Q3 2024 FibroGen Inc Earnings Call
Speaker Change: Good day and welcome to the FibroGen 3rd Quarter 2024 Earnings Conference Call. All participants will be in listen-only mode.
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Speaker Change: I would now like to hand the call over to David DeLucia, Vice President of Investor Relations. Please go ahead.
and Thane Wettig. Thank you. Thank you.
Speaker Change: Good afternoon, everyone. Thank you for joining today to discuss our third quarter 2024 financial and business results. I'm David DeLucia, Vice President of Corporate FP&A and Investor Relations at Fiverr Jones. Joining me on today's call are Thane Wettig, our Chief Executive Officer, Juan Graham, our Chief Financial Officer, and Chris Chung, our Senior Vice President of China Operations.
Speaker Change: Following our prepared remarks, we will open the call to your questions. I would like to remind you that remarks made on today's call include forward-looking statements about fibrogen.
Speaker Change: Such statements may include, but are not limited to, our collaborations with AstraZeneca and Astellas.
Speaker Change: Financial guidance, the initiation, enrollment, design, conduct, and results of clinical trials.
Our Regulatory Strategies and Potential Regulatory Results.
Speaker Change: Our research and development activities, commercial results and results of operations, risks related to our business, and certain other business matters.
Speaker Change: 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 Fribergen's filings with the SEC, including our most recent Form 10-K and Form 10-Q.
Speaker Change: FOPRGEN does not undertake any obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.
Speaker Change: The press release reporting our financial results and business update and a webcast of today's conference call can be found on the investor section of Fibrogen's website at www.fibrogen.com. With that, I would like to turn the call over to our CEO, Thane Wettig.
Thane Wettig: Thank you, Dave. Good afternoon, everyone, and welcome to our third quarter 2024 earnings call.
Thane Wettig: On today's call, I will highlight our current strategy for the company and the exciting opportunity for FG3246 and FG3180, our first-in-class antibody drug conjugate targeting CD46, and our pet imaging agent in metastatic castration-resistant prostate cancer.
Thane Wettig: I will also highlight the continued strong performance of roxidustat in China and the potential for roxidustat development for the treatment of anemia due to lower risk mild dysplastic syndrome. Then Juan Graham, our CFO, will review the financials, after which we will open the call for your questions.
Thane Wettig: On slide three, I would like to highlight the strategic pillars for our company.
First, advancing FG-3246, NFG-3180, and MCRPC remains a key priority.
Thane Wettig: In the second quarter of this year, we shared important data from two Phase I studies highlighting the potential of FG3246 as both monotherapy and in combination with insulutabine. I'll provide a more detailed overview of where we are with the program and the upcoming 2025 catalysts in a moment.
Thane Wettig: Second, Rocks2Stat continues to demonstrate very strong performance in China, generating significant net revenue and positive cash flow, with robust year-over-year revenue and volume growth.
Thanks to this impressive performance.
Thane Wettig: We are reiterating our guidance of Fiverton's full year net product revenue under U.S. GAAP.
Thane Wettig: to be between $135 and $150 million and raising the bottom end of our full year guidance for ROC's due set net sales in China to $330 to $350 million.
Thane Wettig: In addition, we anticipate an approval decision from the China authorities in early 2025 for chemotherapy-induced anemia, which, if approved, would represent a meaningful growth opportunity on top of the substantial revenue generated by Roch's-Dustat in anemia associated with chronic kidney disease.
Thane Wettig: If approved, Fibrogen will receive a $10 million milestone payment from our China partner AstraZeneca.
Thane Wettig: Third, we have a number of partnering opportunities for our remaining pipeline.
Thane Wettig: Regaining the rights to Roxidustat from AstraZeneca in the U.S. and ROW, excluding China and South Korea, enables us to pursue internal or external development of certain indications with high unmet need, such as anemia in patients with lower risk mild dysplastic syndromes.
Thane Wettig: Moreover, we continue to seek partnership opportunities for our early oncology pipeline of the Phase I-Ready FG3165, an anticoagulant-9 antibody, and FG3175, an anti-CCR8 antibody.
Thane Wettig: Lastly, due to our significant U.S. cost reduction efforts and the wind-down of the PAM Revlimab development program, Pyrogen exited the third quarter in a solid cash position with 160 million dollars in cash, cash equivalents, and accounts receivable.
Thane Wettig: Assuming additional repatriation of cash from our China operations, we expect our cash, cash equivalents, and accounts receivable to fund operating plans into 2026.
Thane Wettig: Altogether, we are confident that our refined focus, along with our strong foundation, position us well to create value for shareholders, now and in the future.
Speaker Change: I will now provide a brief overview of our FG3246 and FG3180 programs in MCRPC.
Speaker Change: Slide 5 highlights the high-end met need in late-stage prostate cancer.
Speaker Change: There are approximately 290,000 men diagnosed with prostate cancer each year in the U.S. Of these, there are 65,000 drug-treatable patients where the cancer is metastasized and becomes castrate-resistant, resulting in a grim five-year survival rate of approximately 30 percent.
Speaker Change: There remains a significant opportunity for new treatments that can extend survival for these men. FG-3246 could be this new treatment option.
Turning to slide 6.
Speaker Change: FG3246 is a potential first-in-class ADC in development for MCRPC with a novel antibody, YS5, which binds to a tumor-selective epitope of CD46.
CD46 and the specific CD46 epitope have several distinguishing features.
Speaker Change: PD-46 is upregulated during tumor genesis and helps tumors evade complement-dependent cytotoxicity.
Speaker Change: The CD46 epitope is highly expressed in MCRPC tissues with lower interpatient variability and higher median expression compared with PSMA, as depicted in the graph in the lower right-hand portion of the slide.
Speaker Change: This expression is upregulated in the progression from localized castration-sensitive prostate cancer to metastatic castration-resistant prostate cancer and further overexpressed following treatment with androgen signaling inhibitors.
Speaker Change: And the CD46 epitope is also overexpressed in colorectal cancer and other solid tumors.
Speaker Change: A companion PET imaging agent, FG3180, utilizes the same targeting antibody as FG3246 and is also under clinical development.
Speaker Change: In preclinical studies, the PET imaging agent has demonstrated specific targeting of and uptake by CD46 positive tumor cells.
Speaker Change: Slide 7 highlights the importance of the companion pet imaging agent, FG3180, to the development pathway for FG3246.
Speaker Change: We believe that having a patient selection biomarker would not only allow us to better enrich the patient population in the phase 3 portion of the clinical development program, it would also enable differentiation of FG3246 in the prostate cancer treatment landscape.
Speaker Change: In addition, FG3180 could represent an important commercial opportunity as a companion diagnostic to FG3246.
Speaker Change: Slide 8 recaps the top-line results from the Phase 1 monotherapy study and the Phase 1b portion of the investigator-sponsored study of FG3246 in combination with enzalutamide, both of which were reported in the second quarter of 2024.
Speaker Change: The completed monotherapy study included a total of 56 MCRPC patients who were biomarker unselected and were heavily pre-treated, receiving a median of 5 lines of therapy prior to FGE3246.
Speaker Change: In the efficacy of valuable population of 40 patients, we observed a median radiographic progression-free survival of 8.7 months, overall response rate of 20% confirmed by RECIS 1.1, and PSA reductions of greater than 50% in 36% of patients.
Speaker Change: Adverse events were consistent with those observed with other MMAE-based ADC therapies.
Speaker Change: The manuscript describing the Phase I monotherapy trial has been submitted and we anticipate acceptance and publication in the coming months.
Speaker Change: Following our recent discussion with the FDA regarding the FG3246 development program, we are preparing to initiate the phase two monotherapy trial of FG3246 in the first quarter of 2025.
Speaker Change: Interim results of the Phase 1b portion of the investigator-sponsored combination study with enzalutamide that is currently being conducted at UCSF were reported at ASCO in June of this year.
These interim results included data on 17 biomarker unselected patients.
Speaker Change: 70% of which were pre-treated with at least two prior ARSIs.
Speaker Change: In addition to establishing the phase two dose of FG3246, the IST also demonstrated an encouraging preliminary estimate of RPFS of 10.2 months, with PSA declines observed in 71% of available patients.
Speaker Change: The trial remains on track for top-line results in the first half of 2025 and will also include CD46 expression data on patients screened with FG3180, our PET biomarker, during the Phase II portion of the IST.
Speaker Change: On slide 9, we depict the comparison of the initial results from the monotherapy trial and heavily pre-treated patients and the combination trial that show an impressive RPFS versus the existing FDA approved standard care in the MCRPC setting.
Speaker Change: While we cannot make direct comparisons to these trials due to differences in things such as study design and previous treatments, we are encouraged by these RPFS results.
Speaker Change: Moving to slide 10, we would like to share the phase two dose optimization trial design based on our discussion with the FDA.
Speaker Change: We plan to enroll 75 patients across three dose levels to determine the optimal dose for Phase III based on efficacy, safety, and PK parameters.
Speaker Change: It is important to note that FG3180 will also be a part of the study as we seek to demonstrate the correlation between CD46 expression and response to the ADC in this all comers population.
Speaker Change: One other important design element is the primary prophylaxis with GCSF to mitigate adverse events associated with neutropenia commonly seen with ADCs containing an MMAE payload.
Speaker Change: The addition of GCSF may enable a better tolerated and more consistent treatment, thereby extending duration of therapy with FG3246 and potentially enhancing efficacy measures such as RPFS.
Speaker Change: On slide 11, we highlight the recent and ongoing studies for FG3246 and FG3180. As I mentioned earlier, we are expecting additional data for FG3180, our PET imaging agent, from multiple studies being run at UCSF, including the Phase I Imaging Development Study, which was recently upsized, as well as the combination trial with enzalutamide.
and Thane Wettig.
Speaker Change: Slide 12 shows the recent and upcoming catalysts for the FG3246 program. As mentioned earlier, we had a productive meeting with the FDA regarding the FG3246 development pathway and received guidance for the Phase 2 trial design highlighted a few slides earlier.
Speaker Change: In addition, IND submissions for FGE3246 and FGE3180 are planned this quarter and next quarter respectively.
Speaker Change: We have potential value inflection points in the near term with the anticipated initiation of the phase 2 dose optimization study in MCRPC in the first quarter of 2025 and the top-line results from the phase 2 portion of the combination study with enzalutamide, which are expected in the first half of 2025.
Speaker Change: To summarize on slide 13, FG3246 targets a novel epitope on prostate cancer cells with first-in-class potential.
Speaker Change: It has already demonstrated promising efficacy signals with an acceptable safety profile, both in monotherapy and combination settings. We are excited for the upcoming milestones and look forward to updating you on the program as the studies progress.
Speaker Change: Moving now to slide 15, ROCK's reduced step for anemia of chronic kidney disease continues its robust performance in China.
Speaker Change: Third quarter total ROXADUCE net sales in China by Fibrogen and the distribution entity jointly owned by Fibrogen and AstraZeneca totaled $96.6 million.
Speaker Change: compared to $77.1 million in the third quarter of 2023, an increase of 25%, driven by an increase in volume of 34%.
Speaker Change: Fibrogen's portion of Roxadustat net product revenue in China was $46.2 million for the third quarter on a U.S. gap basis compared to $29.4 million in the third quarter of 2023, an increase of 57 percent.
Speaker Change: Moving to slide 16, Roxy Dustec continued its category leadership in brand value share in China, maintaining a 45% share in the most recent three-month period ending in August of 2024.
Speaker Change: The potential approval of the chemotherapy-induced anemia indication early next year would provide an important new treatment alternative for patients with CIA, be a meaningful addition to the ROX-induced statin business in China, and would trigger a $10 million milestone payment from AstraZeneca.
Speaker Change: Given that there have been several generic applications filed and two applications approved in China, I would like to reiterate that the impact of a generic approval and launch in China is meaningfully different than in the U.S.
Thanks for watching!
Speaker Change: Generic players face lead time and execution risks of market adoption after approval as they need to be admitted into individual hospital formularies one listing at a time.
Speaker Change: Therefore, originator products do not experience a meaningful deterioration in revenue until they are subjected to volume-based purchasing, which only occurs after at least four generic products are approved and the government includes the originator in the VVP process.
Speaker Change: Even then, originator products in China have historically maintained a stream of net product revenues and profits after generics entered the market.
Speaker Change: Despite the expiration of our composition of matter patents in June of this year, we do not expect meaningful deterioration of the ROC's two-step business in the near term.
Speaker Change: In addition to the exceptional performance of Roxas Dustat in China this quarter, Roxas Dustat penetration in Europe continues to increase, showing quarter-over-quarter growth.
Speaker Change: We expect this growth to continue given the fact that ROC's due status is reimbursed in all EU5 countries.
Speaker Change: is the only HIF-PHI indicated in the EU for the treatment of anemia of CKD in both non-dialysis and dialysis patients and has exclusivity until 2036, positioning it for continued growth and HIF market leadership over the next decade plus.
Speaker Change: Now to slide 17, we announced earlier this year that we regained all U.S. and ROW Rocks of Dustedt rights from AstraZeneca, with the exception of South Korea, while the China Collaboration Agreement remains in place.
Speaker Change: Regaining the rights to Roxas DuSette in the U.S. allows us to pursue Roxas DuSette development opportunities with potential partners or on our own in indications such as anemia associated with lower risk myelodysplastic syndromes.
Speaker Change: Slide 18 highlights the unmet need and the potential for oxydustat in patients with anemia associated with lower-risk MDS.
Speaker Change: There is a lack of effective second line and beyond treatments given the currently available therapies are effective in approximately 50% of patients.
Speaker Change: In addition, there are no oral options available or in late-stage development, which could be a meaningful differentiator for Roxas-Dustat and potentially translate into significant commercial opportunity.
and Thane Wettig. Thank you. Thank you.
Speaker Change: Moving on to slide 19. In late 2023, subgroup analysis from the phase 3 Matterhorn study of broxibustatin in patients with anemia of lower-risk MDS were presented at the American Society of Hematology annual meeting.
Speaker Change: and patients with anemia associated with lower risk MDS who entered the trial with a higher transfusion burden.
Speaker Change: Loxodustat demonstrated a meaningful difference in transfusion independence versus placebo. Results that are highly similar to the pivotal trials for two recently approved therapies for anemia associated with lower risk MDS.
Speaker Change: Based on these results, we believe that Roxoducet represents an important potential therapy for patients with anemia associated with lower risk MDS.
Speaker Change: Therefore, we are currently evaluating options for Roxidustat to determine the best path for continued development with the aim of realizing additional value for Roxidustat in this high-value indication.
Speaker Change: I will now turn the call over to Juan to discuss the company's financials. Juan?
Thank you, Thane.
Juan Graham: I will focus my remarks with a revenue summary for the third quarter of 2024, subsequently providing financial performance details of our China business for the quarter. And finally, I will wrap up with operating expense results and our cash outlook.
Juan Graham: I also want to remind everyone that more information on our financial results is available in our press release and our recently filed 10-Q.
Juan Graham: For the third quarter of 2024, total revenue was $46.3 million, compared to $40.1 million for the same period in 2023.
Juan Graham: an increase of 15% year-over-year. We recorded $46.2 million of net product revenue for RucksaDustep.
Juan Graham: Sales in China compared to $29.4 million in the third quarter of 2023, representing an increase of 57% year-over-year.
Juan Graham: In Q3 2024, we recorded $0.4 million in development revenue compared to $6.8 million during the third quarter of 2023. As mentioned in prior quarters, after the termination of the AstraZeneca-U.S. Rest of the World Agreement,
Juan Graham: We expect quarterly development revenue to be below half a million dollars for the remainder of 2024.
Juan Graham: In Q3 2024, we recorded negative 0.3 million dollars of direct product revenue compared to 1.3 million dollars during the third quarter of 2023.
Juan Graham: We recognized 1.1 million dollars from our Astellas royalties in the EU and at the same time We recorded a 1.4 million dollar true up from our Astellas royalties in Japan due to product mix
now moving on to a credentialed performance in training.
Juan Graham: Total ROXADUSTAT net sales from the Joint Distribution Entity, or JDE, owned by AstraZeneca and FibroGEN, and direct-to-distributor sales for FibroGEN, was $96.6 million.
Juan Graham: in the third quarter compared to $77.1 million in the third quarter of 2023, an increase of 25% year over year.
and Thane Wettig. Thank you. Thank you.
Speaker Change: This growth has enabled us to achieve and maintain a brand value share of 45% of the category in China.
Excuse me.
Speaker Change: From total Roxadusta net sales in China, Fivergent's net transfer price from sales to the JDE was $29.7 million this quarter compared to $24.2 million in the third quarter of 2023.
An increase of 23% year-over-year.
Speaker Change: Net transfer price is the best reflection of Fivergen's portion of the cash received from Roxadustat in China. During this quarter, we also released $12.5 million from deferred revenue due primarily to changes in forward-looking expectations for Roxadustat in China.
Speaker Change: As a result, Fivergen recorded $42.2 million in net revenue for the quarter from Rexodustat sales to the JDE, and $4 million of direct-to-distributor sales for Fivergen China, totaling $46.2 million in the U.S. gapping.
for cold year 2024.
Speaker Change: For your models, we reiterate our forecast for fibrogen in China and net product revenue to be between $135 to $150 million on a U.S. gap basis.
Speaker Change: Five Origin China Revenue assumes a forecast of ROXODUS.NET sales in China to range from $330 to $360 million, narrowing our prior guidance of $320 to $350 million.
Thank you. Thank you.
Now moving down the income statement.
Speaker Change: Total operating costs and expenses for the third quarter of 2024 were $63.1 million compared to $103.6 million for the third quarter of 2023, a decrease of $40.5 million, or 39% year-over-year.
Speaker Change: excluding restructuring charges of $18.6 million in the third quarter, our total operating costs and expenses,
Speaker Change: were $44.5 million. Total operating costs and expenses for the quarter came in below our guidance range of $45 to $55 million, which reflects a strong execution and cost reduction in discipline spend.
and Thane Wettig.
Speaker Change: R&D expenses for the third quarter of 2024 were $21.7 million compared to $61.2 million in the third quarter of 2023, a decrease of 65% for $39.5 million year-over-year.
Speaker Change: For $21.7 million of R&D expenses, approximately 42% was related to problemat, 37% directed to FG3246.
Speaker Change: with the remainder directed towards ruxodusta and our immuno-oncology acid development activities.
and Thane Wettig. Thank you. Thank you.
as we expect.
Speaker Change: Our PAM-REBL-MAP and Immuno-Oncology R&D expenses to decline significantly in the fourth quarter of the year as we have either shut down or reprioritize our R&D spend.
and Thane Wettig. Thank you.
Thank you.
Speaker Change: MDNA expenses for the third quarter of 2024 were $17.6 million compared to $25.6 million in the third quarter of 2023, a decrease of 31% or $8 million year-over-year.
primarily driven by the company's cost reduction efforts.
Speaker Change: Finally, cost of goods sold for the third quarter of 2024 was $5.3 million compared to $4.2 million for the third quarter of 2023.
Speaker Change: During the third quarter of 2024, we recorded a net loss of $17.1 million, or 17 cents, net loss for both BASIC and the looted share.
Speaker Change: as compared to a net loss of $63.6 million, or $0.65 per basic and diluted share, for the third quarter of 2023.
Speaker Change: As we have previously stated, we initiated a significant cost reduction plan to enable our focus on FG-3246, FG-3180, and ROC's reduced debt assets.
Speaker Change: We have reduced our headcount by approximately 75% in the U.S. We have moved to a virtual work environment after terminating our lease, and substantially reduced our operating costs to maximize our cash.
Speaker Change: With this backdrop, we expect our total operating costs and expenses, including cost of goods sold, in the fourth quarter to be between $35 million and $40 million, which includes
Speaker Change: which includes 1 to 2 million dollars in restructuring charges in the fourth quarter.
Speaker Change: Now, shifting towards cash, as of September 30th, we reported $160 million in cash, cash equivalents, and accounts receivable. This reflects an increase of $12.9 million quarter over quarter.
Speaker Change: To provide further clarity on our cash balance, in the third quarter,
Speaker Change: We have invoiced and collected from AstraZeneca $27.7 million for certain historical R&D expenses and milestones owed to Fibrogen. Going forward...
Speaker Change: We expect to have additional cash collections in the fourth quarter of 2024 and the first quarter of 2025.
Speaker Change: These collections will be offset through payments for historical co-promotion sales and marketing expenses due to AstraZeneca China.
Speaker Change: The timing of these payments will be in the fourth quarter of 2024 and the first quarter of 2035.
Speaker Change: After considering the payments to and from AstraZeneca over the coming quarters, the result will be in a net cash collection of roughly 0.5 million dollars to Phytogen.
Thank you.
Speaker Change: For the third quarter, if we exclude the above-mentioned cash inflows, our net operating cash flow was $14.8 million during the quarter.
Excuse me.
Speaker Change: We have consistently stated our cash balance will enable us to fund our operating plans into 2026.
Speaker Change: Assuming additional repatriation of cash from our China operations which we continuously assess through multiple avenues, we expect our cash, cash equivalents, and accounts receivable to fund operating plans into 2026.
Speaker Change: Thank you, and now I will turn the call back over to Thane.
Thane Wettig: Thank you, Juan. To conclude, we remain excited about the company's positive outlook and the potential value we can create for stakeholders.
Thane Wettig: Roxidustat continues to perform extremely well in China, where we expect an approval decision of our SNDA for the chemotherapy-induced anemia indication early next year. And our partner Estelle's continues with the commercialization of Roxidustat in Europe, Japan, and other markets.
Thane Wettig: Aiming to enhance ROC's success value to fibrogen, we are actively exploring development in anemia in patients with lower risk MDS, either by ourselves or through partnership discussions.
Our Oncology Pipeline at VET-G 3246.
Thane Wettig: and FG3180, and MCRPC continues to advance after showing compelling top-line data in the Phase I monotherapy study and in the interim data from the Phase Ib dose escalation portion of the investigator-sponsored study of FG3246 in combination with enzalutamide.
Thane Wettig: We look forward to the publication of the Phase I monotherapy data in the coming months.
Thane Wettig: the anticipated initiation of the Phase II Monotherapy Dose Optimization Study in the first quarter of 2025 and the top-line results from the Phase II portion of the Combination IST in the first half of 2025.
Thane Wettig: In summary, we will continue to execute on our current strategic priorities as a leaner and more focused organization, as we continue to strive towards a valuation that we believe is more reflective of our current and future Rocks to Dustat revenue stream.
Thane Wettig: first-in-class phase 2 ready ADC and companion PET imaging agent and our strong balance sheet.
Speaker Change: I will now turn the call over to the operator for Q&A.
Speaker Change: We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad.
Speaker Change: If you are using a speakerphone, please pick up your handset before pressing the key.
To withdraw your question, please press star then 2.
Speaker Change: And our first question will come from Andy Heisch of William Blair. Please go ahead.
Andy Heisch: Would it be the stage 1, 9 patients followed by the 15 patients stage 2 in terms of kind of the top line that can be expected first half of next year just trying to get a sense of how
Speaker Change: You know, how you manage your expectations and frame the extent of the release of data.
for the
the IST for the, in combination with insulutamide.
to include not only obviously the patients from the...
Escalation Cohorts.
but also RPFS data.
Speaker Change: from the Expansion Cohort, which is dosed at 2.1 mg per kg along with 160 mg per day.
Speaker Change: Benzalutamide. And so, you know, we have to wait for Rahul Agarwal, who is the sponsor of the IST.
Thank you very much.
Speaker Change: to confirm exactly what data will be available when. In other words, as patients are enrolled, we'll see six months RPFS data on some, but maybe not six months on others. And then as the trial continues to those patients.
Speaker Change: that the patients who had a six-month RPFS then will have further RPFS readings, and then those that didn't quite have a six-month RPFS will then progress to...
Speaker Change: ... six month data point, so it will mature over time.
Speaker Change: But our best guidance at this point in time is that in the first half of next year, that we should expect top-line results on both the escalation cohort and the expansion cohort.
roughly 36 patients in total.
Speaker Change: That's helpful. Thank you. And maybe just a bit on the PET imaging agent.
Speaker Change: So obviously the standard of care now is basically you get either gallium-based or fullerene-based agent infused, 30 minutes later you get an image. I'm just curious if that
Speaker Change: is similar to the zirconium-89. You know, how long do patients typically have to wait to get a PET imaging age? So just basically kind of on the logistical side of things.
Speaker Change: Yeah, so that's what's being explored right now, Andy, as part of the ongoing work at UCSF with the PET imaging agents. The expectation isn't that it will be, you know, minutes, it will be days.
post-exposure to the PET imaging agent.
The work in the coming...
months ahead of the Phase 2.
Speaker Change: start will determine exactly the number of days, but it won't be 30 minutes ahead and then you administer the first dose of the ABC. It will likely be, let's say, six days or so.
and Thane Wettig.
and Thane Wettig. Thank you. Thank you.
Speaker Change: The next question comes from Paul Choi of Goldman Sachs. Please go ahead.
Speaker Change: Hi, Thane and team. This is Khalil calling in for Paul. Thank you so much for taking our questions. I guess a couple of quick ones from us. Quickly, I guess on FG30, sorry, on the Phase 2 that you're planning to initiate next quarter, or I suppose Q1 of 25, I think you mentioned 75 patients earlier in this call. I just wanted to clarify, will all of those be imaged as well with FG3180? And then I had a quick follow-up on Roxadu's set after that.
Yeah, thanks Khalil. The majority of them will be...
Speaker Change: treated with the imaging agents at the outset of therapy followed by then treatment with the with the ADC. Not all 75 of them and that's because you know we'll be filing the IND for FG3246
Speaker Change: This quarter, we'll file the IND for the PET imaging agent next quarter, so we won't have the PET imaging agent ready exactly when the first patient is expected to be dosed in the monotherapy trial, but it won't be too long after that when we will start treating patients with the PET imaging agent.
Speaker Change: So the expectation is the majority of them, of the 75, will receive a PET imaging agent.
Speaker Change: Got it. Okay, that makes sense. And then my quick follow-up on Roxas-Dustat was just on guidance. I think the midpoint of your China sales sort of imply continued growth into the fourth quarter of Roxas-Dustat, but then the net sales that you gave of 135 to 150, the high end of that guidance implies a very modest year-over-year decline in the fourth quarter. I may have missed this earlier, but Juan, if you're still on the line, I think you mentioned the $12.5 million release from the JDE. If you could just touch on that again and just explain what's driving the decrease sequentially that this guidance is implying in the fourth quarter, that'd be really helpful for us.
The end of a cold year that I'm having.
What I, basically alluding to your question,
The 135 to 150 still somewhat contemplates a potential approval.
of the CIA indication.
Speaker Change: If that were to happen, the way that, you know, our single performance obligation model basically elucidates that we would need to accrue further into deferred revenue given the future expected performance.
Speaker Change: of the asset from an accounting perspective. So, in that sense, you know, our sales would basically, our sales guidance would have that into consideration.
Speaker Change: as we are providing you this perspective at this point in time. So we will see over the course of the remainder of the year, if we have that approval or not, and if the CIA indication flows into 2025, then we may be on the higher end of the spectrum here.
Speaker Change: Okay, cool. I'm so sorry, but just to clarify, you mentioned, I may have misheard, but did you mention a $12.5 million change in the deferred revenue? Was that an increase or a decrease? I think I missed that earlier in the call.
Speaker Change: That's an increase to this quarter's revenue, and it's basically a release of our deferred revenue. However, the way that the single performance obligation model operates is that if, for instance, we get a CIA approval and an enhancement of our future revenue, we would...
Speaker Change: need to defer more revenue and therefore reduce our revenue for that specific quarter. So that's kind of like the dynamic of how our single performance obligation model works.
Speaker Change: that if we have future expected revenue that is above and beyond to what we're currently expecting, you know, then this quarter or the quarter under which that happens, we will need to accrue further into our deferred revenue on the expectation of that future revenue occurred.
Speaker Change: Understood. Okay, that makes sense. Thank you so much, and I hope you feel better. Appreciate the time.
Speaker Change: This concludes our question and answer session. I'd like to turn the call over to Thane Wettig for any closing remarks.
Speaker Change: The conference is now concluded. Thank you for attending today's presentation and you may now disconnect.