FibroGen, Inc

Thank you for standing by and welcome to FibreGen's fourth quarter and full year 2023 earnings conference call. At this time, all participants are on a listen-only mode. After the speaker's presentations, there'll be a question and answer session. To enter a question at that time, please press star 11 on your telephone. Please be advised that today's call is being recorded. I would like to turn the call over to your host, Mr. David De La Chia, Vice President of Investor Relations. Please go ahead.

Good afternoon, everyone. Thank you for joining today to discuss our fourth quarter and year-end 2023 financial and business results. I'm David De La Chia, Vice President of Corporate FP&A and Investor Relations at Fibrejohn. Joining me on today's call are Fain Weddick, 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 FibreGen's website at www.fibregen.com. With that, I would like to turn the call over to Thayne Wedeck, our Chief Executive Officer.

Thank you, Dave. Good afternoon, everyone, and welcome to our fourth quarter and year-end 2023 earnings call. Although 2023 posed numerous challenges for our organization, We are excited about our prospects in 2024, which we believe to be a pivotal year marked by a number of important clinical readouts across our oncology pipeline and continued growth of our Roxidustat franchise. On today's call, I will focus our stakeholders on the four strategic pillars shaping our company's future trajectory. Additionally, I'll offer insights into the progress of our Pemrevilmab and Roxidustat programs. Dr. John Hunter, our Chief Scientific Officer, We'll then review our exciting 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 Pemrevilmab, where we are expecting readouts from two pivotal phase three studies in pancreatic cancer in the coming months. In January, we announced the graduation and completion of the Pamrevelmab arm in Precision Promise Pancreatic Cancer Action Network Phase 2-3 Adaptive Platform Trial for Metastatic Pancreatic Cancer, where we anticipate top-line data in the second quarter of this year. We are now anticipating top-line data from our ongoing LAPIS Phase 3 trial in locally advanced pancreatic cancer in the second quarter of 2024 as well. Pancreatic cancer is a disease with substantial unmet medical need and represents a significant commercial opportunity for Pemrevumab, which 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, generates significant net revenue and positive cash flow, and provides FibroGen with material and growing economics through our partnerships with AstraZeneca and Astellas Pharma. Today, we announced that Fibrogen has regained the rights to Roxidustat from our partner, AstraZeneca, in the U.S. and ROW territories, excluding China and South Korea. This allows us the opportunity to potentially partner Roxidustat in certain indications with high-end needs, such as anemia and myodysplastic syndromes, which I will touch on later in the call. 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 castrate-resistant prostate cancer. This program also includes the development of an associated CD46-targeted PET biomarker. We anticipate releasing additional data from our FG3246 Phase 1 monotherapy trial in the coming weeks. In addition to FG3246, we are also undertaking IND enabling activities on two innovative oncology antibodies with the intention of filing an IND for FG3165, our anticolectin-9 monoclonal antibody in the first quarter of 2024, and FG3175, our anti-CCR8 monoclonal antibody in 2025. The fourth pillar is our strong cash position. We finished the year with approximately $248.1 million in cash, cash equivalents, and accounts receivable. In the fourth quarter, one quarter earlier than expected, we successfully executed on our company-wide cost reduction plan, which provides us with the ability to achieve several key milestones across our portfolio. We have taken the necessary steps to improve our strong 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, Pamrevelmeb is a novel anti-CTGF human monoclonal antibody in clinical development for the treatment of metastatic pancreatic cancer and locally advanced unresectable pancreatic cancer, or LAPC. Pemrevlumab has demonstrated dose and exposure-related responses in an early-stage pancreatic cancer trial and having been studied in over 1,000 patients across various conditions, a favorable adverse event and safety profile. I would now like to discuss the Pamrevimab opportunity in pancreatic cancer in more detail starting on slide six. 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 PDAC patients in the U.S. There is an overall five-year disease-free survival rate of only 12.5% and for metastatic cancer, the survival rate is approximately 3%. Unfortunately, there have not been any major therapeutic advances for quite some time. On slide seven, we provide an overview as to why we believe Pamrelvomab 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 pancreatic tumor studies have shown that Pamrevelmab can have both direct anti-tumor effects and effects on the surrounding stroma, providing a strong clinical rationale for use in both locally advanced and metastatic pancreatic cancer. Moving to slide 8, 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. Almost 90% of these 75 patients were in fact metastatic, with only 9 having metastatic locally advanced disease. Pemrevomab was evaluated in combination with gemcitabine and erlotinib as first-line therapy. An important observation in the study was that enhanced clinical benefit was observed at higher drug exposure levels. Once drug plasma levels reached a trough 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 Pamrevelmab levels of 150 micrograms per mL or higher versus 11% for those with lower plasma levels. These results in the higher dose cohort patients included improved median overall survival and improved median progression-free survival. Moving to slide nine, pivotal trials are being conducted with Pamrevelmab in both locally advanced and metastatic patients. These patients represent almost 90% of all diagnosed pancreatic cancer patients today, giving Pamrevelmab the potential opportunity to treat a vast majority of patients across this devastating disease. Moving to slide 10. In January, we announced the completion of the Pamrevelmab arm in precision promise. Pancreatic Cancer Action Network's Phase 2-3 adaptive platform trial for metastatic pancreatic cancer, which evaluates Pamrevelmab in combination with the chemotherapy treatments gemcitabine and nabpaclitaxel for patients with metastatic pancreatic ductal adenocarcinoma. The PRECISION PROMISE trial is a phase two, three registrational study that is being executed at the top pancreatic cancer centers in the United States. The primary endpoint of the PRECISION PROMISE trial is overall survival. Pamrevilumab is being evaluated in both first and second line therapy for metastatic disease. Moving to slide 11, the precision PROMIS study is comprised of two stages. In the initial stage of the study, or stage one, at least 100 patients with metastatic pancreatic cancer received Pemrevomab in combination with gemcitabine and nabpaclitaxel. Guided by Bayesian principles, the graduation threshold for Pemrevomab was a protocol pre-specified greater than or equal to 35% predictive probability of success for the primary endpoint of overall survival at the completion of the trial. The Pamrevimab arm successfully graduated to stage two in the third quarter of 2022, and an additional 75 patients were enrolled, receiving the same Pamrevimab treatment regimen as in stage one. All patients were dosed until disease progression, and the final analysis is based upon the data collected for all patients up to 12 months after the last patient initiated treatment. The Pamrevimab arm of the study completed stage two of the trial last month in January of 2024. Pamrevimab is the first experimental arm in the Precision Promise trial to meet its required threshold for graduation to stage two, and we now expect to report top-line data on 213 Pamrevimab-treated metastatic pancreatic cancer patients next quarter. On slide 12, 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 Pamrevomab to placebo in combination with standard of care chemotherapy. The primary endpoint is overall survival, and we now expect top-line data from the study in the second quarter of 2024. As LAPIS is an event-driven trial, we have revised our timing based upon the latest information available to us. Since our last update, the pace of events has decreased, which is a common occurrence in this type of oncology study. We are currently waiting for a sufficient number of events to lock the database and will continue to provide regular updates to our stakeholders as the study nears completion. Moving to slide 13, we show a snapshot of both Pamrevomab registrational 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 disease 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 the potential opportunity to amplify clinically meaningful increases in overall survival driven by those patients benefiting from Pamrevomab treatment. On slide 14, we review the U.S. commercial opportunity for Pemrevomab 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. represents a multibillion-dollar opportunity for Pemrevomab 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 Pemrevumab than we were previously forecasting for the IPF indication. Looking ahead, we expect results from both the Pancreatic Cancer Action Network's Precision Promise Registrational Adaptive Platform Trial evaluating Pemrevumab and metastatic pancreatic cancer and from the lapis phase III study in locally advanced disease in the second quarter of 2024. Moving now to roxidustat in slide 16. Roxidustat continues to perform extremely well in China, where it is indicated for anemia of chronic kidney disease. Full year 2023, total roxidustat net sales in China by Fibrogen and the distribution entity jointly owned by Fibrogen and AstraZeneca was $284.1 million compared to $208.8 million a year ago, an increase of 36%. This growth was driven by an increase in volume of 41%. Fourth quarter total Roxiducet net sales in China by Fibrogen and the distribution entity jointly owned by Fibrogen NAZ was $66.5 million compared to $53.1 million in the fourth quarter of 2022, an increase of 25%. This growth was driven by an increase in volume of 36%. In July of 2023, our supplemental new drug application, Veroxidustat, in patients with chemotherapy-induced anemia was accepted by the China Health Authority, and we continue to expect an approval decision in mid-2024. If approved, VibraGen would receive a $10 million milestone payment from AstraZeneca. We believe this indication represents a meaningful incremental net revenue opportunity on top of the anemia of CKD indication. Moving to slide 17, ROX-induced debt continues to expand its category leadership in brand value share in China, rising to 42% in the most recent three-month period ending in December of 2023. The potential addition of the chemotherapy-induced anemia indication would create a meaningful 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 reiterate the dynamics of 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 listing at a time. Originator products do not experience a meaningful deterioration in revenue until at least four 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. Despite the expiration of our composition of matter patents in June 2024, We do not expect meaningful deterioration of the ROXA business in the near term. In addition to the continued outstanding performance of ROXA-GSTAT in China, the ROXA-GSTAT launch in Europe is accelerated, showing robust quarter-over-quarter growth. We expect this growth to continue to accelerate, given the fact that ROXA-GSTAT is now fully reimbursed in all EU five countries. ROXA-GSTAT 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 Daprodustat, Roxadustat maintains its strong competitive position in the EU. Of note, we have recently been successful in defending Roxadustat's patent portfolio and now believe we have exclusivity into 2036, positioning Roxadustat to continue its growth and market leadership over the next decade plus in the EU. Moving to slide 18, today we announced that AstraZeneca returned all U.S. ROW-Roxidustat rights to Fibrogen with the exception of South Korea and China. Fibrogen's collaboration agreement with AstraZeneca for Roxidustat in China remains in place. Regaining the rights to Roxidustat in the U.S. ROW territories allows us to pursue Roxidustat development opportunities with potential partners in indications such as anemia associated with mild dysplastic syndromes. On slide 19, we highlight the potential opportunity for Roxidustat in patients with anemia associated with MDS. There is a well-defined patient population and a clear clinical need given the current therapeutic alternatives, which translates into a significant commercial opportunity. We look forward to initiating partnership discussions for Roxidustat immediately. Moving on to slide 20, in December we presented data from the Phase III Matterhorn study of roxidustat in patients with anemia of lower risk mild dysplastic syndromes at the American Society of Hematology annual meeting. Although we missed the primary endpoint of transfusion independence, roxidustat demonstrated a numerical advantage relative to placebo. When looking specifically at results in patients with a higher transfusion burden at baseline, there was a statistically significant and clinically meaningful advantage in transfusion independence in patients treated with roxidustat versus placebo. Based on these results, we continue to believe that roxidustat represents an important potential therapy for patients in the U.S. and other territories where it has not yet been approved. I will now hand it off to John Hunter, our CSO, to cover our early stage pipeline.