FibroGen, Inc.
Q1 2018 Earnings Call Transcript

Published: 10 May 2018

[Operator:]

Welcome to the FibroGen Incorporated First Quarter 2018 Financial Results Conference Call. My name is Michelle and I'll be your operator for today's conference. At this time, all participants are in a listen-only mode. As a reminder, this conference is being recorded. For opening remarks and introduction, I will now turn the call over to Karen Bergman, Vice President of Investor Relations and Corporate Communications. Please go ahead.

[Karen Bergman:]

Michelle, thank you. Good afternoon everyone and thank you for joining our call today. Today, we are reporting financial results and corporate update for the first quarter of 2018. Joining me on the call today are Tom Neff, Chairman and Chief Executive Officer, Dr. Seth Porter, Vice President of Fibrosis Therapeutics, Dr. Peony Yu, Chief Medical Officer and Mr. Pat Cotroneo, Chief Financial Officer. Following our prepared remarks, Tom will wrap up with a discussion of key objectives and upcoming milestones. And then we will open the call for Q&A where we will also be joined today by Dr. Elias Kouchakji, Senior Vice President, Clinical Development, Drug Safety and Pharmacovigilance. During this call, we may make forward-looking statements regarding our business, including our collaborations with AstraZeneca and Astellas, financial guidance, the initiation enrolment, design, conduct and results of clinical trials, our regulatory strategies, and potential regulatory results, our research and development activities and certain other business matters. For risks and uncertainties regarding our business and statements made on the call today, as well as factors beyond our control that may cause differences between current expectations and actual results, we refer you to our annual report on Form 10-K for the fiscal year ended December 31, 2017, and our quarterly report on Form 10-Q for the fiscal quarter ended March 31, 2018, filed with the Securities and Exchange Commission. Copies of these filings can be found in the Investors section of our website. We undertake no obligation to update any forward-looking statement whether as a result of new information, future developments, or otherwise. The format for today's call will include remarks from FibroGen's management team, and then we'll open the lines up to take your questions. The press release reporting our financial results and business update and a webcast of today's conference call can be found on the investor section of FibroGen's website at www. Fibrogen.com. The webcast will be available for two weeks from today's date. And with that it's my pleasure to turn the call over to our CEO, Tom Neff.

[Tom Neff:]

Thank you, Karen. Good afternoon to everyone, sorry for the technical screw up the slowed us down to get started. Thank you for joining us today. We have two exciting last-stage drug candidates Roxadustat for anemia and Pamrevlumab for treatment of deep organ fibrosis and solid tumors. And we now have a strong clinical data in multiple therapeutic indications with both with significant market need in each case. I'd like to provide a brief first quarter update including outlook for our programs and a few additional comments on Roxadustat program in China. Our Phase 3 program in Roxadustat to treat anemia in CKD patients targets approval in four regulatory jurisdictions with the global clinical program approaching completion, the Roxadustat team in increasingly busy with the preparation of NDA submissions. In the US and EU starting with our Roxadustat at global program, in these territories, with the seven Phase 3 studies designed to meet US and EU regulatory requirements, we have enrolled over 8,000 CKD patients over the past few years. We recently reached agreement with AstraZeneca that the final patient recruitment for a total of five studies sponsored by our two companies will be completed across the board in early June 2018 or next month. We expect to reach the requisite number of adjudicated MACE accruals for the dialysis and non-dialysis pools with last patient, last study visit expected by end of September. We plan to report top line results from these five studies before year-end 2018. To fulfill pool MACE requirements for the US, we expect to combine the results in FibroGen and AstraZeneca studies with the relevant Astellas European studies. This will mean a total of three studies of Roxadustat versus placebo and non-dialysis dependent CKD and four studies in Roxadustat [indiscernible] and dialysis dependent CKD. We plan to complete adjudication of the MACE events and pooled analysis as quickly as possible and to report MACE results prior to filing the US NDA in the first half of 2019. In Japan, our partner Astellas is conducting Phase 3 program and is preparing for the Japan NDA. Astellas has completed all four Japan Phase 3 studies in dialysis patients. We are working with the Astellas team to support their expected NDA in Japan for anemia associated with dialysis dependent CKD later this year. In the non-dialysis dependent program, Astellas is conducting two phase 3 studies and expects data readout from one of these studies in the fourth quarter of 2018. Dr. Peony Yu will discuss the top line results from the two recently completed Japan phase 3 study in hemodialysis patients later on in this call. In China, the Roxadustat NDA for the treatment of anemia associated with a CKD was accepted by the China FDA for review last October. The China regulatory authorities have a comprehensive process for reviewing new drug applications for the registration of domestic class one innovative drugs. This review will cover a very broad range of activities to name a few, technical review of the NDA filing, inspection and clinical trial sites, onsite inspections of manufacturing campaigns, especially manufacturing sites, analytical testing of drug substance and drug product as manufactured by FibroGen. China may be the first country for FibroGen to receive approval for Roxadustat. To prepare for Roxadustat launch in China, we have been building out our capabilities in the core areas of responsibility of FibroGen China and work with our partner AstraZeneca China on launch readiness. Most notably, our commercial manufacturing facilities in Beijing and Cangzhou are on schedule to come online after we receive NDA approval and complete the necessary post approval inspections. We advanced a key step in this process recently when our commercial API facility in Cangzhou was awarded the pharmaceutical production permit or PPP. This occurred about two months earlier than was originally planned. So, kudos to the China team for getting that done. We are working closely with AstraZeneca on the development and implementation of a market access strategy to maximize the value proposition of Roxadustat in China. With regard to reimbursement, AZ brings substantial experience, expertise, and resources to advancing this work. In the short term, we are focused on gaining early inclusion on hospital formularies also known as hospital visitings followed by inclusion on the national or provincial drug reimbursement lists in the medium term. Pamrevlumab is our other program. And as we look at what's going on in the fibrosis part of it, we see Pamrevlumab with the potential to address a very broad range of fibrotic and fiber diseases, leading off with IPF, our lead program, and in the oncology area of pancreatic cancer and then Duchenne muscular dystrophy. In IPF, our randomized phase 2 trial we determine that the treatment with Pamrevlumab yields a statistically significant reduction in the progression of lung fibrosis as measured by quantitative HRCT using algorithms developed by our vendor MEDQIA. So far as we know, this is the first report of a statistically significant effect measuring changes on lung fibrosis and a full-year study meaning 48 weeks or 52 weeks that range. Additionally, these results are consistent with similar results obtained in our previous open-label phase two IPF trial and appear to correlate with changes in pulmonary function and disease progression in both of our phase two studies. Apart from the CHRCT result, our 067 randomized placebo controlled phase 2 trial of Pamrevlumab showed positive results compared to placebo for primary and secondary endpoints including force vital capacity measured in absolute volume and percent predicted disease progression measures the quality of life and safety endpoints. Notably, a key endpoint in our recent phase 2 study was disease progression as defined by decline of 10% or greater in FPC percent predicted or death. In the assessment of this clinically meaningful composite endpoint, the proportion of patients with progression by week 48 was 10% percent for Pamrevlumab patients and 31.4% for the placebo patients. This statistically significant result suggests Pamrevlumab may prevent or retard disease progression. A similar effect on disease progression was observed in the predecessor study 049. To-date, over 500 patients have been exposed to Pamrevlumab including nearly 240 IPF patients. Pamrevlumab has been well tolerated in all studies. In the IPF population, we have not observed the types of adverse reactions that have been reported with the current approved therapies in IPF, the development of an efficacious and save therapy with minimal side effects particularly reduction of freefall mortality morbidity events characteristic in IPF populations would represent a major improvement in safety and a meaningful advance in treatment of IPF patients. In total, our results to-date indicate that patients treated with Pamrevlumab as compared to placebo experience a slowing and progression of lung fibrosis associated with a slowing of disease progression and an improvement in quality of life. In combination with good safety and tolerability reported to-date, we believe these results position us well and development in Pamrevlumab as an advanced therapy for IPF. Going forward, we expect to obtain feedback from our agency FDA on our phase 3 program by mid-year. At the coming ATS meaning at San Diego, we will be presenting data from our 067 study on quantitative HRCT where we will present the first HRCT study results showing us statistically significant reduction in lung fibrosis progression. Second, positive results from the St. George Respiratory Questionnaire assessment indicating improvement in quality of life. And third, new results and other aspects of IPF using the pre-clinical model of radiation induced lung fibrosis which in the past has proven to be highly predictive of clinical outcomes. In our pancreatic cancer program, we are evaluating Pamrevlumab as a potential therapy given in combination with gemcitabine. In February, FDA granted fast track designation for the development of Pamrevlumab in locally advanced unresectable pancreatic cancer or LAPC based on promising clinical results in this patient population. We will report updated results from our ongoing open-label phase 2 trial at ASCO annual meeting in June. In a nutshell, these results will show a majority of unresectable locally advanced pancreatic cancer patients treated with Pamrevlumab and chemotherapy were assessed as resectable after six months of treatment. We will also report that there appears to be a survival benefit in the study for patients who have undergone tumor resection. We expect to reach agreement with FDA on pivotal clinical trial design by midyear. In Duchenne muscular dystrophy or DMD, we are pleased to announce we have completed the enrollment of phase 2 open-label clinical trial in non-ambulatory Duchenne muscular dystrophy. This is a three-year study focusing on non-ambulatory patients. As you know DMD is a degenerative genetic disease caused by mutation in dystrophin gene, patients typically lose the ability to walk by the age of 12 and gradually lose upper body strength and mobility. In fact over 70% of the DMD population is wheelchair bound. As a potential anti-fibrotic therapy Pamrevlumab would not be limited to any particular dystrophin mutation. Dr. Seth Porter is here today to provide updates on current activities in our Pamrevlumab development programs. On the financial side, as of March 31, FibroGen had $730.4 million in cash. With that, now let me turn this over to Dr. Peony Yu for further update on the anemia program. Peony?

[Peony Yu:]

Thank you, Tom. As mentioned, we are completing multiple phase 3 studies to meet the registration requirements of four regulatory agencies in collaboration with AstraZeneca in the US and China, and with Astellas in Europe region and Japan. Tom has covered China where our NDA is currently under review by the Chinese regulatory agency. My update today will focus on progress in the US, Europe, and in Japan. Our US EU phase three program consists of four dialysis studies in which Roxadustat is compared with EPO and three non-dialysis studies in which Roxadustat is compared to a placebo. We have reach alignment with AstraZeneca in completing enrollment in June, we have already enrolled more than 4,200 patients total in the three non-dialysis studies and we will have enrolled over 4,600 patients across the four dialysis studies. With the last patient in September, we expect to have sufficient data for MACE endpoint analysis. Primary efficacy assessment of the Roxadustat phase 3 program is based on results from the individual studies which we plan to report in the fourth quarter of this year. The adjudicated MACE data from these seven phase 3 studies will be analyzed in two pools, the dialysis and separately the non-dialysis prior to our NDA submission planned for first half of 2019 .The independent Data Safety Monitoring Board or DSMB has been conducting periodic safety review of these clinical studies since phase 2 and throughput phase 3 with evaluation by treatment arm. At the most recent DSMB meeting, at the end of this March, we received the recommendation to continue studies as per current protocols. Next, I would like to briefly highlight our decision on using placebo as a comparator in our large US EU non-dialysis program which is about to finish. Placebo is considered a gold standard for safety comparison. If our trials demonstrate Roxadustat to be non-inferior to placebo in safety evaluation, there may be an opportunity to avoid the ESA black box label. In the US, anemia in non-dialysis patients is generally left untreated due to a combination of label restrictions, ESA safety concerns, limited access to and the inconvenience of ESA therapy. Therefore, orally administrated Roxadustat may offer a more attractive and assessable therapeutic option for anemia to address this important unmet medical need in CKD patients. Turning over to discuss Japan, there are a total of six phase 3 Roxadustat studies. Our partner, Astellas, has announced the completion of all four phase 3 dialysis studies. These studies will comprise the data needed for the NDA package for anemia associated with dialysis dependent CKD patients in Japan and this is targeted for submission in 2018. This will be followed by NDA for non-dialysis indication which will be submitted after both of the non-dialysis phase 3 studies in Japan will be completed. The pipeline results of the peritoneal dialysis study were disclosed in the November of 2017. Astellas recently announced positive topline results from the two Japan phase three studies in hemodialysis patients. ESA-naïve correction study consists primarily incident dialysis patients were treated with Roxadustat for 24 weeks. In this study, hemoglobin response was defined as achieving hemoglobin ten grams per deciliter or higher, plus an increase in hemoglobin from baseline by at least one gram per deciliter. The results shows 86.5% of the patients who received the 50 milligrams, three times a week starting dose and 89.2% patients who received 70 milligrams three times a week starting dose, both were followed by dose titration and they achieved hemoglobin response. In the 52-week study in hemodialysis patients previously treated with ESA, treatment was then switched to Roxadustat. 71.9% of these patients maintained hemoglobin between 10-12 grams per deciliter at weeks 18 to 24 and 71.2% at weeks 46 to 52. Safety findings in both studies are consistent with those in prior Roxadustat studies, with no safety signals detected. The fourth dialysis phase 3 study in Japan is an active controlled conversion study in hemodialysis patients. This study is already completed and data readout is planned for the second quarter of 2018. One of two Japan phase 3 studies in CKD non-dialysis patients has already completed enrollment with data readouts planned for the fourth quarter of 2018. In summary, in collaboration with AstraZeneca and Astellas colleagues, we will be completing multiple phase 3 studies to support regulatory submission in various regions in the coming months. We look forward to reporting results of these studies to you as they become available. We shall continue our efforts toward seeking marketing authorizations to offer a new anemia therapeutic option to CKD patients in China, Japan, US, Europe and the rest of the world. Stay tuned. I'd like to now turn the call back to Tom.

[Tom Neff:]

Thank you, Peony. Dr. Seth Porter will now discuss the status of our Pamrevlumab product platform and corresponding lead therapeutics indications. Seth?

[Seth Porter:]

Thank you, Tom. In IPF, positive results and ongoing analysis from our randomized double blind placebo control phase 2 clinical trial continues to be well received by clinical thought leaders. Four FibroGen abstracts had been accepted for poster presentation at the upcoming ATS 2018 meeting in San Diego. These include quantitative measures of changes in lung fibrosis by HRCT, health related quality of life assessment by the St. George Respiratory Questionnaire or SGRQ, PK and PKPD modeling for Pamrevlumab in IPF patients, and updated preclinical results from the mouse model of radiation induced lung fibrosis. With respect to HRCT, Pamrevlumab demonstrated a statistically significant reduction compared to placebo in progression of lung fibrosis using the most up to date methods for quantifying fibrosis in IPF patients. These results are consistent with results previously published from our open-label IPF study. The quantitative HRCT poster will be presented on Sunday May 20. The SGRQ assessment of health related quality of life is an instrument that has been broadly used in IPF clinical studies. Patients treated with Pamrevlumab extended to have improved scores in the SGRQ assessment consistent with FTC and HRCT results while placebo treated patients tended to show worsening scores as expected for the progressive disease. The SGRQ poster will be presented on Monday May 21. The data to be presented from the radiation induced fibrosis model expands upon the results we published last year showing that lung fibrosis is associated with a spectrum of changes in gene expression patterns and that systemic treatment with Pamrevlumab can effectively reverse or mitigate many of those fibrosis associated gene expression changes. That poster will be presented on Sunday May 20. Our understanding of the clinical potential of Pamrevlumab in pulmonary fibrosis has grown from animal and human studies. That, combined with positive efficacy and safety outcomes from 067 phase 2 study including IPF disease progression, leaves us to believe we are in a strong position to further our clinical development of Pamrevlumab in IPF. Turning to pancreatic cancer, as Tom mentioned, we are very pleased to have received fast track designation from the FDA for Pamrevlumab for the treatment of locally advanced unresectable pancreatic cancer. We will be reporting updated phase 2 results from the treatment periods for study 069 at the ASCO meeting in June. There is general recognition that successful resection of locally advanced pancreatic cancer yields a survival benefit. Consequently, there is growing interest globally among oncologist and surgeons for this new adjuvant approach to treating pancreatic cancer. Neoadjuvant treatment for locally advanced unresectable pancreatic cancer is an indication for which no drug or drug combination has been approved. We are preparing to meet with the FDA and expect to have pivotal trial design feedback in the next quarterly call. Finally, turning to Duchenne muscular dystrophy, as Tom mentioned, we completed the phase 2 clinical trial enrollment in DMD. This is a three-year study focused on non-ambulatory patients. Nearly all muscular dystrophy patients transition to non-ambulatory wheelchair status sometime after the age of ten. According to the CDC, the prevalence of DMD in the US is approximately one in 10,000 males and more than 70% of DMD patients transition to non-ambulatory wheelchair status sometime after the age of ten. The lack of normal dystrophin leads to an accumulation of fibrosis and muscles and the extent to fibrosis is associated with a loss of muscle function. The anti-fibrotic mechanism of action of Pamrevlumab is not limited to a particular dystrophin mutation. Thus, we expect that Pamrevlumab may benefit a broad DMD patient population. In our trial, we are evaluating multiple endpoints including pulmonary function, upper body strength and mobility, and imaging endpoints. Thank you for your time today, and I will turn the call back over to Tom.

[Tom Neff:]

Thank you, Seth. Pat Cotroneo, our Chief Financial Officer will now walk us through financial highlights for the first quarter of 2018 Pat?

[Pat Cotroneo:]

Thank you, Tom. Quick comment before I discuss results. As of January 1, 2018, we adopted on a fully retrospective basis the accounting standards update 2014-09 titled revenues from contracts with customers also known as AFC-606. Unless otherwise indicated, all financial results of the previous periods and years have been recast as if the company had adopted this standard since the start of our current collaboration agreements; Astellas since 2015 and AstraZeneca since 2013. For more information on our adoption of this new revenue guidance please see note one of our quarterly report on Form 10-Q filed with the SEC earlier today. As announced today, total revenue for the quarter ended March 31, 2018, was $31.9 million as compared to $29.4 million for the first quarter of 2017. For the same period, operating expenses were $72.5 million and net loss was $41.4 million or $0.50 per basic and diluted share as compared to operating expenses of $58.3 million, a net loss of $30.6 million or $0.48 per basic and diluted share for the same period in the prior year. Included in operating expenses for the quarter ended March 31, 2018 was an aggregate noncash portion totaling $12.4 million, of which, $10.9 million was a result of stock-based compensation expense. As compared to an aggregate noncash portion totaling $10.5 million of each $8.4 million was a result of stock-based compensation expense. Upon the adoption of the new revenue guidance under AFC-606 as of January 1, 2018, we recast our consolidated statement of operations and balance sheet from the amounts previously reported. This resulted in a $2.6 million increase in revenue for the first quarter of 2017 and a cumulative net reduction in revenues through year-end 2017 of $34.7 million which will be recognized over the future remaining development period. As of March 31, 2018, we had $730.4 million in cash as compared to $762.2 million at the end of 2017. For these purposes, total cash refers to cash, including cash, cash equivalents, receivables, investments, consisting primarily of investment grade corporate debt and restricted time deposits relating to our building lease. We are currently projecting a yearend cash balance in the range of $600 million to $620 million, excluding milestone payments that may be received under our collaboration agreements with AstraZeneca and Astellas. Thank you, everyone. And I would like to turn the call back over to Tom.

[Tom Neff:]

Thank you, Pat. 2018 looks to be an exciting and defining year for both Roxadustat and Pamrevlumab. For Roxadustat, patient enrolment in the five US phase 3 studies run by FibroGen and AstraZeneca will conclude in the second quarter of 2018. We plan to report top line results from phase 3 Roxadustat clinical studies in CKD, anemia in the fourth quarter of 2018, along with AstraZeneca. In China, we anticipate a market approval decision for Roxadustat by year end 2018. For Pamrevlumab in IPF, we have seen statistically significant benefits from Pamrevlumab therapy and progression of fibrosis, as measured by quantitative HRCT. These and other results will be presented this month at ATS. We expect to report on the Phase 3 program in our next quarterly call. In pancreatic cancer, we will report updated Phase 2 trial results for Pamrevlumab in locally advanced and resectable pancreatic cancer at the ASCO annual meeting in June. We expect to reach agreement with FDA on pivotal clinical trial design mid-year, supporting a registration pathway for locally advanced and resectable pancreatic cancer. With that, I would like to turn the call back over to Karen for Q&A. Karen?

[Karen Bergman:]

Thank you, Tom. Michelle, if you kindly open up the lines for questions.

[Operator:]

[Operator Instructions] First question in the queue ma'am comes from Joel Beatty with Citi.

[Joel Beatty:]

The first one is regarding the non-inferiority goal for the MACE events in the phase 3 roxadustat program. Could you give a sense of what that boundary is or how much of a wiggle room there is, if to realize non-inferiority?

[Peony Yu:]

So, Joel, thanks for the question. So we are looking at - we're using - we analyze - so - now just to refresh ourselves, the non-dialysis studies are the ones that use placebo control as the one I mentioned. And so the non - and we will - now the studies are still blinded, and so we will need to wait until unblinding to make that comparison of the adjudicated MACE across the three studies from over 4200 patients. And to show - to demonstrate the non-inferiority. So, and then in dialysis, we will be pulling from four studies and similarly, the roxadustat will be grouped into one treatment arm and then will be compared with the epo comparators across these studies. And the first path will be non-inferiority and once we succeed in that, then - if and when we do succeed in that, then we will move for superiority comparison. So I hope that answers your question, Joel.

[Operator:]

The next question comes from Michael Yee with Jefferies.

[Michael Yee:]

Roxa question and a follow up. On the MACE analysis, can you guys just talk about why you're waiting a couple of months to release the data as opposed to just putting it all out with the top line efficacy at once? Maybe talk a little bit about what was driving that rather than just put it all out there for everybody in one press release? And then related to that, following along the last question, we want to understand how you handicap non-inferiority versus superiority and specifically whether or not your full base case is, it is non-inferiority with all the MACE going and expanding in the right direction for roxa.

[Tom Neff:]

Michael, I didn't quite follow that last phrase in the second question. Could you say it one more time?

[Michael Yee:]

I would just like to understand whether the base case is that it is non-inferiority with a trend favoring the drug arm on all MACE events and whether or not the types of patients today versus ten years ago in treat and the lower event rate has been accounted for. Thank you.

[Tom Neff:]

Okay. So let me do the first part and then Peony, you're going to get the meat of this thing. It would be wrong to say there was a delay with regard to the accrual of safety pools. What we have to do is to take the five studies that AstraZeneca and ourselves will report out in the fourth quarter. So these are now obviously, AstraZeneca in Europe is running these studies and then we - to those studies, we didn't have to add the Astellas studies, which is not part of the reporting in the fourth quarter and done under a set of rules for Europe that differs a little bit from what we're doing in the US. And so in order to properly account for the amount of time we think it will take for our two partners to sign off on the various things that have to be done, because usually this goes deep into their organizations and it takes a little while for everybody to get signed off. We provide for some extra time to set up a calendar and goals and so on. It would also be fair to say that if top line reporting is in December, lots of people are incentivized to have the MACE thing turned around by March, but we're not saying that officially, we're saying easy, mid-year and we agreed with that. So in effect, report out that pooled MACE and then submit NDA in the time periods after December 31. But it's the issue of adding the fourth study in dialysis and the third study in non-dialysis at that point and whether or not there'll be any challenges in integrating those studies that take any time, it's just hard to tell how much time it might take, as you've got three organizations at that point working on these things. So that's the answer there and Peony go ahead and address the rest of it please.

[Peony Yu:]

Okay. So Tom, I would also like to add one more supplement, a small point to what you were saying about the adjudicated data, the reason it takes longer is operationally it has a few more steps, because one needs to obtain novel data by the independent party to send to the external independent adjudication experts.

[Tom Neff:]

Yeah. You're right about that actually. We have to add the adjudication step in the calculus.

[Peony Yu:]

Exactly. And whereas when we report out the efficacy result from the study, it is as soon as we complete the study and clear the data, we can analyze it. So we save that spend. And so instead of delaying reporting to you the top line result, this is why we do at a different time. So the second part of your question, you have asked us what's the difference between our patient and the treat patient is an excellent question. Indeed, we are studying a patient population of CKD patients not on dialysis that have not - I have not seen any publication on in previous control trials. The studies that supported approval of the ESA had higher entry hemoglobin criteria and they are less advanced in the security of the CKD. And however since 2011, the label change for ESA, the treatment standard have changed. So in our study, patients - those baseline hemoglobin needs to be below 10. And they tend to have a lower EGFR than the studies that have been reported so far. And as far as what would be the implication of the MACE event, right, typically patients with more advanced chronic kidney disease tend to have a higher risk such as mortality or hospitalization. But overall, in our study, right now, it's blinded that when we mix up the placebo treated and the Roxadustat patients together, the overall event rate observed is lower than what has been reported by treat.

[Tom Neff:]

So let me - it's an interesting question you asked, Michael. Let me add one other thing here. In the non-dialysis study versus placebo, there's never been a study of this treatment population before, so there's no comparative that would make any sense. In the treat study, they looked at patients that had a median EGFR at around 30, 28 type of range. So this is between stage 3b and 4. We are looking at substantially more advanced disease in the patients in our non-dialysis study versus placebo. So we will be seeing median EGFRs in the mid to low teens is my expectation. And so this pool and the notion that there's not any therapy available for it also attaches to the notion that a lot of countries and medical practices have decided that this rigid rule of enrolling people in the dialysis at EGFR15 doesn't really make any sense. And so we're seeing this profound number of patients that are between EGFR 8 and 12 routinely in all the countries in the EU5 and US and so on. And so, the world out there has evolved quite a bit since, since the treat study. And in the dialysis portion, well, it is true that the event rates are less frequent and therefore it takes longer. We still have the issue of the inflammation and hypo response in about a third of the patients and simply put, there's a large number of patients for whom EPO cannot work at all and those patients are not handled very well in the system right now in the US under the bundle, but with roxa for whatever reason, the inflammation just has no impact on the therapy. So while epo will completely fails, roxa sails through these things as if there was no impediment from an inflammation and so that segment of the population, we've heard from CMS, the idea they view that as an unmet medical need now, given current therapies. And so as you're thinking about these ideas, I think these various points you might want to consider in the overall picture.

[Elias Kouchakji:]

So Tom, I would like to add that, just to remind everyone, this is Elias that the treat is targeted hemoglobin of 13.5, which is by itself is could lead to a different profile and different number of MACE event. That by itself does make a big difference in treat than what's been done now as - in the clinical trials for the non-dialysis. Again, in MACE's study for treat was either end point is MACE itself I suppose beneficial, while in our studies, we are pulling MACE multiple studies as a safety endpoint. That's why this is taking later on time to be able to pull all this data, then when we complete the efficacy analysis, which is the hemoglobin itself. So these two things as we have a big differentiation between our programs in a way to treat versus the plan to do.

[Tom Neff:]

Let me also point out Michael that as far as I know, amongst the other companies that are copying the roxa technology, there are no placebo studies being on non-dialysis at all and as far as I know, there are no collections of incident dialysis in a manner that would be sufficient to arrive at conclusions. And so that's distinction.

[Michael Yee:]

Appreciate it. It was very interesting because you're not treating to the high level as treat, yet give rate charge is low, so there are some things to think about and appreciate the color.

[Operator:]

The next question in the queue comes from Terence Flynn with Goldman Sachs.

[Unidentified Analyst:]

This is actually Gavin on for Terence. Had a quick question on Pamrevlumab on the phase 3 design that we should expect mid-year, can you provide any more color on that design. I know a competitor recently shared their design on background of standard of care. So I was just wondering a commentary on that and then whether or not we're going to get it in term in the DMD study.

[Tom Neff:]

So let me start with the question. For this - the part of mid-year, are you referring to pancreatic cancer or IPF?

[Unidentified Analyst:]

Apologize, the IPF study.

[Tom Neff:]

Okay. So I mean for us, we are following where our data takes us is general idea and this has been innovation from the very beginning. Elias, if you'd like to comment on this please.

[Elias Kouchakji:]

Yes. At least, I would like to remind everyone this is the design that you're talking about this company, they have very little of data in their phase 2 studies, while we have complete phase 2 studies, which has showed the statistical significant results. That is by itself is certainly does to potentially - and that is consistent with the overall 9 when you add it on top of 067, this has given us a much different power and level of understanding of our product in this population and this is - at that time, this is what we will be taking in the direction and to our studies, what the design will be. It's appropriately based on this data, not on a minimal data that has been planned previously. So, that would be the most direction will be taking at this time and this discussion will be occurring with the regulatory agencies using less data. See, the DMD question, we are feeling very good that we are able to complete the enrollment in this study as well as we understand the other product versus trying to open non-ambulatory, it is facing a lot of hurdle in enrolling this population. This study is to be run for up to three years. We will hope to take a look in to some interim analysis when our patient complete the first year of a treatment and that will not occur till next year. So this time, so this is where we take a look as a cumulative data. From the three points that Seth mentioned before, pulmonary function, muscle function and imaging that we are doing at the same time.

[Tom Neff:]

Gavin, is this what you were looking for with your question.

[Unidentified Analyst:]

Yeah.

[Operator:]

The next question in the queue comes from Geoffrey Porges with Leerink.

[Geoffrey Porges:]

My question is related to timing specifically. First on the China approval, it sounds as though you may be a little bit less confident about the timing of the approval this year compared to the past certainly. Your language route was the same, but it may be the first country approved for roxadustat as opposed to language in the past, where it seemed very confident that we could come perhaps even sooner than the end of the year. So has something changed there in terms of that timing? Secondly you haven't mentioned MDS on this call. Could you give us an update on where your progress in MDS. And the outlook for roxadustat in that indication? And then thirdly, you commented on Pamrevlumab and potentially a pivotal trial for IPF, but could you give us a sense of when we might understand what that looks like? Is it something that you will be providing mid-year or is it still too soon to even say when we'll know what the pivotal trial design and timing will look like?

[Tom Neff:]

Okay. So last one first. We've had programs in parallel in pancreatic cancer and IPF. And what we try to do is make it so that the FDA interactions are a few weeks apart. And so one of them will be in early June and the other one will be right around the 4th of July. We expect to have pretty good comprehension of where we are after these meetings, given the totality of what we know right now. So we will be looking to share what we can in early August. The next time we have an earnings call. The comment about China, it would be very presumptuous of me to presume that we are going to get approved first in China, because China has to decide to approve us first, right, and so it is the nature of things that we have to say under the circumstances that if we are approved in China, therefore and so on. In China, there have been a large number of reforms in the past couple of years, some of which have effective baseline assumptions in the program. Timing wise, I don't think we've - we're talking about timing that's moved out by any substantial length of time as it relates to drug approval or as it relates to getting the follow-on manufacturing license is done. I think that how they're going to treat in innovative programs is literally a live issue right now with the senior people in China that make decisions about this stuff. And so we are watching very closely how it goes. The sense we get is that we have very strong sponsorship from people that really believe China needs an alternative in anemia, because unlike other countries, China's challenges are the baseline therapy and chronic anemia care is not transfusion. Everywhere else in the world, it is transfusion, but in China, it is not. And as such, all you have are the indicated uses of EPO, which are ones that are a small subset of the ones that would be typical in the US or Europe, because in China for whatever reasons, they ended up using knockoffs of epo initially instead of brand products. And when the cancer safety stuff happened, it sort of froze all the development in China. And so, there's nothing much in the way of approvals with epo. So there's a very large need for. Anyway, so as it relates of China, whilst there is no doubt that things are moving around a lot and for example, we've had to deal with two invoices and things like that this year and so on. To date has not really affected the Center for Drug Evaluation's decision on drug timing or the commercial manufacture licensure. Things downstream of that are obviously dynamically changing all the time, but we haven't gotten to the point that's terribly materially going. People are very, very excited about the project overall. So I think there is a lot of momentum. WeChat is a good place to look for some of that. We really sampled in November and December and we were - we had 70 videography per day for a few days in November and December, it was down to about 35 in China on WeChat.

[Peony Yu:]

And Tom as you told us, we should not be presumptuous. I mean in China, you always tell us - in China, we follow the rules and laws of China and as is the first class 1.1, candidate being evaluated for NDA, we just need to follow the process and things are moving really well.

[Geoffrey Porges:]

MDS?

[Tom Neff:]

I was going to say the other question that Geoff had asked about was MDS. So Peony, why don't you go ahead and?

[Peony Yu:]

Yeah. So, thank you. So MDS is our first additional anemia indication beyond CKD. And we are very excited about the opportunity to address this through unmet medical need, where in fact, we have two parallel teams working on MDS study. One is the US team is working on a global study on MDS patients who are transfusion dependent and the China team is working on a Phase 2/3 MDS study in patients who are non-transfusion dependent, but are and anemic. Both teams are doing a good job in study start-up activities and we have a number of sites started at the virtual screening patients. So in the coming months, we are looking forward to provide you more update.

[Operator:]

The next question in the queue comes from Andy Hsieh with William Blair.

[Andy Hsieh:]

Just from a timing perspective, Tom. So in China, after approval, how long do you think the drug will be available commercially and after that, how long would it take reimbursement to get approved? So it was really just a modeling question, I just want to get a sense of when the company can start recognizing revenues in China?

[Tom Neff:]

So let me make sure I understand your first question right. Did you say how long the drug will be available?

[Andy Hsieh:]

Sorry. How long would it take for - basically the lag time between approval and the commercial availability?

[Tom Neff:]

Okay. So China differs in a very distinct way from other countries and jurisdictions and that when you're doing business in China for China and getting reimbursed in China, you first have to obtain a hospital listing. And so hospital listing process is by itself cycle time of anywhere from 6 to 15 months per hospital. And to find a way to manage this, we used the AstraZeneca milestones when they launched BRILINTA in China for hospital listings. And so conceptually, I believe the most recent briefing I got from commercial side in China was that we are about 25% to 30% larger than the BRILINTA effort in terms of the number of hospitals that are being sought in the listings. It populates the major goals for the first couple of years, because it's absolute necessity to get that done before you move into what we would think of as commerce selling. And so, as I think about what we face with the institutional side in China, where you do the hospital listed first and then after that, you're going to start selling through the provincial auction process. It will take three or four years to get to the point where you have substantial traction and then this is what everybody expects and this has been the totality of experience in China for those kinds of products. In addition however to the basic in hospital, 3A hospital. We have other aspects, pharmacy distribution is out there as part of the picture, direct sales, privately direct sales to people that right now, for instance, would prefer to have the EPO over the domestic EPOs and they're willing to pay a considerably higher premium price. So these market segments are ones that are addressable in addition, because it will be large on road. There are several countries that will take on the China regulatory files, such that distribution can start in those countries. And so, as you look at the theatre activities, that's another piece of the picture. And AstraZeneca has made a point of saying, we're going to endorse OBOR as much as we can in countries where it's appropriate. I think amongst the countries that know are in that group are Indonesia, Malaysia, Philippines, India, all are considered that way as well as some of the parts of China that we think of as China, but China does not, so Macau and Hong Kong also. So the pictures sort of are very different than how you'd be thinking about a US rollout, but there's a great deal of experience in AZ because they've had several drugs that they've launched in China and so they have a lot of templates that are based on time to achievement, time to milestone kind of thing. And so once you get inside of that, it all sort of makes sense. The way I think about it is that during the period of administrative exclusivity, so we get approved under special rules where the efficacy portion is dealt with early and a decision is made and then we have to do a follow on 2000 patient safety collection. And only after that safety collection is over, do you get a grant that is unconditional and during the period of that safety collection, you're under what's called administrative exclusivity, which prevents others from trying to compete in the segment that you're in, but that will take three or four years inherently. So A, the administrative exclusivity period is typically denominated up to five years and so as you think about it, it's not going to be immediate that sales come, but as we invest in these things and succeed getting over the hurdles, they represent really high barriers to entry for anyone trying to compete in China. So that's the other side of it and so I think that's sort of where we are right now as I hope this is helpful.

[Operator:]

There are no further questions in the queue at this time. So I'll turn the call over to Mr. Neff for closing remarks.

[Tom Neff:]

Thank you all for the joining the call today. We anticipate sharing additional clinical data insights on regulatory process during the remainder of 2018 and into 2019. We will also be participating in webcasting two upcoming conferences, the 2018 Jefferies Annual Healthcare Conference in June 5 to 8 in New York and the Goldman Sachs Annual Global Healthcare Conference on June 12 to 14 in Los Angeles in Rancho Palos Verdes. We would look forward to seeing anyone that's visiting those conferences. And of course, they'll be live and available online, the Goldman conferences has got a video feed, so you can see it live. I would like to express my sincere thanks to the FibroGen teams in the United States and China for their dedication and hard work. We have accomplished an enormous amount the last 12 months and we have even more to do in the next 12 months. And my gratitude to our partners and our investors for their support, as we pursue our programs. We look forward to seeing you at the Jefferies Conference, the Goldman Sachs Conference. I'd like to wish everyone a good afternoon and good evening. Thank you.

[Operator:]

Thank you. Ladies and gentlemen, this concludes today's teleconference. Thank you for participating. You may now disconnect.