Q3 2022 Omeros Corp Earnings Call
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Good afternoon, and welcome to todays earnings call for <unk> Corporation. At this time all participants are in listen only mode. After the company's remarks, we will conduct a question and answer session. Please be advised that this call is being recorded at the company's request and a replay will be available on the company's website.
For one week from today.
I will turn over the call to Jennifer Williams Investor Relations for warehouse.
Good afternoon, and thank you for joining the call today I'd like to remind you that some of the statements that will.
We made on the call today will be forward looking these statements are based on management's beliefs and expectations as of today, only and are subject to change altra.
All forward looking statements involve risks and uncertainties that could cause the company's actual results to differ materially.
As you refer to the special note regarding forward looking statements in the company's quarterly reports on Form 10-Q, which was filed today with the SEC and the risk factors section of the company's annual report on Form 10-K for a discussion of these risks uncertainties.
Now I would like to turn the call over to Dr. Greg <unk>, Chairman and CEO of bone marrow.
Thank you Jennifer and good afternoon, everyone. We appreciate you joining us for today's call will start with a corporate update and an overview of our third quarter 2022 financial results followed by a more detailed financial summary, John .
Turning me on the call today are Mike Jacobsen, Nordea dock, Cathy Melfi, and Steve Whittaker, our respective had to finance commercial regulatory and clinical.
Let's start with in our supplement have been transplant associated thrombotic microangiopathy or Ta TMA.
We now have the decision from FDA as office of new drugs on our appeal of the complete response letter or CRM.
That we earlier received from the office of cardiology, non malignant hematology endocrinology nephrology.
It proposes a path forward based on historical survival data, specifically that is either proposed.
Resubmission.
<unk> comparing response from our completed pivotal trial to a threshold derived from an independent literature analysis.
And evidence of increase survival from patients in our completed trial compared to an appropriate historical control group.
It also notes that persuasive evidence of superior survival versus a well matched historical control group couldn't be sufficient even in the absence of the independent literature analysis.
Given its very recent receipt.
Working through the details of the decision with our team of regulatory and legal advisors.
We will update our shareholders once we have completed our analysis.
Have determined our preferred path forward.
Elsewhere in our in our supplemental development program, our phase III Artemis <unk> trial evaluating <unk> for the treatment of Iga nephropathy.
It remains on track to read out nine months proteinuria data in mid 2023.
We're in our thoughtful of Mab in acute and long COVID-19 discussions continue with the U S government regarding the preparedness strategy for current and potential future pandemics and upcoming funding pathways and programs.
So these represent multiple opportunities for both the COVID-19 related assays that we are developing as.
As well as for in our supplement as a therapeutic for COVID-19, and potentially other severe in fact their diseases.
In addition to our two recent peer reviewed articles in frontiers in immunology and in the journal of clinical and translational medicine.
We are preparing several manuscripts for publication further detailing the role of mast two and the lectin pathway.
Across COVID-19 in a range of pulmonary diseases.
Turning now to our RMS $10 29. This is our longer acting next generation antibody against mass too.
Were advancing through our single ascending dose phase one clinical trial.
Evaluating our Ams $10 29 in healthy subjects.
Having now completed three.
Six planned cohorts.
The pharmacokinetic and Pharmacodynamic data are right in line with our predictions and.
And the drug has been well tolerated with no safety concerns.
Plan to CMC toxicology and regulatory activities are also on track to enable initiation in mid 2023.
Phase one multiple ascending dose study of RMS $10 29.
Which will then allow rapid progression into a variety of phase II indications currently under evaluation.
We're planning for once monthly two once quarterly subcutaneous or intravenous administration for Oems and <unk>.
Which we expect will make it well suited for chronic indications.
Completing our mast two portfolio. We believe that we are closing in on a lead development candidate for our small molecule <unk> two inhibitor.
Data, indicating whether we have been successful in our goal to identify lead orally available compound.
As expected by year end.
So, let's now discuss the other major component of our complement portfolio.
Oh I'm at nine O six our lead antibody targeting <unk> three.
As we have discussed previously masked or is the key activator of the alternative pathway of complement.
Our phase <unk> program is underway evaluating <unk> 906, and both Ravi Elisa map treated and treatment naive.
Patients.
Enrollment is on track to begin in December .
The initial patient data are expected in the first quarter of 2023.
Another almost 906 phase <unk> program is initiating in patients with C. III Mary Allopathy.
And data here are expected shortly after PSNH data.
The commercial opportunity for alternative pathway inhibitors is well established we expect that <unk> 906 has a good likelihood.
Demonstrating significant advantages over other alternative pathway inhibitors on the market.
Or in development.
These advantages include decreased infection risk and a more convenient dosing profile with subcutaneous or intravenous administration as infrequent.
Once every several months.
Another important advantages that math III does not appear to be an acute phase reactive.
Meaning that unlike other alternative pathway targets the concentration of mask III.
It does not increase in the setting of inflammation.
This could prove to be a major advantage of almost 906 over other alternative pathway inhibitors, whose targets are acute phase reactants.
Those agents carry the risk of inadequate dosing.
During inter current inflammatory diseases or conditions, such as infections are surgery.
Which can lead to the underlying disease breaking through the treatment.
Because masked Korea is thought to be the only alternative pathway target that is not an acute phase reactants.
<unk> 906 dosing can be stable.
Can remain stable.
And as expected not to carry the risk of breakthrough of the underlying disease.
The likely effectiveness all of them.
906 was recently underscored by publicly reported results from our phase III trial, using either <unk> inhibitor combined with attack Capanne a factor B inhibitor.
<unk> has also been reported to successfully treat PSNH and patients not receiving other complement inhibitors.
The results in each population showed marked reduction.
Both intra and extra vascular hemolysis in Pn H.
Overcoming the extra vascular hemolysis caused by <unk> inhibition alone.
Remember that <unk> 906 blocks the conversion of pro factor D to factor D.
Which activates factor B <unk>.
906 alone would be expected to achieve results very similar to that reported by <unk>.
For us either with a C five inhibitor.
Our alone.
We look forward to sharing almost 906 data in both <unk> and <unk> three and <unk> 30.
Soon.
Let's turn now to financial results for the third quarter to understand fully those results I'll provide some important context by revisiting a bit of recent history.
Last December <unk> completed the sale of its commercial product omidria to Rainer surgical.
The transaction with Rainer required us to reclassify, all historical Omidria revenue and expenses.
As discontinued operations.
To record the present value of future estimated omidria royalties.
A contract royalty asset on our balance sheet.
And to record the royalties earned.
As a reduction from the Omidria contract royalty asset.
Our royalty rate for U S. Net sales of Omidria is currently 50%, which equates to nearly 80% of the total operating profit.
Our loss for the current quarter was $17 $5 million or 28 cents per share.
Compared to $22 7 million or <unk> 36 per share in the third quarter of last year.
Our noncash expenses were $4 $6 million or <unk> <unk> per share for the current quarter.
And $6 4 million or <unk> 10 per share for the prior year quarter.
Our total cash burn for the reporting quarter was $26 $6 million of approximately $5 million of which were manufacturing costs.
For the <unk> for the third quarter are 50% royalty on <unk> net sales was $16 5 million.
This was down slightly approximately $700000 from the second quarter.
Due to the timing of wholesaler purchases leading into the July 4th holiday weekend.
<unk> gross to net discounts were consistent with those of the second quarter.
<unk> third quarter unit sell through to the <unk> and hospitals were in fact up.
4% over the second quarter.
Fourth quarter Omidria sales are expected to show continued growth.
As of September 32022, we had $221 million of cash and investments on hand available to support ongoing operations.
This includes the $125 million that we received from <unk> Healthcare Trust in exchange for a relatively small portion of our expected.
<unk> Omidria royalties.
This royalty asset sale closed on September 30.
Under the terms of the agreement <unk> paid solely out of the imagery of royalties we received from Rainer.
The structure of the transaction is very favorable to <unk>.
The potential maximum total royalties payable by <unk> to DIY through the full term.
<unk> 30.
The agreement.
$188 million.
<unk> royalty payments. The DRA are back loaded for example, the maximum royalty payment that could be received by <unk> in 2022 is $1 $7 million rising to only $13 million in 2023.
In fact, DRA does not have the potential to receive in aggregate.
$125 million, which is the amount equal to <unk> upfront payment to us.
Until August of 2028.
Further the royalty amount to be paid by <unk> to the IRI in any given year it's capped.
If royalties paid by Rainer <unk> for any given year are less than that capped royalty amount to which DRA is entitled for that year.
DIY absorbs the shortfall on.
<unk> is not responsible for nor is DRA able to recoup our carryforward.
That shortfall amount to a subsequent year.
So effectively.
We look at this one can think of would be agreement as resetting at the start of every year through the term of 23.
With the royalties to be paid by <unk> to <unk> for that year.
Limited to the capped amount originally specified in the DRA agreement.
And any shortfall.
<unk> payments to DIY during the previous year.
Being forgiven.
In this way the transaction shifts risks from <unk>.
Specifically shifting risk associated with <unk> ability to generate the omidria royalty stream.
For example.
While unlikely to occur.
The risk of lost royalties due to a product recall or the loss of separate payment for Omidria is no longer solely borne by <unk>.
Rather DRA would absorb the loss of any shortfall from the capped royalty as to which they were otherwise entitled.
Concurrent with off loading these risks.
<unk> received the upfront payment of $125 million and will continue to receive all royalties from Rainer and excess of bone marrow cells annual capped payment to <unk>.
Those excess royalties at a near to <unk> are expected to be substantial.
Also to be clear this is an asset sale not alone.
<unk> has no recourse and no security interest in any of our <unk> assets other than annual capped royalties through 2030 as specified in the agreement.
Because <unk> receives only kept royalties and we will not share in any upside in omidria sales growth nor in any milestone payment by Rainer <unk> triggered by achievement of long term separate payment for Omidria.
Our accountants that Ernst and young have advised.
That we record the already received $125 million upfront payment as a liability.
This is consistent with the accounting of nearly all other companies' recent asset sales and Mike will provide additional details on this a little later in our call.
The proceeds of the <unk> transaction and our continued participation in the substantial omidria royalty stream.
Provide us with financial flexibility.
To address the late 2023 maturity of $95 million of our outstanding convertible notes in the manner best suited to market conditions, and our business priorities as they evolve.
We also have a $150 million at the market sales agreement, which for purposes of good housekeeping.
We have just filed two key effective.
The ATM of course has not been used.
Here are a couple of additional pieces of good news on Omidria last week.
Masks are the center for Medicare and Medicaid services released its 2023 final rule for the outpatient prospective payment system.
And that rule CMS reaffirmed omidria qualification for separate payment when used as part of cataract lens replacement surgery, and ambulatory surgery centers or <unk>.
Under CMS is non opioids surgical pain management policy.
CMS reaffirmed this qualification for Omidria.
Leased through 2023.
Also the non opioids prevent addiction in the Nation Act or then no pain Act.
Is making good progress.
With strong buy as part of <unk> and by cameras support that includes Chairpersons and key members of relevant congressional committees.
The Bill now has half the Senate.
118, representatives as sponsors and cosponsors.
Sponsors are optimistic that a vehicle for the mill will be available in the near future.
The no pain act would provide separate payment for non opioid pain management drugs like Omidria and.
In both the ASC and hospital outpatient department settings.
For our renewable five year period.
Passage of the no pain Act would trigger a $200 million milestone payment to <unk> from marine our surgical.
The entirety of this milestone payment wouldn't belong to <unk>.
Because as I mentioned earlier this milestone is excluded from the <unk> transaction.
Let's now wrap up our program update with some of our other pipeline programs are <unk> seven inhibitor program <unk> five to seven.
As the focus of discussions regarding third party funding for continued development in the treatment of addictive disorders.
<unk> is also being evaluated at Emory University in primate models known to be clinically predictive for the treatment of L. Dopa induced dyskinesia.
Although <unk> is the most widely used drug in the treatment of the roughly 10 million patients worldwide with Parkinson's disease.
L. Dopa induced dyskinesia is are the often severe ling severely disabling and voluntary movements caused by L. Dopa in more than 50% of Parkinson's patients develop these dyskinesia is following extended treatment withheld delta.
Preliminary data from Emory are encouraging and.
And we expect final data.
By year end.
If these final.
Findings hold we're considering moving all of them as five to seven which already has successfully completed a phase one clinical program.
A phase II trial in patients with L dopa induced dyskinesia.
That is a disorder with really no good treatment.
And one that represents a substantial unmet need.
We will close the update today on our programs with our immuno oncology efforts in which we are evaluating a number of novel approaches to treat cancers.
These programs have grown out of our work.
From our <unk> program, specifically GTR $1 74.
And our immuno oncology programs, we're advancing research on potential cellular and molecular therapies for.
<unk> cancers.
On the cellular front, we're evaluating novel approaches for both car T and adoptive T cell therapies.
We've identified pathways in T cells that limit their ability to kill specifically.
Tumor cells.
By using inhibitors of these pathways, we've significantly and preferentially enhanced the expansion of T cells that specifically recognize and efficiently kill tumor cells.
An important problem that limits the efficacy of current adoptive T cell therapies is a lack of central memory phenotype.
Hey, phenotype, specifically that sustains a robust immune response.
Against the cancer and is crucial to prevent relapses.
To overcome this issue we've identified inhibitors that work by skewing T cells towards a memory T cell phenotype.
Endowing T cells with better fitness and sustained tumor killing functions.
We continue to develop and validate our novel approach and we believe that it could improve response rates for patients receiving either engineered.
Native T cell therapies for liquid or solid tumors.
On the molecular front, we've developed novel biologics that could specifically target cancer cells and kill them directly or indirectly.
Through potentiation of the immune system.
Preliminary data on this front are also encouraging.
And we will keep you updated as developments arise again, we expect to have updates later this year.
I will turn the call over now to Mike Jacobsen, Our Chief Accounting Officer, who will go through a more detailed discussion of our third quarter financial results as well as more details on the Dr ideal.
Mike Yes, thanks, Craig.
As Greg briefly discussed in December of last year ran a required omidria and associated business operations.
The cell required us to restate, our financial statements for all the prior periods.
Continuing operations and discontinued operations.
This means that for all of 2021 Omidria revenue and operating expenses are shown in a single line on our income statement.
Discontinued operations.
In addition for 'twenty 2022, any amid related activities are also included in discontinued operations.
All of our other activities are included in continuing operations.
We received royalties of 50% of the net sales of Omidria in the U S until the earlier of.
Either January one 2025 or the payment of the $200 million milestone.
The milestones to be paid by Rainer and events in a separate payment is secure for omidria.
Continuous period, but at least four years.
Thereafter, we will receive a 30% royalty on U S. Net sales for the duration of the relevant.
But in terms, which extends to at least 2033.
We will also receive a 15% royalty on any non U S. Net sales were.
Over the life of the.
Relevant patents.
From an overall standpoint, considering U S royalties and a reduction in our operating expenses.
Steve nearly 80% of the U S operating profit when royalties are 50%.
And then over 40% when the royalty is 30%.
Looking are turning to our actual results.
Our net loss for the third quarter was $17 5 million.
28 per share.
This compares to a $38 million loss or <unk> 49 per share for the second quarter of this year.
Our noncash expenses for this quarter were $4 6 million or <unk> <unk> per share.
As of September 32.
2022.
$221 million of cash cash equivalents and short term investments available for.
For our general operations.
This is a $98 million pre.
From June 30 of this year.
Excluding the $125 million received from DIY, our decrease in cash and investments at the end of the second quarter was $26 6 million.
We also have an at the market sales agreement that allows us to sell from time to time up to $150 million of our common stock.
As Greg discussed earlier on September 30, we entered into an agreement on that.
<unk>, whereby we received $125 million upon closing and are obligated to pay up to $188 million out of the monthly royalties on Omidria net sales.
<unk> September one 2022 and December 31 2030.
Monthly as Rainer makes the royalty payments.
<unk> received their predefined portion of the royalty payments.
Which is a prorated monthly portion of the annual royalty cap or the applicable year.
We are titled to any remaining royalties received.
Cri is not entitled under the agreement to Carryforward and later recoup any shortfall in the royalty.
Royalties received on our mantra.
Any annual period.
Or less than the cap amount applicable to that calendar year.
In addition, Cri has no recourse to our assets other than our major royalty receipts.
As required under GAAP, we recorded a $125 million received from Dr. ISO.
A liability on our balance sheet, rather than as a reduction in our omidria contract royalty asset.
As Greg mentioned, despite this being an asset sale without any recourse.
Securitization other than the predefined royalties owed.
Required to book, the $125 million payment as a liability.
The direct result.
<unk> royalty payments being capped.
We will record implied interest expense at nine 4% on the outstanding liability and the implied interest expense will be recorded as a component of continuing operations in our income statement.
The annual amount that DRA is entitled to receive an additional details on the transaction are included in note eight in our quarterly 10-Q filed earlier today.
Cost and expenses from continuing operations for the third quarter were $58 million, which is an increase of $13 $3 million from the second quarter.
The increase was primarily due to commercial <unk> drug substance manufactured in the third quarter.
Which we expensed as research and development costs.
Given that we do not yet have.
<unk> approval for <unk>.
As we finalize our path forward for Ta TMA, we continued gain on our supplement sales and marketing spend.
Well the timing.
The FDA approval of declared.
Interest expense for the third quarter was $5 million and consistent with previous quarter.
Now, let's look at our mineral royalties.
As I mentioned previously royalties earned are recorded as a reduction in the omidria contract royalty asset on our balance sheet.
In the third quarter actual royalties earned from Omidria sales was $16 5 million.
Which was a decrease of 700000 from the second quarter.
The decrease is due to the timing of the wholesaler purchases at the end of the second quarter.
Just one in the fourth of July holiday.
For the third quarter actual Omidria unit sales purchased by the ASC and the hospitals increased 4%.
Over second quarter purchases.
<unk> gross to net discounts.
Consistent.
Discontinued operations include two key components royalty interest income and periodically measurements to the immediate contact royalty asset.
We recorded $37 million of income in discontinued operations in our third quarter income statement recognizing for accounting purposes, the $8 million of interest earned on the immediate contracts, both the asset and $29 million in the remeasurement adjustments to the Madrid contract royalty asset.
Based primarily on the increase in Omidria sales that we're seeing.
Now, let's take a look at our expected fourth quarter results.
We expect overall operating costs from continuing operations in the fourth quarter to decrease from the third quarter of 2022.
That's in our supplement drug substance manufacturing for the year was completed and expense in the third quarter.
Interest expense for the fourth quarter should be approximately $8 million.
This is an increase of $3 million due to the transaction with DRA being accounted Florida to let those.
Income from discontinued operations should be in the $8 million to $9 million range.
With that I'll turn the call back over to Craig.
Alright, Thanks, Mike.
Operator, let's open the call to questions.
Yes.
Thank you.
At this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced.
Please hold one moment for the first question.
Okay.
Okay.
Our first question comes from Colin Bristow with UBS.
Hey, good afternoon, and thanks for taking my questions. So on the.
Hs <unk> TMA indication just curious is there an outcome here.
You would ultimately sort of a bank.
And taking this forward.
Then on in terms of the comparable historic data to FDA work that compared to.
It seems likely to escape <unk> already performed.
Similar internal.
Reviewed.
That's what they're asking you to do and just curious as SBA given any indication of this or the efficacy bar that it believes that the appropriate benchmark.
Yeah, Hi, Colin and thanks for the questions.
And answer to your first question.
Yeah.
We believe as we have believed.
Since we've seen the data.
This drug because this shouldnt be approved.
Warren's approval, so with respect to abandoning that I mean thats really.
Not not on the option table at this point I mean.
So I think that answers that pretty clearly as of now.
With respect to your second question the FDA conduct.
Research and historic control group.
And may have some idea of the threshold.
They are expecting we have no indication of that.
But can't speak for.
For what.
FDA has done.
To that regard.
But I'll ask.
Steve or Kathy if they have any other views on that.
Excuse me Greg.
Yeah.
I don't know if FDA did anything but it wouldn't surprise me if they.
<unk> had actually done independently.
Okay. Thank you.
Thanks, Paul.
One moment for our next question.
And our next question comes from Steve Brozak with <unk> Securities.
Hey, good afternoon, Greg.
Two questions.
The first one.
I'm not sure if you're aware, but it looks like theres been some.
Negative.
Voting on.
Weber, who and how they were looking at there their therapeutic on Covid, but.
One of the questions that popped up.
Specifically around it was a failure to understand mechanism of action.
I'm not going to compare them to youku. So obviously completely different but can you go and give us some.
As much detail as possible on.
How comfortable you are with mechanisms of action and specifically how that brought you into developing the diagnostic approach to understand what the markers what the signals. We're in as much detail that you can give on that.
And then I've got a follow up question. Please.
And I'm sorry, Steve you are asking about mechanism of action and Ta TMA, our mechanism of action and Covid I'm trying to make sure I answer your question sorry, absolutely.
Mechanism of action as you understand them and Covid and also how the companion diagnostic system, you've set up plays into this to this offer.
This is not just what you've done but what other people have written about it and I've got one follow up afterwards please.
Sure I heard you say you would like that in as much detail as possible I think.
The details are well published on this or not.
Not only in our publications so.
In the publication and frontier as an immunology also the publication.
<unk>.
The manuscript published in.
In clinical and translational medicine, I think lays out the mechanism.
Pretty clearly.
As as does the first popular the first publication that covered.
But the response to our supplement have been severe COVID-19 patients treated in Bergamo. So yes.
I will hit this I think at a very high level since thats all been been well documented but the bottom line is that.
COVID-19 is an endothelial injury.
That is the same as what we're seeing in Ta TMA.
We have data.
We have clinical data.
We have published data from Bergamo.
You have.
Standard of care controlled.
Blind study out of I spy.
We're in our supplement.
<unk>.
Greatest benefit to survival.
<unk> by the I Spy group.
Fight the challenges sort of aligned against in our supplement in that study.
You also have.
In vivo.
All models.
Animal models of COVID-19, you have.
Data is showing very clearly when youre getting into the assays.
That it is lectin pathway hyper activation that is the driver in COVID-19.
<unk> pathway hyperactivity in the results in our consumptive.
Hypo complement team here.
And that hypo complement team are then renders the adaptive immune response.
Dysfunctional or non functional.
And that is likely the cause of secondary infection.
<unk> cobot, and we know very clearly looking clinically.
That treatment with <unk> within one to two doses reverses that hypo complement team is so normalizes the complement profile and restores the adaptive immune response.
All of that's been well published.
Well documented the extension to long Covid.
Is there as well.
At the same hyper activation.
The lectin pathway is seen based on our data now looking at close to 1000 patients.
We see the same thing.
And about 25% to 30% of patients with long coat. So I don't know if I may know thats a lot of detail maybe more than you wanted or maybe it's less than you are actually looking for but I think in the interest of time.
Let me hold there and again point you to to the publications.
Got it alright look that actually is a great segue.
Secret and likely is not doing too much not doing too little doing it just right, which is what you just did but all kidding aside.
FDA, obviously came back and said that they wanted to have a literature.
Just a review on the literature side, one of the things that we look at that.
Candidly literature Disney spring up all by itself as it is.
It has influenced it is directed at the created by the Kols, who take the time and are familiar with the subject matter.
How would you position in our supplement.
With the Kols that have worked with you that the Hematological oncologists that are specific and now I'm talking about stem cell TMA related nurses to the med abuse, how would you position them in terms of advocacy and an explanation of the <unk>.
Value nor supplement in terms of what the FDA would be looking at into the future.
I'll hop back in the queue.
After that thank you.
Uh huh.
I think I understand the question I mean look we have.
Strong advocacy.
Within the expert community so within the community.
Of stem cell transplant or <unk>.
Who treat.
Well number one who perform this.
Very rare procedure.
And then as part of that.
Part of that management of the procedure and the post procedural complications treat.
Ta TMA.
We have as I said very strong advocacy.
You just need to look at the publication in the journal of clinical oncology, which is <unk>.
Really I believe.
The highest ranked journal in oncology I think.
<unk>.
The index factor on that one it's about 55.
You look at the author list and I think that answers a lot about the advocacy how we would.
How they would help us going forward with FDA.
Kevin.
Haven't thought through that part.
We just received this.
Decision from FDA, we really need to digest it we wanted to make it available for shareholders right away.
We've got a lot of <unk>.
Work still to do as we digest that.
Work with our advisors to figure out how to most effectively.
And most expeditiously.
And our thoughtful of map approved for this indication.
So again, let me, let me hold there and see if that answered your question.
Yes, that's it.
Thanks.
Hop back into queue. Thank you.
Okay. Thanks.
One moment for our next question.
And our next question comes from Eric Joseph with JP Morgan.
Hi, Thanks for taking the question.
Yeah.
Okay.
On CMA within the supplement if FDA wants to see survival benefit in a matched historical patient populations do you have a sense of the minimum.
Benefit in survival, you would have the power to detect given sort of the conservative sizing of your 30 population and then on.
Hi, again with phase III Artemis.
He noted that enrollment is ongoing and you have a nine month readout expected mid year can you just clarify how close you are to full study enrollment and do you expect this study to maintain adequate power to detect it.
And protein area when you read out next year. Thanks.
Yeah.
With respect to what would be the minimum threshold that FDA would want to see with respect to.
In our supplement of survival benefit relative to historical control, we haven't had a chance to discuss that.
With FDA.
We know.
That what we've seen with <unk>.
Clearly exceeds particularly given the severity of the patients that we've treated with in our supplement clearly exceeds what's in the literature and we think that's likely.
The literature is reflective.
And frankly likely over reflective of what is happening in <unk>.
In the real World just given publication bias.
Which would you usually don't publish negative data.
As you know.
So if anything it's an overstatement, but the mortality benefit or the survival benefit that we've seen.
In our supplement.
We think is quite substantial.
With respect to your second question on the <unk> trial study enrollment powering.
We've powered that.
90%.
<unk>.
Enrollment is wrapping up.
And we believe as I said, we're on track for mid 2023.
Top line data I mean, Steve do you have any other.
Comments are more color you can you can give to that.
I don't think so Greg.
Powered at 90% conservatively and we will have data.
Mid 2023.
With a 9.5 I'm sorry, our $90.
Preliminary endpoint right to be clear those are the.
Longer term Egfr data.
As we've been very clear data that we are looking for in mid 2023.
Our our 36 months.
36 week.
Proteinuria data.
So just to clarify that if I could.
We shouldn't have.
Youre not necessarily going to have enrolled.
450 patients per the clinical trials entry.
Hi to be sufficiently powered for protein area.
No.
<unk> sufficient proteinuria powering is not based on the <unk>.
450 patients Eric is based at 90% confidence based debt.
It effectively.
About 60% of that is that correct.
The $4 50, as the power needed for all patients with Egfr endpoint. So I think you may be you may be conflating those two numbers.
That's very helpful.
Appreciate it yes, okay great.
Thank you.
One moment for our next question.
And our next question comes from Greg Harrison with Bank of America.
Hi, there this is Mary Kate on for Greg. Thanks for taking our questions regarding the update's expected at ash, including the trial design.
Phase two study in pediatrics, maybe what differences should we keep in mind is to evaluate <unk> in pediatric patients and do you expect a similar impact in this population. Thank you.
Now, let me turn that over to Steve would occur Steve can you address that sure.
We would expect a similar treatment effect in the pediatric population.
Pediatric studies tend to be smaller than the adult studies.
And.
The study will be similar to that which we ran single arm study.
With the.
It will be.
Hum.
<unk> historical control associated with it for the for the MAA.
Which we do not have to finish this prior to the EMEA, Let me just make that clear, but we did have agreement with the.
Pediatric committee of the EMA.
Okay.
So that helped Mary yes.
Yes, that's great. Thank you okay.
I wanted to look for and then I might add one point on the pediatric witches that pediatric patients tend to do better.
With TMA following.
Transplant, then do adults, it's almost as if there.
Two different populations.
Yes.
Andrew.
One is the resiliency I think of children as it caused the other is the.
The diseases and the children for which they undergo.
Transplant are are often.
Not as lethal.
As are those in the adult population.
And our next question comes from Brandon Folkes with Cantor.
Alright, thanks, taking my questions.
Greg maybe just a point.
And a clarification.
Clarification, but yes.
Okay.
In terms of when you say <unk>.
Considering options to address the path with the FDA put out there with <unk>.
Article control independent Nextgen analysis.
Are you considering options to address that in particular.
May you be considering broader options as well.
Alright.
Yes, Hi, Brandon Thanks for thanks for the question with.
With respect to.
The options that we're considering.
Certainly we are looking.
We're considering a broad range of options.
With respect to historical control, we think that that is a.
Very doable option.
One that.
That can be addressed.
We need to sort through how best to do that but I think in answer to your question if I caught it.
It was dropping away on our end I think our we added a little bit of a break up electronically here, but I think if I'm answering your question. We're also looking at what we can do more broadly and let me turn to to Kathy our head of regulatory and see if anything you want to add there Kathy sure.
Sure, Greg and as Greg mentioned before we will be going back to SBA to discuss these guns and as we always do to reach agreement with them on what is expected and what we need to do that.
Again.
As Greg also mentioned we're still.
Sorting through this and our option, but we'll plan to put together what we think is a very robust proposal whatever that may look like and then go to the FDA.
Yeah, obviously, Brandon the objective is get the drug approved as quickly as possible.
No approved treatment patients need it we're hearing that from the physicians were hearing that from the physicians who have used it.
Even those who were initially sort of nonbelievers, who have now used it and are believers as the result of compassionate use.
Uh huh.
I think there is a clear need.
This is why we're committed to getting this approved as quickly as possible.
Our next question.
And our next question comes from centers Ballinger with Needham.
Hi, good afternoon.
Hi.
Just a couple questions on the recent decision.
Decision and their proposed passed two to resubmit the BLA.
If I recall up to earn.
Early 2019.
These pivotal studies for diplomat.
Q&A.
The primary endpoint.
Mortality comparison to historically matched controls.
Just curious.
If the data the FDA is looking for a similar to what you were already doing as part of the trial.
And I guess in hindsight.
Why was that endpoint modified back then.
Okay.
Uh huh.
Thanks appreciate the question Serge.
Yes sure correct.
We had initially.
Proposed.
Just what you identified which was an historical.
Control.
And using so survival is the primary endpoint with an historical control.
The division.
Uh huh.
Rejected that proposal and instead ask for a response based endpoint.
Where say a threshold to exceed and I think you are probably correct around the dates as well I'd have to go back and specific look, but yes, I think you sound like you're you're up to speed on that so I'll take your word on the dates but yes.
You are correct. So we had initially proposed sort of just.
Just what we're seeing now as as the.
Option going forward or as an option going forward.
<unk>.
And yes, FDA had requested.
We instead pursue.
A response based endpoint with a threshold to exceed and together with FCA we developed.
That response based endpoint.
That answer your question.
Well I guess.
Opponents passengers.
That was.
Elucidated in denial.
Couple of days ago.
How close is it.
To what you were already doing as a secondary endpoint.
That pivotal study.
Yeah.
I think it is I think it is.
Yeah.
I think it's very close.
I think as we.
Read it as effectively.
The same thing.
Okay.
With with the historical control so.
What initially was proposed biomass.
So yes.
Thanks.
Again, we were very willing to do it at that time, I think where we're.
Obviously April .
Two two.
Undertake that.
That right now.
And the same with the same approach that that we were proposing as you said several years ago.
Got it thank you.
Okay.
Thanks.
I'd now like to turn it back to Dr. <unk> for closing comments.
Yes.
Alright, Thank you operator, and thanks to all of.
The folks with the questions. They were they were on point and we appreciate them.
Again, I want to thank everyone for joining the call today.
We'll continue to keep you updated on our progress.
But everyone is very focused on.
This route forward.
With <unk> Ta TMA.
We can assure you were.
Working very hard on that and we'll have updates as we have more information for you I think they.
The coming year, frankly, the rest of 2022 and the <unk>.
Coming year hold some.
Really we think.
Citing milestones for the company.
And well, let you know how all of those go.
As always we appreciate your continued support.
All please have a good evening thanks again.
Thank you for your participation in today's conference. This does conclude the program you may now disconnect.
Yeah.
The conference will begin shortly to raise your hand during Q&A you can dial one one.
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