Kyntra Bio, Inc. (KYNB) Earnings Call Transcript

Hi, everyone. Thanks for joining the session with FibroGen. I'm pleased to have with us the CEO, Enrique Conterno. Enrique, thanks for joining us today.

No, thank you very much, Joe. I very much appreciate the invitation. Look forward to discussing a number of topics.

Yes. Great. So I guess, I think a lot of viewers are going to be familiar with FibroGen, but some may not. So could you begin with an overview of what the key areas of focus are for FibroGen?

Sure. So FibroGen is a company very much based in science. We've been able to progress 2 key products, one of them, roxadustat. The second one, pamrevlumab, which are very much in late stages. Roxa has already been commercialized in China and Japan and undergoing review in the U.S., Europe. And pamrevlumab has now 3 studies in clinical -- 3 programs in Phase III in clinical development in IPF, which is idiopathic, pulmonary fibrosis, Duchenne muscular dystrophy and finally, in locally unresectable pancreatic cancer -- locally advanced unresectable pancreatic cancer. In addition to that, I think we are making a concerted effort to really advance new products into the clinic. We are delighted to have announced that Percy Carter is joining FibroGen to lead our scientific efforts. We're very excited about that. So it's -- the focus for FibroGen is really around fibrotic diseases, cancer and, of course, anemia, given roxadustat program.

Great. So a lot of great topics in there to discuss over the next 45 minutes or so. But let's begin with the topic that I think is probably at the top of a lot of investors' minds, and that's the vadadustat results that came out last week from Akebia in non-dialysis setting that seemed disappointing. But could you discuss your take on those results? And what that means for roxadustat?

Yes, I think, there are 3 elements that I would highlight as we think about those results and in the context for roxa. I think number one, I think, is the significant level of evidence that we have already with roxadustat around NDD. As you know, when we look at our pool studies for NDD, we were able to show non-inferiority relative to placebo, which is a higher bar than a comparison to a product that had -- or product to have box warnings. So we feel very good about our pool MACE data in NDD. Second, in addition to the pool studies, we have an additional study, DOLOMITES, which is a study against an active comparator, darbepoetin, where we adjudicated MACE events. And in that study, when we look at time to MACE events, we basically had a hazard ratio of 0.81 in favor of roxadustat. So favorable trend in favor for roxadustat, an additional study. And then finally, I would highlight that -- which I think is important to put in context. But when it comes to cardiovascular studies, we've seen there's ample precedent for the FDA to basically label the products with their corresponding outcomes from CV, meaning different outcomes even within the same class, then we'll have different labels. We, of course, have -- see this in GLP-1s, where we've seen a number of different studies. Some GLP-1 have protective claims when it comes to CV, some do not. Some have different populations. So we see though the specific results for each product basically reflected on each of their respective labels. That's not only the case for GLP-1, so we can think about SGLT2s or DPP-4s, where we basically see the MACE data reflected of those -- of the specific results for the molecules. We think that's also how investors should be thinking about roxadustat and the results that we have, meaning not all HIFs necessarily are the same, so we have our own evidence and we feel very good about the level of evidence that we have with roxadustat.

Very good. And maybe one -- I'll ask it about a little bit more is the DOLOMITES data. And I know that there's a lot of studies that FibroGen has on roxadustat that go under this package. If I have them straight, I think DOLOMITES isn't necessarily part of the main core U.S. studies and was conducted to just help support -- I think it may have been requested by Europe. But could you share a little bit more about how much is able -- is that still submitted to FDA? How much are they able to look at that and consider that now?

Yes. So the FDA -- for purposes of MACE, I think the FDA basically requested a particular way of us pulling certain studies because in NDD, all of our studies were against placebo. DOLOMITES is against an active comparator. It's difficult to combine apples and oranges because you're having different levels of comparison. So our submission basically reflected the 3 studies that we have relative to placebo and basically the MACE -- the adjudicated MACE outcomes and looking at safety from that perspective. DOLOMITES is an additional study. And yes, we submit all of the information that we have to the FDA, including a study that may not be part of the pool studies, but basically, the FDA gets to see all of our data.

Okay. Great. And then in the -- some of this relates to labeling. And I think a discussion that's come up a lot with investors, even before the data we saw last week is could roxadustat have a black box warning. And I know that at this point, we're getting close to the PDUFA date in December. So there's probably not a lot you can say on that. But maybe just generally, how important is this debate even to have? Is it important to roxadustat whether it has a black box warning or not?

Yes. So we commented as part of the Q3 -- Q2 earnings call that unfortunately, given it was imminent that we would be entering labeling discussions that we were not going to be able to make further comments in terms of our engagement with the FDA. So that is the case. We feel -- I think what I can say is we feel very good about where we are in terms of the review with the FDA, the level of engagement that we have. I know this question about a box warning comes often, which is are we going to get one or not. My -- and what is the impact that a box warning would have? It's always difficult to handicap what is going to be the final level. But we feel very good about the level of energy that we have. I think what I've said before is that we have excellent data. We don't believe that the data that we have warrants a box warning. But once again, difficult to handicap what we'll end up with the FDA. What I would say is that it is not only whether you have a box warning or not, but also what does the box warning say. There are ample examples out there where products that have box warnings basically have done incredibly well in terms of having commercial success. There is one condition, which I think is met in the case of roxadustat, but it's difficult for a product that has a box warning if the competitors in the class don't have one. I think the uptake and the overall commercial ability to be highly successful commercially is -- can be impaired. But in this particular case, we are entering a field where products do have a box warning in the case of ESAs. So it is not a limiting factor. I don't think it limits the overall long-term success of the product. Box warning may limit some of the initial uptick, but long term, I think we have ample of evidence that we see these products are very much as a transformational medicine.

That's great. So let's pivot away from labeling. And maybe could I ask about reimbursement and focusing on the dialysis setting and that's unique that there's the bundled payment system that many patients are under in the U.S. and then there's also the TDAPA program that could cover the first couple of years or so, I believe. Could you tell us about the process generally for roxadustat, and see if it's eligible for TDAPA and when you find out about that?

Yes. So we believe that roxa will be eligible for -- TDAPA is eligible for TDAPA once it is approved. I think the process is once we receive approval, we will submit a request something called -- that is called a HCPCS code and then submit for TDAPA reimbursement. We think it is critical for us to be prepared to do this as soon as we get approval so that we can get the reimbursement for TDAPA as soon as possible. We believe that reimbursement could come as early as April 1 because we see now CMS that could be -- is, from a guidance perspective, making decisions on a quarterly basis. So I think the idea -- best-case scenario for us to be -- and I think also something that is likely is that for us to shoot to have reimbursement from a TDAPA perspective starting April 1 of next year. Clearly, this is critically important because it is an incentive for -- that CMS is providing for dialysis organizations to be able to include products that deliver innovation into their protocols. And in a certain way, it's almost -- it eliminates any type of economic disincentive not to include products. So -- and as you mentioned, it -- TDAPA, according to the guidance today, would last for a period of 2 years. So I think it is critically important for us, and we're working to ensure that we get reimbursement through TDAPA as soon as possible.

That sounds great. And April 1 day just comes a few months after the December PDUFA date. So that seems like nice timing. And then can I ask what happens after that 2-year period of TDAPA? Do we know if roxadustat would be in the bundle or not? Or what -- how do you figure out what happens after those 2 years?

I think the concept under TDAPA and the concept behind the 2 years is that CMS will basically review the experience with roxadustat based on those 2 years and the benefits that roxadustat offers. And then I think the intent will be to try to think about how to include basically roxadustat or HIF-PHIs into the bundle and what the appropriate rate for the bundle will be based on that experience and the benefit that they've seen with the innovation.

Great. So let's switch to non-dialysis. Could you just -- could you help frame the size of the addressable market? And I ask because for dialysis patients, it seems like there's a lot of great data out there that makes them pretty easy to count. But I don't think the same is true for non-dialysis. So how do you think about the size of that market?

Yes. The way I think about the size is for us to be able to look at patients with CKD and anemia, and we are looking at stages mainly 3 to 5. And we are -- we need to be thinking about, okay, what is the size of that overall population. I think roughly, you can estimate that in the U.S., there are about maybe 5 million patients with CKD and anemia in total. Now this is anemia defined at higher levels that in terms of hemoglobin that we will be able to treat with roxa. So we need to -- when we think about the addressable market for roxa, it's maybe half of that size. So I think about an overall universe of our addressable market of about 2.5 million patients that could be potentially treated with roxadustat in that setting.

Got it. So the 2.5 million seems to be I think higher than where ESAs are at right now in non-dialysis patients. But certainly, they have a long history of their own issues. Can you maybe help frame the perspective of what could help grow the non-dialysis market opportunity beyond where ESAs are at right now?

Yes. So today, I think most patients with CKD and anemia in non-dialysis setting actually are not treated with an ESA. In fact, when you look at data, looking at the 12 months prior to going on dialysis, you look at maybe about -- only about 14% of those patients have been treated with ESA. So what that basically means that there's a huge opportunity to basically be able to activate and be able to treat many more patients that are suffering from anemia. The opportunity here is one of market expansion. And we are thinking not about an increase of 10% or 20%, but we're thinking about a multiple increase relative to the opportunity. Keep in mind that prior to ESAs getting some of those negative trials in NDD when it comes to certain levels of hemoglobin targets and so forth, the rate of treatment was nearly 30%. Today, the rate of treatment is less than half of that, with CKD and anemia, specifically on the NDD setting. So there's a very good past history that there's a need to be able to treat patients. And we think that roxadustat, therefore, can be an important catalyst for the market expansion. So we think this is a very relevant and important opportunity for us.

Terrific. So FibroGen seems to have a presence all over the world in one way or another, and one very common area is China. Roxadustat is already on the market there. And earlier this year, we saw sales increase from $5 million in Q1 to about $16 million in Q2, which was a nice increase. Could you describe a little bit what was behind that increase? And how to think about that trajectory going forward?

Yes. We're very pleased with the increase that we saw in terms of revenues with roxa in China. Clearly, as you know, we received NRDL inclusion, effective at the start of this year. So the first couple of quarters have been terrific, $5 million and $15.7 million, respectively. I think what we see in an underlying metric that is very important for trying to think about long-term success for the product is basically how well the hospital listings are progressing. And we mentioned that at the end of Q2, our hospital listings in China because once -- yes, you can have national reimbursement, but then you need to list hospital to hospital. But our hospital listings are -- today -- as at the end of Q2, represented already 45% of the overall CKD anemia opportunity in China. Quite frankly, that is a very significant number. The progress is excellent. You can look at a number of benchmarks or products that have become blockbusters and what were they able to achieve the first couple of quarters relative to -- in terms of coverage. So we feel that we made already significant progress. Listing is a particularly important metric to look at because it is not like hospitals can just list products. Anytime a hospital lists a product, they actually have to -- in China, you have to exclude a product. So you are, in a sense, making a trade-off. So we feel very good about the products that we make. In addition to that is when we look at the adoption that we have, I think we feel very good about not just the overall adoption the hospitals are -- that different prescribers are having, but also about the breadth of different patients. It's not just dialysis patients, but we basically look at the breadth of patients that physicians are choosing for roxadustat, everything from home dialysis to NDD. And if there is a probably an area where we've been surprised is how quickly we've seen adoption in the NDD segment in China. So we're very pleased with that. And I think it provides -- I think the breadth of patients provides, what I say, a number of different ways, levers for us to grow long term. It's a great predictor of long-term success.

That's great. So a lot of great points in there in terms of hospital listings and the breadth of patients that are on roxadustat. The non-dialysis point was interesting that you've seen growth there. And maybe a little bit early there in the launch to ask this question, but what do you see as the adherence like in non-dialysis patients? Do they just take it, address their anemia and stop? Or is it the type of thing that they're continuing?

It's always difficult -- first, it's always difficult to measure and look at length of therapy in a specific setting because you need longitudinal data. We have expected that adherence in the dialysis setting is going to be very good and more challenging in non-dialysis setting, just because you're part of the protocol on the dialysis setting and it's -- it can be administered even during the dialysis session. So when it comes to NDD, that is going to be a key focus for us to ensure how can we ensure not just that we have enough patients being started on roxadustat, but how do we ensure that the length of therapy is appropriate and how when we do that, we can make that as long as possible. I think it's too early for us to comment on that, but that's something that we are looking at carefully and something that we'll be able to comment more in the future.

That's great. So one more question on China. And during the Q2 earnings, you announced that there is the, I think, a revised agreement with AstraZeneca. Could you tell us more about the key points of what's new in that agreement?

Sure. So I think it was an opportunity for AstraZeneca and FibroGen to basically update the China agreement. I think for FibroGen, I think first, for both parties, I think it better aligns both parties to ensure that we are maximizing the opportunity that we have with roxa. In particular for FibroGen, I think our overall profitability becomes more predictable and improved with the new agreement. So we -- that's something that was important to us as well.

Okay. Very good. So for roxa, just maybe moving away from anemia of chronic kidney disease, there's also other areas of focus. Could you provide an update on the status in those -- I think there's 2 other main areas, MDS and chemotherapy-induced anemia. Tell us about...

Yes. So we have disclosed those 2 studies, and we're also looking at additional potential opportunities within the anemia space with roxadustat. But specifically, when it comes to MDS and CIA, MDS is now in Phase III and trial is enrolling. So we expect to complete enrollment next year. We'll be providing very specific time lines on each one of our trials for roxa and pam at the Q3 earnings call. CIA, for us, chemo-induced anemia, is a much larger opportunity. Almost when we look at relative size, almost comparable to what we think an anemia CKD is, so very significant opportunity. We're in Phase II, and we are enrolling very well, and hopefully, we'll be fully enrolled this year. So we want to be enrolled as soon as possible and then thinking about, of course, starting the Phase III based on those results.