that we could reach target without a routine chronic supplementation of iron for that home-based population.
In terms of a terminal number I personally expect the his class to continue to help grow the category and increase the share of that category. It's hard for me to guess, what the terminal value would be but I think theres significant differentiation of the hip class in non dialysis, because just the oral nature and the fact that.
We click reached target without.
Routine chronic supplementation of iron ore that Homebase population.
Dane.
Yes, Thanks, Chris just a couple of additional points to make if we take a look at the 12 months ending in 2021 versus the 12 months ending in 2020.
Chris Chung: Thane, Yeah, thanks, Chris. Just a couple of additional points to make. You know, if we take a look at the 12 months ending in 2021 versus the 12 months ending in 2020, Roxas-Dustat drove a substantial portion of the category growth. I think its portion of that was over 75%.
Thane Wettig: And so we would expect that to continue. It will continue based upon the positive experiences from clinicians and patients. And then what Chris referred to as well in terms of the renewal of Roxas-Dustat on the NRDL and greater affordability from a patient pocket perspective. And so we do anticipate Roxas-Dustat to continue to capture a majority of that category growth. The final point is that we believe that the NDD category is largely untapped, while the dialysis segment is very well defined.
<unk> reduced debt drove the substantial portion of the category growth in the <unk> portion of that was over 75% and so we would expect that to continue it will continue based upon the positive experience from clinicians and patients and then Chris referred to as well in terms of the renewal of Russia just to add on the.
In our GL and greater affordability from a patient.
Perspective, and so we do anticipate <unk> to continue to capture a majority of that category growth.
Yes.
The final point is is that we believe that the <unk> category is largely untapped.
The dialysis segment is very well defined 90% plus patients who are in dialysis are receiving treatment for their anemia associated with their chronic kidney disease, but there's still substantial opportunity that remains in the NPD category and when we think that the value proposition for <unk>.
Thane Wettig: Ninety percent plus patients who are in dialysis are receiving treatment for their anemia associated with their chronic kidney disease, but there is still substantial opportunity that remains in the NDD category. And we think that the value proposition for ROC2STAT will continue to be tailored-made for more and more patients being treated for their anemia in that NDD population. Thank you, Thane, and Mark; maybe you can now address the LAPIS EFS. Sure. So just to remind everybody, we are planning an interim analysis based on event-free survival, which is comprised of resection, lack of progression locally or distantly of disease, and freedom from mortality or survival.
We will continue to be tailor made for more and more patients being treated for their anemia and that <unk> population.
Thank you Zane and Mark maybe you can address that lumpy.
Yes.
A question sure. So just to remind everybody. We are planning an interim analysis based on event free survival, which is comprised of resection locker.
Progression locally or distantly of disease, and our freedom from a mortality of survival based on the interim analysis, we do have a predefined threshold for.
Thane Wettig: You know, based on the interim analysis, we do have a predefined threshold for efficacy that would be utilized to decide whether or not there's potential to file an accelerated approval, file a BLA for an accelerated approval, and that would be a decision made after FDA feedback as well.
Efficacy that would be utilized to decide whether or not there is potential to followed et cetera accelerated approval, followed BLA for an accelerated approval and that would be a decision made after FDA feedback as well. So theres a number of stops. There then we would take to make that.
Mark Eisner: So there are a number of steps there that we would take to make that decision. Very good, thank you. Thank you. Hey, and thank you.
Precision.
Very good thank you.
Thank you.
Operator: And I'm showing no further questions. I would now like to turn the call back over to you. You know, we go to turn out. We're making closing remarks. Very good. Now, thank you very much for everyone's participation in today's investor call and your interest in FibroGen. Enjoy very much the rest of your day. Bye-bye. This concludes today's conference call. Thank you for participating. You may now disconnect.
And thank you.
I am showing no further questions I would now like to turn the call back over to Rick Hill can turn out.
For closing remarks.
Very good. Thank you very much for everyone's participation in today's investor call and your interest.
In fact, Virgin enjoy very much of the rest of your day Bye bye.
This concludes today's conference call. Thank you for participating you may now disconnect.
Yeah.
Okay.
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