FibroGen, Inc.
Q3 2015 Earnings Call Transcript

Published: 13 Nov 2015

[Operator:]

Welcome to the FibroGen Quarter 3, 2015 Conference Call. My name is Kathy, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note this conference is being recorded. I will now turn the call over to Greg Mann, Executive Director of Investor Relations. Mr. Mann, you may begin.

[Greg Mann:]

Thank you, operator. Good afternoon and thank you all for joining our call. On this call we expect to make forward-looking statements regarding our business including our collaborations with AstraZeneca and Astellas, financial guidance, the initiation enrolment design, conduct and result of clinical trials, research and development activities and certain other statements regarding the future of our business. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes that are difficult to predict, and many of which are outside of our control. We refer you to the risk factor section of our annual report on Form 10-K for the year ended December 31, 2014, our quarterly report on Form 10-Q for the quarter ended March 31, 2015, and June 30, 2015 and our quarterly report on Form 10-Q for the quarter ended September 30, 2015, each of which has been filed with the SEC for risks and uncertainties regarding our business, as well as the statements made on the call today. We undertake no obligation to update any forward-looking statement whether as a result of new information, future developments, or otherwise. A webcast to this conference call will be available for replay on the Investor Relations page at FibroGen's website, www.fibrogen.com. I'll now hand the call over to Tom Neff, Chief Executive Officer of FibroGen.

[Tom Neff:]

Thank you, Greg. Good afternoon, thank you for joining us today. On today's call, we will review key updates and our programs, discuss recent accomplishments and highlight our most important near-term and long-term goals. Joining me for this discussion are Dr. Peony Yu, VP of Clinical Development; Dr. Frank Valone, Chief Medical Officer and Pat Cotroneo, Chief Financial Officer. Let me begin with comments on FibroGen’s progress enrolling patients in our Phase 3 roxadustat studies and results of the latest roxadustat DSMB or Data Safety review. As we announced in our press release in 10-Q this afternoon, our roxadustat timelines remain on track. We continue to expect to file regulatory submissions for roxadustat in 2016 for China and 2018 for the U.S. We and our partners, AstraZeneca and Astellas are conducting a total of seven Phase 3 trials for registration in the U.S. EU and other territories. FibroGen is conducting three of these seven trials. As stated in our last call, the shareholders, the working assumption agreed with AstraZeneca was that FibroGen would meet target enrolment for its trials enrolled by March- April 16 as a base goal with a stretch goal of December 2015. We confirm our prior guidance in the one trials meeting target enrolments within the stretch goal, another trial will hit target between stretch and base goals and we expect the third trial to hit the agreed upon target of the base goal. Last quarter, we said that on a combined basis, the three Phase 3 trials were two thirds enrolled, now they are more than 80% enrolled. An independent data safety monitoring board or DSMB is overseeing all of the roxadustat Phase 3 studies and convenience periodically to review the roxadustat safety data. During its October 2015 review, the DSMB held a face to face meeting pursuant to its charter, we received the required communication that day from the DSMB which directed us to proceed with current Phase 3 protocols without modification. Dr. Peony Yu will provide additional details on U.S./RoW roxadustat program later in the call. The global scope of roxadustat program includes an agreement with our partner AstraZeneca for the development and commercialization of roxadustat in China. Subsequent to our last investor call on August 13, 2015 the CFDA formerly approved our clinical trial application and the program has advanced to Phase 3. Overall, we intend to activate 30 to 35 sites to enrol a total of 450 patients of which 300 patients will be in dialysis and 150 will be in non-dialysis. As of the beginning of this week we have obtained FX approval for 13 sites and signed contracts at 11 sites. We expect to initiate 10 sites by the end of November with the majority of target sites being initiated by the end of the year. With a two to three week screening period, we expect subject enrolment to begin in mid-December. Our goal is to complete enrolment within six months from commencement of dosing. On another front from our last discussion with our regulators with respect to end of Phase 2 and beginning of Phase 3, we have been exploring opportunities for expanding the development of roxadustat into additional indications in China, specifically we have been advised in China that the myelodysplastic syndrome or MDS and chemotherapy induced anemia or CIA are disease areas where there is significant unmet medical need, access to transfusions in chronic therapy is the rare exception in China and the practise often involves the relatives of a patient who receive regulatory authorization to provide transfused blood, thus transfusion is not base line standard of care as it is in the United States. We also believe that EC [ph] is very limited as it is not approved for MDS in China and has limited reimbursement in China and oncology. Pursuant to these conversations we are currently planning to file clinical trial applications in China in the first half of 2016. AstraZeneca is our commercialisation partner in China. AstraZeneca pay for 50% of development cost received 50% of profits by means of royalties and dividends. AstraZeneca has made a firm positive commitment to the expanded development activity in anemia. We will provide additional information on the China CKD and ESR Phase 3 programs in our next call. In Fibrosis, our second major clinical platform, FibroGen continues to make steady progress with FG-3019 a fully human antibody that blocks the biologic activity of connective tissue growth factor or CTGF, the Central Mediator in Chronic Fibrotic conditions. I am going to touch briefly on our current studies in fibrosis; however I will focus my comments today on the pancreatic cancer study. Dr. Frank Valone will review the current development plan for FG-3019 in more detail later in the call. In idiopathic pulmonary fibrosis, or IPF we are currently conducting a Phase 2 placebo controlled trial or FG-3019 as first line therapy in IPF. Over the next quarter, we have contracted the sites in Canada, New Zealand, Australia, South Africa and India in order to fully enrol the study. In Duchenne muscular dystrophy we are now contracting sites and we expect to initiate patient dosing this quarter and a Phase 2 study of FG-3019 and non ambulatory patients with Duchenne muscular dystrophy. In Liver fibrosis, we held a pre R&D meeting with the USFDA in early October to discuss study endpoint and potential regulatory pathways and we now expect to file on IND in the first quarter of 2016. In pancreatic cancer, FibroGen is exploring the impact of altering or reducing fibrotic extracellular matrix on tumor growth and metastasis. We are conducting a Phase 2 study in stage 3 pancreatic patients who have been scored as not eligible for surgical resection. According to a very recent article in the Journal of clinical oncology of the estimated 47,000 new cases of pancreatic cancer in the United States, approximately 50% will be classified as clinically localized with 35 percentage points of these patients diagnosed with locally advanced pancreatic cancer that precludes surgical recession. 15 percentage points of patients are diagnosed with primary tumors that are potentially receptacle. To put this into market segment numbers of the annual incidence figure of 23,500 of localized tumors, 16,450 have localized advanced pancreatic cancer. Thus we can frame this FG-3019 clinical program as potentially addressing about one third of all newly diagnosed cases of pancreatic cancers. Patients deemed ineligible for recession typically receive chemotherapy or chemotherapy plus radiation therapy. Our pilot study examines whether the combination of FG-3019 and the standard chemotherapy regimen of gemcitabine and abraxane can convert these subjects tumors from inoperable to operable state. A published surgery study shows that patients with complete tumor resection had median survival of 20.1 months compared to median survival of 9.8 months for patients whose tumors cannot be completed removed. Because this is open label, we are able to provide early data to investors. 12 subjects are currently enrolled in the FG-3019 study, seven have finished their study. As of November the update report is as follows; three of these seven patients were randomized to standard of care, meaning gemcitabine and abraxane upon restoring six months later they are still not eligible for resection therapy. The other four patients were randomized to FG-3019 plus standard of care. Of these four, one discontinued therapy due to an SAE unrelated to study drug and the other three have finished therapy. Each of the three on FG-3019 that have finished six months of therapy has been rescored as eligible for resection treatments success and two of the three have had RGO [ph] resections, clear margins and the other one I said on R01 resection. There is no question the resection surgery is a potential major clinical benefit for patients when we design this trial we assume one to two patients would have resection with chemotherapy alone out of upto 20 control arm patients. Even though these early results were notable since the three 3019 resections out of four patients treated for 3019 are more than we expected for the entire control arm and a 40 patient trial, it is still too early to know what the outcome will be and what the next steps are. Dr. Valone will provide more details on this program later in the call. We plan to present our then-current data at the Annual ASCO GI Conference in San Francisco in January 2016. Now turning briefly to our corneal implants program and FG-5200. We have successfully completed tech transfer of a corneal fabrication process from San Francisco to the manufacturing facility in Beijing, China. This enables us to start local production materials in the first quarter of 2016 and then to start China’s required chronic toxicology study in the third quarter of 2016. Finally, I wish to mention a few items related to our financial position. At the end of Q3, or September 30, 2015 FibroGen has $365.6 million of cash, cash equivalents investments and receivables under our 50

[Peony Yu:]

Thank you, Tom. I'd like to comment briefly on the profile of roxadustat and its potential for treating patients with anemia and then describe the Phase 3 clinical program design. Roxadustat is our first-in-class hypoxia-inducible factor prolyl-hydroxylase inhibitor in development for the treatment of anemia in patients with chronic kidney disease. In response to hypoxic conditions such as high altitude of blood loss, the human body naturally makes more red blood cells to carry oxygen. Roxadustat pharmacologically turns on that response system to make red blood cells. The current treatment of CKD anemia using ESA is associated with cardiovascular MACE [ph] which goes up with high ESA growth. Iron is a necessary ingredient for making red blood cells and hepcidin as a hormone which blocks up the bodies iron stores and interferes with the bioavailability of iron. Information in patients with chronic kidney disease tends to lead to elevated hepcidin levels and higher ESA dose requirement. One problem with current anemia care is when IV iron is used to overcome the block of iron availability induced by hepcidin. IV iron inturn induces super physiologic hepcidin levels that blocks red blood cells production. First, creates a vicious cycle, increasing the need for more IV iron and more ESA. Both agents have those associations with worst patient outcome. In contrast, once they have used their triggers they coordinate a process for making red blood cells in the body reducing hepcidin, mobilising iron, increasing iron transport factor, like transferring which makes iron available, and with only a modest trends in elevation of injectable erythropoietin. As reported in our manuscript on the Phase 2 incident dialysis study published in the October issue of the Journal of the American Society of Nephrology, haemoglobin responses were similar between patients on overall iron and IV iron supplement to roxadustat In addition, roxadustat raised haemoglobin levels in heamodialysis patients regardless of the level of inflammation. We have studied roxadustat in more than 1100 subjects in Phase 1 and Phase 2 with consistent results across multiple studies. We have reported a 90% or higher haemoglobin response rate at the selected doses in four Phase 2 anemia correction studies in CKP patients on dialysis and those not on dialysis. In addition, at the American Society of Nephrology Kidney week meeting last week, we presented three postures and one oral presentation. Three key results were reported from our six complete their Phase 2 studies. One, roxadustat raised it transferrin level to transport iron effectively around the body. Two, roxadustat raised it soluble transferrin receptor, a key marker of erythropoietic response. Three, roxadustat reduces hepcidin level. At our ASN oral presentation, we also show improvement in quality of life for CKD patients whose anemia corrected with roxadustat. Next, I would like to share our rationale for intermittent dosing. Roxadustat was carefully selected from our large library of HIF-PHI based on its biochemical profile to optimize potential safety and efficacy for anemia therapy. Its health life is 10 to 12 hours. Roxadustat is dosed orally three times a week in dialysis. So, there is enough time for complete resets of the HIF system between each dose. In non-dialysis, we have shown that twice a week and weekly dose can produce results similar to three times a week dosing. In HIF biology it is believe that some HIF target gene are induced very quickly after exposure to HIF-PHI, while the majority of HIF-target genes require longer periods of HIF activation for significant reduction. We believe that increasing the intervals between HIF activation using an intermittent dosing regimen has the potential to limit the HIF responses to their early response target genes such as those involves in erythrogenesis. This approach has the potential to reduce the risk of off target effect due to continuous HIF activation such as those in genetic models. Another advantage of allowing full resets of HIF is avoiding a attenuation of therapeutic effect. Our long term safety studies have shown durability of Roxadustat dose effect in patient for as long as four years. Finally, I shall briefly describe our ongoing Phase 3 program. Our Phase 3 program is powered to demonstrate cardiovascular safety using major adverse cardiac event of MACE. As the primary safety endpoints, MACE is being evaluated in two separate patients study pool dialysis with 3500 patients and non-dialysis with 3800 patients. In the non-dialysis Phase 3 studies, roxadustat has been compared to placebo. The regulatory requirement is to show roxadustat to be superior on efficacy in anemia correction and non-inferior on safety. In our Phase 3 dialysis studies roxadustat is compared to important alpha, while the regulatory requirement is to show non-inferiority for both efficacy and safety. All studies are powered to show safety superiority over ESA in hemodialysis patients. As Tom mentioned, Phase 3 studies are progressing well. I'll hand the call back to Tom now. And we'll be happy to address questions at the conclusion o f the call.

[Tom Neff:]

Thank you, Peony. Now we'll turn to FG-3019. Dr. Frank, go ahead please.

[Frank Valone:]

Thank you, Tom. I’d like to review briefly our second major clinical program that focuses on treatment of fibrotic diseases and fibrotic cancers. Our lead product candidate FG-3019 a pro-human monoclonal antibody that blocks biologic activity of CTGF or Connective Tissue Growth Factor, CTGF has been shown to be central mediator of fibrosis and to contribute to tumor growth and metastasis;. A large body of preclinical and clinical data has led us to develop FG-3019 in four distinct areas, pancreatic cancer, idiopathic pulmonary fibrosis or IPF, Duchenne muscular dystrophy and liver fibrosis. As Tom reported we are running a trial patient's with inoperable stage 3 pancreatic cancer These patients has survival similar to patients with metastasis cancer, study showing only half of inoperable stage 3 patient are alive, approximately eight to 12 months after diagnosis. Survival is so poor, very few studies even report five-year survival. The outlook for patients with resectable pancreatic cancer is considerably better. Study show that half are alive between 17 and 27 months for diagnosis and 20% alive at five years. Tom presented data for per seven subjects in which more subjects in experimental arm containing FG-3019 converted to resectable status and underwent tumor removal. We intent enrol up to approximately 40 subjects in this study. To accomplish this we've expanded the study from where it started at Virginia Mason Medicine Clinic in Seattle to include Mayo Clinic in Georgetown University. Our secondary clinical development is IPF. We completed dose findings, single-arm open label trial with FG-3019 and subjects with moderate IPF. Results of this study show that 35% of subjects had stable, we've improved lung fibrosis after treatment with FG-3019 for 48 weeks. To our knowledge, no IPF clinical trial has shown lung fibrosis as measured by high resolution CAT scans. This includes trials of the recently approved drug pirfenidone and nintedanib. We are currently running study 067 which is randomized in pirfenidone and nintedanib but not fully penetrated the markets. We are opening where its currently schedule to be 23 new sites in Canada, New Zealand, south Africa and India with additional nine sites in Australia Romania and Bulgaria.. We project enrolment to complete in the first half of 2016 and as such we are moving the date to reporting top-line data this first half of 2017. We also continue to evaluate a trial that combines FG-3019 with an approved therapy. Duchenne's muscular dystrophy has been a scientific and clinically interest to FibroGen for a number of years. DMD is characterized by extensive muscle fibrosis. We and our collaborators have obtained compelling preclinical data as far as developing FG-3019 and DMD. This is a high priority program for us as FG-3019 has the potential to treat all subjects with DMD regardless of the underlying genetic defect. And, thus, FG-3019 is quite different than most products currently under development, the target subsets of DMD patients with specific genetic defects. In late July we received FDA clearance for our IND for treatment of non-ambulatory patients with DMD. The study's primary endpoint has changed in forced vital capacity. For non-ambulatory patients loss of lung function becomes a major health issue and ultimately results in full time use of ventilators. Other end points are changes in arm function, which is critical to the patient's quality of life and MRI assessment of cardiac and arm muscle fibrosis. Sensor IND [Indiscernible] the FDA, we have begun opening clinical sites and are now starting to screen subjects enrollment in this trial. We intend to expand our DMD program to include ambulatory boys with DMD, and we intend to meet with the FDA to discuss this plan next year. On a final note, we've had a long standing interest in treating liver fibrosis with FG-3019. In October we met with the FDA to discuss developing FG-3019 for treatment of liver fibrosis due to the NASH or hepatitis C. We were encouraged by that meeting and we are now working with our FDA reviewer to finalize plans for Phase 2 trial and subjects where liver fibrosis due to NASH. We plan to submit an IND with this indication in the first quarter of next year. With this information, I'll now turn back to Tom.

[Tom Neff:]

Thank you, Frank. Now, we'll turn to financial matters, and Pat Cotroneo. Pat, please go ahead.

[Pat Cotroneo:]

Thank you, Tom. As we announced in our press release today, total revenue for the quarter ended September 30, 2015 was $19.5 million. For the same period, operating expenses were $63.3 million and net income was $45.1 million or $0.75 per basic share and diluted share. Included in operating expenses for the quarter ended September 30, 2015 was an aggregate non-cash portion totaling $8.3 million of which $6.8 million was a result of stock-based compensation expense. In terms of our cash balances, we had $365.6 million in cash, cash equivalents, investments, and receivables compared to $346.8 million at the end of 2014. Our investments consist primarily of two to three-year investment grade corporate debt. In connection with the cost sharing arrangement with AstraZeneca, FibroGen's total funding obligations for roxadustat excluding China are limited to $116.5 million, of which $104.7 million had been incurred and $11.8 million remained as of September 30, 2015. As Tom just discussed based on the current year projections, FibroGen expects to reach this $116.5 million cap before December 2015 on an accrual basis, at which time Astellas and AstraZeneca will be responsible for funding further roxadustat development in CKD through launch for all territories outside of China. Looking to year-end 2015, we continue to anticipate that our cash, cash equivalents, investments and receivables will be approximately $330 million. With that, I'll turn the call back over to Tom.

[Tom Neff:]

Thank you very much Pat. Operator, thank you. That's concludes our prepared remarks. We'd like to begin the question and answer session.

[Operator:]

Thank you. We will now begin the question and answer session. [Operator Instructions] And it looks like our first question comes from Michael Yee from RBC Capital Markets. Michael, please go ahead.

[Michael Yee:]

Hey, thanks. Good afternoon Tom and Frank. Couple of questions, congrats on the 3019, I guess, initial data you talked about in pancreatic cancer, pretty exciting I guess, can you describe I guess what do we do with that data going forward and you have to finish off that Phase 2 study, is that endpoint of study you can do on Phase 3? Maybe just walk through what the next steps are there, because I think that's pretty new data that you just described. Second question was on NASH, which was a new development. Can you explain what that study design you're thinking that would be, I mean, first, I'd like to see a placebo controlled study, so can you talk about little of that? And my last question on roxadustat, there were some recent, I guess, delays or commentary made about GSK, they talked about their new program, this has been off radar, I think for a lot of people, so can you describe a little bit context about what you know that we should think about in terms of versus roxadustat? Thanks.

[Tom Neff:]

Okay. Thank you, Michael. Let's see if we can get through this stuff. So, I think, I'll try to answer the question on pancreatic. This is a pilot study wherein we plan to enrol up to 40 patients with the provided that once we were convinced of either efficacy and evidence enough to move forward or lack of efficacy we either to proceed or stop. So conceptually we could anywhere from now until 40 patients make a decision to go to the next step. The data so far is certainly of note. The numbers are too small however to be sure. And so, we will continue to looking at patients for a while. The feeling here is if what we've seen so far with three 3019 patients that had completed six months doing as they did effect. Patent continues, we'll probably go talk to the agency about the endpoint and how they like to see this addressed as a next step. We are quite willing to do whatever study is needed behind that, so there is no limitations in budget or anything else that would inhibit our ability to move forward, but I think we need to understand exactly how FDA looks at this is unmet need and how they look at this clinical benefit. I suspect that we'll need to make the judging process something that FDA is completely satisfied with. The rest of it I think looks very good right now, so we'll just be hoping in the next few patients.

[Michael Yee:]

Let's put it this way, do you think you need to enrol the 40 something patients. I'm just trying to think about timing, just like something …?

[Tom Neff:]

Michael, I don't. Yes, based on the data so far if it continues I don't think we need enrol the 40 patients to draw our conclusion, but we need to see more of the same here. So I don't want to get ahead ourselves. It could be with anything, so this kind of statistics for all we know the next 15 patients on 3019 strike out. I mean, we have to see what happens. But there's a point where it becomes apparent and obviously right now when we're expecting one or two patients in the control arm at most to have the perception your three out three, say, three out four but arguably three out three is the fourth patient discontinued really at some point the difference there that disparity will be one that everybody and their gut feels like we got to act on if and when the data come in along that line. So let me stop that line there and answer your next question about NASH. And I want to hand that to Frank to handle. And I think question were do we have a plan for study and will it be a placebo controlled study.

[Frank Valone:]

Yes. That's a good question. The answer about placebo always yes. We do plan placebo controlled trial and that was what we presented to be FDA was a standard randomized double-blind placebo controlled trial. Much of our discussion with the FDA dealt with what endpoints we should use. This still a bit of horse-trading, but I think we're going to end up is that they're going to ask us to make biopsy changes in fibrosis, our primary endpoint. We've already proposed that we'll be targeting patients that had advance liver fibrosis, not looking at early stage fibrosis rather patient who are brought stage 3 and 4, stage 4 being sclerosis. We're targeting advance fibrosis and asking can we make that better using FG-3019. There are other endpoints where we're going to include their focus on refunction, I think we have some good ways to access liver function and we probably looking for signals both in changes in fibrosis and function that commence us to move forward into further trials.

[Tom Neff:]

Okay. And let me try the roxadustat question. GSK sort of got more visible recently on their program. They set some things that we found very odd, the one our focus on for now is this idea the oncology envision causes cardiovascular events. And so the way we process this stuff are one of the cofounders company called leading expert our prolyl hydroxylase causes triple heel [ph] collagen or form and our view would be that in order to have any interference with collagen, meaningful magnitude you have to have continues addition of the prolyl hydroxylases that sit in the endoplasmic reticulum, so its two membranes you got to get through. And for our purposes roxadustat unlike everybody else we are doing intermittent dosing and so with intermittent dosing you don't have continuous blockade of collagen hydroxylase under any circumstance. And we done all sorts of models to try to evaluate this and at most we might have 1% effect on collagen in the most extreme stress example with intermittent dosing. The companies that have daily dosing have a different problem obviously because they need to wait 12 to 14 hours to get EPO Cmax, and when you think about that in the system resetting it never really resets at a 24 hour period and that's why we don't do daily dosing. But I would also say this, that we cannot find any examples of cardiovascular mortality, mobility outcomes associated with blockade of the human prolyl hydroxylase enzymes and to try to prevent the collagen customer from assembling and so we're mystified by the comments as a class effect and I would instead suggest perhaps is the compound series maybe GSK is looking or something like that. They have done a couple of studies that are very different than the ones that are required for anemia and it might be whatever they worried, whatever they choosing to one mail at and something there, but for us we've talk to our expert group were oncology and everybody says there is nothing here at all to report. So we were mystified about that. As far as their program, you know they are in Phase 2 somewhere and we don't know exactly what they are doing next. And I think that's all that we can say right now.

[Michael Yee:]

Understood. Thanks.

[Tom Neff:]

Okay. Thank you, Michael.

[Operator:]

And our next question comes from Seamus Fernandez from Leerink. Seamus, you can go ahead.

[Seamus Fernandez:]

Thanks very much for the questions. So, Tom, I was wondering given the structure of the contingent payments, your updates for how we should be thinking about cash burn which I think if I hear the comments, right, it was basically by end of 2016 your expectation for cash would be in $295 million to $300 million range. With the contingent payment that's first come in from AstraZeneca, as I look at $300 million at the end of 2016 just before we get to sort of series of development in regulatory milestones. It would seem like upon the approval of an exciting start potentially in 2018 you would be operating with a very substantial cash balance. So I'm just trying to get a better sense of what those – what that cash balance could potentially and how those development and regulatory milestone kind of shape up and how much of a ramp off of what I think that $100 million estimated of just sort of cash burn would be in 2016 potentially on the basis of your comments, would we see a substantial ramp in other programs in 2017 as we look forward.? But that's really just one-one question, but just want to get a better sense how to think about the cash situation?

[Tom Neff:]

Yes. Let me try to pass this out and answer it. First, you're correct in hearing and repeating that we said, $295 million to $300 million of cash at the end of 2016 and I add up the caveat that as we get to the point of doing final budget next month for next year if thing change we will inform the relevant investors as soon as we can. But right now that's what we see. The overall assumptions that we use in our planning are that we assume with respect to 3019 that as long as we're doing the proof-of-concept Phase 2 type studies and we're not on the pivotal studies that it would not require additional financing for corporation. It changes obviously depending on what the – when you have enough data that's compelling that you can act on the pivotal program, what the cost structure is and what we're facing and so that scenario is the only one that we thought about is one that creates financing need. We mentioned LCM in China and potentially that's another factor is that hopefully didn't plays out, all safe for the moment that we put that to the side and just focus on what we're dealing with. There are a lot of milestones certainly, it’s on a $1 billion order going forward, a portion of them are pre-submission, I think working assumption there is – if you could get every milestone that's out there maybe a quarter of its pre-submission maybe a little more, not quite sure that the dominators should be there, but some like that and – but for our purposes we don’t plan under the assumption, those things are automatic and so we run the place the pretty tightly in terms of cash management. And so as we look past 2016, we’ll be paying a lot of attention to data on 3019 and implications for pivotal studies as the factor that would result in financing activity. With regard to the anemia program, I think we’ve described pretty well what’s out there and what’s potentially available, but I do not want to presuppose success and I don’t want to presuppose how fastest how long it’s going to take to get there. So we’re going to play it one step at a time past 2016, and if then a win we’re in place that we’re filing data successful data, yes, there will be a lot of cash that comes in. I won’t deny that. However, these things are all contingent milestone so let me correct one thing and that is that in 2016 I mentioned $62 million payment from AstraZeneca that is a non-contingent payments and so that’s the last of a series of payments by AstraZeneca. The total of 402 million that was non-contingent payments that were agreed by us in AstraZeneca in 2013, so there are in addition to the contingent milestones there are the agreements that cover the clinical trials and as we’ve noted except for China we were now at a point with regard to any anemia indication that some of the Astellas reimbursements and AstraZeneca reimbursements will cover all of the reported cost, the cost that we submit to our partner. So I think that’s the picture that we’re looking at. And I don’t think I should go any further than that because we don’t really know right now what’s going to happen next.

[Seamus Fernandez:]

No, that’s perfect. And maybe just as a separate question. Can you just – what’s at this point – I think on the last conference call Peony you mentioned that the DMC at this point would be evaluating – or really only looking for highly in frequent events. But I just wanted to get a sense of when did the last DMC occur and at what frequency is it taking looks at this point? Are those occurring less frequently now every six months and previously with every three months or just any update on how the DMC is evaluating the studies?

[Tom Neff:]

So Seamus, let me try to handle that because the comment you referred to was actually mine from the last call.

[Seamus Fernandez:]

Alright. Sorry about that.

[Tom Neff:]

The DMC operates by a Charter. The DMC, DSM-IV as we call it, began in 2009 and the core membership has continued from that time regard of the few people to seven totals now but that’s essentially how it’s been operating. The Charter provides for four meetings a year and couple of those are face to face and we try to note that when it happens. The focus of the group is -- its wrong to say that it’s looking for very rare events. The comment there was more along the lines that patient years exposure aren’t quite far enough along that any real conclusions can be drawn was statistical power as it relates to the mason points and so a lot of effort is gone and to look for rare events at various times. This past meeting – this was a company presentation of about 3 hours and an equal amount of time in a close session and I got the impression that there was a very strong consensus to continue with the studies, no modifications and we got a lot of feedback, but I think that thus far as I’m willing to discuss this we are – because we are the holder of statistical center point and this was two larger partners. We’re under some very extreme structures about any disclosure going outside of clinical operations and safety have been into the commercial side of the company and so I think the parameters have been imposed by others and I’ve agreed to them and I just have to say that we observe this boundaries and I apologize if I can’t offer you more information at the present time.

[Seamus Fernandez:]

No, no. That’s perfect. Thank you so much.

[Tom Neff:]

Thank you.

[Operator:]

And our next question comes from Terence Flynn from Goldman Sachs. Mr. Flynn, please go ahead.

[Terence Flynn:]

Thanks for taking the question. Maybe -- Tom, you mentioned, Roxa for MDS and CIA in China. Maybe just give us an update on how you and your partners are thinking about plans for these indications and other geographies. And then on the 3019 Phase 2 IPF trial, I know you guys previously discussed that you could expand it to include some potential combination drug use – in the current study. Is that still part of the plan or will that be separate study? Thanks a lot.

[Tom Neff:]

Thank you, Terence. So with regard to expansion of anemia activities I think in the past we’ve indicated that AstraZeneca has considered a lot of different scenarios and that still goes on. With regard to China the circumstances were such that there was a discussion that having between ourselves and the regulators that precipitated forward moment. And we want to make it very clear that we intend to follow through on a China pathway. At the same time, this was a little bit unexpected for us and as a result there wasn’t there are three parties involved with ourselves in AstraZeneca but also Astellas which will also rise in Japan and Europe. And so there needs to be meetings with pre-sided meetings in the future for non-China territories and as I said that’s the case that where China we weren’t expecting to be doing this -- at the time, we started doing in August, but we have follow through and we have -- what are now becoming concrete plans there and AstraZeneca has been outstanding on their own. And so – that’s a part I can report and the rest of it just has to be for the future. As it relates to the combination therapies with FG-3019, I’m going to let Dr. Frank Valone answer this question. The starting point is that we are indeed looking at combination therapies, but just specific. Go ahead, Frank, please.

[Frank Valone:]

Sure. And that’s a very good question. We still are looking very closely at combination therapy. We think that as we are looking forward to positive Phase 2 results and going under Phase 3 one root for approval would be an add-on. We are adding FG-3019 on top of one of the two approved drugs either pirfenidoneor nintedanib. We are looking at now as just logistics doing that. We want to get this done as fast as we can and we’re really trying to figure out whether it’s better to add a non recurrent trial or do we separately study and that’s what you just say active discussion in the group which result that soon and be able to move on in that area.

[Tom Neff:]

And we’ll report on that as soon as we have firm plan in the form of protocol agreement, an agreement on a protocol internally. And for the moment you should assume we’re just working away at the alternatives. So I think that’s it for Terence.

[Terence Flynn:]

Great. Thank you, guys.

[Tom Neff:]

Okay.

[Operator:]

[Operator Instructions] And our next question comes from [indiscernible] at Stifel. Please go ahead.

[Tom Neff:]

Sorry, I couldn’t hear you. Could you just say that a little louder?

[Unidentified Analyst:]

[indiscernible] from Stifel. Thank you for taking my question. So I have a quick question about incidents dialysis paper that was recently published. So the paper indicated that there were about 6 patients that choose some hypertension signal as they had to readjust their anti hyptertension [ph] medication. So this was one of the contents of the ESA. How significant it is for you guys? How you plan on treating it in the coming Phase 3 trial?

[Tom Neff:]

Okay. This is study 053 adjacent article was publication of that study. So Peony, I’m going to ask you to take this on, please. Did you understand the question she asked?

[Peony Yu:]

Yes.

[Tom Neff:]

Okay.

[Peony Yu:]

So we have a patient population with chronic kidney disease and patients who are on dialysis who are undergoing a fluid shift three times a week. And hypertension has been identified as an issue with the use of ESA. In multiple studies, when we look at the rates of hypertension in patients treated with roxadustat in placebo controlled trials we have shown no difference between our drug and that of placebo. And we monitor patients of blood pressure very carefully throughout in Phase 2 and Phase 3 we have not identified hypertension as the signal in control trials.

[Unidentified Analyst:]

Okay. That’s perfect. Thank you. And I have an additional question, there were relevant comments about changing environmental total [ph] regulations in China basically to initiating a trial to allow marketing of the recession independent of manufacturing authorization, how does it affect FibroGen?

[Tom Neff:]

Could you just clarify that question, I think we had a bit of a panic here.

[Frank Valone:]

Yes we’re having a hard time hearing on the speaker; can you say it one more time please?

[Unidentified Analyst:]

The enrolment. Can you hear me?

[Frank Valone:]

Yes

[Operator:]

And it looks like she did just get disconnected.

[Frank Valone:]

It’s okay.

[Tom Neff:]

Yes, she disappeared. I would suggest we follow up with her.

[Frank Valone:]

Separately.

[Tom Neff:]

We’re at the end of the hour.

[Frank Valone:]

Okay.

[Tom Neff:]

So, let me say thanks to everyone who’s still on the call for participating today. We realize you have many things you can do with your time everyday and we appreciate that you were willing to listen to what’s going on in FibroGen. We look forward to speaking with you again and providing future updates at our next report probably in early March 10-K filing into February. Thank you very much.

[Operator:]

Thank you, ladies and gentlemen. This concludes today’s conference. Thank you for participating. You may now disconnect.