ChemoCentryx Inc (CCXI) 2018 Q3 法說會逐字稿

Good afternoon, and welcome to the ChemoCentryx Third Quarter 2018 Financial Results Conference Call. (Operator Instructions) As a reminder, this conference call will be recorded. I would now like to turn the call over to Bill Slattery of Burns McClellan. Mr. Slattery, please go ahead.

Thank you. Good afternoon, and welcome to the ChemoCentryx Third Quarter 2018 Financial Results Conference Call. Earlier this afternoon, the company issued a press release providing an overview of its financial results for the third quarter ending September 30, 2018. This press release, along with a few slides that you may find helpful while you listen to this call, are available on the Investor Relations section of the company's website at www.chemocentryx.com.

Joining me on the call today is Dr. Thomas Schall, President and Chief Executive Officer of ChemoCentryx, who will review the company's recent business and clinical progress. Following his comments, Susan Kanaya, Executive Vice President, Chief Financial and Administrative Officer of ChemoCentryx, will provide an overview of the company's financial highlights for the third quarter before turning the call back over to Tom for closing remarks.

During today's call, we will be making certain forward-looking statements, which those of you following the slides can see on Slide 2. These forward-looking statements are based on current information, assumptions and expectations that are subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These risks are described in the company's filings made with the Securities and Exchange Commission, including the company's annual report on Form 10-K filed on March 12, 2018.

You are cautioned not to place undue reliance on these forward-looking statements, and ChemoCentryx disclaims any obligation to update such statements. In addition, this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, November 8, 2018. ChemoCentryx undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this live conference call.

I will now turn the call over to Tom Schall.

Thank you, Bill, and good afternoon to everyone listening. Thank you for joining us on our third quarter 2018 conference call. Today, I will highlight 3 points, all of which illustrate and substantiate an overriding theme, as you can see from Slide 3. That is we are moving inexorably forward to our goal of advancing our clinical programs toward regulatory submissions for marketing approval.

Accordingly, today, first, I will talk about our clinical trials of our unique asset avacopan in 2 open kidney diseases and how we are now expanding the footprint of avacopan into dermatological disease. I will outline for you how this is lining up for a beautiful choreography of releasing 3 key sets of top line data in quick succession starting in the coming year. Second, I will address our second lead asset, CCX140, whose unique mechanism of action we believe holds the key to benefit in another orphan kidney disease. Finally, I'll refer to the strength of our financial position before turning the call over to Susan for financial highlights of last quarter.

Our value creation journey from scientific discovery to setting new standards of care in modern medicine is taking a huge and next step forward. Let me start with avacopan and the treatment of anti-neutrophil cytoplasmic autoantibody-associated or ANCA-associated vasculitis, an orphan disease that is characterized by a wide spectrum of burden for patients summarized on Slide 4.

As I reported on our last call, we completed our ADVOCATE Phase III pivotal trial enrollment in July. With more than 300 patients enrolled, we believe that the ADVOCATE trial is the largest randomized controlled clinical trial of a novel drug candidate ever conducted in ANCA-associated vasculitis. And make no mistake, our aim is nothing short of a new standard of care, one which spares patients from the scourge of old therapies such as chronic high doses of glucocorticosteroids that date back several decades.

Based on the data to date, we believe that the ADVOCATE Phase III clinical trial will continue to provide strong clinical evidence of avacopan's ability to halt ANCA vasculitis, to halt it rapidly and durably while also freeing patients from the noxious side effects of chronic high-dose steroids, which can include death as well as longer-term disabilities, and liberating ANCA patients from the greatly diminished quality of life associated with current standard therapy, including chronic steroids. The ADVOCATE trial will assess the durability of avacopan's impact on safety and efficacy over a sustained 1 year of treatment. We are confident that we'll be able to share top line data from this trial in the fourth quarter of this coming year 2019.

With this data, we expect to submit a U.S. New Drug Application, or NDA, during the first half of 2020. I'll remind you that data from the randomized controlled Phase II trials were compelling. Avacopan rapidly alleviated the signs and symptoms of ANCA-associated vasculitis. Avacopan also made people feel better, as reported by validated quality of life outcomes instruments. And avacopan therapy significantly reduced the toxicity that occurs with the chronic use of steroids.

In other words, in Phase II, avacopan not only reduced the burden associated with the traditional standard of care. It also independently improved clinical outcomes for patients. The data to date suggests that avacopan can make improvement across the total burden of ANCA disease. We designed the Phase III advocate trial with this knowledge and accordingly, are optimistic about the results.

While the enrollment of ADVOCATE is complete, the hard work definitely continues. We are now focused on completing the trial with high-quality data sets and in preparing for our submission to the FDA so that we can file as rapidly as possible. Meanwhile, we are working in parallel to fundamentally understand the market opportunities and dynamics and to formulate our commercial strategy. The ADVOCATE trial itself is big news for our company and more importantly for the patients. But this is only the first in a cadence of successive readouts of top line data involving our uniquely differentiated molecule, which I will remind you, has the added benefit of being orally administered.

Our second trial involving avacopan, which you can see on Slide 5, is for the treatment of C3 glomerulopathy, or C3G. C3G is a rare disease that attacks the young and frequently requires a kidney transplant from a parent with relapse after the transplant all too tragically common. Based on emerging science and on expert investigator feedback and with the aim of having the most comprehensive and controlled trial ever attempted in C3G, we have expanded our clinical study to 88 individuals in this randomized controlled trial. Half of the C3G patients will be on the empirically derived standard of care, and half will have avacopan therapy.

Avacopan's performance will be assessed using a validated renal histology index at 6 months of therapy. The trial is not only blinded but quite large relative to the C3G orphan patient population. To stress this point, our goal here is to have a definitive result. Can avacopan be the new standard of care in C3G? By successfully engaging the expert clinical community, we have 95% of our planned clinical sites activated, and the investigators are enrolling patients at an excellent pace.

Given the rapid enrollment so far in this trial, we hope the C3G trial will be fully enrolled in 2019. And given the fact that avacopan's performance will be evaluated after 6 months of treatment, we therefore expect that top line data from this trial could come 1 to 2 quarters after the data from the aforementioned ADVOCATE trial. Given the rarity of this disease, C3G, and the fact that there are no approved therapies, strong data could potentially support our registration application.

The third trial I will touch on today is also for avacopan but this time to treat patients in a different disease area with profound unmet medical need, as you can see from Slide 6. Hidradenitis suppurativa, or HS, is a damaging and disfiguring skin disorder. Remarkably, the only registered therapy has sales totaling about $1 billion worldwide despite being widely regarded as being only moderately effective. There is evidence from a proof of concept study that C5a is driving this disease, which is also known to be neutrophil-driven, so not unlike ANCA-associated vasculitis. Hence, the potential role for orally administered avacopan.

We recently attended the international HS symposium in Toronto, and we were impressed by the widespread desire in both the patient and clinical communities for new approaches to this disease, particularly those with the convenience of an oral medication such as avacopan.

We've had discussions with the FDA and are now ready before the end of this year to launch our clinical trial of avacopan in HS at multiple centers. This trial will be a large, definitive, 3 armed, randomized, controlled trial with over 350 patients suffering from modest -- moderate to severe HS. The trial will compare avacopan to placebo and use the HS Clinical Response score instrument, which has been previously validated by the FDA, as a primary endpoint. Importantly, since this primary endpoint will be assessed after 12 weeks of treatment, although we will, of course, follow patients for longer, we expect that we could provide top line results within a reasonably short time frame after the C3G readout.

To summarize, I would draw your attention to the 3 ways to win with avacopan, as you can see on Slide 7. We are planning for a cadence of top line data that would start in the fourth quarter of 2019 with ADVOCATE data from ANCA vasculitis and will be followed 1 to 2 quarters later by data in C3 glomerulopathy and then by the HS data soon thereafter. With 3 potential indications across 2 different disease areas, avacopan is a pipeline in a drug.

Avacopan with its ability to precisely target the C5a receptor is unique in the world. It enables us to advance avacopan in a number of important diseases where C5a and the C5a receptor play an important role in pathogenesis. These diseases are characterized by high unmet need and likely significant commercial potential.

I would remind you that avacopan's targeting of the C5a receptor is so precise that it does not impact the protective actions of a second C5a responsive pathway known as C5L2. A growing body of recent literature attest to the fact that C5a going through a second receptor, C5L2, has important biological benefits. With avacopan, we leave C5L2 intact by design, not serendipity. We knew that in the complement system, absolute precision should be the highest goal, and that through absolute precision, we could develop much more targeted medicines for better health.

Let me now turn briefly to our second asset, CCX140. We were delighted in the third quarter that the FDA granted CCX140 Orphan Drug Designation for focal segmental glomerulosclerosis, or FSGS. As shown on Slide 8, FSGS is another debilitating orphan kidney condition that lacks an approved therapy. Our clinical trials involve 2 subpopulations of patients with primary FSGS: one so-called nephrotic syndrome and one in the sub-nephrotic population. These 2 trials are now proceeding in parallel and actively enrolling patients.

At the meeting of the American Society of Nephrology last month, we presented new data on the novel mechanism of action that truly differentiates CCX140, a selective inhibitor of the chemokine receptor known as CCR2, from any other new molecules attempting to tackle FSGS. We now know that CCR2 has a direct role in the glomerulus in FSGS kidneys. We presented data at ASM that showed that the CCR2 inhibitor CCX140 may have a direct beneficial effect on podocytes in the glomerulus, i.e. the specialized filtration cells in the kidney, thus explaining the rapid and durable benefit of reducing proteinuria that we have seen in both animal models and in humans.

It was in that prior successful human trial, our Phase II trial of CCX140 in diabetic nephropathy, that we also established a favorable safety profile over 1 year of continuous dosing of CCX140 while primary -- while meeting the primary endpoint of a sustained and significant reduction in proteinuria. Proteinuria reduction is important since in at least one form of FSGS, this endpoint is likely to be the key endpoint for regulatory approval.

Before I turn the call over to Susan, let me say a word about our financial strength. With clinical momentum growing ever stronger, our robust financial position allows us to conduct and complete all of the trials that we discussed today while we simultaneously plan for commercialization of our first medication. As you'll recall, ChemoCentryx possesses all rights entirely for avacopan and CCX140 in the United States. For the international commercial rights for avacopan and CCX140, we have licensed those to our world-class partner, Vifor Pharma, who will pay us tiered royalties between the teens and the mid-20s on any aggregate net sales in their territories. I will say more about our preparations for commercialization in the United States on a future call. Susan?

Thank you, Tom. Our third quarter 2018 financial results were included in our press release today and are summarized on Slide 9.

Revenue was $9 million for the third quarter, consistent with the same period in 2017. Revenue recognized represents amortization of the upfront license fees, milestone payments and collaboration funding from Vifor Pharma.

Research and development expenses were $15.1 million for the third quarter compared to $12.3 million in the same quarter in 2017. The increase in 2017 to 2018 was primarily attributable to the avacopan ADVOCATE Phase III pivotal trial, which completed enrollment in July 2018. General and administrative expenses were $5.4 million for the third quarter compared to $3.6 million in the same period in 2017. The increase was primarily due to higher employee-related expenses, including those associated with our avacopan commercialization planning efforts and increased professional fees.

We recorded a net loss for the third quarter of $10.9 million compared to $6.6 million in the third quarter of 2017. Total shares outstanding at September 30, 2018, were approximately 50.4 million shares.

Finally, we ended the quarter with approximately $186 million in cash, cash equivalents and investments. Excluding cash received from milestone and upfront payments and credit facility advances, we used cash and investments of approximately $40.7 million for the first 9 months of 2018. And we expect to end 2018 with approximately $170 million. Tom?

Thank you, Susan. To summarize, as you can see again on our last Slide, Slide 10. Our relentless pursuit of advancing clinical development has led us to the threshold of an exciting future. We are completing the ADVOCATE trial and preparing to share top line data in the fourth quarter of this coming year. Pivotal data from ADVOCATE in ANCA vasculitis will only be the first of a series of 3 key data readouts of avacopan as we then expect to report on our current C3G study shortly after the ADVOCATE result and thereafter on the large avacopan HS trial.

As to the second orphan disease drug asset, CCX140, as we conduct our clinical trials of CCX140 in FSGS, the FDA has recognized its potential on this disorder this past quarter by awarding CCX140 Orphan Drug status. Moreover, the new mechanism data that we presented at ASM last month underlines the promise of the unique CCX140 asset as well. Our financial strength enables us to push forward in multiple clinical programs simultaneously while we prepare to commercialize avacopan in the United States.

With that, I will now turn the call back over to the operator and look forward to your questions.

(Operator Instructions) Our first question comes from Michelle Gilson with Canaccord Genuity.

I just wanted to ask you about now that you've enrolled the Phase III study, can you talk a little bit about the baseline characteristics of the patients in the study, especially given the entry criteria for ADVOCATE allowed for somewhat sicker patients versus CLEAR? And then can you also remind us on the data in that subset of the CLEAR population, what that looks like? Did you eGFR stabilization, BVAS reductions in that segment of the population?

Thank you, Michelle. That's a very good question. So by and large, the patients in Phase III very closely matched the patient population in this position that we had in the Phase II studies, both CLEAR and CLASSIC studies. You're right. We've allowed a little bit more liberal inclusion criteria when it comes to eGFR, and that is because we learned in the Phase II study that probably we're going to have a pretty good chance of arresting the advance of kidney decline or at least being able to opine on that based on what we saw in Phase II. And there were a couple of exceptional cases in Phase II where we did allow somewhat lower eGFR to the study. So we do have some data on that. I would say that overall, the patient populations in the ADVOCATE trial are very similar to the patient population we saw in the Phase II CLEAR trial. They've just scaled obviously for greater end. So I think that we are very sanguine about the possibility that the Phase III data should be fundamentally informed by what we saw in Phase II.

Okay. And then can you also remind us on the data that make you so confident in the long-term effect of avacopan and seeing the remission rates at 26 and 52 weeks?

Yes, that's a great question. Thanks for asking. So fundamentally, it is probably valuable to recall the mechanism of action of avacopan, which is quite unlike any of the other therapies right now out there. We are arresting the ability of neutrophil to be activated through C5a receptor by C5a. That is fundamentally the damage-inducing step in systemic vasculitis and ANCA vasculitis. If we remove the ability of those neutrophils to be activated, both human clinical data as well as extensive animal pharmacology suggest that, that fundamental terminal damage effector pathway is shut down. And we've shown that again both in preclinical models, we and others, with an otherwise lethal brand of anti-myeloperoxidase antibody, which is one of the human ANCAs, a lethal anti-myeloperoxidase antibody glomerulonephritis model, which those animals are completely protected and quite healthy when you block C5a receptor with avacopan. Those are published data. Or if you genetically delete C5a receptor, no matter what else is going on in the animal system, including still having very high levels of the ANCA antibody, as long as you get rid of the neutrophil that could be activated by C5a receptor, you eliminate the disease. And how that relates to the human situation is since folks will be taking avacopan chronically and durably in the case of the ADVOCATE study for -- continuously for 52 weeks, we believe fundamentally that we will have simply short-circuited the terminal damage effector pathway of this disease. And therefore, response and remission should be quite durable. Moreover, we've eliminated one of the very noxious parts of the standard of care, which is the chronic high-dose steroids, which itself causes other kinds of damage not related to vasculitis. The reason that steroids are such a problem is also the reason that in clinical practice, they have to be tapered. And so as folks come off of those steroids, they tend to start having -- and this would be irrelevant to the control group, they tend to have a relapse of their symptomatology for ANCA vasculitis. So fundamentally, we believe that there is a -- based on our models and based from the data to date, over the course of 26 and then 52 weeks, the standard of care group should have more relapses, that is loss of remission, whereas folks on our experimental drug should stay in remission since they're taking it in a chronic fashion. And so that's how the study has been set up. And again, it really does reveal the inadequacy of the current standard of care. People simply cannot stay on standard of care chronically because it's too toxic, frankly, and that really illuminates part of the unmet need.

And our next question comes from Ed White with H.C. Wainwright.

So as always, Tom, you had a very clear and concise presentation. So I just have one more question for you. I think, Tom, when you discussed HS, maybe I heard you wrong, but I thought you said 350 patients, is it 350 or 390? Or is it approximately 390?

So Ed, thank you for that question. To clarify, I think I said in excess of 350. Right now, we're modeling or targeting 390. We'll have 3 groups in a controlled fashion of 130 each. And as I said, it's a blinded controlled trial. So it will be 1:1:1 randomization.

Okay. Great. And then the only other question I have was just with the -- are you going to release the interim data from the HS study or give us at least enrollment updates similar to what you did with ADVOCATE in the C3G trial?

We're certainly intending to give enrollment updates, Ed. And then we won't be giving any interim data releases, however, other than, of course, the variety of which we discussed progress of the enrollment, et cetera. We'd love to -- we intend to entirely protect the integrity of the data set in HS because it will come as no surprise just by looking at the scale of that study that it's powered to be a registration-grade study. And for this orphan disease, a well-controlled study of that size, if the data are sufficiently strong, may well constitute the basis of an interesting registration discussion, particularly as it relates to the maturity of the asset in other areas. So it's one of the reasons we set up the study the way we did.

And our next question comes from Steve Seedhouse with Raymond James.

Tom, just a follow-up on the HS trial. Could you just clarify what -- in addition to placebo, what the other 2 arms are? And what are your assumptions, I guess, for the effect size that inform those trial numbers? Are you assuming similar or better response rates than Humira?

That's a great question, Steve. So what we have in the other 2 arms, the ones who are not placebo, are the 2 doses that we've got great experience with in Phase II. We've got the 30 mg twice a day dose and the 10 mg twice a day dose is intended. And again, we're covering the constellation of possibilities of both biological and clinical effect. So we want to be comprehensive about that. The assumption is, as a minimum working assumption, that we ought to be able to detect the same delta that Humira had over background therapies quite handily with the size of study. So that would be the baseline assumption.

Okay. Great. And is this -- are you planning on enrolling this trial at centers that have experience with InflaRx' C5 antibody? And just given that trial completed enrollment, I just think it would give us a sense of sort of if your cadence of enrollment would be similar.

There's no question there will be some overlap. And there will be other sites that are probably not experienced in that particular trial. But we will avail ourselves of all of the experienced sites that we can. And I haven't talked about the number of sites we're targeting, but it's a greater number than our friends at InflaRx. So we'll have even more sites than they did.

Okay. Appreciate that. And just last question. So if you can just update us on the status of the Conditional Marketing Authorization application in Europe, just what the CHMP's Day 120 questions mentioned in your 10-Q and recent prospectus pertain to? It sounds like they comprised clinical, nonclinical and quality. Are these questions, things that would need to be addressed for your eventual full filing? Or are they specific to the conditional application just based on not having completed Phase III?

Yes. Thank you, Steve. We -- the Day 120 questions for us really didn't constitute any real surprises qualitatively. They were very thorough and extensive. You'll recall the Conditional Marketing Authorization application is based on the 12-week Phase II data. So inevitably, there were questions related and specific to CMA given the length of the data experience that we have to date. And so none of the questions were surprising. I think we -- one can look at the standard calendar for the EMA, and I can -- it's easy to deduce that we have responded by this time. And we quite thoroughly responded to all their questions, whether they were in the CMC space, the off-clinical programs or even questions on clinical issues. So we will just have to see how that goes. We're not -- again, just using standard EMA time lines, we would not anticipate a full opinion to be rendered until sometime in the spring, leaves us with the interesting conundrum of what we might do with the 12-week license even if it were approved at that time given the fact that our full 52-week data is only a couple of quarters away from that. So some interesting logistical questions there. But to answer your question in brief, yes, we had a slate of questions, again, none of which were qualitatively surprising to us. We answered them, and that package is still under review at this time.

And our next question comes from Konstantinos Aprilakis from with JMP Securities.

This is Jon on for Konstantinos. So on the last call, you indicated you might get the full Japan enrollment by the end of this quarter, in time with your full data release. Are you seeing sufficient numbers there?

Yes. Thank you. That's a very good question. It's a bit a nuance and a subtlety. But yes, Japan enrollment is also fully complete. And so we have all of the global enrollment now in hand. Again, without going into too many details, the total number of folks enrolled around the world therefore is 331. The original design of the study was not to include Japan under the original concept. So you've seen the number of 316 as our full enrollment from the previous calls and the previous disclosures. But yes, Japan is done. And so that, too, is now rolling along. The Japan cohort will not necessarily hold up the evaluation of the previous full Phase III enrollment cohort. But the details will be worked out as we go along and see how the database cleaning and database lock dates will look as we go forward.

All right. That's clear. And then do you plan on releasing any kind of interim data perhaps around that 26-week mark for the ADVOCATE trial?

Also a very good question. The short answer is no. And the reason is the way we've set up the trial is that we will collect all of the data on 52 weeks before we start analyzing any of the data. And then when we analyze the data from 26 weeks, then subsequently, 52, which is part of the primary endpoint, we'll do it in a hierarchical fashion. And the reason for that is we didn't want to spend any alpha as we analyze this data. And so we thought it was a very -- and continue to think it's a very clever and important design. So we won't see any week 26 data. We'll let last patient come out. And then we'll do all the analysis once we have the full 52-week data sets. but statistically, we'll do it in a hierarchical way.

All right. That makes sense. Last question if I can. Could you also discuss how you guys view implications between noninferiority versus superiority at the final readout?

Yes. That's a very good question. And again, it's one of these subtle but important points that can be easily misunderstood. But let me try to clarify it. In this indication, which is an orphan disease, noninferiority at week 26 is the sole regulatory precedent certainly at the level of statistical analysis. And that was evidenced by the previous trial called RAVE where rituximab was offered as an alternative to cyclophosphamide, both of those, however, in combination with high doses of chronic steroids. So it provides something of a precedent. And there, the null hypothesis statistically was statistical noninferiority of RAVE versus then standard of care, which was rituximab plus steroids rather versus then standard of care of cyclophosphamide plus steroids. And so that was fulfilled. Now noninferiority sounds so lackluster in plain English, but the point of fact is the defined statistical term, which is really the only test one can use in an indication such as this where the new agent start to have an advantage over the incumbent. So at very least, you only want to be no worse at the specified endpoint, in this case Birmingham Vasculitis Activity Score because the new agent is thought to have other advantages as well, which are measured outside of the primary endpoint also. In addition, superiority endpoints statistically, even when numerical superiority is achieved, may be limited by the number of N or patient population you can get into the trial in an orphan indication. So all of those are some background notes. And again, our 26-week endpoint is perfectly consistent with the single Phase III regulatory precedent that we have, which is extracted from the RAVE trial. We think that -- we're confident after discussions with regulatory agents -- agencies rather that, that same 26-week endpoint will provide sufficient impetus at least in Europe, if we're successful, to gain license for ANCA vasculitis. We are -- in addition, however, we're highly desirous of looking at durable or sustained remission, which is why we built in the 52-week endpoint in this study, because after all, this is a chronic disease with relapsing and remitting and we wanted to know whether we could not just induce the remission but sustain it. So we built in a 52-week endpoint where, again, we will first ask the question, are we statistically noninferior to the standard of care that is avacopan without chronic high-dose steroid of at least as good than the standard of care, which originally has the chronic high-dose steroid in terms of durable remission with 52 week? If we achieve that endpoint statistically, we'll then ask the subsequent question, are we actually statistically superior at week 52? And we think there is a reasonable chance that we will be superior at week 52 because the standard of care group will, a, be liable to have more relapses during that time. And perhaps, they'll also have more dropouts during the period of the 1-year dosing. So we're very sanguine about the possibility of not just hitting noninferiority at week 26 and week 52 but the possibility that we might actually convert also to having superiority at week 52. But I will stress, in terms of regulatory precedents, there's only one precedent, which is noninferiority at week 26. We're convinced in the EMA that gets us the license. If it's both noninferiority at week 26 and week 52, we believe we have a license, as I mentioned, in Europe and possibly in U.S. And if we're superior at week 52, clearly, we have a very, very good case to make here in the U.S. for a license as well. Both agencies, just to sum up and give you the fuller picture around the data, are very keen to see all of the analysis that were prespecified because all of those relate to the total burden of disease, as I alluded to on the slide. I believe it was Slide 4 of the deck. And that's really important now in the modern era of ANCA vasculitis. So the BVAS endpoint only refers to 1 of the 4 categories of the total burden of disease. And both FDA and EMA have said, please bring us all of the data. And if it scales the way it did in Phase II with avacopan, that will be a very powerful discussion with those agencies.

The next question comes from Anupam Rama with JPMorgan.

This is Tessa filling in for Anupam this evening. Maybe one from us on competitive question. Based on the data to date, how might avacopan be differentiated to some of the other complement-based approaches specifically in HS? And then maybe one on CCX140, if I could, how we should be thinking about first enrollment and then time lines to data for the FSGS 2 trials. And I think you said it was somewhere in the 2020 time frame.

Great. Both excellent questions, Tessa. Thank you for those questions. So avacopan, in some fundamental ways, couldn't be more different than other approaches in complement intervention, even right down to HS. For example, if we use the HS example, the other approach that I know of is an antibody against C5a. Avacopan is an orally active small molecule against the C5aR, C5a receptor. The antibody has to be dosed, currently, as far as I can tell, once a week by infusion. Our drug is taken by mouth daily. The antibody is a chimeric antibody. That is to say it was made in a mouse. So it's mouse anti-human, at least partially mouse. That means it's liable to have immunogenicity over time, which could lead to a loss of efficacy. The antibody does not bind the receptor. It binds the ligand. There may be significant challenges just by way of what we call mass action. Since we don't know the concentration of ligand in the local environment but we know that in some local environments, it can be actually huge, getting the antibody to the site of action in sufficient quantity is something that remains to be demonstrated clinically. And it's very difficult if not impossible to demonstrate experimentally. By contrast, our small molecule binds up the receptor, making the receptor simply unavailable to ligand, irrespective of how much quantity of ligand you have in the environment. We've shown that in model systems in vivo. We've shown it experimentally in vitro. And we've shown it by extrapolation in human subjects. Very, very clearly. The receptor is pharmacologically inert. It doesn't matter how much C5a you throw into the system. Then finally and importantly, Tessa, by binding up C5a as with an antibody, there may be untoward consequences biologically because as I alluded to in my remarks, there is a second pathway where C5a binds to another molecule, another receptor called C5L2. And C5L2 is well documented to have biological benefit in the complement system. I could cite a handful of papers which basically have in the title anti-inflammatory functions for complement C5L2 binding protein, disruption of complement, C5L2 exaggerates inflammation, et cetera, C5L2, the second C5a receptor, suppresses acute lung injury. That is when it's functioning. And so we could go on and on. So given a choice, and I have a choice, and we engineered this into our molecule some years ago, I would love and think it's imperative to leave C5L2 intact to perform its good functions while eliminating only the functions of C5aR, which is what avacopan targets. So that's the differentiation with other approaches. There's other complement intervention strategies for other diseases. Most of them are upstream in the complement cascade, and I think those could be more difficult to manage in the long term for chronic care. So I won't really want to go any of those in detail now that we've covered the HS landscape. CCX140 in FSGS, very good question. FSGS, again, these trials are launched now. We're actively recruiting in 2 forms of primary FSGS, and again, looking at the ability of CCX140 to reduce proteinuria in this patient population as we have shown it to do in a previous successful large Phase II study in diabetic chronic kidney disease where CCX140 continuously dosed for 52 weeks lowered -- durably lowered proteinuria above and beyond the background medications that it was added to. And that was the double-blinded trial. So it's a very nice study. I would love to be able to tell you exactly when we're going to have these trials enrolled. The first trial is in patients with nephrotic syndrome levels of proteinuria. These are very, very ill patients that have greater than 3.5 grams of protein in their urine relative to the ratio of creatinine in their serum. And these people progress extremely rapidly to end-stage renal disease and dialysis and even worse. Everyone thinks that by reducing the proteinuria to sub-nephrotic levels or even substantially reducing it, some of these folks come into the clinic with 10 or 20 grams of protein in their urine, even substantially reducing it on a percentage basis will definitely help with the delay of progression to end-stage renal disease since the protein itself becomes an insulting agent to the kidney and its tubules, for example. So that's a small study. The first cohort we're going to look at is about 6 or 7 people. But even getting data on 12 or 13 people could begin to constitute an interesting discussion with the FDA should protein lowering be significant in those small handful of primary nephrotic FSGS patients about how to license that drug in that indication for that limited population. We hope, by the end of this coming year, to have sufficient data from that study with the nephrotic syndrome patients to be able to start entertaining the discussion with agents -- agencies or at least knowing what we need to do in the next step to bring home a definitive answer in the nephrotic FSGS. So I'll have more to say about that in 2019. Similarly, with the parallel study in the sub-nephrotic population, that's a program which is running as a 4-arm study with the placebo control where CCX140 is added on top of the protocolized empirically derived standard of care. There are no FDA-approved therapies, by the way, as you probably know. And we hope to have that 4-arm cohort enrolled by the end of 2019, which we'll look at a 12-week reduction in proteinuria and see if we have a significant reduction in any or all of the 3 arms relative to the control. And then what we'll do there is decide which dose should we expand versus control, again, to try to increase and have a discussion with the FDA about how to register the drug ultimately in sub-nephrotic FSGS. So it's early days yet, but I'm hopeful that through 2019, we'll make significant progress such that in 2020, I'll have some critical readouts in FSGS as well. But we'll firm up that picture as we get into 2020. I'll have more to say about that in detail.

And I'm showing no further questions in the queue at this time. I'd like to turn the call back over to Thomas Schall for any closing remarks.

Well, thank you very much, Jimmy, and thank you, everyone, for joining our conference call today. It's been a very exciting conference call with great questions. I wish you all a very pleasant evening, and look forward to talking to you next quarter. Thanks again.

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