Kyntra Bio, Inc. (KYNB) Earnings Call Transcript & Summary

Okay. Good afternoon, one. I'm Paul Choi, the SMid cap biotechnology analyst at Goldman Sachs. We'll continue with our next session here, which is FibroGen. And I'm very pleased to introduce from management, Enrique Conterno, who's, I think, a well-known quantity to investors. He's the CEO here at FibroGen. I think as with other sessions, what we'll do is let Enrique do a few brief introductory remarks and give us an overview of what he's finding to be going on at FibroGen. And then we'll proceed with the Q&A.[Operator Instructions] And with that, Enrique, I'll turn it over to you for some opening comments.

Very good, Paul. Thank you very much for the invitation. It's a pleasure to be here. I'm very excited with the agenda that we have at FibroGen. As I've mentioned in the past, we are very committed to 3 overarching goals. #1 is to ensure that regulatory and commercial success of roxadustat, and we are making excellent progress. I'm pleased with how the regulatory review is going. And also, I think it is important as -- when we look at the profile and some of our competitors starting to get some of the data basically reinforcing that we have a highly differentiated product profile in roxadustat, and we can speak a little more about that. Second, overall objective is about accelerating the development of pamrevlumab. Of course we've been pursuing IPF. We are pursuing locally advanced and unresectable pancreatic cancer and finally we intend to start Phase 3 trial for Duchenne Muscular Dystrophy in the second half of this year. Three important indications that we have been discussing for quite some time. We had announced that we had paused the IPF studies, we paused that for a couple of months, but we have now restarted enrollment of the IPF studies. We paused it due to vulnerability of those patients to COVID-19 given their vulnerability when it comes to pulmonary function. And of course in DMD we are going to be starting, we believe, in the second half as I mentioned. Now in addition to those three important trials we announced yesterday that we are also starting trials in COVID and it is important just to give maybe a sense of how we are thinking about this. There are two main areas of COVID that we are studying. All of them in hospitalized patients. But one area is in the acute settings, where patients we believe that pamrevlumab can help with oxygenization so at the end patients should require less ventilators and basically really better survival over all. And then I think probably more evident than that is on the chronic side that we think about the patients that develop post being hospitalized and plus having COVID basically develop interstitial lung disease and they have fibrosis and we clearly given the data that we have from IPF, we view we have a very unique and important approach to try and ameliorate this fibrosis in those patients. So we clearly have a very interesting trial as well when it comes to that second setting. And finally the third overarching objective is to really reenergize our research agenda and bring new clinical candidates and bring new products. Really leveraging the scientific platforms that we have both around HIF biology and CTGF biology. So it is very exciting and we are planning to share more of that I think during an Analyst Day that we are planning to hold sometime in Q3 or Q4.

Great. Thanks for that overview, Enrique. Maybe we will start with the commercial piece because roxadustat is approved in certain international markets, specifically in China and Japan. Can you maybe give us a sense of what the commercial environment is like for you and your partner post-COVID and you know sort of what’s happening in the China market- probably is most of interest to investors. And just has there been any inflection in recent weeks as China has been opening up?

Yes. I think as I've mentioned, we feel very good about our China launch. Just to recap, we had 5 million dollars of sales in net product sales of roxadustat in Q1. Keep in mind that Q1 has 2 months’ worth of lock down in China, two out of three in the quarter. So in a certain way I think April was really the first month when we started to see basically China starting to return to a new normal. We have seen an important inflection on demand in China. Of course, I think we had talked about the listings and how much progress we are making on the listings. Which, at the end of Q1 we had shared that we were already accessing, based on hospital listings, over 30% of the overall market for CKD anemia in China both across DD and NDD. And those listings continue to improve, so what we shared in the Q1 earnings call was basically that we expect a meaningful ramp-up in revenue as we look at Q2 and beyond. So we are very excited and think I would qualify the launch as going very well.

Okay. And by the way, I'm just getting some comments that maybe the audio and visual might be having a little bit of issues. So I do want the audience to know that we are working on it and hopefully Enrique's comments, which are more important than my questions are coming through. If something is not clear, please just let me know and I'll try to reiterate or summarize what Enrique is saying here. Then maybe just to follow up on the China side with regard to the NRDL, has that-how is that, in your view now that you are officially on the NRDL, change the market opportunity for you? It does effect the price in terms of downward pressure, but in terms of access, how does that change the dynamic for roxa there?

Well, as you know, I think NRDL's really for products in China -- really for the -- really, the launch of products in China that is really when you can have meaningful uptake for our products and when you can have meaningful listings. And we are very pleased with the price that we received. And at this point in time, it's -- the key objective for us is really to improve the number of hospitals where we're listed, and we are doing that at record pace. I'd like to compliment our partner, AstraZeneca, which is a force in China, in doing a terrific job. And we're seeing adoption in those hospitals. So we are basically seeing many of the pillars basically working. One thing that is encouraging for me to look at China beyond the number of patients. So for us, is to look at the different types of patients that we're enrolling. It's not just generally DD and NDD. I had expected maybe the NDD uptake to be maybe slower, but we are seeing good uptake in NDD. And when it comes to dialysis, we're seeing home dialysis, we're seeing incident dialysis. We're seeing patients that were on prevalent dialysis. So it's -- we are seeing basically many different types of patients, which gives me a confidence that we have many ways of growing over time, which I think is very encouraging for us.

Great. And maybe the last question on China, and you touched on it. You're seeing mixed use in terms of the different populations as you indicated. Just in terms of how patients are responding to it and potential stickiness and adherence to therapy, I know it's early days, but could you maybe provide some color on this? Is this something that they're just maybe trialing for the near term? Or what is the adherence looking like, at least in the early days here?

I think it's a little bit too early to look at the adherence. But as you know, that is going to be key for roxadustat. Hopefully, a benefit that we can provide over other therapies, given its oral use and the overall efficacy safety profile, So that's something that is part of our agenda to ensure that patients are adhering so they can get a full benefit of the product. But it's a little bit too early to comment on what the adherence is.

Okay. Great. Thanks. Understood. Maybe shifting gears then. You talked a little bit about competitor data here that's recently emerged. And you saw some competing data from another drug in the HIF category here. And we're also probably in a time frame where we could see some incremental updates in a different population. So I think you probably understand that we're talking about Akebia's data here. And so could you maybe provide your initial thoughts on what you saw with the dialysis population here? What does that mean perhaps from a competitive perspective for FibroGen here?

Yes. I think the data from the competitor validates the class, but it also reinforces the highly differentiated medicine that we have in roxadustat. And maybe I wanted to make a few comments on that. As I think about efficacy, which is so key, as you know we had with roxadustat, a statistical superiority on hemoglobin relative to EPO in DD. And when we look at the data of our competitor, yes, they were non-inferior clinically, but really -- relative to darbepoetin, but statistically inferior when you look at the results. Our hemoglobin mean was 10.86. Their hemoglobin mean was 10.36 -- sorry, 10.85 for us, 10.36 for them. Now keep in mind and as you know, hemoglobin levels are related to transfusion. So the higher your hemoglobin in that 10 to 12 range, the lower risk of transfusion that you have. And we demonstrated a statistically significant reduction in transfusion relative to EPO. It's also important to note that the cohort of patients on hemoglobin, 8 to 10 have about a three- to fivefold increase in the risk of transfusions relative to 10 to 12. And the standard deviation was a little bit above 1, I think, for the competitor product. For us, it was just slightly less than 1. So think about 10.36, standard deviation of 1, how many patients you have below 10. Think about our product, and therefore what is the real outcomes when it comes to efficacy. Now in addition to that I think as you know, I've been very excited about our incident dialysis data and the fact that we showed a 30% reduction in MACE risk and 34% when it comes to MACE plus. Honestly, that's huge and that's an anchor. Because as patients start dialysis, clearly part of that dialysis initiation is going to be treatment of anemia. And I believe that we have the very best data. It's quite compelling and differentiated. So I feel like we probably have the best of both worlds, validation of the class, but also a differentiated product.

Would your expectations for the upcoming competing data in non-dialysis-dependent population be any different here? Do you think the trial will succeed? Given your earlier comments on the class validation, is there any reason to think it wouldn't work? Or are you looking primarily for differences on the periphery here as you highlighted with the dialysis population?

Yes. Let's wait for the data. Let's -- and I'll comment on the data once I see it, so I can comment, not speculate on it.

Fair enough.

But I -- as you know, there's a difference in trial design in that we compare [ ourself ] to placebo, which I think gives us the very best chance to basically have a label without a black box, given that we showed basically comparable safety to placebo. It is very difficult to achieve that -- if the trial is designed with a comparator relative to a product that has a black box. Clearly that, from a regulatory perspective, really doesn't fly. So I also like our chances to get the very best possible label here.

Great. That's actually kind of related to an inbound question we received from an investor, if you don't mind. And just in terms of -- you talked about comparators. And is a placebo comparator, in your mind, a higher bar as you think about the regulatory process than comparing to EPO?

It is when it comes to safety, of course. And at the end, I think EPO have a black box, so ESAs has black box. So it is a much higher bar, right? So if you compare yourself to a black box, as you know we just released data from DOLOMITES yesterday. And as part of the data, we had a -- yes, very good efficacy, noninferior but as favorable on the efficacy side to darbepoetin, but the hazard ratio on CV was of course not a large number of events, but it was 0.81 for MACE and 0.9 for MACE plus. So I think it reinforces the profile. But regardless of what that result would be, if all of our trials were compared to ESAS, I think it will be extremely difficult to avoid a black box. So I do think it's a high hurdle. Keep in mind also that most patients in that setting are really not receiving an anemia treatment. One statistic that I've shared in the past is that when you look at the 12 months prior to initiating dialysis. So these are patients before going to the 12 months prior, only 14% of them are on a ESA treatment in the United States. That's a very low number. So I think what that tells me is there's a huge opportunity to increase the treatment rates, not just in the 12 months, but we're going to be looking at stages 3 to 5 and making sure that everybody is really receiving the proper standard of care and treating anemia when appropriate. And I think that's a very important opportunity for us. And quite frankly, I think we're offering a product now that is going to be -- has a safety profile that doe not exist in NDD. So I think the possibilities are very significant for us.

Great. So maybe sticking on the topic of data. You mentioned DOLOMITES. But maybe if we could go back a few months to ASN meeting last year, you presented some detailed data across your studies. But one of the questions, I think, that remains on the mind of investors is just given what you presented at ASN, what is your current thinking on a potential advisory committee meeting for roxa later this year? Especially it got a little trickier given the FDA is operating in a COVID environment. And just maybe do you expect a meeting? Is that going to happen? And just where are you in terms of preparation for that?

As we've shared in the past, we have received no indication from the FDA of an Adcom. Typically, sponsors -- the FDA shares with the sponsors that they should plan for an Adcom, either prior to submission or during filing acceptance. We are having our mid-cycle review later this month. That is, we can call it almost the last opportunity for the FDA to say, hey, we're going to plan. It will be very late, but it could be a time when the FDA could say we -- they want to look at that. Clearly, after that data I think the chance of an Adcom, I think, decreases exponentially. So I -- at this point in time, nothing has changed. We feel very good about our data. I think I remember the first time we met and I shared with you, I found the data very compelling on the CV side as well. On the CV safety side, one is comparable or relative to placebo and NDD when the alternative today basically has a black box. So that's a great scenario. And relative to EPO in DD, in incident dialysis where there are so many risks for CV events, we basically have a 30% reduction in MACE. That's an unbelievable result. So I find the data very compelling, and I don't believe the CV data -- safety data warrants a black box.

Okay. Thanks for that, Enrique. Maybe digging into the data a little deeper that you presented. In terms of the MACE end point that you referenced, in all 3 populations, it was below the historical 1.3 standard that's typically been used in this sort of population. But some of the individual components were above that. And can you -- you said your mid-cycle review meeting is coming up here. But I guess, what's your -- the company's perspective on when thinking about the composite end point and how the agency might view that, versus some of the individual components that did show somewhat higher upper bounds with regard to the confidence intervals?

Well, the higher bounds for the subcomponents, including some that are below 1, the ones that are below 1 is because you have a smaller sample size. That's just a function of the sample size. Clearly, you design the trial and the sample size to be able to meet a certain -- to be able to rule out a certain level of excess risk, okay, in this case I think 1.3 or 30% excess risk. Typically, what the FDA will look at is they will look at MACE, and they will basically look at the entire pool, which is for DD and for NDD and look at the benefit/risk profile of the product. I feel like -- I feel that we have with roxadustat, we have a very favorable benefit/risk profile. When it comes to the sub-endpoints, when it comes to whether it's death or MI or stroke, I -- what FDA is looking at is whether any of those sub-endpoints basically are statistically significant when it comes to harm. So -- but in all of the cases for our studies and the pooled analysis for both DD and NDD, the confidence interval actually includes 1. So we don't have that issue. But that could be, even though the study is not powered to do that, that could be a question that the FDA has if you have one of the subcomponents to basically have the entire confidence interval to the right of 1, if you wish. That's not our case. So in a certain way when I look at the interim data, I think as I look at principles as I've -- as you know, I had a chance to run CV studies in my previous roles. I basically feel like we meet a number of different filters that make me feel very confident about the strength of the data from a commercial safety and a regulatory perspective.

Okay. That makes sense. Maybe just to talk a little bit about one of the populations that that gets a little bit overlooked relative to dialysis or non-dialysis, that's the incident dialysis population. And as a reminder for investors, this is a population that has had basically minimal exposure historically to EPO or very limited exposure. And in terms of the trial, this is the one subgroup or the one population that didn't show an improvement on MACE here. Is this also, Enrique, an artifact of the trial sizing and design? And maybe more from a commercial perspective and regulatory perspective, how are you approaching the opportunity in this particular population?

Yes. So as you said, I think we showed a significant benefit when it comes to MACE in this population, 30% reduction in MACE. Just for your audience, incident dialysis is basically we enroll patients that basically were starting dialysis, the definition is within the first months of starting dialysis to be enrolled in this particular trial. And we had 1,500 patients in this trial, so a fair amount of patients. And what we -- as you know, these patients are at significant risk because of the transition. It is one of the riskier times for patients. And I think the results are quite compelling. Unfortunately, as you know survival with dialysis is not good. So patients after 5 years don't have a great chance of survival in some cases. So giving them the best chance by whenever they start dialysis to have -- to basically be on a treatment that has such compelling MACE results, I think is incredibly important. So I feel it is the natural point when the treatment decision for anemia will be made starting dialysis and where we have probably the most compelling data that we have.

Okay, interesting, right. Maybe continuing on the commercial front here, Enrique. In terms of the U.S. market, it's -- in terms of dialysis providers, it's essentially a duopoly dominated by 2 companies, specifically DaVita and Fresenius. Can you maybe comment on what's been happening with regard to your discussions with these potential providers? What is the feedback been on the roxa data, and perhaps how are they thinking about implementing or integrating roxa into their treatment paradigms there?

Clearly, as you can imagine first, we have close relationships with dialysis organizations, the 2 large ones you mentioned and others as well. Clearly, we've been working with them because we run our clinical trials and they were part of that. And clearly we are in discussions, thinking about how to ensure once we get approval, that we can have the most success incorporating roxadustat into different protocols. Clearly, that's a decision that each one of those dialysis organization will have to make. A pretty important part of that decision-making process is reimbursement. And as you know, we have a framework from CMS called TDAPA, which is basically the add-on payments for products that bring innovation and that in order to basically create an incentive for dialysis organizations to include these products into their protocols, given that they have a bundle that is capitated, they are going to be providing this add-on payment. This add-on payment is 100% of the ASP, or average selling price, and we believe that roxadustat is eligible. The process for this to happen is you once you get approval, you apply for this, then you would basically get authorized for -- to be included in TDAPA. We believe that roxadustat is eligible, and we intend to apply for it.

Great. So just to remind audience who may be listening here, this TDAPA technology innovation premium that you referenced would be incremental to the fixed bundle that these centers currently get for treatment and for drug. That's correct?

That is correct.

Okay. Great. So one of the things, I guess, in terms of your last steps here is as you think about commercialization here and the footprint in the U.S. is thinking about the competitive landscape and ultimately perhaps pricing. You've obviously mentioned that you're talking about your discussions with some of the larger dialysis providers here. But how does pricing in the U.S. perhaps potentially look like in your mind relative to what it's been established in terms of your existing commercial markets like China and Japan? And then how do you think potentially about what the commercial landscape might look like in Europe where your partners are also seeking approval for roxa?

Yes. It's an excellent question. Clearly, we want to make sure that we are pricing our products relative to the value, a significant value that the product can provide. We won't be discussing specific pricing strategy as you can imagine, until basically we launch the product, we don't think that will be in our best interest to disclose that now. But we need to ensure when we look at the U.S., that we are looking at all the benefits that the product basically provides and from a clinical and from an economic perspective to the system. And then making sure that we are pricing the product appropriately to what it offers. Clearly, when it comes to different settings or different markets in Europe for example, Europe in many markets -- most markets in Europe, they tend to anchor to a specific price. Which is why in Europe, you typically need a trial like DOLOMITES, for example, that allows you to basically bridge from the anchor price, maybe from an ESA and how do you bridge that to a price for in this particular case for roxadustat. So you still do the formal economic analysis, but the process is a little more rigid, I think, than in the U.S. I'm excited about, honestly how transformational this product could be when it comes to the treatment of anemia, first in CKD of course. But keep in mind that we're also pursuing other indications, 2 that we have shared in chemo-induced anemia and also MDS. So very exciting opportunity for us to really revolutionize the treatment of anemia.

Sure. That actually provides a nice segue to talk about these additional opportunities for roxa. Obviously, investor focus has largely been in the past year or so on regulatory landscape. But you are also running an ongoing Phase III in MDS, and you've published some very interesting data there. Can you maybe talk about what is the next potential update for the MDS study? What is the enrollment status right now? And then in terms of the competitive landscape, there's a drug approved out there for treating anemia for MDS related patients. Can you maybe just think about how clinicians might view roxa in this population, given that there is an approved therapy out there for patients with anemia who have MDS?

Yes. Clearly, it's -- as you know, this is a highly vulnerable population, and we are delighted with the progress that we're making. I think through the COVID-19 epidemic, I think we've continued to see good progress in the enrollment of our Phase III study in MDS. There is indeed a therapy approved, but keep in mind that this is -- they have a much narrower label. It's really for ring positive and really as a second line to patients that have failed on ESAs. And our study really looks at both ring positive and negative and whether they are naive to ESAs or failed on ESAs. So we probably have a population segment that is probably 3x as large as the current approved therapy. So we're excited about that trial and what -- looking at our results, we should be able to see something on that trial sometime next year.

Next year on that. Great. And then you also referenced what could also potentially be a very broad population as well, which is chemotherapy-induced anemias. I think that's also something like MDS that gets overlooked a little bit there. Can you maybe give us an update on what are your plans there? You obviously have your plate full with roxa in dialysis and your regulatory situation, but you have the Phase III going on in MDS. What's the plan to sort of expand the opportunity set here with CIA?

So CIA as you know, we're in Phase II. We'd like to conclude as soon as possible and then enter Phase III. Keep in mind that we have around 1.3 million patients with chemo in the U.S. And depending on the area, you could be looking at rates of anemia between 30% and 90%. So there is a very significant need when it comes to chemo. So we are trying to make as much product as we can as fast as we can because we think that this opportunity is very meaningful. Keep in mind that ESAs used to sell almost $4 billion in this segment back in the mid-2000s. So they had a very significant use in this setting. And when you look at blood transfusions in the United States, about 15% of the blood transfusion are in heme-oncology, so hematology-oncology. That's -- it's -- there's a very significant need, and I believe that we can also play an important role.

Okay. Thanks for that. So maybe sticking with the pipeline here and switching gears to pamrevlumab. I think the program that you talked about earlier in IPF, it was on pause. And you talked about it resuming here, but you're also planning a second trial. So I was wondering, can you maybe comment on when that second trial might potentially kick off here? And just what are sort of -- what does enrollment look like for the first trial now that you resumed that? And then maybe we can talk about the commercial opportunity after that as well.

Yes. So one of the reasons we're excited about pamrevlumab is because when we look at the Phase II results, which were published in the Lancet, we see an effect size on forced vital capacity that is basically larger than products that are today standard of care or any product that I can see in development. So we have once again a very differentiated product on the efficacy side and it's highly tolerable. In addition to that, it is really the only product that in IPF that when you look at imaging, you basically can see reversal of fibrosis. So it's a very exciting profile. Keep in mind that the Phase III trial was designed in such a way that it is very close to the Phase II, which I think always increases the likelihood of success. We're going to be providing a full update on the time lines for this trial and others on pamrevlumab during our Analyst Day in Q3 or Q4. So we look forward to that. I think what I would say is clearly when you look at enrollment, one of the most important things for enrollment is site activation. We are making great progress in site activation. One of the things we've done is geographic expansion of where we are enrolling patients. So in Asia whether it's Korea or Taiwan or in Europe, but also we intend to start enrolling patients in China likely in Q3 of this year. So we -- with that geographic expansion, it allows us to activate many more sites and really accelerate the enrollment in a really big way. So I'm excited about our plans to bring the therapy to patients as soon as possible.

Great. And you talked a little bit about the patient population here. And so I think you were probably referring to Esbriet, which is the approved therapy in the indication. But can you maybe remind us, are the trials designed to be a second-line therapy? Is this supposed to be something that would displace it in the front line? How do you think about the target population ultimately for pamrev here in IPF?

Yes. In ZEPHYRUS 1, we are enrolling patients that are naive to therapy and patients that have failed the standard of care. As you know, only less than half of the patients really are able to be on the standard of care for a number of different reasons, including tolerability reasons. So the idea with this product is to truly -- if we can show results not only when it comes to forced vital capacity where we can have the largest effect size of any product when it comes to pulmonary function, but if we can also look at some measures when it comes to disease progression and the fact that we can have a significant impact there, I think this product could be pretty transformational. And I believe that the product, yes, in some cases, is going to be used with other products or -- but in many cases, why not utilize this product as your first-line product? It's all going to depend on at the end, on the Phase III trials. But if they replicate -- if we replicate what we saw in Phase II, I think our chance to become standard of care, first line, are very significant.

Okay. We're pushing our timing here. But Enrique, I want to maybe spend a little bit of time talking about strategy here and particularly with regard to the third leg or aspect of the story. You talked about particularly with regard to investing in discovery and research here. And just -- you have you a pretty full plate right now with roxa in 3 indications and then developing pamrevlumab for 3 indications. But just at what point do you think about reinvesting in the business, emphasizing discovery again and just maybe potentially adding a third leg to the story here?

Yes. We are really putting a lot of focus on that area. Of course, that today is not visible to investors, but I find very significant opportunities to basically develop -- to think about HIF biology and develop new compounds. They're not necessarily going to be HIF-PHIs, okay? So I think there are many opportunities for us. But if you look at whether it's preclinical models or you just look at the underlying biology of the HIF class, it is pretty clear that you could be impacting many different diseases or disorders. And it's very exciting for us to think about that. I would disclose some more during our Analyst Day, probably not enough to -- for you to say, wow, exactly, tell me more, but enough to maybe whet your appetite of how exciting this area is and all the different opportunities or the reasons to believe. And I think similarly for CTGF biology, of course we have pamrevlumab. We could think about what additional indications we could pursue with that asset. But also we need to be thinking about how do we leverage CTGF biology to develop new clinical compounds and being able to bring the next leg of this -- our innovation story to patients. So I'm very excited about that. I think it's very promising.

Great. It sounds like the Analyst Day or R&D Day coming up here will be really interesting for multiple reasons. Unfortunately, we've come up here on our time limit. Enrique, thank you so much for participating again in the GS conference, and we'll see you again soon.

Thank you very much, Paul.

Okay, thank you.