Everest Medicines Limited (6HN.F) Earnings Call Transcript & Summary

Good day, and welcome to Everest Medicines 2022 Full Year Financial Results Conference Call. Please be advised that today's conference is being recorded. [Operator Instructions] At this time, I would like to hand the conference over to your speaker today, Ms. Leah Liu, VP of Corporate Affairs. Please go ahead. _:p id="1777062289" name="Leah Liu" type="E" /> Thank you, operator. Good morning, everyone, and welcome to our Everest 2022 Full Year Financial Results Conference Call. Joining us today are Mr. Rogers Luo, our Chief Executive Officer; Mr. Ian Woo, our President and Chief Financial Officer; Ms. Sunny Zhu, Chief Medical Officer of Infectious Diseases; Dr. Zhengying Zhu, Chief Medical Officer of Internal Medicine; and Dr. Jennifer Yang, Chief Scientific Officer. Before we get started, I'd like to remind you that the speakers on this conference call may make statements that constitute forward-looking statements, including descriptions regarding the intent, belief, current expectations of the company or its officers with the respect to the company operations and financial conditions of the company, which can be identified by terminologies such as will, expects, anticipates, future, intends, plans, believes, estimates, confident and similar statements. Such forward-looking statements are not guarantees of our future performance and involve risks and uncertainties, and actual results may differ from those in the forward-looking statements as a result of various factors and assumptions. The company or any of its affiliates, directors, officers, advisers, representatives has no obligation, does not undertake to revise forward-looking statements to reflect new information, future events or circumstances after the date of this conference call, except required by law. And now I will turn the call over to Rogers Luo, our CEO, to provide more information on our business update and our 2022 full year financial results. Mr. Luo?

Thanks, Leah. Good morning, good afternoon, and good night, everyone. So I would like to introduce the first several slides and followed by Ian present the details of the corporate financial result and the pipeline advancing. So this slide shows our road map for Everest in the past 5 years and in the 5 years down road. So Everest was founded 5 years ago and has built a solid foundation during our 5-year history with 11 first-in-class and best-in-class assets across 5 therapeutic areas, licensing. NDA approvals received from Trodelvy in China and Xerava in Singapore. In 2022, we divested Trodelvy in the transaction valued up to USD 480 million, strengthening our balance sheets in order to advance our new strategic visions. 2023 to 2024 will be a key period of transformation for Everest. As we shift from a licensing model to a licensing plus discovery -- in-house we got discovery and new pipeline generation model. At the same time, we are also evolving from our clinical-stage biotech company into a biopharma company with comprehensive fully integrated capabilities from drug discovery, manufacturing to commercialization. Starting with the approval and the commercialization of Xerava and Nefecon, which we will address a little bit later in more details by Ian. Then looking beyond these 2 years, we will continue to expand our product pipeline with global rights, leveraging our in-house R&D and business development capabilities and maximizing commercial opportunities as we strive to become a leading Asia-based global biopharma company. Next slide. This is actually the key strategic priorities for Everest. In the beginning of this year, we announced our new strategic priorities, which are highlighted in these slides. We will be focusing on 3 strategic areas of renal diseases, mRNA platform and infectious disease. For renal disease, we anticipate receiving approval from Nefecon in the second half of this year, and we have started to build an in-house commercial team to prepare for its launch this year. Nefecon is a first-in-class -- our first-in-disease innovative therapeutics for IgA Nephropathy debilitating disease affecting between 4 to 5 million patients in China with no approved therapeutics up to date. We also have BTK inhibitors EVER001 in a Phase II trial for glomerular diseases, and we expect to have preliminary clinical proof of concept data by the end of the year. Our discovery team is working on multiple renal disease related projects and we expect to file an IND for our most advanced internally discovered renal disease program in 2024. At the same time, we are actively seeking complementary renal disease opportunities through in-licensing, leveraging our global business development platform. We have full discovery and development capabilities for our clinical validated mRNA platform, and we are developing our bivalent COVID-19 vaccines, which is currently on the rolling IND submission in China. Our discovery team is also working on several mRNA prophylactic vaccines, major infectious disease and multiple therapeutic cancer vaccines. And our most advanced non-COVID mRNA program is our rabies vaccine, which has achieved preclinical proof of concept. Our important investment we made for our mRNA platform is our manufacturing site for mRNA vaccines in Jiashan, which is designed with the capacity of 700 million doses. Our manufacturing facility is now operational. We have 3 assets infectious disease portfolio that we purposefully assembled to adjust the key unmet needs in the market, multidrug-resistant gram negative infections. This is the subsector within China's antibiotics market. That is the fastest growing and has the most attractive commercial dynamics. Our 3 antibiotics are expected to launch over the next 2 to 3 years starting from Xerava, which has already approved in China and in early this month. And taniborbactam, which are targeting to file an NDA in the second half of this year and approval next year. We're also expecting to advance SPR206, which is a new generation of polymyxin into Phase III clinic trials, end of this year. Next slide, please. This slide shows our comprehensive pipeline that many of you may be familiar. What I want to highlight here is that we have 4 to 5 products that are expected to launch in 2023 and in 2024. Those are Nefecon, Xerava, Taniborbactam and Etrasimod, as well as our bivalent COVID-19 vaccine. We expect these near-term commercial products to build a solid foundation. For 2025 and beyond, our pipeline is increasing our products with worldwide rights focused on the strategic priority areas that I mentioned on the last slide to leverage our commercial platform in China and other Asia-Pacific regions and to drive global value upside. Next slide. Last year and year-to-date this year, we have made many achievements in clinical development, regulatory submissions and approval and drug discovery across key strategic focus areas. We achieved NDA approval for Xerava and had 2 NDA submissions accepted by regulatory authorities. We reported positive top line result from 6 clinical trials and achieved the first preclinical proof-of-concept milestones among our internal discovery platform. We started off in '23 with positive momentum including NDA approval at Xerava early this month in China and positive Phase III trial readout for Nefecon in IgA nephropathy, the most robust Phase III data ever generated in IgAN. Let me pass on to Ian to discuss more details, developments at the company. Ian, please.

Thank you, Rogers. So I'll take over here and let's start with Xerava eravacycline. So first, we are thrilled to have received the NDA approval in China for Xerava for the treatment of complicated intra-abdominal infection on March 16. We expect to launch Xerava under the Chinese brand name [ Idja ] in the third quarter of 2023. Next slide. This is a little bit busy slide, and the words that are -- some of the text is small, but what we want to show you on the slide -- on the bottom of the -- is that there are critical unmet medical needs in multidrug-resistant gram-negative infections in China. And as you can see, carbapenem-resistant gram-negative pathogens, especially Klebsiella pneumoniae and Acinetobacter baumannii continue to rise over the last 15 years. When we speak to KOLs and ICU physicians, we understand that often patients with severe infections under critical care, have only one round of antibiotics or have time to only use -- to use only one round of antibiotics. And given this backdrop of increasing carbapenem-resistant rates, there is an urgent clinical need for novel, safe and effective antibiotics. Next slide. So this, we think, is a very important study and a number of studies conducted in China and globally have demonstrated the Xerava's differentiated profile against gram-negative pathogens, especially those commonly found in China. It's impressive to see Xerava retain strong activity in carbapenem and Tigecycline-resistent Acinetobacter baumannii strength as well as other commonly seen pathogens in China. These in vitro susceptibility studies are especially clinically important and meaningful for us in Asia and clearly demonstrate the higher potency and differentiated profile of eravacycline. Next slide. These are the data that formed part of the global approval and also the China approval. So we have demonstrated that Xerava is as effective as carbapenems in cIAI as a monotherapy in 2 pivotal global clinical trials. In the IGNITE1 study, eravacycline was noninferior to ertapenem. And in the IGNITE4 study, eravacycline was non-inferior to meropenem. We conducted a China bridging study, which completed in March 2021 and demonstrated consistent efficacy and safety of Xerava in China and globally. Data from these global pivotal studies and the China bridging study formed the basis of the China NDA approval. Next slide. So with such a differentiated profile and the substantial unmet needs in China, we're quite optimistic about Xerava's market potential in China for multidrug-resistant gram-negative infections. Effective antibiotics for MDR gram-negative infections is the most attractive antibiotic subsegment in China with a 45% CAGR, as you can see in the chart on the bottom left, and attractive daily pricing. So as you can see in the table on the bottom right, Zavicefta daily pricing is at about RMB 4,000 and Polymyxin's daily pricing is between RMB 6,000 to RMB 9,000 per day. So we believe that Xerava will bring similar clinical benefits to patients, and we intend to price in a similar range. Tigecycline has significant drawbacks in terms of its tox profile and a much lower lung penetration than eravacycline, and it's often used in multiple doses above approved levels to drive efficacy due to lack of alternative options. Nevertheless, tigecycline sales was about RMB 2 billion, and its -- the volume was over 4.5 million doses in China last year across branded and multiple generic versions. In Singapore where Everest has been commercializing Xerava, we have seen 80% replacement rate of tigecycline in 2022 in those hospitals where we have been listed. So in China, if we are able to replace just 10% of the tigecycline's volume, we believe that the peak sales of Xerava will easily reach about RMB 1.5 billion. Next slide. So in preparation for our Q3 launch of Xerava, we have been rapidly building our commercial infrastructure. We intend to build a highly efficient commercial team with central leadership covering medical affairs, marketing, market access, sales and channel and commercial operations excellence. Most of this leadership team is already in place, and they bring to Everest decades of MNC and biotech experience. I will also add that we intend to leverage the same leadership team for the launch of Nefecon as well. So there will be synergies across these products. We have started hiring sales reps, and the initial team will be around 100 to 120 FTEs to cover 300 to 500 hospitals with a focus on top-tier hospitals in core markets. As we approach the launch of taniborbactam and SPR206, we will continue to further expand this commercial team. Xerava has been recommended in multiple global treatment guidelines issued in China, the United States and EU, and we'll continue our efforts on additional guideline inclusions in China. Next slide. In addition to China, we also hold rights for Xerava in Singapore, Taiwan, Hong Kong, South Korea and certain Southeast Asian markets. Our in-house team have already launched Xerava in Singapore, and as I mentioned before, replaced 80% of tigecycline's volume in listed hospitals. In Taiwan, we expect to receive NDA approval in the second half of this year and have already signed a strategic agreement to commercialize Xerava with our partner, TTY Biopharma (sic) [TTY Biopharm]. We also expect to launch Xerava by the end of this year in Hong Kong. And are under discussions with local authorities on regulatory pathway for South Korea and other Southeast markets. So overall, we expect sales in these APAC territories to reach approximately 10% to 15% of the Mainland China levels. Next slide. This is our entire -- this is our full antibiotics portfolio. We believe we have 3 best-in-class antibiotics with complementary spectrum of coverage across multidrug-resistant gram-negative infections. Other than Xerava we have taniborbactam, a novel beta-lactamase inhibitor with strong activity against pseudomonas infections, which is a dominant clinical gram-negative pathogen in China. And we also have a next-generation polymyxin derivative SPR206 or EVER206 that has a reduced renal tox profile. Renal tox has been a key impediment to broader use of the polymyxin class of antibiotics. We expect to launch taniborbactam in 2024 and SPR206 1 to 2 years thereafter. Our in-house commercial team will be efficiently mobilized around this complementary portfolio. Next slide. So let's switch to Nefecon, our first in disease therapy for the treatment of IgA nephropathy, we expect NDA approval in the second half of 2023 under the Chinese brand name Nefecon. Next slide. So this is the data that our partner, Calliditas announced on March 12. We think this is a very exciting top line 24-month Part B Phase II in NefIgArd trial data for Nefecon in IgA nephropathy. So the analysis -- this trial included 364 patients diagnosed with primary IgAN who are on a background of optimized and stable RAS inhibitor therapy. The patients were randomized in a 1:1 ratio into 1 of 2 treatment groups. Nefecon 16 milligrams per day orally or placebo, and treated for 9 months daily then monitored for 15 months off drug. This is the largest registrational trial for IgA nephropathy patients and the longest globally thus far. So a total of 364 patients were included for efficacy analysis and the 2 treatment groups were balanced with regards to baseline characteristics. The primary endpoint for this, the Part B of the Phase III study, was a time-weighted average of eGFR observed over 2 years. And this primary endpoint was met with highly statistical significance. So here on the chart on the left, what we're showing is the eGFR outcome at both 9 months and 24 months in parallel. So to be able to get a more direct readout on the effect on renal functions by Nefecon treatment. You can see that in the placebo group, placebo plus RAS inhibitors, eGFR declined continuously at 9 months and then declined further at 24 months. And it is -- it was a total loss of renal -- eGFR of 12 milliliters per minute. This corresponds to a 21.5% decline from baseline over 24 months. In contrast, in the Nefecon treated group, eGFR was essentially stable in 9 months. And by 24 months, we have -- we saw a loss of 6 milliliters per minute. And this corresponded to an 11% decline from baseline. So what this really means in summary is that 9 months of dosing with Nefecon resulted in a 50% less loss of kidney function compared to placebo at month 24. It is worth mentioning here that the treatment effects or the treatment benefits on eGFR was observed across study population regardless of baseline proteinuria levels. This leads to the confidence that we have that in pursuing for regulatory filings for full approval for the entire study's population. Next slide, please. So this slide shows a different analysis of eGFR. This shows the 2-year total eGFR slope analysis. This was done as a supportive analysis. And what this shows is a statistical significant improvement in slope estimated to fall in the range of approximately 1.8 to 3 milliliters per minute per year. This is fairly significant amount of savings in eGFR decline per year. And this difference in the 2-year eGFR slope observed between Nefecon and placebo, we believe, is highly clinically relevant. So with the -- with this observed difference of between 1.8 milliliter to 3-milliliter per minute per year, the estimated hazard ratio of clinical outcome is less than 0.5, and the estimated median time delay to clinical outcome attributed to Nefecon by our calculation is -- is greater than 11.3 years. In another words, right, 9 months of treatment with Nefecon could potentially lead to a much longer timeline of progression into end-stage renal disease by over 11 years. We're very keen to see more detailed data coming from Part B in the -- in future conferences and publications. This is the first drug treating IgA nephropathy that have disclosed, that have published top line 2-year eGFR data. And this is very meaningful for the community. So with a -- what we know of Nefecon is that it has an impressive safety and efficacy profile. And we believe that there are a few important directions that we can go and to further explore this product, especially with clinical use experience. We would love to understand better retreatment during the disease course, the impact of longer treatment duration of longer than 9 months, et cetera. And all of these will hopefully lead to further delaying disease progression in a clinically meaningful way. Next slide. So as we all know, that proteinuria is an important risk factor in disease progression for IgA nephropathy patients. So it is quite impressive to us that we have been able to -- that Nefecon has been able to demonstrate very significant reduction in proteinuria during the treatment period. And this effect seems to be durable even after 15 months of treatment discontinuation. So on the chart on the left, can you see that this is the proteinuria levels at 9 months, and we're seeing a reduction of 33.6% with Nefecon plus RAS inhibitors versus a reduction of 5.2% for placebo plus RAS inhibitor. And at 24 months that for Nefecon, that reduction has reduced slightly to 30.7%, but whereas placebo per plus RAS has essentially no decline in -- has not able to generate any declines in proteinuria at all. So this result, we believe provides further support of the disease-modifying effect of the Nefecon treatment in IgA nephropathy patients. And finally, I think as I mentioned before, Nefecon was generally well tolerated by patients with the majority of treatment adverse effects rated as mild to moderate in terms of severity. Next slide. So in terms of the timing of regulatory development, so we submitted the -- we filed the NDA for Nefecon in China, and the NDA filing was accepted in November of 2022. And the priority review was granted by the NMPA in January of this year. We expect to receive the first wave of approvals for Nefecon in Mainland China and Singapore this year followed by NDA approvals in South Korea, Hong Kong and Taiwan in 2024. Next slide. We believe there is a substantial market opportunity for IgAN treatment in China. According to our research an estimated 350,000 kidney biopsies are performed in China each year, among which around 1/3 are diagnosed with IgAN. There are approximately 200,000 to 300,000 existing diagnosed IgAN patients currently using various treatment options. Apart from IgAN patients diagnosed through biopsy. There is a significant number of people with renal issues, who are not willing to undergo a biopsy. Physicians may consider treating them with Nefecon for a period of time, given that there is no approved therapy for most glomerular diseases in China. If Nefecon reduces a patient's proteinuria, it is likely that this patient suffers from IgA nephropathy. Altogether, we think there are 4 million to 5 million existing cases of IgAN in China. The market for IgAN treatment is fairly concentrated geographically to the coastal provinces. And we believe that 60% of the potential patients are concentrated in less than 700 hospitals. Therefore, we will only have a focused sales team of a few hundred people to launch and commercialize Nefecon if and when it is approved. As Nefecon targets a disease with significant prevalence and incidence rate, we will be working with key stakeholders to get the treatment listed on the National Reimbursement Drug List as soon as possible so that we may provide more patients with access to Nefecon. We hope to get on to the NRDL in 2025. Next slide. Expanding our leadership position in the treatment of renal diseases, especially for a common glomerular diseases is a key strategic priority for Everest. The top 4 glomerular diseases in China are listed here. In addition to IgAN, you have [ membranous nephritis ], minimal charge disease (sic) [minimal change disease], and FSGS. Combined, these 4 types of glomerular diseases represent a substantial patient population of around 10 million. Currently, there are no approved therapies in China for any of these diseases. So in our pipeline, other than Nefecon, we have a covalent reversible BTK inhibitor, EVER001, which will begin Phase II studies soon in glomerular diseases, and we expect to have top line data by the end of this year. We also have preclinical candidates in our discovery pipeline, and we will continue to expand the renal portfolio through internal discovery and in-licensing. Next slide. This is an org chart of our commercial organization as Xerava is already approved and Nefecon is expected to be approved in the second half of this year. We have -- we're putting together our commercial team and the leadership team is in place. We will have 2 business units, an internal medicines unit and an infectious disease unit, both under the leadership of [ Zhengying Zhu ]. We expect to have a team of 80 to 100 in our internal medicines unit initially to support the launch of Nefecon and around 100 to 120 employees in our infectious disease unit. This is in 2023. In 2024, we will continue to expand the size of the team as more products are approved. You can see that those leading the commercial team have extensive experience working with both MNCs and local biotechs in China. Next slide. So next, I would like to turn to our mRNA platform. We believe that we have a clinically validated mRNA platform that has end-to-end capabilities covering the full value chain from antigen design to commercial production. The platform's mRNA sequence design has been proven in a number of our clinical and preclinical stage assets. Our bioinformatics team uses a state-of-the-art algorithm to improve antigen design and facilitate vaccine discovery. And with the full technology transfer of this platform from Providence Therapeutics, we have developed a full production process and have begun operations at our manufacturing facility in Jiashan and expect to be up to commercial scale production by the end of this year. Next slide. So this is a picture of our Jiashan facility. It's near Shanghai. Currently, it's dedicated to mRNA vaccine production. And we began operations in December 2022. The facility was built to global standards and was designed to enable an annual manufacturing capacity of 700 million doses of mRNA vaccines. And we intend to use this facility for both domestic and global markets. It can also accommodate production of our prophylactic vaccines as well as our therapeutic cancer vaccines under development. Next slide. Last year, we saw stellar results from our first-generation COVID-19 vaccine generated from our mRNA platform. We think this validates our platform in both efficacy and safety. This is a comparison study of our first-generation COVID-19 vaccine versus PTX -- versus Pfizer's Comirnaty. And it is the only head-to-head study done globally versus existing approved COVID-19 vaccines. As you can see, efficacy was noninferior to Comirnaty and safety was even numerically better than Pfizer in many cases. Next slide. So we're targeting to use our clinically validated mRNA platform to generate a series of in-house discover the vaccines in both infectious diseases as well as cancer vaccines against solid tumors. Our first non-COVID mRNA vaccine, a vaccine for rabies, achieved preclinical proof of concept demonstrating our abilities in mRNA discovery. We look forward to sharing more information about the progress of our non-COVID mRNA projects in the near future. Next slide. So we will now review our financial data for full year 2022. So first, revenue was RMB 12.7 million -- sorry, RMB 12.8 million, and this is an increase of RMB 12.7 million from 2021. This is primarily driven by the sales of Xerava in Singapore as well as the sales of Trodelvy in Singapore prior to the return of this product to Gilead. Cost of revenue was about RMB 4.6 million, and our gross profit was RMB 8.1 million. General and administrative expense increased by RMB 33.8 million to RMB 276.5 million for the year ended 2022. This was primarily due to increases in onetime professional service expenses that we incurred in 2022. R&D expense increased by RMB 196 million to RMB 809.7 million for the year ended December 31, 2022. This is primarily due to additional clinical trials for our drug candidates, expansion of our internal discovery team to build up in-house R&D capabilities and then the increased cost during tech transfer of our drug candidates. I will say that this is a gross number. The actual number is going to be lower than this because the R&D expenses related to Trodelvy following -- after August 1, 2022, are reimbursed by Gilead. Similarly, the next line item, distribution and sales expense, distributing and selling expense related to Trodelvy after August 1, 2022 will also be reimbursed by Gilead. Distribution and sales increased to RMB 326.7 million in 2022. This is primarily due to the increase in costs in preparation for the launch of Trodelvy. And most of those expenses are no longer with the company going forward. So the next line item I will explain is other gains. So other gains you see here, other gains is RMB 1.1 billion for the year -- for the year in 2022. This is primarily attributable to the disposal gains from the Trodelvy transaction. It is a net number that includes a number of other items. The number related to Trodelvy is about 1.3 billion, and then there's about 150 million of foreign exchange losses that we incurred throughout the year and some other smaller items. So the loss for the year by the IFRS measure narrowed by RMB 761.4 million, and this is primarily attributable to the disposal gains from the Trodelvy transaction. And if we look at it on a non-IFRS measure, the losses also narrowed by about RMB 760 million due to the other gain of -- from the Trodelvy transaction. I think this is -- the Trodelvy transaction has a pretty big impact in the financial positions for the company in 2022. So if we look at the cash balance, we ended the year on the -- ended the year with RMB 1.65 billion of cash and cash equivalents and the bank deposits on our balance sheet. And on a pro forma basis, we are guiding to a pro forma cash balance of USD 432 million. The difference between the balance sheet cash balance and the pro forma cash balance is USD 196 million of upfront payment from Gilead that we received in January of 2023. Next slide. So looking forward to 2022 -- to this year, we have a strong list of catalysts lined up. So we expect to receive NDA approval in China and Singapore for Nefecon and expect to file NDA for Nefecon in Hong Kong, Taiwan and South Korea. For EVER001,our BTK inhibitor, we anticipate to have top line data readout by the end of this year. Xerava has already received NDA approval for complicated IAI in China, and we anticipate NDA approval in Taiwan will follow shortly. For Taniborbactam, we will file the NDA in China and our partner in the U.S., Venatorx is expected to file the NDA in the U.S. We will be initiating the Phase III trial for SPR206 or EVER206 this year. And on the mRNA side, we expect that our bivalent COVID-19 vaccine will receive IND approval, and then we will initiate the Phase I and II trials and a potential EUA -- towards a potential EUA in China. Last but not least, we have Etrasimod which we expect to complete our Phase III enrollment shortly and have the 12-week induction of remission data from this trial at the end of this year as well. Additionally, we expect that our partner, Pfizer, will receive the FDA approval for Etrasimod in ulcerative colitis. This is potentially -- this will potentially happen before the end of this year in the U.S. Next slide. So finally, we just want to reiterate some of our key investment highlights. So first, I think it's a quite unique position that we find ourselves that we have 4 near-term product launches that we believe have an aggregate peak sales potential of about RMB 10 billion. The first is Xerava, which we have received approval and will launch in the third quarter of this year. Next is Nefecon. Approval is anticipated in the second half of 2023. Next year, we expect approval of Taniborbactam and potentially Etrasimod. There is also the potential for COVID-19 vaccine approval during that time period. So we have at least 4 product approvals over the next 2 years which we believe is very significant for any biopharma company and particularly for a biopharma company of our size. Second, we have differentiated ourselves from other biotech and biopharma companies by focusing on renal diseases and on infectious diseases. And we fully intend to build ourselves into a leader in these areas by continuing to expand the pipeline and our ecosystem through a combination of internal discovery and in-licensing. Third, we have built a strong in-house discovery capability or expertise, and our capabilities are anchored in our clinically validated mRNA technology platform. And we have multiple prophylactic and therapeutic vaccines under development. Last but not least, our robust balance sheet with a pro forma cash balance of over USD 430 million will support our development as we transform our company into a fully integrated Asia-based biopharma company. Now I will hand over to the operator to start the Q&A. Thank you very much.

[Operator Instructions] The first question comes from Arthur He please.

This is Arthur from H.C. Wainwright. My first question is regard the launch of the eravacycline. So besides first of all, how the run for the sales team and besides building the sales team, could you give us more color on your preparation for the launch in the third quarter this year?

Okay. I'll take this question first. If any, anything to be added, Ian, please can chime in. So as we already get approval early this month, we are preparing for the commercial launch of XERAVA in several aspects. Number one, we are hiring our sales marketing team. So currently, the team size by the end of this year is around 100, 150 to 200. We have targeting about 500 hospitals, around 500 hospital because in self-pay market about 500 key hospitals account for more around [ 7% ] to 80% of the market potential in the self-pay market. So then we are working on the -- because these products is mainly outside of China. So we are preparing for the importation, supply chain, make sure we get the product distributed widely in China. So we are working with one of the biggest importer in China -- available in China. Surely, we are also preparing -- as we get our [ proposal ], we are doing a lot of promotion activities to the key hospitals. So we are also planning for reimbursement and negotiation end of this year. So we are collecting data, we are educating doctors and also we are generating pharmacoeconomic data to support our pricing. So because the product is approved before July 1, product XERAVA is eligible for reimbursement negotiations. So we are planning for that reimbursement. Hopefully, we can get the reimbursement if we have a good price. So once that's done, we also [ number four ] is about medical [indiscernible] preparation, which means we are collecting in vitro and we're doing some real-life studies to generate more data as well as for generate more doctor use experience for these products in ICU settings. So general data is also gaining more doctors experience. So in these 4 aspects, we are now pretty very actively doing that kind -- those 4 aspects.

My second question is regarding Nefecon. But as we see this robust Part B data from Nefecon presented by your partner. I just wonder have you guys speak with the physicians in China? And what's the feedback and the perspective from them regarding the eGFR data?

Okay. I'll go first, then Dr. Zhu can add on. So actually, you're right. Thanks for the very good question. Actually, we had several KOL meetings after Phase III Part B data readouts. The feedback actually is quite positive, actually. I just cited some of the quotes from some KOLs. Number one is that with that data, once the product is approved in China, there will be a very -- a big change, I would say, they call it a revolutionary change in the IgAN treatment because this is the first approved drug in IgAN, right? With that data, doctors literally said it can be used for any patients diagnosed with IgAN. Actually, they are probably more aggressive than we expected. Because you can see with 9 months treatment and 15 months follow-up without treatment actually show very impressive benefit in terms of eGFR savings, in terms of Proteinuria reduction. So, rapidly it can delay about 10 years progression to end-stage renal disease, which is a huge benefit. So doctors and patients are expecting this product available in China as soon as possible. We are planning to early access program in [indiscernible] free trade zone, you're going to be available, going to be launched pretty soon, I would say. So address a huge amount here in China. So probably Zhengying, you can add on some further more comments.

Sure. Thank you, Rogers, and thank you for the good question. I think, obviously, for nephrologists in the community are very excited to see the early release party data is indeed the first study having shown the long-term eGFR benefits followed by a Proteinuria reduction. And this is ever first trial that linked to the Proteinuria reduction with the long-term renal function protection. So that's -- and I think the more exciting data point to see is on top of the impressive renal function loss benefit of the renal function benefits. I think the sustained Proteinuria reduction over the course for 2 years, is another very strong indicator for the disease-modifying effect of this drug. And this is -- we know that to continue is a strong predictor for long-term renal product -- renal function protection. So, which will lead to say, even though we will see considering longer term of the renal function protection. So let's say -- so this is very eager to having the drugs be available to the patients soon, very, very soon.

Congrats on the progress.

The next question comes from Linhai Zhao, Goldman Sachs. The next question comes from [indiscernible] , Goldman Sachs.