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

Good afternoon, everybody. Thank you for joining. This is the FibroGen fireside chat. I'm Albert Hwang from Morgan Stanley. Thanks for being at the conference. And I'd like to introduce the CEO of FibroGen, Enrique Conterno, who -- maybe you can give a couple of minute overview on how things are going with the company. And then we can get started with questions. Enrique?

Very good. Thank you, Albert. Thank you very much for the invitation. We have an exciting agenda here at FibroGen. Clearly, roxadustat being commercialized in China and Japan, very much undergoing the final stages of the regulatory review in the United States, submission in Europe. Clearly, a transformational medicine when it comes to CKD anemia. We are making progress with pamrevlumab on enrollments on a collective of high need medical indications whether it's IPF or LAPC or DMD. So now we basically have Phase III programs in each one of those indications. And I would say we're very excited when we think about IPF, I think, our Phase II data. And what we have, I think, is superb. So very excited about that particular asset. And finally, I think we are really putting a lot of effort behind our overall research agenda, bringing new products into the clinic here at FibroGen, and recently, we hired a new Chief Scientific Officer, Percy Carter. I'm very excited about the opportunity to truly make innovation, a constant stream here at FibroGen bringing new molecules into the clinic. So I'm very excited with an agenda across all fronts. Albert, I think you are on mute, right now.

They always tell you to mute, and then I always forget. So we'll get into detail on all of those fronts. I think maybe the first thing to focus on is probably a question that's on everybody's minds. And that is how do you think about roxa as different from vada, the Akebia product, given their recent non -- NDD data? So do you look at that as a -- every drug is specific to its own targets? Or do you look at it as a mechanism effect, et cetera?

Yes. Clearly, that's a question that is coming often to us, and I'll provide, I think, an appropriate perspective in terms of trying to put that result into context for investors. I'd like to make 3 points. Number one, roxadustat has a very significant data set in MDD. We have a pool analysis in NDD that we submitted to the FDA. As part of our NDD pool analysis, when we look at MACE, we were non-inferior relative to placebo, which is a higher bar than ESAs would be. So we feel very good about our data there. Point two is we -- in addition to that post study, we have an additional study, DOLOMITES, against an active comparator in darbepoetin. That study had MACE outcomes adjudicated. And as part of those results, we saw a MACE result that was favorable to roxadustat, a hazard ratio of 0.81 in that specific DOLOMITES study. So that's an important additional level of evidence, I think, in favor of roxadustat and the safety when it comes to NDD. Finally, I think it's a question that comes, okay, the data that roxa has is very strong in NDD, but what are going to be the implications from a labeling perspective, given this data. And I think here, I will point out that the FDA -- there's ample pressure by the FDA to look at cardiovascular studies for different products, even when they're within the same class and make sure that the label applies for those products comes from the respective cardiovascular studies that we have when it comes to GLP-1s, cardiovascular studies that were, in some cases, different in results, and you see the labels basically reflect the outcome and the data for each study and the label for that product. That is also the case for GLP-2s of DPP-4s. So we take that to mean that the cardiovascular studies are really vast studies with many patients. And the FDA takes the results from those studies seriously and basically, in summary, applies the respective outcome from the study to the specific product, the specific label. In short, what I would mention when it comes to our data is that we continue to feel very confident about our prospects overall for us roxadustat, and, of course, specifically in the NND setting given the data that we have.

Okay. And your PDUFA date, just to remind everyone, is December 20 of this year. And the package that you put together for the FDA, and please share what you're comfortable with but, is mostly the 6 studies, 3 for NDD and 3 for DD, and is there any additional data that, you mentioned that you have this additional trial, I think you said it was a DOLOMITES one, that has the comparator with darbe? Would that information be shared as well? Do you try to share as much as possible? Or how does that work?

Yes. I think when it comes to the submission to the FDA, we agreed with the FDA prior to submission on the studies that will be pooled for MACE, 3 specific studies when it comes to DD and 3 specific studies when it comes to NDD. And we have also agreed on the statistical method of how we were going to look at MACE on those studies. Clearly, when it comes to the submission to the FDA, we include all of our studies. So the ones that are pooled for MACE as well as some of the additional studies that we may have conducted. So yes, I think the DOLOMITES data that we had at that time was also submitted to the FDA.

Okay. Great. Okay. So we'll -- I'm sure everybody will be looking forward to the December PDUFA. Maybe moving on to China. I think it would be helpful to just talk about how the China business is doing broadly after launch. And perhaps if you can talk about what the read-through could be for the U.S. and rest of the world? And if that is a read-through or how things are different or how things are harder or easier in China?

Yes. As you are aware, we got reimbursement in China. Starting this year, we are in the NRDL. Post NRDL, I think key critical success factor for launches to ensure listings in hospitals. And we've done a fantastic job. I think -- AstraZeneca is our partner in China, we basically have a 50-50 profit share for the roxa business in China with AstraZeneca. They've done a fantastic job really listing roxadustat in many hospitals. So we made a lot of progress. At the end of Q2, we were already listed in hospitals that represented 45% of the overall CKD anemia opportunity in China, and that's very impressive. We had $5 million in sales in Q1, $15.7 million in Q2. And we see continuous progression when it comes to revenue, demand that we basically see. So the underlying business, I think, is very strong in China. We are very pleased with the progress that we have. We, of course, look at China and the -- on its own merit in terms of this can be a blockbuster product, just looking at China alone. So a very significant opportunity for us with roxadustat in China. And -- but of course, we also try to learn from China, what can we apply to other markets, including the U.S. So we capture a lot of those learnings. Of course, the adoption that we have for roxadustat in China is brings -- give us a lot of confidence in terms of what we could expect in other geographies. So one of the learnings or things that we've seen in China is we've seen probably faster uptake in NDD than maybe at least than I had expected. So -- which is, I think, very encouraging. And when we look at the broad use of roxadustat in China, whether it's home dialysis, dialysis in general or late-stage NDD or NDD in general, we -- I basically see lots of opportunities for roxadustat to grow over the long term. A great opportunity for us to capitalize in China, and we've got to capture those learnings and apply them in the U.S. when relevant.

I think it will be helpful to just highlight some of the key numbers in terms of addressable market. Obviously, there's a much bigger population, but at least I'm not familiar with is the dialysis population similar to the U.S.? Is it higher or lower? What about non-dialysis? And how has that been growing? Or how has that been changing?

Yes. So the dialysis market in China is actually the largest dialysis market in the world. We estimate somewhere 700,000 to 800,000 patients on dialysis alone. We see that market growing pretty fast year-on-year. In fact, in China, there's 1 million to 2 million additional dialysis-eligible patients that should be maybe or could be in dialysis, but are not in dialysis today. In addition to that, we estimate that the market in China could be maybe an additional 5 million patients when it comes to NDD, as we think about the addressable market for us in China. So it's really a really significant opportunity and I would highlight that we are basically going to be the only HIF who are really creating this new market, but the only HIF for quite some time. We don't expect other HIFs until maybe 2024. So great opportunity for us to build a great business, I think, in China.

Okay. Great. And can you maybe remind us of the partnership with AZ? And how much you contribute to the sales and marketing? Or how -- I guess, how you're educating yourself for other markets through the maturity of the China piece?

Yes. So allow me maybe to provide a broad perspective on roxa partnership and then I'll specifically address China. But when we think about roxadustat, basically, all of our commercial and development expenses, so new indications, as you know, we are pursuing chemo-induced anemia. We're pursuing MDS, potentially other additional indications beyond those. All of those expenses really are paid by our partners. When we think about commercial expenses, similar. So everything basically, expenses development or commercial outside of China are paid by the partners. In China, we basically go 50-50 with AstraZeneca, where we have a 50-50 profit share. In the rest of the markets, we are under a royalty transfer price type of arrangement, where we're getting a royalty in the low to mid-20 in terms of percentage. So it's very attractive for us. We have a major transformation of products, and we are very active, of course, in China, given the 50-50 share. We're trying to rely on the strengths of AstraZeneca in China, so they do much of that -- or all of the sales and marketing efforts. And in our case, it's basically medical and the science and the things that FibroGen could contribute best. So I think the arrangement of the partnership, the collaboration in China, I think, is working well. We recently updated our agreement in China with AstraZeneca to better align both parties, which I think is excellent, that, that agreement provides more predictable and better profitability also for Fibro.

Great. Okay. And hopefully, as that business grows, the -- and your investor base will start to see more of the value that, that produces and I guess the synergies that it has with the rest of the business. Maybe moving on to pamrev. Can you just very quickly highlight the asset, the mechanism before we get into some of the questions, just what it is, what you're going after?

Sure. Pamrevlumab is a monoclonal antibody basically an anti-CTGF. CTGF is a major fibrotic pathway. And really, we have an asset in Phase III, in 3 different indications now in Phase III. And we're very much excited about by some of the data that we've seen. Clearly, IPF, idiopathic pulmonary fibrosis, is a very important indication for pamrevlumab. In IPF, we had outstanding Phase II data I mentioned, and I highlight that our Phase II data, I believe, is -- the effect size that we saw on our Phase II data is better than any data that I've seen with IPF that I'm aware of on products that are either marketed, that today are standard of care or products that are in development. So very excited about the ability to have an asset with a very differentiated profile. The key for us with that asset is execution and ensuring enrollment. We made a lot of progress when it comes to site activation over the last few months. But clearly, enrollment right now, in particular, because of COVID and the vulnerability of this specific population is a challenge. But I feel good about our ability to recruit quickly now that we have all those sites activated. We also have LAPC, locally advanced pancreatic cancer, another exciting opportunity for us. We had the Phase II data that was promising. Clearly, here, we are looking at improving the resectability of the patients that are on the pamrevlumab arm, and there's a lot of evidence that shows that improved resectability, you're able to resect, survival improves in oncology. So great opportunity for us with that indication. And finally, with DMD, we just started that trial in DMD. Our Phase II trial in DMD was open-label, and we did not have a comparator, but when we look at the progression of the disease in those patients, it is -- we're very encouraged by what we see. So each one of these indications alone is very significant, but collectively, I think it's a massive opportunity for FibroGen and great opportunity for patients.

Okay. And on the IPF side, you touched on it previously. Has the COVID environment impacted enrollment? I know a lot of pulmonary companies, patients tend to stay at home. Has that impacted you? And how do you see that going forward? Or how have you been trying to mitigate that?