Churchill Capital Corp XI

Good afternoon and welcome to the Chemocentric's third quarter 2021 financial results conference call. At this time, all participants are in a listen-only mode. Later on, we will conduct a question and answer session. As a reminder, this conference call will be recorded. I'll now turn the call over to Lee Roth of Burns MacLellan. Mr. Roth, please go ahead.

Thanks, Jesse. Good afternoon and welcome to the Chemocentrics third quarter 2021 financial results conference call. Earlier this afternoon, the company issued a press release providing an overview of its financial results for the quarter ended September 30th, 2021. 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 the company's website at chemocentrics.com. Joining us on the call today is Dr. Thomas Schall, 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 of ChemoCentrics, will provide an overview of the company's financial highlights for the quarter before turning the call back to Tom for closing remarks. During today's call, we'll be making certain forward-looking statements. As explained on slide two, 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 It may cause our 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 1st, 2021, and our quarterly report on Form 10-Q for the quarter ended September 30th, 2021. We were cautioned not to place any undue 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 this live broadcast, November 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 call. With that said, it's my pleasure to turn the call over to Tom Schall. Tom?

Thank you, Lee, and good afternoon to everyone listening. Thank you for joining us on our third quarter 2021 conference call. Please, let's move to slide three in our presentation. I have talked in the past of our corporate journey as a voyage into uncharted waters, full of uncertainty, sometimes tempestuous storms, and occasionally pushed by fair, strong winds of progress. Now, for the first time in our history, we have arrived at the shore of a new world, a new era for the company, and I believe for the patients whom we've always have aimed to serve. Following FDA approval in Anka vasculitis on October 7th, our innovative medicine Tavneos, the brand name for Avocopan, our small molecule selective inhibitor of the complement C5A receptor is now available across the United States. In retrospect, the Tavneos Odyssey seems hard to imagine. From concepts to compound to clinical development, commercial launch over the past 16 long years. But the voyage was worth it. Tavneos is the first FDA approval in ankylobasculitis in a decade. And with the approval of Tavneos, we achieve our vision of helping to improve patients' lives and becoming an integrated biopharmaceutical company with discovery development, and U.S. commercial capabilities. A remarkable journey indeed. Today, I will share a little bit more about the launch of Tavneos, which I and others hope may represent part of a new era for ankylovasculitis patients. We also aspire to make last month's FDA approval just the beginning of more contributions that Tavneos may make to patients with rare diseases and who have currently inadequate treatment options. I'll update you today on what comes next, where we stand with some of our development programs. And it bears repeating that all of this is based on our unique proprietary discovery platform, capitalizing on our core scientific expertise in targeting specific chemoattractant receptors to block inflammatory responses that lie at the heart of so many diseases and recently also applied to the activation of the immune system in cancer therapy using a true orally active small molecule inhibitor of the major immune checkpoint pathway. Let's begin by turning to slide four where you will see the indication very recently approved by the FDA. Stamniosis indicated as an adjunctive treatment for adult patients with severe active antineutrophil cytoplasmic autoantibody-associated vasculitis, also known as ankylovasculitis or ankyloassociated vasculitis, specifically granulomatosis with polyangiitis or GPA and microscopic polyangiitis or MPA, the two main forms of ankylovasculitis. It is given in combination with other standard therapies, and dosed at 30 mgs, 3 10-mg capsules twice daily with food. This is a strong label, and we are pleased with it. As you can see from slide 5, we estimate that in the United States, approximately 9,500 patients squarely fit the profile outlined in the label, these patients being quite similar to the advocate clinical trial population. Observers have also noted that with Tavneos, there is no so-called infusion confusion. Patients simply take their pills with food. Following approval on October 7th, our commercial and medical affairs teams sprang into action and executed on their many careful preparations, finalizing package inserts, training and certifying the field force, and so on. We received the FDA approval on a Thursday took approximately one week to get everything in place, and then launched on Monday, October 18th. And while we are gazing to the stars in our aspirations and our expectations for what we believe can be a blockbuster drug in this indication of ankylovasculitis alone, we also have our feet firmly on the ground as we look upward and forward. We all know that too many launches during this pandemic have not quite lived up to their expectations. COVID has complicated many plans for launches across the industry. To add to the complexity in the case of Tavneos is the fact that it is a specialty medication. So, turning to slide six, we are not naive as to the facts. We are launching into a world in which there is considerable uncertainty and in which face-to-face interactions, whether they take place between patients and their clinicians or between our field force and physicians, are constrained by a pandemic. Against this pandemic-generated new world disorder, we have endeavored to arm ourselves with a comprehensive plan and the right tools to execute on that plan. We are emphasizing quality in everything associated with our commercial execution, knowing that a firm foundation is essential to build the structure that brings this new medicine to as many appropriate ankylovasculitis patients and as quickly as we possibly can. You can see three major channels of action as we deploy what is now a fully trained field force with deep experience in nephrology in rheumatology, and in rare diseases. Our field sales force is now educating and detailing physicians following their unbranded disease education interactions and appropriate scientific exchanges that our medical science liaisons had with their clinicians. Our field force, including the MSLs, will focus on approximately 3,400 physicians comprising key opinion leaders, top prescribers, and community specialists who are responsible for roughly 80% of all prescriptions in ANCA-associated vasculitis. In the middle box on slide six, Tabneos Connect is a tool custom-built by us to focus on helping the appropriate patients receive Tabneos with as little effort and as little consternation as possible as we provide practical and, if necessary, financial or to help patients initiate their treatment with Tavneos. We know that it takes one or two months to go through the prior authorization process when a new medication is now covered by medical policy. Tavneos Connect allows us to partner with patients as they work with payers to obtain the necessary approval. We will also work with payers on patient access with the goal of securing appropriate coverage of Tavneos in their medical policies. Following the pre-approval clinical information exchanges that our national account team held with payers, which created a lot of interest, we are now engaged in post-approval clinical presentations and supporting information with the goal of securing appropriate coverage in medical policies. To be clear, our rollout in the early quarters will be focused on patient access. It is obviously far too soon after launch to provide much detail on how it is going. You can expect more on our Q4 call. But so far, we are pleased with the rollout of our plan, the functioning of our customized tools, and the interactions to date across the key stakeholders. Turning to slide seven. The most meaningful way to measure our progress for these first few quarters is not the revenue line, but instead by tracking three key metrics. One, patient start forms, which for a specialty drug is a lead metric that we will use as a proxy for prescriptions. Two, patients on drug. This lags patient start forms because of the time it takes before payers set their medical policies and load them onto their IT system. And finally, three, we'll be watching the conversion rate from patient start forms to patients on drug. In short, again, our initial focus will be firmly on patient access. From this, in our view, eventually all other metrics will follow. Kavneos was also approved in Japan at the end of the third quarter. triggering a milestone payment of $20 million to us from our partner, VIFOR Pharma. VIFOR will also pay us royalties in the teens to the mid-20s percent on potential ex-U.S. sales off one aggregate net sales line. Slide 8 shows the next steps for Tavneos. In Europe, the Committee for Medicinal Products for Human Use, the so-called CHMP, is meeting over the next few days. We expect the CHMP at this meeting to make a recommendation, i.e., render an opinion to the European Union as to whether Tavneos is suitable for use in ANCA-associated vasculitis. The EU, in turn, makes the official decision on the marketing authorization application based on that CHMP opinion. We expect the official EU action in January. So where do we go from here? Now that we have received approval for tabneos in ache of vasculitis, we are refocusing our attention on other indications. As you can see, we are hoping to turn tabneos into a pipeline and a drug with a further three indications in or about to enter clinical development. For example, in the debilitating skin disease, hydranitis superativa, or HS, please see slide 9, we plan to discuss with the FDA a pivotal phase 3 trial of Tobneus in patients with severe HS, the so-called early stage 3 of the disease. As you may recall, the dosage and that patient population were defined in our phase 2 Aurora trial in hydranitis superativa. We currently envision three to 400 patients for the next trial across two arms using the hydranitis superativa clinical response score or high score as the primary endpoint at 12 weeks with an open-label follow-up period. Pending regulatory input, we hope to launch this trial in the first part of 2022. With an estimated 30 to 50,000 patients in the U.S., early stage III disease could become another blockbuster indication for tabneos, and we have filed for orphan drug designation. Turning to slide 10, we also plan to meet with the FDA to discuss the data from our accolade phase 2 clinical trial of tabneos in the very rare kidney disease of C3 glomerulopathy. We note there are no FDA-approved therapies for this year's rare yet devastating kidney disease. The Accolade trial is a randomized control blinded trial testing tap neosis effects on kidney health in C3G using readouts including histology, that is, renal biopsy, and traditional biomarkers. Although the trial did not meet its primary endpoint in terms of a change in the C3G histologic index of disease activity, a measure of acute glomerular inflammation at six months, there was a significant improvement in the pre-specified secondary endpoint of the C3G histologic index of disease chronicity, which is a measure of kidney fibrosis or scarring. As you can see from this graphic, not only did patients on tabios have less fibrotic progression than the placebo group, during the first six months or 26 weeks of the trial, but also patients on placebo who had greater fibrosis during that first six months, when they crossed over to top nails during the second six months of the trial, reversed the scarring trend and showed a significant slowing of fibrosis as indicated by the biopsies taken at week 52. An e-poster was accepted on these data as a late-breaking entry at the American Society of Nephrology's annual kidney week, which just took place last week. Furthermore, as you can see from slide 11, Tavneos treatment in C3G led to an improvement in kidney function as assessed by biomarkers, including a reduction in proteinuria and, perhaps most importantly, an improvement in estimated glomerular filtration rate, or EGFR, as opposed to a deterioration in these markers in patients in the control arm. We note again that a similar result in EGFR improvement was observed in the advocate trial of dominoes in ache of vasculitis. And EGFR is widely regarded by nephrologists as a comprehensive way to measure overall kidney function. I'll note here, too, that EGFR has important implications in terms of the third potential indication for tabneus, lupus nephritis, or LN, a disease in which uncontrolled complement activation has been implicated in kidney destruction. Overall, we and others believe that kidney improvements seen in both ankylovasculitis and C3 glomerulopathy may bode well for our plans with tabneus in LN. To this point, at the ASN's kidney week last week, an abstract was presented with the following conclusion, quoting, C5A activation-induced macrophage secretion of factors that are known to drive inflammation, fibroblast activation, and tissue fibrosis may contribute to LN disease progression, inhibiting C5A receptor activity with avocopan, now tabneos, blocks these pathological changes and may provide therapeutic benefit to LN patients, ending quote. In brief, as I mentioned, uncontrolled complement activation has been implicated in the profound kidney destruction in LN, and the disease is poorly controlled with broad immunosuppression. So the targeted novel anti-inflammatory mechanism of tabneosis could prove to be an important differentiator in therapy for lupus nephritis. Our timing for launching clinical development is now the first half of this coming year, 2022, and we plan a two-step process, first to demonstrate the early effects of Avacopan-Tavneos in a focused patient group, and then expanding to a population of the scope, size, and length to provide a definitive finding regarding Tavneos' potential in this underserved indication. With an estimated prevalence of 65 to 100,000 patients in the United States, lupus nephritis is yet another orphan disease target for topneos. Moving beyond the topneos pipeline in a drug program, let me remind you of other important assets in our pipeline. Today I'll update you on just one, our small molecule immune checkpoint inhibitor CCX559, which is referred to on slide 12. In Q3, we launched first in human studies of our potent PD-L1, PD-1 pathway inhibitor, CCX559, following promising preclinical anti-tumor efficacy data using this molecule, and as reported at the meeting of the American Association for Cancer Research earlier this year. We initiated the design outlined on slide 13 and have already moved now through several dosing levels in cancer patients. We can confirm that the drug does get absorbed at levels that are approximately just proportional and that has been well tolerated to date as summarized on slide 14. We are very pleased with the progress of CCX559 to date. which we believe to be the best-in-class, orally-administered PD-L1, PD-1 pathway inhibitor, and by some appreciable measure as that. We look forward to report more full data at upcoming oncology meetings and on these quarterly calls. Before turning the call over to Susan, let me summarize in three points. One, COVNIOS has been launched. and launched in the middle of a pandemic. Revenue will be a somewhat trailing indicator. We should focus on patient access and engagement in the first year or so of launch. But the long-term potential we see is we're a blockbuster in this indication of ANCA-associated vasculitis alone. Two, we have moved forward on three additional indications for tibias. Two of these, Hydronitis superativa and lupus nephritis will involve clinical trials. On the third, C3 glomerulopathy, we plan to meet with the FDA to discuss the clinical data today and the potential pathway to registration in this ultra-rare disease. Three, we have launched a phase one trial of our first small molecule checkpoint inhibitor and progress is proceeding well to date. And as you will hear in a moment, financial situation is healthy. Susan.