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

Good afternoon, and welcome to the 2021 Annual Meeting of Stockholders of FibroGen, Inc. I would now like to turn the call over to Enrique Conterno, the CEO and Director of FibroGen. Please go ahead.

Thank you, and good afternoon. I'm pleased to welcome everyone to the FibroGen 2021 Annual Meeting of Stockholders. At the request of the Chairperson of our Board, Jim Schoeneck, I will act as Chairman of this meeting. Since our online annual meeting is being conducted on a new platform this year, please bear with us if we encounter any technical issues. Before I call the meeting to order, I would like to take a moment to recognize and thank Dr. Kalevi Kurkijärvi for serving on our Board of Directors for 24 years and who will be retiring at the end of June. Kalevi brought significant experience across a number of areas to the company and made significant contributions over the years. We thank him for his efforts and wish him well. I would now like to introduce to you the members of the Board and executive management who are with us today. The members of our Board are: Jim Schoeneck, Chairman of our Board; Suzanne Blaug, Dr. Aoife Brennan; Dr. Benjamin Cravatt; Jeffrey Edwards; Dr. Maykin Ho; and Dr. Kalevi Kurkijärvi. The officers of FibroGen here today are: Chris Chung, Senior Vice President of China Operations; Pat Cotroneo, Chief Financial Officer; Michael Tung, Vice President, Investor Relations and Corporate Strategy; and Thane Wettig, Chief Commercial Officer. Please let me also introduce Michael Lowenstein, our Chief Legal Officer, who will act as Secretary and Inspector of Elections of this meeting. I would also like to introduce Allison Samson and [indiscernible] of PricewaterhouseCoopers, FibroGen's auditors, who are available to respond to appropriate questions. Before turning to the formal business of the meeting, I would like Michael to mention some procedural matters that are different this year due to the online format of the stockholder meeting.

Thank you, Enrique, and good afternoon, everyone. First, there is an agenda outlining the components of this meeting, which should be visible on your screen for those meeting participants who are logged into the website for this meeting at www.virtualshareholdermeeting.com/FGEN2021. Second, stockholders of FibroGen as of the March 29, 2021 record date are able to vote during the meeting until we close the polls following the presentation of the proposals. You may vote by clicking on the voting button on the bottom-right portion of the website for this meeting. If a stockholder has already voted online by telephone or by mailing a physical proxy card, voting at this meeting is not necessary. However, a vote submitted at this meeting will supersede an earlier vote. Third, questions pertaining to the business of this meeting may be submitted by stockholders during the meeting by clicking on the Q&A button at the bottom right portion of the website for this meeting. If we do not get to your question, you are welcome to send it to Michael Tung, our Investor Relations contact at [email protected], which can also be found on the investor overview page of our website, fibrogen.com. Fourth, we are recording this meeting, and you will be able to replay the recording for 30 days from the website for this meeting. Please wait a day or so after this meeting for the recording to be uploaded. Enrique?

The time is now 12:08 p.m. Pacific Time on Wednesday, May 26, 2021, and the meeting will now officially come to order. We propose to proceed with the formal business of the meeting as set forth in your notice of annual meeting and proxy statement, and we will address questions pertaining to the business of today's meeting that are submitted through the stockholder meeting website. After the formal part of the meeting, I will give a brief update presentation on the company. Will the Secretary please report at this time with respect to the stockholders' list and the mailing of the notice of the meeting.

I have at this meeting a complete list of the stockholders of record of FibroGen's common stock on March 29, 2021, the record date for this meeting. And a list of the registered stockholders is available on the virtual meeting website. I also have with me an affidavit certifying that on or about April 13, 2021, a Notice of Annual Meeting of Stockholders of FibroGen was sent to all stockholders of record as of the close of business on March 29, 2021.

Mr. Lowenstein has been appointed by the Board to act as Inspector of Elections at this meeting and has taken and subscribed the customary oath of office to execute his duties with strict impartiality, which will be filed with the records of the meeting. His function is to decide upon the qualification of voters, accept their votes and tally the final votes. Will the Secretary please report at this time with respect to the existence of a quorum?

Proxies have been received for 78,432,658 of the 92,068,818 shares of common stock outstanding on the record date, which represents approximately 85.18% of the total number of outstanding shares. This constitutes a quorum today, and we may now carry out the official business of the meeting.

There are 3 proposals to be considered by the stockholders at this meeting. The first item of business today is the election of our 3 Class I director nominees: James A. Schoeneck, Jeffrey W. Henderson and Dr. Maykin Ho to the Board to hold office until the 2024 Annual Meeting of Stockholders or until their successors are elected. The second item of business today is the approval, on an advisory basis, of the compensation of FibroGen's named executive officers as disclosed in the company's 2021 proxy statement. The third item of business today is the ratification of the selection of PricewaterhouseCoopers by the Audit Committee of the Board of Directors as the independent registered public accounting firm of FibroGen for the year ending December 31, 2021. That was the final proposal for today's meeting.

There are no questions submitted at this time.

Since there are no questions regarding the proposals, the Secretary will now describe the voting procedures.

Each share of common stock is entitled to 1 vote. Voting is by proxy, telephone and mail prior to the annual meeting and by proxy online at www.virtualshareholdermeeting.com/FGEN2021 during the annual meeting. You do not need to vote on the stockholder meeting website if you have already voted your proxy online, by telephone or by mail. The time is now 12:11 p.m., and the polls are now closed for voting.

May we have the results of the voting?

My report as Inspector of Elections covering the proposals presented at this meeting is as follows. The first proposal to elect our Class I director nominees: James A. Schoeneck, Jeffrey W. Henderson and Dr. Maykin Ho to the Board, is carried, with each director receiving the votes of the holders of at least 92.8% of the shares voting. The second proposal to approve, on an advisory basis, the compensation of FibroGen's named executive officers, as disclosed in the company's 2021 proxy statement, has passed with 57,341,905 voting in favor, 5,415,148 opposed and 455,333 abstaining. The third proposal, the selection of PricewaterhouseCoopers by the Audit Committee of the Board of Directors as the independent registered public accounting firm of FibroGen for the year ending December 31, 2021, has been ratified, with 76,689,182 voting in favor, 1,536,904 opposed and 206,572 abstaining. We expect to report our preliminary voting results, or if available to us on a timely basis, our final voting results on a current report on Form 8-K to be filed with the SEC within 4 business days after the end of this meeting. If not earlier reported, we expect to report our final voting results in an amendment to our Form 8-K within 4 business days after the final results are known to us.

This concludes the formal portion of today's meeting. We will now adjourn the meeting before proceeding to the corporate presentation. Let me wrap up today's meeting with a brief presentation about the company business. We're going to be making a number of forward-looking statements, which involve substantial risks and uncertainties. I won't be going through the entire disclosure here. But we take no duty to update some of these forward-looking statements. Let me -- let's go now to the company overview. Our company mission is to develop innovative first-in-class medicines for the treatment of chronic and life-threatening or debilitating conditions. Our -- we have a number of exciting projects, which I will cover in just a second. But importantly, we also have a good cash position with about $682 million in cash and a number of milestones that are expected that are related to the approval and first commercial sales of roxadustat in the U.S. and Europe. We expect our 2021 ending cash to be in the range of $600 million to -- $660 million to $670 million. Our 3 areas of focus, which we have discussed consistently, are: number one, to ensure the regulatory and commercial success of roxadustat; number two, to accelerate the development of pamrevlumab in 3 high-value indications: locally advanced resectable pancreatic cancer, Duchenne muscular dystrophy and idiopathic pulmonary fibrosis; and number three, to expand the clinical development pipeline by evaluating both internal and external opportunities that address unmet medical needs. One of our most exciting and most late-stage project is roxadustat. This -- when it comes to roxadustat, we've launched roxadustat for anemia associated with chronic kidney disease in China and Japan, both for NDD and DD, and it has been submitted in the U.S. We're expecting the outcome on July 15, 2021. In the EU also, the regulatory review is ongoing, and we anticipate a decision in mid-2021. We have additional regulatory submissions in a number of different countries. And in addition to anemia associated with chronic in disease, we have 2 additional indications that we are pursuing, including chemotherapy-induced anemia, where our Phase II study enrollment has been completed, and anemia associated with myelodysplastic syndromes or MDS, where the Phase III study is currently enrolling. In the case of pamrevlumab, which is another first-in-class program, we have 3 indications that we are pursuing locally advanced unresectable pancreatic cancer, which is enrolling and is enrolling very well. Duchenne muscular dystrophy with LELANTOS-1 and LELANTOS-2 non-ambulatory and ambulatory, both Phase III studies enrolling. And finally, idiopathic pulmonary fibrosis, ZEPHYRUS or ZEPHYRUS-1 and the ZEPHYRUS-2 study, both of them enrolling. As we have seen some of the COVID pandemic improve in the U.S., we've seen enrollment, in particular, when it comes to the first ZEPHYRUS study basically pick up, which is important to us. We are showing now the overall -- our overall efforts when it comes to our marketed and late-stage portfolio. As you can see, we have a number of different opportunities with -- as we look at all of them together. Each one of these opportunities is very meaningful, but collectively, they do represent a very significant opportunity for FibroGen to deliver value to shareholders and, of course, make a meaningful difference to patients. We have disclosed already our clinical trial time lines for many of our efforts here. I think it's -- we are not disclosing any type of change versus what we have disclosed before. But as you can see, we have a number of disclosures that are expected, or readouts that are expected to happen between roxadustat in the case of chemo-induced anemia in the second half of this year. In the case of myelodysplastic syndromes, and this is a Phase III study, in the first half of 2022. And then the first readout for pamrevlumab for LAPC and DMD expected to happen in the second half of next year. I think it's important that we note that roxadustat is a very unique opportunity in that it has the potential to truly revolutionize the treatments of anemia of CKD. We view roxadustat as truly that basically enabling, I think, patients to have their bodies stimulate the coordinated erythropoiesis type of response by activating the HIF pathway. So very excited about what this product is already accomplishing in the markets where it has been launched, but what it could do in a number of other geographies, including the U.S. and Europe, where we expect regulatory decision this year. I think it's important that we do share the collaboration economics for roxadustat. Without going into a lot of detail, we basically -- we have partnered this product across the world. We have 2 partners in AstraZeneca and Astellas that are doing an excellent job and collaborating very well with FibroGen. And outside of China, we basically have a royalty type of agreement. In China, we do have a 50-50 profit split. I think it's important to note that all roxadustat R&D and commercial costs are basically reimbursed outside of China, which it's important to note as we go forward. Finally, let me make a few comments about China and our launch there and how we are viewing the overall market. Clearly, this is the largest dialysis market in the world. Important to note that the government in China, the Ministry of Health recently has established a new guidelines and looking at hemoglobin targets and so forth. And we view this as an opportunity to basically ensure that patients are indeed getting to the appropriate guidelines and an opportunity for roxadustat overall. Clearly, the dialysis opportunities, the opportunity where we expected faster uptick as we launched, but we view the NDD opportunity to be an opportunity, yes, that requires that we build the market. But over time, we expect that opportunity to be larger than the one in the house. Our revenue in China has consistently increased quarter-on-quarter. We -- roxadustat net sales to distributor were $43.5 million in the first quarter of 2021. And we can see this is a significant increase from the $5 million that we booked the first quarter after a reimbursement in China of $5 million in the first quarter of 2020. This is driven by both listings in hospitals, where the product can be accessed, but also adoption within those hospitals by prescribers. So very excited about what we see basically in China. Important to note that out of the $43.5 million of net sales to distributor in China, FibroGen now, under the updated agreement with AstraZeneca, we book -- the net product revenue that we booked from China, for roxadustat in China, was 15.4. And as we look at the market, it's pretty clear that roxadustat is becoming an incredibly relevant option in this market. It's now the #1 brand by value in the anemia of CKD markets with a 27% share in that market. I think something that is important to note, not covered in this slide, is that when we look at the overall market, we've seen the market truly expand in a very significant way. Not only is the market expanded. But actually, even when we take roxadustat, and we are just looking at ISA market, so the ISA sales, actually ISA have accelerated since the launch of roxadustat, which is a great signal that many more patients are being treated, and the opportunity to do so across both dialysis-dependent on non-dialysis-dependent segments. Finally, I'd like to finish our presentation today basically briefly highlighting some of the upcoming milestones that we have coming up. In the case of roxadustat, when it comes to approvals, potential approvals in both U.S. and Europe, we expect both of those in 2021. The -- I shared the chemo-induced anemia top line data in the second half of this year and anemia associated with MDS in the first half of 2022. In the case of pamrevlumab, we -- as I mentioned already, we do expect top line reception data for locally advanced unresectable pancreatic cancer in the second half of next year, and the LELANTOS non-ambulatory Phase III study top line data in the second half of next year as well. So clearly, a number of pivotal and important events for shareholders and patients. Very excited about these milestones that are coming up so we can add as much value and reach as many patients as possible. With that, I'm going to conclude -- I'm concluding our presentation today, and I'm going to ask if there are any questions.

There are currently no questions submitted at this time.

Very good. Since there are no questions about our company business. We will now end the meeting. And I want to thank everyone for all of you for attending FibroGen's 2021 Annual Stockholder Meeting. Thank you.