ChemoCentryx, Inc.
Q3 2015 Earnings Call Transcript

Published:

  • Operator:
    Welcome to the ChemoCentryx Third Quarter 2015 Financial Results Conference Call. [Operator Instructions]. I would now like to turn the call over to Susan Kanaya, Senior Vice President and Chief Financial Officer at ChemoCentryx. Ms. Kanaya, please go ahead.
  • Susan Kanaya:
    Thank you. Good afternoon and welcome to the ChemoCentryx Third Quarter 2015 Financial Results Conference Call. This afternoon we issued a press release providing financial results and company highlights for the quarter ended September 30th, 2015. This press release is available on our 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 a corporate update and review our anticipated milestones. Following his comments, I will provide an overview of the financial highlights for the third quarter before turning the call back over to Tom for closing remarks. As a reminder, 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 our filings made with the Securities and Exchange Commission, including our annual report on Form 10-K filed on March 13, 2015. 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 9th, 2015. ChemoCentryx undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call. I will now turn the call over to Tom.
  • Thomas Schall:
    Thank you, Susan. And thank you to everyone for joining us on our third quarter financial results conference call. Today I will discuss the clinical progress we have made in our pipeline program since the second quarter and then I will summarize the key milestones that we expect to achieve in the coming months and into 2016. We made excellent progress across our clinical programs. We've had multiple presentations of clinical and preclinical data, we had recent medical meetings. Patient recruitment has been progressing nicely in several clinical trials. And we are on the verge of reporting topline Phase II results from a key trail in our orphan and rare disease program. During today's call, I will cover the following three areas. First, in a primary focus area for the company, orphan and rare diseases. We are presently evaluating our complement system inhibitor known as CCX168 in multiple disease settings including antineutrophil cytoplasmic autoantibody or ANCA-associated vasculitis also called ANCA disease or AAV for short. As well as an atypical Hemolytic Uremic Syndrome or aHUS. Since the large majority of our near term news events and catalysts over the next four quarters involve the orphan and rare disease program underway with our complement inhibitor CCX168. We will devote most of today's remarks to the CCX168 program. After that I will turn to a briefer summary of our second topic, that is a synopsis of recent activities and chronic kidney disease where we presented data last week at the American Society of Nephrology's Kidney Week from our Phase II trial in patients with diabetic nephropathy, which employed CCX140, our inhibitor of the chemokine receptor known as CCR2, ineffectively reducing proteinuria over a one-year treatment regimen. And closing with the third area, our immuno-oncology program with an update from the ongoing trial of patients with non-resectable pancreatic cancer, who are being treated with CCX872, our second CCR2 inhibitor as well as preclinical efforts where we recently reported data on combination therapy with chemokine receptor and check point inhibitors. Let's begin with our recent accomplishments in the orphan and rare disease program. CCX168 is a lead program for ChemoCentryx. Importantly, the prevalence of the selected disease indications within the CCX168 program is relatively small. And therefore development of this novel agent maybe manageable by our development and potential commercial operations, should we elect to pursue such an option. CCX168 is a very potent orally administered, highly specific small molecule inhibitor of the complement C5a receptor or C5aR. During today's call, I will primarily address our ongoing ANCA-associated vasculitis or AAV Phase II trials and in particular provide more granularity around our approach in evaluating the European phase II study known as the CLEAR trial, since we planned to unblind and discuss topline data from this trial in late December or early in January of 2016. ANCA-associated vasculitis is an orphan disease which can affect various organs in the body. Devastation to internal organs occurs as the result of a raging autoimmune inflammation and subsequent destruction of the blood vessel. In AAV, neutrophils are considered the terminal effector cell that does the damage. And these cells are attracted to sites vascular destruction and they are also activated at those sites by the activity of the complement system product known as C5a and its receptor C5aR which is the target of CCX168. AAV affects approximately 40,000 people in the United States, with approximately 4000 new cases each year, greater than 75,000 people in Europe with at least 7500 new cases each year there and is currently treated with courses of immuno-suppressants that is either cyclophosphamide or rituximab combined with high dose steroid administration. If left untreated, 80% of patients diagnosed with ANCA Vasculitis die of the disease within two years of onset. But even with current standard treatments patients are at risk. Reports of the proportion of people who die within the first year of diagnosis with standard of care treatment range from a 11% to 18% of patients. Other published figures of outcomes in AAV highlight the medical need in this area. For example, consider the following. Patients with one of the two principle forms of AAV, granulomatosis with polyangiitis or GPA have a nine fold increased mortality risk in the first year of disease compared to healthy controls. This is attributed to infection as much or more than vasculitis and renal disease. And people with the other form of AAV, microscopic polyangiitis or MPA have a worse prognosis than GPA with a one-year mortality rate up to 23%. Relapse in AAV is common. Following initial treatment up to 30% of patients relapse within six to 18 months and approximately 50% of all patients relapse within three to five years; each relapse carries with it the risk for increasing irreversible organ damage. Not only is the return of the disease is a constant threat for ANCA patients, but the toxicities and complications involved with current therapy itself pose real risk to this patient population. In fact, the greatest threat to patients with AAV the first year comes from current therapy rather than the disease itself. As mentioned, first year mortality is well documented as at minimum 11% and most of the deaths occur within the first three months of therapy. Several studies have shown that the use of steroid therapy is associated with this increased risk of infection and mortality. Even non-fatal infections are also hugely problematic for patients and hospitalization associated with steroid therapy induced infections are a main driver of complication related healthcare cost in ANCA disease. Thus, the medical need is clear as well as the health economic opportunity of the innovative new therapy such as CCX168 in this orphan indication. Simply put, there are currently no approved steroid reducing or steroid eliminating therapies for ANCA disease and we believe that there should be. The healthcare cost to patients and the economic burden to healthcare systems worldwide as a result of complications from steroid use are well documented. Therefore, one of our key objectives in the AAV program is to offer ANCA patients the ability to substantially reduce or even eliminate the steroid component in the current AAV treatment regimen while retaining therapeutic efficacy with a better tolerated drug. Specifically, we aim to control disease activity preferably with a more rapid onset of action in current standards-of-care, also reduce relapse, prevent recurrences, and prevent worsening of disease, and manage treatment toxicity, most particularly by a marked reduction or elimination of steroids in an ongoing standard-of-care. This is in order to reduce therapy related early mortality due to infection. Most KOL's agree that success in AAV for a new therapy is essentially to preserve current levels of efficacy, i.e. those currently seen with standard-of-care of regimen of immunosuppressant plus steroid while eliminating the major toxicities of the current regimen such as infection risk. We are testing these therapeutic goals in our two ongoing phase II trials in AAV by inhibiting the complement system with orally-administered CCX168. Let me briefly review these trails and tell you about some upcoming data readout as well as define what we think success in AAV would look like. The CLEAR trial is a phase II trial being conducted in Europe designed to evaluate the safety and efficacy of CCX168 in AAV patients while substantially reducing or even eliminating steroids from the current treatment regimen and preserving or improving efficacy in the treatment as a disease as compared to the current standard-of-care. The CLEAR trial is being conducted in an innovative three steps fashion using a randomized double-blind double-dummied trial design. You may recall steps one and two have already provided evidence that CCX168 treated patients had a more rapid and a more pronounced clinical response in both a steroid reduced group. These were patients treated in step one of the CLEAR trial and in a steroid free group those treated in step two of the CLEAR trial compared with the contemporaneous control group that received the standard-of-care which included full-dose steroids. CCX168 treatment was associated with rapid and pronounced improvement in a multiorgan disease activity score known as the Birmingham Vasculitis Activity Score or "B-V-A-S" BVAS as well as rapid improvements in renal function which is important since most AAV patients have kidney manifestations of the disease. As you may know, step three of the CLEAR trial expanded the number of patients tested under both the step one type and the step two type treatment paradigms that is CCX168 plus reduced steroid regimen and CCX168 plus no steroid regimen, both of which are compared to full-dose steroid regimen in the absence of CCX168. The goal of step three is to allow us to assess which treatment paradigm might constitute a potential phase III trial plan. As pre-specified in the statistical analysis plan, the primary endpoint analysis will evaluate the BVAS data from steps one, two, and three combined and will therefore include a dataset of approximately 63 patients. The primary endpoint is a comparison of CCX treatment CCX168 treatment groups versus the standard-of-care control group based on BVAS response. Specifically, BVAS response is the percentage of patient who achieve a BVAS reduction from baseline of at least 50% at 12 weeks plus have no worsening in any body system component. The goal for CCX168 therapy is to preserve if not improve efficacy relative to standard-of-care in the treatment of AAV with the view that toxicity is associated with steroid use, will accordingly be lessened over time. If there is a similar or improved outcome between CCX168 treated patient groups compared to the standard of care controlled group in terms of the percentage of patients with BVAS response, the primary end point would be achieved and the clear trial will be a success. Also as with steps one and two, we will report on additional efficacy assessments including protein in the urine as measured by Urinary Albumin Creatinine Ratio or UACR, urinary MCP-1 creatinine ratio and hematuria. We call that rituximab in the pivotal rave study was approved as a non-inferior alternative to the immuno-suppressant cyclophosphamide. As such, we believe it is clinically and commercially meaningful to offer an alternative to an unspecific anti-inflammatory drug such as prednisone with our targeted anti-inflammatory drug CCX168. I will also note that in order to ensure the highest and most consistent quality of the CLEAR clinical trial readout data, the CLEAR protocol provides for centralized scoring of the BVAS assessment. Data from each patient will be reviewed and subject to verification by two independent BVAS evaluators. This central evaluation process must be completed before the database is locked. I mention this because while the trial ran per plan in terms of enrollment and last patient out time, the central BVAS evaluators have now the important task in front of them of conducting their reviews as quickly as highest quality will allow while processing the inevitable goal of sick patients who are initiated near the end of the enrollment period. With challenges of timing associated with year-end activities, such process may take a short while longer perhaps a couple of weeks than originally contemplated. We project announcing topline results from the CLEAR trial in late December or early January. Note, also that the use of BVAS simplifies and standardizes the data analysis from our Phase II trial but also it should de-risk our Phase III development, since precedent shows the acceptability to regulatory agencies of BVAS endpoint for registration in ANCA associated vasculitis. The second ongoing clinical trial in AAV is a Phase II trial being conducted in North America known as CLASSIC in which we are evaluating the addition of two different doses of CCX168 to a full standard-of-care regimen over 12 weeks of treatment. One of the reasons we commence the CLASSIC trial was to enable regulators to see the effects of adding CCX168 to the current standard of care regimen of high-dose steroids and to evaluate the safety profile in this setting. We continue to enroll patients in CLASSIC per plan and we anticipate announcing topline results in the second quarter of 2016 which would then enable us to conduct end of Phase II meetings with regulators approximately mid-year 2016. From a commercial point-of-view, AAV has an attractive market opportunity for ChemoCentryx. As mentioned previously, AAV affects approximately 40,000 people in the United States, approximately 4000 new cases per year and greater than 75,000 people in Europe. The health economic benefits of reducing steroid complications alone, provide a compelling economic model for CCX168 going forward. I will also remind you that last year both the Food and Drug Administration and the European Medicines Agency granted Orphan Drug designation for CCX168 for the treatment of the major forms of AAV. We believe too that our intellectual property surrounding CCX168 is robust, extensive, and long lived. Also, I have note in background we have been accomplishing the essential work regarding so called CMC, Chemistry Manufacturing and Controls functions as well as essential off-clinical work including the recent successful completion of the long term toxicology program which will enable longer term dosing in the context of a Phase III program. These functions have been advancing very well and we do not anticipate CMC or off-clinical work stream will be limiting factors in the registration path of the drug. Operationally, we have an energetic timeline. We are poised to advance our AAV program to Phase III this coming year should CLEAR and CLASSIC results be supportive. Now, I'll briefly examine our complement inhibitor CCX168 also an atypical Hemolytic Uremic Syndrome or aHUS. aHUS is a rare disease where in the absence of appropriate therapy up to half of all aHUS patients progressed to end-stage renal disease with 25% dying in the acute phase of the disease. Patients with aHUS who end up in end-stage renal disease are generally consigned to lifelong dialysis which itself carries a five year survival rate of just under 40% with infections accounting for almost 15% of deaths. Atypical HUS is currently treated with Eculizumab, Soliris by trade name, which is an antibody given by infusion that inhibits a part of the complement system. But Eculizumab treatment is not accessible to all aHUS patients, also not all who receive Eculizumab derive benefit and of those who do obtain the drug some patients have break through, i.e. they become resistant to the therapeutic effects of Eculizumab over time. Our orally administered complement inhibitor CCX168 is designed to reduce the thrombosis in the kidney and aHUS, that is to inhibit the terminal effector stage of complement activation that leads to vascular damage in this disease. You will recall we presented data on the anti-thrombogenic effect of our drug in an aHUS preclinical study at two international medical conferences last quarter. Just last week, we also presented aHUS data at the American Society of Nephrology's annual Kidney Week. The results from the final ex-vivo study compared thrombosis formation on microvascular endothelial cells exposed to zero from diagnosed aHUS patients. CCX168 treatment resulted in a dose-dependent inhibition of thrombosis and this inhibition was similar to that seen with Eculizumab. The authors of the poster also summarize the objective of the ongoing Phase II proof-of-concept clinical trial in an aHUS patient population who are on dialysis and who are dosed orally with 30mg of CCX168 for 15 days. We plan to report early results from this study in the first half of 2016. Summing up our complement inhibitor CCX168 development approach. We believe the development of CCX168 is of great potential value to the company and its investors. There are many appealing features underlying our plan. The CCX168 asset is wholly owned by us, also we are working in clinical areas of high need and the clinical development and regulatory paths in orphan and rare disease are tractable in scale and scope as well as affordable for a company of our stage of development. Now, let me turn briefly to our chronic kidney disease program. The company previously reported that a Phase II clinical trial in diabetic nephropathy patients taking CCX140 are orally administered inhibitor of the chemokine receptor known as CCR2 achieved its primary endpoint of significantly lowering protein in the urine, an important marker of improved kidney function over 52 weeks of therapy. CCR2 inhibition therapy represents a therapeutic approach which is differentiated from the current standards-of-care which comprise mainly blood pressure medications that slow but do not halt the progression of disease. Since our last conference call we published and reported at multiple medical meetings the positive results from our diabetic nephropathy Phase II clinical trial of CCX140. These included the publications of the study results in the August 2015 issue of the Lancet Diabetes & Endocrinology, also in oral presentation Of the same at the European Association for the Study of Diabetes or EASD annual meeting last September and just last week in oral presentation of the data by professor Richard [Glassic] from the David Geffen School of Medicine at UCLA at the American Society of Nephrology's annual Kidney Week meeting. Highlights of the trials primary endpoint along with post treatment and follow-up data were shown, indicating a persistence of therapeutic benefit, after CCX140 was withdrawn consistent with the disease modifying property of the drug in diabetic nephropathy. We, along with others in the medical community believe that CCX140 could be a valuable addition to the current treatment of diabetic nephropathy. We are moving forward with end of Phase II meeting preparations, continuing to complete our off-clinical and CMC work required for this comprehensive discussion and plan to secure meeting with the FDA towards the middle of this coming year. Since our financial model doesn't contemplate independent development by CCXI and then indication of this larger scope further advancement of the program would be conducted in the context of a partnership. Lastly, I will turn to our immuno-oncology program. We have an ongoing multi-centered clinical trial in patients with non-resectable pancreatic cancer with our second CCR2 inhibitor known as CCX872. Pancreatic cancer is the 15th most common cancer worldwide but the fourth highest cause of cancer related death. Even with the most recent advances in the treatment of pancreatic cancer, median overall survival is six to eight months. Human pancreatic tumors are characterized by a highly immuno-suppressive micro environment in the tumor cellular micro environment CCR2 bearing cells are thought to be largely of an immune suppressive behavior. These are the cell called Myeloid Derived Suppressor Cells or MDSCs. These cells effectively help tumors hide from the body's cytotoxic immune response to tumors. Inhibiting CCR2 with CCX872 and thus the MDSC is controlled by CCR2 could therefore lead to the liberation of the cytotoxic immune response against the tumor cells and improved patient survival. In our ongoing clinical study, up to 54 patients with non-resectable pancreatic cancer are being enrolled and will receive CCX872 in combination with FOLFIRINOX, one of the current standards-of-care in the treatment of pancreatic cancer. The primary efficacy measurement will be progression-free survival when patients have completed at least 24 weeks of treatment. Last week we presented pharmacokinetic data from the trial at the 2015 AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutic commonly referred to as the Triple Meeting. After a single 150mg dose daily of CCX872, the pharmacokinetic profile was excellent and consistent with that seen previously in healthy volunteers. Specifically, we saw very good receptor coverage after 12 hours of dosing. Since the ongoing portions of protocol involves twice-daily dosing, we expect to see greater than 90% coverage over the receptor throughout the day which should support an excellent therapeutic index for CCX872. Enrollment in this study is progressing as planned and we have recruited over 20% of our enrollment target. We expect additional data including overall response data from this study to be presented in the first half of 2016 and initial progression-free survival data in the second half of 2016. Our commitment to immuno-oncology is high. We also recently presented pre-clinical data at two meetings including the Society for Immunotherapy of Cancer, the SITC annual meeting, and also at the aforementioned Triple meeting. We show that the combination of one of our inhibitors of the chemokine receptor known as CCR1 and molecule known as CCX9588 combined with an anti-PD-L1 antibody, that is an anti-checkpoint inhibitor, significantly decrease circulating and tumor infiltrating myeloid derived suppressor cells which are known to be responsible for the induction of a metastatic phenotype in primary tumors which can lead to the early dissemination of cancer cell. In addition, the combination of CCX9588 and the anti-PD-L1 antibody also increased effector T-cell in the tumor infiltrate. This is known in the literature to have an anticancer effect and indeed overall tumor size was significantly reduced by the combination of our small molecule chemokine receptor inhibitor with the check point inhibitor. These results suggest that an orally administered CCR1 inhibitor combined with an antibody against the check point inhibitor such as PD-L1 maybe of utility in treating triple-negative breast cancer which was modeled in these experiments. With that review of our key programs, I'd like to turn the call back over to Susan.
  • Susan Kanaya:
    Thank you, Tom. As I mentioned earlier, our 2015 third quarter financial results were included in our press release provided earlier this afternoon. Research & Development expenses were 7.9 million for the three months ended September 30th, 2015 compared to 7.5 million reported in the same period in 2014. This increase was primarily attributable to higher expenses associated with CCX168, our C5aR inhibitor, due to ongoing Phase II clinical trials for the treatment of AAV in Europe known as the CLEAR trial and in North America the CLASSIC trial. Along with our Phase II pilot clinical trials in patients with aHUS and IgA nephropathy. Further, cost associated with CCX140, our CCR2 inhibitor, in preparation to conduct an end of Phase II meeting with the FDA and the ongoing Phase Ib clinical trial with CCX872 or second CCR2 inhibitor in patients pancreatic cancer contributed to the increase. These increases were partially offset by lower expenses associated with CCX507 our second generation CCR9 inhibitor did a completion of Phase I clinical development in the third quarter of 2014. General and administrative expenses were 3.8 million for the three months ended September 30th, 2015 compared to 3.5 million in the same period last year. This increase was primarily due to higher intellectual property related expenses, travel expenses and professional service fees partially offset by lower employment related expenses and legal fees. Total shares outstanding at September 30th, 2015 were approximately 44.1 million shares. Cash, cash equivalents and investments totaled 85.2 million at September 30th, 2015. With that, I will now turn the call back over to you, Tom.
  • Thomas Schall:
    Thank you, Susan. I am proud of the marked progress accomplished during the year and in the quarter by our project teams. Not only have our clinical programs advanced but off-clinical supportive functions within the company including for example pre-clinical manufacturing and QA QC efforts have kept pace with our clinical development initiatives. As we head into the final weeks of 2015, we look forward to several key data milestones this year and into 2016 and expect additional clinical progress for our programs in the upcoming year. Beginning with our orphan, our efforts in orphan and rare diseases, we look forward to the following. Announcing topline results from the Phase II trial in Europe, in ANCA vasculitis known as CLEAR with our C5a receptor inhibitor CCX168 in late December or early January of the coming year. Enrollment continues in the ANCA vasculitis Phase II trial in North America known as CLASSIC and we expect to complete enrollment by the end of 2015 and report topline data in the second quarter of 2016. With positive CLEAR and CLASSIC Phase II results, we plan to conduct end of Phase II meeting in the U.S. and Europe in 2016 and then also to initiate a Phase III program in patients with ANCA vasculitis by the end of 2016. Lastly, we will report early results from the CCX168 Phase II concept study in patients with aHUS in the first half of 2016. In the area of chronic kidney disease, we continue to prepare for the Phase III clinical development program for CCX140 and diabetic nephropathy and we are preparing for end of Phase II meeting with the FDA for CCX140 and also business development discussions continue. Finally, in the area of immuno-oncology, we look forward to advancing the pancreatic cancer clinical trial of CCX872 in combination with FOLFIRINOX therapy and expect to report initial overall response data from Part B of the trial in the first half of 2016 and the initial progression-free survival data in the second half of 2016. And we look forward to presenting additional results from our preclinical models evaluating combination therapy with chemokine receptor and check point inhibitors. In closing, I am very pleased with the progress we have made over the last quarter I look forward to sharing important news with you during the upcoming months. We will now take any of your questions. Operator?
  • Operator:
    Thank you. [Operator Instructions] Our first question comes from Anupam Rama of JPMorgan. Your line is open.
  • Unidentified Analyst:
    Hi, thank you for taking my question. This is [Yugo] on for Anupam. Regarding the CLEAR study, would you provide further details on what may push the data readout to January rather than December and also you mentioned on the 2Q call that the patient enrollment was about half way marked for CLASSIC trails. Would you provide an update on the both enrollment progress for CLASSIC? Thank you.
  • Thomas Schall:
    Sure, thank you for your question. So, to be just clear on the CLEAR trial enrollment. So, we've always prognostication that topline results would happen either near the end of the year, towards the end of this quarter, in fact. So, the only adjustment we are making is it's possible that could go a couple of weeks beyond that prognostication into early January. The reasons for that are as I touched upon in my remarks, the BVAS scoring goes to a central committee of independent evaluators and those independent evaluators are responsible for the ultimate BVAS evaluations and their standardizations amongst the many sites in the study. We don't entirely control the pace of their activities and as many of these people are thought leaders that are in the academic community, a number of year-end activities are obviously in front of them as well as in front of others. So, as we said before, we will either have data towards the end of December or possibly the first couple of weeks in January but that really is the only adjustment we've made. The CLASSIC trial in North America has been enrolling nicely. You are quite correct, on the 2Q call we had stated that we were beyond the halfway mark. And I can only say at this point that we are closing in on our initial enrollment target. We are pretty confident that by the end of the year we'll be nearly fully enrolled and that will allow us to readout data as we've been suggesting all along sometime within the first half of this coming year 2016.
  • Unidentified Analyst:
    Great. Thank you, so much.
  • Thomas Schall:
    And I'm sorry, was there another question there in -- okay, that's right, we covered them both. Thank you.
  • Operator:
    Our next question comes from [Mark Fram]. Your line is open.
  • Unidentified Analyst:
    Hi, guys. Thanks for taking my question. Just thinking, with the AAV program, I understand how are you to get adoption if CLASSIC works out and you replicated that in Phase III in SHIELD's period on the efficacy. But if we follow more the CLEAR path of replacing steroids which again we know are generic, I mean, do you think just getting an approval and not if you're already even up or do you need to have kind of data on the secondary endpoint showing a real effect on both outcome the bad -- the adverse events of steroids to drive adoption?
  • Thomas Schall:
    Mark, thank you for your question. I also would like to add that I have the pleasure of being joined today by Pirow Bekker our Chief Medical Officer and I'm going to let him take the details of the question. I will say this, we believe that the argument for a steroid reduction and certainly steroid elimination therapy is very compelling for the reasons that I outlined in my remarks. There are many infectious diseases consequences principally of steroid therapy. And the documentation in the literature suggest very strongly that the major single cause of first year mortality in AAV is therapy related events and those therapy related events are due to steroids. So, the both the patient benefit and the healthcare economic benefit we believe we are fundamentally very compelling. This being an orphan indication, non-inferiority as a statistical definition, pretty much is the standard, merely because numbers tend to be small. So, I will let Pirow Bekker take it from there with any detailed comments that he might have around your question.
  • Pirow Bekker:
    Thank you, Tom. Yes. So, from a regulatory perspective, we believe that demonstrating non-inferiority by standard BVAS endpoint would be sufficient to get approval. But Mark, as Tom pointed out during his opening remarks, we have shown certainly evidence of a greater effect on albumin urea reduction and also on renal inflammation based on uninary MCP-1 levels. So, it could well be that based on a secondary endpoint we are able to show superiority and I think that will go a long way to get this drug approved.
  • Thomas Schall:
    Mark, I'll come back to another aspect of this. Just by example, so if you think about how AAV is treated, it really is a combination of two things. On the one hand you have immuno-suppressants, either cyclophosphamide which is still used quite a bit or Rituximab and I'll come back to that in a moment. And on the other hand you have the combination of one of those two and it is one of those two with high doses of steroids. So, what we are trying to do is test and show that you don't need those high doses of steroids and that CCX168 will preserve all the efficacy and indeed we aspire to go beyond that. But at least we know where since therapeutic efficacy than that current standard-of-care which includes the steroid, but just remove at least the vast majority or the vast bulk of the steroid load. So, why do we think that that's an important approach? Again, just on the sheer face of it, the facts that I alluded to in my remarks about mortality and cost and other burdens of steroid therapy but also it's the precedent, it's the analogy that Rituximab showed. So, it does strike to some nature of the question that you asked and so far as cyclophosphamide is also a generic but associated with different kinds of safety issues in steroids. And for many reasons people wanted an alternative to cyclophosphamide and that's where Rituximab came in. They tested the hypothesis, could they be at least no worse in efficacy when they took Rituximab instead of cyclophosphamide and combined that with high dose steroid. And so what they got approved on again was typically a non-inferiority endpoint to right to cyclophosphamide. And they've actually done very well, certainly in North America and increasingly in Europe in being used in preference to cyclophosphamide, which again has been used for many years and was generic. Rituximab is done really well in essentially replacing that to some degree. So, I think that's the analogy we are using. And I'll also mention just the last thing is that in the rave study which was essentially the pivotal study for Rituximab, there was some hint of numerical superiority in efficacy but again because end tends to be small in an orphan indication, it was the endpoint of non-inferiority. So, that got the drug approved. So, I believe in our study in Phase II, success for us will certainly be if we achieve statistical non-inferiority to the standard of care with CCX168 in these patients with either much reduced steroid load or preferably no steroid load at all. And I think that that will be certainly very important for us in the community, will drive us forward into discussions with the FDA and we believe into registration studies.
  • Unidentified Analyst:
    Thanks a lot for those answers. Then just kind of following-up, do you think you need to in Phase III, kind of choose between CLASSIC and CLEAR, those styles of treatment or is there a way to have both of them in there?
  • Thomas Schall:
    We think that Phase III will probably make a choice between CLEAR and CLASSIC. And if we have to go by what the patient efficacy groups are saying and what the key opinion leaders say in the patient care community, everyone would love to see steroids going out of the mix or certainly being vastly diminished in the mix. So, I think our working hypothesis and our aspiration is that a clear trial design for registration would be probably important for us. And having said that, however, again the rapidity of the response that we've seen so far with CCX168 and AAV, which comes from steps one and two of the CLEAR trial and those data we discussed before. The rapidity of the response itself is quite interesting and compelling for both patients and clinicians. So, if for whatever reason in CLASSIC we were to see a very pronounced response very rapidly, that itself would be interesting. But all things being equal if we got similar responses in CLEAR and CLASSIC, obviously I think we would like to strip away the steroids in the equation -- part of the equation in the therapy. Pirow, is that concurrent with your views?
  • Pirow Bekker:
    Yes, Tom, I agree with that. I think the CLEAR path is our preferred path at this point and I think that's what we like to test in placely.
  • Unidentified Analyst:
    Okay. Thank you, very much.
  • Pirow Bekker:
    Thank you.
  • Operator:
    I am showing no further question. I would like to now turn the call back over to Dr. Tom Schall for any further remarks.
  • Thomas Schall:
    I very much appreciate the opportunity today to go into much more depth around our orphan and rare disease program with CCX168 as well as to bring you updates on some of the other areas of our effort. I very much look forward to updating you on these programs as we go forward, in the next quarter. So, thanks very much for your time, your attention, and your excellent questions. And I wish you all a very pleasant afternoon.
  • Operator:
    Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone have a great day.