ChemoCentryx Inc (CCXI) 2021 Q1 法說會逐字稿

Good day, and thank you for standing by. Welcome to the ChemoCentryx First Quarter 2021 Financial Results Conference Call. (Operator Instructions) After the speakers' presentation, there will be a question-and-answer session. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions)

I would now like to hand the conference over to Lee Roth of Burns McClellan. Please go ahead, sir.

Thank you, Lee. Good afternoon, and welcome to the ChemoCentryx First Quarter 2021 Financial Results Conference Call. Earlier this afternoon, the company issued a press release providing an overview of its financial results for the first quarter ended March 31, 2021. This release, along with a few slides that you may find helpful while you listen to the 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 quarter before turning the call back over to Tom for closing remarks.

During today's call, we will be making certain forward-looking statements, as explained 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 such forward-looking statements. These risks are described in the company's filings made with the Securities and Exchange Commission, including our annual report on Form 10-K filed on March 1, 2021.

You are cautioned not to place any 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 accurate only as of the date of the live broadcast, April 29, 2021. 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.

With that, it's now my pleasure to turn the call over to Tom. Tom?

Thank you, Lee, and good afternoon to everyone listening. Thank you for joining us on our first quarter 2021 conference call. It's been just 59 days since our Q4 and full year 2020 call. So in my remarks today, I will briefly review 3 main areas: first, avacopan and ANCA-associated vasculitis as we move ever closer to potential launch; second, an update on our progress in making avacopan a pipeline and a drug; and third, our plans for CCX559, our oral immune checkpoint inhibitor.

Moving on to Slide 3, I'll start with highlights from our Virtual R&D Day, which was held on April 14. This was held as we look forward to the potential launch of our first medication soon after the PDUFA date of July 7, which we believe deeply offers new hope to patients. Speaking of patients, those of you who attended our R&D Day on April 14 will have heard a powerful and moving account of what it is like to live with ANCA vasculitis. A person who is enduring ANCA-associated vasculitis, Mr. Glen Massie, described his long and winding journey towards diagnosis and then with the severe consequences, consequences not only of the devastating disease itself, but also consequences of the treatments currently available.

But let me express the hope for an alternative to having to take, as he puts it, medicine on top of medicine. Glen's story is a vivid reminder of the desperate need for new therapy. It is for Glen, his family and all the others that must endure the scourge of a disease who have only current treatments that often trade one bad illness for another. It is for them that we, at ChemoCentryx, go to work each day and each night. Make no mistake, we will not stop. We will not rest easy. We will not give up until the hope of avacopan is delivered to them.

At our R&D Day, we discussed some new data, shown on Slide 4, from the successful ADVOCATE trial. The information covers an 8-week period immediately following the 52-week endpoint determination, during which time patients stopped taking avacopan. During that period, from weeks 52 to week 60, again once people have stopped taking avacopan, there were 6 relapses out of 158 subjects of the avacopan group and 7 relapses out of the 157 subjects in the prednisone group. This suggests a waning of efficacy once avacopan treatment is stopped.

It was notable, too, that a key indicator of renal function, the Estimated Glomerular Filtration Rate, or eGFR, which had steadily increased in the avacopan group from start of the study through week 52, then started to modestly decline after avacopan treatment had stopped. These observations may support the idea of continued benefit of therapy with avacopan in ANCA-associated vasculitis.

Our R&D Day also featured 2 world-renowned clinicians who treat ANCA-associated vasculitis: Dr. Peter Merkel, Chair of Rheumatology and Director of the Penn Vasculitis Center at University of Pennsylvania; and Dr. David Jayne, Director of the Vasculitis and Lupus Service at Addenbrooke's Hospital in Cambridge, England.

Dr. Merkel laid out the unmet needs in this insidious disease. He pointed to the many different areas of the body in which ANCA-associated vasculitis can strike patients, often developing into an organ or life-threatening disease. He explained that the current therapy includes too much use of glucocorticoids and for too long leading to patients hating glucocorticoids. As Dr. Merkel put it, glucocorticoids are both the best drugs we currently have and also the worst.

Dr. Jayne summarized the potential for avacopan to reduce the number of relapses, which would reduce the risk of permanent organ damage and reduce the cost of care. Dr. Jayne also emphasized that avacopan's ability to improve quality of life is a remarkable and rare finding at ANCA-associated vasculitis studies. Dr. Jayne referred to The New England Journal of Medicine publication of February 18, see Slide 5.

The article on the ADVOCATE trial findings had received then nearly 35,000 page views, putting it at the 92nd percentile of all New England Journal articles. Not bad for an orphan disease during a pandemic. Finally, Dr. Jayne described avacopan as a potential monotherapy for nonsevere disease, helping to prevent longer-term relapse. I would remind you that approximately 2/3 of the total patients in ADVOCATE, balanced across both avacopan and placebo arms, did not receive rituximab or another immunosuppressant during the last 26 weeks of the ADVOCATE trial.

Why is this important? Because, in effect, the last 26 weeks in ADVOCATE allow for a glimpse of avacopan activity in a placebo-controlled blinded fashion for some 200-plus patients in that period of the trial. It showed avacopan's efficacy in sustaining remission without the help of an immunosuppressant such as additional rituximab or cyclophosphamide. This may be particularly useful in times like COVID.

During the Q&A session, both Dr. Merkel and Dr. Jayne indicated that they saw avacopan as a potential maintenance therapy, a viewpoint that is supported by the strong data through the 52-week line of dosing period of the trial and also by the observations from week 62 to 60 when the drug was stopped, as I mentioned earlier. The New England Journal of Medicine article, the editorial that accompanied it, the new data on what happens to patients in the 8 weeks after they stop treatment, the strength of the case made by 2 of the world's top experts, and, above all, the patient's testimony, all these elements suggest that the need for a novel therapy is urgent. The burden of disease is great, and avacopan, a well transformed care.

Now we look forward to next week's May 6 FDA Arthritis Advisory Committee meeting. From the filing of our NDA, we have consistently anticipated and have been preparing for such a meeting, given the fact that avacopan is a new molecular entity in an orphan disease with only 1 previous approved drug. Our approach to the AdCom meeting is to deliver a high degree of granularity in response to the topics raised by the FDA over the course of the review in order to help the committee with its deliberations and the agency in its subsequent decision.

It is also an excellent opportunity to share knowledge of the significant complexities of this rare disease, and one hopes to hear from patients whose lives have been turned upside down by ANCA-associated vasculitis. It is a forum, in our view, to underscore the strength of the ADVOCATE clinical data, which we believe provide a favorable benefit-risk profile as a potential paradigm-shifting treatment alternative for ANCA-associated vasculitis patients.

While we have now received the FDA's briefing book for the Advisory Committee, the document is not ours, but the FDA's, and it is confidential. And therefore, we will not be commenting on it today. However, we do expect the FDA to make the AdCom briefing materials available publicly before the AdCom meeting date. We expected the FDA to pressure test our NDA, as would be normal for any AdCom meeting. As we said during R&D Day, we believe, based on historical discussions with the FDA, that the AdCom topics may include the Phase III trial design, understanding how ANCA vasculitis is treated, the ADVOCATE trial statistic assumptions, safety reviews and benefit-risk profile.

In our presentations, we look forward to expanding our perspectives and our information to address FDA questions. We are confident in this approach. We believe that clinically meaningful primary and secondary endpoint signal consistently favor avacopan therapy. Accordingly, we have confidence in the anticipated outcome of the AdCom meeting.

In light of this impending meeting, we will be entering into a quiet period following the conclusion of today's earning call activities. While we appreciate that you will likely have questions ahead of next week's meeting and will likely have additional questions upon availability of the briefing materials, we hope you understand and can appreciate that we will not be commenting further on the AdCom until after its conclusion on May 6.

Turning now to our preparations for potential launch. During R&D Day, our Chief Operating Officer, Tosh Butt, summarized our commercial plans. If you look at Slide 6, Tosh reported on primary market research that illustrated the potential market interest in avacopan, with 97% of 125 rheumatologists and nephrologists surveyed indicating that they would prescribe avacopan if approved by the FDA and 100% of them, all of them, finding the avacopan data compelling either extremely so or moderately so. Asked about the greatest unmet need in ANCA vasculitis, it is interesting to see that better safety, fewer side effects was seen as a top priority for 47% of these experts compared to 31% who choose better efficacy.

As you can see from Slide 7, in a market research study of 138 physicians, comprising mainly rheumatologists and nephrologists with a handful of other specialists who treat ANCA vasculitis, which was conducted in April of 2021, that is some months after we released the data, you can see 65% had heard then of avacopan and 89% had a positive impression of its profile. We are now raising the profile of ANCA-associated vasculitis through our Rethink ANCA disease awareness campaign, running online at rethinkanca.com in print journals and at relevant congresses.

We have also held preapproval information exchange with payers covering roughly 85% of the United States ANCA-associated vasculitis patient population, a process which is still ongoing. Payers are receptive to avacopan's value proposition, and we are building a high support capability to help individual patients obtain access to avacopan after launch since it typically takes 6 to 12 months for new medications to be listed on electronic formularies.

Turning to Slide 8. We estimate that the eligible patient population for avacopan in the United States is up to about 20,000 patients, of whom 8,000 form our initially addressable segment, that is those who need it most, namely patients who are newly diagnosed or relapsing with organ or life-threatening disease. In short, we are well on our way to building a world-class commercial capability.

We will be ready for a rapid launch, if approved, after the PDUFA date of July 7. Our partner, Vifor Pharma, is making commercialization plans also ahead of the expected regulatory decisions in Europe and Japan in the second half of 2021. Vifor would pay us royalties from teens to the mid-20s percent on potential net sales off of one aggregate sales line. As you can see from Slide 9, ANCA-associated vasculitis is just the start for avacopan. We are moving forward on other fronts as we seek to turn avacopan into a pipeline and a drug with multiple orphan disease indication.

First, Slide 10 shows our plans for debilitating skin disorder, hidradenitis suppurativa or HS. We are on track to launch by the end of this year a pivotal Phase III trial of avacopan in patients with severe HS. Our Phase II AURORA clinical trial demonstrated that in the most severe form of HS, the so-called Hurley Stage III patients, avacopan could provide a significant improvement compared to placebo after 12 weeks of therapy. We are following these Phase II patients for an additional 24 weeks, and we'll report out those data when we have it.

We expect the Phase III trial to enroll somewhere between 300 and 400 patients, divided into 2 arms. The primary endpoint will be the hidradenitis suppurativa clinical response score or high score measured against placebo at 12 weeks, consistent with the Phase II AURORA study, continuing with the randomized blinded period for a total of 6 months with an open-label follow-up. HS is another indication with blockbuster potential for avacopan since an estimated to 30,000 to 50,000 patients in the U.S. have Hurley Stage III disease. We have filed for Orphan Drug Designation for avacopan on early-stage 3 patients. Note too that we are scheduled for a poster session at the Society for Investigative Dermatology in May.

Moving back to kidney disease, the results of our ACCOLADE trial of avacopan in the very rare disease of C3 glomerulopathy, which we plan to publish in a top nephrology journal, included an important finding, shown on Slide 11. Avacopan demonstrated significant improvement in renal functions, as measured by Estimated Glomerular Filtration Rate in stark contrast to the background medication or placebo arm.

eGFR is what most nephrologists would regard as the gold standard for measuring kidney function, and a finding like this has never previously been seen in a randomized controlled trial in patients with C3G. We are preparing for a meeting with the FDA to discuss with the agency the evidence of clinical benefit of avacopan in the treatment of C3G. At our R&D Day, we reported some new observations from week 26 to 52 in the ACCOLADE trial using the new C3 Disease Chronicity Index.

As the graphic on Slide 12 shows, the chronicity score in patients with placebo rose in the first 26 weeks of the study but declined after these placebo patients crossed over to avacopan. This suggests an effect of avacopan in arresting fibrosis or scarring in and around the kidney's filtration units, the glomeruli. This is the second clinical trial in which avacopan has achieved statistical significance in improving renal function, as assessed by eGFR. The other being in ANCA vasculitis.

This is a promising sign too for patients with other kidney diseases, such as lupus nephritis, which could also lead to kidney destruction, as depicted on Slide 13. Avacopan might offer lupus nephritis patients the chance of a more targeted therapy than the broad immunosuppression that is currently used in an effort to control that disease. Current therapy typically only provides limited benefits, so the patient need is great. We hope to introduce avacopan into clinical development for LN during the second half.

Finally, as we turn to Slide 14, a few words about plans for our next-generation oral checkpoint inhibitor, CCX559. As noted on Slide 15, CCX559 was featured in a poster session at the American Association for Cancer Research Meeting earlier this month. Current antibody-based immunotherapies have contributed significantly to cancer treatment, but not always without safety consequences.

Pneumonitis, for example, can be profound in non-small cell lung cancer patients treated with antibody immunotherapies. As we discussed during our R&D Day on April 14, lab data on our orally active PD-L1/PD-1 pathway inhibitor, CCX559, suggests that as a small molecule, it may penetrate the tumor environment better than an antibody, and preclinical data show excellent results in tumor shrinking and tumor remission in vivo. Slide 16 outlines our plan to take CCX559 to the next stage of clinical development and then how to evaluate its value proposition. We expect to initiate a Phase Ib trial in cancer patients later this quarter.

I will now turn the call over to Susan to outline the strength of our financial position.

Thank you, Tom. Our first quarter 2021 financial results were included in our press release today and are summarized on Slide 17. Revenue was $10.4 million for the first quarter of 2021 compared to $6 million for the same period in 2020. The increase in 2021 first quarter revenue was primarily due to the $10 million milestone payments from Vifor for the February 2021 acceptance of the Japan NDA for avacopan in the treatment of ANCA vasculitis.

Research and development expenses were $23.4 million for the first quarter of 2021 compared to $19.3 million in the same period last year. This increase was primarily attributable to the manufacture of commercial drug supply in anticipation of the launch of avacopan for the treatment of ANCA vasculitis and costs associated with the advancement of CCX559, our orally available small molecule checkpoint inhibitor. These increases were partially offset by lower Phase II-related expenses due to the completion of patient enrollment of the avacopan AURORA clinical trial in patients with HS and a discontinuation of further clinical development of CCX140 in FSGS in 2020.

General and administrative expenses were $16.3 million for the first quarter of 2021 compared to $8.8 million for the same period last year. This increase was primarily due to higher employee-related expenses, including those associated with our commercialization planning efforts and higher professional fees. These results produced a first quarter 2021 net loss of $29.7 million compared to a net loss of $21.7 million in the same period in 2020. Total shares outstanding at March 31, 2021, were approximately 69.7 million shares. We've closed the first quarter of 2021 with $424.2 million in cash, cash equivalents and investments. And for 2021, we continue to expect to utilize cash and investments in the range of $145 million to $155 million.

Tom?

Thank you, Susan. To summarize, the first quarter of 2021 has positioned us strongly for the rest of the year, as you can see from Slide 18. We are well prepared for the FDA Advisory Committee on May 6 and the potential commercial launch soon after the PDUFA date of July 7. We aim to meet with the FDA to discuss the clinical benefit of avacopan for the treatment of C3G. We plan to initiate our next cycle of 3 clinical trials over the next few quarters: first, in human studies in cancer patients for our small molecule checkpoint inhibitor, CCX559; a Phase II/IIb adaptive study of avacopan in LN; and a pivotal Phase III trial of avacopan in hidradenitis suppurativa Hurley Stage III patients.

By the time I report to you on our next quarterly results, we may have taken the final step becoming a forward integrated novel therapeutics company with our first commercially available medication. Again, make no mistake. We will continue to be implacable in our pursuit of new science in the interest of the patients, the clinicians and the investors that we serve.

I will now turn the call over to the operator for your questions. Operator?

(Operator Instructions) Your first question comes from Michelle Gilson from Canaccord.

I guess the first one. Out of the sort of anticipated AdCom topics that you outlined at the R&D Day, is there one that you anticipate will be of greater focus than the others, I guess, from a higher level?

Michelle, I think that's a very good question, of course. I think we've outlined the spectrum of items that we think will be important. There will probably be others as well. Other than that, I don't think I'm going to speculate too much about the AdCom at this point because we're very close to it, and it's really up to the FDA about what kind of questions they're going to put to the committee. So we'll be ready for any and all questions that they might pose.

Okay. And then just as a follow-up. One of the areas that you -- that we've heard some feedback on is the trial design. And obviously for ADVOCATE, the standard of care was different than it is today when ADVOCATE was initiated, so -- including the steroid regimen as well as maintenance therapy. Could you maybe walk us through how you think about avacopan sitting in with the current standard of care and how it compares to the current standard of care? And if this topic comes up in the AdCom, how you plan to support avacopan's position within the current standard of care?

Michelle, I think there's a lot of misconceptions about what is current "standard of care" there and there are some facts that have changed since we started the trial. But let me put it -- let me be very clear. We tried to make the ADVOCATE trial as close to real-world practice as possible. I -- that includes steroid regimen and tapering, both then best practice and, in fact, that's now best practice. We tried to make the background medication of either cyclophosphamide or rituximab as close to real-world practice. And in fact, we were completely aligning ourselves with the label of all those medications at the time, including rituximab.

So what we got was an excellent trial design that reflected then real word practice. And still, to a large extent now, the one thing that has changed is rituximab label was expanded towards the very end of the ADVOCATE trial by the way to allow for increased frequency of dosing. So before it was essentially one regimen at the start of the treatment phase, which is 4 infusions spaced by 1 week. And now you can top up according to the label as frequently as every 6 months or so.

Now while that is becoming an emerging paradigm, especially for patients that have a history of ANCA-associated vasculitis with relapse, the latest figures I saw, by the way, for newly diagnosed disease, I don't know if that's yet been adopted as the majority paradigm. So I think while rituximab's label has expanded fairly recently, I'm not sure I would call it exactly a changed standard of care. But it is a very fair point to say, "Well, look, rituximab is used ever more frequently." All the better the features of the ADVOCATE trial actually allow us to leapfrog to what I think is the gold standard, which would be better for a maintenance therapy once people are quiescent. How would you do that trial? You do a double-blind, randomized placebo-controlled trial.

And as I referred to in my remarks, de facto, you can get some of that information from weeks 26 to 52 in the ADVOCATE trial from the 65% of the people in that trial who had avacopan plus rituximab as a start and then went on to have no further medication as the trial were on. So they didn't get tapped up with rituximab. What did we see? We saw about a 71% sustained remission in the avacopan group versus a 50 -- middle 50% remission in the prednisone group. And this is the rituximab's staff alone. And it's not a tiny number of people. It's 200-plus people. So it's bigger than the whole RAVE trial.

So what that tells us is that we have a very good way of maintaining remission after people get to a quiescent state at that first 26 weeks, and there isn't a need to give them necessarily more rituximab. And rituximab is not without its consequences. So it's at least an observation. Is it a trial designed to answer that question? No. But it is a feature of this trial that does shed light on that question. Could avacopan be used as a monotherapy in a maintenance surgery? And the answer is, well, these data suggest that it could., And that's what Dr. Merkel and Dr. Jayne alluded to in their remarks at both international congresses and Dr. Jayne at the R&D Day.

So I think that's how best I would answer the question. We did an excellent trial. We reflect standard real-world practices at the time and still. And the fact that we didn't add additional rituximab actually gives a feature to our trial, which I think is very valuable. Finally, again, rituximab is a changing landscape. It's not used routinely, I think, even at this point, for newly diagnosed people in the second 6 months. It's mostly reserved for people with the history of relapse. So that's -- I think that's what I would put to the community at this point. It's again a set of observations based on data.

Your next question comes from Steve Seedhouse from Raymond James.

This is Timur Ivannikov on for Steve Seedhouse. In terms of the post week 52 relapse rate you indicated, I'm not sure whether it's fair to annualize those rates from 4% over 8 weeks to 26% per year. But would that rate be comparable to what you would expect outside of the trial setting? And can you also remind us whether you've shared this data with the FDA?

I don't think it's fair yet to analyze the data, because it's such a short period and it's still fairly small. So I don't want to overinterpret that data. So that's an important point. And by the way, I would say that when we talk about numbers and comparisons, we're all trying to compare number from study A to study B, and we're looking at the numeral. But the definitions can be different, and that really is of critical importance. So I would have to say be cautious about what we talk about with relapse from study to study, how is it defined.

So certainly, in our study, what was interesting is there was a moderate decline in the rate of sustained remission once people stop taking avacopan. And it started to be similar to what we see in the prednisone group. And so that was an interesting observation. It's, again an 8-week period, still a fairly small number of people, but it was an interesting observation. I probably wouldn't have made that much of it if we haven't also seen, again, a modest decline in eGFR after a steady increase week-by-week from very early on in the trial continuing to increase out to week 52.

So again, the suggestion is that there might be need or benefit by keeping people on avacopan. And I think it's really -- I'll limit my interpretation to that at this point. And again, without going into what would be in our briefing book, per se, but at least that's a document that we own, I think it's fair to say that those data are -- the FDA are aware of those data.

Our next question comes from Dae Gon Ha from Stifel.

Very much looking forward to the AdCom next week. But Tom, I just wanted to go back to some of the additional data that you presented at the R&D Day. Specifically, just wondering, you highlighted the rituximab cohort data and looking at sort of the de facto monotherapy data, as you just mentioned to the prior question. But just wondering if you had done any additional subgroup analyses, for example, patients that do not have the renal involvement.

And I'm just wondering, coming from a more rheumatology focus, what about those patients that did not necessarily have the renal involvement, what to do there? And I guess the follow-up question to that is, in terms of flares, given that the trial was not inferior but superior in the last 26 weeks. It wasn't 100%. So I would presume there to be some flares that happened in the interim. Any color you can provide in terms of what types of flares or severity that you saw during that period?

Flares were defined, I think, fairly carefully in The New England Journal paper. So I probably would refer you to that rather than speak off the cuff. But to be clear, you could have not had a flare certainly over a certain set of criteria that would constitute a major flare. You could not have had a flare between weeks 26 and 52 and be considered in sustained remission at week 52. So the fact that some 66% of the patient population in the avacopan group or nearly 67%, as I recall, I'm just thinking -- quoting off the top of my head, versus 55% in the prednisone group, we're still in remission is considerable, and as you said, statistically superior in the comparison.

Mind also, this is all based on intent-to-treat numbers, so that the -- we know that 10% of the people did drop out of the trial or had basically -- so they were not available for that in-house. That already -- that takes it down from 100 to 90 available as a top number if you get the ITT analysis. And in fact, if you look at the numbers, an additional 10% while still in the study had stopped taking study medication basically in both groups. So again, if you really had, for whatever reason, wanted to say, well, if you looked at the number of people still on both study drugs over that period of time, again, the top number would be about 80. So it's kind of an interesting way of thinking about it.

But we have a considerable sustained remission rate, clearly better than the prednisone group. The -- without getting into subgroup analysis too much, I will say this that we look at all the subgroups. And especially when we look at the -- some of the factors that you're talking about, but essentially subgroups do consistently as well, numerically or better than the prednisone group. They do that by not having to take the prednisone load -- the daily oral prednisone load along the way. And typically, they also have improvements in the clinically relevant secondary endpoints when they're on avacopan, eGFR, relapse rates lower, et cetera.

So we hope to be able to publish a lot more of this data as we get through the next phase of our development program. But I would be hard-pressed to point to any subgroup at this point that doesn't do at least as well, typically better than prednisone-based therapy, and even if the numbers were exactly the same, which is atypical, by the way, for any subgroup. But even if they were exactly the same, remember, they got there without taking the prednisone load. So they get the benefit of reduced prednisone induced toxicities. And as I mentioned, the other clinically relevant secondaries also fall in line with that. So the signals consistently show avacopan benefit across most of these parameters.

Your next question comes from Ted Tenthoff from Piper Sandler.

I'll start by saying break a leg or good luck or whatever you believe in for next week. But I think the data are so compelling here, I'm scratching my head to see what the FDA could really kind of find fault with. And I guess the one question I keep coming back to is, does the FDA recognize -- and again, not asking you to put words in their mouth, but do they recognize how bad of an actor the steroids are? And do you think there needs to be further education there? Or do they pretty much understand and accept that?

Well, Ted, it is a really good question. I know, in my own case -- I mean, I've been studying this disorder for a long time. But the first couple of years, it was studying it from afar. And I could read the charts to the side effects, and I could conceptualize somewhat and abstract what this might mean, and it painted a pretty bad picture for me and sort of my intellect. It wasn't until I started talking and seeing individuals who are on these steroid regimens that I truly got just helpful how the steroids are.

Steroids, they're just poison. I make the statement publicly, and people tell me I'm provocative when I make it, but I think it's backed up by science. Steroids maim and kill, full stop. And until you see that, until you live with it, you just don't -- you can't grasp it. So I can't speak for the FDA. I'm sure there are many fine professionals who have had clinical experience, maybe even seen this disease. But I can say that most of us, even though as knowledgeable in this disorder, you just don't get it until you see it first hand. So that's -- I'll just leave the question there. Education, I think, is necessary, education all across the board, all of us.

I mean I have to agree. I mean, I don't think I appreciated this until I started attending your event. So I do think you're working for the patients here. That's very clear. And every time we hear more testimony from patients, it's so clear the need. So wishing you the best of luck next week, and we'll certainly be paying close attention.

Thank you, Ted.

And your next question comes from Ed White from H.C. Wainwright.

Just a couple, maybe one for Susan first. Can you give us an update on where you are with the sales force? Are they in place now, including the related costs and prepared to launch prior to July 7, if, in fact, the approval comes before the PDUFA date?

Sure. Thanks, Ed. Thanks for the question. Actually, we have the benefit of having Tosh Butt on the line with us today, our Chief Operating Officer. So I think I'll allow Tosh to answer that question. Tosh?

Susan, thank you very much for punting the question over. Happy to take it. Yes. So regarding the field force, what I can share is that we have been in the process of building up our field force. That comprises both medical science liaisons as well as sales professionals. The medical science liaisons are enrolled, and they've been interacting with key opinion leaders, having appropriate disease education conversations about ANCA-associated vasculitis.

We have hired our sales managers, and they are in the process of hiring our sales professionals. What I can share with you is that those sales professionals will be onboard with adequate time to train them on the disease state, to train them on avacopan and to train them on the customers in their relative geography. That work is about to take place very shortly. And in terms of your question around should the approval come a few days in advance of the 7/7 PDUFA date? We expect to be ready to move very, very quickly if it does come early.

Great. And Tom, maybe a question for you regarding the lupus nephritis study. Maybe you can give us a little bit more detail on what that study will look like. Any thoughts that you can give us on the size of the study, protocols, et cetera.

Sure, Ed. Thank you. We would love to begin an ADVOCATE-type trial in lupus nephritis immediately. We found it's a little bit more complicated than that. Ultimately, that's what we aspire to. It will take a step or 2 to get to that level of trial, which we would aspire to be the registration step of a study for avacopan in lupus nephritis. It turns out that the way medicine is practiced in lupus nephritis though is a little bit different. They're very used to just add-on therapies and looking for incremental benefit.

I'm not saying incremental in a small way, certainly a significant benefit. And that's how medicine has been practiced. So even with all of the latest therapies, and there have been some really nice advances recently, as you know, still probably these are added on to glucocorticoids. For example, there's still a lot of daily prednisone in the lupus world routinely. And we're still only getting true benefit for about 40%, 4-0 percent, of the patient population, even with all the latest care. And that's on top of not insignificant amounts of daily thread.

So I think we're going to have to go through a step as we had to some time ago as well, but we can do it in a very efficient and accelerated way, to first showing that, yes, we can safely step down GC in the presence of avacopan to virtually nothing on a daily basis and then expand the trial quite rapidly and vigorously to get to a larger and something that looks a bit like ADVOCATE and go forward in using that as a registration step. So beyond that, I'm going to not comment too much further on the details because it's an active process right now. And -- but I think we're getting to a very powerful plan here that will be very effective for the lupus world.

Your next question comes from the line of Joseph Schwartz from SVB Leerink.

I was wondering if you could elaborate on your commercial preparedness in terms of your interactions with treating physicians and maybe even groups of patients and advocacy folks themselves. For example, I heard you mention your Rethink ANCA initiative. Is there any way that you could quantify the reception you've seen so far in terms of registrations for more information and maybe how many AAV patients are treated at the centers that have accepted your outreach?

Well, look, Tosh, perhaps you'd like to speak to that topic.

Yes. I can talk about that, yes. So the question is about the reception to our product so far and about education. So what I can share with you is that we have been interacting -- well, let me step back. So when you look at this marketplace, the top 400 physicians who treat ANCA-associated vasculitis, comprising of rheumatologists and nephrologists, they write about 30% of the prescriptions. So initially at launch, that cohort of customers will be a big, big source of attention for us because they see -- they treat the bulk of the patients and they can have the biggest positive impact on these patients and their lives and the subsequent health care ecosystem costs.

So we've been interacting with those physicians on a very appropriate basis, engaging in disease awareness with them. Many of them have seen the ADVOCATE publication in The New England Journal of Medicine that was published in February. They've also seen the wholly independent and accompanying 2-page editorial also in that same edition. And you've seen the download figures that Tom talked about, over 35,000 downloads, making it one of the most popular New England Journal articles of recent history. So there's a tremendous amount of interest.

You also saw the slide that Tom shared with some recent market research that we've done very recently. In fact, that research is currently ongoing, and that research speaks to the awareness and familiarity of these physicians, primarily rheumatologists and nephrologists, have around avacopan. It's 65% of physicians have heard of avacopan now and 89% have a positive impression of that profile. And we expect this awareness of avacopan and the positive impression to elevate after the AdCom and as we get closer to FDA approval.

Okay. And are there any...

On your question around patients as well. So look, we have been conducting patient advisory boards really to understand the disease a lot better so we can really get under the skin to understand what are these patients feeling, what are they hoping for from a new treatment. And Tom's alluded to many of those factors. We've also been engaging appropriately again with patient advocacy groups because they have a very close relationship with these patients. They understand where these patients go for treatment. They understand what these patients are going through, and then, most importantly, understand what these patients want from future treatment and any organization that's hoping to introduce a new medicine and/or product service for these patients. So we've been working very, very closely with those patient advocacy groups as well. Hopefully, that answers your question.

Yes. Super helpful. So I guess, my follow-on question would be have you come across any intriguing analogues for avacopan that might be instructive for how the AAV launch could go based on the ability to replace steroids, which has happened in other areas of medicine, as well as offer other important clinical benefits? Any analogues that we should keep in mind as we're modeling the launch?

Well, look, I wouldn't want to speculate on the launch uptake. At this stage all I'm comfortable sharing is that, look, if you look at the actual patient population that Tom alluded to, we believe there are 20,000 potential patients. And initially, the focus will be on those 8,000 patients who mimic what we see in the ADVOCATE study, which is ANCA-associated patients either with life-threatening or organ-threatening disease. We believe those patients are potentially ideal for a medication like avacopan, and that will be the focus certainly in the short term, should we get FDA approval.

But we do believe there's potential for avacopan use in the other 12,000 patients who have what we call grumbling disease, whereby, yes, their condition is not life-threatening. They don't have an immediate organ threating disease. But they have grumbling disease. They're still on chronic glucocorticosteroids. And quite frankly, they're not well. So that's what I'd say there.

And in terms of uptake -- yes, in terms of uptake, I would add that, look, and reiterate the point that Tom made is that this is a new drug, and it's going to take us 6 to 12 months if you look at various payers, various hospital systems across the U.S. and their processes and their time lines for new drug reviews. It can be anywhere from 6 to 12 months before these medicines are added to their electronic formularies.

And once it's added to an electronic formulary, the prior authorizations, medical necessity build, they tend to go through that process as a lot smoother and shorter. So for the first year, we expect there to be a little bit of challenge as we work through paper-based systems, where physicians have to do individual patient appeals to get the drug approved based on medical necessity. But that's normal for a new drug, particularly in rare disease or the specialty space.

And your next question comes from the line of Anupam Rama from JPMorgan.

I was looking at the FDA Advisory Committee page for May 6 earlier today, and it was noted that some of the presentations will be prerecorded and those prerecordings would actually be available May 4. Do you have a sense of which portions are being prerecorded? Is any of ChemoCentryx' portions being prerecorded? Just to get a sense of what we -- what -- the totality of what we might see on sort of May 4?

Thank you, Anupam. Good to hear from you. Yes, the world of COVID is still with us, and it's just created a whole new world of how these Advisory Committee meetings are done. So that's correct. I think there will be prerecorded sessions from us, the sponsor. I think they get posted on May 4. That's my understanding. It's a so-called -- that's the so-called long or 60-minute presentation, 60-minute plus or minus, by the way.

I think FDA also has a presentation, and I believe that, that might get publicly posted. I'm a little bit confused myself, to be honest with you. But that's my current understanding. And then the committee hears those prerecorded publications as well. On the day of the meeting, there's an additional short presentation, I believe, both by us, so that the committee can ask us additional questions, the sponsor, and by the FDA. And so that's additional. There may be some overlap between those 2 or there may be some new information. I can't really speak to content.

But yes, it's a little bit different in COVID. Then of course, agency -- I'm sorry, the committee will ask questions both to us, and I think they'll have another question period with the agency. And then in the afternoon, the open public forum occurs as well. So it's a much different format in this era as we try to be virtual. There are constraints because it's all slides and recording. It's not in person, and there's not video allowed and all that other stuff. So it's not perfect, but it still can be a very effective forum. So yes, I anticipate, based on my current knowledge, that a presentation from us will be posted publicly on May 4. But that will be a somewhat different presentation that will actually occur on May 6. So that will be an additional one.

And your next question comes from Yanan Zhu from Wells Fargo Securities.

Tom, you elaborated really well the rituximab use in the ADVOCATE study. I'm wondering if you could also elaborate on the steroid use as well. Could you talk about the speed of tapering in the control arm and whether that could be considered standard of care by physicians? And also, equally importantly, the fact that the steroids were tapered down to 0 over 21 weeks instead of a lower dose -- kind of a maintenance dose, whether that can be considered standard of care by physicians?

You asked very, very important questions. When we started the design of the trial some years ago, in fact, we have paneled a body of experts, both academic and practicing clinicians. And we asked them, "Look, we read the literature. We've done our interviews. We can't come up with what the steroid taper really looks like in this field." And rheumatologists tell us that they taper steroids within 6 months and yet the patients are still on 5 or 10 mg a day. Nephrologists will say they taper steroids within 6 months and they're essentially down to 0 by 4 weeks.

What is standard? So the fact is we took a range of what the standard was. We appealed to all the clinical trials at the time, including PEXIVAS, which was ongoing at the time. And what we got as a consensus from the expert panel was an emerging modern standard of steroid taper, at least an aspired standard, which is let's get people off of daily scheduled glucocorticoids within 6 months. And so that's what we put into our trial. It's sort of a model standard of care, best practice. In the real world, there's probably a lot more persistent glucocorticoid use, which is fine, all to the good. It just speaks again to the need for a substitute, alternative to glucocorticoid with a highly targeted therapy, by the way.

So I believe that if you talk to any individual physician, just like a statistic, they might say, "Well, that's not how I would taper or I would actually keep them on 5 mg for another 6 months," or something like that. This does represent modern best practice, trying to minimize both daily steroid load, have a fairly rapid taper and get them off of daily glucocorticoids certainly by 6 months. And so I think we reflect that in our trial design with steroid. And I think we're right again within the range of total glucocorticoid load over the 6 months and even the 52-week period, where we have essentially a sevenfold median higher glucocorticoid exposure in the prednisone group over the entire period of the trial, ninefold median higher of oral glucocorticoid during the period of the trial.

And so there's a massive reduction in total glucocorticoid. And again, our goal is to eliminate as much as possible the need for daily scheduled oral prednisone. So I think we can say we're standard care, although any given physician, she or he, will have their own opinion on that in their practice. And you're quite correct. Rheumatologists tend to keep people on daily prednisone. Once they get down to 5 mg, they kind of dismiss that. I wonder why that is, though, because the data really shows that there's probably no safe daily steroid dose right down to 2.5 mg.

I think a very recent paper of meta-analysis published across 6 autoimmune diseases, including vasculitis -- undefined kind of vasculitis, really showed that even at 2.5 mg of oral pred per day, there is a threefold increase in severe cardiovascular disease year-on-year. And as you get up towards higher doses, 25, 30 mg per day, there's a sixfold increase in cardiovascular disease. That's what the parameter was measured in that paper. So again, it's really -- we've gotten used to steroids and their effects, but it doesn't mean that they're not really dangerous even at low doses. So sorry about the long-winded answer, but we did tried to standardize best modern practice with glucocorticoid administration, particularly the daily oral prednisone. And I think we were successful in that.

Great, great. And then just a quick follow-up just to anticipate what happens next week. I know you prepared your briefing document without knowledge of the FDA's briefing document. So when the briefing documents are both made available next week, do you think we could find answers to FDA's questions in your document? Or we'd better wait for the actual committee meeting to find out?

I think -- again, without speaking to the FDA's briefing book, I fundamentally believe that the answer to our questions about how outside experts will think about this data, we need to wait for the Ad Committee meeting. We'll know at the end of the day on May 6 what outside experts think about the data package. I wouldn't -- I think that's what this is all about. Both we and the FDA are trying to get an idea of what do informed outside people think, not necessarily vasculitis experts, by the way, but informed rheumatologists and nephrologists, what do they think of this data on balance. And so my advice is wait for May 6, and we'll see what the answer is.

Thank you. There are no further question at this time. I'd like to hand the call over to Dr. Schall for any closing remarks.

Well, thank you very much for everyone for their attendance today. I really appreciate your time and energies. We look forward to talking to you again in the near future. And again, thanks for your time, and you may now disconnect. Good day.

Ladies and gentlemen, this concludes today's conference call. You may now disconnect. Thank you for your participation.

Good-bye.