FibroGen, Inc

to FibroGen's third quarter 2023 earnings call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand has been raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. It is now my pleasure to introduce Vice President of Investor Relations, David DeLucia.

Good afternoon, everyone. Thank you for joining today to discuss our third quarter 2023 financial and business results. I'm David DeLucia, Vice President of Corporate FP&A and Investor Relations at FiberGem. Joining me on today's call are Thayne Wedick, our Chief Executive Officer, Juan Graham, our Chief Financial Officer, Dr. John Hunter, our Chief Scientific Officer, and Chris Chung, our Senior Vice President of China Operations. Following our prepared remarks, we will open the call to your questions. I would like to remind you that remarks made on today's call include forward-looking statements about FibroGem. Such statements may include, but are not limited to, 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. Each forward-looking statement is subject to risks and uncertainties that could cause actual results and events to differ materially from those projected in that statement. A more complete description of these and other material risks can be found in FibroGen's filings with the SEC, including our most recent Form 10-K, and Form 10-Q. Fibrogen does not undertake any obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. The press release reporting our financial results and business update and a webcast of today's conference call can be found on the investor section of Fibrogen's website at www.fibrogen.com. With that, I would like to turn the call over to Thayne Wettick.

Thanks, Dave, and good afternoon, everyone. Welcome to our third quarter 2023 earnings call. I would like to begin today's call by acknowledging that November is global pancreatic cancer awareness month, a time when we reflect on the importance of raising awareness about pancreatic cancer and the need for continued research, support, and more effective therapies for this devastating disease. On today's call, I will focus our stakeholders on the four strategic pillars that will guide the company into the future. as well as provide an update on our Pamrevimab and Roxidustat assets. Dr. John Hunter, our chief scientific officer, will then review our exciting early stage oncology pipeline. Last, Juan Graham, our CFO, will review the financials, after which we will open the call for your questions. Starting on slide three, FibroGen has four key strategic pillars that we believe offer significant value today. First is Pamrevelmab with upcoming pivotal trial readouts for two pancreatic cancer indications through the first half of 2024. One readout in locally advanced disease and the other in metastatic disease. Pancreatic cancer represents a significant commercial opportunity with substantial unmet need, and Pamrevelmab has demonstrated effect in both preclinical and early clinical studies, which we will detail in a moment. Second is Roxidustat. Roxidustat is approved in over 40 countries around the world. generates significant net revenue and provides fibrogen with material and growing economics through our partnerships with AstraZeneca and Astellas Pharma. Third is our early stage oncology pipeline. We are very excited about the potential of these programs. FG3246 is a first in class potent antibody drug conjugate or ADC for the treatment of metastatic castration resistant prostate cancer. This opportunity also includes the development of an associated pet biomarker diagnostic. In addition to FG3246, we are also undertaking IND enabling activities on two innovative oncology antibodies with the intention of filing INDs and commencing clinical activities in 2024. Fourth is our strong cash position. In the third quarter, we successfully executed on implementation of our company-wide cost reduction plan. now resulting in an expected reduction of total annualized expenses of $120 million, which provides the company a bridge to achieve a number of key milestones across our portfolio. We have taken necessary steps to improve our financial position and will continue to focus on financial discipline. In summary, we believe there are few biotechnology companies of our market cap that have such a compelling mix of commercial, late stage, and early stage assets. When you combine our assets, our strong balance sheet, and the quality of our talented colleagues at Fibrogen, we believe that we have a strong foundation to drive significant shareholder value creation today and into the future. Moving to slide five, Pamrevimab is a novel anti-CTGF human monoclonal antibody in clinical development for the treatment of locally advanced unresectable pancreatic cancer, or LAPC, and metastatic pancreatic cancer. Pamrevimab has been studied in over 1,000 patients across various conditions, has demonstrated dose and exposure-related responses in an early-stage pancreatic cancer trial, as well as a favorable adverse event and safety profile. On slide six, and before we dive into the pancreatic cancer data and opportunity, I would like to provide a recap of recently announced Pamrevimab results. In August, we reported top-line data from our Phase III Lelantos II study. a placebo-controlled trial of Pamrelvomab for the treatment of ambulatory patients with DMD on background corticosteroids. The study did not meet the primary endpoint of change in the North Star Ambulatory Assessment total score from baseline to week 52. FibroGym would like to thank the patients, caregivers, and clinical trial investigators for their dedication to participating in this important study, which contributes toward the understanding of this devastating disease. Looking ahead, We anticipate upcoming results from two Pamrelvomab trials in pancreatic cancer. We expect results from the LAPAS phase three study in locally advanced disease in the first quarter of 2024, and we expect results from the Pancreatic Cancer Action Network's Precision Promise Registrational Adaptive Platform Trial, evaluating Pamrelvomab in both first-line and second-line metastatic pancreatic cancer in the first half of 2024. I would now like to discuss the Pamrevimab opportunity in pancreatic cancer in more detail starting on slide eight. Pancreatic cancer represents one of the largest unmet needs in oncology with an annual incidence of nearly half a million patients across the major regions combined. This includes approximately 60,000 PDEC patients in the United States. There is an overall five-year disease-free survival rate of only 12.5%. and for metastatic cancer, rates are as low as 3%. On slide 9, we provide an overview as to why we believe Pamrevimab can provide benefits to patients diagnosed with pancreatic cancer. Based on preclinical data, CTGF plays an important role in the growth and progression of pancreatic tumors. Mouse tumor studies have shown that Pamrevimab can have both direct antitumor effects and effects on the surrounding stroma. providing a strong clinical rationale for use in both locally advanced and metastatic pancreatic cancer. Given the upcoming Phase III readouts, we would like to remind investors of what we believe are compelling preclinical and early clinical data that informed our decision to move Pamrevomab forward in pancreatic cancer. On slide 10, Pamrevomab in combination with gemcitabine in a KPC mouse model slowed tumor growth, decreased metastatic burden, inhibited formation of acetates or buildup of fluid in the abdomen, and substantially improved survival. On slide 11, the same mouse model also provided a mechanistic rationale for Pamrevlumab's beneficial effect on animal survival. Pamrevlumab as a monotherapy and in combination with gemcitabine made tumor cells more susceptible to chemotherapy-induced cell death or apoptosis through quantitative reduction in XIAP a protein involved in apoptotic resistance and promotion of cell survival. Moving to slide 12, we would like to reference the data from our open-label dose escalation phase 1-2 trial in patients with locally advanced stage 3 or metastatic stage 4 pancreatic cancer. Most of these 75 patients were, in fact, metastatic, and only 9 had locally advanced disease. Pamivirumab was evaluated in combination with gemcitabine, and erlotinib as first-line therapy. An important observation in the study was that clinical benefit was observed at higher drug exposure levels. Once drug plasma levels reached a trop threshold of 150 micrograms per mL, a number of important results were found. The most notable result in this study was that one-year survival was 37% for patients who had circulating comrevimab levels of 150 micrograms per mL or higher versus 11% for those with lower plasma levels. These results in the higher dose cohort patients with plasma drug levels above the 150 micrograms per mL threshold included improved median overall survival and improved median progression-free survival. Moving to slide 13, pivotal trials are being conducted with Pamrelvimab in both locally advanced and metastatic patients. These patients represent almost 90% of all diagnosed pancreatic cancer patients today, giving Pamrevelmab a potential opportunity to treat a vast majority of patients across this devastating disease. On slide 14, we provide an overview of the global Phase III LAPIS trial, a double-blind, placebo-controlled trial in 284 patients with locally advanced unresectable pancreatic cancer, comparing Pamrevelmab to placebo in combination with standard-of-care chemotherapy. The primary endpoint is overall survival, and we expect top-line data from this study in the first quarter of next year. On slide 15 is an overview of the Pancreatic Cancer Action Network's PRECISION PROMISE trial. This is a Phase 2-3 registrational study that is being executed at the top pancreatic centers in the United States. Like the LAPAS trial in locally advanced disease, the primary endpoint of the PRECISION PROMISE trial is overall survival. Pamrevelmab is being evaluated in both first and second line therapy for metastatic disease and was the first experimental treatment arm in the Precision Promise platform trial to be evaluated in the first line metastatic setting. Moving to slide 16, we show a snapshot of both Pamrevelmab registration of phase three studies. One important difference between the two studies is the dosing regimen of the Precision Promise study. Pamrevomab is dosed in 28-day treatment cycles until progression or discontinuation, which is distinct from lapis in which Pamrevomab was delivered in a neoadjuvant setting and where it was dosed for up to six months. We believe the ability to dose patients until disease progression in the metastatic setting provides a potential opportunity to amplify clinically meaningful increases in overall survival driven by those patients benefiting from Pamrevomab treatment. On slide 17, we reviewed the U.S. commercial opportunity for Pemrevilmab in pancreatic cancer. There have been limited treatment advances over the last two decades in both locally advanced and metastatic diseases with immuno-oncology therapies providing benefit to a small subset of metastatic patients. Using straightforward assumptions, the total addressable market for pancreatic cancer in the U.S. is a multi-billion dollar commercial opportunity for Pemrevilmab if it can demonstrate a significant improvement in overall survival in either locally advanced or metastatic patients. In fact, metastatic pancreatic cancer alone represents a larger market opportunity in the U.S. for pamrevilumab than we were forecasting for IPF. Moving on to roxidustat on slide 19, I would like to provide a recap of recently announced roxidustat results, as well as review our upcoming milestones. In May, we announced positive topline data from our Phase III clinical study of Roxadustat for the treatment of anemia in patients receiving concurrent chemotherapy treatment for non-myeloid malignancies in China. Roxadustat demonstrated non-inferiority compared to recombinant erythropoietin alpha on the primary endpoint of change in hemoglobin level from baseline to the average level during weeks 9 through 12. These data were recently presented in an oral presentation at the ESMO Congress 2023 in Madrid on October 21st. I'm excited to announce that in July, our supplemental new drug application or SNDA for roxidustat in patients with chemotherapy induced anemia has been accepted by the China Health Authority, and we continue to expect an approval decision in mid 2024. Upon approval, FibroGen will receive a milestone payment from AstraZeneca. We believe this indication could represent a meaningful incremental net revenue opportunity on top of the anemia of CKD indication. Moving now to slide 20, Roxidustat for anemia of chronic kidney disease continues to perform extremely well in China. Third quarter total Roxidustat net sales in China by Fibrogen and the distribution entity jointly owned by Fibrogen and AstraZeneca was $77.1 million compared to $59 million in the third quarter of 2022, an increase of 31%. This growth was driven by an increase in volume of 37%. Fibrogen's portion of Roxadustat net product revenue in China was $29.4 million for the third quarter on a U.S. GAAP basis, compared to $17.4 million in the third quarter of 2022, an increase of 69%. Moving to slide 21, Roxadustat continues to expand its category leadership and brand value share in China, rising to 42% in the most recent three-month period ending in August of 2023. The potential addition of the chemotherapy-induced anemia indication would create an additional catalyst to both continued share and volume growth of Roxidustat in China. Given that there have been several generic applications filed in China, I would like to briefly touch on the generic market more broadly in China and the exclusivity of Roxidustat. The impact of a generic approval and launch in China is meaningfully different than in the U.S. market. generic players face lead time and execution risk of market adoption after approval, as they need to be admitted into individual hospital formularies one at a time. Originator products do not experience a meaningful deterioration in business until at least four or more generic products are approved. Even then, originator products in China have historically been able to maintain a stream of net revenues and profits after generics enter the market. Our composition of matter Patents expire in June of 2024, and we do not expect meaningful deterioration of the ROXADUSTAT business in the near term. In addition to the continued outstanding performance of ROXADUSTAT in China, the ROXADUSTAT launch in Europe is accelerating, showing robust quarter-over-quarter growth. We expect this growth to continue to accelerate given the strong competitive position of ROXADUSTAT. ROXADUSTAT is the only HIF-PHI indicated in the EU for the treatment of anemia of CKD in both non-dialysis and dialysis patients, and with GSK's decision to withdraw the MAA for Depra-Dustat, combined with market exclusivity for Roxidustat beyond 2030, Roxidustat is well-positioned to continue its growth and market leadership throughout this decade. I will now hand it off to John Hunter, our CSO, to cover our early stage pipeline. John?

Thank you, Thayne. Moving to slide 23, we have a snapshot of our early stage oncology pipeline programs that are currently in the clinic or at later stages of non-clinical development. On slide 24 is an overview of the exclusive license deal that we entered into with Fortis in Q2 of this year for 446, now called FG3246. FG3246 is a potential first-in-class antibody drug conjugate, or ADC, for metastatic castration-resistant prostate cancer, colorectal cancer, and other tumor types. FG3246 binds to a cell receptor target that internalizes upon antibody binding and is present at high levels in prostate cancer and other tumor types, but that demonstrates very limited expression in most normal tissues. making it an ideal ADC target candidate. Moving to slide 25, FG3246 is comprised of an anti-CD46 antibody, YS5, linked to the anti-mitotic agent MMAE, which is a clinically and commercially validated ADC payload. FG3246 has demonstrated efficacy against CD46-expressing tumors in both preclinical and clinical studies. The associated PET imaging biomarker, PET46, utilizes the same targeting antibody as FG3246 and is under development at UCSF. It is comprised of the YS5 antibody coupled to the radionuclide zirconium-89 and in preclinical studies demonstrates specific targeting of and uptake by CD46 positive tumors. we plan to explore its potential for use in identifying FG3246 responsive patients in a Phase II trial that is described on slide 27. Moving to slide 26, as we noted in our last earnings call, FG3246 has demonstrated monotherapy clinical efficacy in multiple myeloma and metastatic castration-resistant prostate cancer. Interim data from the ongoing Phase I trial in prostate cancer showed that four out of 21 evaluable patients had partial responses based on resist criteria at the two highest study doses and an overall PSA50 response rate of 45% in heavily pretreated patients who had a median of five prior therapies. The safety profile for FG3246 was consistent with other MMAE-based ADC therapeutics, with neutropenia being the most common adverse event. Updated data from the trial will be reported upon study completion, projected for Q1 2024. On slide 27, we show ongoing and planned clinical trials for FG3246. In addition to the phase 1 dose escalation and expansion study referenced on the previous slide, there is also a combination study with enzalutamide that is currently being run at UCSF. The rationale for this combination is based on preclinical data demonstrating upregulation of CD46 in tumor cells following enzalutamide treatment, therefore potentially making them more responsive to treatment with FG3246. Initial data from this trial is expected in the second half of 2024. A trial for the PET46 biomarker in prostate cancer is in progress at UCSF. The goal is to develop a screening assay to select patients with high CD46 expression who are most likely to benefit from treatment with FG3246. This biomarker will be part of a Phase II study run by Fibrogen, in which up to 100 patients will be enrolled following a PET scan with PET46. Patients will not be stratified at the start of the study, but the correlation between PET positivity and FG3246 3246 efficacy will be assessed at the end of the study with the potential to use the PET46 biomarker to stratify patients in a pivotal Phase III trial. We anticipate the initiation of the Phase II trial in metastatic castration-resistant prostate cancer in the second half of 2024. Moving to slide 28, I would like to briefly cover our preclinical oncology pipeline. The pipeline includes two immuno-oncology antibody programs, one targeting galectin-9, or GAL9, and the other targeting the CCR8 G protein-coupled receptor. FG3165 is an anti-GAL9 antibody developed to reverse immune resistance in solid tumors. GAL9 is a soluble immunopressive molecule that is overexpressed in many tumor indications, and that has been implicated in maintaining an immune-suppressed tumor microenvironment. FG3165 has been shown preclinically to reverse multiple Gal9-mediated mechanisms of immune suppression, including prevention of Gal9-mediated effector T cell apoptosis, reversal of Gal9-mediated signaling in T cells, and disruption of dimerization of the immune checkpoints TIM3 and VISTA. This data was presented at the Society for Immunotherapy and Cancer annual meeting this past weekend, and the poster will be available on our website. We are working towards a Q1 2024 IND filing for this program. Moving to our CCR8 program. CCR8 is a receptor that is highly expressed on tumor infiltrating T regulatory cells, known as Tregs, with very limited expression outside of the tumor microenvironment. Antibody-mediated depletion of CCR8-positive Tregs results in potent anti-tumor effects in preclinical tumor models. FG3175 is an anti-CCR8 antibody designed to selectively disrupt and deplete Tregs in the tumor microenvironment without affecting peripheral T regulatory cells. Given its highly specific targeting of Tregs in the tumor microenvironment, we see FG3175 as having broad therapeutic potential in solid tumors. I will now turn the call over to Juan to discuss the company's financials.

Thank you, John. Before jumping into the financial update, I would like to spend a moment to acknowledge and thank our FibroGen colleagues around the world. I'm continuously inspired by many interactions with our team in which I see tremendous resilience, positive mindset, and exceptional operational capability that enables us to deliver on key clinical, operational, and financial milestones. Now diving into these quarters financial results. For the third quarter of 2023, total revenue was $40.1 million compared to $15.7 million for the same period in 2022, a robust increase of 155% year over year. This significant growth showcases the strength of our business I will now provide further texture on our revenue. As of Q3, 2023, we recorded $29.4 million of net product revenue for Roxidustat sales in China compared to $17.4 million in the third quarter of 2022, representing an increase of 69% year over year and highlighting the strong performance of Roxidustat in China. During the third quarter, we recorded $6.8 million as development revenue associated with co-development efforts for ROXADUSTAT with our partners as compared to $2.5 million during the third quarter of 2022. For the fourth quarter, and as we have previously guided, we expect co-development revenue to range from $3 to $5 million. In the third quarter, due to the successful completion of post-approval safety studies associated with ROXADUSTAT in China, we triggered a $4 million milestone payment from AstraZeneca. $2.6 million of this milestone was recognized as licensed revenue, $0.9 million was recognized as co-development revenue, and the remainder is classified as deferred revenue. Finally, in the third quarter, we also recorded $1.3 million in drug product revenue for Roxadustat bulk drug product or active pharmaceutical ingredients sold to our partner, Estelis. I will now move to provide further detail on our financial performance in China. As previously mentioned by Thane, total ROXADUCE.NET sales for the Joint Distribution Entity, or JDE, owned by AstraZeneca and Fibrogen was $77.1 million this quarter, compared to $59 million in the third quarter of 2022. A substantial increase of 31% year-over-year, highlighting the continued strong performance of the Avrenso franchise in China, while also achieving our highest value share since launch at 42% of the category. From total ROC-seduced net sales in China, FibreGen's net transfer price from sales to the JDE was $24.2 million for the third quarter compared to $19.5 million in the third quarter of 2022, an increase of 24% year over year. Net transfer price is the best reflection of FibreGen's portion of the cash received by Ruxudustat in China. During this quarter, we also released $2.3 million from deferred revenue. As a result, FibreGen recorded $26.5 million in net revenue for the quarter from Ruxudustat sales to the JDE and $2.9 million of direct-to-distributor sales from FibreGen China. totaling $29.4 million on a U.S. GAAP basis. Our revenue growth highlights the continued robustness in execution and physician and patient adoption of Ruxudustat in China. Now moving down the income statement, our operating costs and expenses for the third quarter of 2023 were $103.6 million compared to $109.4 million for the third quarter of 2022. a decrease of $5.8 million year over year. It is worth noting that this quarter's operating expenses include a $12.6 million restructuring charge related to a reduction in force during the third quarter. R&D expenses for the third quarter of 2023 were $61.2 million compared to $75.2 million in the third quarter of 2022. The reduction in R&D expenses is primarily attributable to the shutdown of our late-stage trials in Pemrevlimab, as well as the reduction of U.S. R&D headcounts. Of the $61.2 million in R&D expenses, approximately 45% was related to Pemrevlimab, 40% allocated to support our early-stage pipeline, and the remaining 15% directed towards Ruxudustad development activities in the U.S. and China. SG&A expenses for the third quarter of 2023 were $25.6 million compared to $29.9 million in the third quarter of 2022, a decrease of $4.3 million year over year. The reduction in SG&A expenses is primarily attributable to reduced infrastructure costs as well as the reduction of U.S. SG&A headcount. During the third quarter of 2023, we recorded a net loss of $63.6 million, or 65 cents net loss for both basic and diluted share, as compared to a net loss of $91.7 million, or 98 cents per basic and diluted share for the third quarter of 2022. The impact of the above-mentioned restructuring charge of $12.6 million related to the reduction in U.S. workforce represents approximately 13 cents loss per both basic and diluted share. On slide 30, we highlight our performance against our prior savings guidance. I am pleased to announce an improvement in our expected savings to be in the upper range of our previously communicated guidance of $100 million. We are now forecasting a reduction of approximately $120 million in total annualized expenses, which roughly translates to around $30 million per quarter. After adjusting for one-time charges in the third quarter, we achieved over 60% of our total expected savings this quarter versus expected savings of approximately 20% that we communicated during our second quarter update. We now expect to achieve 75% to 85% of our quarterly savings in the fourth quarter of 2023 and deliver on our quarterly expected run rate savings of $30 million in the first quarter of 2024. Now shifting towards cash, as of September 30th, we reported $283 million in cash, cash equivalents, investments, and accounts receivable. Our cash balance reflects a change of $78.1 million versus the prior quarter, which captures a variety of one-time cash outflows such as a $14.1 million historical co-promotion expense in China, severance payments, as well as clinical trial shutdown costs, which increased our cash utilization in the quarter. As we move forward, we expect our cash burn rate to reflect the reduction in operating expenses, and we expect fourth quarter cash burn to be substantially lower. With the reduction in operating expenses and maintaining a disciplined capital allocation approach, as previously communicated, We expect our cash, cash equivalents, investments, and accounts receivable to be sufficient to fund our operating plans into 2026. Thank you. And now I would like to turn the call back over to Fain.

Thanks, Juan. In closing, we are excited about our near-term prospects and the value they provide to stakeholders. To recap, we expect top-line data from the following two PEM Revlimab pivotal studies, our Phase III Lapis trial in locally advanced pancreatic cancer, in the first quarter of 2024, and the Phase 2-3 Pancreatic Cancer Action Network Precision PROMIS trial in metastatic pancreatic cancer in the first half of 2024. Roxadustat continues to perform very well in China, where our SMDA has been accepted for the chemotherapy-induced anemia indication, and our partner Astellas continues with the commercialization of Roxadustat in Europe, Japan, and other markets. In our early-stage pipeline, we expect top-line results from the phase one monotherapy trial of FG3246, a first-in-class antibody drug conjugate targeting a novel epitope on CD46 for metastatic castration-resistant prostate cancer by the first quarter of 2024, and anticipate the initiation of a phase two trial in MCRPC in the second half of 2024. We anticipate filing an IND for FG3165, our anti-Gal9 antibody, the first quarter of 2024 we anticipate filing an ind for fg-3175 our anti-ccr8 antibody in the second half of 2024 and we have a strong balance sheet and expect our current cash position as juan said to fund operations into 2026. in summary we will continue to execute against our strategic priorities as we strive to attain evaluation that we believe is more reflective of our current and future Roxadustat revenue stream, near-term Pamrelvimab readouts in pancreatic cancer, our early-stage pipeline, and our strong balance sheet. I would like to thank all the employees of Fibrogen for their continued hard work and perseverance over the last few months. I would now like to turn the call over to the operator for Q&A.

Thank you. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. And our first question comes from the line of Paul Choi with Goldman Sachs.

Hi, I was muted there. This is Khalil calling in for Paul. Thank you so much for taking our questions. I have a couple quick questions. So with regard to Rokodustat in China, could you please provide some additional color on one, your expectations when you might start to see an eventual impact from generic competition beyond next year in terms of either pricing or market share? And then two, given the idiosyncrasies of China that you mentioned, how does that really affect the company's strategy in mitigating such an eventual impact from potential generics?

Yeah, thanks for the question. I'll go ahead and start off and ask Chris Chung, who is in China right now, to follow up with supplemental comments. There are a number of things in play that make it really difficult to pinpoint when we would expect meaningful impact of generic entry. This is a much different dynamic than in the US market, where you have patent expiration, you have a generic launch, and you see immediate erosion of the brand share, and in fact, It's typical over the course of the first 12 months of generic penetration in a market like the United States. You see 90% to 95% of the value eroded. It's different than that in China for a number of different reasons, as we tried to outline in the call. The first reason is because of the fact that each of the generics, by the time they are able to gain approval, are going to have to go hospital by hospital in order to establish the listing. And we really don't anticipate until we see multiple generics being available and then the advent of the potential for volume-based procurement or volume-based purchasing before you would see a meaningful impact on the brands, both price as well as market share. And so while we do expect at some point in time there to be the potential for volume-based purchasing, we just can't state when that will be. It's going to be dependent upon the review of the generic applications is going to be dependent upon the approval of those generic drug products, and it's going to be dependent upon the government then calling for volume-based purchasing. And so there are a lot of unknowns that make it difficult at this point in time for us to then kind of forecast much beyond 2024. Regardless of what happens, even in the advent of multiple generics being available, we do see in China with other multinationals a very strong continued value or revenue stream for the for the originator that continues on in perpetuity on for several years. In fact, there's, you know, a large multinational that has about 15 products that are a part of volume-based purchasing. And with those 15 products combined, they are realizing well over a billion and a half dollars in revenue. So we still believe that there are great prospects for Roxadustat in China. And in addition to that, we have the CIA indication, which we expect a decision on, in the middle part of the year, which gives us an additional opportunity for both volume as well as revenue catalysts. Chris, let me ask you to go ahead and add some comments to that.

Yeah, you know what? I'm not sure I have much to add beyond what Thayne just provided. I thought it was a comprehensive overview, and I would add that what Thayne just described is not specific to Roxidustat. It is very consistent with how the industry is responding to regulations and how the industry is performing. Dane, back to you.

Thank you. As a reminder, to ask a question, please press star 11 on your telephone. And our next question comes from the line of Andy Shea with William Blair.

Thanks for taking our questions. So, mostly on FCD3246, maybe from a strategic perspective, how would you position that asset? So, would that be in the pre-chemo setting, like what we've seen with the Phase II PSMA4? And along the same lines, given the popularity of the PSMA PET imaging agent, should that be perceived as a headwind for CD47 as well? And maybe also related to that, but maybe from a kind of clinical trial and data perspective. So, for the Q1 data readout, it's listed here 53 patients total. So, it seems like you have presented data on 21 before. Does that mean we should expect additional 32 patients in the Q1 update? So any sort of clarifications on that would be much appreciated.

Thanks, Andy. I'm going to turn this one over to John.

Yeah, Andy, thanks for the questions. I'll take them in order. In terms of the positioning, we are looking to go into a pre-chemo setting, although obviously the recent success of PluVicto has sort of – you know, has to be factored in when we start to really plan out where we're gonna target the phase three, but that is still our plan. With regards to the PET imaging, if I understood the question correctly, if the question was, does the broader use of PSMA PET imaging agents increase the likelihood and maybe comfort of investigators using, our PET imaging agent for CD46? I would say the answer is yes. In metastatic castration-resistant prostate cancer, it's become very common for physicians to now do that imaging for Pluvicto and other competitive PSMA radionuclide-labeled antibodies. And then finally, with regards to the additional number of patients, So the interim data last year at ASCO had 21 patients who were resist-evaluable. I think that they had maybe like mid-30 number of patients in that. So there are additional patients who have entered into the trial since that readout. And also some of the patients who were on drug then continued to receive treatment, which I think will have an impact on the measured progression-free survival.

Thanks, John. And so, Andy, you know, we're going to, you know, follow the data. And, you know, ultimately, you know, these men undergo several lines of treatments because none of these treatments that are available today or probably even into the near future are curative. And so, you know, the phase two trial will be really, really important to inform then the phase three design. Got it. Okay.

Maybe one last one about the generics for XG-STAT. So, I guess in the U.S., it's not really an originator to drop the price and start a price competition. Is that not the case for China? Is there a case where you can kind of drop the price and really compete with generic insurance?

Yeah. Yeah, Chris, let me start, and then you can follow up. It's really dependent, Andy, on really the product that you're talking about. As you know, in the U.S., it's very, very rare for the originator to drop the price just because there's no way you could ever make up the value and volume. I think because of the way that the volume-based procurement or purchasing works in China, I think that there is likelihood an opportunity to decrease the price to some extent, but nowhere near what you would see a generic price point to be. Again, just because it doesn't make sense to do that, you'd maintain volume at a higher price and be far better off than maintaining more volume at a much lower price. So, Chris, maybe if you want to speak to – you're thinking about Roxas you said in particular.

Yeah, absolutely. So, thank you for the question. So looking at how multinationals and the bigger brands have historically responded to generic competition. First, when there's generic competition, the decision to lower the price is solely the election of the originator drug. And on the market, we've seen ranges from zero to 15%. Once there are enough number of generic drugs on the market and the government calls volume-based purchasing, the originator drug can elect to still participate in the market at a particular preset discount that is required by the government. So historically, the two bans are either 10% or 30%, and for the bigger brands, it's typically 30%. And this is dictated by the government.

Got it. That's super helpful. Thank you so much. Thank you. One moment, please, for our next question. And our next question comes from the line of Jason Gerberry with Bank of America.

Hi, good afternoon. This is Dina on for Jason. We just had a couple questions on FG3246. This is based on the activity that you're seeing in the MCR PC patients in the Phase I trial thus far. Are you planning to assess 32, 46, and earlier lines. And I know you're planning to enrich for patients that express CD46. Could you just please remind us what percentage of the patient population you expect to be in this subgroup of CD46 expressors? Thank you so much.

John? Yes, thanks for the question. Just with regards to going into earlier lines, the enzalutamide combo study that's being run as an investigator-sponsored trial at UCSF does open the possibility of going into a first-line setting if that is positive. So, you know, we are following that carefully to see what those results look like, and then we would make a decision, I think, based on those results Just with regards to the percentage of patients who we expect to be positive, we have a pretty limited data set at this point regarding expression by IHC for patients that either do or do not express CD46. We do think that the PET biomarker will give us much better data on that and really kind of guide our thinking. But based on the data that we have in hand right now, we've been estimating between 50% and 70% of the patients with metastatic castration-resistant prostate cancer will be CD46 positive. But I do want to stress that we are looking to acquire more data points to sort of firm that number up.

And we won't be enriching in the Phase II trial. We're going to be assessing the patients ahead of treatment with RCD3246 or RCD46. And then once the efficacy results are in, then we'll do a correlation with the PET positivity and in the efficacy results.

Got it. Thank you. And just a quick follow-up. Just thinking more broadly kind of your strategy for this, you know, Fortis potential acquisition during these next four-year periods, You know, you have, you know, obviously success in this MCRPC trial will be important, but, you know, do you have any plans to assess this indication or this, sorry, asset and other indications in the next four years?

Yeah, we do. In fact, we've got the plans to do a tumor expansion trial as well. And it's just a matter of determining exactly when the right time is to do that tumor expansion trial, whether we go ahead and pull the trigger on it earlier or wait until we see some sort of an efficacy signal in the phase two trial. We'll make that call at some point in the future. But yeah, there are definitely plans. And you heard John speak about multiple myeloma in his remarks as well.

Thank you so much.

Thank you. I'll now hand the call back over to CEO Thayne Wedding for any closing remarks.

Well, thanks, everybody. We appreciate your participation in today's investor call and your interest in Fibrogen. Enjoy the rest of your day. Thank you.

Ladies and gentlemen, thank you for participating. This concludes today's program, and you may now disconnect.