ChemoCentryx, Inc.
Q3 2017 Earnings Call Transcript

Published: 12 Nov 2017

[Operator:]

Good afternoon and welcome to the ChemoCentryx third quarter 2017 financial results conference call. At this time, all participants are in 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 conference over to Steve Klass, Vice President with Burns McClellan. Mr. Klass, please go ahead.

[Steve Klass:]

Thanks Tyron. Good afternoon and welcome to the ChemoCentryx third quarter 2017 financial results conference call. Earlier this afternoon, the company issued a press release providing an overview of its financial results for the quarter ended September 30, 2017. 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 provide an overview of the company's business and clinical progress during the third quarter. 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 third 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 14, 2017. 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, November 7, 2017. 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 Schall.

[Thomas Schall:]

Thank you Steve and good afternoon everyone. Thank you for joining us on our third quarter 2017 financial results conference call. Within the broad and advanced ChemoCentryx pipeline are included our major lead programs comprising novel, orally administered medicines that target specific chemoattractant receptors which are involved in the pathogenesis of orphan renal diseases. These are diseases that can result in chronic kidney disease leading to subsequent organ failure, dialysis and death. 2016 has been an exciting year to-date for ChemoCentryx and we have continued to make excellent progress since the end of the second quarter. Today, I will update you on the avacopan Phase III ADVOCATE clinical trial progress and in fact, the main theme that will run through my remarks today is the fact that for the first time in the company's history, we stand on the brink of running multiple late-stage registration supporting clinical trials simultaneously. These development programs involve two of our drug candidates, the novel and versatile complement C5a receptor inhibitor now known as avacopan and also CCX140, an inhibitor of the chemokine receptor CCR2. Both of these novel therapeutics are in clinical development for orphan kidney diseases as those of you following the slides can see on slide three. I will bring you up-to-date on these trials and also overview some of the growing body of evidence that provides powerful support for the potential efficacy and safety of these drug candidates which were originally developed from our basic science discovery efforts and our in-house drug discovery platform. First, let me talk about the dramatic progress in enrollment in our global Phase III trial called ADVOCATE for avacopan in the treatment of ANCA-vasculitis, which you can see on slides four and five. Momentum towards our 300 patient target has accelerated since our last quarterly earnings call in August, so much so that we now have over 185 sites activated worldwide in 19 countries around the globe. We have approximately 110 patients enrolled as of today. Also as many of you know, all Phase III registration trials are overseen by an independent data monitoring committee as well. To-date, the ADVOCATE trial DMC has recommended that the trial proceed unchanged reinforcing the earlier observations that avacopan seems to be very well tolerated in ANCA patients and now for dosing periods which are longer than the previous clinical studies. Importantly with this pivotal Phase III trial, we are on track to achieve our ambitious goal of completing ADVOCATE enrollment by mid-2018. As some of you know, ANCA-vasculitis is currently treated with drugs that are designed to suppress the immune system, drugs such as cyclophosphamide or rituximab combined with the long-term use of high doses of steroids such as prednisone or methylprednisolone, which have been shown to cause high incidences of serious adverse events including death. The standard of care regimen, especially the steroids, is a source itself of much of the total burden of disease for patients with ANCA-vasculitis. Indeed, the current large unmet need in ANCA-vasculitis includes the inadequacies of current care in the patient journey. Despite current therapies, that is as I mentioned, cyclophosphamide or rituximab plus high-dose steroids, ANCA-vasculitis remains a serious potentially life-threatening disease with at least an 11% first year mortality rate with most of those tests occurring within the first three months and current treatments contributing 60% of this mortality mostly due to serious infections associated with steroids. And with all that, the current regimens can be slow to act in relieving the signs and symptoms of ANCA-vasculitis and in fact, often do not provide a durable therapeutic benefit. We have a new approach with avacopan. Anti-neutrophil cytoplasmic auto-antibody or ANCA-vasculitis is caused by the over activation of the complement system, which in turn activates neutrophils to destroy blood vessels through inflammation. Avacopan is the first late-stage drug candidate to block only and I emphasize only, the C5a receptor in the complement system. Those of you following the slides online will be able to see a schematic of the complement system on slide six. By blocking the C5a receptor, we leave the rest of the patient's immune system functioning normally. Avacopan's action selectively stifles the activation of harmful neutrophils that cause the ANCA disease, avoiding major limitations of other complement system-targeting therapies that are in development. Avacopan possesses a highly specific mechanism of action. It is the first targeted therapy developed for ANCA-vasculitis. We and others believe avacopan could make the current standard treatment regimen in ANCA-vasculitis irrelevant, marking a paradigm shift in the treatment of this disease, providing a true twenty-first century medicine that makes obsolete a standard of care that dates back several decades and fails too often to prevent organ failure and death. With avacopan, our belief, based on the data to-date, is that patients will get better and will get better faster, they will stay healthy and avoid the physical and psychological side effects that come with the previous century's standard of care and enjoy a markedly better quality of life. Further evidence of this potential was presented last week at two major meetings, the 2017 meetings of the ASN or American Society of Nephrology as well as at the American College of Rheumatology-associated Vasculitis Clinical Research Investigators Meeting. These discussions included overviews of the new approach to ANCA therapy envisioned with avacopan. At AACR, presentations outlining the published Phase II CLEAR clinical trial data were made with avacopan and it was summarized that the primary endpoint was achieved with avacopan in CLEAR, there was a more rapid onset of ANCA disease remission with avacopan treatment than with the standard of care and this was accompanied by marked, rapid and significantly superior improvements in measured renal parameters such as proteinuria lowering. Avacopan treatment showed that high-dose chronic steroids could be rendered simply irrelevant for rapid and beneficial treatment effect in ANCA-vasculitis. Also in CLEAR, patients reported feeling significantly better. There was a statistically significant enhancement in quality of life metrics and avacopan exhibited a favorable safety profile. At the ASN moreover, key novel biomarker data from the Phase II CLEAR trial were presented which showed a marked correlation in a much more rapid improvement of kidney inflammation following avacopan treatment in patients with ANCA-vasculitis than in those patients treated with the standard of care. Key investigators in ANCA-vasculitis reflected in their remarks last week. Not only is the ADVOCATE clinical trial the largest controlled trial of a pharmacologic agent in ANCA-vasculitis ever conducted, it is the most promising to achieve that long-desired therapeutic prize, making high-dose chronic steroids obsolete. We recently received orphan designation in Switzerland from SwissMedic for avacopan for the treatment of the two major forms of ANCA-associated vasculitis, MPA and GPA, formerly known as Wegener's disease. This adds to our orphan drug designations for avacopan from the FDA and the European Medicines Agency, EMA. I am also excited to report that we have now started enrolling patients in what we believe to be a registration-supporting trial for a second indication, C3 glomerulopathy or C3G disease which you can see on slide seven, following productive discussions with the FDA and the EMA. C3G is a rare disorder that often affects the young requiring dialysis and all too frequently, kidney transplant. There is simply no effective treatment today. Immunosuppressive drugs are minimally beneficial and even kidney transplants frequently fail. Our trial design, shown on slide eight, is a controlled two-arm study involving 44 patients, comparing avacopan to empirically used standard of care. There will be a six months primary endpoint based on a renal histology index. We and other experts believe that we have designed the most stringent controlled trial yet initiated for C3G. The third indication that I will talk about today involves a different novel therapeutic in the CCXI pipeline. This is the CCR2 inhibitor CCX140 for the treatment of focal segmental glomerulosclerosis or FSGS. As described on slide nine, FSGS is a debilitating illness for which, again, there is no approved treatment. Also at ASN last week, data were presented demonstrating the podocyte-protective properties of CCR2 inhibition as a differentiated potential treatment option for FSGS patients. Researchers showed the efficacy of CCR2 inhibition in improving kidney function using a number of in vivo pharmacological models of FSGS. The data revealed a very rapid and profound improvement in proteinuria with CCR2 inhibitory therapy. Investigators also demonstrated marked histological improvement in animals treated with CCX140 including increased density of podocytes, a specialized cell population in the kidney that performs key filtration functions and which is known to be damaged in FSGS. These data suggests CCR2 inhibition involves a unique mechanism of action in the kidney involving a novel element of renal cellular protection at the level of the podocyte. We have been working with the FDA and the EMA and plan to launch trials in two subpopulations of FSGS stations. We are filing two IND applications, one for non-nephrotic primary FSGS patients and another IND application for primary FSGS patients with nephrotic syndrome. These two subpopulations, we believe, will comprise different indications for FSGS. We have a great deal of clinical experience with CCX140, it already having successfully completed a one-year Phase II study in chronic kidney disease in patients with diabetes. CCX140 treatment durably and significantly lowered proteinuria in vast chronic kidney disease while being very well tolerated in patients over its one-year dosing period. Those data provide the underpinning of our current studies in FSGS, an orphan chronic kidney disease where proteinuria lowering may constitute the actual registration endpoint in certain FSGS patients. Importantly, we also have a plan to bring our novel renal therapeutics to market once they are approved. For marketing abroad, we have a very experienced commercial partner in renal care, Vifor Pharma and their subsidiary Vifor Fresenius Medical Care Renal Pharma. While ChemoCentryx retains 100% of the rights in the U.S. and China to avacopan and CCX140 for these orphan renal products, Vifor has the rights to commercialize avacopan and CCX140 in markets abroad with ChemoCentryx receiving significant royalties on eventual net sales from those Vifor territories. Our partnership with Vifor, which is now a year-and-a-half old, has also provided us with financial resources we need to advance multiple late-stage clinical trials simultaneously. We ended Q3 with more than $150 million cash in pro forma cash and investments. At ChemoCentryx, we started with basic science in the service of discovering novel molecules that selectively target chemoattractant receptors which are the molecular guidance systems of destructive inflammatory cells. We have now advanced that science well into late-stage clinical development and aspire in this next step to advance these novel medicines through the approval process and into clinical practice. With Vifor, we are now planning for commercialization abroad while ChemoCentryx develops its plans for commercialization in the U.S., the next big step in our climb of value creation. We believe the value we create for our shareholders by commercializing our orphan renal disease medicines will help us also to accelerate our earlier-stage candidates, as overviewed in slide 10, in other disease areas where chemoattractant receptor inhibition could provide the key, areas such as cancer, debilitating skin pathologies and other autoimmune diseases. We are planning soon to present updated overall survival data for the treatment of advanced pancreatic cancer using our CCR2 inhibitor CCX872 at a major medical meeting. We will also provide updates on our regulatory initiatives such as our EU PRIME program designation and certain U.S. filings soon. Early in the New Year, we will discuss advancing other candidates in the clinical development in 2018. I will now turn the call over to Susan to give you an overview of our robust financial picture with the main points from our third quarter financial results. Susan?

[Susan Kanaya:]

Thank you Tom. For those of you following on our slides, our Q3 financial results are on slide 11. Revenue was $9 million for the third quarter compared to $4.1 million for the same period in 2016. The increase in revenue from 2016 to 2017 was due to amortization of the upfront license fee commitments from Vifor pursuant to the avacopan and CCX140 agreement as well as collaboration revenue for development services under the CCX140 agreement in 2017. These increases were partially offset by lower grant revenue from the FDA to support the clinical development of avacopan for the treatment of patients with ANCA-vasculitis. Research and development expenses were $12.3 million for the third quarter compared to $8.4 million for the same period in 2016. The increase from 2016 to 2017 was primarily attributable to the initiation and patient enrollment of the avacopan Phase III ADVOCATE trial in patients with ANCA-vasculitis and startup expenses for the Phase II clinical trial of avacopan for the treatment for C3G. These increases were partially offset by lower costs associated with the completion of the avacopan CLEAR and CLASSIC Phase II clinical trials for the treatment of ANCA-vasculitis and enrollment completion of the CCX872 Phase I trial in patients with advanced pancreatic cancer in 2016. General and administrative expenses were $3.6 million for the third quarter compared to $3.2 million for the same period in 2016. The increase from 2016 to 2017 was primarily due to accounting related fees associated with preparing to meet the requirements pursuant to the Sarbanes-Oxley Act of 2002. Net losses for the third quarter were $6.6 million compared to $7.1 million for the same period of 2016. Total shares outstanding at September 30, 2017 were approximately 48.8 million shares. Pro forma cash, cash equivalent, investments and remaining upfront commitments totaled $154.8 million at September 30, 2017. I will now turn the call back over to Tom.

[Thomas Schall:]

Thank you Susan. As you can see on slide 12, the third quarter of 2017 saw strong progress in our pivotal Phase III ADVOCATE trial for avacopan and ANCA-vasculitis with approximately 110 patients enrolled to-date and the start of patient enrollment in a second registration supporting trial for avacopan in C3G. We are preparing to file IND applications for registration supporting trials for our CCR2 inhibitor CCX140 for the treatment of patients with FSGS very shortly. In parallel, we are planning for commercialization of avacopan with our partner Vifor Pharma. It is easy to find optimism among these very bright prospects. We have demonstrated that we are marching relentlessly to late-stage clinical development moving ever closer to approval of our potentially paradigm-shifting therapeutics and hope to bring modern medicine, at last, to patients enduring debilitating and costly maladies of orphan kidney disease. With that, I look forward to taking your questions. Operator?

[Operator:]

[Operator Instructions]. First question is from Anupam Rama of JPMorgan. Your line is open.

[Eric Joseph:]

Hi guys. It's Eric, in for Anupam this evening. Thanks for taking the question. Just in thinking about the breadth of a potential label with avacopan in AAV, are regulators looking for any particular kind of minimum thresholds in the number of patients receiving background treatment with cyclophosphamide or Rituxan or by AAV subtype, be it MPA, GPA, EGPA? And how are you kind of seeing that mix in the patients that you have recruited so far? Thanks.

[Thomas Schall:]

Yes. Eric, thank you. It's an excellent question. So as you know, there is still a geographic divide among patients who will use in background, preferentially cyclophosphamide versus rituximab. All patients, I will stress, all patients get the high chronic doses in current standard of care of corticosteroids such as prednisone or methylprednisolone. So the agency is cognizant of this and we know from our studies in Phase II that we had a relatively equal mix of rituximab versus cyclophosphamide as the background immunosuppressant. And the Phase II data suggests that in the presence of the avacopan therapy, it really didn't matter. Both populations, whether they were on cyclophosphamide or rituximab, had relatively similar response rates with the avacopan therapy as the test article. And of course, you will recall that in the CLEAR trials as in ADVOCATE, really what we are testing is the elimination of steroids which we believe to be irrelevant for therapy once we are inhibiting the C5a receptor. So based on the Phase II data and based on the fact that we are in 19 countries around the world, we think we will have a relatively equal distribution of rituximab or cyclophosphamide. We are agnostic, in any case, about that because we think the response rates will be about the same. Similarly with GPA and MPA. We know from our Phase II clinical development program that, again, they were about equally distributed. There are some features of those two forms of ANCA-vasculitis that are interesting. But again, for the context of this clinical trial, we think that we will probably be more or less equally represented. And certainly, the agencies are not looking for balance of one versus the other. And again, our Phase II data suggests that generally speaking, we will have a similar response rate irrespective of the form of ANCA-vasculitis. This may well be because of the mechanism of action of the drug. Recall that what we are doing is really trying to shut down the terminal damage effector pathway at the level of the neutrophil. And probably to a greater or lesser extent with both those forms of ANCA-vasculitis, that is the key terminal damage effector pathway. So I think we, from a mechanistic standpoint, really are approaching ANCA-vasculitis, irrespective of the subtype in the appropriate way. So, so far in our Phase III trial, we don't really know. We are blinded as to the data. All we know is that we are getting very robust enrollment. And if it's anything like Phase II, we will probably expect fairly equal distributions across those various populations.

[Eric Joseph:]

Got it. Thanks for taking the question.

[Operator:]

Thank you. Our next question is from Eric Schmidt of Cowen and Company. Your line is open.

[Eric Schmidt:]

Good afternoon. Thanks for taking my questions. Maybe Tom, on the C3G primary endpoint of C3G histologic index, can you talk a little bit more about what that index measures now? How you actually, I guess, histologically grade the tissue? And what would be the rationale for why you could see improvement there? I don't think that we have seen any data thus far in this endpoint.

[Thomas Schall:]

Eric, I think that there's been a lot of work around how to codify and validate a more precise index for C3G. We know that the longer-term outcomes such as eGFR and even shorter term in diseases such as proteinuria, there's such variation in this patient population that they are thought not to be that appropriate, certainly not for a six month or a one year trial. What we do know is that in renal biopsy, which is very common in C3G, particularly in those folks that have undergone transplant, that the degree of crescentic formulation around the glomerulus, the degree of mesangial proliferation that accompanies that, the degree of infiltration of certain populations of inflammatory cells do provide strong correlates with a decline in kidney function and in fairly real time. So a great deal of work has gone on in the community, mostly at large academic centers, to try to come up with a way of codifying the biopsies. We have ourselves seen in certain compassionate use instances where renal biopsy did correlate with the stabilization of kidney function and that was accompanied fairly rapidly with avacopan therapy with the reduction in inflammatory cells and in fact, in elimination of inflammatory cells in and around the glomeruli, a reduction in mesangial proliferation and a genuine reduction in the amount of crescentic damage around glomeruli that was noted. So there will be, I believe, some of the folks that have worked in the major academic centers on the validation of histologic end point, I believe a paper is certainly in advanced preparation that may well now be impressed. And we will be able to discuss a lot more of those details when that paper comes out. We had a role in sponsoring some of that work, as have others in the community. And it has, I hope, provided a platform by which we can have a validated histologic endpoint which will, with data that is being used by the team and is in the publication, correlate strongly with longer-term renal outcomes. And so I would like to bring up the details of that publication when it's actually made but I think for us, it's a very good place to be, looking at such an endpoint at the six month time point.

[Eric Schmidt:]

And did you say you do have data on avacopan on this endpoint in C3G patients, Tom?

[Thomas Schall:]

We had one compassionate use case not yet published, but certainly has been published in the abstract form, Eric. And I think it was presented at the European Renal Association meeting last year where in the compassionate use case, we did report on serial renal biopsies at the time of avacopan baseline started treatment two months later and then an additional six months after that where we saw robust reduction, as I said, in mesangial proliferation and inflammatory cell infiltration in that patient. So that provided us with at least that n=1, proof-of-concept that that might be a valuable way forward.

[Eric Schmidt:]

Okay. And obviously you have got agreement with the FDA that a statistically significant result here would be approvable. Is that fair to assume?

[Thomas Schall:]

What we have had is extensive discussions with both FDA and EMA. And as you know, there is no regulatory precedent for C3G since there's no approved therapy. So suffice it to say that while this, for the moment, is considered a Phase II trial, we will have and the FDA and EMA are both very open to looking very carefully at this histology data and should it proved to be robust enough, then I think there will be a very interesting discussion about registration given both the rarity of this disease as well as the fact that there simply are no other approved therapies. So I think both agencies are fairly open to that, but I think it's also fair to say they are not yet committing in advance of data.

[Eric Schmidt:]

Okay. Fair enough. And then in FSGS, we have seen a number of new entrants into the space. Could you maybe just compare and contrast the approach you would have on 140 to potentially with what some of your competitors are doing? And I don't know if this is something you think might be used in combination with other agents or whether you think your approach might be superior? I would be all ears. Thanks.

[Thomas Schall:]

Yes. Thank you. It's a real good question and again, I am a little bit limited, obviously, details about other's programs. But from what I know, we do have some information about how we are different. First and foremost, as you probably well know, all FSGS patients are going to be on a background already of sort of standard therapies, including inhibitors of the renin-angiotensin-aldosterone pathway or RAAS pathway, most of those typically being angiotensin inhibitors either at the converting enzyme level or at the angiotensin receptor blockers. So they are all going to be on that already. And so this is true in other chronic kidney diseases we have worked in, including diabetic nephropathy. So the major approaches right now are, as standard therapy people do throw a lot of ACEs and ARBs at these folks that results in some reduction but it's not sufficient to make a longer term benefit to the patient population, at least historically. And so now the approach is, well, what can we layer on top of ACE and ARB? So one of the other sponsors has taken the approach of a fairly clever molecule where an endophilin-1 blocker is kind of welded in a molecular way to an ACE or an ARB. Actually, it's an ARB, frankly. And so in that case, that drug is essentially already using a new approach, endophilin-1 pathway inhibition with an existing approach, the angiotensin receptor blocking. The advantage of that is you tend to get and this has been shown by our colleagues at Retrophin, you tend to get a more profound protein reduction. The questions that are out there, I think, are, well, what about the liabilities that are known for blocking endophilin pathway, including a lot of fluid retention, edema, et cetera? Will you be able to manage that? And I haven't seen all the data, but there seems like maybe there is some evidence for that being a side effect and it seems to be manageable according to the sponsor and that's great. What we are doing is entirely different. So we are inhibiting CCR2 and it's going to obviously go on top of the ACE or an ARB that's already in clinical practice. And what our model data show is that when we inhibit CCR2 on its own in models of FSGS, we can get as much as a 70% reduction in proteinuria over the course of one to two weeks, so a pretty rapid reduction. If we add that to angiotensin receptor blocker or other kinds of RAAS inhibitors, you can get about a 90% reduction, which is really quite significant. When you compare that with a combined endophilin-1 inhibitor coupled to the angiotensin receptor blocker, you get really very comparable and at least as good, sometimes superior reductions in the proteinuria and in a slightly faster timescale. What you don't get in those animals with CCR2 blockage is any kind of edema or hemodilution which is a nice surrogate for fluid retention. And we showed some of this data last week at the ASN. So we think that our approach in terms of protein lowering and again with, say, for example, primary FSGS with nephrotic syndrome, proteinuria reduction may well be and in fact best indications could be the registration endpoint. You can get profound lowering of proteinuria without edema, without any kind of evidence for fluid retention rather, which is quite different from, in our head-to-head in vivo experiments, what we see with endophilin-1 inhibition plus angiotensin receptor blocking. And in addition to that, Eric, another feature which came out of the studies is that podocytes, which are really part of the absolute central equation in FSGS which many refer to as podocytopathy, we have now great evidence for CCR2 inhibition therapy leading to a kind of podocyte-protective effect in these studies at the level of the histological analysis. And beyond that, there's actual very good evidence now for CCR2 expression intimately in the glomerulus in cells that are certainly abutting the podocyte. So there's some newly appreciated or at least becoming newly appreciated direct action in the glomerulus of CCR2 and its inhibition in these kind of pathologies seems to be renal-protective at the level of podocyte protection. And so I think that's entirely new and it really caught a lot at ASN last week. We don't see that, frankly, when we try the endophilin-1/ARB combination in our animal model. So that's another differentiating point.

[Eric Schmidt:]

Thanks Tom.

[Thomas Schall:]

Thank you Eric. Good questions.

[Operator:]

Our next question is from Mike King of JMP Securities. Your line is open.

[Mike King:]

Hi guys. Thanks for taking the question. I am just curious if you could provide a little more color on the FSGS trial design? I think you mentioned the potential there being two trials now. Can you talk a little bit more about that?

[Thomas Schall:]

Sure Mike. The more we learn about FSGS, the more interesting it becomes. There are some nuances there clinically and from a regulatory standpoint. We think that when we started to look at this a while ago, we might have been naive and thought all FSGS is FSGS. But as you know, there's both primary and secondary and even within the primary population, we have non-nephrotic and nephrotic. In extensive discussions with experts in the clinical community as well as with regulators, we have learned that not all of these FSGS types are equal and not all of them will get the same kind of regulatory treatment. So we are very keen to use this knowledge, develop a sophisticated trial path and as I mentioned in my remarks, at minimum now we are going to go into two populations of FSGS. These are both primary FSGS and just in parenthesis, why not secondary? Well, I think most experts, including the expert regulators that we have had the discussions there say, well, you know in secondary FSGS, the primary disease is the problem causing these secondary effects. So effective treatment of the primary indication is where you guys need to go. So we have kind of left secondary FSGS at the moment on the shelf because it's a complicated regulatory scenario in our opinion. But in primary, that's different. In primary, by definition, it's the FSGS that's the issue. And so we realize now that people with nephrotic syndrome, people with more than three grams of albumin per creatinine ratio in the urine and who are also becoming depleted in albumin in the serum, that's a very interesting population. Proteinuria is massive, as you can well imagine, from those numbers. And it is thought that the reduction of proteinuria is very strongly correlated with kidney function. So there, if one can get a positive, a robust and durable proteinuria lowering with your agent, we think it is quite likely that that in itself could suffice for registration. With the non-nephrotics and we are still in the primary population by the way, you may well need a little more work. We think that reduction in proteinuria, if robust enough, could certainly prove, in our discussions with experts and others, as at least an accelerated assessment feature, may be a provisional endpoint if one then correlates that with longer-term outcomes by following that patient population longer. So in the non-nephrotics, we are going to do a little bit more extensive upfront work and look at the degree to which we get proteinuria lowering over a fairly short time period and whether or not we see robust enough levels to carry on with larger N and expand that to a bona fide pivotal study. But we will be having discussions with regulators and others along the way with the non-nephrotic effects that we see. So that's why we are calling it two populations. We believe those are two indications and possibly two separate labels. That's based on a lot of discussions we have had over the last several months with experts and regulators.

[Mike King:]

Thanks a lot, Tom. I appreciate it.

[Thomas Schall:]

Sure thing, Mike.

[Operator:]

Thank you. There are no further questions at this time. I would like to turn the conference over to Tom Schall for any closing remarks.

[Thomas Schall:]

Well, thank you very much. And once again, I appreciate everyone taking the time with us to learn about our programs and our updates. We also look forward potentially to seeing individuals at upcoming conferences including in London at the Piper conference and others in New York. And Susan, could you update me on which of those conferences we will be at, please?

[Susan Kanaya:]

Absolutely. We will be in London for the Jefferies conference and at the end of the month, in New York for the Piper Jaffrey conference.

[Thomas Schall:]

Thank you for that correction. I misplaced my notes for a moment. And with that, again, I will thank everyone for their participation today and look forward to seeing you soon and updating you further on our programs. Thank you very much.

[Operator:]

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may now disconnect. Have a wonderful day.