FibroGen Inc (FGEN) 2018 Q1 法說會逐字稿

Hello, and welcome to the FibroGen Inc. First Quarter 2018 Financial Results Conference Call. My name is Michelle, and I will be your operator for today's conference. (Operator Instructions) As a reminder, this conference is being recorded. For opening remarks and introduction, I will now turn the call over to Karen Bergman, Vice President of Investor Relations and corporate communications.

Michelle, thank you. Good afternoon, everyone, and thank you for joining our call. Today, we're reporting financial results and corporate updates for the first quarter of 2018.

Joining me on the call today are Tom Neff, Chairman and Chief Executive Officer; Dr. Seth Porter, Vice President of Fibrosis Therapeutics, Dr. Peony Yu, Chief Medical Officer; and Mr. Pat Cotroneo, Chief Financial Officer. Following our prepared remarks, Tom will wrap up with a discussion of key objectives and upcoming milestones, and then we will open the call for Q&A where we'll also be joined today by Dr. Elias Kouchakji, Senior Vice President Clinical Development Drug Safety and Pharmacovigilance. During this call, we may make forward-looking statements regarding our business, including our collaborations with AstraZeneca and Astellas; financial guidance; the initiation, enrollment, design, conduct and results of clinical trials; our regulatory strategies and potential regulatory results; our research and development activities and certain other business matters.

For risks and uncertainties regarding our business and statements made on the call today, as well as factors beyond our control that may cause differences between current expectations and actual results, we refer you to our annual report on Form 10-K for the fiscal year ended December 31, 2017, and our quarterly report on Form 10-Q for the fiscal quarter ended March 31, 2018 filed with the Securities and Exchange Commission. Copies of these filings can be found in the investor's section of our website. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise.

The format for today's call includes remarks from FibroGen's management team, and then we'll open the lines up to take your questions. The press release reporting our financial results and business update and a webcast of today's conference call can be found on the Investors section of FibroGen's website at www.fibrogen.com. The webcast will be available for 2 weeks from today's date.

And with that, it's my pleasure to turn the call over to our CEO, Tom Neff.

Thank you, Karen. Good afternoon, everyone. Sorry for the technical screw up that slowed us down. Good to get started.

Thank you for joining us today. We have 2 exciting week stage drug candidates, roxadustat for anemia and pamrevlumab for the treatment of deep organ fibrosis and in solid tumors, and we now have strong clinical data in multiple therapeutic indications with both, with significant market need in each case. I would like to provide a brief first quarter update including outlook for our programs and a few additional comments on our roxadustat program in China.

Our Phase III program in roxadustat to treat anemia in CKD treatment targets approval in 4 regulatory jurisdictions. With the global clinical program approaching completion, the roxadustat team is increasingly busy with the preparation of NDA submissions. In the U.S. and EU starting with our roxadustat global program in these territories, the 7 Phase III studies designed to meet U.S. and EU regulatory requirements we have enrolled over 8,000 CKD patients over the past few years. We recently reached agreement with AstraZeneca that the final patient recruitment for a total of 5 studies sponsored by our 2 companies will be completed across the board in early June 2018, or next month. We expect to reach the requisite number of adjudicated MACE accruals for the dialysis and nondialysis pools with last patient last study visit expected by end of September. We plan to report top line results from these 5 studies before year-end 2018. To fulfill the full base requirements for the U.S., we expect to combine the results in FibroGen and AstraZeneca studies with the relevant Astellas European studies. This will mean a total of 3 studies of roxadustat in -- versus placebo in nondialysis dependent CKD and 4 studies in roxadustat vs. epoetin alfa and dialysis dependent CKD. We planned to complete adjudication of the MACE events and pooled analysis as quickly as possible and to report MACE results prior to following the U.S. NDA in the first half of 2019.

In Japan, our partner Astellas is conducting Phase III program and is preparing for the Japan NDA. Astellas has completed all 4 Japan Phase III studies in dialysis patients. We are working with the Astellas team to support their expected NDA in Japan for anemia associated with dialysis dependency CKD later this year. In the non-dialysis-dependent program, Astellas is conducting 2 Phase III studies and expects data readout from one of these studies in the fourth quarter of 2018. Dr. Peony Yu will discuss the top line results from the 2 recently completed Japan Phase III studies in hemodialysis patients later on in this call. In China, the roxadustat NDA for the treatment of anemia associated with CKD was accepted by the China FDA for review last October. The China regulatory authorities have a comprehensive process for reviewing new drug applications for the registration of domestic Class I innovative drugs. This review will cover a very broad range of activities, to name a few, technical review of the NDA filing, inspection of clinical trials sites, on-site inspections of manufacturing campaigns, especially manufacturing sites, analytical testing of drug substance and drug product as manufactured by FibroGen. China may be the first country for FibroGen to receive approval for roxadustat. To prepare for a roxadustat launch in China, we've been building out our capabilities in core areas of response ability of FibroGen China and work with our partner AstraZeneca China on launch readiness. Most notably, our commercial manufacturing facilities in Beijing and Cangzhou are on schedule to come online after we receive NDA approval and complete the necessary post-approval inspections.

We advanced a key step in this process recently, when our commercial API facility in Cangzhou was awarded the pharmaceutical production permit, or PPP. This occurred about 2 months earlier than was originally planned, so kudos to the China team for getting that done.

We are working closely with AstraZeneca on the development and implementation of a market access strategy to maximize the value proposition for roxadustat in China. With regard to reimbursement, AZ brings substantial experience, expertise and resources to advancing this work. In the short term, we are focused on gaining early inclusion on hospital formularies, also known as hospital listings, followed by inclusion on the national or provisional drug reimbursement lists in the medium term.

Pamrevlumab is our other program and as we look at what's going on in the fibrosis part of it, we see pamrevlumab with the potential to address a very broad range of fibrotic and fibro-proliferative diseases leading off with IPF our lead program, and then in the oncology area, pancreatic cancer and Duchenne muscular dystrophy. In IPF, our randomized Phase II trial, we determined that the treatment with pamrevlumab yields a statistical significant reduction in the progression of lung fibrosis, as measured by quantitative HRCT, using algorithms developed by our vendor, MedQIA. So far as we know, this is the first report of a statistically significant effect measuring changes in lung fibrosis in a full year's study, meaning 48 weeks or 52 weeks, that range. Additionally, these results are consistent with similar results obtained in our previous open label Phase II IPF trial, and appear to correlate with changes in pulmonary function and disease progression in both of our Phase II studies.

Apart from this HRCT result, our 067 randomized placebo-controlled Phase II trial in pamrevlumab showed positive results compared to placebo for primary and secondary endpoints including forced vital capacity, measuring absolute volume and percent predicted disease progression, measures of quality of life and safety endpoints. Notably, a key endpoint in our recent Phase II study was disease progression as defined by a decline of 10% or greater in FVC percent predicted or death. In the assessment of this clinically meaningful composite endpoint, the proportion of patients with progression by week 48 was 10% for pamrevlumab patients and 31.4% for the placebo patients. This statistically significant result suggests pamrevlumab may prevent or retard disease progression.

A similar effect on disease progression was observed in the predecessor study 049. To date, over 500 patients have been exposed to pamrevlumab, including nearly 240 IPF patients. Pamrevlumab has been well-tolerated in all studies. In the IPF population, we have not observed the types of adverse reactions that have been reported with the current approved therapies in IPF. The development of an efficacious and safe therapy with minimal side effects, particularly reduction of free-fall mortality morbidity of its characteristic and IPF populations would represent a major improvement in safety and a meaningful advance in treatment of IPF patients.

In total, our results to date indicate the patients treated with pamrevlumab as compared to placebo experienced a slowing in progression of lung fibrosis associated with the slowing of disease progression and an improvement in quality of life. In combination with good safety and tolerability reported today, we believe that these results position us well in developing pamrevlumab as an advanced therapy for IPF.

Going forward, we expect to obtain feedback from our agency FDA on our Phase III program by midyear. At the coming ATS meeting in San Diego, we will be presenting data from our 067 study on first quantitative HRCT, where we will present the first HRCT study results showing a statistically significant reduction in lung fibrosis progression. Second, positive results from the St. George's Respiratory Questionnaire assessment indicating improvement in quality of life; and third, new results in other aspects of IPF using the preclinical model of radiation induced lung fibrosis, which in the past has proven to be highly predictive of clinical outcomes.

In our pancreas tumor, pancreatic cancer program, we are evaluating pamrevlumab as a potential therapy given in combination with gemcitabine and nab -- paclitaxel. In February, FDA granted Fast Track designation for the development of pamrevlumab on locally advanced and resectable pancreatic cancer or LAPC, based on promising clinical results in this patient population. We will report updated results from our ongoing open label Phase II trial at ASCO annual meeting in June. In a nutshell, these results will show a majority of unresectable locally advanced pancreatic cancer patients treated with pamrevlumab and chemotherapy were assessed as resectable after 6 months of treatment. We will also report that there appears to be a survival benefit in this study for patients who have undergone tumor resection. We expect to reach agreement with FDA on pivotal clinical trial designed by midyear.

In Duchenne's muscular dystrophy or DMD, we're pleased to announce we completed the enrollment in our Phase II open label clinical trial in nonambulatory Duchenne muscular dystrophy. This is a 3-year study focusing on nonambulatory patients. As you know, DMD is a degenerative genetic disease causing by mutation in the dystrophy gene where patients typically lose the ability to walk by the age of 12 and gradually lose upper body strength and mobility. In fact, over 70% of the DMD population is wheelchair-bound. As a potential antifibrotic therapy, pamrevlumab would not be limited to any particular dystrophin mutation. Dr. Seth Porter is here today to provide updates on current activities in our pamrevlumab development programs.

On the financial side, as of March 31, FibroGen had $730.4 million in cash.

With that, now let me turn this over to Dr. Peony Yu for further update on the anemia program. Peony?

Thank you, Tom. As Tom mentioned, we are completing multiple Phase III studies to meet the registration requirement of 4 regulatory agencies. In collaboration with AstraZeneca in the U.S. and China and with Astellas in the Europe and -- region and Japan. Tom has covered China, where our NDA is currently under review by the Chinese regulatory agency. My update today will focus on progress in the U.S., Europe and in Japan.

Our U.S. EU Phase III program consists of 4 dialysis studies in which roxadustat is compared with EPO and 3 nondialysis studies in which roxadustat is compared to a placebo. We have reached alignment with AstraZeneca in completing enrollment in June. We have already enrolled more than 4,200 patients total in the 3 nondialysis studies, and we will have enrolled over 4,600 patients across the 4 dialysis studies. With the last patient vista in September, we expect to have sufficient data for MACE endpoint analyses.

Primary efficacy assessment of the roxadustat Phase III program is based on results from the individual studies, which we plan to report in the fourth quarter of this year. The adjudicated MACE data from these 7 Phase III studies will be analyzed in 2 pools, the dialysis and separately, the nondialysis, prior to our NDA submission plan for first half of 2019.

The independent data safety monitoring board or the DSMB has been conducting periodic safety reveal of these clinical studies since Phase II and throughout Phase III, with evaluation by treatment arm. At the most recent DSMB meeting at the end of this March, we received the recommendation to continue studies as per current protocols.

Next, I would like to briefly highlight our decision on using placebo as comparator in our large U.S. EU nondialysis program, which is about to finish. Placebo is considered a gold standard for safety comparison. If our trials demonstrate roxadustat to be noninferior to placebo in safety evaluation, there maybe an opportunity to avoid the ESA black box label.

In the U.S, anemia in nondialysis patients is generally left untreated due to a combination of label restrictions, ESA safety concerns, limited access to and the inconvenience of ESA therapy. Therefore, orally administered roxadustat may offer a more attractive and accessible therapeutic option for anemia to address this important unmet medical need in CKD patients.

Turning over to discuss Japan. There are a total of 6 Phase III roxadustat studies. Our partner, Astellas, has announced the completion of all 4 Phase III dialysis studies. These studies will comprise the data needed for the NDA package for anemia associated with dialysis-dependent CKD patients in Japan, and this is targeted for submission in 2018. This will be followed by NDA for nondialysis indication, which will be submitted after both of the nondialysis Phase III studies in Japan will be completed.

There. The top line results of the peritoneal dialysis study was disclosed in November 2017. Astellas recently announced positive top line results from the 2 Japan Phase III studies in hemodialysis patients. In ESA-naive correction study consist primarily incident dialysis patients were treated with roxadustat for 24 weeks. In this study, hemoglobin response was defined as achieving hemoglobin 10 grams per deciliter or higher plus an increase in hemoglobin from baseline by at least 1 gram per deciliter. The result shows 86.5% of the patients who receive the 50 milligrams 3 times a week starting dose and 89.2% of patients who received 70 milligrams 3 times a week starting dose both were followed by dose titration, and they achieved hemoglobin response.

In the 52-week study in hemodialysis patients previously treated with ESA, treatment was then switched to roxadustat. 71.9% of these patients maintained hemoglobin between 10 to 12 grams per deciliter at weeks 18 to 24 and 71.2% at weeks 46 to 52.

Safety findings in both studies are consistent with those in prior roxadustat studies with no safety signals detected. The fourth dialysis Phase III study in Japan is an active controlled conversion study in hemodialysis patients. This study is already completed and data readout is planned for the second quarter of 2018.

One of the 2 Japan Phase III studies in CKD nondialysis patients has already completed enrollment with data readout planned for the fourth quarter of 2018.

In summary, in collaboration with AstraZeneca and Astellas colleagues, we will be completing multiple Phase III studies to support regulatory submissions in various regions in the coming months. We look forward to reporting results of these studies to you as they become available. We shall continue our efforts towards seeking marketing authorizations to offer new anemia therapeutic options to CKD patients in China, Japan, U.S., Europe and the rest of the world. Stay tuned.

I'd like to now turn the call back to Tom.

Thank you, Peony. Dr. Seth Porter will now discuss the status of our pamrevlumab product platform and correspondingly therapeutic indications. Seth?

Thank you, Tom. In IPF, positive results and ongoing analysis from our randomized double-blind placebo-controlled Phase II clinical trial continues to be well-received by clinical thought leaders. Four FibroGen abstracts had been accepted for poster presentation at the upcoming ATS 2018 meeting in San Diego. These include quantitative measures of changes in lung fibrosis by HRCT, health-related quality-of-life assessment by the St. George Respiratory Questionnaire or SGRQ, PK and PK PD model for pamrevlumab in IPF patients, and updated preclinical results from the mouse model of radiation induced lung fibrosis.

With respect to HRCT, pamrevlumab demonstrated a statistically significant reduction compared to placebo in progression of lung fibrosis using the most up-to-date methods for quantifying fibrosis in IPF patients. These results are consistent with results previously published from our open label IPF study. The quantitative HRCT poster will be presented on Sunday, May 20.

The SGRQ assessment of health-related quality-of-life is an instrument that has been broadly used in IPF clinical studies. Patients treated with pamrevlumab ascended to have improved scores in the SGRQ assessment, consistent with FPC and HRCT results, while placebo treated patients tended to show worsening scores, as expected for the progressive disease. The SGRQ poster will be presented on Monday, May 21.

The data to be presented from the radiation-induced fibrosis model expands upon results we published last year showing that lung fibrosis is associated with a spectrum of changes in gene expression patterns and that systemic treatment with pamrevlumab can effectively reserve or mitigate many of those fibrosis-associated gene expression changes. That poster will be presented on Sunday, May 20.

Our understanding of the clinical potential of pamrevlumab in pulmonary fibrosis has grown from animal and human studies. That, combined with positive efficacy and safety outcomes from our '06 7 Phase II study, including IPF disease progression, leads us to believe we are in a strong position to further our clinical development of pamrevlumab in IPF.

Turning to pancreatic cancer. As Tom mentioned, we are very pleased to have received Fast Track designation from the FDA for pamrevlumab for the treatment of locally advanced unresectable pancreatic cancer. We will be reporting updated Phase II results from the treatment period for study 069 at the ASCO meeting in June. There is general recognition that successful resection of locally advanced pancreatic cancer yields a survival benefit. Consequently, there is growing interest globally among oncologists and surgeons for this new adjuvant approach to treating pancreatic cancer. New adjuvant treatment for locally advanced unresectable pancreatic cancer is an indication for which no drug or drug combination has been approved. We are preparing to meet with the FDA and expect to have pivotal trial design feedback in the next quarterly call.

Finally, turning to Duchenne muscular dystrophy. As Tom mentioned, we completed the Phase II clinical trial enrollment in DMD. This is a 3-year study focused on nonambulatory patients. Nearly all muscular dystrophy patients transition to nonambulatory wheelchair status sometime after the age of 10. According to the CDC, the prevalence of DMD in the U.S. is approximately one in 10,000 males. And more than 70% of DMD patients transition to nonambulatory wheelchair status sometime after the age of 10. Lack of normal dystrophin leads to an accumulation of fibrosis in muscles and the extent of fibrosis is associated with the loss of muscle function. The anti-fibrotic mechanism of [action of] pamrevlumab is not limited to a particular dystrophin mutation. Thus, we expect that pamrevlumab may benefit a broad DMD patient population. In our trial, we are evaluating multiple endpoints, including pulmonary function, upper body strength and mobility and imaging endpoints.

Thank you for your time today, and I will turn the call back over to Tom.

Thank you, Seth. Pat Cotroneo, our Chief Financial Officer, will now walk us through financial highlights for the first quarter of 2018. Pat?

Thank you, Tom. A quick comment before I discuss results. As of January 1, 2018, we adopted on a fully retrospective basis, the accounting standards update 2014-09 titled Revenues from Contracts with Customers, also known as ASC 606. Unless otherwise indicated, all financial results of the previous periods and years have been recast as if the company has adopted the standard since the start of our current collaboration agreements, Astellas since 2005 and AstraZeneca since 2013. For more information on our adoption of this new revenue guidance, please see note 1 of our quarterly report on Form 10-Q filed with the SEC earlier today.

As announced today, total revenue for the quarter ended March 31, 2018, was $31.9 million as compared to $29.4 million for the first quarter of 2017. For the same period, operating expenses were $72.5 million and net loss was $41.4 million or $0.50 per basic and diluted share as compared to operating expenses of $58.3 million, a net loss of $30.6 million or $0.48 per basic and diluted share for the same period in the prior year. Included in operating expenses for the quarter ended March 31, 2018 was an aggregate noncash portion totaling $12.4 million, of which $10.9 million was a result of stock-based compensation expense, as compared to an aggregate noncash portion totaling $10.5 million of which $8.4 million was a result of stock-based compensation expense.

Upon the adoption of the new revenue guidance under ASC 606 as of January 1, 2018, we recast our consolidated statement of operations and balance sheet from the amounts previously reported. This resulted in a $2.6 million increase in revenue for the first quarter of 2017 and a cumulative net reduction in revenues through year-end 2017 of $34.7 million, which will be recognized over the future remaining development period. As of March 31, 2018, we had $730.4 million in cash as compared to $762.2 million at the end of 2017. For these purposes, total cash refers to cash, including cash, cash equivalents, receivables, investments, consisting primarily of investment-grade corporate debt and restricted time deposits relating to our building lease. We are currently projecting a year-end cash balance in the range of $600 million to $620 million, excluding milestone payments that may be received under our collaboration agreements with AstraZeneca and Astellas.

Thank you, everyone, and now I would like to turn the call back over to Tom.

Thank you, Pat. 2018 looks to be an exciting, defining year for both roxadustat and pamrevlumab. For roxadustat, patient enrollment in the 5 U.S. Phase III studies run by FibroGen and AstraZeneca will conclude in the second quarter of 2018. We plan to report top line results from Phase III roxadustat clinical studies in CKD anemia in the fourth quarter of 2018 along with AstraZeneca. In China, we anticipate a market approval decision for roxadustat by year-end 2018.

For pamrevlumab and IPF, we have seen statistically significant benefits from pamrevlumab therapy and progression of fibrosis, as measured by quantitative HRCT. These and other results will be presented this month at ATS. We expect to report on the Phase III program on our next quarterly call. In pancreatic cancer, we will report updated Phase II trial results for pamrevlumab in locally advanced and resectable pancreatic cancer at the ASCO annual meeting in June. We expect to reach agreement with FDA on pivotal clinical trial design midyear, supporting registration pathway for locally advanced unresectable cancer.

With that, I would like to turn the call back over to Karen for Q&A. Karen?

Thank you, Tom. Michelle, if you'd kindly open up the lines for questions.

(Operator Instructions) First question in the queue comes from Joel Beatty with Citi.

The first one is regarding the non-interior goal for the MACE events in the Phase III roxadustat program. Could you give a sense of what the boundary is, or how much of goal run there is to rule out an inferiority?

Peony, why don't you get -- take that, please?

So Joel, thanks for the question. So we are looking at -- we are using -- we analyze -- so now just to refresh ourselves, the nondialysis studies are the ones that use placebo control as the one I mentioned. So the non -- and we will -- now the studies are still blinded. And so, we will need to wait until unblinding to make that comparison after adjudicated MACE pool across the 3 studies from over 4,200 patients and to show -- to demonstrate the noninferiority.

Dialysis?

So and then in dialysis, we will be pooling from 4 studies, and similarly, the roxadustat will be grouped into 1 treatment arm and then will be compared with the EPO comparators across these studies. And the first test will be noninferiority, and once we succeed in that, then -- if and when we do succeed in that, then we will move for superiority comparison. So I hope that answers your question, Joel.

The next question comes from Michael Yee with Jefferies.

A roxa question and a follow-up. On the MACE analysis, can you guys just talk about why you're waiting a couple of months to release the data as opposed to just putting it all out with the top line efficacy at once? Maybe talk a little bit about what was driving that rather than just putting it all out there for everybody in 1 press release. And then, related to that, following along the last question, we want to understand how you handicap noninferiority versus superiority, and specifically, whether or not there are fear-based cases is noninferiority with all the MACE going and the trending in the right direction for roxa and all types of patients in 20, yes.

Michael, I didn't quite follow that last phrase in the second question. Could you say it one more time?

I would just like to understand whether the base cases standard is noninferiority when they trend favoring the drug ARM on all MACE events, and whether or not the types of patients today versus 10 years ago entreat and the lower vent rate has been accounted for.

Okay. So let me do the first part, and then Peony, you're going to get the meat of this thing. It would be wrong to say there's a delay with regard to the accrual of the safety pools. What we have to do is to take the 5 studies that AstraZeneca and ourselves will report out in the fourth quarter. So these are now obviously AstraZeneca and Europe is running these studies. And then to those studies, we then have to add the Astellas study, which is not part of the reporting in the fourth quarter and done under a set of rules for Europe that differs a little bit from what we're doing in the U.S. And so in order to properly account for the amount of time we think it will take for our 2 partners to sign off on the various things that have to be done, because usually, this goes deep into their organizations, and it takes a little while for everybody to get signed off. We provide for some extra time to set up a calendar and goals and so on. It would also be fair to say that if top line reporting's in December, lots of people are incentivized to have the MACE thing turned around by March, but we're not seeing that officially. We're seeing the AZ wanted midyear, and we agreed with that. So in effect, report out the pool MACE and the submit NDA in the time periods after December 31. But it's the issue of adding the fourth study in dialysis and the third study in nondialysis at that point, and whether or not there will be any challenges in integrating those studies that take any time. It's hard -- it's just hard to tell how much time it might take because you've got 3 organizations at that point working on these things. So that's the answer there, and Peony, go ahead and address the rest of it, please.

Okay. So, Tom, I would also like to add one more supplement a small point what you were saying about the adjudicated data. The reason it takes longer is operationally it would -- it has a few more steps because one needs to obtain the other data by the independent party to send to the external independent adjudication experts.

Yes, you're right about that actually. We have to add the adjudication step in the calculus timeline.

Exactly. And whereas when we report out the efficacy results from the study, it is as soon as we complete the study and clean the data, we can analyze it. So we save that stuff. And so instead of delaying reporting to you the top line result, this is why we do it at a different time. So the second part of your question. You have asked us what's the difference between our patient and the treat patient is an excellent question. Indeed, we are studying a patient population of CKD patients not on dialysis that have not -- I have not seen any publication on any previous control trials. The studies that supported approval of the ESA had higher entry hemoglobin criteria and they are less advanced in the security of the CKD. And -- however, since 2011, the label change for ESA, the treatment standard have changed. So in our study, patients most baseline hemoglobin needs to be below 10, and they tend to have lower eGFR than the studies that have been reported so far. And as far as what would be the implication of the MACE event rate, typically, patients with more advanced chronic kidney disease tend to have a higher risk such as mortality or hospitalization. But overall, in our study, right now is blinded that when we mix up the placebo treated and the roxadustat patients together, their overall event rate observed is lower than what has been reported by treat.

So let me -- it's an interesting question you've asked, Michael. Let me add 1 other thing here. In the nondialysis study versus placebo, there's never been a study of this treatment population before. So there's no comparative that would make any sense. In the treat study, they looked at patients that had a median eGFR of around 30, 28 type of range. So this is between stage IIIb and IV. We are looking at substantially more advanced disease in the patients in our nondialysis study versus placebo. So we'll be seeing median eGFRs in the mid-to low teens is my expectation.

Yes.

And so, this pool and the notion than there's not any therapy available for it also attaches to the notion that a lot of countries and medical practices have decided that this rigid rule of enrolling people in the dialysis at eGFR 15 doesn't really make any sense. And so we're seeing this profound number of patients that are between eGFR 8 and 12 routinely in all the countries in E5 and U.S. and so on. And so the world out there has evolved quite a bit since the treat study. And in the dialysis portion, well, it is true that the event rates are less frequent, and therefore, it takes longer. We still have the issue of the inflammation and hypo response in about 1/3 of the patients. And simply put, there's a large number of patients for whom EPO cannot work at all, and those patients are not handled very well in the system right now in the U.S. under the bundle, but with roxa, for whatever reason, the inflammation just has no impact on therapy. So while EPO completely fails, roxa sails through these things as if there was no impediment from inflammation. And so, that segment of the population, we've heard from CMS the idea they view that as an unmet medical need now given current therapies. And so, if you're thinking about these ideas, I think these various points you might want to consider in the overall picture.

So Tom, I would like to add -- remind everyone -- this is Elias -- that the treat is targeted a hemoglobin of 13.5.

That's the original treatment goal, yes.

Which is by itself as this could lead it to a different profile and different number of MACE event. Now by itself, it just make a big difference in treat than what been done now in the clinical trials for the not on dialysis. And again, in MACE's study for treat was the endpoint is MACE itself has to prove as beneficial while in our studies, we are pulling MACE multiple studies as a safety endpoint. That's why this is taking a later-on time to be able to pull all this data, and then when we complete the efficacy analysis, which is the hemoglobin itself. So by these 2 things as we have a big differentiation between our programs and what the treat was planned to do.

Good points. Let me also point out, Michael, that as far as I know, amongst the other companies that are copying the roxa technology, there are no placebo studies being done in not dialysis at all. And as far as I know, there are no collections of incident dialysis in a manner that would be sufficient to arrive at conclusions. And so that distinction. Anyway, Michael, go ahead if you have another question.

Appreciate it. No, that's good. Appreciate it. It's very interesting because you're not treating to that high level as treat given rates are so low. So there's other things to think about and I appreciate the color.

The next question in the queue come from Terence Flynn from Goldman Sachs.

This is actually Gavin on for Terence. Had a quick question on pamrevlumab. The Phase III design is expected midyear. Can you provide any more color on that design? I know a competitor recently shared their design on background of standard of care. So I was just wondering your commentary on that, and then whether or not we're going to get an interim in the DMD study?

So let me start with a question for this part about midyear. Are you referring to pancreatic cancer or IPF?

Apologize. The IPF study.

Oh, okay. Okay. So I mean for us, we are following where our data takes us. It's the general idea, and this has been innovation from the very beginning. Elias, if you'd like to comment on this, please?

Yes, at least I would like to remind everyone, this is the design that you're talking about is other company. They have a very little of data in their Phase II studies while we have a complete Phase II studies which has shown a statistical significant results. That is why itself it should lead us to potentially 2...

Two full Phase II studies.

Yes. And that's just consistent with the 049 when you add it on top of 0467, it gives us a much different power and level of understanding of our product in this population. And this is, at that time, this is what we will be taking the direction into our studies what the design will be. It's appropriately based on this data, not on a minimal data that has been planned previously. So that is would be the most direction we will be taking at this time, and this discussion will be occurring with the regulatory agencies using this data.

How about the DMD question?

The DMD question. We're feeling very good that we are able to complete enrollment in this study as we understand either our product is trying to enroll in nonambulatory is facing a lot of hurdle in enrolling this population. This study is to be run for up to 3 years. We will hope to take a look into some interim analysis when our patient complete the first year of the treatment. And that is -- will not occur till next year. So this time out, this is where we take a look at accumulative data. From the 3 points that Seth mentioned before, pulmonary function, muscle function and imaging that we are doing at the same time.

The next question from the queue comes from Geoffrey Porges with Leerink.

My questions are related to timing, specifically first on the China approval. It sounds as though you're maybe a little bit less confident about the timing of the approval this year compared to the past, certainly your language around the same, but it may be the first country approved for roxadustat as opposed to language in the past, which seemed very confident that it could come, perhaps even soon as the end of the year. So has something changed there in terms of that timing? Secondly, you haven't mentioned MDS on this call. Could you give us an update on your progress in MDS and the outlook for roxadustat indication. And then thirdly, you commented on pamrevlumab and potentially a pivotal trial for IPF a moment ago, but could you give us a sense of when we might understand what that looks like? Is it something that you will be providing midyear or is it still too soon to even say when we'll know when the pivotal trial design and timing will look like?

So the last one first. We've had programs in parallel and pancreatic cancer and IPF, and what we try to do is make it so that the FDA interactions are a few weeks apart, and so one of them will be in early June and the other one would be right around the Fourth of July. And we expect to have pretty good comprehension of where we are after these meetings given the totality of what we know right now. So we will be looking to share what we can in early August, the next time we have earnings call.

The comment about China. It would be very presumptuous of me to presume that we're going to get approved first in China because China has to decide to approve us first. And so it's the nature of things that we have to say under the circumstance that if we are approved in China, comma, therefore and so on. In China, there have been a large number of reforms in the past couple of years, some of which have effective baseline assumptions in the program. Timing-wise, I don't think we've -- we're talking about timing that's moved out by any substantial length of time as it relates to drug approval or as it relates to getting follow-on manufacturing licenses done. I think that how they're going to treat an innovative program is literally a live issue right now with the senior people in China that make decisions about this stuff. So we are watching very closely how it goes. The sense we get is that we have very strong sponsorship from people that really believe that China needs an alternative in anemia because it's -- unlike other countries, China's challenge is the baseline therapy in chronic anemia care is not transfusion. Everywhere else in the world it is transfusion, but in China it is not. And as such, all you have are the indicated uses of EPO, which are ones that are a small subset of the ones that would be typical in the U.S. or Europe because in China, for whatever reasons, they ended up using knockoffs of EPO initially instead of the [intermediate] brand products and when the cancer the safety stuff happened it sort of froze all the development in China. And so there's not that much in the way of approval with EPO. So there's a very large need for...

Maybe you actually go on mute because we are getting a lot of background noise from the breathing.

Oh, I see. Anyway, as it relates to China, whilst there's no doubt that things are moving around a lot, and for example, we've had to deal with 2 invoices and things like that this year and so on. It to date has not really affected this Center for Drug Evaluation's decision on drug timing or the commercial manufacture licensure. Things downstream to that are obviously dynamically changing all the time, but we haven't gotten to the point it's terribly material yet. They have been -- people are very, very excited about the project overall. So I think there's a lot of momentum. WeChat is a good place to look for some of that. We sampled in November and December and we had 70 videography per day for a few days in November and December it was down to about 35 in China when we checked.

And Tom, as you told us, I mean, we should not be presumptuous. I mean in China you always tell us in China we follow the rules and laws of China and as the first class 1.1 candidate being evaluated for NDA, we just need to follow the process, and things are moving really well.

So then the other question you've asked. Sorry?

MDS?

I was going to say the other question that Geoff had asked was MDS. So Peony, why don't you go ahead and knock?

Yes, so thank you. So MDS is our first additional anemia indication beyond CKD, and we are very excited about the opportunity to address this true unmet medical need, where in fact we have 2 parallel teams working on MDS studies. One is our U.S. team is working on a global study on the MDS patients who are transfusion dependent, and the China team is working on Phase II-III MDS study in patients who are nontransfusion dependent but are anemic. Both teams are doing a good job in study startup activities, and we have a number of sites started at the verge of screening patients. So in the coming months, we are looking forward to provide you more update.

The next question in the queue comes from Andy Hsieh with William Blair.

Just from a timing perspective, Tom. So in China after approval, how long do you think the drug will be available commercially? And after that, how long would it take reimbursement to get approved? So it's really just a modeling question. I just want to get a sense of when the company can start recognizing revenues in China.

So let me make sure I understand your first question right. Did you just say how long the drug will be available? Is that what ...

Sorry, no. How long would it take for -- basically, the lag time between approval and the commercial availability.

Okay. So China differs in very distinct way from other countries and jurisdictions in that when you're doing business in China, for China and getting reimbursed in China, you first have to obtain a hospital listing, and so hospital listing process is by itself a cycle time of anywhere from 6 to 15 months per hospital. And to find a way to manage this, we use the AstraZeneca milestones when they launched Brilinta in China for hospital listings. And so conceptually, I believe the most recent briefing I got from the commercial side from China was that we are about 25% to 30% larger than the Brilinta effort in terms of the number of hospitals that are being sought on the listings. It is -- it populates the major goals for the first couple of years because it's an absolute necessity to get that done before you move into what we would think of as commerce or selling. And so, yes, as I think about what we face with the institutional side in China where you do the hospital listings first, and after that, you're going to start selling through the provincial auction process, it will take 3 or 4 years to get to the point where you have substantial traction, and then this is what everybody is -- expects, and this has been the totality of experience in China for those kinds of products.

In addition, however, to the basic in hospital 3A hospital, we have other aspects. Pharmacy distribution is out there as part of the picture. Direct sales, privately, direct sales to people that right now, for instance, will prefer to have the [Kieran] EPO over the domestic EPOs and they are willing to pay a considerably higher premium price. So these market segments are ones that are addressable.

In addition, because of OBOR, so one belt one road, there are several countries that will take on the China regulatory files such that distribution gets started in those countries. And so, as you look at the theater of activities, that's another piece of the picture, and AstraZeneca has made a point of saying we're going to endorse OBOR as much as we can in countries where it's appropriate. I think amongst the countries that I know are in that group are Indonesia, Malaysia, Philippines, India. All are considered that way as well as some of the parts of China that we think of as China but China does not. So Macau and Hong Kong also. So the picture's sort of very different than how you'd be thinking about a U.S. rollout, but there is a great deal of experience in AZ because they've had several drugs that they have launched in China. And so they have a lot of templates that are based on time to achieve and time to milestone kind of thing. And so once you get inside of that, it all sort of makes sense. The way I think about it is that during the period of administering exclusivity, so we get approved under special rules where the efficacy portion is dealt with early and a decision is made, and then we have to do a follow on 2,000-patient safety collection. And only after that safety collection is over do you get a grant that is unconditional and during the period of that safety collection, you're under what's called administrative exclusivity, which prevents others from trying to compete in the segment that you're in. But that will take 3 or 4 years inherently. So a, the administrative exclusively period is typically denominated up to 5 years. And so as you think about it, it's not going to be immediate that sales come, but as we invest in these things and succeed in getting over the hurdles, it represent really high barriers to entry for anyone trying to compete in China. So that's the other side of it. And so, I think that's sort of where we are right now. I hope this is helpful.

There are no further questions in the queue at this time. So I'll turn the call over to Mr. Neff for closing remarks.

Thank you all for joining the call today. We anticipate sharing additional clinical data insights on regulatory process during the remainder of 2018 and into 2019. We will also be participating and webcasting 2 upcoming conferences, the 2018 Jefferies Annual Healthcare Conference in June, 5 to 8 in New York. And the Goldman Sachs annual Global Healthcare conference on June 12 to June 14 in Los Angeles and Rancho Palos Verdes. We would look forward to seeing anyone that's visiting those conferences. And of course, they'll be live and available online at the Goldman conferences. They've got a video feed so you can see it live.

I would like to express my sincere thanks to the FibroGen teams in the United States and in China for their dedication and hard work. We have accomplished an enormous amount the last 12 months, and we have even more to do in the next 12 months. And my gratitude to our partners and our investors for their support as we pursue our programs. We look forward to seeing you at the Jefferies Conference, the Goldman Sachs Conference. I'd like to wish everyone a good afternoon and good evening. Thank you.

Thank you, ladies and gentlemen. This concludes today's teleconference. Thank you for participating. You may now disconnect.