ChemoCentryx, Inc.
Q2 2018 Earnings Call Transcript
Published:
- Operator:
- Good afternoon. And welcome to the ChemoCentryx Second Quarter 2018 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. As a reminder, this conference call will be recorded. I would now like to turn the call over to Steve Klass, Vice President of Burns McClellan. And Mr. Klass, please go ahead.
- Steve Klass:
- Thank you, operator. Good morning and welcome to the ChemoCentryx second quarter 2018 financial results conference call. Earlier this afternoon, the Company issued a press release providing an overview of its financial results for the second quarter ending June 30, 2018. This press release, along with a few slides that you may find helpful while you listen to this call, are available on the Investor Relations section of the Company’s website at www.chemocentryx.com. Joining me on the call today is Dr. Thomas Schall, President and Chief Executive Officer of ChemoCentryx, who will review the Company’s recent business and clinical progress. Following his comments, Susan Kanaya, Executive Vice President, Chief Financial and Administrative Officer of ChemoCentryx, will provide an overview of the Company’s financial highlights for the second quarter before turning the call back over to Tom for closing remarks. During today’s call, we will be making certain forward-looking statements. These forward-looking statements are based on current information, assumptions and expectations that are subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These risks are described in the Company’s filings made with the Securities and Exchange Commission including the Company’s annual report on Form 10-K filed on March 12, 2018. You are cautioned not to place undue reliance on these forward-looking statements and ChemoCentryx disclaims any obligation to update such statements. In addition, this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, August 9, 2018. ChemoCentryx undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this live conference call. I will now turn the call over to Tom.
- Dr. Thomas Schall:
- Thank you, Steve, and good afternoon to everyone listening and thank you for joining us on our second quarter 2018 conference call. As those of you following on slide online can see, we have slides for you to follow. On slide three, I’ll start by summarizing for you three striking advances for the Company. One, we have just fully enrolled a landmark or even what might be termed a historic Phase 3 trial known as ADVOCATE of avacopan for the treatment of ANCA-associated vasculitis. While we don’t of course yet know what the topline data will reveal, we can predict topline readout in the fourth quarter of 2019. Two, we took in greater than $90 million in cash during the first half of this year, ending Q2 with more than $200 million on our balance sheet. Such cash reserves allow us to pursue multiple late-stage, high-value opportunities simultaneously. Three, this financial strength allows us, for example, to initiate what we aim to be a definitive clinical trial of avacopan in a new area, hidradenitis suppurativa or HS. By the end of the year, we intend to launch a randomized controlled study with over 100 patients per comparator arm in order to achieve a definitive read on the clinical benefit that avacopan could provide to the significantly underserved patient population. Let me reflect on these points and others as we go through our progress report for the second quarter. A most significant achievement since I last reported to you is the completion of enrollment in the landmark ADVOCATE trial of avacopan for the treatment of anti-neutrophil cytoplasmic auto-antibody-associated vasculitis or ANCA vasculitis, for short. In July, we achieved our enrollment goal, as shown on slide four. Why do I term this a landmark trial? For one, this is the largest, randomized controlled trial of a new pharmacologic agent ever conducted in the orphan disease of ANCA vasculitis. Second, we enrolled it in record time. We set ourselves the bold, some might say audacious goal of enrolling 300 patients by the middle of this year, and we are proud to have attain this goal. As mentioned, ANCA vasculitis is an orphan disease. So, we had to look for centers all over the world. We ended up with 316 patients and more than 200 activated clinical sites in 20 countries, worldwide. We are very grateful, especially due to the patients and the dedicated clinicians who took part and are continuing to take part in this study. The most important part of landmark though is the treatment benefit we are attempting to render this vastly underserved ANCA patient population. ANCA vasculitis patients suffer a serious total burden of disease and a huge diminishment in quality of life. Ironically, one of the biggest parts of this total burden of disease includes the severe health consequences resulting from the current therapy, not just the debilitating symptoms caused by the underlying disease. For about the last 40 years, standard therapy, especially the high chronic doses of corticosteroids over many months and the sicknesses steroids cause, have given patients a lesser of two evils option. With avacopan, we hope to convert from a lesser of evils to a greater good approach. The ADVOCATE trial will evaluate the safety and efficacy of avacopan, following 52 weeks of continuous treatment, showing the impact of avacopan and treating active ANCA vasculitis and also testing the durability of the clinical benefit, which is one of the major problems with the current standard of care. ADVOCATE is designed to greatly reduce or eliminate the need for chronic high doses of steroids and thus eliminate steroid therapy’s debilitating consequences and provide other marked benefits to patients’ quality of life. We believe this should be achievable because of avacopan’s highly precise mode of action. Avacopan attacks directly the underlying cause of ongoing damage in ANCA vasculitis, without the need of the immunosuppressive, sledgehammer approach that steroid therapy represents. Our ambitious aim is nothing short of revolutionizing the standard of care, making patients better on a sustained basis and dramatically improving their quality of life. In short, avacopan’s precise mode of action makes for pragmatic precision medicine. By the way, some patients’ enrollment in ADVOCATE continues in Japan, in order to support a regulatory application there. We expect to Japan enrollment to conclude later this year, so that all Japanese patients complete treatment before our planned release of topline data. Thus, the 52 weeks of treatment clock is ticking and we plan to release topline data from the ADVOCATE trial in the fourth quarter of 2019. We expect that successful topline data would then form the basis of a new drug application or NDA during the first half of 2020. Meanwhile, a conditional Marketing Authorization Application for avacopan in the treatment of ANCA vasculitis, based on the limited 12-week data from Phase 2 is under review by the European Medicines Agency, a full MAA, a full Marketing Authorization Application would comprise the comprehensive 52-week Phase 3 ADVOCATE data to come. It should be clear that the ADVOCATE trial is far from our sole focus however. We are moving fast on our plan to expand into a new and large area of unmet patient need orphan dermatological disease. As you can see from slide five, avacopan will be the spearhead of innovative thrust into that dieses area, specifically with the expansion of avacopan into a new indication, hidradenitis suppurativa or HS. HS is a chronic inflammatory skin disease, which causes painful and disfiguring boil-like nodules under the skin. By the end of this year, we intend to launch a large, randomized controlled study of avacopan in HS. We intend the study to be comprehensive with at least 100 patients per comparator group and involving dozens of sites. The study will employ endpoints with regulatory precedents and will measure patient benefit as a 12-week primary endpoint. Our goal is to provide a definitive answer as to whether therapy with avacopan will provide a benefit to patients suffering from HS. We are reminded that the versatile avacopan is acquiring a favorable reputation as a highly differentiated potential therapy because of its mode of action. As I alluded to earlier, avacopan is different from other drug candidates and complement therapy, or the complement intervention space because of its unique selectivity. Avacopan precisely targets the C5a receptor, blocking the activation and amplification of inflammatory disease-causing neutrophils while leaving unscathed the rest of complements function in tissue maintenance and immunity. In fact, the mechanism of avacopan is so precise that it does not even effects the protective actions of a second C5a responsive pathway, those that derive from the beneficial receptor, known as C5l2. We designed avacopan deliberately to do this, since history shows that precise medicines based on precise mechanisms, tend to lead the better patient outcomes. And as an additional benefit, avacopan is superbly convenient. It is an orally administered capsule. It is gratifying too to report that our second ongoing trial of avacopan in C3 glomerulopathy or C3G, a rare kidney disease, is also performing well. Some of you will recall that our initial clinical trial is a six-month primary endpoint study, comparing avacopan in a cohort of 22 patients with a control group of 22 patients. The control group will receive placebo for six months and then cross over to avacopan. Enrollment is at about the halfway mark today. Meanwhile, our aim is to make an important expansion to this study, reflecting the heterogeneity of C3G disease. We have filed an amendment to include a second group of 44 randomized patients, two groups of 22. These are individuals who have C3G but exhibit somewhat lower levels of complement activation, as measured in the blood. The rationale for this amendment is emerging science, which suggests that complement activation, as measured in the blood, may not in fact adequately reflect the complement mediated damage going on at the site of destruction in this case the kidney. Again, our aim is simple. We intend to obtain a definitive answer as to whether avacopan can provide benefit in C3G as certain compassionate use case today suggest, using what is arguably the most rigorous, controlled study, designed to-date in this disease. And this is an important question to answer. As depicted on slide 6, C3G often strikes the young. Kidney transplant is often required. And relapse after transplant is all too tragically common. There are no FDA-approved therapies for C3G. We believe our progress in the trial to date is good and that successful data from such a randomized controlled trial could potentially support regulatory submissions. Let me now focus on another clinical program, which is underway, involving our second asset, targeting kidney disease, CCX140, an inhibitor of chemokine receptor known as CCR2, in focal segmental glomerulosclerosis or FSGS, described on slide seven. FSGS is another devastating orphan kidney disease with no approved therapy. At the 55th Annual Meeting of the European Renal Association, European Dialysis and Transplant Association Congress in Copenhagen in May, we presented are novel findings on the role of CCR2 inhibition, in improving renal function and normalizing glomerulus structure in vivo models of FSGS. And as many of you’ll recall, we previously completed a Phase 2 trial of CCX140 in diabetic nephropathy patients where CCX140 met its primary endpoint of a lasting, significant reduction in proteinuria in patients dosed continually for one year’s time. So, not only do we have a lot of clinical experience with this drug but the success in proteinuria reduction is highly significant, because it seems likely that a reduction in proteinuria will be the key to regulatory approval in at least some forms of FSGS. Accordingly, building on our successful Phase 2 trial, we are now evaluating CCX140 in two sub populations of primary FSGS. One, in patients with nephrotic syndrome and another in sub-nephrotic primary FSGS patients. Patients are now currently enrolling. As we pursue all of this exciting late stage work, I’m also pleased to report that the financial health of the Company has never been stronger. We took in more than $90 million in the first six months of this year and ended the quarter with more than $200 million on our balance sheet. Furthermore, operations this year are running favorable to our financial plan. Before turning the call over to Susan for an overview of our second quarter financial results, let me say a word about our global footprint. In June, we signed an additional agreement with Vifor Pharma that further streamlines and strengthens our commercialization approach, especially in orphan and rare diseases of the kidney. The June agreement provided additional upfront cash payments to ChemoCentryx, totaling $21.5 million and includes licensing to Vifor Pharma, the rights for Vifor Pharma to sell avacopan and CCX140 for kidney disease in China. Notably, any Vifor sales in China would accrue to total sales in Vifor territories. And it is the cumulative Vifor sales from ChemoCentryx derives its ascending, sales tier based royalties, which range from the teens to the mid-20s percentage. So, any incremental increases in sales can have a large accretive, beneficial impact for ChemoCentryx. I’ll remind all, importantly, that ChemoCentryx retains all rights entirely to all products in the United States. The Vifor agreement leaves ChemoCentryx free to focus all of our commercial energies on the United States market for avacopan and CCX140. Our partnership with Vifor helps us execute with a focus on our robust development of strategy with these unique position therapies as we enter a new era of value-creation for our Company. Susan?
- Susan Kanaya:
- Thank you, Tom. Our second quarter 2018 financial results were included in our press release today and are summarized on slide eight. We reported approximately $202 million in cash, cash equivalents and investments at June 30, 2018. As Tom mentioned, in the first six months of the year, we received $91.5 million in cash from milestone and upfront payments and credit facility advances. Cash utilized for the first half of the year was approximately $25 million and we expect our full year 2018 cash utilization to fall in the range of $60 million to $70 million. Revenue was 15 million for the second quarter, compared to $8.9 million in the second quarter 2017. The increase from 2017 to 2018 was primarily due to the Company’s adoption of Accounting Standards Codification Topic 606, effective January 1, 2018. Research and development expenses were $17.8 million for the second quarter, up from $14.3 million in the same quarter in 2017. This increase from 2017 to 2018 was primarily attributable to patient enrollment and start-up expenses related to the avacopan and CCX140 Phase 2 clinical trial in patients with C3G and FSGS, respectively. General and administrative expenses were $4.7 million for the second quarter compared to $4.2 million for the same period last year. The increase was primarily due to higher employee-related expenses, including those associated with our commercialization planning efforts, partly offset by a decrease in professional fees. Net loss for the second quarter of $6.9 million compared to $9.2 million in the second quarter of 2017. Lastly, total shares outstanding at June 30, 2018 were approximately 50.3 million shares. Tom?
- Dr. Thomas Schall:
- Thank you, Susan. To summarize, as you can see on our final slide, slide nine. In the second quarter of 2018, the Company reached a new horizon. We hit historic milestone as we completed patient enrollment, and our landmark Phase 3 ADVOCATE pivotal trial of avacopan for the treatment of ANCA vasculitis, demonstrating our capability to run a sophisticated multicenter trial across several continents, indeed across the globe. Positive data from the ADVOCATE trial would allow us to begin to compile full MAA and NDA dossiers, late next year. Our clinical trial for a second indication for avacopan in C3G is well underway, and we have filed an amendment to double the number of patients. Clinical development of our second renal disease asset, the CCR2 inhibitor CCX140 is ongoing in two patient populations of primary FSGS. We intend also to start a comprehensive, randomized controlled study of avacopan for the treatment of the dermatological indication of HS later this year, as we expand our value-creation beyond kidney disease. We intend the second half -- we entered the second half of this year with an impressively strong balance sheet, with more than $200 million in cash and investments. In conclusion, my belief is that 2018 to-date shows marked progress for our enterprise, and that progress reveals that positive forces are in motion for ChemoCentryx. We believe powerful momentum is building. And we look forward to an exciting future. With that, I will now turn the call back over to the operator and look forward to your questions. Operator?
- Operator:
- [Operator Instructions] Our first question comes from the line of Konstantinos Aprilakis with JMP Securities. Your line is open. Please go ahead.
- Konstantinos Aprilakis:
- Hey, guys. Thanks for taking my questions. And congrats on the early enrollment completion for ADVOCATE. So, regarding ANCA-associated vasculitis, can you talk about how you envision avacopan ultimately being used in the clinic, given that patients in the trial are likely taking either cyclophosphamide order rituximab? Is there a reason to believe that either combo might be more efficacious?
- Dr. Thomas Schall:
- Yes. We are agnostic as to what background medication is being taken, cyclophosphamide or rituximab. This is based on our experience in Phase 2 where again we had a relatively even mix across the two trials of those background medications, and the numbers don’t seem to change, at least from the Phase 2 data we have so far. Moreover, we know from published precedent when rituximab was originally approved for use, instead of cyclophosphamide, and again this is all against the backdrop of normal high dose chronic steroid therapy over a six months timeframe with tapering of the steroids. But, the numbers weren’t all that different. Patients were in signs and symptoms remission, if you will, by six months at about 60% average rate, a little bit higher on the rituximab group, 64% versus 53% in the cyclophosphamide plus steroid group versus rituximab plus steroid. And those were certainly significant at the level of non-inferiority, suggesting rituximab was doing as well with signs and symptoms control as the standard of care. But the numbers were not sufficiently different to cause us to change any of our models about whether or not those background therapies would affect what was happening with avacopan and indeed data to-date from the Phase 2 programs suggests that they do not affect. So, how will this be used ultimately? Well, the first thing, and again, I’m sure most folks will recall, initially, what we are trying to do is dramatically reduce or even eliminate the need for chronic high doses steroids in this patient population. The steroid load contributes fundamentally to strongly to the total burden of the disease because the steroids themselves, as you know, cause tremendous problems in this patient population. So, that is what we aim to do, and that’s what we’re testing very carefully in the ADVOCATE trial. Some may ask me ultimately, do you think these other agents are useful at all, maybe with the precise mode of action avacopan. And since this is a neutrophil-driven disease, driven by activation of complement down to the C5a, C5a receptor level, maybe even rituximab and/or cyclophosphamide are not actually going to be that useful. While ultimately we will test this in the clinic, preclinical modeling does tell us however, that in very thorough models of ANCA disease in rodent systems, you don’t need to inhibit anything but the C5a receptor. And those data are published by us and others. So, who knows what the long-term approach will be. But, our next step is to simply try to make sure that in the presence of avacopan, folks don’t need to take the load of high chronic doses of steroids.
- Konstantinos Aprilakis:
- Can I ask a quick question on the hidradenitis suppurativa trial that’s supposed to initiate later this year? So, you mentioned the inclusion of endpoints with regulatory precedent. Could you just briefly review those endpoints and perhaps thresholds for success that we should be looking for?
- Dr. Thomas Schall:
- Well, I’ll have a lot more to say about the details, probably on next quarter’s call as we get through the final stages of our planning and our regulatory feedback. But suffice it to say that there is only one approved incumbent therapy for HS right now, and that is the antibody Humira. So, what we know from them is that AbbVie sponsored some trials in HS a few years ago and defined an endpoint that is -- was the regulatory endpoint for the approval of Humira in that disorder. So, we are following that precedent, since that is the sole regulatory approval precedent endpoint. But, in addition, it’s something called the HSQI [ph] index by the way. In addition, we have the ability, and we are building in other endpoints that we will look at in that trial to more comprehensively approach what we now know about the burden of disease in HS. And we will be capturing as many of those indices as we can. The trial will be large enough certainly to see clinically meaningful reductions in the HS index and even beyond that, we believe with the patient population that we will enroll. So, as I said, I’ll fill you in on many more of the details, hopefully on our next quarter call. But, we intend to have a trial comprehensive enough and large enough to give us a definitive answer about the potential benefit that avacopan may give us in that patient population.
- Operator:
- And our next question comes from the line of Anupam Rama with JP Morgan. Your line is open. Please go ahead.
- Tessa Romero:
- This is Tessa on for Anupam this evening. Thank you for the update here, and congratulations on all the progress. One from us maybe on the Phase 3 ADVOCATE trial, with the update here that you are now 100% enrollment, data is coming in 4Q 2019. Maybe you can talk a little bit about how you think about the market opportunity for avacopan in AAV in the context of patient eligibility, the screen failure rate for ADVOCATE and your general experience in recruiting patients globally in Japan, et cetera?
- Dr. Thomas Schall:
- I also have the great pleasure today of being joined by our Chief Operating Officer, Bill Fairey, who has done a lot of analysis in this area and he is going to drive our go-to-market strategy. I’ll just say, generally and Bill may add to this with other of his comments. We know that the incidence and prevalence of the disease are actually quite reasonable for an orphan disease. We have in the U.S., at least about 7,000 new cases per year and upwards of 90,000, potentially even more ongoing, prevalent cases in the U.S. And for Europe, you can scale that up by about 1.2 or 1.3. We know that a lot of these people are in active flare or relapse each year. And we started to analyze those numbers as probably the initial market for the drug. I will say that the screen failures that we’ve had in ADVOCATE and other trials really are related to mostly advanced disease, probably beyond where we want to be a in a clinical trial but certainly subsequent clinical investigation, we’ll investigate some of those folks. These are ones where for example, as you probably know, ANCA vasculitis manifests itself as kidney dysfunction ultimately in about 75% to 80% of individuals with this disease. And so, sometimes, even with the initial presentation, folks are already in pretty advance state of kidney failure. And certainly after several relapses, this can be a profound problem. What we intend to do and what we’d like to do with our therapy is basically keep people out of that status, indefinitely, thereby creating great value for that patient as well as great pharmacoeconomic value. But even in the short term obviously, the improvements in quality of life, bringing their disease under control and keeping them also off of debilitating steroid therapy and all the complications and expenses come from those complications of steroids is where we’re going. Bill, does that pretty much encapsulate some of your thinking as well or you have…
- Bill Fairey:
- I think it’s an excellent summary, Tom. The initial market I think for avacopan is going to be this incidence and relapse population. And what we’ve seen in some recent market research is that the treatment decisions based or made during induction tend to reflect the treatment decisions made for maintenance therapy as well. And so, this is potentially a nice opportunity for avacopan as we generate more data in that area.
- Operator:
- And our next question comes from the line of Steven Seedhouse with Raymond James. Your line is open. Please go ahead.
- Steven Seedhouse:
- I have a few questions about the hidradenitis trial as well. I was hoping you could just clarify, this is going to enroll early stage two and three patients or just stage three, and are you enrolling Humira naïve or Humira refractory patients or both?
- Dr. Thomas Schall:
- I’ll say that we’re going to enroll quite severe patients. So, let me dodge the question for the moment on whether it’s two or three or both. And I’ll come back to that in our next call. But, I will say just about Humira naïve versus non-naïve. It’s really interesting and it shows up even in the publications on the clinical trials with that agent. Frankly, most folks are not driving sustained benefits. So, if one, for example, looks at the data about the 12-week efficacy with the drug, Humira, one -- I’ll figure about 50%, which is certainly a significant advance over what had been seen before with underlying standards of care. Interestingly, they will pass the 12-week endpoint, many of those people lose their response to Humira. So, potentially, if one just looks very simply at the numbers that have been published, it looks as that perhaps one in four of the severe patients that have been treated with Humira have a sustained benefit. All of this -- jus by way of saying that, I believe that we are more or less agnostic as to where patients have been. If they are in an active flare, if they qualify for our inclusion criteria, as long as we protocolize their con meds, we simply think that they’re going to be good candidates for the trial and good candidates for therapy. And also, this may speak to mechanism. While anti- TNF approaches such as Humira are very powerful, if this is purely a disease of activated complement as data suggests, then the TNF -- the upstream effects of TNF may only be very partially effective. And maybe that’s what we are seeing clinically. So, again, I don’t think we are all that concerned about whether patients have seen Humira or any other agent for that matter. If they are in an inactive state and they qualify for inclusion criteria, we will enroll them and we will simply carefully protocolize their background meds and of course will stratify as well, so that we can track the population as well when we have the results.
- Steven Seedhouse:
- And just backing up, I’m curious how you decided on such a large trial straightaway altogether. I mean, it’s about a third of the combined size I guess of the two pivotal Humira trials. Why not run a smaller pilot study or dose finding study like some biologics have done historically?
- Dr. Thomas Schall:
- We are looking for a definitive answer. And we feel that we have a very advanced Phase 3 asset, it’s Phase 3 obviously in another indication. But we have a great deal of clinical experience with the drug. All of our off clinical studies and all of those other reams and mountains of data that one needs to have in advanced assets are in place for us largely. So, we believe, based on our experience in ANCA vasculitis and our emerging experience with C3G, we understand the drug we understand effective doses for neutrophil-driven diseases and certainly HS falls in that category. And we’re just going to do a definitive study because time is also something that is of great interest, both for patient benefit and also in terms of just how we think about investing in this program. So, I would say that if we hadn’t had so much clinical experience with avacopan already, we might do, as you say, Steven. But, at this point, we feel that we’ve got enough experience and enough understanding of the behavior of this drug. And there are enough similarities in this neutrophil-driven disease that this will be a nice definitive study. Now, that’s not to say we want to do some other exploratory work. We are working on different formulations. We might do some other safety and mechanism studies in this population. But, this will provide a great answer about the effect of avacopan in this population. And as I said, if the data are positive, well, then, there will be some very interesting and compelling discussions to be had with regulators at that point.
- Steven Seedhouse:
- Just last question, again, on this trial, if I may. I apologize if I missed this. But, is this a placebo controlled trial or is this an active control trial or are you testing two different doses of avacopan? And on the dose selection, are you using the same doses as in the AAV or how did you model the doses for the trials?
- Dr. Thomas Schall:
- Yes. So, what we envision is using the same dose as we’ve shown to be effective in ANCA vasculitis based on our Phase 2 studies. And the dose is ongoing in the ADVOCATE trial in ANCA vasculitis. The HS study will be a placebo controlled study. So, what we’ll do is we will take people on their background meds obviously, will protocolize what those background con meds are and how they are used obviously. But then, they will get a placebo to avacopan. The other group will get active avacopan, and the same kind of protocolized background in con-meds.
- Operator:
- Our next question comes from the line of Michelle Gilson Canaccord. Your line is open. Please go ahead.
- Michelle Gilson:
- I was wondering that you can maybe expand a little on the additional low complement patient in C3G study. And just kind of the emerging data suggesting that there may be differences in the blood versus site of destruction. And then, maybe how that could treat or how that could affect the treatable population in C3G?
- Dr. Thomas Schall:
- Yes. Great questions, Michelle. So, when we design the study originally, there was a small amount of data, it was quality, but the suggestion was that soluble -- and what we measure, as you may know, some of the other listeners may also know or may not, the most stable component of activated complement, the terminal part of the cascade is the soluble MAC complex or soluble C5b-9. There are technical difficulties with assessing other fragments including C5a in the serum in blood. So, people do use soluble MAC complex. And when we started the trial and certainly started designing the trial, there was a small amount of high-quality data that suggested that soluble MAC in the blood was a very good biomarker for active disease and therefore disease that might be amenable to treatment with C5a, C5a receptor components, intervention strategies. However, over the last year or so, especially at meetings, we’ve been seeing a lot more data suggesting that soluble MAC complex doesn’t necessarily indicate the severity of the disease, C3G, doesn’t necessarily even correlate that well to the extent one can compare direct immunohistochemistry or detection by antibody of MAC complex and other components of the complement activation at the site of disease in the kidney. And then, finally, there’s been a paper published recently and I think there’ll be another soon where again when one looks -- and again, this is a fairly small number of patients, since it’s a rare disease. So, these are all kind of observations we’re making and then having to fill in and extrapolate from fairly small end. But there are a number of cases where therapy with other agents such as eculizumab, which as you know, blocks C5b-9, seems to be effective or not effective in ways that simply don’t correlate to soluble MAC complex again. So, I think that the emerging idea coming out of the field is, gosh, we just don’t know if soluble MAC complex really is a good marker. And it was always understood just to be a marker. Because, frankly, maybe all of the stuff is coming out of circulation and it’s actually there at the site of damage in the kidney whether it’s MAC complex or C5a, et cetera. And there is emerging data, some of which is published or at least presented, showing that yes, we are seeing a lot more of the components we’re interested in, including C5a receptor positive cells at the site of damage. Then, we might extrapolate from this sort of proxy biomarker of soluble MAC complex. So, right now, the data just don’t support cleanly, not cleanly, and again, the end is small in any case, just doesn’t support the idea that high C, the C5b-9 -- soluble MAC complex C5b-9 complex in the serum is just that greater marker. So, what we decided was, hey, we can just -- let’s just do the clinical experiment. We have got a program ongoing. We’ve already been creating sort of inclusion criteria that requires soluble MAC complex, why don’t we just include this other group as well, then we will have the clinical answer. And again, as you know we are very data-driven company. So, we want a definitive result. If I were to go and do the high soluble MAC complex population only and get a positive result, what’s the next question? Would it work in these other folks? We’d have to do that experiment anyway. We’d have to do that clinical trial anyway. And the same is true, if we got a negative result -- does that apply to all of the folks with C3G. So, it made a lot of sense for us to add this other population, analyze it as a separate stratification, but be able to look at the population as a whole. If we get a good answer and certainly the trial is rigorously designed to give us a definitive answer in both these populations, then that will then form the market segment. If it doesn’t matter about the levels of soluble MAC, we will still get a pretty good idea obviously of where the drug does seem to have its best effect. And if it’s across that whole population, well then, by definition, it would kind of double how we are thinking about the market population now.
- Michelle Gilson:
- And then, you keep talking to a lot of nephrologists and one of the trends that seems to keep coming up is that they seemed to be very compelled with treatments that treat a segment of the FSGS population? And they like the idea of segmenting that population in terms of finding biomarkers in different populations for different therapies. So, I was wondering if you could talk a little bit about your 140 program and your strategies for development in that program and maybe if you’re thinking of -- if you have any ongoing have hypothesis of ways that you can maybe select for patients that could be better responders within that population.
- Dr. Thomas Schall:
- A great question. So, already I think we are little bit ahead of some of the other folks in this area insofar as. While it took us a long time to understand maybe some of the regulatory comments, both public and other discussions, we finally got that at minimum the -- it seems that there are definitely distinct populations of FSGS, not just clinically but regulatorily. So, for example, again, we are running two distinct trials. And we are concluding that nephrotic syndrome patients are just a different patient population. And our goal there is to get them to be sub-nephrotic and substantially lower their proteinuria over the course of therapy. And so, we have one separate trial designed that’s looking exactly at that. And now that’s going to be a fairly small trial. And again, we vetted this quite extensively with discussions with experts and agencies. But a significant result in even a small trial of nephrotic syndrome patients could be very, very interesting and could support, based on proteinuria reduction alone, say, getting them to a sub nephrotic range could support I think talking about a registration for that drug in that segment of the population. Then, we have another population, obviously the sub-nephrotic population. We’re running a separate trial there. That’s going to be somewhat larger. We’re going to do a lot more just ranging in that trial. As you know, that trial is launched, and we’ve talked a little bit about the design. The question that we have though is the one that you posed, even in the sub-nephrotic folks, rare disease that this is, there are a lot more of those patients, can we define a profile who will benefit more from therapy. Those are outstanding questions. There is a lot of very good hypotheses, a lot of things that we will test to try to answer or add information to those hypotheses. But, we do need to get some more data as we hope to do. Beyond that, there is just not -- again, while there is excellent hypothesis out there, there is just not a lot of good hard data that’s been published and any of us can go on. And it’s one of the reasons I think that we don’t have any approved therapies yet. And then, finally, I’ll just say that in terms of segmentation. Again, I don’t know at the level of biology, if it makes sense to say that there is a meaningful distinction between secondary FSGS, i.e. the same kind of kidney lesion associated with high proteinuria et cetera, et cetera, but downstream of other causes, whether it’s viral infection or drug abuse or other health issues. At the end of the day, perhaps the lesion in the kidney can be modified by the same strategies that we’re employing for primary patients. But, it seems to be the case that certainly from a regulatory point of view that’s going to be a different population to think about. How all of it comes together at the end I think is an exciting set of questions and we’re going to have some very good answers over the next couple of years. We, meaning this field, including ChemoCentryx contributing to that.
- Operator:
- Thank you. And I showing no further questions at this time. And I would like to turn the conference back over to Tom Schall for any further remarks.
- Dr. Thomas Schall:
- Well, I would like to thank everyone for joining our call today and the stimulating questions and discussions. We will continue to update you as we reach major milestones in the execution of our plan. And also, I’ll say that I look forward to seeing many of you at some of the upcoming healthcare conferences in September. With that, I thank you all again and wish you a very pleasant afternoon.
- Operator:
- Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program, and you may all disconnect. Everyone, have a great day.
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