Welcome to the FibroGen First Quarter 2020 Financial Results. At this time, all participants’ lines are in a listen-only mode. After the speakers ‘presentation, there will be a question and answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Mr. Michael Tung. Please go ahead, sir.

Thank you, operator, and good afternoon, everyone. Thank you for joining us on today's call to discuss FibroGen's results for the first quarter of 2020. Today's call will be led by Enrique Conterno, our Chief Executive Officer. Enrique will be joined by Dr. Peony Yu, our Chief Medical Officer; Ms. Chris Chung, our Senior Vice President of China Operations; Dr. Elias Kouchakji, our Senior Vice President of Clinical Development, Drug Safety and Pharmacovigilance; Mr. Pat Cotroneo, our Chief Financial Officer. Before we begin, I would like to point out that 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, commercial results and results of operations, risks related to our business 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, 2019 and to our quarterly report on Form 10-Q for the quarter ended March 31, 2020, 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 prepared 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 the webcast for today's conference call can be found on the Investors section of FibroGen's website at www.fibrogen.com. And now, I would like to turn the call over to Enrique Conterno, our CEO. Enrique?

Thank you, Mike. And good afternoon, everyone, and welcome to our first quarter 2020 earnings call. Given the challenges presented by the COVID-19 pandemic, I would like to take a moment on behalf of FibroGen to reassure patients, healthcare providers, investigators, and stakeholders of our continued commitment to bring to patients a potential, first-in-class medicine for the treatment of chronic and life-threatening conditions. Governments, businesses, and society in general, have taken unprecedented measures to mitigate the spread of the COVID-19 outbreak. Like many businesses, FibroGen has taken a number of actions to support both our workforce and communities in these challenging times. In the U.S., our employees are working remotely when possible. While in China, they are now back working in our offices, manufacturing plants, and the field. We have implemented protocols globally to minimize the risk of illness for our employees who need to work on-site at any of our facilities. Despite the difficult circumstances, we remain committed to ensuring the regulatory and commercial success of roxadustat, a potentially transformational oral medicine in anemia therapy, first demonstrated in patients with chronic kidney disease. With Pamrevlumab, we are implementing a comprehensive plan to accelerate development across the three indications of idiopathic pulmonary fibrosis or IPF, locally advanced unresectable pancreatic cancer or LAPC, and Duchenne Muscular Dystrophy or DMD, once the situation with COVID-19 improves. Finally, we continue to advance the innovation of our hypoxia-inducible factor or HIF and connective tissue growth factor or CTGF platforms. Our business continuity plans are in effect and we are seeing an impact to our operations resulting from COVID-19, we remain confident that FibroGen has the resources and capabilities to navigate through these uncertain times and achieve our stated goals. As China comes back online, we are continuing our manufacturing operations and launch efforts there.…

Thank you, Enrique, and good afternoon, everyone. Our 2020 start has been busy. And today, I would like to review some of the roxadustat highlights thus far this year. As Enrique mentioned earlier, we continue to expect an FDA decision on our roxadustat NDA by the PDUFA date of December 20, 2020. We have no indication the FDA will hold an Advisory Committee Meeting, but we continue to prepare diligently in case, one is scheduled. To ensure success in the U.S., we and our partner AstraZeneca continue commercialization preparations. We plan to submit our Phase III individual study and pool efficacy and safety manuscripts for publication over the coming months. In Europe, the Marketing Authorization Application filing for roxadustat for treatment of anemia in both dialysis and non-dialysis-dependent CKD patients is expected in the second quarter of 2020. In Japan, our partner, Astellas, continues the commercial launch of Evrenzo, the Japan brand name for roxadustat for treatment of anemia in dialysis-dependent patients. Astellas ‘supplemental NDA for anemia in non-dialysis patients is currently under review by PMDA. We recently presented new analyses from our Phase III roxadustat trials at the annual National Kidney Foundation Spring Clinical Meeting. And the conclusions can be summarized as following: In our non-dialysis patients, roxadustat achieved comparable hemoglobin correction with similar doses regardless of iron status at baseline. Roxadustat treatment resulted in a statistically significant reduction in red blood cell transfusion risk of 74%. 40% of the patients in this non-dialysis patient pool were not iron replete or did not have sufficient iron stores to even qualify for ESA treatment. Furthermore, roxadustat reduced the risk of red blood cell transfusion and IV iron rescue, compared to placebo in non-dialysis CKD patients, regardless of iron status at baseline. Finally, roxadustat significantly reduced the risk of red blood…

Thank you, Peony. I am excited to share details of the positive progress made during the first quarter on the roxadustat launch in China. As many of you know, roxadustat was included in the 2019 National Reimbursement Drug List last November. It became effective January 1st of this year and the government is ensuring that rollout is completed on an accelerated basis. Hospital visitings have been a key focus of our large efforts and the top priority of the AstraZeneca-dedicated roxadustat sales team. We are pleased with our progress to-date. Roxadustat is now listed and available at many hospitals within our target universe. We are particularly pleased with the penetration as Top-Tier Class 3 institutions, which are the larger accounts and also where key opinion leaders and early adopters practice. We believe the hospitals where we are listed to-date represent greater than 30% of the potential CKD anemia market opportunity in China. Roxadustat net sales were just under $5 million for the quarter. Q1 represents the first quarter after the inclusion of roxadustat in NRDL and obviously, sales were affected by the COVID-19 pandemic. From late January through the end of February, China was essentially locked down and sales visits were completely stopped. During that time, physicians and hospitals were largely focused on treating COVID-19 patients. The number of non-dialysis outpatient visits were highly impacted and dialysis visits were also affected, but to a lesser degree. Looking forward to Q2, we expect operations in China to return to a new normal, where social distancing rules will continue to apply. Sales representatives are now able to conduct sales visits and hospital visiting committee meetings are being scheduled. Many forms of scientific engagement have moved to digital, where disease education, case discussions and roxadustat experience sharing are now being conducted primarily online in a virtual manner. We have seen roxadustat utilization across different patient populations, including hemodialysis, peritoneal dialysis and non-dialysis and in both ESA naive and ESA-treated patients. We continue to be encouraged by the unique value proposition of roxadustat in the treatment of anemia and CKD, in particular, within the treatment setting in China, given the reduced need for intravenous iron to achieve target hemoglobin levels, even in the presence of inflammation, as well as the oral route of administration. We look forward to keeping you updated as we advance our work towards the long-term goal of making roxadustat the standard-of-care in treating CKD anemia patients in China. I will now turn the call over to Elias who will provide an update on the pamrevlumab program. Elias?

Thank you, Chris, and good afternoon. Today, I would like to provide an update on our pamrevlumab program, given the COVID-19 development over the recent months. As you all know, we are developing pamrevlumab in three separate orphan diseases. At the time of our last earnings call, we were enrolling ZEPHYRUS, a randomized double-blind, placebo-controlled Phase III study evaluating pamrevlumab in IPF and announced plans to initiate a second similar Phase III trial in IPF named ZEPHYRUS 2. Given the recent COVID-19 pandemic, in order to ensure patient safety in this vulnerable population with compromised lung function, we have decided at this time to temporarily pause enrollment of ZEPHYRUS Phase III clinical study. The safety of our patients is our top priority, as we continue to assess this dynamic situation and we continue to work with investigators to provide care and clinical trial continuity for patients who were already enrolled in this trial. Prior to pausing enrollment, we were focused on accelerating enrollment of our ongoing ZEPHYRUS Phase III study in preparing to initiate the ZEPHYRUS 2 trial. To the extent possible, we continue these preparations, such as when we are able to restart enrollment, we will hit the ground running. Moving on to our locally-advanced unresectable pancreatic cancer or LAPC, program. LAPIS is our ongoing randomized double-blind, placebo-controlled Phase III trial in patients with LAPC. As you know, these patients have a great prognosis and we are working with our investigators and clinical trial site staff to implement changes, which mitigate the risk to patient and comply with regulatory and government guidance. We continue to prepare to initiate a Phase III trial, LELANTOS, evaluating pamrevlumab as a treatment for Duchenne muscular dystrophy or DMD, in the second half of 2020. There is a significant interest for DMD health from the DMD healthcare providers and patient communities. This global trial will be a randomized double-blind, placebo-controlled Phase III trial of pamrevlumab in patients with non-ambulatory DMD. It will enroll approximately 90 patients randomized 1-to-1 to placebo and have a treatment period of 52 weeks. Now I will turn the call over to our CFO, Pat Cotroneo for the financial update. Pat?

Thank you, Elias. As announced today, total revenue for the first quarter of 2020 was $24.4 million, as compared to $23.9 million for the first quarter of 2019. The current quarter revenue consists of $19.4 million in development revenue, plus net product revenues of $5 million for roxadustat sales in China. For the same period, operating costs and expenses were $105.5 million and net loss was $78.3 million or $0.89 per basic and diluted share, as compared to operating costs and expenses of $72.7 million and a net loss of $45.4 million or $0.53 per basic and diluted share for the first quarter this year. Included in operating costs and expenses for the quarter ended March 31, 2020 was an aggregate non-cash portion totaling $22.1 million, of which, $16.9 million was a result of stock-based compensation expense, as compared to an aggregate non-cash portion of $20.4 million, of which $16.4 million was a result of stock-based compensation expense for the same period in the prior year. At March 31, FibroGen had $598.4 million in cash, cash equivalents, restricted time deposits, investments and receivables. As previously stated, in accordance with the U.S. GAAP, we recognized in our Q2 2019 financial results a total of $180 million of milestone payments, when achievement became probable. The amount was comprised of $50 million for anticipated milestone from AstraZeneca related to the filing of the U.S. NDA, which was received on April 1, 2020 and $130 million in anticipated milestones from Astellas in connection with the EU MAA filings, which we expect to occur in the second quarter this year. Based on these milestone payments and our latest forecast data, we continue to estimate our 2020 ending cash balance of cash, cash equivalents, restricted time deposits, investments and receivables to be in the range of $720 million to $730 million, assuming the U.S. NDA approval in Q4 2020. Looking ahead, we have a total of $375 million in anticipated milestones expected over the next 15 months for the U.S. and Europe, which includes the aforementioned $130 million of milestones for MAA submissions, plus $245 million of milestones on approvals and first commercial sale. At this point in time, we have no changes in expectations in any of the anticipated milestones over the next 15 months. Thank you. And I would now like to turn the call back over to Enrique.

Thank you, Pat. In closing, FibroGen is well positioned to navigate these uncertain times. We, and our partners are committed to making roxadustat available to as many patients across the globe as quickly as possible. We have ample supply of roxadustat drug product to meet demand for the year and ample supply of pamrevlumab for our planned clinical trials. As roxadustat sales ramp up, our financial position is strong with approximately $600 million in cash at the end of the first quarter. We have a total of $375 million in anticipated milestones expected over the next 15 months in the U.S. and Europe, which includes $130 million of milestones for the MAA filings, plus $245 million of milestones on approvals and first commercial sale. In addition, we received full partner reimbursements for development and commercialization of roxadustat in all geographies, except China, where we share these expenses 50-50 with AstraZeneca. Based on our current forecast, we are reiterating our estimated 2020 ending cash to be in the range of $720 million to $730 million and continue to believe we are well financed for years to come. Now, I would like to turn the call back to the operator for questions. Operator?

[Operator Instructions] Our first question comes from Michael Yee with Jefferies. Your line is open.

Hey Enrique. Hey Peony. Hey guys. Two questions from me, if you can hear me okay.

Yes.

There was recently some competitor data that came out this week. Maybe you could just talk about how to put that into context. Importantly, in the dialysis segment they only had 10% of the population and incident, where you had I think, upwards of 40%, yet you guys have the same hazard ratio of 0.96. So, maybe talk to that dataset and what that would mean, both in incident dialysis and stable dialysis, when you try and compare that data? And then my second question is on China. Chris, I thought you had some good comments there. Maybe talk about how you expect Q2, Q3, Q4 to ramp as people are modeling sales. Thank you.

Very good. Thank you very much, Michael, for the questions. I am going to turn over the question on the recent competitor data to Peony. But let me just make a comment on that. Clearly, this data validates HIF-PHIs, I think in an important way. But I am excited for us to be able to also share why we are so excited about roxadustat in terms of the differentiations and we will then go to Chris for your questions in China in terms of sales ramp up. Peony?

Thank you, Enrique and thank you, Mike, for asking the question. Recent data reaffirms the safety of the HIF class, as Enrique said. In addition, we are reassured that the roxadustat product profile is compelling. This is a great opportunity to remind us about the differentiating aspects of roxadustat. Now from an efficacy standpoint, roxadustat is numerically and statistically superior in hemoglobin efficacy endpoint, which then in turn, translates into clinical benefit of reduction of transfusion in dialysis patients. Our primary efficacy endpoint of change from baseline to weeks 28 to 52 was superior to an active comparator after we met non-inferiority comparison and the P-value is less than 0.001. Now, what is very – we also have statistically significant reduction in transfusion risk. Importantly, we have demonstrated cardiovascular safety in the overall dialysis population and in MACE. And furthermore, we demonstrated a reduction in MACE+ risk. In our 1,530-incident dialysis patient pool, where the comparison between roxadustat with epoetin alfa started within the first four months of dialysis initiation, roxadustat had a 30% lower risk of MACE and 34% lower risk of MACE+ than epoetin alfa with a trend towards lower or cause mortality relative to epoetin alfa. Now this is a highly-relevant population. The difference between the incident dialysis and the stable dialysis is that, incident dialysis describes the point of entry, timing of the entry into the study. Patients – this includes patients who have started dialysis within four months of study enrollment and continue receiving treatment well into stable period as the average treatment is around two years. And to address the question of – that you have brought up about stable dialysis, the other subgroup of the all dialysis patients are patients who entered a study at the time that they have been on dialysis for more than four months and continued treatment. When we look at the converted patients or the stable dialysis patients and evaluate and looking at safety – cardiovascular safety, it does not change any of the conclusions that we have on the – about roxadustat being safe and efficacious. And so, in conclusion, roxadustat’s excellent cardiovascular safety profile, coupled with the statistically significant and clinically meaningful, higher hemoglobin efficacy results and lower transfusion rate relative to epoetin alfa, together makes roxadustat potentially a better treatment option for dialysis-dependent patients. We like the hand that we have and expect the product label to reflect the results of clinical trials on our compound.

Okay. I appreciate the question because, yes -- because of the stable population and doing the math around that versus them. So, incident is important, and I appreciate the response and maybe Chris, on China?

Chris?

Yes. Hi, Mike, so we continue to be optimistic about second, third and fourth quarters. The way to look at the numbers might be, you saw the Q4 numbers and you saw the Q1 numbers. So, what does the Q1 numbers tell you? So, there is seasonality in terms of when the things typically coming in China. So as you know, without listings you can’t prescribe. So listings are key. But also, there is tremendous momentum coming out of NRDL to list, because it makes the drug affordable and it makes hospitals wants a list. So we are very happy with the Q1 numbers. It reflects momentum coming out of NRDL. It reflects a bit of a slowdown because of COVID. We are now coming out of COVID into new normal. It’s a little bit touch-and-go, so it’s hard to predict based on it, but we continue to be very optimistic in what the rest of the year looks like.

Thank you, guys. Appreciate it.

Thank you. And our next question comes from Geoffrey Porges with SVB Leerink. Your line is open.

Hi. In NDD versus DD, I am curious, Chris, first of all, in China, what’s your assessment of how this will play out over the long-term? Hypothetically, do you think that they’re roughly equal? Or do you think that one is going to ultimately be significantly larger than the other? And then, Enrique, I know you’re not responsible for commercialization, but I’d love to hear your color on what you think the situation will be in the U.S. again? Do you think that the opportunity will be larger in dialysis, given your incident dialysis data? Or do you think that the greater opportunity will be getting the non-dialysis claim? Thank you.

Very good, Geoff. Let me try to address both of your questions. Looking at the relative size of both dialysis and non-dependent-dialysis, clearly, the number of patients that have anemia, and that are on dialysis is significant, but the opportunity to help patients in non-dependent-dialysis is, of course, much, much larger. I view both opportunities as important opportunities. But over time, I view the opportunity in non-dialysis-dependent patients to be much larger than the opportunity in the dialysis. Of course, we will need to do our job to ensure the patients are accessing treatment for anemia, patients that have CKD. When it comes to the U.S., I know you give in a minute this way, but I am completely engaged when it comes to ensuring that we can have a successful commercialization of roxadustat and I had the opportunity to engage, of course, with AstraZeneca. The situation there follows, I think, similar comments in China being the NDD opportunity over time, has a potential to be significantly larger, as we develop that market and we ensure that patients are treated. Keep in mind, that when we look at patients coming in to dialysis today and we look at the prior twelve months, only about 14% of them are treated for anemia in those prior twelve months. So, a great opportunity, I think to ensure that many, many patients get appropriately treated and clearly, a huge opportunity for market expansion there.

Great. Thank you very much.

Our next question comes from Jason Gerberry with Bank of America. Your line is open.

Yes. Just curious, if you can comment on your 2020 roxa publication strategy, I imagine your competitor will be looking to make a splash in ASN later this year. And so, I know that there is some data points regarding the roxa program, for instance, the data on the MACE subcomponents for the DD study. Just curious, if we could get any more incremental data published out of you guys later this year? And if you can comment at all on that front? And then maybe just a follow-up for Chris. Help us think about the $5 million number for China this quarter. Is that a pure demand-driven number? I assume, inclusive of the COVID headwind you mentioned 30% of hospitals have access to roxa, but I think in prior conversations, you talked about the NDD market requiring more market building. So should we think about that access as being more around the DD opportunity, at least at the onset? Thank you.

Yes. Thank you, Jason, for the question. I am going to ask Peony to comment on our publication strategy. We are excited about the publications that we are – publication planning, what we are trying to do this year. And then I am going to ask Chris to give us some more color on China. Peony?

Yes. I am very excited about our upcoming publication plans. We could – I can say that we are data-rich and we are working very closely with our two partners, Astellas and AstraZeneca, to some – we are committed to submit our Phase III individual studies, as well as pool efficacy and safety manuscripts for publications over the coming months. We also plan to submit a number of abstracts to ASN, which will be held in October of this year. Stay tuned. Thank you.

Thank you. Chris?

Thank you, and I would want to

I am – I – yes, Chris, if you could please answer the question on China, provide little more color.

Absolutely. So Jason, you asked if the $5 million is a pure demand number? So the answer is no. The $5 million represents ex factory revenues from FibroGen Beijing into the channel. In particular, it represents net revenues, which is, orders minus VAT, which is 13% net or distributors’ discounts, incentives, commissions. So it's really a pure net number into the channel. The difference between the channel inventory, the demand number is the gap. So this is not a demand number. It's a net ex factory number. The second question, Jason, I believe you asked is, whether this represents more DD versus NDD. So, what we have seen so far is very consistent with what Enrique said just now. In the long-term, the NDD market has more patients and we can have a significant impact in that patient population because they are currently either not treated or undertreated. But that is a market we need to build. For DD, it's a substitution market. It's a very well-established standard-of-care and treatment pattern, where either people are converting from standard-of-care to HIF-PHIs or incident patients are starting with HIF-PHIs. We have seen adoption across all the patient types, which is hemodialysis, peritoneal dialysis and very encouragingly, non-dialysis. So, the number you're seeing in terms of revenues is shift in from our factory into the channel based on demand from HD, PD and NDD.

If I…

Great. Thank you.

Yes, if I could just complement a bit. As you know, Jason, I had responsibility for China as well, when I was at Lilly. To be able to have basically a 30 – access to 30% of the overall market opportunity post-NRDL listing, I think, is very significant. So, we – that's a great progress. We used to take companies post-NRDL listing basically years to be able to have meaningful market access opportunity in China. I think that's extremely encouraging. I do want to make sure, there wasn't anything, while the $5 million are just the ex FibroGen sales, net sales, there is nothing unusual when it comes to stocking. The stocking was very normal for the quarter and I would say, as we look at Q2, Q3 and Q4, we do expect a meaningful ramp up.

Great. Thank you.

Thank you. And our next question comes from Adam Walsh with Stifel. Your line is open.

Hi. Thanks for taking my questions. This is Edwin on for Adam. First one, on COVID-19. We know there are published studies showing that COVID-19 patients, even those who have recovered have suffered from lung damage, including fibrosis. So, do you have any plans to explore pamrevlumab or other pipeline assets in these COVID-19 patients? And I have a follow-up, if I may.

Yes. Thank you for your question, Adam. I am going to ask Elias to comment, but just, we are planning to study pamrevlumab in hospitalized patients with COVID-19. And we see two potential applications in the acute setting to improve oxygenation and also in the post-acute setting to ameliorate lung fibrosis. I am going to ask now Elias to make a few more comments or reasons to why we are excited about this additional opportunity to be able to help patients with COVID-19. Elias?

Thank you for your call. So, as Enrique is saying, we are looking at these studies currently and we are discussing these studies with regulators, such as the FDA and other European regulators. We are moving forward with planning for these studies. And the difference is, as we know, there is two stages of the COVID-19, the acute phase, the first 15 days and the residual phase. In the acute phase is, there is a big lack of oxygenation, which is obviously is important part that is leading to a lot of difficulties in treating these patients. Pamrevlumab can have some effect. We have some data that to show, that is – we can affect the leakage at the level of the vessels and it can reduce the edema and might facilitate oxygenation. In the long-term, so, that this patient is showing interstitial lung fibrosis and lung disease, specifically after the Acute Respiratory Distress Syndrome. In IPF, we have shown our good effects on fibrosis, and we believe that this potentially that CTGF is similarly is affecting fibrosis, which we know it is from our radiation-induced lung fibrosis that we can slow down or stop that progression of the fibrosis and we are planning forward to discuss these studies soon and planning to move forward with them.

Great, great. My next one. Earlier this week, a competitor discloses upper bounce of non-inferiority margin of 1.25, which is agreed by the FDA. Should we assume that it is the – you hold you to the same standard or review and approval? Thank you.

Yes. Thank you. I will try to answer this pretty quickly. I think we have stated this before, we feel that the overall cardiovascular data that we basically have on both DD and NDD is quite compelling. And we feel that roxadustat presents an important – it has an important benefit risk ratio. As we stated before, questions about non-inferiority will be a part of a review decision for roxadustat, but we feel very confident in terms of what we have been able to show and the benefit risk profile that the product has. Thank you.

Thank you. And our next question comes from Yaron Werber with Cowen. Your line is open.

Yes. Hi. And thanks for taking my question and congrats on China. I mean, it looks like it's off to a really terrific start. I had a quick question relating to maybe just your thoughts, and I don’t know if you can comment a little bit ahead into the U.S. launch, early next year, in the dialysis setting and specifically, with the benefit of TDAPA. With TDAPA drugs like roxa should once included, have a financial incentive to get used. Earlier, I think it was last week, Amgen noted that Parsabiv has seen a decent uptick in small and sort of medium-sized dialysis clinics, but much – faced much bigger headwind sort of really getting into DaVita and Fresenius. So thoughts about, sort of how would you tackle that to make roxa sort of more attractive for them? And then, I have a quick follow-up as well.

Yes. Thank you. I think – thank you for your question. Clearly, TDAPA offers, I think, an incentive to make sure that innovative products are included as part of the treatment protocol for dialysis centers. And I think it's designed for a product such as roxadustat. Just to maybe speak a little bit about the process, once we receive approval, we will have to submit for – to be reimbursed under this system, this TDAPA system. We expect that within three months, we will be able to get that designation. And clearly, as we think about that, just like we will be preparing for any launches, clearly, in this particular case, the large dialysis organizations are key in terms of their adoption, and you can be reassured that we are, and AstraZeneca is working closely with them to ensure that we can have the very best adoption possible and ensure that innovation is included in the treatment of patients in the dialysis centers and that is included fast. So, I can't speak for other companies. But I feel good about the plans and how we are solidifying those plans now.

Okay. And just another question. At sometimes, Peony, I think maybe you touched upon this, do you have plans to release the data for the prevalent dialysis on its own? I mean you've done really a terrific job showing us the incident dialysis data and overall dialysis and just curious about the prevalent dialysis as it accounted for about 80% of patients in the markets. Thank you.

Yes. I am going to ask Peony to address that question. I assume it is talking about the stable dialysis. Peony, and if – what are our plans when it comes to releasing that particular data?

Yes. As I mentioned, our incident dialysis data also contains prevalent dialysis data in that. Incident was the first four months, that's the entry into the study and patients continue receiving treatment and so they are the prevalent patients. And as I've mentioned earlier that, we have looked at the patients who – the stable dialysis or the prevalent dialysis patients who have been on dialysis for four – more than four months at the time that they enter our Phase III studies and we are very comfortable with the efficacy and the safety data in that subgroup. And that's the results does not change our conclusion or confidence about our products. And there, it is very likely that we will – we may share this data and I wanted to remind ourselves that, that was not necessarily a – that analysis was not a pre-specified analysis. And so, we are still comfortable with it. And the most important, to keep in mind is that the overall data - overall dialysis, which was pre-specified analysis and that we have already disclosed that and reiterate that the 86% of the patients who start dialysis have not had received any ESA treatment for anemia and therefore, incident dialysis where we take those patients within the first four months into the study and we consider that data to be highly relevant. And we believe that we may have the largest incident dialysis patient pool in CKD anemia programs. I am sorry. Enrique, did you want to add something?

Yes. Thank you, Peony. The only thing that I wanted to add, Yaron was, you talked about the incident dialysis being 20% of the market. I think it's – that’s correct for the first year, right? You’re thinking of – but unfortunately, the mortality of patients in dialysis is very high. So, having a product that is differentiated in incident dialysis is, given that it's a natural point for a treatment decision, when it comes to anemia starting dialysis. We found it's particularly important in order to have preference for that treatment. And we believe that roxadustat is uniquely – is going to be uniquely positioned there. Thank you.

Thank you.

Thank you .And our next question comes from Paul Choi with Goldman Sachs. Your line is open.

Thank you. And hi, everyone. I hope you are doing well and thanks for taking our questions. Maybe my first question is for Peony, and with regards to the double-blind portion of the Phase III MDS trial. Can you maybe just comment on – are you seeing – thinking about any potential impacts to time lines, just given that the patients have to be conditioned for their MDS treatment before potentially receiving roxa? And then, I had a follow-up on Europe.

Okay.

Peony, go ahead.

Yes. I wanted to clarify that, unlike another product trial, in terms of trial design, our MDS trial includes patients who are treatment-naive and those who have failed ESA. And then, we are – it also includes patients who are ring sideroblast-positive and ring sideroblast-negative. The trial is a global study and includes study sites and patients in the U.S. and in Europe. I hope that answers. And then, we are now at the double-blind, placebo-controlled portion of the study. And as you alluded to, I just wanted also remind ourselves that, we have a share of very encouraging positive data of the open-label segment of this study at the American Society of Hematology in 2019. Hope that answered the question.

I guess, maybe to put it in a different way, Peony, just given the situation with COVID and the risk to MDS patients who have to go through chemotherapy or conditioning. Do you see any changes to the time line for your Phase III?

Oh, okay. Now I wanted – actually, there is a little impact on our trial – on our Phase III trial for the following reasons, because, now the patients we enroll are already transfusion-dependent. So, they are – they do need to be monitored and treated by their physician or in other words, they are tethered to the healthcare system. And participation in our trial, where we provide an oral medication to reduce the risk of transfusion, it's view, as you can think about this – think about it this way, that it could be favorable, if patients have less – will require less transfusion. That can translate into less exposure risk. Does that make sense?

Yes. That's helpful. Thank you. And then, regarding Europe, as you are approaching the MAA here in the coming – in this quarter and as you look maybe on the forward here and think about commercialization, just with regard to the different European views on using roxa in the two populations. Can you maybe comment on how you expect adoption might go there between yourselves or what your partner might see as you think about the early launch curve there? Thank you very much.

Yes. Clearly, as we have stated, we are expecting a filing in Europe this second quarter. And clearly, as you know, when it comes to Europe, different markets behave differently. This is a good question for Astellas, but we need to keep in mind that in some markets, you can make the product – you can launch the product right away, like in Germany and so forth. In some other markets, you need to go through – be able to get some reimbursement. So there is going to be a market-by-market decision and we look forward to helping as much as we can Astellas that they are really the drivers when it comes to commercialization of course, in Europe.

Okay. Thanks for taking our questions.

Thank you. And our next question comes from Difei Yang with Mizuho. Your line is open.

Hi everyone. Thank you for taking the question. This is Alex on for Difei. I was wondering if you could comment a little bit on the NDD setting in the U.S. Specifically, I was interested in – if you could talk about what is the standard of care there? How are ESAs used today? And what do you think are the benefits of having a placebo comparator in that setting? And then, along with that, I was wondering whether or not you would expect the black box warning on approval? Thank you.

Very good. I am going to try to pass this to Peony. I’ll try to answer the last part of your question. Clearly, I think what we said is that the data, the data that we have, we do not believe wants a black box. But this is a decision for the regulators. I am going to ask Peony to comment on NDD and the standard-of-care. Unfortunately, many patients are not treated for anemia that do have anemia. And so, there is an opportunity for – to improve the treatment rates. But Peony, you can talk about the standard-of-care and maybe provide some color in NDD in the United States. Hello Peony?

Sorry, I just – thanks for reminding me to be unmuted. So, thank you for the question. We do believe that non-dialysis-dependent patients, anemia is largely an unmet medical need and this offers a great opportunity for roxadustat to improve care in this population. What I mean by that is that, because of a cardiovascular safety concern of ESA, their treatment of non-dialysis patients with ESA is limited to keeping hemoglobin less than 10. And in the literature, there is extensive evidence that keeping patients hemoglobin less than 10 is associated with higher transfusion risk. And so, there is well-known that, since the label change in ESA in 2011 that the transfusion rates has gone up in the non-dialysis patients, along with the reduction in the treatment rate of non-dialysis patients. And this is reflected by the USRDS data of only about 13.5% of the patients entering dialysis have been exposed to ESA in the 12 month prior. What does this translate for roxadustat? This is the main reason that we have chosen placebo as the comparator, since no care is the standard-of-care in the U.S. And in our Phase III program, we have demonstrated a significant increase in hemoglobin level compared to placebo and importantly, significantly reduced transfusion to only about a third of the placebo. And now – and our treatment resulted in hemoglobin at around 11 and this is what is our treatment goal. And so, I also wanted to point out that placebo comparator offers as a comparator is a high bar for comparison for cardiovascular safety, because, if one were to choose ESA, that – as an agent, that already has a box warning for cardiovascular safety. But, placebo is the gold standard. With – in comparison to placebo, we have demonstrated that - we have demonstrated cardiovascular safety in the MACE endpoint and MACE+ endpoints.

Very good. Yes.

Finally, finally, our talk does not – in our program, 40% of our patients were not iron repleted, which is a requirement for ESA. So, not only are we able to treat the patients to a more therapeutic level of hemoglobin and reduce transfusion, we are going to be able to expand treatment to more patients, even when they don't have as much iron around. Thank you.

Very good. Thank you, Peony. And I know that we are – we have already extended our time. So, I want to thank everyone for joining our call and for all of your support of FibroGen. Thank you. Thank you very much.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. And you may now disconnect. Everyone, have a great day.