Kyntra Bio, Inc. (KYNB) Q1 2017 Earnings Report, Transcript and Summary

Welcome to FibroGen, Incorporated First Quarter 2017 Financial Results Conference Call. My name is Adriane and I'll be your operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] Please note this conference is being recorded. For opening remarks and introduction, I will now turn the call over to Karen Bergman. Vice President, Investor Relations and Corporate Communication. Karen, you may begin.

Thank you, Adriane. Good afternoon everyone and welcome FibroGen's financial results and corporate update call for the first quarter of 2017. The call will be led by Tom Neff, our Chief Executive Officer. Tom will start with an overview of our corporate strategy and execution on our product programs in the first quarter. We today will be joined by Dr. Peony Yu, Chief Medical Officer, who will provide updates on Roxadustat development for CKD Anemia and for Anemia associated with Myelodysplastic Syndromes for MDS. Dr. Seth Porter, Vice President of Fibrosis Therapeutics, will discuss FibroGen's development programs for pamrevlumab including our Phase 2 study in idiopathic pulmonary fibrosis and pancreatic cancer. And Mr. Pat Cotroneo, Chief Financial Officer, who will review financial performance in the first quarter. On this call, we expect to make forward-looking statements regarding our business, including our collaborations with AstraZeneca and Astellas, financial guidance, the initiation, enrollment, design, conduct, and results of clinical trials, research and development activities, and certain other business matters. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes that are difficult to predict, many of which are outside of our control. For risks and uncertainties regarding our business statements made on the call today, as well as factors that may cause differences between current expectations and actual results, we refer you to our Form 10-K for the fiscal year ended December 31, 2016 and quarterly report, including our Form 10-Q for the period ended March 31, 2017 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 to take your questions. A webcast of this conference call will be available for replay on the Investors page at FibroGen's website, www.fibrogen.com. At this time, it is my pleasure to turn the call over to our CEO, Tom Neff.

Thank you, Karen. Good afternoon and thank you for joining us today. This is an exciting time for FibroGen, as we prepare for an eventful summer and rest of year across our pipeline in multiple therapeutic implications. We will be releasing important data in Q3 from our pamrevlumab or FG-3019 antibody development program in idiopathic pulmonary fibrosis or IPF. We are on track to report top line clinical results from a Phase 2 study results from a double-blind, placebo-controlled study measuring lung function or fibrosis reversal. Concurrently we will report the results of double-blind, active-controlled sub-study evaluating pamrevlumab safety with the two currently approved drugs one study with pirfenidone on [aspirate] and the other would nintedanib [ofab] In addition, some important preclinical data is on tab for publication. The original study on radiation induced lung fibrosis demonstrating the ability of pamrevlumab to reverse lung fibrosis was published earlier this year in the Journal of the National Cancer Institute. A follow on study describing changes in pulmonary genes expression cause where radiation in gene clusters attenuated by treatment both pamrevlumab is currently being submitted for publication. We'll also be reporting on a comparison the effectiveness of the two approved IPF drug versus pamrevlumab in the same radiation and induced fibrosis model at an IPF summit. These results are highly favorable and provide clear contrast of the mechanism action for each of these agents. Coupled with results of the exploratory study at IPF patients, published in the European Respiratory Journal in May 2016, we anticipate that the combination and consistency result today in these clinical and preclinical studies will place this candid therapy in a strong position to initiate pivotal studies in IPF. We believe that IPF can be a significant value generated for pamrevlumab due to the several unmet medical need and limited life expectancy seen at the time of diagnosis. The first approvable US advise of therapeutic IPF medicine was about two years ago and even though neither appears to be disease modifying [ofab and aspirate], together are currently reporting annualized sales of $1.5 billion. Given that patient and physician awareness of approved therapies continues to increase, these products are expected to continue rapid sales growth. Starting nearly a decade ago when we first observed reversal in radiation induced lung fibrosis with FG-3019, we've been fully committed to address the fibrotic damage caused by this serious chronic disease. Because of the important roles of CTGF in fibrosis and tumor biology, we study pamrevlumab for multiple fibrotic proliferative indications. Earlier in the first quarter, we published similar results from our previous pancreatic cancer clinical study in a patient population 88% of whom had metastatic disease. In the study, increased pamrevlumab levels in blood stream correlated with improved survival. In the current study in Locally Advanced Pancreatic Cancer or LAPC, we expect to complete the active treatment period by year end. As reported to ASCO GI over the last two years, we continue to see favorable difference between pamrevlumab treated and controlled arms and resectability and trends in overall survival. In on going discussions with members of our advisory board we've been encouraged to press forward aggressively for this indication. We will be meeting with the Pancreatic Cancer Research Team, a consortium of clinical investigators prior the ASCO meeting next month. PCRT is an international collaborative organization conducting clinical trials in pancreatic cancer patients. Since publication of pamrevlumab preclinical and clinical data, there has been an increase interest from scientific and efficacy communities for the development of pamrevlumab in liver diseases including a hepatocellular carcinoma and colon and GI carcinoma. In addition, we interject [piece collaborators] have reported compelling results of pamrevlumab and models in malignant Mesothelioma has been reported in molecular cancer therapeutics. Later in this call, Dr. Porter will address our IPF program as well as various aspects of our fibro proliferation program looking at pamrevlumab and cancer settings, as well as plans for our current clinical trials in that respect and unresectable locally advanced pancreatic cancer. Moving on to our late stage Roxadustat program in CKD and dialysis anemia. We and our partners Astellas and AstraZeneca currently have Phase 3 programs in four regulatory jurisdictions worldwide involving 15 Phase 3 studies that have enrolled over 10,400 patients. We are closet to approval decisions in China. And on the heels of reporting positive clinical results from our two Phase 3 pivotal trials this past January, we are pulling the safety assessment treatment period of the Phase 3 program this month. And we expect to complete the China NDA submission by the end of the third quarter 2017. For the past two years, we've actively collaborated with AstraZeneca on the commercialization plan for our Roxadustat. And developing a broad strategy that will differentiate the HIF mechanism currently available therapy strategically across multiple patient populations. For dialysis patients, we are unable to reach target releases, most commonly due to under treatment and underlying inflammation, a group that we estimate be approximately half of the treated population. We expect Roxadustat for an alternative therapy capable of achieving the desired hemoglobin target without the type of dose increases observed in ESA's without any IV arm. For non-dialysis patients for Roxadustat is expected to increase treatment rate and compliance rate as the first oral nintedanib for this out patient population. For non-dialysis patients for dialysis stage or stage 5 CKD prior dialysis initiation, we expect to offer rapid correction in a population severity where anemia is typically the most difficult problem they face. For dialysis patients who are treated with peritoneal dialysis which is a home based modality, we expect the accessibility of Roxadustat to make peritoneal dialysis more attractive for patients. Dialysis in China has been experiencing double digit growth in recent years due to promulgation of a new reimbursement system called severe disease that makes dialysis reasonably affordable for most patients in major cities. The Chinese government is encouraging expansion of peritoneal dialysis as a less capital intensive way to build out the country's dialysis capacity. Patients with anemia who are hyper responsive to treatment of ESA due to annoying information, for whom we expect Roxadustat to offer an alternative therapy capable of achieving the desired hemoglobin target without the type of dose increases seen with ESA's. We expect that these points of differentiations will improve in fall in prices strategy as we further develop our program. FibroGen is now received authorization for these Roxadustat as China an approved drug name, please note that up to now we have referred to Roxadustat in China is FG-4592. We are continuing our efforts to expand the development of Roxadustat and other indications in China and in the US. We now have approval in India for Phase 3 studies in both China and the US, it all commence later this year. Later on this call, Dr. Peony Yu will provide updates in our USRW programs and the plan for our India studies. Moving on to financial highlights. At the end of the first quarter FibroGen finished with $314.2 million of cash. On April 11, 2017, FibroGen enclosed a financing and raise in their proceeds of $115.1 million. The reasons for these financing stem from our realization that the opportunities in China are going to be considerably larger than we originally planned as our regulators have encouraged advancement of parallel development oncology and inflammation related anemias beginning even prior to our first approval in CKD anemia. After much study by our team and marketing partner AstraZeneca along with key opinion leaders who expert in current standard of care on various tumor types, we see attractive opportunities to expand clinical development activity in the near term. In addition, we've been very surprised at the rapid increase in the level of interest in our China based anemia programs coming from PRC based investment groups. In particular, we've had ongoing contact for the past two years with two large, well regarded investment groups with outstanding reputation and track record both in China and in the United States. These groups have done detail work regarding our anemia program in China as part of extensive efforts to understand our company. These investors see our anemia programs as an outstanding investment opportunity and have been in intrigue with the possibilities of our chem subsidiary over the China wealthy where we have admitted minority investors in the past. Each group has expressed high interest in becoming long-term investors in FibroGen parent company common stock. Recent discussions focused on this financing around to support the scale of resources supporting our expecting growth as additional anemia studies beyond seeking CKD has not been part of our financing plan at the time of the IPO. Each group also encouraged continued FibroGen innovation of PRC. For example, with the chronic -- program currently being development in Beijing and with FG-3019 or pamrevlumab antibody. This financing was completed on April 11. There was no price discount offered. The US portion of this round was over subscribed and allocated very quickly primarily with support from current institutional shareholders. We had total demand which significantly exceeded the ceiling on the offering which is $120 million. As a result of this transaction, we've updated our current guidance on year end 2017 cash to $370 million. Later in this call, Pat Cotroneo, our CFO will discuss our financial results for first quarter. Following that I'll wrap remarks today with an update on 2017 milestones and then open up the call for your questions. I'd now like to turn this call over to Dr. Peony Yu. Peony?

Thank you, Tom. We are making steady progress in our large global Phase 3 CKD Anemia program targeting four independent regulatory pathways. We are on track for the US NDA submission in 2018. To date, no safety signal have been identified that FMB met in April and again recommended we continue our study for the US and Europe without protocol modification. In China, we are on track for filing the NDA for CKD Anemia by the third quarter of 2017. As discussed in our January call, both Phase 3 studies in China met their primary end point. In the dialysis 806 study not only Roxadustat met the non-inferiority criteria for its primary end point, change in hemoglobin level at the end of treatment. The hemoglobin increase was significantly higher in the Roxadustat arm than the current EPO arm in the protocol analysis when both treatment arms were treated to the same hemoglobin target range of 10 to 12 grams per deciliter. Dialysis patients with inflammation measured by elevated C - reactive protein level were less responsive to EPO in the comparator arm, consistent with the published historical ESA study. In contrast, Roxadustat was shown to correct and maintain hemoglobin level in inflame patients with high CRP asking dose with normal CRP level. Consistent with our Phase 2 findings, our China Phase 3 trial demonstrated Roxadustat's ability to overcome the suppressive effects of inflammation on our results for ESA and show that Roxadustat is potentially more than just an oral treatment alternative to ESA for anemia therapy in CKD patients. To date, no safety signal has been identify in our China Phase 3 study. The 52 week expansion of both the dialysis and the non-dialysis study will be completed in mid June. And we are on track to complete the China NDA submission in Q3, 2017. MDS has been described as bone marrow failure disorder in which patients are enable to make enough red blood cell and the chronic inflammation further contribute to the anemia. Anemia in MDS can be severe enough to be life threatening. But treatment options are limited. Most MDS patients end up requiring chronic red blood cell transfusion despite the known risk including infection and iron overload. We are excited about the upcoming study for treating anemia associated with MDF. The FDA has accepted our IND for Phase 3 trial. This is a global multi center Phase 3 study in transfusion depended lower risk MDS patients. Following a small open label, a 160 patients will be randomized 3 to 2 into the double blind placebo controlled study to receive Roxadustat versus placebo for 28 weeks with safety extension to one year. The primary end point is the proportion of patients who achieve transfusion independent. The study is starting in the third quarter of 2017. In China, where chronic transfusion is not an option due to severe blood shortages. Anemia therapy for MDS patients is a critical need. In March of 2017, we received approval from the China CFDA on our Phase 2/3 MDS Anemia CTA. Following a small open label component, 135 patients will be randomized 2 to 1 to a double-blind placebo-controlled Phase 3 study to receive Roxadustat or placebo for 26 weeks. The primary end point here is the percent of patients who achieve hemoglobin response. This study is expected to initiate in the fourth quarter of 2017. For pivotal MDS study, each is designed to meet the region respective regulatory requirement. These trials will enable us to evaluate Roxadustat in both transfusion depended and non-transfusion depended MDS patient. Our MDS program represents the beginning of our pursuit of hematology, oncology related anemia indication for Roxadustat. And with that I'd like to turn the call back to Tom.

Thank you, Peony. Dr. Seth Porter, who heads our pamrevlumab anti CTGF and Fibrosis Therapeutics program, will now talk about progress in IPF and pancreatic cancer.

Thank you, Tom. As Tom mentioned, we are close to completing the randomize Phase 2b trial in IPF. In addition, we expect to complete enrollment in a locally advanced pancreatic cancer trial and continue to enroll in our pilot study in Duchenne muscular dystrophy. Pamrevlumab is our wholly owned and proprietary monoclonal antibody against connected tissue growth factor. CTGF is essential point through which many factors and conditions associated with fibrosis work. Based on our data, we believe that the blockade of CTGF will be more effective approach to fight broader disease and multiple cancers. We've conducted research in a mouse radiation induced fibrosis model demonstrating that pamrevlumab treatment of pulmonary disease enabled a durable reversal of fibrosis as assessed by CT imaging and by histological examination. The reversal resulted in improved pulmonary function and prolongs survival. A subsequent seemed to be submitted manuscript shows that treatment with pamrevlumab in a same study reverse gene expression associated with lung injury. The change is parallel other improvements in lung structure and function. We are now completing comparison of pamrevlumab to pirfenidone and nintedanib as single agents and in combination in the same mouse fibrosis model. Results demonstrate superior performance of pamrevlumab for inhibition fibrosis and reversal of gene expression associated with fibrosis. We expect to present those results at IPF conference this year. Applying findings from animal studies to IPF patients in an open label critical trial, we observe that pamrevlumab was able to reverse lung fibrosis as measured by quantitative high resolution CT imaging with a statistically significant improvement in pulmonary function associated with stable arm proved fibrosis. Those results were published in 2016 in the European Respiratory Journal. Last year we fully enrolled our placebo-controlled Phase 2b, 48 weeks comparison of pamrevlumab to placebo in IPF patients. As well as two sub studies to test pamrevlumab in combination with either pirfenidone or nintedanib. Our principal focus in the sub studies is on safety assessment of combination treatment. The IPF patient population with median life expectancy following diagnosis of three to five years needs an effective treatment option and we hope to be able to provide that with pamrevlumab. While IPF is classified as an orphan disease, we believe there is substantial commercial potential for an agent with an excellent safety profile that has shown potential for disease modification in at least some patients. Furthermore, we have good reason to believe that pamrevlumab can be safely combined with other therapeutics, suggesting that pamrevlumab if approved could become the standard therapy for IPF to which other therapies could be added. Studies continue on a mechanism of CTGF and disease and therapeutic effects of pamrevlumab. Data from FibroGen and others indicate that in fibrosis elevated local CTGF levels lead to activation and a variant proliferation of myofibroblast, a cell type that plays a crucial role in normal would healing and in fibrosis. Elevated CTGF inhibits chemotherapy induced apoptosis of cancer cell and it may also inhibit apoptosis effecting mayo fiber glass. The pathology of CTGF needed fibrosis is for the most part similar in all organs and tissues that experience fibrosis. Preclinical and clinical data indicate that blockade of CTGF can be effective in a treatment of certain cancers in which biological mechanism have parallels to fibrosis. And work conducted in mouse model of pancreatic cancer published in PANS in 2013, we and other collaborator show that CTGF enhances the survival of pancreatic tumor cells by making tumor cells resistant to the cell that's ordinarily induced by chemotherapeutic agents. In contrast, pamrevlumab enhance the activity of chemotherapy and increased survival. Switching our focus to human disease and fibro proliferative disorders, we published results from our first pancreatic cancer trial in January 2017 in the Journal of Cancer Clinical Trials. These demonstrated that achieving above threshold levels of circulating pamrevlumab in pancreatic cancer patients in combination with chemotherapy yielded three fold improvements in one year and doubling of medium survival compared to outcomes with lower levels of circulating antibody. We previously reported findings from our ongoing open label trial and locally advanced unresectable pancreatic cancer. The interim results continue to indicate that treatment with pamrevlumab plus chemotherapy for six months alters tumor sufficiently to enhance stability of a patient for surgical exploration and surgery completion. We expect to complete enrollment in that trial soon to enable completion of treatment in all subjects by the end of 2017. In both IPF and pancreatic cancer, pamrevlumab continues to be well tolerated with no safety concerns. We are hopeful that the results from the IPF and pancreatic cancer study will place us in a strong position to initiate pivotal programs in two indications with considerable unmet medical need. Thank you for your time today. And now back to Tom.

Thank you, Seth. Pat Cotroneo, our Chief Financial Officer will now through financial highlights for the first quarter of the year 2017. Pat?

Thank you, Tom. As announced today, total revenue for the quarter ended March 31, 2017 was $26.9 million. For the same period, operating expenses were $58.3 million and net loss was $33.2 million or $0.52 per basic and diluted share. Included in operating expenses for the quarter ended March 31, 2017 was an aggregate non-cash portion totaling $10.5 million, of which $8.4 million was a result of stock based compensation expense. In terms of our total cash balance, we had $314.2 million as of March 31, 2017, as compared to $342.2 million at the end of 2016. 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. On our balance sheet, the category of long term investments consists entirely of investment grade corporate debt with remaining maturities of fewer than two years. As Tom mentioned, for 2017 we are currently projecting year end cash of approximately $370 million, which includes the effect of our recent offering that raised $115.1 million in net proceeds and closed April 11, 2017. I'll now turn the call back over to Tom.

Thank you, Pat. We anticipate a busy second half of the year with a number of milestones on the horizon for both our lead programs. Milestones for Roxadustat include in China. We anticipate completing our NDA submission in CKD Anemia by the end of Q3, 2017. And MDS Anemia, we expect to initiate patient dosing in a US Phase 3 clinical study in Q3, 2017 and the Phase 2/3 study in China in Q4, 2017. We continue to plan to submit the US NDA for Roxadustat in 2018. For pamrevlumab or FG-3019 in Q3, 2017 we report top line results from IPF trial continuing three studies. First is a comparison of pamrevlumab placebo. Second is a combination and safety evaluation with nintedanib. And third a combination and safety evaluation with pirfenidone. And locally advanced pancreatic cancer, we expect surgical assessment data by January 2018 or possibly sooner. We can now turn to your questions. Operator?

[Operator Instructions] And our first question comes from Terence Flynn with Goldman Sachs. Please go ahead.

Hi, this Cameron on for Terence. Thank you for taking our questions. Maybe just two from us. First for Roxadustat, can you provide any more specific guidance on when we should be expecting the first data from the US and European Phase 3 trials? And then second, for Roxadustat regulatory filing in China in 3Q, can you just tell us what the cadence steps are? Thanks.

Okay. For the US, we have not made decision yet about any sequence or order or groupings of studies that have been requested by US FDA and are subject to joint venture with the Astellas pursuing to their agreement with EMA. In China, the key steps there are a pre NDA submission that we will be doing shortly. This will lead to discussions with regulators about this specific steps and the NDA. We will be planning joint filing of 806 and 808 meaning the dialysis and non-dialysis, it will be a 52 weeks period for one 806 the dialysis, 26 weeks for the non-dialysis. And then the request of additional data from the CDE will come if and when they want it for the 52 weeks extension in non-dialysis. So that's the sequence of events in China.

And the next question from Geoff Porges with Leerink. Please go ahead.

Thanks very much and congratulations on over the progress and all the looming milestones. First on Roxadustat, could you let us know what sort of dose increase you expect for MDS compared to the CKD dose if any? And then Tom and Peony, there is a lot more activity going on in the HIF generally with four programs and so thousands and thousands of patients over sudden potentially being recruited to trial. Could you tell about how your program and molecule compares to the others in development, but way you see yourself in terms of timing but more importantly way you see the profile that you might ultimately have compared to those other profiles.

Okay. So Peony do you want to take the first part of this question.

Sure, Tom. Yes, so Geoff as you know that because of the -- as far as the dose requirement of ESA or EPO for the treatment of MDS or CIA is typically about that dose is about 5x of the dose being used chronic kidney disease anemia. Now, our drug has as you know our drug has a complete different mechanism of actions where we turn on the red blood cell making machinery and impact the various part of the manufacturing cycle so to say. Then what we expect that the amount of dose in MDS to be the starting dose is now set at about 50% higher than that of CKD and the maximum allowable dose is the same as that in CKD dialysis patients.

Great, thanks very much. That's very helpful.

So Geoff with respect to the timing ahead of program I believe it's the case of where we are well ahead of any other program worldwide. The degree of ahead-ness is different in different jurisdictions. In China, I have recently seen assessment that we are six to seven years ahead of first competitor. In the US, there are lot of people make lot of noise and I recognize here try to wait through all that. My observation would be that we are well along in our plan in Phase 3 and others are just beginning. And these are very large studies to recruit. As far as things that are distinctive and different, I'd point to a couple of aspects. One obviously we are doing China as a Chinese company regulated directly by the CD and CFDA, no one else is doing that. In the US and Europe, our focus is in non-dialysis on placebo patients so as the entire pool CKD patients. Our premises been that use of ESA will and has dried up almost completely in non-dialysis settings. So we are now seeing something like 4%-5% ESA exposure before dialysis, that's gone down steadily since the 2011 package administered. Everyone else to my knowledge is doing active control comparison in non-dialysis. We don't quite see the logic there. And then in dialysis, we have significant focus on incident dialysis which is a very straight ahead comparison on safety and ESA and HIF biology. I am not real cleared on what others are doing. By way of observation, we've heard a couple of people dropping out. We've seen a couple others get into some complicated patent issues. So I think that we just continue to execute and keep moving ahead, that's our focus. We have quite a lot interest in anemia chronic disease and other inflammatory, co-morbidities where anemia is a significant problem. And we also intend to explore on oncology applications both in arenas where you see really severe anemia really no prior experience and major journals and people like for example multiple myeloma, as well as some of the categories where chemotherapy is clearly interfere with the progression of dosing interfere by severe anemia so for instance in China and lung cancer we are seeing per capital rates of 7x the US population and China's 4.5x the US. You can do all those numbers and we see patients that are getting treated to hemoglobin 5 and 5.5 and they can't tolerate any more chemo. So there is compelling unmet medical need in that kind of setting. And so we are trying to focus on places where there are such compelling unmet medical needs as we expand beyond CKD dialysis. I hope that's helpful over here.

That's very helpful. Tom, can I join a question on pamrevlumab? So I just you were help with HIF yourself talk about what's coming up and in the past you've talked about other indications as well beyond those that you are studying. It sounds though you are fairly convinced that there is a path forward in the new adjuvant pancreatic cancer setting. I mean conditional upon the IPF results that we are going to see very soon that would determine the path forward there. When do you think we might hear about other indications that you may pursue or explore with pamrevlumab?

Okay. So in general we look at the opportunities ahead in the following manner. We've the first active anti fibrotic agent that I am aware of, where you can see material fact on metrics main oncology and fibrotic and so on. In ways we are -- there is clinical benefit and so we view our fibrosis study and pulmonary fibrosis is really scratching the surface of whole series of other organic fibrotic diseases in the kidney and liver and so on. What the priorities are depends a little bit on whether if and when we partner. So we have thought very carefully about a few of these indications not all of them. And we know certain companies out there they spend a lot of time on once that we looked at as well and some others. So it's not yet obvious to me what is a next step after pulmonary fibrosis so I can't really supply an answer although there is a list of about half dozen indications that we talked about and passed it out or reaffirm we are interested in. In fiber proliferation, it's a very fascinating arena because we are so surprised how it works in so many different ways right. And the evidence continues to pile up. There is an impact by the antibody on cancers that's measurable and reproducible affects research in tumor cynical bring-- [Harver Hellsclyde] quite a lot of work on that. And so I think that we are seeing things at our reproducible effects in the pancreatic stage, another example the CA99 and PET scan we see consistent effects and so as student of this we are trying to take in where the -- we are going where the data is taking us. And I think that there are several other indications it's not yet clear whether larger indications should be a priority here because even small indications are so much unmet need like measles [philomia] for instance, it's a very, very difficult situation for patients. So we are evaluating those things as we go along and not any conclusion yet about what direction, what oncology applications are best seen as a next priorities. So I think it's a case that we've been data driven with pancreatic cancer from the outset 10 years ago. We have similar data streams and other cancer and you can see in publication if you dial 3019 or pamrevlumab and just look through literature. And we'll be in primarily affected by our sense of those data streams as we look at other opportunities. But we think there are a number -- and of course I have mentioned before there is intense amount of interest in combination therapy with immunotherapeutic agents in solid tumors. An increasingly the narrative seems to be this antibody has something to do with awakening T cells in solid tumor. And so we are also studying that whole arena of course is quite large independent of our direct investigation in areas like pancreatic cancer. I hope that's helpful.

And our next question comes from Joel Beatty from Citi. Please go ahead.

Hi. This is Shawn calling for Joel. And also I like reiterate a congratulation on all the upcoming milestone. Few questions today, probably more Seth about pamrevlumab and kind on the fibrosis strategy. First, what would good results look like in the IPF study? Is success in the main placebo controlled part of the trial sufficient? Or would you have to show efficacy in the combination to have confidence moving forward?

Seth, do you want to take that one?

Sure. So I'll just remind you that the Phase 2b trial is primarily focused on the comparison of the pamrevlumab to placebo. And so that's where our focus will be. With regard to the combination treatment, really it's four six months as opposed to a year and sample size is smaller so we are looking primarily for safety and combination of pamrevlumab with those agents. It is very-- we are certainly looking at the FBC and quantitative HRCT outcomes in that combination study but again it's a shortest study with smaller number of patients. So with regard to efficacy, we are focused on the comparison to placebo and I think the results that we reported in the open label study, that was reported last year provides a good sense of what would expect in terms of comparing pamrevlumab in that study to historical controls. I think you can make a pretty good comparison or assessment or prediction at what we would expect for this comparison to placebo.

Yes. I'd like to underscore that the studies with pirfenidone and nintedanib are intended to be overall safety assessment. They are not intending to be efficacy studies. So we won't be judging the efficacy portion of the studies in a way that defines a next step in Phase 3. That's not the purpose of the study. However, the placebo study will be highly informative as to our next step phase study.

I'd like to make one more comment that other than measuring FBC in other placebo-controlled study published by other companies, our study will also provide measurement of fibrosis by play of HRCT and so we are very excited to see what that looks like compared to placebo.

A quick follow up, is that possible?

Go ahead.

Do you have any clarity on what the path forward will look like in pancreatic cancer of indication specifically both resectability via submission interrogate for the primary end point or will have to show survival data?

I'll try to answer that. We developing the pancreatic cancer indication, I have had several in our actions with expert advisors and although they are very impressed and encouraging us to be very aggressive moving forward, no one sure what to think about an end point such as resectability statistics so we make the assumption that in the worse case you'll seeing an overall survival metric and even with that these studies are not too terribly large and can be enrolled pretty rapidly. So we aren't trying to walk a plank where assuming something is high improbably for regulators. We are much more in the mindset are sharing the data and having discussion about what's logical as a next step. And the advisory board work that I have seen, there was specific encouragement, in fact couple of the advisors came back after lot of months later and revised their advice by saying I have studied more on pancreatic program and I think you ought to be more aggressive. And we've been advising -- so I think there is a real interest in this agent and many people who are considered senior key opinion leaders and major academic institutions have that on record are saying they expect this agent to be a core therapy in pancreatic cancer soon. So I think you are in a -- it's an interesting situation but we'll do the work that has to be done as asked by our regulators.

And the next question comes from Tom Shrader from Stifel. Please go ahead.

Hi, this is Alex on for Tom Shrader. Like maybe from me congrats on the continued progress. I had a few questions. First with instant dialysis patients and with lower risk MDS. So to begin the Phase 3 Roxadustat trial complete in China, for dialysis and non-dialysis CKD patients. Where there instant dialysis patients involved in the Phase 3 China studies and will the regulatory filings submitted in China cover this population or do you plan on conducting more trials specifically on target instant dialysis patients?

So the circumstances of the program in China involve regulatory priority that is so much constraining with respect to which studies will be done and so on. And our focus has been on executing exactly what the regulatory bodies look over clinical development and over various priorities in the system have desire to see so the study involved patients in non-dialysis that are being not treated with alternate therapies. And in dialysis have equal therapy some of whom have iron support, most of whom not. In China, you are still less than half of the patients each year that need dialysis being able to get dialysis because the systems still being build out. And outside of the cities of course the use of ESA is completely unpractical because the access to 3A hospitals is not feasible on a regular basis .And non-dialysis categories in stage 5, where people have to wait EGFR for five or six even to get on to an initiation list in a major city for dialysis or patients that couldn't get dialysis in past year, the situations are very, very acute in terms of the severity of anemia want to do about it. In addition, in most of the country there are no cold storage to sterile pathways that you can maintain things like ESA so the spirit is this in non-dialysis is to provide a first treatment option for patients and in dialysis it's very much the case that just being able to get to more patients over time, get to the peritoneal population, so that they don't have to go 3A hospitals even though they are doing peritoneal dialysis. It's a kind of initial focus that exists. I am quite sure over time as regulators in China see the data from the US and from Europe but particularly from the US in incident they will react accordingly and we will respond to their observations as we are obliged to do. In the pathway we are in however the next major study is post approval safety study or what we call pass study and this is a few thousand patients where we collect data for a couple of years. And this is an absolute requirement of the administrative exclusivity program that we are part in one class one point one therapies and by insure category in China.

Okay. Excellent. Thanks for the additional color. And then with -- seduced to start anemia associated barring MDS, specifically in China. In the US it seems like they are having that many new approvals in the last few years in this indication. Is it the same in China? Can you educate us a little bit on the treatment options for this indications within China and then potentially when the data read out what should I be thinking about to make a comparison?

Okay. So in the US MDS, it has been the case for many years that the ESA therapies are allowed and are reimbursed, but have not been approved by FDA. If you go back to the ODAC meeting in 2008 with ESA safety, Dr. [Pastor] said at the beginning of the meeting that all they talked about that they would apply everything except for MDS therapy. And so everybody is recognized it's a very difficult situation that exist. However, as treatment evaluation and treatment options have clarify over time, the standard is to use transfusion until the point that the patient can no longer tolerate it. And so FDA's viewpoint is that the last stage of the decline of -- no matter who are they --ability to make red blood cells in the marrow is really dependence on transfusion. And as such they are asking us to see if our therapy can get people offer transfusion implication being an extend period of time the patient is alive because there is a life time amount transfusion that's tolerated if you start later you stay alive longer. In China, there is no such equivalent situation. So the first lesson from our regulator is that transfusion is not standard care therapy in China and because the public blood supply isn't really significant reliable source and there has been serious issues with Hepatitis B and C infection and so on. So the instruction from regulators is not to assume as part of the standard care. With regard to ESA therapy, it's very rare. There is no approval for anything. So in China you have severely anemic patients and actually Dr. Peony Yu, I am going to ask her to add some more about China because she is recently been doing studies in China with some of the key opinion leaders in MDS. So she can give you some more color on the population. Peony, go ahead please.

Yes. Thank you, Tom. In a recent meeting with about dozens hematologist, KOL in MDS, they are very enthusiastic about participation in this upcoming Phase 2/3 clinical trial using Roxadustat. As Tom said that transfusion on chronic basis is really not much of an option for the patients there. Even the professional group recommendation for threshold for considering transfusion is for hemoglobin to be less than six. And I still recall hearing from division head telling me that in her their -- or their hospital the hemoglobin and which patient receives transfusion could be as low as 3, 4 or 5. That's never been hurdle in the US because physicians here will think about transfusion for someone whose hemoglobin is below 9 and often time it is somewhere between 8 and 9. And also another difference is that health coverage in China often does not pay for the cost of the transfusion itself even when this blood available and one needs family members to donate blood to reliably get blood over there. So the need there is much more urgent in China than it is in the US.

And that's close the question-and-answer session. I'll now turn the call back over to Tom for final remarks.

Thank you, operator. We thank you all for joining this call today. We are looking forward to reporting data and our progress in our China and US programs during the coming quarters. And the opportunity builds momentum our product development programs. We are excited to be in a position to aggressively develop the anemia franchise in China. And ultimately to reach patients in many areas where ESA and transfusions are not available, and where ESA may not really be the safest option. Our focus in bringing therapies to patients, who do not have adequate treatment options, as we build value in our product development programs across multiple indications, continues to be the core focus of our efforts. This is all accomplished by the dedication and incredible efforts of our team in the US and in China and through collaboration with our partners, our clinical thought leaders, key opinion leaders, various investigators and so many different trials that are ongoing on. And expert regulatory and scientific advisors among others. I'd especially like to send my thanks to everyone in our US and China offices and to our shareholders for their continuing interest in our programs. I'd like to wish everyone a good afternoon and evening. And a very calm and enjoyable move into summer in the next couple of months. Thank you for being on this call. Appreciate it.

Thank you, ladies and gentleman. This concludes today's conference. Thank you participating. And you may now disconnect.