Amgen Inc. (AMGN) Q3 2019 Earnings Report, Transcript and Summary

Good afternoon, and welcome to the ChemoCentryx Third Quarter 2019 Financial Results Conference Call. [Operator Instructions]. As a reminder, this conference call will be recorded. I would now like to turn the call over to Mr. Bill Slattery of Burns McClellan. Mr. Slattery, please go ahead.

Thank you. Good afternoon, and welcome to the ChemoCentryx Third Quarter 2019 Financial Results Conference Call. Earlier this afternoon, the company issued a press release providing an overview of its financial results for the third quarter ended September 30, 2019. This press release, along with a few slides that you may find helpful while you listen to this call, are available on the Investor Relations section of the company's website at www.chemocentryx.com. Joining me on the call today is Dr. Thomas Schall, President and Chief Executive Officer of ChemoCentryx, who will review the company's recent business and clinical progress. Following his comments, Susan Kanaya, Executive Vice President, Chief Financial and Administrative Officer at ChemoCentryx, will provide an overview of the company's financial highlights for the third quarter 2019 before turning the call back over to Tom for closing remarks. During today's call, we will be making certain forward-looking statements, which those of you following the slides can see, if you look at Slide 2. These forward-looking statements are based on current information, assumptions and expectations that are subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These risks are described in the company's filings made with the Securities and Exchange Commission, including the company's annual report on Form 10-K filed on March 11, 2019. 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 4, 2019. ChemoCentryx undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this live conference call. At this time, it is my pleasure to turn the call over to Tom Schall.

Thank you, Bill, and good afternoon, everyone listening. Thank you for joining us on our third quarter 2019 conference call. In the third quarter, I adopted a new mantra that I then called 4, 5, 6, which of those of you who are following can see on Slide 3, that is, we at ChemoCentryx had 4 clinical programs, yielding 5 data readouts over the then next 6 quarters. One quarter later, we are on track with this goal. Today, I will concentrate on the first top line data events for each of our first 2 drug candidates, the release of results from our pivotal Phase III ADVOCATE trial of Avacopan in the treatment of ANCA-associated vasculitis in mid- to late Q4, that is, this quarter and then I'll touch upon 2 studies of CCX140 for focal segmental glomerulosclerosis, or FSGS, in the LUMINA I trial, which is expected to have top line data in the first half of 2020, followed by the LUMINA II trial also next year. Rounding out the last quarter's mantra of 4, 5, 6 will be data that we project in 2020 from 2 more trials of avacopan: the AURORA trial of avacopan in hidradenitis suppurativa, or HS; and the ACCOLADE study of avacopan in C3 glomerulopathy, or C3G. So as you can see, top line data will come fast and frequent as we enter the most exciting period yet in our rich and storied history here at ChemoCentryx. As most of you are aware, on October 1, we were joined in New York by 2 of the world's leading nephrologists, Dr. David Jayne of Cambridge University in England; and Dr. John Niles of Massachusetts General Hospital in Boston. We hosted an R&D Day, went into great depth on ANCA vasculitis and FSGS and the unique mode of action of our targeting systems of the novel medicines: avacopan and CCX140, respectively. This meeting also featured a fascinating and powerful session in which Dr. Jayne interviewed an ANCA vasculitis patient. Ms. Dianne Shaw spoke movingly about the difficulties of living with this rare but ravaging disease, including how she and other patients attempt to cope with the devastating impact of the high doses of chronic steroids that are used in the current so-called standard of care. We know ANCA vasculitis to be a neutrophil-driven disease where complement fragment C5a binds to the C5a receptor, or C5aR, which then drives neutrophils to inflame and ultimately destroy the body's blood vessels. Avacopan intervenes to make the C5a receptor pharmacologically inert or inactive even at trough levels of the drug in the body. Avacopan does so with exquisite selectivity. It does not inhibit the second and beneficial receptor for C5a, another receptor called C5L2, as Dr. Jayne pointed out at our R&D Day and as you can see from Slide 4. This is important because the literature shows that C5L2 has a beneficial impact on inflammatory health. Indeed, evidence required us to design avacopan, and this was with considerable scientific effort to stifle the roles of the bad actors, C5a receptor binding the C5a, while allowing free reign for the good interactions of C5L2 with C5a. So maybe it was no surprise when our Phase II CLEAR, randomized, controlled clinical trial of avacopan demonstrated that avacopan rapidly brought neutrophils to normal levels in ANCA patients while swiftly bringing active vasculitis under control, also while showing benefits across the total burden of disease in ANCA vasculitis, that is, with evidence of improving and stabilizing kidney function and even improving patient-reported outcomes and validated quality-of-life assessments. Avacopan did all of this without the high doses of steroids that are currently used in the traditionally established standard of care for ANCA vasculitis. The Phase II CLEAR and the Phase II classic trials provided the logical building blocks in laying the foundation for the pivotal ADVOCATE Phase III double-blind, double dummied, randomized, controlled clinical trial. We expect to have top line data from the ADVOCATE trial between the middle to the end of this current quarter. So what should you look for in these results? To help us follow this, please look at Slide 5. First, to the 2 primary end points. In the ADVOCATE trial, the first primary end point occurs at week 26 and answers the question can you effectively bring patients with an active vasculitis flare into a state of BVAS remission as measured by the traditional, but limited, Birmingham Vasculitis Activity Score. BVAS remission is defined as having a BVAS score of 0 and being off steroids for the preceding 4 weeks. There is much to say about BVAS, and I'll briefly explain the limitations of BVAS in a moment. As we've discussed many times, the statistical null hypothesis is one of statistical noninferiority of avacopan therapy compared to chronic steroid-containing standard of care in achieving this BVAS remission. Why is noninferiority the null hypothesis that is employed? Mostly, the answer is a pragmatic and arithmetic one. It is simply not feasible to power a study for statistical superiority in an orphan disease such as ANCA. The sample size, or N, would be too large for an orphan disease trial. Regulatory agencies understand this. So noninferiority with respect to the BVAS end point is the only pragmatic option available to us. In addition, BVAS only measures the ability to get through the active vasculitis crisis. The steroid containing standard of care can get people through the initial crisis, but it does so at a great cost. And these other costs are not captured in the BVAS primary end point by its traditional design. So patients with ANCA vasculitis can still get into a so-called BVAS remission and still be quite unwell from the ongoing ANCA disease and from, and maybe especially from, the illnesses that are caused by the steroid therapy itself, these steroid induced problems being largely not scored in the BVAS assessment. The second primary end point is a similar comparison of statistical noninferiority of BVAS remission at 52 weeks and is intended to answer the question can you keep a patient in BVAS remission following the acute crisis. I will note for all of us that avacopan has the same primary end point null hypothesis, that is, statistical noninferiority for BVAS remission, as was used in the preceding RAVE study, which, in fact, was the sole basis for the approval of rituximab being offered as an alternative to cyclophosphamide, both, of course, in combination still with noxious steroids. RAVE, in fact, was the only other Phase III pivotal trial that has led to an approval for a therapeutic entity in ANCA vasculitis. We plan to report both the 26- and 52-week primary BVAS end points in our top line data readout this quarter. Make no mistake, we believe that achievement of the noninferiority null hypothesis for BVAS remission constitutes a victory. But I'll admit, I don't like the term noninferiority because it sounds lackluster, a word that is completely at odds with our aim, which is nothing less than to revolutionize the standard of care with a 21st century medicine that meets the desperate needs of ANCA patients. The second element that we plan to touch upon, therefore, in the top line data release features the total burden of disease, as we aim to establish avacopan as a superior profile of therapy in ANCA vasculitis. As I mentioned, the BVAS score itself is limited because it only measures active and acute vasculitis signs and symptoms. It is not a true reflection of whether a patient is well, and that is why our ADVOCATE trial aims to fill this gap by measuring a number of important secondary end points, as shown on Slide 5. We hope that these will show that avacopan contributes to a meaningful benefit in other dimensions that are vital to patients and, indeed, to the health care system, including diminishing or arresting ongoing organ damage, particularly in the kidney, damage that accumulates with the use of steroids; also eliminating therapy-induced illness and improving the patient's quality of life and the ability to function normally. As you can see from Slide 6, the current standard of care is simply not safe, it's not fast and it's not durable. And it's not even inexpensive as some individuals who are not particularly well versed in this area have suggested because the relatively low-cost of purchasing steroids is illusory. As to chronic high-steroid therapy, there's a more prevailing and informed view. That is the buying cost of steroids is dwarfed by the using cost of steroids, that is, the economic burden of steroid therapy. Consider here the vast economic burdens of the system of treating the profound side effects, illnesses and dealing with the deaths caused by the use of steroids. And I would submit that these economic burdens of steroid use, vast as they are, pale in the raw light of the human cost to patients, their families and their daily lives. So now turning to Slide 7, we know from our many discussions with patient advocacy groups, with clinicians and with regulators that there's great interest beyond BVAS in alleviating the total burden of disease in ANCA vasculitis. Our previous results from our controlled Phase II trials make us hopeful that we can do exactly that. We are hopeful that the top-line data from ADVOCATE will demonstrate, as they did in the Phase II trials, with objective measures that avacopan improves organ function and quality of life with a favorable safety profile. Before turning to our second drug candidate, let me say a quick word about avacopan's potential to become a pipeline and a drug, shown on Slide 8. Before the end of next year, 2020, we expect to release top-line data of avacopan Phase II trials in 2 additional indications. First, in our ACCOLADE trial of avacopan for the rare kidney disease C3 glomerulopathy, or C3G, a life-threatening disease that typically strikes the young. There's no approved therapy for C3G. I'm very pleased to tell you that we recently received a $1 million grant from the FDA to support the advancements of our ACCOLADE trial. We will present a post-run avacopan in C3G at the upcoming annual meeting of the American Society of Nephrology, or ASN, meeting this week. Second, our AURORA trial of avacopan in hidradenitis suppurativa, a disfiguring skin disease that's thought to implicate the C5a receptor. Again, the unmet need here is very high, and the commensurate commercial opportunity is significant. Beyond that, there could be many other indications for this versatile, small molecule with its unique mode of action, but for now we're clearly focused on delivering our prime objective of top-line data results. Let me turn now to CCX140, our orally administered inhibitor of the chemokine receptor known as CCR2. Please see Slide 9 where we describe two clinical trials: LUMINA-1 and LUMINA-2, which are underway for CCX140 in the treatment of another rare kidney disorder, focal segmental glomerulosclerosis, or FSGS. As Dr. John Niles from Mass General discussed during our R&D Day last month, there is no approved treatment for FSGS. However, steroids with their attended toxicities are frequently used. Our objective in the LUMINA trial studies is defined in terms of reduction of protein in the urine, or proteinuria, as the FDA has indicated that proteinuria lowering in FSGS could potentially be a registration end point. And some of you may recall that proteinuria lowering was the metric we studied successfully in an earlier Phase II trial of CCX140. In that trial of several hundred patients with diabetic chronic kidney disease, CCX140 met its end point of rapid and sustained reduction in proteinuria while demonstrating a good safety profile. That successful study provided the basis of our work now in the orphan disease of FSGS because of its significant unmet need and owing to the facts that in FSGS cost, size and timeline for these kind of studies are wholly tractable for a company of the scope and stage of ChemoCentryx. As you will see in Slide 10, we've completed enrollment in our LUMINA-1 randomized, placebo-controlled trial of FSGS patients with high levels of protein in the urine. The primary end point is reduction in proteinuria at 12 weeks. We expect to report our top line results during the first half of 2020. Our LUMINA-2 trial is a single-arm, open-label study of patients with nephrotic levels of proteinuria and primary FSGS, which is a rarer condition. We expect top line results of this trial during 2020. Again, at this month's ASN meeting, there will be a scientific poster represented on the LUMINA-1 trial and 2 posters on the novel role that CCR2 inhibition place in renal diseases such as FSGS. In summary, we stand on the threshold of a remarkable period. This gives us the potential for multibillion-dollar commercial opportunities in the U.S. alone, as you can see from Slide 11. When the ADVOCATE top-line data are released, we and the experts will be looking at whether ADVOCATE achieves statistical noninferiority in BVAS-based remission compared to the standard of care at week 26 and whether avacopan sustains BVAS-based remission at 52 weeks and also whether there are indicators that avacopan reduces the total burden of disease in ANCA vasculitis. Following ADVOCATE, we look forward to reporting out top-line data of avacopan in C3G and HS during the course of the coming year. Excitingly, this may just be the beginning of the avacopan franchise. And then we'll look forward to releasing top-line data from both our LUMINA-1 and LUMINA-2 trials during 2020 as part of our other major program with CCX140 and FSGS where the lack of approved or effective treatment shows an urgent unmet need. And so we move forward from last quarter's mantra of 4, 5, 6 to now what I call program 2020-4 sights, that is, after this quarter's top line readout from ADVOCATE where I personally believe that we are well positioned for a positive readout propelling us to an NDA and other regulatory filings, we look beyond as well, 4 major data readouts in 2020 or 2020-4 sights. As we like to say in ChemoCentryx, the future has never been closer or more exciting and what a compelling time it is for clinicians, patients and shareholders alike. Now let me turn the call over to Susan Kanaya, who will describe our strong financial position. Susan?

Thank you, Tom. Our third quarter 2019 financial results were included in our press release today and are summarized on Slide 12. Revenue was $10.6 million for the third quarter compared to $9 million for the same period in 2018. Revenue is recognized based on the proportion of cost incurred as a percentage of the total budgeted cost to fulfill the performance obligations under our avacopan and CCX140 commercialization agreements with Vifor Pharma. Research and development expenses were $18.1 million for the third quarter compared to $15.1 million in the same period in 2018. Phase II clinical expenses increased in 2019 primarily due to patient enrollment in the avacopan AURORA trial in patients with HS and the 2 CCX140 LUMINA trials in patients with FSGS. These increases were partially offset by lower expenses for the avacopan ADVOCATE Phase III pivotal trial as the study was fully enrolled in the second half of 2018. General and administrative expenses were $6.1 million for the third quarter compared to $5.4 million in the same period in 2018. The increase from 2018 to 2019 was primarily due to higher employee-related expenses including those associated with our launch readiness efforts and higher professional fees. We recorded a net loss for the third quarter of 2019 of $12.9 million compared to $10.9 million for the same period in 2018. Total shares outstanding at September 30, 2019, were approximately 58.3 million shares. Lastly, we ended the third quarter with $205.8 million in reported cash, cash equivalents and investments, and we expect to close the calendar year with more than $185 million in cash and investments. Tom?

Thank you, Susan. My final slide is Slide 13. As you can tell, we are well placed to deliver on our plan and our promise with 6 top-line data readouts expected between now and the end of this coming year. Consider this, we have an excellent track record of program execution over many years. We have a plan for bringing our new medicines to market, with ChemoCentryx owning the U.S. market entirely and our capable partner Vifor Pharma preparing an ex U.S. international launch with excellent economics for ChemoCentryx. We have a strong financial position so that we can run these multiple trials, get the data readouts and submit our regulatory filings to the FDA and EMA including those for positive data after ADVOCATE. And after ADVOCATE, we look forward to the next year with 2020-4 sights. For all these reasons and more, I believe ChemoCentryx represents an enterprise of value like few others in the industry. I'll now turn the call back over to the operator and we look forward to your questions. Operator?

[Operator Instructions]. Your first question is from Steve Seedhouse from Raymond James.

Looking forward to data later this quarter. My first question is can you share the split or the rough split or qualify in some way how many patients would have received Rituxan or cyclophosphamide in ADVOCATE even if it's on a blinded basis? Or if not, was there anything in the protocol to ensure a minimum number of patients on either of those regimens?

Steve more details to come, of course. I don't have the exact details to give to you today. I will say this that we modeled the rituximab cyclophosphamide usage pretty much how the geography where the trial was going to be mapped out. So approximately about 1.25 or 1.3 rituximab to every 0.6-or-so cyclophosphamide just given the global distribution. And so I have no reason to believe that we'll be too variant from that, but I just don't have the details at this moment.

Okay. That's still helpful. And could you maybe also, on the secondary end points, speak to which of those on the entire list, or whichever ones you might highlight, are adequately powered to hit a nominal p-.05 and which may not be powered for that type of nominal p-value, even if the result favors avacopan numerically? Or are they all theoretically well powered?

I think the short answer is they're all theoretically well powered rather and, of course, the details are -- for example, when you have quality of life, you actually have several categories within quality of life. And so the question is, is there a way to talk about those in aggregate or do you talk about categories individually. In Phase II, we talked about categories more or less individually, but it was very clear, 6 of 8 of those categories in the SF-36, by way of example, was statistically p less than 0.05 in advantage to avacopan relative to the baseline readings and relative to the standard of care. So we're fairly optimistic that with the larger N in the ADVOCATE trial, we'll be able to show reasonable p-values across a number of very important secondary end points and in short we tried to power the numbers appropriately to at least show folks where we thought we were seeing meaningful benefit in some of those areas.

Okay. Are there any milestones from your partner associated with Phase III either hitting the primary end point or subsequently filing for approval or subsequently approval that we should be aware of?

Susan, I'll let you take that question.

Sure, Steve. The milestones are not tied to clinical but are indeed tied to regulatory events.

Okay. And are you able to disclose ranges or what those amounts would be?

No. We haven't done so. But I think the CMA gave you a guide at least for one piece. But tied to approval would be the likely next one and then think about other territories that may trigger additional regulatory milestones.

The next question is from Michelle Gilson from Canaccord.

Can you just talk about given the baseline characteristics and severity of the population you hold in ADVOCATE and kind of the lower dose GC regimen that landed within the control arm? Could you just talk about what expectation should be in the first 26 weeks around safety, maybe infections and also other GC-related tox? Are there any toxicities that we should be keeping our eye on that should expect to be more predictively observed within the GTI and within the control arm that we should expect avacopan to improve on substantially? And then just one more. Which of those toxicities within the glucocorticoid toxicity index contribute the most to the overall QC economic burden in ANCA?

Wonderful questions, Michelle. Thank you so much. When we think about glucocorticoid toxicities in these trials, I think we have a couple of different things that inform our ideas and informed how we set up ADVOCATE. So number one, we're using more or less the same steroid regimen that we used in CLEAR. So we certainly have some experience with what I call the more modern practice of the GC regimens over 6 months, which is a little bit lower than what was used historically and incrementally lower than what was used in RAVE but not -- again, not too much lower but a more modern practice I would say. When we took in aggregate the normal serious adverse event categories related to GC use, things like incipient diabetes, bone fractures, weight gains, psychiatric disorders and infections and maybe a couple of others as well, we and others have used that as a sort of basket of common glucocorticoid-related SAEs and safety events over the history of this and other indications. As we knew from CLEAR, overall, we had a significantly -- a significant fewer number of those events in aggregate with avacopan therapy versus the standard of care. Certain categories were very interesting. And again, we'll just have to see what happens with the greater end. So we'll use that same bucket of categories that's been traditionally used. And again, I'm optimistic that we ought to be able to show in aggregate significantly fewer events with avacopan than with the standard of care. We're also using this fairly newly developed glucocorticoid toxicity index, which is very data rich indeed, there's lots of stuff that goes into it, and it was developed by John Stone and colleagues of Mass General. We are probably the first trial, blinded trial of scale, to really look at how that will read out. So I won't make too many comments on it yet, but I'm very keen to look at how that might be a service to us and others as we truly look in detail and in depth at the effects of glucocorticoids. It is notable too in clinical trials that infections -- we're all interested in infections. RAVE was interesting because, as you probably know, the average rate of serious infections in RAVE was about 11%. Across that study of 200 patients in two arms, both arms were getting the glucocorticoid regimen. In the real world, people believe that serious infections are maybe double or even more than double that rate. So I always like to remind people that in clinical trials, patients are superbly well looked after. Moreover, they are taking a lot of note about their own health. And so symptomatology, that might go to a serious infection, in real-world practice, will get caught earlier in clinical practice and a clinical trial and people will get therapy for those events a lot earlier. So it's not unusual to see diminished rates of infection in a clinical trial setting over what is known from real-world evidence. Nevertheless, we are very optimistic, again, that we'll be able to show -- we hope we'll be able to show as we look to those events that there should be significance in difference in aggregate and maybe trends in some of the individual categories with glucocorticoids. Clearly, economically, to get I think to the final aspect of your question, it's interesting. Obviously, hospitalizations are a huge burden on the health care system. Infections drive a lot of that. Infections and rehospitalization for infections is a big driver. But it's by no means the only driver and, in aggregate, may not even be the main driver when one also considers certain things that are not often talked about like fairly severe significant psychiatric issues that require care, usually quite urgent in acute care, very expensive care. And then there's the other what I call the sleeper of glucocorticoid use, and this shows up in mostly quality-of-life metrics, but it's been shown in looking at just GCs a little bit in a more focused way, and that is a diminished sense of vitality. So if you look at SF-36, there's a category for vitality. Now that sounds like a very vague term, but the largest part of the vitality score comes from chronic fatigue. And that's important in a very broad economic way because that's what keeps people out of the workforce. So I get asked a lot about the vitality component of quality-of-life assessments, which, in the CLEAR trial, we had a significant improvement over 12 weeks in vitality in the SF-36 from that trial. And I'll remind everyone it was a blinded trial, so we didn't know that result until the unblinding, and it was really quite remarkable to folks that follow that sort of stuff, so that is also a big economic feature and one that will factor into discussions around this and other programs going forward.

Okay. [Technical Difficulty].

Michelle, with apologies, you're cutting out. So I am not -- I only caught maybe every third word of your question.

I'm sorry, [Technical Difficulty].

Not really, no.

[Technical Difficulty]. I'll follow-up with you later.

Okay. Thank you. I do apologize, but we and others couldn't hear what you were asking.

The next question is from Anupam Rama from JPMorgan.

This is Tessa filling in for Anupam tonight. We had 2 questions today centered on ADVOCATE. The first one being will ADVOCATE potentially have more renally involved patients? And what impact might that have on the results here coming this quarter?

I think the -- as we look at the big population of all ANCA pop people, it's pretty well known that ultimately, over time, about 75% of folks will manifest renal dysfunction and ultimately, over time, fairly severe renal dysfunction. So again, I would expect that what we'll see will not be out of line with what we saw in the Phase II programs. And I wouldn't expect a big variance from that. And again, I won't quote a number since we'll be releasing data this quarter. But let's put it this way, frankly, I don't think it matters much whether it's a renal dysfunction, a pulmonary dysfunction, an ENT disorder. Our mechanism of action really speaks to the damage that is caused at the end of the process and arresting that damage and putting the system back in a situation where we don't have chronic inflammation and eventually vascular necrosis. I think David Jayne actually brought this up very astutely at the R&D Day where Professor Jayne pointed out that, in a strange way, the 2 major forms of ANCA disease, and for those that are not totally initiated yet, they are something called GPA or MPA, and they more or less relate to the kind -- one or 2 antibodies, autoantibodies, that shows up: anti-proteinase 3 or anti-myeloperoxidase. And in a strange way at a genetic level, they're different diseases because those antibody -- the production of those autoantibodies is caused by 2 different lesions. But the point is once the antibodies are present, the neutrophils get primed, and these autoantibodies also act as a kind of stimulator of chronic complement activation leading ultimately to C5a production, which then binds the C5a receptor on these prime neutrophils, and that's really what causes the damage. So the beauty of our approach is, because our mode of action is very targeted and targeted at what actually causes the disease and the destruction, I really don't care if it's MPO or PR3. And I think that when we looked at our generally, the features across the patient population from the Phase II development program, I think that, that was borne out. Admittedly, numbers are fairly small from Phase II, but it certainly supported the idea that our mode of action should be reasonably effective irrespective of whether the primary pathology seems renal or otherwise. And so I'm very optimistic that we're going to get a good effect. I welcome kidney patients because I think there's a profound economic driver to the opportunity with renal involvement as, ultimately, renal involvement and its care in ANCA vasculitis is staggeringly expensive. So if we can help those folks, and we showed in Phase II that the evidence suggested that we could, at least in the context of that development program, I think that's a very powerful feature.

The next question is from Dae Gon Ha from SVB Leerink.

Congrats on all the progress, look very much forward to the ADVOCATE data this quarter. So I guess, just one question on the ADVOCATE. Tom, can you just remind us, are patients stratified for their baseline steroid use coming into the study? And perhaps as you're -- like you said in your prepared remarks, you're engaging in a lot of commercialization effort, so perhaps if you can speak to what you have found in terms of the major disconnect in the physician community or even in payer community. And then the second question is on AURORA. It looks like the enrollment pace is picking up pace, you now have 80% of sites activated, 55% of patients enrolled. So in light of the SHINE data last year, I was just wondering can you perhaps talk about quantity over quality as you get these underway. What efforts are put in place to avoid the unusually high placebo rates that those InflaRx folks saw?

Sure. Sure. Sure. So let me take the HS stuff first. Yes, we're probably, as of today, even way beyond the 55% that you quoted. So you're right, enrollment has picked up considerably. And we've taken great pains to make sure the quality stays high in this trial. We want a definitive result. We don't want a nonresult. So among other things, we'd taken great care in site selection. And in fact, I will just say and it's probably a matter of record in our filings, we're actually a U.S. trial with the AURORA trial at this point. And so we believe that some of the placebo response seen in other parts of the world at least will have some greater control up here. More to the point and more important however, we've done extensive training and we've tried to centralize a lot of the discussion around the primary end point, the HiSCR. Everyone must get past the ability -- or they're trained before they are validated for the trial or the sites are activated for the trial. We have monthly training in HiSCR. We have very active outreach. We have people in the sites all the time, reminding them of what we need to do in HiSCR. And then if things come through in the blinded data on the scoring through successive assessments, there are actually alerts that our team go out and say, let's make sure we're using consistent criteria. Let's make sure you're using the checklist and the notes, et cetera. So we believe that we'll be able to standardize that a lot more fundamentally. Moreover, we have not created the expectation, I believe, based on randomization ratios that patients -- the majority of patients will get active drug or at least the dose of active drug that people -- most people think will be clinically active. So other trials probably predispose themselves to the expectation, again leading to a higher placebo response. I think some of the randomizations were -- I'm not remembering entirely, but maybe 4:1 or 5:1. So the vast majority of folks were thinking they were going to get an active substance. We've got a very strict 1:1:1 randomization. And in fact, one of the doses is a, what we believe, to be, while clinically interesting, probably a suboptimal dose. So that's another feature. Suffice it to say that these and other features -- really, we've been obsessive about making sure that, to the extent possible, we will reduce the ability for the placebo response to confound us. Being an orally active drug as well, we don't have the active infusion process. That we know from other indications historically has contributed to placebo response. So I think the variety of factors lead us to make sure that we won't be in the same situation, we should get a very definitive answer. Last thing I'll mention is that our N is bigger so that even if placebo response is higher than, say, the PIONEER studies and should allow us to capture authentic deltas. So we put a lot of time, thought, energy and training into this. I'm pretty convinced that we won't have confounding features there. Let me go back to the idea about GC use disconnects, et cetera. It's highly protocolized what happens with GC exposure prior to randomization in ADVOCATE. And the exclusion criteria are pretty severe. Most folks basically have to come into the trial in flare. So in our position we don't have -- if they're on chronic GC, they are not eligible for the trial. The only way they can come into the trial with a new flare, either new diagnosis or a relapse. Yes, it is true that many people, not a majority interestingly, but many people may see GCs during workup prior to randomization, we allowed for that in CLEAR, and we allow for it with exactly the same rules in ADVOCATE and again, that's highly protocolized and rules driven, and it will not confound our results. We knew that from the CLEAR trial. So yes, they have to get steroids that are in the kit. So they don't have discretion about whether they're getting steroids that are nonkitted, nonprotocol. Any other steroids that are supplied are recorded rigorously and essentially will determine whether those people are still in the protocol or not. So I think we've got a very good setup. It's consistent with what we did in Phase II. It's consistent with all of the best guidance from current KOLs about what best practice is now. So that's why I think the ADVOCATE trial is again very tightly designed and designed to give us, I think, an important and clear result. Oh yes, I will come back -- you said -- you asked a question about disconnect. So interestingly, the disconnects are more with the casual observer. I probably get more of the question about aren't steroids cheap and effective from the investment world than certainly the clinician world. With the clinician world, I never get that kind of question from real experts. Sometimes people on the periphery might mention it, increasingly less frequently. I have never ever in 6 years in working in ANCA vasculitis, never ever once heard that from a patient. So I think the disconnect is one of perception. And as you get more and more to the center of this disorder, you don't hear it. Interestingly too, payers are much more sophisticated on this question than I think the average person or industry give them some credit for. Payers appreciate the economics of steroid use. And in fact, I really borrowed the statement of the use of buying pales in comparison to the use of actually using the steroids in the clinic, the cost of therapeutic burden. So I think that paradox is now being resolved and the people that matter: patients, clinicians and payers, really aren't disconnected as much as maybe laypeople or people that are not close to this field.

The next question is from Ted Tenthoff from Piper Jaffray.

I really appreciate the detail you provided about differentiation between other studies and the labor you put in to really trying to design ADVOCATE. My question is sort of [indiscernible] since we've had so many on the clinical program kind of roll forward a little bit. And assuming positive data, you mentioned that FDA and EMA filings could come next year. What has to be done to sort of get those going beyond clinical data submissions? And then even looking a little bit further, what should we be starting to anticipate for early commercial preparation?

Great. Yes, Ted, obviously, that's the key question on our mind as well, or key set of questions. We, of course, assume success. I think we believe in success based on the data from the previous trials and all the blinded data and the preponderance of all the information we have. So naturally, we must plan for success in ADVOCATE. An NDA filing in the United States is quite a profound undertaking. We understand that deeply. We have assembled a regulatory team here at ChemoCentryx now over the past couple of years, which is I believe one of the best in the industry. They have multiple, in fact, among the team, many dozens of NDA filings and launches under their belt. We have a raft of recent FDA personnel on the consultant role. And so I think we're moving along beautifully and putting together all of the necessary components of the future NDA filing. And we're really well on track to do that. Once we have our top line data, again, we believe we'll be well within industry standards in terms of time from top line to the ability to file the NDA. And of course, the NDA requires obviously, a finalized clinical study report, all your CMC has to be in shape, et cetera, et cetera. We, I must say, for a small company, I'm really proud to say that we anticipated a lot of these questions, and I must say we've had the benefit under the previous so-called prime designation in Europe of understanding what we needed to do to get in shape for a licensing application. And so we had some -- a little bit early heads-up with that, and that was great. So we got ahead a lot of the critical questions. I won't go in any -- to the details today. Suffice it to say, we're very cognizant of CMC, we're very cognizant of drug supply, we're very cognizant of all those things beyond just clinical data that need to go in these applications. And these have all gone really, really well, and we've had many discussions with a variety of regulators. So in the U.S., we're in great shape, and we are building our commercial infrastructure as we speak. So a big part of our growth plan, Ted, and already our people on staff doing all of the stuff that will go into how we market avacopan in the United States where, as you know, we own it 100%. We have a great partner, a very capable partner in Vifor Pharma and their partners, Fresenius Medical Care and, in fact, avacopan will be marketed, I believe, through their joint company Vifor Fresenius Medical Care Renal Pharma in their strong spots throughout the world, and then they sublicense commercial rights to Kisei [ph], and this is all public information in Japan, so all the same to us. They've got a great commercial infrastructure. They've been doing lots of work to sort of plug-and-play both avacopan and eventually 140 into their commercial field force ex U.S. I'm very impressed with what they've done. And it's great for us because the economics are really quite good. We will take down off top line aggregate cumulative sales in all of their territories, royalties from the top line ranging from the teens to the mid-20s based on very shallow sales tiers. So I'm a big believer in Vifor Fresenius and Kisei getting every last dollar of sales because it all goes to the top line and potentially gets me to another tier. That works out great, and we have approval -- filing and approval milestones as well in those other territories. So economically perfect for me and ChemoCentryx and our shareholders. So I think that this is going to be something that you'll all be impressed with as we start talking about more of these details getting into the coming year 2020, so that we can anticipate a great launch right after PDUFA. So more to come on the details but I assure you this takes up a huge amount of our time and effort here.

Excellent. Well, I agree with your sentiments that it took some exciting time at the company, wishing you well in the first data readout.

Your final question is from Ed White from H.C. Wainwright.

I think all of my ADVOCATE questions were asked except for one. You were talking previously about pharmacoeconomic data. Will you have an actual study or a publication around the ADVOCATE -- end-of-day ADVOCATE trial or will you have at least pharmacoeconomic data in hand once the drug is launched?

Absolutely, Ed. I hope the answer is yes to both of your questions and, in fact, already is in process. We are doing a lot of work on the pharmacoeconomic prospects for the drug. There'll be more data coming out from others as well as some of our own data coming out over the next year about the health economics surrounding avacopan and its opportunity. Naturally, we plan on putting out not just one but a series of papers in the referee journals talking about the data in some detail. So that plan is really well established here. And again, once we get through the top line readout, I think you'll see lots of information coming out in what I call a fast and frequent way, one hopes, that will help you address all these questions.

And then the other question I had was just on C3G with the ACCOLADE study. So it's now 60% enrolled. I think the last time we had talked about it you had said the first stratum was almost 100% enrolled. Is that fully enrolled now? And we can just assume that all the other patients are from the second stratum of patients?

Ed, I would say it's nearly fully enrolled in the first stratum. And you're right, disproportionately, we're getting more of that second stratum. So we'll -- I'll have more to say about the details of how we're going -- the trial conduct and what we plan to do in the coming quarter.

There are no further questions at this time, sir.

Well, with that, I want to thank everyone for joining our call today and all the excellent questions. For those of you who will be at the American Society of Nephrology meeting, we look forward to seeing you and then subsequently updating you further in the near future as we make progress this quarter and beyond. So you may now disconnect, thank you again.

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