FibroGen Inc (FGEN) 2021 Q1 法說會逐字稿

Good day, and welcome. Thank you for standing by. Welcome to the FibroGen First Quarter 2021 Financial Results Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions) I would now like to hand the conference over to your speaker for today, Mr. Michael Tung. Please go ahead.

All right. Thank you, Erica, and good afternoon, everyone, and welcome to FibroGen's conference call for our fiscal 2021 first quarter. I'm Michael Tung, Vice President of Corporate Strategy and Investor Relations at FibroGen.

Joining me on today's call are Enrique Conterno, our Chief Executive Officer; Dr. Percy Carter, our Chief Scientific Officer; Pat Cotroneo, our Chief Financial Officer; Dr. Mark Eisner, our Chief Medical Officer; Thane Wettig, our Chief Commercial Officer; Chris Chung, our Senior Vice President of China Operations; and Dr. Elias Kouchakji, our Senior Vice President of Clinical Development, Drug Safety and Pharmacovigilance. Format for today's call includes prepared remarks from Enrique, after which we will open up the call for Q&A.

I'd like to remind you that remarks made on today's call may include forward-looking statements based on FibroGen's current expectations. Such statements may include, but are not limited to, statements regarding our collaboration 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, commercialization and results of operations; risks, plans, market opportunity and strategy related to our business; the planned FDA Advisory Committee meeting and other anticipated FDA interactions; and certain other business matters.

Such forward-looking statements are subject to significant risks and uncertainties that could cause actual results and events to differ materially from those anticipated in such statements. For a discussion of these and other material risks and factors that could affect our future financial results and business, please refer to the disclosure in today's press release reporting our fiscal 2021 first quarter financial results and business update, our most recent Forms 10-K and 10-Q and reports that we may file on Form 8-K with the Securities and Exchange Commission.

All statements are made as of today, May 10, 2021, based on information currently available to us, and FibroGen does not undertake any obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law. Today's press release reporting our fiscal 2021 first quarter financial results and business update and a webcast of today's conference call can be found in the Investors section of FibroGen's website at www.fibrogen.com.

With that, I would like to turn the call over to Enrique Conterno, our CEO. Enrique?

Thank you, Mike, and good afternoon, everyone, and welcome to our first quarter 2021 earnings call. Today, I would like to provide a high-level summary of the most important accomplishments and developments in recent months. Pat Cotroneo, our CFO, will then review the financials, after which we will open up the call for your questions.

I reiterate my assessment that FibroGen is uniquely positioned to create significant value for patients and shareholders by executing on the 3 areas of focus as shown on Slide 2: number one, ensuring regulatory and commercial success of roxadustat, a transformational medicine for the treatment of anemia, first, in patients with chronic kidney disease, but with significant potential for expansion to treatment of additional indications; number two, accelerating the development of pamrevlumab in 3 indications with significant unmet medical needs, locally advanced unresectable pancreatic cancer, Duchenne muscular dystrophy and idiopathic pulmonary fibrosis; and number three is strengthening research productivity by leveraging our leadership position both in hypoxia-inducible factor and connective tissue growth factor biology and by accessing external innovation. Today's call will include a review of roxadustat, our continued strong performance in China and our clinical trial programs.

Let us get started with the roxadustat U.S. New Drug Application, or NDA, review. In March, we announced that the FDA had decided to hold an Advisory Committee meeting for the roxadustat NDA. Our team remains focused on preparing for the upcoming Advisory Committee meeting, which is tentatively scheduled for July 15. In April, we made an announcement clarifying for the FDA, and the medical and investment communities certain prior disclosures of primary cardiovascular safety analyses from the roxadustat Phase III program for the treatment of anemia of chronic kidney disease. Our meeting with the FDA was productive, and we have had further productive discussions with them regarding the AdCom.

Importantly, this clarification does not impact our overall conclusions regarding the comparability with respect to cardiovascular safety, of roxadustat to epoetin alfa in dialysis-dependent patients, and to placebo in non-dialysis-dependent patients. As described on April 6, for the incident dialysis subgroup, based on the prespecified stratification factors, roxadustat is comparable but not superior to epoetin alfa with regard to cardiovascular safety. We look forward to publicly discussing the analysis of the cardiovascular safety data at the Advisory Committee in July.

We have reached out to key opinion leaders, primary investigators, and medical journals to discuss this matter, and the discussions thus far have been productive and appreciated. We continue to progress our internal review expeditiously, and will communicate at the appropriate time. Importantly, we are putting controls in place to prevent this type of occurrence in the future. I want to reiterate that we continue to have confidence in the roxadustat data and in the safety and efficacy profile demonstrated in the Phase III program. FibroGen and AstraZeneca are committed to working together with the FDA to bring roxadustat to patients with anemia of CKD in the U.S.

Our pre-commercial activities have continued. FibroGen recently presented additional analyses at the National Kidney Foundation Spring Clinical Meeting and the ISN World Congress of Nephrology, and there continues to be significant interest in roxadustat from the clinical community. Health care professional disease education activities are ongoing and expected to increase through the official launch. Our partner, AstraZeneca, has a comprehensive renal commercial presence in the U.S. and together, we are committed to make roxadustat available to as many CKD patients as quickly as possible.

In order to ensure patient access, AstraZeneca is leading the discussions with dialysis organizations and with payers who cover non-dialysis patients. We have submitted manuscripts covering the CKD anemia Phase III studies to peer-reviewed journals. As noted in Slide 3, 6 of these manuscripts have been published, encompassing both non-dialysis-dependent and dialysis-dependent data, and we expect additional publications of the Phase III data in the coming months.

Astellas recently reported their fiscal year 2020, which ended in the calendar year first quarter. They guided to total EVRENZO sales of approximately $80 million for the fiscal year 2021, and this guidance includes EVRENZO sales in both Japan and Europe. In Europe, we continue to expect a midyear decision by the European Medicines Agency on the marketing authorization application for roxadustat for the treatment of anemia in adult dialysis and non-dialysis patients with chronic kidney disease.

Moving now to China and Slide 4. We're pleased to report total roxadustat net sales to distributors in China of $43.5 million for the first quarter versus $29.2 million in the fourth quarter of 2020. An increase in uptake continues to be driven by both an expansion in hospital listings and broad adoption within listed hospitals. Under the revised partnership structure, FibroGen reported $15.4 million in China roxadustat net product revenue for the first quarter of 2021.

As we have previously disclosed, beginning the first quarter, a jointly owned distribution entity, or JDE, is responsible for selling roxadustat to distributors and will pay for AstraZeneca's commercialization efforts in China and AZ's portion of the profit share. Previously, FibroGen was responsible for these items. The JDE is expected to account for over 95% of overall China roxadustat sales volume going forward. The rest will continue to be conducted directly by FibroGen.

Hospital listings continue to be a key focus of our launch efforts. Notably, at the end of the first quarter, roxadustat was listed at hospitals that collectively represent approximately 74% of the CKD market opportunity in China. As you can see on Slide 5, interestingly, since the inclusion of roxadustat on the NRDL, the ESA market growth has accelerated. In fact, ESA revenue over the last 6 months has shown 21% growth over the same period of the prior year.

Moving to Slide 6. Roxadustat has expanded the anemia of CKD category over the past 14 months, which translates into roxadustat adding new patients to the anemia of CKD category. Combining this view of roxadustat uptake along with the growing ESA category as shown on the previous slide, it is evident that roxadustat is growing share in an expanding market, which is a great sign. Finally, as shown on Slide 7, roxadustat is the #1 branded treatment for anemia of CKD in China for each of the past 2 months with a 27% value share in the segment that includes all ESA products and roxadustat, currently the only HIF-PHI on the market.

We continue to see significant roxadustat utilization across a range of anemia of CKD patient populations. Approximately 65% of patients treated with roxadustat in China are on dialysis, covering hemodialysis and peritoneal dialysis, while the remaining 35% are not on dialysis. This broad utilization pattern bodes well for long-term success and provides critical learnings as we prepare to launch roxadustat in the U.S., Europe and in other countries. We look forward to keeping you updated as we advance our long-term goal of making roxadustat the standard of care in treating China's CKD anemia patients.

Moving now to our clinical development and starting with roxadustat. During the quarter, we completed enrollment of our Phase II chemotherapy-induced anemia, or CIA, trial. In ASPEN and DENALI, our 2 roxadustat Phase IIIb studies in CKD anemia patients conducted with U.S. dialysis organizations, many patients have transitioned now into the extension phase. We expect to present top line data at a future medical meeting.

Moving now to pamrevlumab. In March, we announced the initiation of LELANTOS-2, a Phase III randomized, double-blind, placebo-controlled trial of pamrevlumab in ambulatory patients with Duchenne muscular dystrophy. Pamrevlumab was recently granted Fast Track designation and Rare Pediatric Disease designation from the U.S. FDA for the treatment of DMD. We value this acknowledgment of the serious and life-threatening manifestations of this rare disease and support of our mission to provide pamrevlumab as a potential treatment option for DMD patients.

I will turn now the call over to our CFO, Pat Cotroneo, for the financial update. Pat?

Thank you, Enrique. As announced today, total revenue for the first quarter of 2021 was $38.4 million as compared to $24.4 million for the first quarter of 2020. The current quarter revenue consists of $15.4 million in net product revenue for roxadustat sales in China, $14.6 million in development revenue and $8.5 million in drug product revenue for roxadustat bulk drug or active pharmaceutical ingredient.

For the same period, operating costs and expenses were $108.9 million, and net loss was $71.8 million or $0.78 per basic and diluted share as compared to operating costs and expenses of $105.5 million and a net loss of $78.3 million or $0.89 per basic and diluted share for the first quarter last year. Included in operating costs and expenses for the quarter ended March 31, 2021, was an aggregate noncash portion totaling $25.1 million, of which $19.4 million was a result of stock-based compensation expense as compared to an aggregate noncash portion of $22.1 million, of which $16.9 million was a result of stock-based compensation expense for the same period in the prior year.

At March 31, FibroGen had $682.6 million in cash, cash equivalents, restricted time deposits, investments and receivables. As mentioned in our last call, we have made some changes in financial reporting. Starting this quarter, the jointly owned distribution entity between AstraZeneca and FibroGen, or the JDE, is responsible for selling roxadustat to distributors and pays for AZ's commercialization efforts in China and AZ's portion of the profit share. Previously, FibroGen was responsible for these items.

As of March 31, the JDE accounted for over 95% of overall China roxadustat sales volume, while the rest continues to be conducted directly by FibroGen. As such, under this new structure, FibroGen reported $15.4 million in China roxadustat net product revenue for the first quarter of 2021 on a U.S. GAAP basis, which included FibroGen's revenue generated from our sales to the JDE as well as our direct sales in China. To provide context for the operating results of our roxadustat business in China, total roxadustat net sales, including sales through the JDE to its distributors and FibroGen China's direct sales to our distributors, was $43.5 million for the first quarter of 2021.

Looking ahead at our broader financial picture, we have a total of $245 million in potential milestones expected by the end of the year for anticipated U.S. and EU approvals and first commercial sale in the U.S. At this point in time, we have no changes in expectations in any of the anticipated milestones between now and year-end 2021. Based on our latest forecast data, we continue to estimate our 2021 ending balance of cash, cash equivalents, restricted time deposits, investments and receivables to be in the range of $660 million to $670 million assuming U.S. and EU roxadustat approval in 2021.

Thank you. And now -- I would now like to turn the call back over to Enrique.

In closing, this is an exciting time for FibroGen. Roxadustat continues to perform very well in China and is under regulatory review in the U.S., Europe and other geographies. Our team remains focused on preparing for the upcoming Advisory Committee meeting that is tentatively scheduled for July 15, and we look forward to presenting the roxadustat data in a public forum. Pamrevlumab is a wholly owned potential first-in-class new medicine in Phase III development in 3 indications with significant unmet medical need: locally advanced unresectable pancreatic cancer, Duchenne muscular dystrophy and idiopathic pulmonary fibrosis.

Finally, we continue to advance our research agenda. We're delivering on our unique scientific expertise, strengthening and broadening our internal capabilities, while also looking for external opportunities with the goal of expanding our pipeline of innovative drug candidates. As shown on Slide 8, we're in a strong financial position as roxadustat sales ramp-up with approximately $682 million in cash and another $245 million in anticipated roxadustat milestone payments expected during 2021.

I would like to take a moment and also welcome Tricia Stewart, who we recently appointed as Chief People Officer at FibroGen reporting to me. She comes most recently from Genentech and will be responsible for advancing our people and culture strategy. Looking forward, I believe we're positioned for success.

Now I would like to turn the call back to the operator for questions. Erica?

(Operator Instructions) Our first question comes from the line of Annabel Samimy.

I'm not sure if I missed the initial comments, but I was wondering if you could tell us, during the preparations for the AdCom, have you conducted analysis of any of the additional clinical benefits that were published or presented or claimed like reduced RBC transfusion efficacy regarding inflammatory status on hypo responders or better iron utilization? And can you feel comfortable that the data that you presented at those meetings are accurate? And then secondly, you had mentioned some critical learnings in China. Maybe you can highlight what those learnings are for us.

Very good. Let me turn the first -- your first question about roxadustat and the benefit risk profile to our CMO, Chief Medical Officer, Mark Eisner.

Yes. Thanks for the question. So yes, the answer to your question is, yes, we have confirmed the additional benefits in terms of hemoglobin increase with roxadustat, reduction in red blood cell transfusions, roxadustat having benefit in patients with high CRP and who are functionally iron deficient. So we've been able to confirm all of those results, and that has not changed since our April 6 press release.

Very good. Clearly, I think when it comes to China, I think the results in China, I think, I would call nothing short of impressive and quite frankly, gives us a lot of confidence for how roxadustat is becoming a primary choice when it comes to treating anemia of CKD in patients in China across the continuum of both DD and NDD. There are a number of learnings that we are capturing from China. One of them, I think I've mentioned in the past, was we've seen a faster-than-expected uptake, in particular, in the NDD segment. And what we basically see is basically also excellent feedback because it is -- when it comes to a launch, clearly, the first few quarters could be always impressive.

But now I think we have a string of quarters where we've seen continued growth quarter-on-quarter that basically reflects not just the overall benefit/risk profile of roxadustat that we've discussed, but also the feedback from health care professionals and patients in terms of what roxadustat is offering in the real world. So I think it's very -- honestly, we are very encouraged with that and the potential read-through of that to other markets.

Your next question comes from the line of Michael Yee.

We had 2 questions. The first was to the extent you can talk about maybe topics or relevant areas of interest that you think will be discussed or could be a focus for the panel, that would be great. Since it sounded like you've had good ongoing conversations and things, maybe you could shed some general light on how to think about that from an expectation standpoint. And the second was related, which was that I know that it is being reviewed in terms of an AdCom from the cardiovascular renal group. Is that a separate group that you've had dialogue with? Or how does that play into things in terms of ongoing discussions?

Yes. I'm going to have Mark Eisner try to answer both of those questions, and I will complement as appropriately. Mark?

Yes. So thanks for the question. So yes, we have been having collaborative dialogue with the FDA about the Advisory Committee. I think both the agency and FibroGen and our partner, AstraZeneca, want to make sure that we have a very fulsome discussion at the Advisory Committee and give the Advisory Committee members the information they need to fully understand the program. In terms of the themes, I think I'd largely characterize it around the benefit/risk profile of roxadustat for patients with CKD anemia and just further explaining the safety and the efficacy of the medicine for NDD and DD populations and getting the input particularly from expert nephrologists who treat patients with CKD anemia. So that's kind of a broad answer, but that's where we are with the agency at the moment.

And in terms of you mentioned that this will be a cardiorenal drug advisory committee, which it is, and yes, we've had conversations both with the office -- at the office level with the cardiorenal -- it's actually OCHEN but includes cardio and renal and also with the benign hematology division. So we've had discussions at all those levels of FDA, including the various stakeholders for both disease areas.

Yes. I would just maybe add that I think our preparations when it comes to the AdCom, I think, are progressing well.

The reason I ask is because this is -- supposedly, we'll have renal or nephrology experts on there and you think that, that would be a positive, yes, because there would actually be experts on the panel rather than just people who are not familiar with that. Is that a fair statement?

I think it is important to have nephrology experts with the -- which I believe the FDA intends to have because they do treat patients with CKD anemia both in the NDD setting and dialysis setting. So they're in a very good position to understand the unique attributes of roxadustat and where the benefit/risk is going to be positive. So yes, I think it's going to be really important to have that nephrology input.

Your next question comes from the line of Edwin Zhang.

First one, can you please remind us the purpose and design of the ASPEN and DENALI clinical trials? How are the new study results going to affect or help the adoption of roxadustat in the U.S. dialysis organizations? And then I have a follow-up.

Sure. So the ASPEN and DENALI trials, they're single-arm, open-label studies conducting -- conducted in large dialysis organizations that, I think, will provide an understanding of roxadustat in a more real-world clinical setting. It is a clinical trial, but it is one that's conducted in a setting that's very much a real-world clinical setting for hemodialysis patients. We are expecting to present data sometime by the end of the year in a scientific meeting. And for the [other] large dialysis organizations, I mean, the data, we are committed to making that available to them at their request so they can further understand the value and the use of roxadustat in their patient populations.

Okay. My next question on pamrevlumab on DMD. Are we going to expect a publication of the Phase II study, including the 2-year data? And what's your current thinking on the market opportunity of pamrevlumab in DMD?

Yes. We'll have Mark answer the question on pamrevlumab, Duchenne muscular dystrophy and questions, in particular, around the 2-year data on publishing the data.

Right. So we are in the process of working to get the 2-year outcomes data published. So I don't have a specific date for you yet, but we're working on that actively. And we do think that's important to show how the benefits continue to be between year 1 and year 2.

And I think you were asking about the overall opportunity in DMD, and maybe let me try to frame that in the context of the 3 programs that we basically have for pamrevlumab. We see each one of these opportunities, whether it's IPF, LAPC or DMD, as significant opportunities. The IPF opportunity, when we look at from a -- clearly, I think it's important to say that the 3 of them are significant unmet clinical needs. The IPF opportunity is expected to be larger than the other 2, LAPC then and then DMD. But each one of those opportunities is significant on its own, and collectively, I think they do represent a massive opportunity. We are -- we expect that we will have the LAPC results and DMD results in the second half of next year from a readout perspective. While in the case of IPF, we have not shared that, but we expect to share at a specific time in the near future.

Your next question comes from the line of Jason Gerberry.

I guess just first on the slew of shareholder suits, can you just remind us sort of what's the burden of proof in these matters? I would assume the fact that the FDA is moving forward with an AdCom inherently implies there's some ambiguity around the safety and the upper bounds of the confidence interval on NDD. But just kind of curious if you can just provide a little bit of a helpful legal framework to think about the shareholder class-action suits.

And then my second question is just on DD. Assuming approval, what I wonder about is as the second and third HIFs come to market, what are your thoughts that the dialysis organizations might look to hop from one product ending in TADAPA phase and some of the financial benefits to the second and subsequent third products that may offer some of those financial benefits? Just thinking about the longevity of a dialysis launch.

Yes. Thank you. I think on your first question, we do not comment on either ongoing or potential litigation. That's -- as far as your question about HIFs and how would the second or third HIF, whenever it comes, impact the contracting or maybe a dialysis organization being able to move from one HIF to the other, a couple of comments that I would make. First is, clearly, launching first is important, and we've seen that across many different launches across different therapeutic classes because you tend to establish yourself as basically the go-to product, the product that the health care professionals have experience with.

And then second, I think quite frankly, there's no real experience in terms -- or studies showing basically switches from one HIF to the other and who can say that that's going to work well. Keep in mind that our -- at the end of the day, we have to look at also the clinical data and how do the products basically compare overall. So there are a number of variables. And I don't believe this is -- that we should be thinking -- as we've seen in other therapeutic classes that it's either appropriate or that it will be convenient to just basically switch products [in large] from one compound to a different one or the same class. I think there are a lot of considerations that would have to be made.

Your next question comes from the line of Geoffrey Porges.

First one, I'll ask a couple that you probably [kind of wouldn't] answer and then one that hopefully you can. The first is in the discussions with the FDA, can you give us a sense of whether the basis for the labeling discussions is going to be the protocol stratification or the post hoc stratification? That would be helpful.

And then secondly, you have these Phase II and Phase III studies in CIA and MDS coming in the second half of the year and the beginning of next year. And then obviously, those indications are completely different price points to the dialysis and non-dialysis indications where, of course, you have to think about the bundled rate and all that sort of thing. So have you had any further thoughts, Enrique, about whether you will price differentially for the different markets and whether that's feasible, or whether we should expect you to price pretty much in the same band?

And then lastly for China. Is the reported revenue under the new arrangement that comes into your results as a proportion of the total revenue in market, is that percentage likely to remain relatively constant going forward or actually increase? Or is it just going to be really bouncy?

Yes. Thank you, Geoff, for your questions. Let me first say that when it comes to our interaction with the FDA, I think we're not really providing any detail when it comes to our interactions. Clearly, just in general, I think the -- we expect that the FDA will be looking at the overall evidence, what we -- including what the primary analysis is and also a number of sensitivities around some of those analysis. So far, we feel good about our discussions with the FDA in that they are very productive discussions.

In terms of your question around CIA and MDS, clearly, when it comes to MDS, I think that's where the biggest price differential is. It's also in CIA. But of course, we're going to need to see when it comes to CIA what, based on the Phase II results, what is the dose and so forth and what also -- what is it that we're basically seeing. So I expect that CIA, while there might be some slightly different price points, I don't view them as meaningful. In the case of MDS, there is a pretty significant difference between products in the markets that have been used for MDS and basically what we would price, for example, anemia of CKD with roxadustat.

I think it's fair that we want to make sure that we are appropriately pricing so that we can -- based on the value that the product and the medicine is offering in the different populations. And while that is always the goal, we all know that, that is a challenge, in particular, in -- it's a challenge in the U.S. how to effectively do that. So at this point in time, we're not commenting on how we are thinking about that. But clearly, that has to be part of our strategic thinking just to ensure that we are appropriately receiving the value for what roxadustat is offering in the different patient populations.

Finally, you asked a question about the relative -- FibroGen reported revenue relative to the overall sales -- net sales to distributors between the joint distribution entity and FibroGen's indirect sales. And with that proportion that we reported this quarter, that is going to be the ongoing proportion going forward. There are a number of factors that play into this. We provided some guidance, I think, during the last earnings call that we expected that number will be somewhere between 30% and 45%. We need to -- I -- we continue with that type of guidance. So I think it's going to bounce a little bit based on a number of different considerations. I think the bottom line here is when we look at the overall net sales of roxadustat to distributors, it is pretty clear, I think, that the product is having an incredible performance and is really valued, I think, in terms of what it's offering patients in China.

The next question comes from the line of Yaron Werber.

This is Brendan on for Yaron. Just a couple of quick ones from us. I think, first, looking at the growth of roxadustat sales in China, it kind of looks like January and February sales are maybe more or less flattish. Are there some specific drivers behind that, that you can maybe identify to help us understand just some of the commercial dynamics at play there?

And then secondly, just on the DENALI and ASPEN studies, I think you mentioned just now that we could get data from there maybe by the end of this year. If memory serves me, I think we were supposed to see that data in Q1 of this year originally. So I guess, have there been any delays in enrollment or treatment there that you might be able to comment on?

Yes. Okay. Let me try to address your question about China. And I think you mentioned that the sales in China maybe were -- if I understood correctly, you felt they were flattish in January and February. I don't think that's the case for roxadustat. Clearly, we're basically seeing increased share, and we're seeing increased share in a growing market, right? So we feel very good about where we are. And when we look at our internal sales in the first quarter, clearly -- or the sales that we reported just right now [what is] overall net sales to distributors, I think we've seen a significant increase north of 40% sequentially between Q4 and -- of 2020 and Q1 of 2021. So I don't believe that's the case. And your second question was related to DENALI and ASPEN, and I'm going to have Mark Eisner provide an answer.

Yes. I think that there are 2 different things. One is when -- I mean, as this is an open-label study, it's potentially possible to provide for dialysis organizations data cuts for their own use. So that was, starting Q1, possible. What I was talking about as a distinctive factor was when we expect top line data from the overall study to be available, that -- I think we've been consistent that, that should be by end of year at a medical meeting.

Your next question comes from the line of Difei Yang.

Just 2 questions, circling back to the DENALI and ASPEN trials. Would you be able to clarify if the sites -- the clinical sites are mostly DaVita or Fresenius or is a balance of the 2? And the second question is related to AdCom. So what's the role for AstraZeneca for this AdCom? Is it primarily driven by FibroGen?

Yes. Let me -- just very quickly on DENALI and ASPEN. We're not commenting on who are we doing those studies with. But as we said, it's -- clearly, we're doing this with large dialysis organizations. And as far as the AdCom, of course, FibroGen is the sponsor. So we're the sponsor of the NDA. And maybe, Mark, you can provide some additional comments on the role of AstraZeneca.

Yes. I would describe it as a highly collaborative effort between FibroGen and AstraZeneca. We've essentially formed a joint working team to prepare for the Advisory Committee, to prepare the presentations and get ready for the Q&A. So it's a highly collaborative process between both companies.

Your next question comes from the line of Paul Choi.

This is Aliza on for Paul. A quick one from us. Now that pamrevlumab has Fast Track and Rare Pediatric Disease designation for its DMD program, can you walk us through how you're thinking about any update in timing in this program, regulatory and potentially commercial as well?

Yes. Maybe I will comment on -- I'll make some initial comments, and Mark will add some additional color. Clearly, I think the key for us when it comes to ensuring that we can complete our DMD and be able to bring this medicine to patients is really the enrollment of our trial. So we are working very closely to -- and diligently to try to ensure that the enrollment in DMD for both of our trials can happen as quickly as possible. To that end, we've added a number of additional sites, including now in China where we have gotten the approval, and we started basically recruiting patients in DMD as well that will contribute to the overall global program.

So we are excited about those designations. I think the designations generally basically allow for basically more interaction with the FDA in this particular case related to this program. And I think that's a benefit from a regulatory review process and can provide the basis to be able to move quickly -- more quickly and/or resolve any type of issues in a broad manner. Mark, any additional comments?

No. I think that was well stated, Enrique. I mean, I would say that both the Fast Track and the pediatric rare disease designation from FDA speak to the high unmet medical need and the potential of pamrevlumab to help patients with better outcomes with this high unmet medical need. I think it helps us in terms of enrolling the trial because it's just another way of highlighting how important these studies are. So overall, I think it's a real positive for our ability to enroll these trials and to focus on doing it expeditiously.

The next question that we have is from the line of Andy Hsieh.

Great. So I have 2 questions regarding the China market dynamics, maybe for Chris. So the trajectory in terms of hospitals, it seems, has been very impressive. So I'm just curious, as you kind of reach -- going from about 74% to 80% to 90% [to] high 90%, what are some drivers that your team is thinking about in terms of continuing to grow that revenue line? And also, in terms of the kind of the periodicity of the national reimbursement dynamic, I think every single year, there is kind of scheduled pricing cuts mandated by the government. I'm just wondering what the FibroGen China team is thinking about in terms of kind of preparing for that.

Yes. I think I'll have Chris indeed address both questions when it comes to drivers for revenue growth going forward. In China, we tend to have increased -- there's a limit to given how well we've done with hospital listings in terms of how much will that continue to contribute. And then also, I think you may have a question about the NRDL. And I would say the negotiation for products happens every 2 years, not every year, although there's -- every year, there's some product that will be negotiated. Chris?

Sure. So to answer the first question, we think of hospital listings as market access. So until you're listed in a hospital formulary, no physician can dispense. So once you get your foot in the door, in this case, roxadustat, you still need to convert the prescribers one at a time. So let's say there are 35 nephrologists in the department. You don't get all 35 in the first day. You might get 5. The next year, you might get 10, and hopefully, there's an upward trajectory. And for every single prescriber, let's say, they have 200 patients, you also don't get the 200 on the first day. You might get 20, and then you might get 25%. You might get [50%].

Obviously, if we were successful, we'd love to get the vast majority of prescribers and the vast majority of their patients, but there's some art to new trajectory. So we see getting our foot to the door in terms of the success we have in hospital listings to bode very, very well for future adoption. But really, we are at the very, very beginning of market adoption of roxadustat. So 74% is very good, which means that 74% of the potential market could actually get access to prescriptions, but that doesn't mean that, that's the end of the uptake. I hope that makes sense.

The second question with regards to NRDL. Enrique is absolutely correct. It's renewed every single 2 years. So roxadustat will be up for price negotiations in Q4 of 2021, and the new price will become effective in 2022. There are obviously a number of factors that they would consider in the price: first is the budget impact of roxadustat on the national health care budget; the second, the value proposition of how much we actually save in health care costs and many other factors in the value proposition; and third is really how strong is the market adoption and how much prescribers value this drug. We remain confident in the outcome of price negotiations.

To be clear, if the price only goes in one way, it always goes down. It never goes up. So it's the discretion of the NRDL in terms of how they value it and how much it comes down. Every single year, they come up with a different set of criteria for determining pricing. The 2019 one was different from 2020. The 2021 eligibility criteria and prioritization has not yet been announced. We're working very closely with market access and AstraZeneca to demonstrate the value of our drugs, and we remain confident about a very good outcome in Q4 this year for the price that will be effective for 2 years thereafter.

Chris, this is Thane. If I could just maybe piggyback on to your answer on the China trajectory to answer and to provide some more color on Andy's first question. This is really the first time we've provided some granularity around China performance over and above revenue and then snapshots of hospital listings and things of that nature. And so if you take a look at some of the slides that we provided, the first thing to reiterate is that we've got a market that when you add the ESA growth on top of the category expanding nature of roxadustat, it's a market that's really taken off, which really highlights the commercial responsiveness to this category.

And then when you take a look at the market share perspective we've provided, which is a value-based market share of 27%, we're in the process of turning that value-based market share into a volume-based share calculation, which is a bit difficult given some of the dosing dynamics associated with ESAs. But it's probably fair to say that our current volume penetration is much, much lower than 27%, which just speaks to the significant upside potential that roxadustat continues to have in the China market. And we think it's also -- as Enrique said in his prepared comments, it's a really nice read-through to the other markets when we are able to launch in the U.S. and Europe.

There are no further questions at this time. I would like to turn the call back to Enrique. Please go ahead, sir.

Very good. Thank you, Erica. We very much appreciate everyone's participation in today's investor call and your interest in FibroGen. Please follow up with our Investor Relations team if you have any questions we have not addressed on the call, and enjoy the rest of your day. Thank you very much.

This concludes today's conference call. Thank you all for joining. You may now disconnect.