Churchill Capital Corp XI

Good afternoon and welcome to the Chemo Centrics Second Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. As a reminder, this conference call will be recorded. I would now like to turn the call over to Lee Roth of Burns McLean. Mr. Roth, please go ahead. Thank you, Paul.

Good afternoon, and welcome to the Chemocentric second quarter 2021 financial results conference call. Earlier today, the company issued a press release providing an overview of its financial results for the quarter ended June 30th, 2021. And a copy of this release, along with a few slides that you may find helpful while you listen to the call, are available on the investor relations section of our website at www.chemocentrics.com. Joining us on the call today is Dr. Thomas Shaw, President and Chief Executive Officer of Chemocentrics, who will review the company's recent business and clinical progress. Following his comments, Susan Kanaya, Executive Vice President, Chief Financial and Administrative Officer, will provide an overview of the company's financial highlights for the quarter before turning the call back over to Tom for closing remarks. Tasif Tashbat, Executive Vice President and Chief Operating Officer, will then join Tom and Susan for Q&A sessions. During today's call, we'll be making certain forward-looking statements. As explained on slide two of the presentation, these forward-looking statements are based on current information, assumptions, and expectations that are subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These risks are described in the company's filings made with the Securities and Exchange Commission, including our annual report on Form 10-K filed on March 1, 2021. Your cautions not to place under reliance on these forward-looking statements, and ChemoCentrics disclaims any obligation to update such statements. In addition, this call contains time-sensitive information accurate only as of the date of the live broadcast, August 9th, 2021. ChemoCentrics undertakes no obligation to revise or otherwise update any forward-looking statements to reflect events or circumstances after the date of this live conference call. With that, it's now my pleasure to turn the call over to Thomas Shaw.

Thank you, Lee, and good afternoon to everyone listening. Thank you for joining us on our second quarter 2021 conference call. Please move to slide three in our presentation. Many years ago, we at Chemocentrics embarked on a voyage of discovery and development with our lead candidate, Evacopan, in the treatment of ANCA-associated vasculitis in order to see if we might improve the lives of patients with that rare but often organ-threatening or even life-threatening disease. Our science, which was and is unlike that of any other sponsor, showed that the C5A receptor inhibition might constitute an entirely new mode of therapeutic action in the treatment of that disease. This mode of action was a specific way of arresting complement-driven inflammatory cells that are at the very core of tissue and organ destruction in E. covasculitis. This mode of action is a highly targeted approach, which was and is attempted for the first time in this disease, and quite unlike the broadly immunosuppressive regimens that have been used for nearly 50 years and are still in use today. Urged on by ANCA experts, and importantly to ANCA patients, we applied ourselves to try to bring something new and useful to the treatment paradigm in ANCA disease. As most of you know, we progressed Avacopan through two phase two trials and then a pivotal phase three trial. That phase three trial advocate represents the largest and longest randomized clinical trial ever conducted for a new molecular entity in this relatively rare but often deadly disease. The results of our advocate trial we believe were positive across many therapeutic metrics, And those results, after careful review by peers and data analysts, were published in the New England Journal of Medicine. One week after I reported to you on our first quarter results, an FDA Arthritis Advisory Committee on May 6th was held and was essentially deadlocked on the key questions posed by the FDA on Avacopan for use in ANCA therapy. While disappointed by that discussion, We took to heart the stated idea that we had not yet clearly enough explained the findings and their significance to the agency and to the community at large. We wished to make clearer that Avacopan could potentially be an additional therapeutic tool to place in the hands of patients and their physicians whose current treatment armamentarium is quite limited in the fight against ankylovasculitis. Discussion at the advisory committee meeting also illustrated certain dilemmas facing all of us when medical innovation may offer a new hope in an orphan disease. A, how do you test a new drug and how do you assess results in an area of major unmet need when the scarcity of patients limits the realistic size of a trial? And B, how to conduct such a trial given that pragmatically It also needs to reflect the practice of real-world medicine if anyone is hoped to enroll in it. We as sponsors and innovators in the orphan disease space struggle with these questions all the time, as do our colleagues in regulatory agencies. Because, to be clear, in a clinical trial in an orphan disease, available patients are not only rare by definition, but they realistically and ethically expect and must have access to currently available standard care practices, while still the trial must rigorously test the key variables of what the new drug can achieve. Such conundrum must be solved if we are to offer patients new benefits of additional efficacy, better safety, or a combination of both. Every patient able to enroll in an orphan disease trial counts fundamentally. And since enrollable patients are limited in number, all the data one can glean from each and every one of those patients must be carefully harvested and considered. This can sometimes make for complicated trials. But the luxuries of non-orphan disease trials, for example, the feasibility of doing larger studies and additional trials, are typically simply not available in rare disease. Such were the dilemmas, and such was the nature of the discussion underlying the advocate trial, discussions that we had with experts, with regulators, and with patients before we launched the trial. These discussions were productive and, to us, represented a victory of collaborative thought. After the May Advisory Committee meeting, we engaged in a dialogue with the FDA learn what additional information from the Advocate Trial would be useful to them in reaching their decision, and to share relevant Avocopan data from other disease areas. The agency was helpful and clear in their information requests, and we endeavored to provide additional necessary data and analyses in order to attempt to chart a clearer understanding and path. On July 6, we announced that the additional information that we provided to the agency was deemed by the FDA to be a major amendment to the NDA for Evacopan and Echovasculitis. We commend the agency for that judgment and fully support the extension of the PDUFA target date to October 7th. There is much important information to be digested and all parties wish to reach correct conclusions. We stand ready to work productively with the agency during this review time and beyond. Looking beyond that time, should a license be granted on October 7th, we will be ready for a potential U.S. launch. We have established a network of specialty pharmacies and distributors. We have been training our product representative professionals and determining the location and characteristics of the highest need demographics. We have been talking with patient organizations and conducting disease education programs. We have engaged with payers in allowable interactions of information exchange with the goal of building a strong patient access program to support patients and clinicians in the early months before formulary decisions are made. So again, should the FDA decide positively on the value of Ibacopan in this disease area, we will be ready as we have made considerable investments in being prepared to bring the drug to patients. These investments represent not only that considerable type of time, people, and money over the last couple of years, but an investment in fundamental innovation which goes back nearly 20 years. All of this has been done in the firm belief that we might improve lives and even save lives. We stand by that conviction. Outside of the U.S., we expect regulatory decisions on Avacopan and Incubasculitis later this year from the European Medicines Agency, as well as Japan's Pharmaceuticals and Medical Devices Agency. Our partner, B4 Pharma, is making similar preparation for commercial launches in Europe and Japan. Should Avacopan be approved in the territory's license for commercial distribution to buy for and its sublicenses? VIFOR will remit to us royalties in teens to mid-20s percent on potential net sales off one aggregate net sales line. Turning to slide four, we are well underway in our strategic aim to make Avacopan a pipeline in a drug. With phase two data supporting its potential in C3 glomerulopathy and in the debilitating and disfiguring skin disease, hydranitis suprativa, or H.S. For us, the conviction that abacopan can help patients who have major unmet need stems from our understanding of the detailed advocate data and the fact that such data seem interconnected with observations in other diseases. Increasingly, we find evidence for a pathology-driving role of the C5A receptor in other debilitating disorders. These are disorders where we believe that abacopan's novel, precise, targeted mechanism of action could add to the current care providing additional options for physicians and patients. For example, in HS, Hydronitis Suprativa, we previously reported top-line results from our Phase II Aurora trial, with a subgroup analysis showing that in the most severe form of HS, the pre-specified Hurley Stage III patients, for whom almost no effective therapies existed, Avocopan demonstrated a statistically higher response than placebo after 12 weeks of therapy, which is guiding our further clinical development. Increasingly, our work at Chemocentrics provides a strong mechanistic rationale for the therapeutic effect of Avocopan in early stage 3, and thus the underpinning of our phase 3 trial approach. While it is well known that extensive subdermal tunnels are a signature feature of early three versus the more moderate early two-stage disease, work here at Chemocentrics, having now examined many HS patient biopsy sections, suggest that even where tunnels exist in the less severe form of early stage two disease, the very architecture and the immune activation status of these structures is different. With C5A and C5A receptor, seeming to play a larger role in the Hurley 3 disease. We hope to present our continued work on the C5A receptor expression in Hurley stage 3 patients at the upcoming American Association of Dermatology meeting and other dermatological symposia this year. As referred to in slide 5, the Aurora phase 2 trial identified A, an effective dose, B, the patient population that we should target in a phase 3 trial, and C, that we could do so with good safety based on the evidence today. We aim to discuss with the FDA our plans for a pivotal phase 3 trial of Avocopan in patients with severe HS. Our current thinking is that this will involve approximately 300 to 400 patients across two arms using the hydronitis superativa clinical response score, or ISCOR, as the primary endpoint at 12 weeks with an open-label follow-up period. With an estimated 30,000 to 50,000 patients in the United States with early stage III disease, this represents another highly significant indication for Evacopan, and we continue to pursue orphan drug designation for early stage III HS patients. We noted also a connection between kidney benefits seen in the ADVOCAT trial of ankylobasculitis with the Accolade clinical trial of Avacopan for the treatment of C3 glomerulopathy, or C3G. Both trials showed improvement in kidney function as measured by estimated glomerular filtration rate, or EGFR. Slide 6 reviews the results from Accolade, showing how Avacopan treatment in C3G led to an improvement in the estimated glomerular filtration rate, as opposed to deterioration in patients in the control arm. EGFR is what most nephrologists would consider to be the gold standard for measuring kidney function. And we find it encouraging that Evaclopan treatment produced these results in two different renal diseases. Another interesting finding from the ECHO-LATE trial is the change in kidney fibrosis progression seen in patients in the placebo arm after they crossed over to Evaclopan therapy. The C3G histologic index disease chronicity score went up during the first 26 weeks for patients on placebo, evidence of the progression of kidney fibrosis, and then came down when those patients were switched to Evacopan in the second 26 weeks, as shown on slide 7. We are planning to meet with the FDA later this year to discuss evidence of clinical benefit from Echolay. The kidney improvement effects seen in both ankylobasculitis and C3G may bode well for our future plans with Avocopan and lupus nephritis, or LN. Uncontrolled complement activation has been implicated in kidney destruction in LN, and the disease is poorly controlled with broad immunosuppression. So here again, the precisely targeted, novel, potently anti-inflammatory mechanism of action of Avocopan may prove to be an important differentiator in therapy for LN. Our timing for launching clinical development is now the first half of next year, 2022, and we plan to develop in a two-step process, first to demonstrate the early effects of Avacopan in a focused patient group, and then expanding to a population of the scope, size, and length to provide a definitive finding regarding Avocopan's potential in this underserved indication. With an estimated prevalence of 65 to 100,000 patients in the U.S., lupus nephritis is yet another orphan disease target for Avocopan. So, our ambitious plans comprising the pipeline and a drug strategy for Avocopan remain entirely undiminished. It is fair to say also that because of our focus on the ANCA vasculitis NDA, however, execution overall in the other non-ANCA Evacopan indications is taking a little longer than we had originally planned, as we await further clarity on October 7th. As important as Evacopan is to our efforts to improve patients' lives with orphan and rare disease, There are also other novel therapies in the chemocentrics pipeline of which we are justifiably proud. Please see slide eight as we touch briefly on our novel orally administered small molecule checkpoint inhibitor for the treatment of cancer. CCX559 is a novel orally administered PD-1, PD-L1 interaction inhibitor. As referred to on slide nine, we launched our phase one clinical trial of CCX559 with site activations shortly before the end of Q2. We are now pleased to report that we have dosed a cancer patient in this trial, and we are already accumulating early data on such things as pharmacokinetics. We remind you of the promising preclinical data, including in vivo tumor data reported at the American Association for Cancer Research earlier this year, where tumor shrinking and tumor remission with CCX559 was clearly evident in our model systems. CCX559, we believe, based on our in-house work, is differentiated from the very few other small molecule PD-1, PD-L1 inhibitor programs by having better drug-like properties. Direct comparisons suggest CCX559 is more potent, and has significantly better in vivo coverage, potentially leading to cumulative advantages, which may be of an order of magnitude better or more than other candidates. We look forward to the results from this study and we will keep the community posted as to our progress. I will now turn the call over to Susan to outline our financial position.