Welcome to the FibroGen's Fourth Quarter and Full Year 2018 Financial Results Conference Call. My name is Adrienne, and I'll be your operator for today's call. [Operator Instructions]. Please note this conference is being recorded. For opening remarks and introduction, I'll now turn the call over to Ms. Karen Bergman, Vice President, Investor Relations and Corporate Communications.

Adrienne, thank you, and good afternoon, everyone. Thank you so much for joining our call today. We are reporting financial results and corporate update for the fourth quarter and full year 2018. Joining me today on the call are Tom Neff, Chairman and Chief Executive Officer; Dr. Peony Yu, Chief Medical Officer; Ms. Chris Chung, Senior Vice President, China Operations; Dr. Elias Kouchakji, Senior Vice President, Clinical Development, Drug Safety and Pharmacovigilance; and Mr. Pat Cotroneo, Chief Financial Officer. Following our prepared remarks, Tom will discuss upcoming milestones and we will open the call to Q&A. During this call, we may 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; our regulatory strategies and potential regulatory results; our research and development activities; and certain other business matters. For risks and uncertainties regarding our business and statements made on the call today as well as factors beyond our control that may cause differences between current expectations and actual results, we refer you to our annual report on Form 10-K for the fiscal year ended December 31, 2018, filed with the Securities and Exchange Commission. Copies of these filings can be found in the Investors section of our website. We undertake no obligation to update any forward-looking statement whether as a result of new information, future development or otherwise. The format for today's call includes remarks from FibroGen's management team, and then we'll open the lines to take your questions. The press release reporting our financial results and business update and a webcast of today's conference call can be found on the Investors section of FibroGen's website at www.fibrogen.com. The webcast will be available for 2 weeks from today's date. And with that, I'd now like to turn the call over to our CEO, Tom Neff.

Welcome, everyone, and thank you for joining us. In the period since our last quarterly call, we have been very, very busy. Let me begin with an update of key accomplishments over the last 90 days. On December 17, 2018, we received our first regulatory approval for roxadustat from the National Medical Products Administration from People's Republic of China for anemia and dialysis stage patients with chronic kidney disease, or CKD, including patients on hemodialysis and peritoneal dialysis. Not only is China the first country to approve roxadustat, but this represents a number of other incredible first for FibroGen for innovation in China and for the CKD patients with anemia. We are commencing a variety of commercial activities in China in the next few months and plan to launch in the third quarter of 2019. Following very shortly after the China approval is on December 19 -- 20, we and our partner, AstraZeneca, announced top line results from our global Phase III program for roxadustat in dialysis patients, previously on EPO, Study 064 or SIERRAS; as well as newly initiated dialysis or incident dialysis in Study 063 or HIMALAYAS; and finally the non-dialysis-dependent stage CKD patients in the ANDES study. In these 5 U.S. ROW studies, we enrolled a total of 7,721 patients composed of 3,917 in dialysis and 3,804 in non-dialysis. All of these studies have positive top line results. We and our partners believe the results from these trials to support our NDA in U.S. Food and Drug Administration as well as our marketing authorization application, or MAA, with the European Medicines Authority, or EMA. The fully adjudicated MACE results, including completing adjudication procedures to enable consistent safety assessment without bias, are to be included in our planned NDA to the FDA. Completion of the full adjudication procedure…

Thank you, Tom. The China health authority's approval of roxadustat for the treatment of anemia in dialysis-dependent CKD patients, the first approval of any HIF-PHI in the world is a great start for bringing our novel anemia treatment to patients, which was discovered and developed here at FibroGen. For the roxadustat program in the U.S. and Europe, we and our partners, AstraZeneca and Astellas, have announced completion of all studies needed for NDA and for MAA. FibroGen and AstraZeneca have announced positive top line results in our CKD Phase III studies just before year-end, and Astellas has also announced primary efficacy end points were met in all of their Phase III studies. I shall highlight some key exciting findings on this call. First of all, these Phase III studies demonstrated roxadustat's efficacy. We met the primary efficacy end point in each of the 3 CKD non-dialysis studies, ANDES by FibroGen, OLYMPUS by AstraZeneca and ALPS by Astellas, by demonstrating superiority of roxadustat compared to placebo in the change in hemoglobin level from baseline, the hemoglobin averaged over weeks 28 to 52. In the Phase III dialysis studies, non-inferiority criteria were met in primary end point comparing hemoglobin change in roxadustat-treated patients with those on EPO alfa, which is the current standard of care in dialysis and in CKD patients. And furthermore, superiority was demonstrated in all 3 dialysis studies. These are HIMALAYAS and SIERRAS by FibroGen, and ROCKIES by AstraZeneca. Also, much clinically important, roxadustat-treated patients had significant red blood cell transfusion risk, which was measured by time to first transfusion when compared to placebo in CKD non-dialysis studies -- non-dialysis patient in the ANDES studies. Moreover, in active control trial in SIERRAS study, our U.S. dialysis conversion in which patients were randomized to receive roxadustat or to continue stable…

Thank you, Peony. Chris Chung, our Head of China Operations, will now share updates on our current activities and regulatory process. Chris, please go ahead.

Thank you, Tom. We had quite the exciting year-end with roxadustat receiving approval in China for CKD dialysis patients. As stated by Tom and Peony, roxadustat is now the first HIF-PHI approved anywhere in the world. In addition, this approval marks a historic milestone for China. For the first time in history, China is the first approval country for a first-in-class drug. We call this the 3 firsts. At a macro level, the roxadustat approval is in line with the country's mission to become a global player in innovative drug development. Seeking approval in China first for a global first-in-class drug required vision and persistence on behalf of the company, our partner, AstraZeneca, and regulatory authorities in China. On behalf of the company, I would like to thank our tremendous teams in the U.S. and in China, our board and our shareholders who are safe in our China strategy. The approval of non-dialysis is expected in the middle of 2019. The clinical and safety data is already reviewed as part of the dialysis approval. What largely remains is the procedural requirement of clinical site inspection, which are pending scheduling. After approval, non-dialysis will be added to the current label. To continue gathering clinical data in Chinese patients and meet a post-approval regulatory requirement for Domestic Class 1 innovative drugs, AstraZeneca and FibroGen are planning to conduct a number of Phase IV studies, including a post-approval safety study in 2,000 patients. With an approved drug in hand, we're now focusing on market access and commercialization plans. We anticipate commercial launch in the third quarter of 2019. There's been a significant development on the market access front since our last call. Reimbursement increases affordability for patients, and in China, this generally means entry into the National Reimbursement Drug List, or NRDL. The…

Thank you, Chris. I will now like to ask Dr. Elias Kouchakji to update us on clinical development activities for pancreatic cancer, idiopathic pulmonary fibrosis and muscular dystrophy in the year ahead. Elias, please go ahead.

Thank you, Tom. In 2018, we worked diligently on our late-stage clinical programs for pamrevlumab, which included meeting with regulators on our clinical trial protocols, KOLs, investigators in identifying clinical trial sites, identifying vendor and contracting the vendors. It's all to enable that the launch of our Phase III studies in pancreatic cancer and in IPF while keeping our DMD study on track. Pamrevlumab is our wholly owned, first-in-class candidate that targets CTGF inhibition as an approach to fibrotic diseases in cancer. Targeting one of the key pathways in the fibrosis process, pamrevlumab has demonstrated the potential to address a critical aspect of how each of these diseases progress. To date, more than 600 patients have been treated with pamrevlumab with some patient having been treated for up to 5 years, and pamrevlumab has been well tolerated across a range of doses with no dose-limiting toxicity identified. In locally advanced pancreatic cancer, we are in the process of initiating a multinational, randomized, double-blind, placebo-controlled Phase III study that will evaluate neoadjuvant pamrevlumab therapy in combination with gemcitabine and nab-paclitaxel. We will be enrolling approximately 260 patients in this study. The design of this study is similar to our Phase II trial, and we will assess in this study resectability and resection and overall survival. Should the resection rate favor the pamrevlumab combination, we will be requesting a meeting with the FDA to discuss a marketing application under the provisions of accelerated approval. Turning to pamrevlumab for IPF. In the second quarter, we will initiate randomization in a multinational, double-blind, placebo-controlled Phase III study evaluating a population of patient who are not currently receiving approved therapy. We will plan to enroll approximately 500 patients. The primary end point for this trial will be change in percent predicted FVC from baseline. Moving to our ongoing Phase II study in Duchenne muscular dystrophy non-ambulatory patient. We are on target for all patient to complete 1 year of therapy in March of this year and assessment thereafter. Some of these patients have completed two years of treatment and will be started on their third year. And another group has completed three years of therapy and already started on their fourth year of pamrevlumab treatment. With pamrevlumab, we believe we have the potential to develop an entirely new therapeutic option for diseases that are progressive, debilitating and fatal. We are looking forward to updating you on pamrevlumab progress in these 3 indication. Thank you for your time today, and I will turn the call back to Tom.

Thank you, Elias. Pat Cotroneo, our Chief Financial Officer, will now discuss financial highlights for the fourth quarter and full year. Pat, could you please go ahead?

Thank you, Tom. As announced today, total revenue for the quarter ended December 31, 2018, was $108.1 million as compared to $30.7 million for the fourth quarter of 2017. For the same period, operating expenses were $88.1 million and net income was $21 million or $0.25 per basic share and $0.23 per diluted share; as compared to operating expenses of $66.3 million, a net loss of $33.9 million or $0.41 per basic and diluted share for the fourth quarter last year. Included in operating expenses for the quarter ended December 31, 2018, was an aggregate noncash portion totaling $15 million, of which $13.7 million was a result of stock-based compensation expense as compared to an aggregate noncash portion totaling $11.8 million, of which $9.9 million was the result of stock-based compensation expense for the same period in the prior year. We noted a few nonrecurring items pertaining to revenue, which reduced our 2018 burn and resulted in net profit in the fourth quarter: the first, approximately $44 million in roxadustat API shipment to Astellas to be used for product validation work and ultimately, commercial sale, which represents a second shipment in 2018 totaling $64.8 million; and the second, China approval-related milestones totaling $12 million. Total revenue for the year ended December 31, 2018, was $213 million, of which $148.2 million pertains to license and development revenue from our partners. For the same period, operating expenses were $299.7 million or $182 million net of partner reimbursement, and net loss was $86.4 million or $1.03 per basic and diluted share. Included in operating expenses for the year ended December 31, 2018, was an aggregate noncash portion totaling $58.7 million, of which $52.1 million was a result of stock-based compensation expense. At December 31, 2018, FibroGen had $747.2 million in cash, restricted time deposits, cash equivalents, investments and receivables. For the full year 2019, we are currently projecting a year-end cash balance in the range of $720 million to $730 million. Our judgment is that roxadustat NDA and MAA will be filed this year, and this range, therefore, includes approximately $192.5 million in anticipated milestone payments, of which the vast majority are associated with these filings. Thank you. And I will like now to turn the call back over to Tom.

Thank you, Pat. 2019 will be a busy and exciting year for roxadustat and pamrevlumab across multiple highly promising therapeutic indications. Starting with roxadustat in 2019. We expect to have completed the adjudication for MACE analysis to support the NDA and MAA submissions in the second quarter of 2019. Following that, we plan to submit our U.S. NDA for the treatment of anemia and dialysis-dependent and non-dialysis-dependent CKD to the FDA in the third quarter of 2019. In Europe, we anticipate our partner, Astellas, will submit an MAA for dialysis-dependent and non-dialysis-dependent CKD after the submission of our U.S. NDA. In China, we are also expecting to add non-dialysis-dependent CKD patients to the roxadustat label and then scheduling and completion of CFDI inspection of Study 808 trial sites in the first half of 2019. In Japan, we expect a decision on NDA approval for roxadustat and dialysis-dependent CKD in the second half of 2019. In MDS, we expect to advance roxadustat in a double-blind, placebo-controlled portion of the U.S./EU Phase III study with chemotherapy-induced anemia. We expect to start enrolling patients in our Phase II in the U.S. in 2019. For pamrevlumab, our first-in-class anti-fibrotic candidate, our multinational, randomized, double-blind, placebo-controlled Phase III study in LAPC evaluating neoadjuvant pamrevlumab therapy in combination with gemcitabine and nab-paclitaxel will be underway. We expect to commence the pivotal multinational, randomized, double-blind, placebo-controlled Phase III study in IPF in the second quarter of 2019. Next quarter, we also look forward to reporting top line results from our Phase II muscular dystrophy study in non-ambulatory juveniles, including what we expect to be notable data from our pulmonary function test, measured by percent predicted FVC, cardiac function measured by left ventricular ejection fraction measured with MRI, and muscle strength test. With that, I'd like to turn this call back over to Karen for Q&A. Karen, please?

Thank you, Tom. And I'd like to thank everyone for your patience today while we are experiencing a little technical difficulty in starting the call. Let's open the call now with questions moderated by Tom Neff. Thank you.

[Operator Instructions]. And our first question comes from Michael Yee from Jefferies.

My question relates to roxa and what are the gating steps at this point to finishing up the final MACE analysis, which I guess you said would be in the second quarter. Where are you with that? How will it be reported out? And my second part of that question is as it relates to both the dialysis and non-dialysis readouts, how important is delay in progression of eGFR as well as the hyporesponder population? How important are those populations given your confidence in the readout? And will you be able to comment about those?

Thank you, Michael. So I think the second part of this question, I'm going to divide it into a couple sets of comments. We are not dependent on hyporesponse or progression results as it relates to the filing post adjudication for this year's NDA submission. However, we do have the data and we're very, very interested in that data. Peony, would you like to add anything about progression for CKD or hyporesponse patients? Will you, please?

Yes. Thanks, Tom. Yes, so we find that in terms of the progression slowing down, the decline in eGFR has been viewed as very important for -- when we speak of -- with our KOLs and our patients. And then for -- and we know that the hyporesponse has always been the Achilles' heel for EPO therapy, and it causes patients not able to achieve the hemoglobin that they wanted -- level they want to be. So this is -- and then to try to get there to the target hemoglobin, historically, too much EPO then would end up be given to the patient, and then that results in safety issues. So having a drug that -- with a dose requirement and effectiveness not impacted by inflammatory status has been viewed as a very positive characteristic for both efficacy and safety of evaluation. And this is also important in our discussion with CMS. So these are just 2 example of some of the potential benefits that we find with roxadustat therapy. We believe that FDA will look -- they evaluate the drug -- they evaluate based on the benefit-risk ratio, and these are incremental to our articulation of the value of roxadustat.

Thank you, Peony. Mike, the other part of your question. We have an adjudication pool in the U.S. and we have another one slightly different in Europe. So the objectives are to get those adjudication pools completed. We will be, of course, working with our partners in both cases. So I think in dialysis, where there's been many studies before, it's pretty clear how to go forward and we'll try our best to make the assessment very -- as clear as possible. In non-dialysis, it's important to note that, that -- this treatment population where you have CKD patients not being treated with anemia therapy and they're starting a study at hemoglobin 9 or 9.5. This is a completely new treatment circumstance. And for instance, one of the things that we saw in this study very clearly was the placebo arm was very sick and frequently dropped early. And so we are, of course, evaluating all that stuff but it's a much more complex analysis, and I think the idea here is we will do the best we can to update it in a manner where we can sort of see where we're going and what the sentiment is. Thank you for the questions.

And our next question comes from Adam Walsh with Stifel.

I've got a quick one for Peony and then one for Tom as well, if that's okay. Peony, on the non-dialysis CKD roxa results where you have preservation of kidney function as measured by eGFR, that's obviously a very profound result with the potential implications and maybe preserved kidney function and delayed dialysis in these non-dialysis-dependent patients. How much do you think you can leverage that in the clinical community? And how would you go about doing that should you receive approval for roxa in that setting? And then Tom, very quickly, you have a ton going on inside the company right now with a lot of, obviously, initiatives. Do you feel that you're adequately staffed and resourced to execute on the ongoing and planned trials in timely manner as well as the worldwide approval potentially and launch of roxa?

Adam, thank you so much for a very good question. There has been -- we believe that the kidney deserves to have enough oxygen and also deserves to have the benefit of the protective function from a HIF-PHI. And being able to see preservation of kidney function has been something that I and my team have been dreaming for the day when we designed the Phase III program. So now we are happy about it and the -- every single nephrologist that had provided an opinion to me about this tells me it will be valuable to be able to show this benefit, but I will take your question in advice. And while we are preparing our NDA, we will do our best to articulate this and have some good practice by the time we have to talk to more clinician in the future.

So with respect to your question to me, adequate resourcing, first off, thankfully, we have been with adequate financial resources, which makes a lot of other things possible, and we expect that to continue for a while. As I look at the anemia program in China, we have the second largest company selling drugs in China. AstraZeneca is our partner in the launch. They are a fantastic operation in China. This year's revenues in that business were nearly $4 billion, about 25% up year-on-year, so a lot of momentum. And so we feel like we have excellent resourcing for CKD anemia. In Japan, our partner, Astellas -- originally, it was Yamanouchi. And then after the merger with Fujisawa, it became Astellas. And we think we have a great partner in Japan. They're excellent in execution and so on. And so again, you're looking at very big companies with long-time commitment to these programs, focused on these activities for 8 or 9 years. And so I think we're in pretty good shape to those places. In Europe -- and now we're getting into the areas where the regulatory story is still in front of us a little bit. We have to find out what's going to happen, but I would say that in Europe, we have Astellas as a partner. In the U.S., we have AstraZeneca as a partner. And in both cases, we have very motivated leadership, very motivated teams who have excelled in their work for 8, 9 years in the case of Astellas and about 6 years in the case of AZ that we've been able to observe. And so in all of these cases, we are holding royalty rights, not being directly responsible on the ground. Things can happen, of course. And as we expand CKD activities into other areas of anemia, we have to calibrate adequate amount of resourcing at every step. With the antibody, you've got programs that are right at proof of concept stage. And in each area, they're monumental proof of concepts. They happen because there's been no treatment previously. In the case of both DMD and pancreatic cancer, it's just that simple. There's not been treatments previously. And so for us, we have to decide in a wise way how to allocate rights and markets around the world with potential partners and so on, but again, we think we're in pretty good shape in this regard. So let me stop there.

And the next question comes from Geoffrey Porges from Leerink.

Just a couple of detailed questions on things that you mentioned on the call. First question, you mentioned the NRDL new listings in 2019. Could you talk about how logistically that might affect your launch for roxa in China? Do you intend to wait to see what that list is and launch with that price or you launch with a commercial price and then potentially have a low price with the NRDL listing? And then secondly, I think you mentioned AstraZeneca doing a 2,000-patient post-approval study, I think. Could you give us some details about that? And then lastly, I apologize for all the questions, but on the Duchenne disclosure, could you give us a sense of what you'll be able to disclose to us and then what you'll sort of say so we should calibrate our expectations for what to hear from that announcement when it comes?

So let me parse this out there. The Duchenne, I'll have Elias address that. Chris, take on the first part, NRDL. And then we'll deal with the second part. So just go ahead.

Sure. Geoff, with regard to your first question, do we plan to wait until NRDL or clarity around pricing of NRDL before launch, the answer is no. Those 2 are separate ideas. We will launch when we're ready to launch. We will submit an application for NRDL. As you know, the timing -- even though we know it's 2019, the exact timing is uncertain. While we're very optimistic that roxadustat is going to be considered, the criteria is uncertain. And while we're very optimistic that we have a value proposition to demand -- or command, rather, a very valuable pricing for roxadustat, that is also subject to negotiations. So currently, the plan is to unlink the two.

So Geoff, with regard to the PAS study, let me point out that when I first went to China to negotiate the idea of an oral therapy, which was well beyond a decade ago, we understood the system we would be administered under was one where pathway to first approval was a little more rapid than it might be in the list, but there was a post-approval study, or PAS, post-approval safety study, that was required -- mandatory requirement for final approval and the extension of administrative exclusivity for a longer period of time. And so that PAS study is what I think you're asking about. And Chris, go ahead and address the question, please.

Sure. So the post-approval safety commitment is a regulatory requirement for Domestic Class 1 innovative drug, is not specific to roxadustat. Peony and Elias are both here, and we have met with the regulatory authorities in terms of expectations. As far as I know, it's a very routine post-approval safety study with a minimum of 2,000 patients, and I did not get the sense that there's anything specifically to roxadustat or anything that is funky about it. And to clarify the party who's going to run the study is FibroGen and not AstraZeneca.

So Elias, please look after muscular dystrophy and explain what we are hoping for here.

So as Tom mentioned before, let's just say with our patient is completing 1 year of treatment in the mid of March, we still have to clean the data, but we are looking at this key function, looking at the muscle test and the pinch and the pull and others. And at the same time, we are doing an MRI. Similarly, we're doing ejection fraction, left ventricular ejection fraction. And similarly, we have MRIs for the heart. We're doing cardiac MRI. And the pulmonary functions, we are testing for the FVC percent predicted. We will await until the data is completed, until the last patient is enrolled, transfer the data, clean the data. We will be looking at this data at that time. And then when we will -- after we see the data completely, we will make an internal decision, how -- and the evaluation of the data, what our strategy statutory will be for Duchenne muscular dystrophy. We are hoping that this will be a good and positive data that is -- provide a very new option for this patient. And as I mentioned, we have patient now who started on their fourth year of therapy. So that is -- by itself, is giving us hope.

And our next question comes from Joel Beatty from Citi.

I guess can you discuss what are the most important end point roxadustat program that clinicians will care about for use and prescribing in the non-dialysis on an anemia setting?

Okay. Joel, I think -- maybe I'll try to answer this question. In non-dialysis setting, if it is the case, there are patients that are relatively well, meaning eGFR is a baseline of 20 to 30. We're very hopeful we see evidence that we can either slow progression or stall progression in those kinds of patients, as measured by eGFR over time. And of course, this idea would then lead to the notion that patients that are aware of their emerging renal disease and aware of what dialysis is all about might be very motivated to address use of roxa as a chronic therapy that slows down or avoids a progressive disease outcome. It's something you can -- anti-cholesterol medicine. So that -- in that kind of setting, that's what you would hope for. With patients that are sicker, you get in situations where they're actually losing more and more oxygen capacity in their organs, and so it's an all-out alert and a multiplier on all kinds of other diseases. And so I think if it's a safe and effective medicine that you can routinely with once-a-week dosing perhaps have level hemoglobin, 11 or something like that, that kind of idea, you may forestall numerous kinds of cardiovascular, pulmonary system and functional issues that are well documented in other categories of medicine. So that's how we look at it. Thank you for the question.

Great. And if I can ask another question. Can you discuss the definition of non-inferiority that will be used for the MACE analysis?

Where, in what jurisdiction?

Joel, did you hear Tom's follow-on question? This is Karen.

Oh, sorry. What was that?

He asked in which -- or in what jurisdiction are you inquiring.

Sure. So I guess let's say for the FDA approval, there'll be the 2 pools that -- from my understanding, FDA will look at non-dialysis and dialysis and I'm curious on what definition could be used.

So Peony, do you want to take on that U.S. ROW program?

Sure. So the -- and we are now in discussion with the FDA. So we'll use the adjudicated results and it will be based on MACE, which is based on the composite of death, MI, stroke and it will -- the count will be the number of patients who have one or more of these events. And then the reason Tom had mentioned -- asked what jurisdictions are in Europe, we'll be looking at MACE plus. So that will be death, MI, stroke, hospitalization due to heart failure and hospitalization due to unstable angina.

And the [indiscernible]

Yes. So -- and then the criteria for evaluations are -- also differ in the 2 jurisdictions and we -- yes. And then we -- so we are still completing the adjudication, and then the step after that will be to -- for analysis of such -- of those data. Go ahead, please.

Yes, anything else?

No, sir.

Thank you, Peony. Anything else?

No.

And we have another question from Andy Hsieh with William Blair.

One is for Chris. I think you mentioned about -- like a special early access program. From a modeling perspective, are -- is the company along with AstraZeneca thinking about addressing maybe the private pay population? And could you just provide more details regarding that?

So Andy, let me prelim this a little bit. In China, the prescriber utilization profile matters for the NRDL negotiations. So this is not really into private pay, although it may be a side benefit. Chris, do you want to go ahead and...

Sure. Andy, thank you for your question. So I confirm what Tom just said. The early access program is really addressed at market access. As you can imagine, roxadustat is being first launched in China with a 450-subject data set, and the next approval won't be until the second half of this year in Japan. So we're really focused for market access purposes on expanding prescriber experience because we have no referenceable data from outside of China and we have not started any of the Phase IV studies. So in order to get into the reimbursement list and in order to get into the formulary at 5,000 target hospitals, we need people to have used this drug. And in terms of early access programs, the typical 3 types are we could either donate the drug for free or we could give away commercial samples, again, for free; or we could do a patient assistance program, which is basically a subsidy program where we book a bit of our revenues and we give part of the dosing regimen away for free. We are actively working with AstraZeneca to understand the pros and cons of each of those 3 paradigms as well as if there's a hybrid that might serve us well in this situation, but it's really not for private pay. I can really focus on market access to enhance our chances of market success.

The other point I'd make sure is that the first step, this spring, we will focus on the area around Beijing and very carefully evaluating to move forward. And in the second step, the full-blown machinery of AstraZeneca kicks in, and they have really extensive distribution in China. The last I heard is 13,000 salespeople. And so there's ways to pick up the speed very fast once we decide on the path we're taking, which is the virtue of partnering with someone. It has been as successful as AstraZeneca. Anyway, thank you for the question.

Sure. Do you mind if I ask another one? So just the clarification for -- this is a question for Elias, about the MDS Phase III study for roxadustat. Can you kind of remind us what the open label transitioning to the randomized portion entails? Is there -- so what kind of -- what's the rationale behind the open label phase?

Yes. So let me help a little bit. In MDS, we had 2 distinct programs. One was in the U.S. The end point is transfusion 3 weeks or longer, which is a pretty test standard actually. And outside of the U.S., in the China program, we're looking at patients that are early naive for therapies, as such hemoglobin increase. And there, anything more than 1.5 of hemoglobin catches an end point but it's very different. And so what we're talking about today -- and I'll turn this over to Peony now, is in MDS in the U.S., we now have gotten to the point where there's enough data that our partners in AstraZeneca was -- there's a lot of patients here that have gone beyond weeks of transfusion free. Let's get going on the double-blind study. So Peony, please explain.

Yes. So for the U.S. study, before we start that study, we met with the FDA, and the understanding was that we will be pursuing this study in the -- for patients who are transfusion-dependent and demonstrate transfusion independence for 8 weeks. So now that we have -- we are -- we have looked at the open-label data and very much encouraged by that and have gone over the data with our partners, we are at the point of starting to randomize into the double-blinded portion, which has a -- it's planned for having 160 patients with a 3 to 2 randomization. Now separately -- so in China, because there is such severe shortage of blood for transfusion, it is much more practical to study MDS patients with roxadustat by taking patients who are anemic and treat them with roxa to see if we could increase the hemoglobin level because in China, the hemoglobin threshold for physicians to even start thinking about ordering blood for transfusion is below 6. And most -- there are many patients who may -- MDS patients may walk around with hemoglobin below that level and still do not get to have a blood transfusion, which is a different situation than U.S., where the transfusion threshold is more around 8 also. And together, with the result of this study, we believe that we will have a very good basis to cover the entire spectrum of a lower-risk MDS anemic need. Do you have any questions?

No, I think that is a great explanation.

And our next question comes from Difei Yang from Mizuho Securities.

Just a couple. The first question is around -- I'm wondering if you could shed some light on how you think about pricing for roxadustat in China and how would that be relative to the U.S. and Japan pricing.

Chris, why don't you go ahead with that one, please?

Sure. Thank you for the question specifically about pricing in China. So one thing, based on AstraZeneca's experience, we are very careful about is the referenceability of the China pricing, which is new business model. China is launching first before the rest of the world. And to date, we believe that China pricing will not, in any way, affect the U.S., Europe or Japan pricing. It is also a foundational, strategic decision by Tom originally and FibroGen that this is a Domestic Class 1 drug and the approval is not referencing the combo drug. So it's very difficult to make the case that U.S. data was used to get approval in China. So the current assumption is these two are linked. In terms of the pricing level in China, we've conducted extensive pricing studies in China with potential prescribers, potential self-pay patients, potential patients who had received reimbursement as well as proxies to the reimbursement agency to understand a couple of factors. One is what is the fundamental value proposition of roxadustat relative to ESAs, which we believe is very strong. The second is the affordability of the Chinese government to cover roxadustat if we endorsed for dialysis and we expect a much larger non-dialysis population that was previously not addressable by ESAs. Third is the affordability of the self-pay portion by the patients who choose to use HIF-PHIs and is reimbursed. So the combination of those factors, that will be taken into consideration. And finally, as we could all see, because of the expansion of access to innovative drugs, innovative drugs are being widely reimbursed, but there are also price cuts that are quite significant that were levied in particular with oncology drugs in 2018. So at the end of the day, it's really what sells and what we can get reimbursed for, and those decisions are yet to be made but the methodology is as I just described.

Difei, do you want to ask more questions, please?

Yes. Thank you for that detailed explanation. So we have been observing, for example, for PD-1 agents, roughly the China pricing is 50% of that -- of the U.S. pricing. Is that the ballpark we should be thinking about?

This is, unfortunately, a little bit complicated. So let me try how I would think about it. In the U.S. and in Europe, you might have dialysis reimbursement these days, maybe $3,000 or $4,000 per patient per year for these anemia therapies and normal government-reimbursement-type program. And that, of course -- implicitly, that's a TIW schedule dosing. So dialysis exchange matches the time the drug goes onboard with the patient. With our drug, we don't have a constraint of TIW or BIW. We can do QW. And so one of the interesting parts for Chinese counterparties and the government looking at reimbursement is that we can talk about dialysis at TIW. We can also talk about QW at much lower prices if we price on units by milligrams. And as a result, we have some flexibility to deal with the biggest challenge in China, which is to have prices that are reasonably affordable by people other than the top 10% by wealth in society. And so I think that we have flexibility that's different than might have happened in other situations. In addition, we have aspects of the HIF biology that address things that are way, way different than EPO, for sure, but they -- also, the HIF biology addresses risk factors. I've seen a study from UCLA where 11 identifiable EPO risk factors all are -- somehow are negated or nullified with the HIF therapies, that kind of idea. And so how those things get priced is a part of the conversation that's still in front of us. But without a doubt, these things are valuable. And so what I would say my challenge in China is to make sure that governments -- I feel like we're dealing with them in a fair way and we're not being extortionate about pricing, and I'm pretty confident we can do that and still make this thing work, right.

Then turning the pricing discussion into the U.S., do you think roxadustat will be in the bundle or out of the bundle?

This question, I think, is dependent on future conversations. We have incident dialysis data that we debated whether to talk about on this call or just wait until we get through the whole process. We decided to wait just to be careful, but that kind of data is what CMS, several years ago, told us was what they wanted to see to make some decisions here. And at the time we talk to them, the proffer of possibly being entirely outside the bundle because it's new technology, outside regulation hasn't been achieved before and so on. I think that we wait now to understand better U.S. government position, which is obviously evolving, too, and how they're going to look at things. But the most simple and straightforward way to think about this is the different technology and you'd like to see outcome differences in treatment that are clear-cut. And if we can show that, I think that it's game on. And if you can't show it, it's sort of ridiculous to expect to be outside the book, right? So I think we like our chances here, but we have to wait a few more weeks to get to the point we can talk about it articulately with quantitative presentation, if you follow what I mean.

Yes, yes. That makes perfect sense.

And that concludes our question-and-answer session. I'll turn the call back over to Tom Neff for closing comments.

To those that are still on the call, thank you for joining today. I'm sorry we started late. 2018 was a remarkable year for FibroGen that we advanced the development of 2 promising products, each with multiple significant market opportunities now closer to patients who need new and innovative treatment options. We announced the approval of roxadustat in China just days apart from reporting our U.S. Phase III efficacy data. These are -- both of these programs are nearly a decade long effort, enormous amount of commitment. And I can only, in the most humble way, say I appreciate everyone involved that supports us because it's so impossible to imagine having the chance to do that kind of work for such a long period of time and still be here to see the outcomes. The dedication and commitment of our employees are really astounding. And in the case of pamrevlumab, we've gotten now to the point of FDA agreeing on protocols for Phase III and we're in the contracting and execution mode of doing the Phase III. We also will begin to see the promise of anti-CTGF therapy or pamrevlumab therapy in muscular dystrophy and, in particular, impact on ejection -- cardiac ejection fraction and on cardiopulmonary measurements where the situation is desperate almost from the day the boys go into wheelchairs. So we're very, very interested in what the potential is there or hope for those patients. Our company has maintained its financial discipline. So we are able to do this stuff without being in a fire sale situation, and thanks to the gods, it hasn't been that way so far. Obviously, it's always delicate in a biotech company, but right now, we're okay. I would like to take the time here to thank every member of the FibroGen team all over the world for invaluable contributions as well as the physician and investigators who participated in our Phase III programs in anemia as well as our collaboration partners and our investors for continued, awesome support. We look forward to keeping you updated on our progress through 2019. I'd like to wish everyone a good afternoon and good evening. Thank you all for being with us today here.

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