Q3 2022 FibroGen Inc Earnings Call
Thank you Gerald.
To everyone.
Right.
Good day, and thank you for standing by welcome to <unk> third quarter.
2022 earnings 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 will need to press star one one on your telephone.
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I'd like to hand, the conference over today's Speaker, Michael <unk>, Vice President of corporate strategy and Investor Relations Difficultly for us.
Thank you Darryl and good afternoon, everyone I'm, Michael talk Vice President of corporate strategy and Investor Relations at fibers.
Joining me on todays call are Richard <unk>, Our Chief Executive Officer, Dr. Mark Eisele, our Chief Medical Officer, One Graham our Chief Financial Officer, Dr. John Hunter, Our Chief Scientific Officer, Phil <unk>, Our Chief commercial Officer, and Chris Chung, Our senior Vice President of China operations.
The format for today's call with prepared remarks from Enrique one after which we will open the call for Q&A.
I would like to remind you that remarks made on today's call include forward looking statements about pathogen 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 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.
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 beverages as filings with the SEC, including our most recent Form 10-K and Form 10-Q.
<unk> does not undertake any obligation to update publicly any forward looking statements, whether as a result of new information future events or otherwise.
Yes release reporting our financial results and business update and a webcast of today's conference call can be found on the investors section of <unk> website at www dot poverty in dot com and with that I would like to turn the call over to Enrique Conterno, our CEO Enrique.
Thank you, Mike and good afternoon, everyone and welcome to our third quarter 2022 earnings call.
On today's call I will provide a high level summary of the most important accomplishments and developments in the third quarter of 2022.
Kwan Graham our CFO will then review the financials.
After which we will open the call for your questions.
Starting with slide three.
Today, we announced a royalty monetization transaction with another question.
Capital management security and $50 million of additional non dilutive capital strengthening our balance sheet.
We will use the additional proceeds to continue to support our strategic priorities advancing our late stage development programs, where we anticipate top line data from seven pivotal phase III studies, beginning in the first half of 2023 through.
Mid 2024.
<unk> from umbrella map on to from <unk>.
As well as progressing our early stage pipeline.
You can read more about this transaction in our press release published earlier today.
Moving to slide four.
Hybrid into position to create significant value for patients and shareholders by executing on our three areas of focus number one delivering pivotal phase III umbrella of our data in three indications with significant unmet medical need idiopathic pulmonary fibrosis or IPF.
<unk> muscular dystrophy or DMD.
And locally advanced Unresectable pancreatic cancer or <unk>.
Number two ensuring the commercial success of <unk> in patients with chronic kidney disease outside the U S as well as delivering phase III data and Miller Dysplastic syndrome.
Mds and chemo therapy induced anemia or CIA.
Number three increasing our research productivity.
To advance novel programs that leverage internal expertise and access.
Journal innovation for additional pipeline opportunities.
Let's move to our clinical trials on slide five.
Throughout 2022, we have made significant progress in enrolling our phase III studies, it's very exciting to be anticipating data readouts from seven pivotal phase III trials, starting in the first half of 2023 through mid 2024, let's begin with Pan bread roadmap.
Data from the Atlantis, one our phase III trial of umbrella might be non ambulatory patients with DMD is expected in the first half of <unk> III.
The <unk>, one phase III trial of <unk> in patients with IPF.
As expected to readout in mid 2023.
Data from our Atlanta stood trial umbrella in ambulatory patients is expected in the second half of 2023.
Our LAPIS phase III study of umbrella about being locally advanced pancreatic cancer patients who are expected to readout in the first half of 2024.
And finally, we are pleased to announce today that our <unk> phase III trial of umbrella.
Patients with IPF is expected to report out mid 2024.
Moving to the <unk> program, we anticipate readouts from the Matterhorn phase III trial of <unk> in patients with anemia of Mila Dysplastic syndrome.
In the first half of 2023.
And data from our China Phase III study of <unk> study in patients with chemotherapy induced anemia.
I expect that in mid 2023.
2023 will be a transformational year for <unk> and.
And look we look forward to sharing the results of these studies.
I would like to extend my gratitude to the patients caregivers and investigators as well as my <unk> colleagues for their commitment to these studies.
I'd now like to spend a few minutes highlighting our perspective on the significant potential commercial opportunity, we see with <unk> or <unk>.
Early on monoclonal antibody program in each of the three disease areas on slide six beginning with IPF.
With a diagnosed prevalence of approximately 330000 patients.
Across the U S EU, China and Japan.
<unk> represents a significant opportunity we did two approved IPF therapies generating almost $4 billion net revenue in 2021.
Important to note 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.
We believe umbrella has that potential.
To help us sizable number of patients with IPF.
And we are very relevant medicine for patients.
In the Middle column, you can see that DMD opportunity.
Given the devastating nature of DMD and the relentless progression of the disease.
We're hopeful.
<unk> phase III program can lead to an approved therapy that is desperately needed by the DMD community.
While the current approved exon skipping therapies produce an increase in dystrophin levels.
<unk> targeted a small proportion of DMD patients.
I have yet to demonstrate a meaningful clinical improvements and symptoms or disease progression.
There is a.
A clear need for therapies that can estimate disease progression by targeting the downstream pathological changes to improve muscle function and prolonged ambulation.
We believe the anti fibrotic mechanism umbrella, maybe a solution that can help these patients.
And finally in the third column, we wrap up with a snapshot of the locally advanced pancreatic cancer opportunity.
Im clarity cancer represents one of the largest unmet needs in oncology.
Even the diagnosed prevalence of over 90000 patients across the major regions combined with that with a low five year.
This is free survival rate of around 10%.
There have been limited treatment advances in the non metastatic setting.
Over the last two decades.
With immuno oncology therapies, failing to demonstrate survival benefits over the current standard of care.
There is also limited at this stage of development activity.
In non metastatic pancreatic cancer, which.
Which creates a meaningful.
Commercial opportunity for Ambarella map in APC.
<unk> demonstrated a significant improvement in overall survival.
In addition, the pancreatic cancer action networks precision promise adaptive trial platform evaluating umbrella in combination with standard of care for patients with metastatic pancreatic cancer continuous to progress.
Now, let's move to <unk> on slide seven.
We.
The ongoing clinical trials for the treatment of anemia in <unk> syndrome, or Mds in the U S and Europe .
And for the treatment of patients with chemotherapy induced anemia or CIA in China.
Brooks do set is approved in China, Europe , Japan, and numerous other countries for the treatment of anemia in chronic kidney disease patients.
Our European commercial activity will do studies accelerating as he was recently launched in the United Kingdom, Germany.
The Netherlands, and the Nordic countries with further launches expected in the major EU markets over the coming two months over the coming months.
We believe the anemia of seeking the opportunity in Europe is significant.
Initial uptake has been slower than expected, whereas the.
<unk> has launched the early feedback from healthcare providers prescribing at Bristow has been quite positive.
And moving to China, and Brexit Duster continues its strong performance and as you can see on slide eight.
We are reporting third quarter total looks at least in net sales in China $59 million by five Virgin under joined distribution entity.
Compared to $57 8 million in the third quarter of 2021.
These represent an increase of 2% in U S dollars.
Despite the price reduction to the NR Dl renegotiation.
The impact of currency.
This growth was driven by an increase in volume of over 80%.
We continue to expect <unk> growth for the full year 2022 in China, driven by significant growth in volume.
However, just a portion of <unk> net product revenue in China was $17 4 million for the third quarter.
On a U S GAAP basis Kuan will elaborate further in the <unk>.
Finance update.
Turning now to the updated external market data on slide nine.
Brookside Vista continues to be the number one branded treatment for anemia, CEB as measured by value share in the category, which includes all aesop products on Brexit boosters.
We expect this category leadership to continue <unk> volume continues to grow at a fast space.
Next.
Slide 10.
It's a snapshot of Brooks at this stage unit growth as index to December 2020 on the chart on the left.
As well as year over year growth in the table on the right.
Of note is the significant unit growth of rocks at those steps were the leading Esa branded slightly up.
Reflecting.
The anemia <unk> market expansion that has been driven by <unk> since its original and our listing in 2020.
I will now turn the call over to our CFO Kwan Graham for the financial update.
Thank you Enrique.
Before jumping into the financial remarks, I would like to begin by thanking our colleagues in the United States and China for their leadership focus and executing on our strategic priorities.
We have communicated we're fully enrolled in five of our seven phase III <unk> trials.
With pivotal Readouts, starting in the first half of 2023.
Today, we have also announced a royalty monetization transaction with no request capital management, which will further strengthen our balance sheet to continue supporting our strategic priorities now.
Now getting into our financial results total revenue for the quarter was $15 7 million compared to $156 million for the same period in 2021.
It is important to note the main drivers of change versus the third quarter of 2021, which are one a $120 million milestone payment in the last year period from our partner Astellas related to the European Commission approval for <unk> for the treatment of adult patients with symptomatic anemia associated.
With <unk> and two a decrease of $24 $1 million in co development revenue from our partners due to substantial completion of <unk> development.
Breakdown of revenue sources is as follows.
We recorded $17 $4 million net product revenue for <unk> sales in China compared to $13 4 million in the third quarter of 2021.
Which represents a 29% increase quarter over quarter.
During the quarter. We also recorded development revenue of $2 million associated with co development efforts for <unk> with our partners as compared to $26 1 million during the third quarter of 2021.
Given the stage of <unk> development and as anticipated and previously communicated going forward. We expect co development revenue to remain in range to this quarter's results.
Finally, we recorded a reduction of $4 1 million and drug product revenue for <unk> bulk drug or active pharmaceutical ingredients sold to astellas.
This reduction was due to the change in our estimates related to the shipments as per U S. GAAP, primarily driven by the Japanese yen currency depreciation versus the U S dollar.
Now shifting our focus into the operating results for <unk> reduced our business in China.
Total <unk> net sales for them, but joined distribution entity jointly owned by Astrazeneca and fiber, Jim or J D. E was $59 million this quarter compared to $57 8 million in the third quarter of 2021.
This represents an increase of 2% despite the impact of the <unk> price reduction and currency headwinds.
This sales performance is the result of a significant volume increase of over 80% versus third quarter of 2021.
As we have previously communicated.
The growth experienced by our train operations continues to be strong and in line with our expectations of year over year growth in sales.
Moving from <unk> reduced that net sales in China fiber Jensen that transfer price from sales to the JV was $19 5 million for the third quarter consistent with the 30% to 45% range of the <unk> sales, which we have continuously guided.
During this quarter, we deferred $4 $6 million in revenue due to the change in our future estimates for U S. GAAP, primarily driven by unfavorable renminbi currency impact amongst other estimates.
As we have communicated in the past the deferred revenue balance in fibers in China fluctuates based on management estimates of future revenue.
As a result.
Fiber Gen recorded $14 9 million and net revenue for the quarter from <unk> sales to the JV and $2 $4 million of direct or distributor sales from fibers in China.
Now, making our way down the P&L.
Operating costs and expenses were $109 4 million compared to $105 million for the third quarter in 2021.
This increase in operating costs is driven by high.
And drug supply costs associated with our prime revenue my programs offset by lower clinical trial expenses and overall cost management efforts and our infrastructure despite inflationary pressures.
Diving in deeper into our expenses R&D continues to be our focus to support future growth with roughly $75 2 million or 69% of our operating expense capital dedicated to research and development.
Of the $75 2 million $53 $6 million was dedicated to Perm Rebeldom App development and CMC activities 12.
$12 $5 million funnel to support our early stage pipeline and the remaining $9 $1 million directed towards <unk> development.
During the third quarter of 2022 net loss was 91 $7 million or 98 net loss per basic and diluted share as compared to a net income of $49 8 million or <unk> 54 per basic and diluted share for the third quarter last year.
On slide 11 of our presentation, we make reference that at September 30, we reported $441 6 million in cash cash equivalents investments and accounts receivable.
Considering today's announcement on the royalty monetization transaction with no request capital management, we estimate our 2022 ending cash balance of cash cash equivalents investments and accounts receivable to be in the range of $380 million to $410 million.
The royalty monetization transaction, along with our focus financial discipline will provide additional strength to our balance sheet further enhancing our cash position to support our organization.
Finally, as we have previously stated we're privileged to be able to consider a variety of options to continue to strengthen our balance sheet.
Thank you and now I would like to turn the call back over to Enrique.
Very good. Thank you Kwon in closing I would like to reiterate our third quarter developments.
Our financing transaction, a royalty monetization transaction, which gives us.
$50 million of non diluted capital further strengthening our balance sheet.
Our commitment to advancing <unk>.
As a potential first in class medicine in phase III development, three indications with significant unmet medical need.
We expect topline data in 2023 from three <unk> pivotal phase III studies like this one.
In non ambulatory patients with DMD set first one in IPF in Atlanta to a number that are in DMD.
Russell just continues to perform very well in China. Our partner Astellas is moving forward with our commercialization of <unk> in Europe with further launches on reimbursement decisions expected in the major EU markers EU markets over the coming months.
We anticipate topline data in 2023 from two <unk> pivotal phase III studies.
<unk> Global Mds trial on one China trial, and CIA, which are expected to readout in the first half of 2023 and meet 2023, respectively.
We continue to have a strong financial position.
With $441 $6 million in cash.
As of December 30, <unk>, 2022, and expect to end the year with $380 million to $410 million in cash.
We continue to have multiple options to consider to further strengthen our balance sheet to ensure long term success and now I would like to turn the call back to the operator for questions.
Thank you at this time, we will definitely question and answer session.
As a reminder to ask a question you will need to press star one on your telephone your name to be announced.
Please stand by while we compile the Q&A roster.
Okay.
Okay.
Our first question.
Comes from Jason <unk>.
<unk> of Bank of America.
Line is now open.
Hey, guys. Thanks for taking my question.
A couple for me just on the IPF opportunity can you speak to what underpins your confidence that you can enroll subjects similar severity to the phase <unk> trial, and specifically one phrase was conducted I think patients were or I'm, sorry, the market, which is kind of seeing the rollout of new standard of care IPF medicine. So I just wanted to get your thoughts on that and then second.
Early.
If successful in that first program I wanted to get your thoughts on running an adjunct trial given that.
Market leader and they are running an adjunctive trial and so how important do you think that that has to do or do you think the Tam Rev. As a monotherapy.
Highly competitive with a program that youre running.
Hello, Thank you Jason for your question I'm going to.
Pass your questions here to Dr. Eisner, yes. Thanks. So your first question about our confidence that we can enroll a patient population although.
IPF patients in the Zephyrus program of.
Sort of range of severity similar to praise yes, we are.
Highly confident I mean, we are enrolling a broad range of patients, including more severe and we expect to have a very generalizable population of patients in this <unk> program and then your second question around the adjunct or combination trial I'm going to start and then I'll turn to my colleague <unk>.
Many of our commercial kind of perspective that he might have but we are certainly looking at lifecycle options.
<unk> is our first trials are positive we will be looking at several options that could be one of them.
Thank you.
We believe our data will be very informative because they actually the mono therapy designed those efforts program will give us a very clean efficacy and safety signal compared to placebo that will really be very highly informative to clinicians. So let me see what same thinks about some of the more market facing potential of your question.
Yeah, Thanks, Mark Hi, Jason.
As we continue to speak with Pulmonologists.
<unk> Mab.
And we highlight the praise data to get the reaction and then speak about our phase III program with <unk>.
Potential label scenarios.
One of the key questions. We asked them is how they perceive perm rebel map either as monotherapy or in combination even if we don't have combination data to be able to share with them and what we consistently hear back is that when they see the perm revenue that profile. They consider the options that they have right now in terms of standard of care.
And if they have somebody who is on <unk> that they believe needs additional efficacy without then the trade off of further issues from a tolerability perspective.
Replay back to us just a natural inclination to add <unk> on top of current standard of care.
And then when we further precedent to say, we don't have any data.
What they then payback for US is hey, as long as I know that you have a strong efficacy profile and I'm confident about the tolerability of your product.
As I understand the mechanism of an anti <unk>.
They didn't understand how that product can go along well bid either OPE ever aspirate and they just have a natural inclination to want to use them together and so unless we have.
Payer restrictions that say you cannot use Pam roper map without ever aspirate.
Then we're pretty confident that physicians will go there and it's not unlike other disease areas, where if you think about hypertension or type two diabetes for many or many other disease areas.
These add on therapies, it's a very common thing for physicians to do was just it's a natural next step for them and we've heard that same thing over and over again as we researched with.
With Pulmonologists in the U S.
Jason just let me add.
One more key point.
Clearly with positive <unk>, one data I think there will be a number of opportunities that will be in front of us we have outlined some of those opportunities here internally.
You described is one of them quite frankly of course, we have.
At the data, but I would not consider that to be deep dub opportunity for us.
So a number of additional parties, including some what im gonna call adjacent indications to IPF, where we believe the product will work so.
Now we have to just wait for the data we are of course highly enthusiastic.
The conviction that we have based on our <unk> results and we look forward to having an incredible 2023.
Thanks, guys.
Yeah.
Okay.
Thank you.
Our next question comes from the line of.
Annabel Sam Eli.
Okay.
From Stifel. Your line is now open.
Hi, This is Jack calling in for Annabel, Thanks for taking our questions.
So think about Tam in IPF right now my understanding is that the trial is enrolling patients who haven't been eligible or who have not tolerated current treatment.
If youre successful in IPF and there is some indication of fibrosis reduction how do you expect that treatment paradigm to shift.
He designed to potentially offer a first lien position before <unk> or after.
And also do you have a sense of the percentage of the population enrolled who are naive to current therapy versus ineligible.
Very good I'm going to have once again.
Doug or Mark Eisner respond to your question, yes. Thanks for your question. So just to clarify in the Zephyrus program. We are enrolling both naive patients and patients who have previously been on standard of care and have discontinued standard of care prior to entry into the trial. So.
The good thing about that is we're going to have a very broad patient population that includes both nave and experienced patients and we would expect a very broad label for the treatment of IPF, reflecting the patient population that we enrolled so we expect also from a clinician point of view.
They will have all the information they need to make good decisions for their patients based on the benefit risk profile of <unk> for IPF.
I think he also asked.
About the percentage.
We haven't really reported those percentages public.
Publicly I mean, they are ongoing trials.
We don't have that data for you right at the moment.
Great. Thanks.
Thank you. Our next question comes from Michael <unk> of Jefferies. Your line is now open.
Hey, guys. Thanks for the questions.
Two questions one following up on a lot of the IPF questions. We wanted to understand.
I'll remind us.
What you designed the phase III powering for in terms of assumptions on drug versus placebo and how that related to what we've seen in phase two.
And the reason I asked that is in part because of the idea that.
You have patients that.
Have either PVC failed or intolerant to the oral <unk>, whereas in the phase two they had never seen it at all and so the idea here is that there are sicker patients as you referred to so I just wanted to triangulate.
The different populations sort of senior and what you've powered it for based on phase two thank you.
Yeah.
Yes, great Great question. So in terms of power I mean, we have.
Powered studies.
Very robustly.
To be able to detect a treatment effect of <unk> versus placebo.
So I think statistical power should be more than adequate for each trial individually first one is our first two and then the other part of your question, it's pretty interesting to us around how would you expect naive versus an experienced patient to perform in a clinical trial.
It's pretty interesting because I think what we're learning from.
Other studies in the placebo group in particular is that.
Patients who are treatment experienced to go into trials continue to progress over the next year much more than you had anticipated based on the labels for <unk>. So they do progress and they actually are good patients to enroll in the trial just as naive patients are and the best theory about why that would be is that.
If you're a patient on <unk> and Youre doing well, even if you discontinue discontinue therapy and you're doing well youre not really going to enrolling the trial patients were enrolling trials are patients who.
We are continuing to progress typically.
<unk> from the disease, so they actually perform.
They actually progress on trial. Despite the fact that had been on standard of care in the past. So I think that whether they are naive or experienced we expect those patients to progress on the trial and the placebo group, thereby providing us the opportunity with <unk> to show a treatment benefit.
Thank you for that to be interpreted and both the faster placebo, which could be a good thing or all sorts of some more difficult population in general but yes.
Second question.
A follow up as it relates to the combinations that you have made some nice comments about combination therapy, which I think is attractive, particularly if it works and I do recall that previously there was a combination study fairly good sized.
I think the safety was positive but there never was any information have already presented can you just sort of remind us your takeaways from that combination study and what you learn from that thank you.
Yes, I think you actually summarized it quite well I mean, it was a very very small number of patients really.
Not not able to draw on the efficacy conclusions, but theres certainly the safety of combining <unk> and the tolerability with <unk> was more than acceptable.
Okay. Thank you guys.
Great.
Okay.
Thank you. Our next question comes from Danielle Brill.
From Raymond James Your line is now open.
Hey, guys. This is Alex on for Danielle Thanks for taking my question.
Just another one on IPF considering the theme I'm, just kind of curious to hear your thoughts on changing the phase III enrollment criteria to include forced vital capacity down to 45% where are you seeing screening failures and needed to expand.
And just kind of curious if there was any post hoc data cut that the phase two.
The efficacy is a function of baseline forced vital capacity.
Just kind of curious that evident the <unk>, we're still working in these low baseline with metal capacity.
It makes you confident that lowering it is not going to harm the trial. Thanks.
Yeah. Good question. So the second question first no there really wasn't there was no post hoc analysis looking at the FCC as a predictor of efficacy and praised for what I can tell you is that question has been thoroughly looked out in both <unk> and <unk> pivotal trials and interestingly.
The lower or higher FTC, greater or less severity does not predict <unk> Africa or has great efficacy in pivotal trials of those agents. So.
We would expect similar in our trial, yes, you're correct, we did lower the FCC from 55% in <unk> to 45% in the Zephyrus program.
That's for a couple of reasons one key one you mentioned, it's really important to reducing screen failures failures in enrolling the trial second point is that not really harmonizes with virtually all of the pivotal phase III programs in IPF that have been conducted in the past and are being conducted now.
And based on my other comments, we don't expect that to have any adverse effect on the trial. If anything we think there are some advantages including the <unk>.
Patients on a slightly more severe end of the spectrum.
<unk>.
Great. Thanks, so much.
Yes.
Yes.
Yes.
Thank you. Our next question comes from the line of Andrew <unk> from.
From William Blair.
Okay.
Congratulations on getting that deal done.
So regarding the deal.
Quick question on <unk>.
On it.
So first is do.
Do we know.
We estimate how much are you getting from Astellas royalty wise per quarter and also related to that will future milestones count within the framework of this.
This steel.
Also we also have a question on IPF. So obviously there is kind of a timing difference between the readout of the two phase II trials are about a year apart.
Company, whether you guys have strategies in terms of either.
We'll probably shrinking the timing is not possible, but then maybe engaging in dialogue earlier just to kind.
Kind of mitigate the difference in time.
Third one is kind of a quick one I noticed in the 10-Q you mentioned about this.
IP in China about the Crystallin of <unk> I'm, just curious if you can comment a little bit further on that in the context of market exclusivity.
So much.
Sure I'm going to have.
One comment on and respond to your questions on the deal Mark on IPF and the timing between the trials and strategy that we could do or.
Actions have been Chris I'm going to give a decrease to discuss our.
Exclusivity position and in particular the <unk>.
Question on the Christina forms.
Hey, Andy how are you this one.
With regards to your question I think.
With regards to the royalty I think the way to think about it more generally would be that we are under the context of the astellas deal.
We're basically entitled to a 20% royalty clearly.
As you have probably been following.
In launch mode in Europe , So it's difficult to talk about numbers at this point in time, but clearly we expect Europe to.
Fully reimbursed in the next couple of months or in the next few months.
And the key territories, there, which will enable obviously growth in revenue and therefore growth in our royalty.
So that's I think the way to think about that piece and I think I don't know if I mentioned, but we're entitled to a 20% royalty from that transaction.
In terms of near term milestones I think there are.
Just sales based milestones.
In the future.
And yes, there would be a portion that would be attributable here as well in this transaction.
So I think those are the two components.
So your question about IPF in the difference between the.
Readouts as efforts one in his efforts to yes. So we've previously communicated and continue to assert that we the base cases will need both suffers one in his efforts to for filing in the U S that said with the positives are first one trial, we would go to FDA if the data are.
Our strong and compelling and discuss with them the potential for filing one one pivotal trial I think there is precedent for that.
In a rare severe diseases like IPF. So base case, two trials, but we do everything possible to discuss with FDA, whether one pivotal trial could surprise for approval.
Okay.
And with respect to market exclusivity.
We have multiple avenues to put capital exclusivity in China patents are of course, one form of exclusivity.
We have a robust portfolio, including competition matter and yes crystalline patents and other.
Patents. So this is just one form of exclusivity, we also have regulatory and administrative exclusivity by virtue of being a domestic class one innovative drug.
With respect to the specific question about the Crystal form pattern. Yes. This is the first round of invalidation hearings.
We had three crystalline pattern. That's how quick available information were invalidated, which is consistent with our expectations as context.
Hi.
During the first round in validation base is 90%.
We now go on to appeal. There are two rounds of appeals through the courts, we expect that to take two to three years to get resolved. So we're still very early on.
Thank you Andy.
Follow up during the.
Process of appeal.
Are all the patents still enforceable just like in the U S.
They are.
They are they remain in effect until the appeal process is concluded.
Got it.
Got it great. Thank you so much.
One moment for our next question.
Thank you. Our next question comes from Paul Choi from Goldman Sachs. Your line is now open.
Okay.
Hi, Thank you and good afternoon, everyone. Thank you for taking our questions I wanted to switch gears, maybe for a moment.
M D.
And I know, you've historically been somewhat cautious with regards to the.
Prospects for the non ambulatory trial.
And in.
In that case that it hits on the upper limb.
Can you, maybe just remind us what the regulatory feedback here has been on the profitability of that particular endpoint.
I think it's a little less well understood relative to the to the ambulatory population and other trucks that have filed for instance.
Endpoints.
Good question, Paul It's Mark.
<unk>.
We believe that.
Positive clinical data for either of Orlando's, one the non ambulatory population or <unk> to the ambulatory population could support.
Tori filing and this is a disease with a very high unmet medical need.
There are really no therapies approved based on clinical endpoints to currently available therapies are.
Approved on.
Just trofim biomarker, so we believe that either.
Trial could support a filing by itself. So that of course would be a discussion we would have to have with the FDA based on the data.
That's our current assessment.
Okay any questions.
Yes, I think he was asking us about <unk>.
Literally directions related to the endpoints.
So right. So FDA has supported both the.
Performance of the upper limb for the non ambulatory population in the North star for the ambulatory population.
Where there is a draft guidance or guidance on DMD endpoints.
Theyre pretty nonspecific, but these are both endpoints that have.
That are supported in the guidance that had been used in other trials. So we're very confident about the endpoints.
Okay. Thanks for that Mark.
Did it also have a financial question for one here appreciate the cash burn guidance for the remainder of the year.
As you look to next year, you, obviously have several late stage trials rolling off and I just wanted to maybe ask you to what's what's the maybe initial thinking on the rate of burn or just how you think about paring down opex on some of these trials come to end stage completion.
Hey.
Thanks, Paul I think as you.
You called out probably a little bit.
You know as we're going through clearly our auto if our financial approach to these planning and so on.
Where we're looking at 2023, and we will come back.
And our subsequent earnings call to provide more visibility, but <unk>.
Clearly theres a lot of activity happening in 2023.
With that with clinical trials as you pointed out you know rolling off now, but potentially as well we would potentially start ramping up for launch.
Depending on the Readouts.
So I think all of those components is what we're currently discussing and we will provide further perspective over the coming months to what 2023 looks like.
As youre going to expect Paul.
Sure.
Our important dynamics here on one side you correctly state we will have lower travel expenses are those some of those trials.
Conclude.
But in some.
Assuming positive trial, we will also have additional expenses related to bringing those products to market.
So we need to think about how to.
So we prepare for.
Yeah.
Next year, we need to be thinking about how we're going to provide that type of cash guidance given some of those dynamics, but.
It's an exciting time, it's an exciting time for fiber and an exciting time for patients to have so many readouts.
Pivotal data coming in 2023.
Yeah.
Okay, great. Thank you for taking our questions.
Yes.
One moment for our next question.
Thank you. Our next question comes from yarn, however from calling.
First can you just remind us what kind of efficacy.
Phase II Whitney studying TIAA and if we might see more of that data. When you report the China study next year.
And then just quickly on the European launch of our reduced debt. When you say, it's been a little bit slower than expected is that mostly a reflection of just kind of negotiations with individual country reimbursement processes.
Or is there really something about the actual clinical or commercial opportunity in Europe .
All contributing because somebody wants dynamic.
Okay.
Thank you for that question I'll have.
Mark.
The chemotherapy induced anemia questions.
Im saying.
The European performance questions.
Sure so.
Phase II <unk> study was an open label study that looked at.
Two doses of <unk>.
What we showed there as we can in fact increase the hemoglobin and improve the anemia, and we selected the $2 five Meg per kg dose to take forward into the.
China Phase III study, which is a head to head study versus DSA excuse me versus Esa.
A non inferiority design and that will read out mid next year.
China is exclusively that study is exclusively aimed at China and the China population in the China market.
And then regarding the <unk>.
<unk> performance to date.
It is still early in the game reimbursement in Germany and through nice in the UK and then awaiting reimbursement decision in France, Italy, and Spain as Juan said in his.
Previous remarks, and as Astellas has guided they expect.
<unk> decisions in those other three markets by the end of their fiscal year, which would be between now and the end of March.
As we have stated in terms of the performance been slower than expected, that's primarily relates to Germany.
It's still early in the UK Nice approval was granted in July hospitals have 90 days to then adopt that nice guidance and so it's still really early in the UK and I think what we're what we're looking at and what we're experiencing is the reality of a standard of care that's been in place for 30 years.
Yes.
The fact that physicians are so used to using <unk>.
It's just been a bit more difficult than anticipated breaking into that standard of care habit.
<unk> said in his remarks.
When physicians have repaid back to Astellas there.
Spirits and using rocks as you said, it's been very favorable and so just as we've seen in China, where the drug has performed phenomenally well theres no doubt about the clinical relevance and the benefits of <unk> relative to an Esa I think it's just going to take a little bit longer to penetrate into that standard of care habit than perhaps we anticipated.
Maybe just to add with recently conducted some.
Market research in a number of European countries.
Looking at the intent to prescribe.
On.
Clearly.
Reimbursement is a huge catalyst but.
The intent of prescribers.
Yeah.
To be really really high so.
We need to get the reimbursement.
Critical catalyst.
But as we look at the future.
Remain.
We continue to remain very.
I'm excited about the overall opportunity <unk> Europe , we think is very significant.
Alright, great. Thanks, guys.
Thank you I would now like to turn it back to you and <unk>.
<unk> Chief Executive Officer.
Well thank you.
Thank everyone for your participation in today's Investor call and your interest in five region.
And I hope you are very much enjoy the rest of your day. Thank you very much.
Thank you for your presentation in today's conference. This does conclude the program and you may now disconnect.
Now disconnect.
Okay.
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
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The conference will begin shortly to raise your hand.
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Okay.