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

Good evening, everybody, and thanks for joining us at the Bank of America Annual Healthcare Conference being conducted virtually this year. Hopefully, next year -- the CDC just gave us the mask-free mandate. So hopefully, next year, we'll be able to do this in Las Vegas. This is our final fireside chat of a 3-day event, and I'm pleased to be introducing our next company presenter, FibroGen and CEO Enrique Conterno. So Enrique, thanks for joining us.

Jason, thank you very much for the invitation. I'm looking forward to the chat.

Yes. Maybe just kicking things off, maybe just talk a little bit about what drew you to FibroGen. You're coming from Eli Lilly, intimately involved in diabetes, large markets, the primary asset, roxadustat also being something that could be used in pretty large markets. And just overall, what drew you to the company?

Well, I think it's the opportunity to work on transformational medicines. And clearly, it's unique for a company the size of FibroGen to have 2 assets in late stage in both roxadustat and pamrevlumab. And then the ability to be able to bring more products into the clinic. So I think it's exciting, I think, just to think about all the possibilities. And clearly, I think when we think about roxa, when we think about pam, not just 2 new medicines, but truly 2 medicines can be quite transformational and truly first in class. So quite unique, and I feel that my experience was a really good fit for the company.

Okay. Maybe we'll talk a little bit about roxa and the potential role that it could play in the dialysis setting, both dialysis and non-dialysis dependent. We could talk about -- a little bit about some of the unique assets of the U.S. market, which hopefully you'll be able to bring that medicine to market. Well, we can get in the time line considerations and then maybe some of the vagaries of what's going on with FDA. But maybe we'd just set the table for this medicine, which nobody really denies the efficacy benefit that it can provide. It's orally dosed. It has benefits -- unique benefits in certain patients like hyporesponders. So maybe just how do you think about this kind of medicine in the key indications that you're pursuing relative to standard of care, which is an ESA in dialysis, and in non-dialysis, there really isn't a standard of care?

Yes. Clearly, I think it's a pretty significant unmet clinical need when we look at anemia of chronic kidney disease and the opportunity to have a product -- an oral product like roxadustat basically with the type of data that we shared both on DD as well as NDD. When it comes to DD, as you well said, we have a standard today, which are ESAs that are widely used for people that are on dialysis for the correction and maintenance of hemoglobin, people who have anemia. So it's an important -- it's clearly a very important segment that most of these patients are being treated. Of course, the data that we're -- that we've been most excited about has been the incident dialysis data. And just to remind everyone, I think when we look at roxadustat, we view it as comparable on both dialysis dependent on non-dialysis dependent, comparable to ESAs on dialysis dependent and to placebo on non-dialysis dependent. And we have now, I think, the opportunity to -- so patients are starting those treatment with dialysis to be able to treat anemia. And we think that roxadustat can be an ideal choice there given the strength of our data and particularly incident dialysis. When it comes to some additional opportunities, you well pointed out that there are a number of patients that are hyporesponders. We estimate those to be -- to ESAs, we estimate that segment to be as high as 20% of the overall patients on dialysis. When it comes to NDD, we basically have few patients being treated. In fact, when we look at the 12 months prior to initiation in dialysis, we see that only about 14% of those patients are treated with an ESA. So clearly, a pretty significant opportunity to increase those treatment rates. And clearly, the benefit of that is to try to avoid transfusion, minimize the risk of transfusions. We are working very closely right now, very diligently to prepare for the Advisory Committee that we -- that has been tentatively scheduled for July 15. I'm excited about the opportunity to share data publicly, quite frankly. Finally, I think it's important to maybe mention, maybe I'm sounding a bit optimistic, but I am given what I've seen what the product can do. And we can talk about China in a bit. Particularly, the performance in China, I think, is a perfect example of what the transformational product could do. Clearly, the adoption that we're seeing by hospitals, physicians, the feedback from patients, I think, is outstanding. And it's been reflected, I think, on the results that we see.

Great. You guys have these Phase IIIb trials that are being conducted with dialysis organizations. Can you just remind me what's the status of those trials? Will that -- oftentimes, when new medicines come around, they may help investigators get more experience outside of the rigid trial context, right? Can I switch a patient? How easy is it to switch a patient? Which patients do I feel most comfortable with in terms of utilization of the medication? So maybe just a little context for initiating those trials with large DOs? And what do you think that will help accomplish when you are ready to get to market?

Well, I think those -- first, I think those studies are Phase IIIb studies, and they are important because we are looking at roxadustat in a real-world setting with those large dialysis organizations. Those trials are now fully enrolled. And in fact, some patients have already gone into the extension phase. And we look forward to sharing that data, I think, at a future scientific meeting. Of course, the data will be available to the large dialysis organizations for them to be able to see, I think, the benefits of roxadustat in those specific settings.

So you -- presumably, with the dialysis approval, you have a TDAPA reimbursement. We've now seen very limited analogs. The analogs that we have seen is basically Amgen's Parsabiv and not necessarily apples-to-apples with what you'd be dealing with because there's not a generic alternative to what you have. It's a biosimilar alternative efficacy-wise. And so I guess I wonder ultimately if you can speak to some of the practice -- or dialysis organization economic considerations. I realize that your medicine offers much more than an economic benefit to practices. But just how organizations will navigate that because arguably under TDAPA, there's less of a burden on the practice financially to experiment with the new novel medication.

Yes. No, I -- thank you for your question. Clearly, as you well highlighted, I think we really start with the clinical benefits that roxadustat has when it comes to patients on dialysis. And we discussed 2 specific types of patients, patients that are starting dialysis or patients maybe that are hyporesponsive, as very specific patients with roxa can have some of the largest benefits. But when we think about some of the access, maybe frameworks that are utilized in this particular case, we believe that roxadustat will be eligible for TDAPA. So we intend to basically request TDAPA reimbursement be eligible for that. TDAPA is basically payment adjustments for products that otherwise would be on the renal bundle. And it's designed -- TDAPA is designed to basically foster and incentivate innovation by basically providing this payment adjustment or additional payment. Importantly, the considerations here are that the dialysis organization would receive an additional payment when using roxadustat. Of course, this needs to be approved by CMS, and we're working to -- as soon as we get approved, we're going to be working to ensure that we are prepared to make that submission to CMS so that we can get the eligibility as soon as possible.

Got it. So the interesting thing, I guess, is Amgen, the way that the bundle adjusted post Parsabiv, like they're down 50%, or they're pointing down 50% in terms of their sales level coming out of the TDAPA phase. I mean some of that's just driven, I guess, by the volume pressure. Once that TDAPA phase ended, a lot of maybe DOs went to Sensipar -- generic Sensipar because -- but ultimately, I think part of that, too, is that the bundle didn't adjust to address the Parsabiv pricing level. Now I guess how do you see that situation evolving for roxa? On the one hand, you could argue we're different. Maybe your product's more innovative. But there's an ESA there. And so maybe the bundled payment allotted for ESAs represents maybe a good benchmark for where your net reimbursement level may come in kind of post TDAPA.

Yes. I think the concept of TDAPA when it comes to trying to foster innovation within the [ dialysis ] protocols is to ensure that as we think about those 2 years where those TDAPA payments would exist -- and by the way, that's -- we -- that's the current framework basically, TDAPA will last for 2 years. During that time, CMS will basically be assessing the product to determine how the products will be treated now within the bundle, right? And that assessment has to be based on the utilization of the product but also the benefits that they see with the product relative to not utilizing the product. So I think it's -- at the end of the day, I think the world post TDAPA would be governed by how well did roxadustat perform within the 2-year period as assessed by CMS. I'm quite confident on what roxadustat can deliver. So this bundle, I think it's difficult to say what would be this bundle post TDAPA. But I think it's good to think about the formal assessment that is done and then basically ensuring that these payments are now basically taking some of the benefits that we're seeing into account. Otherwise, if they don't do that, at the end of the day, you're providing only a temporary benefit or economic incentive. But if the clinical benefits are there, I think they need to be rewarded as well.

Okay. Now NDD is an interesting market. It's very sizable. It -- from what we hear from physicians, one of the reasons why ESAs are underutilized is because of the restrictive hemoglobin targets. What we hear oftentimes is they've got a lot of patients whose hemoglobin levels are around 9, 9.5, can treat to 10. It doesn't make any sense to maybe even start because the hemoglobin thresholds are so restrictive. Your trial protocol allows for more flexible hemoglobin targets. So just typically, when drugs are given the green light to be studied in a certain way by FDA, they're labeled according to study. So maybe if you can speak to that dynamic and your confidence level that the FDA is comfortable with treating the higher hemoglobin levels. Because it seems like it's an important variable, ultimately from our perspective, to really unlocking the value and getting these patients anemia medication.

Yes. Yes. So clearly, when we looked at our trials, as you point out, I think the hemoglobin target level was 11 plus/minus 1 with roxadustat. We -- as you know, we don't comment on our interaction with the FDA or try to speculate on what the label will look like. But clearly, I think the results that we've discussed are based on protocols that basically look at those specific targets. One thing to keep in mind, and I think I'm reflecting on what we basically are learning from China as we think about the NDD market and some of the dynamics there, it is pretty clear that we might be underestimating the long-term opportunity when it comes to building that market in NDD. I think we've said for quite some time that we expect that the uptake when we look at the dialysis setting will be fast, and maybe a higher proportion of the overall patients will be dialysis-dependent patients relative to vis-a-vis NDD but that over time, we expect the NDD opportunity to scale to be much larger, significantly larger than the DD opportunity. And what we basically see in China is exactly that. It's -- in China right now, I think it's 1/3 of the patients -- or 35% of the patients today are patients in the NDD setting and 65% DD. But what's more interesting is to look at the dynamics of the overall market, which may seem a little bit counterintuitive because since roxadustat was launched in China, what we've seen is actually the ESA market accelerate. So not just continue to expand. It is continuing to expand, but it's actually expanding faster than it was prior to the roxadustat launch. That is pretty unusual, and it speaks to a pretty unmet need. And now that we are, together with AstraZeneca, commercializing the product and -- in China. But also talking about anemia, the importance of treating anemia, not just in the DD setting but in the NDD setting, I think what is -- basically it's making the category for anemia significantly larger. So this type of trend that I'm describing is -- and these types of trends tend to last not just for quarters, but these tend to be trends that basically play out over years. So I'm extremely encouraged by what we see there. And I think the one thing that we maybe underappreciated, in addition to all the clinical benefits, because sometimes we tend to be quite scientific, but it's -- the fact that this product is an oral product. And as we know with ESAs, basically patients have to go into a physician office to have the product administered. That will certainly happen. That's the practice here in the U.S. So the fact that it's an oral product, I think, provides a different level of maybe also convenience in addition to some of the clinical benefits. So you have the importance of treating anemia and avoiding or minimizing the risk of transfusions. But then in addition to that, we look at some of the specific benefits of roxadustat, and we add to that the fact that it's an oral product, and I think it makes the opportunity significantly larger maybe than we initially saw. Now of course, I am translating China into other markets. And I think for the most part, I think it's a fair assessment outside of access because access to the product tends to vary and be very specific from market to market. But outside of access, I feel like physician adoption, we can -- there's a lot of learning that we can take from China, and that has to been pretty encouraging.

Right. And I mean I guess, we, as drug analysts, are very -- oftentimes end up being very U.S.-centric. And typically, when a new major launch hits a category, it kind of grows the broader category and other drug categories benefit from that. So do you think -- if you had to come up with a hypothesis in terms of what's going on there, what's driving that ESA utilization, is it more or less doctors are now starting to just treat more and having to go to other options as well?

Yes. Clearly, our -- this is something that we are studying. But I think what -- this is my view. What we're seeing is basically additional treatments, in particular, so increasing the treatment rate, in particular, in the NDD market. And that increase is so significant. The -- not only is roxadustat growing very fast. As you know, we basically had $43.5 million in Q1 in net sales to distributors. That's an increase vis-a-vis the 29-plus that we had in Q4 of 2020, so very -- a good sequential growth. So yes, it's pretty interesting to see, I think, what's happening. And I think it's all about -- it's been largely driven by increases in the treatment rate in NDD. And I think that bodes extremely well for the future.

Yes. So you've put some rough guidance parameters around the revenue opportunity for roxa in China. I think greater than $500 million based on the guidance that's out there. You seemingly have gotten coverage in hospital setting or for the dialysis center setting much faster than I think you would have expected. So maybe what's next? What are the future catalysts? Or is it just kind of an execution story going forward in that market?

Yes. It is an execution story. Keep in mind that we don't expect another HIF-PHI in China for some time. And as you well said, our -- we now basically have access to about 74% of the overall CKD anemia opportunity in China. And that's going to continue to increase. What are some of the additional drivers of growth? It is about basically continuing the adoption cycle. So we will see increased adoption in hospital where we're listed. What's the concept there and why do I feel highly confident is we basically have much higher share in incident dialysis, which in a certain way, those patients tend to carry through and become patients that are on prevalent dialysis. So over time, we -- that incident dialysis will basically be reflective of the overall share that we have in the dialysis setting. So it is a matter of continuing to execute our strategy. There's additional opportunity for increased listing, but really, I think the big opportunity is going to be on both the adoption but also on the adherence, making sure that the length of therapy is appropriate so the patient can get the full benefit. And yes, we've guided to peak sales of north of $0.5 billion for roxadustat in China for CKD anemia. So for us, it's basically executing our strategy. Keep in mind that we have additional opportunities, indications in China. We are pursuing both MDS, CIA also in China. So chemo-induced anemia and myelodysplastic syndromes. Those indications are above and beyond the guidance that we have provided.

Yes. Okay. Maybe just shifting to the U.S. market opportunity and regulatory situation in terms of -- so it sounds like this is a joint collaborative effort in terms of your preparations and getting ready for the advisory panel. Maybe just talk about how helpful it is to have AstraZeneca as a partner here in terms of navigating the upcoming regulatory outcome.

Yes. Clearly, for us, I think a critical job is going to be our preparation for the Advisory Committee to be held on July 15. To do that, I think you probably know there's a -- given all the learning, there's a -- we've put together a really good process to ensure that we're going to be as prepared as we can be. That includes anything from doing mock reviews, mock outcomes and so forth. But importantly, too, is I think it's key that we work -- continue to work collaboratively with the FDA to allow the Advisory Committee to have the best assessment of the product so that they can appropriately advise. I feel very strongly about this. And I feel that our preparation is giving me additional confidence in terms of what I expect will be a very productive and positive discussion at the AdCom on July 15.

You gave a little bit of a preview, I think, on the last earnings call. Yes. It seems kind of obvious in the sense when you have these therapies that are undeniably effective, right, in categories like this that the focus tends to be just around a vote around views on safety and risk/benefit. But wondering if there's any other additional commentary you want to offer there.

No. I think at the -- when it comes to an Advisory Committee, clearly, you're bringing relevant experts to provide perspective, advice to the FDA. And risk/benefit, the benefit/risk is always part of that discussion. Clearly, I think when it comes to the efficacy, I'm sure that it would also be discussed. But I think with roxadustat, it's pretty clear, very consistent and consistent across many different patient types, including patients that have inflammation and so forth. And the -- when we look at our data, we have a number of different trials, both in DD and NDD. And then we need to look at the overall cardiovascular profile. And as I mentioned, we see our profile being, when it comes to MACE, noninferior to ESAs on DD and non-inferior comparable to placebo on NDD. The -- so at this point in time, of course, the FDA will look at the primary analysis, but I'm sure we will also do a number of additional sensitivity analysis and we -- that I'm sure will be discussed. Those sensitivity analysis, in some cases, look -- make the product -- or hazard ratios lower, in some cases, higher. But all in all, I think should help understand, I think, the overall profile of the product better. And I'm optimistic about -- given our preparation that we will have a good [ showing ].

Yes. It seems to me the key challenge is the managing the magnitude of complexity for the panelists given the different studies, the different analyses and how you can have a focused discussion. We know sometimes advisory panels can sometimes -- there can be some confusion just given the quantums of data involved.

Yes. And I think it's probably important to reflect of what makes -- well, there are a number of factors, what factors can we influence appropriately to make sure that we can have a productive discussion at the AdCom. And as part of that, of course, our preparation is part of that. But also, I think to the collaboration with the FDA and making sure that all the analyses are truly informative, I think, could be important as well. So it's -- data is coming soon, and we're looking forward to it.

Yes. So are we. So I guess just a final question because we're almost out of our time. But pamrevlumab, IPF, maybe if you can just comment how -- you got some dynamics going on, I assume, with the enrollment. You have COVID, but you also have a competitor who wind down their IPF trial, large IPF trial. Maybe that might be a tailwind for enrollment. Just any color you can provide on that process.

Yes. Two things. First, when it comes to pamrevlumab, the first readout that we will see are in LAPC, locally advanced unresectable pancreatic cancer, and DMD, Duchenne muscular dystrophy. And we have basically guided towards a readout in the second half of next year for those 2 important indications. When it comes to IPF, you're right. I think both COVID, the fact that we are seeing basically less cases of COVID, but in addition, the fact that one of the product that was being studied for IPF recently stopped their trial. Both of those, I think, are helping our involvement. We do have additional sites as a result of that, that are now basically enrolling pamrevlumab. And also on sites that maybe we're enrolling both trials, now we have additional patients, patients that basically can come into our study. So I think the dynamics, I think, when it comes to enrollment have been getting more positive than what they have been.

All right. Well, great. Well, Enrique, thanks so much for your time and best of luck here in the coming milestones for the company.

Jason, thank you very much for the time, and congratulations on a successful conference.

Thank you. All right. Operator, with that...