Akebia Therapeutics Inc (AKBA) 2017 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to Akebia's Fourth Quarter and Full Year 2017 Financial Results Conference Call. (Operator Instructions) As a reminder, this call is being recorded.

I would now like to introduce your host for today's conference Mr. John Garabo, Director of Corporate Communications at Akebia. Your line is now open.

Thank you, Skyler. Good afternoon, everyone. I'm John Garabo, Director of Corporate Communications. Thank you for joining us today to discuss Akebia's fourth quarter and full year 2017 financial results. Today's call will be archived and a replay will be available after this call on our corporate website www.akebia.com.

Before we begin, I'd like to remind everyone that this conference call includes forward-looking statements. Each forward-looking statement contained in this call is subject to risks and uncertainties that could cause actual results to differ materially from those described in these statements. Additional information regarding these factors appears under the heading Risk Factors in our annual report on Form 10-K for the year ended December 31, 2017, and in our press release issued earlier today, both of which are available on our corporate website. The forward-looking statements in this call speak only as of the original date of this call, and we undertake no obligation to update or revise any of these statements.

I'd like to now turn the call over to John Butler, Akebia's President and Chief Executive Officer. John?

Thanks, John. Good afternoon, everyone. And thanks for joining us today to review our 2017 financial results and corporate progress. On today's call, I will review our major accomplishments over the past year. Jason Amello, our Chief Financial Officer will review our financials. I'll close with our outlook for 2018 before opening the call for questions. Dr. Rita Jain, our Chief Medical Officer; Nikki Hadas, our General Counsel; and Michel Dahan, our Chief Business Officer will join us for Q&A.

Given its mid-March and how focused we are on driving our business forward. It seems unusual to look back at 2017, but I believe our performance last year speaks to what this team can achieve this year and into the future. As you consider the level of execution we delivered in 2017 from the significant transactions we completed to the momentum of our clinical development program you'll see a team poised to continue to deliver as we drive the vadadustat development program forward and build a leading innovation-driven renal company.

You may recall, we announced a few weeks ago that we are targeting full enrollment for our Phase III INNO2VATE and PRO2TECT studies by the end of 2018, with topline results anticipated in 2019 subject to the accrual of MACE events, followed by market launch anticipated in 2020 subject to regulatory approval. When I look ahead to the upcoming months of 2018, I see an exciting year for Akebia and for HIF-Prolyl Hydroxylase inhibitors. We're expecting important late-stage data readouts from another company, which have the potential to validate HIF-PH inhibitors for the treatment of anemia due to chronic kidney disease. The timing of these data suggest that we have narrowed the timing gap between our program and theirs, assuming we execute to our targeted time lines. We're pleased with the progress we have made with our program and additionally, we believe the straight-forward approach we've taken to designing the PRO2TECT and INNO2VATE programs will ultimately be an advantage for Akebia. That being said, let me reiterate something you have heard me say before that the size of the market opportunity and the significant need for innovation for this patient population provide a large opportunity for multiple products in this space. If you deliver on the potential of HIF-PHis and bring an important new medicine to the patients we serve, that will be most meaningful.

Turning back to our recent accomplishments, 2017 was highly productive. We advanced our global Phase III program for vadadustat and completed significant collaboration and licensing deals to provide us with R&D financing, stronger commercial presence at launch and significant validation of vadadustat. In addition to the progress we've made with PRO2TECT and INNO2VATE, some highlights include, enhancing the study designs for our Phase II FO2RWARD and Phase III TRILO2GY trials. We believe these new designs will provide additional characterization and differentiation of vadadustat and further strengthen our commercial position in global markets, subject to regulatory approval. We expect FO2RWARD to initiate in Q2 of this year with topline results expected in late 2018 or early 2019 and we expect TRILO2GY to initiate late this year or early next with topline results expected in early 2020. Our collaboration partner, Mitsubishi Tanabe initiated Phase III studies of vadadustat in nondialysis CKD and dialysis-dependent CKD patients in Japan with data readouts expected in 2019. Now as a reminder, these studies for Japan are not MACE dependent.

We expanded our collaboration with Otsuka for vadadustat, which originally covered the U.S only to include a collaboration and license agreement for Europe, China and other territories. Across both collaboration agreements, the total committed capital when we signed the agreements upfront plus R&D payments was $473 million with the potential for up to $1.4 billion in milestone payments. Our expanded collaboration with Otsuka provides further synergy with a collaboration partner who has invested extensively in the cardio renal area and shares our commitment to bringing important medicines to patients with chronic kidney disease. Otsuka has an established commercial infrastructure to help ensure the successful launch of our product with vadadustat's significant market potential. We couldn't be happier with this relationship.

We entered into an exclusive license agreement with Vifor Pharma to sell vadadustat as it's only HIF product for distribution to Fresenius in the United States. A kidney dialysis provider that serves nearly 40% of the U.S. dialysis patients. This is subject to FDA approval of vadadustat and the inclusion in a bundled reimbursement model. This strategic agreement gives Akebia the opportunity to rapidly build commercial momentum in the U.S. after launch. I'd also mention that we believe Vifor's decision to choose vadadustat as its exclusive HIF product for distribution to Fresenius speaks volumes about the potential of our product candidate. We announced positive topline results from 2 Phase II studies of vadadustat in Japanese patients, one in nondialysis CKD and one in dialysis-dependent CKD. These data were consistent with findings from previous studies of vadadustat. We completed 2 nonclinical carcinogenicity studies, a 2-year study in rats and a 6-month study in mice, results of which showed no carcinogenic effect of vadadustat.

We signed an exclusive agreement with Johnson & Johnson innovation to in-license HIF-targeting product candidates, including AKB-5169 for the treatment of inflammatory bowel disease for which we're targeting an IND submission this year. And to access an extensive library of well-characterized HIF pathway compounds. We also strengthened our management team with the hiring of Dr. Rita Jain, Senior Vice President and Chief Medical Officer. Rita brings more than 20 years of drug development experience spanning academia and industry. And we're thrilled to have her on the team. At a time when many major corporations, including biopharma, continue to struggle with the issues created by lack of gender diversity, more than half of Akebia's executive leadership team is made up of women. And I believe the diversity of thinking this brings truly makes Akebia a stronger company.

And now I'll turn the call over to Jason for a review of our financials.

Thank you, John, and good afternoon, everyone. The financial results for 2017 are indicative of our continued execution and optimization of our vadadustat development program as well as the significant financial leverage we've obtained from our collaboration partners.

Unique to the fourth quarter of 2017, the company actually reported a net profit rather than a net loss for the quarter. Specifically, net income for the fourth quarter was $12.3 million or $0.25 per diluted share as compared to a net loss for the fourth quarter of 2016 of $37.9 million or $0.99 per share. It's important to note that the net profit was due to revenue recognized in connection with our collaboration with Mitsubishi Tanabe or MTPC, which I will speak more about in a moment. When you look to the full year of 2017, the company did report a net loss of $76.9 million or $1.77 per share as compared to a net loss for the full year of 2016 of $135.7 million or $3.50 per share. The significant decrease in the net loss from 2016 to 2017 is a result of having significant revenue recognized from our collaboration partners in 2017 offsetting increased R&D cost from having both the PRO2TECT and INNO2VATE programs enrolling concurrently for the full year 2017. When you look at the components of the P&L, on the revenue side, we are recognizing revenues from 3 collaboration arrangements. Our Otsuka U.S. agreement, our Otsuka international agreement and our MTPC agreement. It's important to point out that these collaborations are considered multiple element arrangements under the revenue recognition guidance. This generally means that noncontingent payments will be recognized over the life of the arrangement based on how activities under the arrangement are performed or delivered by Akebia versus when payments are actually received from the partner. With that said, collaboration revenue was $87.3 million for the fourth quarter of 2017 compared to $1.5 million for the fourth quarter of 2016. And $178 million for the full year of 2017 compared to $1.5 million for 2016. The $1.5 million collaboration revenue recognized in 2016 related only to the Otsuka U.S. agreement, which was consummated in December of 2016. Collaboration revenue recognized in 2017 related to revenue recognized under both the Otsuka U.S. agreement and the Otsuka international agreement, which was executed in April of 2017 as well as revenue recognized during the fourth quarter of 2017 in connection with the MTPC agreement.

With respect to the MTPC agreement, you'll recall that we have been deferring $40 million of revenues since 2015, pending the satisfaction of 2 conditions: The enrollment of Japanese patients in our Phase III study; and our providing a clinical supply of vadadustat to MTPC.

Both of those criteria were satisfied in Q4 2017, and accordingly, we've recognized $39.7 million of revenue in Q4, which consequently, due to the amount, resulted in Akebia reporting a net profit in Q4.

Moving to research and development expenses, R&D expenses were $68.4 million for the fourth quarter of 2017 compared to $33.4 million for the fourth quarter of 2016. And $230.9 million for the full year of 2017 compared to $115.8 million for the full year of 2016. The increase is primarily attributable to an increase in external costs related to the continued advancement of PRO2TECT and INNO2VATE Phase III program, including ongoing enrollment, the Phase II studies in Japan and study commencement activities for FO2RWARD and TRILO2GY programs, both of which have been replaced with new study designs.

R&D expenses were further increased by headcount, consulting and facility-related costs required to support our expanding R&D programs. We do expect R&D expenses to increase significantly for 2018 as we target to fully enroll both PRO2TECT and INNO2VATE Phase III studies by the end of 2018 and as we advance our activities around FO2RWARD and TRILO2GY.

Despite this expected increase in R&D, it is important to keep in mind that a significant portion of the cost is reimbursed by our collaboration partners, which gets recorded as collaboration revenue, as I mentioned earlier. General and administrative expenses were $7.6 million for the fourth quarter of 2017 compared to $6.1 million for the fourth quarter of 2016 that Compares to $27 million for the full year of 2017 versus $22.2 million for the full year of 2016. The increase is primarily attributable to an increase in cost to support the company's R&D programs, again, including headcount, consulting, compensation-related costs as well as facility costs. We expect our G&A expenses to increase in future periods to support our continued research and development and as we prepare for commercialization of vadadustat.

Turning to our capital position. We ended the year strong with our cash position of $317.8 million, the company also receives cost share funding from its collaboration partners generally on a prepaid quarterly basis. We expect our cash resources, including the prepaid quarterly committed cost share funding from our collaborators to fund our current operating plan into the second quarter of 2019.

And lastly, we ended the year with approximately 47.6 million shares outstanding or 52.5 million shares on a fully diluted basis inclusive of outstanding options and RSUs.

With that, I'll turn it back to John.

Thanks, Jason. Our goal is to build a leading innovation-driven renal company and transform Akebia into a fully-integrated commercial organization. Already 2018 is off to a strong start. We continue to drive progress for our global Phase III PRO2TECT and INNO2VATE programs. As I mentioned, we're targeting full enrollment of these studies by the end of the year, the topline results in 2019 subject to the accrual of MACE events followed by a market launch in 2020 subject to regulatory approval. We're moving ahead with our new FO2RWARD and TRILO2GY studies, which we enhanced in collaboration with Otsuka. Our investment in these study enhancements reflect our confidence in the program and desire to position vadadustat for commercial success. We're targeting to filing an IND submission for AKB-5169, a potential oral treatment for patients with inflammatory bowel disease, for later this year.

We continue to explore the potential of a vast range of HIF compounds, which we in-license from J&J Innovation in early 2017. And we continue to explore strategic business transactions to bring further value to Akebia. We advanced our business from a position of financial strength, with more than $300 million on our balance sheet and significant committed capital from our collaborators to come in over the course of the Phase III vadadustat development program. We also leveraged the expertise and strong track record of our management team and the dedication and talent of all of our employees.

And now we'll open the line for questions. Skyler?

(Operator Instructions) Our first question comes from Chris Raymond with Piper Jaffray.

Just on the -- your competitors' delay, I guess, maybe -- and I know you probably don't want to spend too much time talking about this. But maybe just in relation to comparison with what you guys have going -- so the delay as we read it was primarily based on the complexity, I think, of their data analysis, multiple trials, multiple folks conducting these trials. And it seems like your program is more sort of streamlined. Not actually asking you to say, definitely, you won't run into the same issue, but could you just, sort of, contrast your analysis versus roxadustat? And also we were kind of struck by their commentary that they would not have the pooled MACE analysis. And I know you just mentioned this, John, at the end of your comments, seems like you're still planning on having that, but just maybe talk about the significance of that? And you mentioned also that your gap in timing has narrowed, just maybe talk about that a little bit, if you don't mind?

Thanks, Chris. We're not going to obviously speculate on FibroGen's program, but I do think that the straightforward nature of our program is an advantage. I'll ask Rita, maybe to comment on that.

Thank you, John. Yes, with our program we have taken an approach where we decided to conduct 2 trials in the nondialysis patient population, the PRO2TECT program, and 2 trials in the dialysis patient population, the INNO2VATE program. For all 4 of these studies, we have the same active control, darbepoetin alfa. And in addition to that, we've had similar endpoints across all 4 trials. Such that we've designed the 2 Phase II studies as studies that can be pooled to evaluate MACE data. The 2 Phase III studies, PRO2TECT and the 2 Phase III study, INNO2VATE. So we do believe that the way the studies have been designed with the same active control, which is the standard of care in the space and then the ability to have similar endpoints and pool that data does allow this to be a fairly straightforward approach to looking at these data sets.

And so when we do read out PRO2TECT and INNO2VATE, we will have the MACE data pooled across the studies when we report.

Okay and then -- if I can ask a follow-up. Knowing the INNO2VATE and PRO2TECT are your registration vehicles, primarily -- and I know you've guided to filing, I think, before the TRILO2GY trial reads out. Can you just remind us the role that, that trial serves?

Rita, do you want to talk about that?

Yes. Thank you, John. As we mentioned, we have revised the design of the TRILO2GY trial. And we do plan to have a larger study than was initially planned and within that trial, we will include once-daily dosing and 3 times weekly dosing as well as having data switching from a variety of ESA therapies at baseline. Now this study will provide important information, but it is also important to note that our core registration program is based on INNO2VATE and PRO2TECT. And the data from those studies we'll provide for the registration. We also will have data from our Phase II U.S. study 011 in the dialysis population that looked at 3 times weekly dosing and also from our new Phase II FO2RWARD study, which is also going to include 3 times weekly dosing. So right now, we're not considering the TRILO2GY trial to be gating towards our initial filing. That said, we do think it will provide important information, as John mentioned earlier, to characterize and further differentiate vadadustat.

Our next question comes from Bert Hazlett with BTIG.

John, you mentioned that you couldn't be happier with your partner, Otsuka, that is not necessarily always the case with partnerships. Could you describe a little bit more as to what's transpiring there with Otsuka that's making you so effusive? And I've got one or 2 more.

I suppose that is effusive when it comes to partnerships. I just -- I have lived through a variety of partnerships, not all of them are as collaborative as what we've seen from Otsuka across the board. But -- and Michel Dahan kind of is -- was obviously responsible for the deal and manages the alliance functions. So I'll ask him to comment.

I'm very happy to. So in the context of FO2RWARD and TRILO2GY, let's take this as an example. We started the discussion about how to maximize the potential of vadadustat globally in the second half of last year, shortly after we expanded our collaboration to include Europe and other international markets. And it was great to see the full, I mean, full alignment with Otsuka on how to do that, how to maximize this opportunity of added commercial potential, first and foremost. And frankly, you'll see opportunities to optimize our program. I think the changes that we have announced through FO2RWARD and TRILO2GY reflect the strength of the alliance and here I mean joining our forces, right? And the high quality of the relationship as well as, frankly, the high quality of Otsuka as a partner.

The thing I'll add, Bert, is having partnerships never makes drug development more streamlined, more easier. But I will say the -- not only Otsuka and who they are as a company, but also the way the agreement was constructed where we controlled development across the entire program. And obviously, consult closely with them, but you don't have some of the issues you have in a situation where there are multiple companies running multiple studies. So we are responsible for running all of the studies consulting with them. And that just makes the process much more streamlined.

Okay. Then just to -- kind of a basic one with regard to numbers, $87 million of revenue, roughly $40 million of that -- I guess, for -- this is for Jason, was booked to the deferred revenue that puts a -- the collaboration revenue kind of continuing ops run rate at $47 million roughly for this quarter and of that versus $41 million in the third quarter. As you think about R&D increasing, should we also think about that $41 million versus $47 million? Should that increase quarter-by-quarter going through 2018? Is that what you're indicating?

Yes, the cost is a component of how the revenue gets recognized, as the costs are increasing you will see a commensurate increase in revenue as well. The Mitsubishi revenue will come in again in Q1, and thereafter, because we're supplying them with product. They will be fully furnished with their product for their Phase III trial by Q1. So I think that revenue will kind of normalize and tail off, but the Otsuka revenue will continue, which will be commensurate with our R&D cost for the program.

Okay, terrific. And then just the IBD product, 5169, when is the earliest we might actually be seeing data for that, is that 2019 data readout or more like 2020?

Well, I think that I'll probably hold off on answering that question at this point, Bert. Let's get to the timing of the IND, once we have that, at the same time, obviously, now we're working on what the design of Phase I would be. So once we have both of those things, we can give more clarity on timing of data.

Our next question comes from Difei Yang with Mizuho.

Just a couple. The first one is on competitive. So John, could you share what is your top line view with regards to GSA's (sic) [GSK's] competitive product as well as Bayer's? I know they both are behind you, but from product-profile perspective, how do you view them?

So yes, GSK is, we believe, still behind us in development. I think, recently you've seen that they've made some investments in new studies, et cetera, in the program. And I think that's really a reflection of the market opportunity here. Even though if time lines continue as they are today, they'd be third to the market. They see a significant opportunity, my interpretation of their willingness to continue to invest in the program. I think we'll wait and see Phase III data and compare at that point in time. As we understand the Bayer compound, they're still not -- the last we heard, they were looking for a partner X, in the U.S., and were not moving forward the development. I haven't seen anything that leads me to believe a change has happened there or a deal has been signed. We do expect and we understand that they are moving forward with development in Japan, where as I mentioned before, you don't need the large MACE data. And very little has been published about the Bayer compounds so it's hard to even speak much about the characteristics.

Very helpful. Then my next question is on biosimilar. So we know there are a couple biosimilar versions of ESAs are being reviewed by the FDA. So how do you see the market dynamics will change as those biosimilars are being approved, I believe would be ahead of the HIF-PH launches.

Well, you know, I mean -- I think we're at the point now where -- I don't know, I've been here since 2013 and we've been expecting biosimilar approval anytime, right? And so we're in 2018 and we still haven't -- we haven't seen one yet in the U.S., certainly, so who knows? But fundamentally, remember, the safety concerns of the current ESAs will be the safety concerns of the biosimilar ESAs and the differentiated product profile that we're developing and hope to show in Phase III, I think, will carry over to all of the ESAs in the market. Recall that the dialysis market is a bundled reimbursement market. So it's contract based, and we think that the transaction we completed last year with Vifor is absolutely critical and important and strategic for us that allows us access to those 40% of patients that Fersenius treats assuming the Phase III data support's regulatory approval, of course, and as you think about the market that we've always been most excited about maybe is the nondialysis market. And remember there's well over 1 million patients in the U.S. who are anemic who have chronic kidney disease and for a market like that, a once-a-day oral offering will always be favored by physicians and patients, certainly, versus an injectable product. So we like our competitive positioning against both the current ESAs and potentially biosimilars.

Our next question comes from Kennen MacKay with RBC Capital Markets.

John, wondering maybe if you can comment on sort of where you're getting the conviction that the Phase III trials, especially with the MACE could be complete next year. Is that from the events that have come in here? Or sort of anticipating events from patients who will be enrolled in the latter half of the year? And then, secondly, on that enrollment, wanted to get a sense of whether that timing by year-end was counting more on-site expansion? Or enrollment at currently open sites to meet that deadline? And then one final question, just housekeeping, I think sometimes in the past you had mentioned a DSMB meeting taking place and suggesting continuation of the trial with their clean safety profile or balanced safety profile. Just wanted to check if that meeting had occurred this quarter and have a positive go forward signal?

All right, Kennen, I didn't write those down. Hopefully (inaudible) a lot of questions there. I'll start with the last, we haven't had a DSMB meeting since the one we reported last. I can't remember exactly what quarter that was, but as I said before, by their charter, they have to meet twice a year. We expect that they'll probably meet more frequently as there is more data for them to review, but we haven't had one in the time since the last report. So you asked about enrollment and kind of timing, et cetera. The -- whenever you look at and kind of project to when data will readout, you're looking at your enrollment and your expected event rate. That's, it's kind of those 2 things that will drive the timing of seeing events. And so -- or seeing data and that's what we're looking at, kind of a range of rates, VEN rates, et cetera. And again, that's why we always kind of characterize it as -- we are expecting data in '19 subject to those -- to seeing those events. I mean those will come in, and obviously, that accelerates as you have more time and more patients on the trial. While we are still adding sites, I think, the dramatic majority of sites are on. Rita, you agree, and that's where we expect to get enrollment from. I think we have -- I don't know if there are any other countries we're adding at this point. I think, we're...

No, I think, John, you're correct. We have largely activated the majority of sites in countries that we plan to, and so we're now focused on a number of strategies to continue to accelerate enrollment within those countries and sites. And so that's what we're watching as well as the MACE data as that comes in.

The next question comes from Jonathan Aschoff with National Securities.

(inaudible) you talk about 2/3 of my questions. So I guess the last third was given now the enrollment pace that you're thinking of and sort of the 2019 year for data that is kind of depending on the pace of MACE. My -- I guess the only thing left to my question is, do you think that 2020 commercialization might be on the aggressive side?

Again, I mean, this will -- we will all see together. I mean this is our expectation based on what we're seeing today. We will move as quickly as possible to submit a high-quality regulatory filing from the time we see our data and move as quickly as possible into the commercial setting. So we're not going to lounge about. We're going to work hard to move as quickly as we can, but as we get closer to understanding exactly when data will come out, we engage in our regulatory meetings. We'll understand the timing better and we'll update. But I think we feel very comfortable with the guidance we've given at this point.

Your next question comes from Ed Arce with H.C. Wainwright.

A lot of them have already been asked, but I just want to go back to your 2 ongoing -- well, one of the 2 ongoing plan studies, anyway, FO2RWARD and TRILO2GY, and I know TRILO2GY is due to start later this year, but with FO2RWARD, in particular, being that, that would be rolled into the NDA package. I was just wondering, if you could give us a little more detail and perspectives, John, perhaps on how you think about that adding to the speed of your commercial momentum? And how that would differentiate the drug in an environment of really 3 closely-timed competitors? And then I have a follow-up.

Okay. Rita, maybe you want to start with that one?

Yes, certainly, so I think, as we mentioned earlier, we've enhanced the design of our Phase II study, FO2RWARD. And with the new protocol, we've decided to enroll a larger sample size with a broader patient population though that still includes the ESA hyporesponder group and within the study, we'll be looking both at once-daily and 3-time weekly dosing as well as obtaining data to inform ESA switching protocol. So in all, this data set will provide a range of information that can support our registration package and then as you know in the current INNO2VATE trials, in '016, we're looking at new onset dialysis and then in '017, we're looking at established dialysis subjects whether hemodialysis or peritoneal dialysis and then within that trial, we do allow ESA hyporesponders to be enrolled. So I think we're trying to have a totality of data that could inform the dialysis as well as the nondialysis population and we think the FO2RWARD trial will add to that dataset. And I'll turn it over to Michel.

Yes, Michel, maybe you want to comment on the commercial implications?

Happy to. We have, with those 2 studies, an opportunity to really fully characterize and differentiate vadadustat. Let me mention 3 salient points. First, TIW, I mean we talked about the importance of having full-dosing flexibility and that's what we're targeting so we will have that as part of FO2RWARD and data will be included in our NDA. But then also ESA switching data from all type of ESAs that are being used today, including Mircera, FibroGen and RNF and then obviously, the hyporesponder patient population, an population that has -- where we see very important unmet need and while it is a small patient population, you're talking about 10% to 15% of patients, it actually represents an important cost driver because of the unmet need and because they drive maybe 40% of the use of ESAs in the dialysis market. And so we'll have data in all of those important -- well, in that the patient population and to support the full profile of vadadustat by the time we launch.

Thanks, Michel. Ed, you had a follow-up?

Yes. That was very helpful. The only other question was, and I know, Jason you touched upon this briefly but if you could share any sort of P&L guidance for us in 2018, in particular, after the bump in the revenue from the MTPC collaboration?

Sure. Well, Ed, as you know we don't really give financial guidance on our financial results but to guide you qualitatively, as I mentioned in the discussion, R&D is going to continue to increase because we are really targeting to have enrollment by the end of this year and if you look at the increase from last year to this year, it's rather significant, which was reflecting that second trial coming on for -- where INNO2VATE was started in August of 2016 and you see that significant ramp in 2017. Now we have both of those trials running simultaneously for a full year and trying to wrap up the enrollment by the end of this year. So you should expect a significant ramp there. Not exactly a mirror image of last year, but it would still be a rather significant ramp.

And maybe just reiterate the revenue side? Will MTPC comes through?

Yes, correct, so as I mentioned on the previous question that was asked, the cost is an element of how the revenue gets recognized so if costs go up, revenue goes up. Mitsubishi is under a different arrangement than Otsuka, we're actually supplying them product and they're running their own Phase III, so they are funding their Phase III program, we are supplying them product. So that becomes our responsibility under that agreement. And that's a much more shorter period than the long trials that we're running with Otsuka. So as I mentioned in Q1 of '18, our responsibility relative to Mitsubishi will be pretty much satisfied because we would've satisfied their product supply requirements by Q1. So you'll see the balance of any revenue that we recognize from Mitsubishi, absent milestones that come in at later dates will be satisfied in Q1.

And our next question comes from Jeff Hung with CBS (sic) [UBS].

Can you talk a little bit about why Mitsubishi Tanabe's Phase III does not include the MACE endpoints that's kind of different from the one you are conducting and what's the significance there?

So Jeff, you are breaking up a little bit, but I think you asked why the Mitsubishi Tanabe program doesn't require a MACE endpoint.

That's right.

Thanks, great. So yes, so the PMDA, Japanese regulators don't require MACE data for registration in Japan, and if you recall, when we were deciding between kind of a local program, which Mitsubishi would run and a global program having them participate in the MACE program, we really chose the local program because they could move more quickly, yet they recognize -- our partner recognizes that, that having access to the MACE data could be quite important commercially, and that's why we put the agreement in place where they can access that data for a payment. But of course, none of the -- again, PMDA doesn't require the MACE data. They have -- Mitsubishi Tanabe now has all 4 of their trials up and running and they will -- again, they are saying 2019, they've been doing a fantastic job of driving those studies, the timing of those studies. And so we are expecting really to see that data in the first half of next year.

Great. And then can you remind us what drove the recent changes to FO2RWARD and TRILO2GY? Like was this driven by specific data? Or by regulators? Or was there something that you wanted to see that you felt you wouldn't have seen in the previous design?

Yes, so it really was driven by -- Michel kind of referenced it before. I mean, to a large extent, it was the collaboration with Otsuka, really -- we signed the European part of the agreement in April or so of last year. So it was really the second half of last year that it was -- that was really up and running. And frankly our, kind of, focus has been very U.S.-centric and having a much more global view of our needs from a commercial standpoint and looking to optimize the commercial possibilities for the product really drove -- significantly drove the changes, where we could look -- have a much more holistic view of the dialysis population understand, have much more data, more publication opportunities, more -- to help with building value dossier et cetera, outside of the U.S. It really was looking to optimize for the commercial opportunity here. Anything to add on that, Rita or Michel?

No, I think that's right, we've included endpoints, for example, also when -- endpoints, I mean secondary.

Right. Yes.

Multiple secondary endpoints in order to support value dossier globally. I mean, things that you do with your partners when you have a global view and how to maximize the opportunity in all key markets.

(Operator Instructions) And I'm showing no further questions.

Great. Thanks, Skyler. Thanks, everyone for joining us today. Have a great evening. We look forward to updating you further during the year. Thank you.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.