ProKidney Corp. (PROK) Earnings Call Transcript

Welcome, everyone, to the next session of the Citi's Biopharma back-to-school Summit. So we are literally back to school, checking up on all the companies. So the next one is it's my pleasure to introduce the management from ProKidney. We have Bruce Culleton, CEO; and Ethan Holdaway, who is the Head of the Investor Relations group. So welcome. I'm Yigal Nochomovitz. And for those of you in the room, if you're interested in asking questions, just chime in, there's microphones and also welcome to everyone listening on the webcast.

So Bruce, obviously, you've had a very busy summer with some pretty important data that sent the stock up quite a lot, actually. So tell us about the data, tell us about the platform, I guess, maybe to start with and how you got to this point?

Sure. So first, Yigal, thanks for having us here. We appreciate the opportunity to talk and answer any questions as well. So you're right, we had a busy summer. We announced the results of one of our Phase II trial, top line results in July. And just as a background, ProKidney is an autologous cell therapy company. We have a single asset that's called Rilparencel. It's directed at preserving kidney function in patients who have type 2 diabetes and advanced chronic kidney disease. So our company's headquarters are in North Carolina, where a manufacturing -- it's in Winston-Salem. We have some clinical office and an R&D office in Raleigh. And we have more of a corporate office, just 1 block that way [indiscernible] walk down the street, which was good. So we did announce our Phase II results, top line for a study called REGEN-007. And then a short time after that, we announced an update on our regulatory discussions with the FDA, which we'll get into today, I'm sure as well. So from a top line data perspective, I'll just talk quickly about the design. So REGEN-007 was a randomized open-label study. Patients with advanced chronic kidney disease and type 2 -- and diabetes, type 1 and type 2 diabetes in the study. They were randomized to get a scheduled regimen of Rilparencel, which consists of 2 injections, 1 injection in each kidney separated by 3 months or randomized to Group 2 where they received 1 injection of Rilparencel and then those patients in Group 2 waited essentially for either a decrease in kidney function measured by eGFR or an increase in kidney injury measured by UACR. And once they reach those triggers, then they will get a second injection. The overall sample size was 49 subjects, and we followed patients throughout to 18 months after their last injection. And so just getting to the top line data, and we didn't release all the data because we wanted to preserve potential embargo for late-breaking trials presentation at ASN coming up in -- kidney week coming up in November. So from a top line efficacy perspective, in patients in Group 2 -- in Group 1 sorry. And Group 1 is really important because they're very similar to patients being enrolled in our Phase III program. So patients in Group 1, the patients who received 2 injections, their pre-injection slope of loss of kidney function was minus 5.8 mls per minute per year. And after their second injection their slope for the next 18 months or annualized slope was minus 1.3. So essentially, what that works out to is a 78% improvement in decline in kidney function for those Group 1 patients who got 2 injections. Now we also saw less of a benefit in Group 2, and not everyone got a second injection in Group 2, I think, 15 or 16 people out of the 25 got a second injection, but they also had a delayed second injection, even though if that got a second one. But we did see a 50% improvement in kidney function decline in Group 2. So not as substantial, but still we saw a signal of efficacy in that group as well. It wasn't statistically significant in Group 2, but we did see a clinically important and statistically significant difference in Group 1.

So for the ones that didn't get the second injection in Group 2 that they just -- they didn't hit the trigger or...

Correct. Yes, they didn't hit the trigger.

Okay. So that wouldn't that suggest that they benefited enough or substantially from the first one. Or is it not that simple?

It's probably not that simple. It may simply be that their decline was not substantial to begin with or some patients give us a lot of variability in decline or you're right, presumably, they received some benefit from the first injection as well and didn't progress as you say.

Yes. So very interesting design. And this -- I don't think I've ever seen, well, the cell therapy in kidney cancer -- in kidney disease is -- we haven't seen that before. And then this design is interesting given the staggering in the bilateral. So what exactly are you going to show us -- because you have -- you kind of described it qualitatively, but we're waiting for graphs and charts?

Absolutely.

So what's -- what are we going to get at ASN? Can you -- like how much detail is going to be discussed there?

So ASN Kidney Week again, it's coming up in early November in Houston. So we're submitting an abstract this week for late-breaking trials. So that abstract is going in. I think the deadline is September 9th, so it's in the next 6 days, we'll have that submitted. We also have a manuscript that's written, that will be submitted to Jason for simultaneous publication now. All that depends upon the reviewers. So we can't say that all that's going to happen, but that's our goal. And what you'll see if should we get late-breaking trials, acceptance and manuscript as well, you will essentially see everything in the way of graphs and figures and tables. The tables will outline, sort of, a really good description of what the patient's baseline characteristics are. You'll also see secondary endpoints, which would be things like time to dialysis in each group, time to death in each group. Small numbers, but all that was part of a secondary endpoint analysis. And I think a lot of people are interested in subgroup analysis, what happened to patients if you were on an SGLT2 inhibitor at baseline or you were not. What happened to patients if you're on a GLP-1 at baseline GLP-1 agonist at baseline or not. What if you are type 1 versus type 2 diabetics. So those types of things will have more of an opportunity essentially to produce all that data and reveal all that data in either the abstract presentation or the manuscript. The other thing just for clarity on this is we talked about top line safety as part of our press release in July. All the adverse events will be described in serious adverse events and sort of that just broad safety analysis would also be part of that presentation.

Okay. And so you mentioned some of the changes in the slope, which were profound and -- well, for sure, in the 2 injections 3 months apart. What about just sort of the -- who are these patients? I mean, what stage of CKD were they? Because there's a big -- a big range?

So the entry criteria into the study was eGFR 20 to 50. So that encompasses Stage IV patients and some Stage III patients. The average eGFR, I think, was around 30 -- 29 or 30. So primarily patients with more advanced Stage III and some stage IV patients were part of the study.

Okay. Now you've done a lot of work over the past few years to determine where this therapy would potentially have the greatest impact. And so I guess this just sort of gets into mechanism of action and how it works in terms of the action on the podocytes. So can you talk about the MOA and how you believe this is working and why it may be better suited for certain segment of the CKD population versus another?

So first, I think, Yigal, I believe it works in patients who've got less severe kidney dysfunction as well. And even though we're targeting in our Phase III study, patients who have a GFR less than 35. There's a reason why we're targeting patients with more advanced chronic kidney disease. There are several reasons. But I'll just say that I do think it works in patients who have less severe kidney disease as well. It just may not be an easy market for us right now. Partly because if you look at someone with, let's say, a GFR 50, for the most part, that patient's risk of dying of something other than kidney failure is maybe 100x higher, right? And so the real benefit to that patient in treating them and preserving their kidney function, is maybe not something that the patient would want to go through that their physician may not want them to go through and a payer may not pay for it, right? So our current approach within our Phase III study is to really look at patients with more advanced kidney disease, those that have unfortunately progressed to a GFR of less than 35, many of them with an eGFR less than 30. The nephrologists may have already started discussions around what type of dialysis you may want or if you're suitable for a transplant, et cetera. So it's on a patient's mind, it's on the family's mind, it's on care partners minds. And it's also something that economically becomes a lot more attractive to payers because they don't want these patients ending up in dialysis clinics, because they know the cost of that. It's $125,000 to $250,000 per year. So that's something that they want to avoid as well. So just getting back to the MOA. So we've invested a lot in the last 12 months to sort of revamp our thinking around the mechanism of action. The ProKidney has got a pretty rich history and in a version of ProKidney before ProKidney went public, the previous leadership at ProKidney invested in R&D but stopped really investing in 2015. And the reason for that sort of stopping real investment in R&D in 2015 was, a, I think they felt like they had the answer that they wanted, and b, they wanted to use what funds they had to start Phase I and Phase II clinical studies, as opposed to continuing R&D investment. Now from 2015, when they stopped the research, which suggested that Rilparencel had an effect mainly through anti-fibrotic and anti-inflammatory mechanisms. When they stopped the research in 2015, the advances and new tools and how to demonstrate mechanism of action, continued to advance independent of ProKidney and all our understanding around multiomics was something that evolved over the course of that period of time. So we've really, in the last 12 months, and you'll see some of this at ASN as well. We've really started to focus a lot of our efforts on -- from a multiomics perspective, what happens when Rilparencel is injected in the patient's kidneys. And so that's where our efforts are focused today.

And we're going to get some of that, I assume, biomarker and/or functional data coming?

You'll get some of that -- you'll get hints of some of that data at ASN. And I don't believe there is going to be a light bulb moment where all of a sudden, [ Eureka ], we figured this out. I think it's going to be an incremental story that will essentially come to a point where we say, look, this is how we think it's having an effect on tubular interstitial cells. And we believe those cells talk to glomerular cells, for example. I think that's just going to be an evolving story. But we're going to continue to produce data until we feel pretty comfortable about what the story is as well.

Okay. So you mentioned in the '07, the range was 20 to 50?

It was.

Yes, right. But -- and then in the PROACT 1, which we can get into more detail, that's restricted to the lower half of that?

Correct. Yes, we've really narrowed that. So PROACT 1 was originally designed with an eGFR of 20 to 50, and about -- just a little over a year ago, we narrowed that range to 20 to 35, partly because of the changes in the therapeutic approach to chronic kidney disease and diabetes with the advent of -- SGLT2 is coming into the market, nonsteroidal MRAs, GLP-1 agonist, like the 4 -- we talk about the 4 pillars of care now in chronic kidney disease and diabetes. That's really been beneficial for patients, but there's not a lot that's been done to study patients with more advanced chronic kidney disease. All those studies have been primarily in patients with less severe chronic kidney disease. We're focused on those patients with the greatest -- what we think is the greatest unmet need at this point in time.

Right. So I guess what I was driving at was, when we see the ASN data are you going to have a view into the efficacy in that 20 to 35, which will obviously everyone sitting here and listening is going to be very curious about that set of data.

Yes. Yes. So that will be part of the subgroup analysis as well.

Okay. Well, then speaking of the PROACT 1 -- so what else is there to say -- how far along is that study? What -- when could it read out -- can you discuss that?

Yes. So PROACT 1, just as a reminder, to everyone, it's a randomized, sham-controlled, multicenter Phase III clinical study. And for a cell therapy, this is a big, big trial. Our target -- the primary endpoint for the confirmatory analysis. It's a time-to-event study, and we expect we'll need 600 to 700 patients enrolled in that study to accumulate those events over a desired period of time. So for a cell therapy, that's a huge clinical study. I mean listening to an earlier session this morning, where there's -- for rare diseases, you're still looking at single-arm studies, that are small and uncontrolled. So this is, I would argue, one of the largest cell therapy studies. Currently, I would say, currently enrolling patients. So that -- that study was designed with an eGFR of 20 to 50, as I said, and we've reduced that now from 20 to 35. We've made some real good progress around enrollment. Recently, we said we're over 50% enrolled for our accelerated approval readout, which we expect in Q2 of 2027. And we had really good August for enrollment, really good July for enrollment. So we're above -- well above 50% enrollment for that accelerated approval.

And what's going to -- what endpoint is going to give you that path to accelerated approval?

So we are looking at a difference in eGFR slope between the 2 treatment arms. So the interventional arm and the Sham control arm. And we're looking for a difference of at least 1.5 mls per minute per year of change in eGFR slope.

And then assuming you check the box on that, then the full approval would be based on an outcomes, what would be the full approval?

Correct. So the full approval is in the same study. So we're using -- we have a single Phase III study. The interim readout will be accelerated approval readout and the confirmatory analysis will be based upon clinical events, and those clinical events are time to initiate dialysis, time to transplant, time to renal or cardiovascular death or time to more than a 40% drop in eGFR. Sort of accepted clinical harder endpoints, and that would be for the confirmatory analysis. We haven't said -- we haven't issued new guidance on when we think that confirmatory analysis will be, but we expect we'll announce some new guidance on that early next year.

So when you do the Q2 2027 for the slope difference, that doesn't -- and at that point, you won't -- by default in the protocol to analyze for outcomes. It's not. That's on how it's going to work.

That's not. So we will analyze for outcomes when we achieve, I think our target number of events is 122 events, that will trigger the endpoint -- confirmatory endpoint analysis.

Which presumably would be obviously after that point but you haven't said -- you don't know yet because it depends on the timing.

Correct, it does.

Okay. So is that -- so that's the key Phase III trial. Is there -- is there a different one? Or is that's the main one?

That's it. Yes. We -- so just for clarity as well, we had another Phase III program that we ended up stopping before we enrolled any patients. We stopped that around this time last year. And the reason we stopped that is because we didn't need it. We have an RMAT designation through the FDA and a single Phase III study is sufficient for approval.

So that one that was paused -- or stopped was sort of like a replicate of this one or was -- it was just a replicate?

Very, very similar. Yes, it was primarily being done in Europe and Asia.

By the way, some people have asked me, since you amended the enrollment criteria to look at the 20 to 35, what -- how do you analyze? There were maybe some that got in that were over between 35 and 50, right? Do they get analyzed in some way? Or how do they get deal...

So they're all part of the primary analysis. So they'll -- all be part of the primary modified intent to treat analysis and the overall safety database as well.

Okay. And then commercially, if this study works, then that would be -- the regimen would be this you -- well, we didn't even talk about that yet. Let's -- can we go through the kind of went backwards -- the manufacturing and how the cell product is prepared and yes?

Yes, of course. So it's an autologous cell product. So we -- how we obtain kidney cells from a patient is through a percutaneous kidney biopsy. That is a pretty standard procedure that's done throughout the world. It's essentially done under local -- mild sedation and local anesthetic. And what we do for the clinical study is an interventional radiologists primarily, although nephrologists are also trained to do this. Interventional radiologists use a standard kidney biopsy needle, and we take a couple of samples of the kidney biopsy, mainly from the outer cortex of the kidney. Those samples are then shipped back to our manufacturing facility in Winston-Salem, and over the course of several weeks, those cells are expanded and we select out certain types of cells, which are primarily tubular interstitial in nature -- tubular epithelial in nature. And those cells make up the final product of Rilparencel. Before Rilparencel -- after Rilparencel is actually produced, it's cryopreserved. We typically make anywhere from 2 to 5 doses per patient although we only inject 2 doses in a patient in the trial, we hold on to the others if there's any vials that are still available. And that cryopreserved vial gets shipped back to the clinical study site where it's thawed and under CT guidance is injected back into a patient's kidney. This is the REGEN-007, the Phase II data was the first data that we showed injections in both kidneys. And the Phase III trial is also designed to inject Rilparencel into the biopsy kidney and 3 months later into the other kidney.

So I actually hadn't thought about this before, but when you do the biopsy, then it doesn't matter which kidney, right? I mean it does -- and then with the one that gets injected first doesn't matter whether it was the one that had a biopsy or not, I guess it doesn't matter.

It doesn't. But we do go back into the biopsy kidney for the first and then the other kidney for the second injection.