ProKidney Corp. (PROK) Earnings Call Transcript & Summary

Greetings. Welcome to the ProKidney Corporate Update Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. At this time, it is now my pleasure to introduce your host, Ethan Holdaway, Senior Director, Corporate Development and Investor Relations. Please go ahead, sir.

Thank you, operator. Good morning, everyone, and welcome to ProKidney's Corporate Update Conference Call. Earlier this morning, we issued a press release that provided interim REGEN-007 Phase II trial results and several clinical and operational updates. Today's presentation is now available on the Investors section of our website, and a replay of the call will be available approximately 1 hour after completion. Joining me today are ProKidney's CEO, Dr. Bruce Culleton; our CFO, James Coulston, and our Chief Business Officer, Nik Pereira. Following the presentation, we will open the call for questions. Before we begin, I'd like to remind everyone that we will be making forward-looking statements during the presentation today. I encourage you to refer to the most recent SEC filings regarding risk factors associated with these statements. I would now like to turn it over to ProKidney's CEO, Dr. Bruce Culleton. Bruce?

Thanks, Ethan. Good morning, everyone. Today, it's my absolute pleasure to present exciting interim data from the Phase II REGEN-007 clinical study and several important operational updates. But first, let me tell you a little bit about ProKidney and ProKidney's clinical study program. Our company's goal is to preserve kidney function and have a meaningful impact on the lives of patients with advanced chronic kidney disease. Our product is rilparencel, also known as REACT. It is a proprietary autologous cell therapy that is generated from a patient's own kidney cells. The patient cells are harvested via traditional biopsy and expanded in our manufacturing facility. These expanded cells are then cryopreserved ahead of being injected into the patient's renal cortex via a percutaneous outpatient procedure. We have an experienced leadership team with several new faces leading critical functions, as we have announced recently, and we have made substantial progress in the last 6 months, which we are happy to share with you today. Let's take a step back and review why rilparencel could be very special. As you can see, chronic kidney disease is a significant problem. While 1 in 7 adult Americans have some degree of CKD, there are more than 3 million Americans who have type 2 diabetes and advanced Stage 3b and 4 CKD. Treatment options for patients -- for these patients have improved over the last 5 years, but no therapy currently provides long-term preservation of kidney function and treated patients continue to develop kidney failure. Within this large population, I'd note that more than 135,000 CKD patients in the U.S. continue to progress to dialysis every year. There is a substantial opportunity with rilparencel as we believe we can preserve kidney function to delay or eliminate time on dialysis. Rilparencel is different than other small molecules and biologics, and we'll walk through new clinical data this morning that will show why we believe rilparencel may be able to preserve kidney function and possibly provide greater benefit in high-risk CKD patients. The new data being released today complements the recently announced Phase II 002 study results that was presented as a late-breaking clinical trial at the 61st Scientific Congress of the European Renal Agency. Rilparencel's clinical study program is robust, as highlighted in this chart. We've previously published data showing rilparencel potential to delay dialysis from the Phase II 003 study of patients with Stage 4 and 5 CKD. This, combined with preclinical data and interim data from Study 002, we initiated our pivotal Phase III program, the PROACT 1 and PROACT 2 randomized controlled trials. As just mentioned, we recently presented final results from the 002 study, where a strong efficacy signal in a subgroup of patients with the highest risk of kidney failure was observed. This data helped inform the decision to amend the PROACT 1 study protocol. Today, we'll be focusing on interim data from our REGEN-007 study. As you can see from the images on this slide, the 007 study uses a cryopreserved rilparencel product, and injections are performed both -- in both the biopsy kidney and the contralateral kidney, thus replicating the approach in our Phase III program. Now, before discussing the study results, we are delighted to give you an update on manufacturing and the Phase III clinical program. In November of last year, we announced a pause in our manufacturing to address an audit of our manufacturing facility. Importantly, this pause was not due to a clinical safety event. The audit was performed by our contracted, qualified person to evaluate our readiness for release and distribution of rilparencel to the EU. Certain deficiencies in the documentation of the quality management systems, including improvements and validation of GMP systems, had to be addressed prior to release and distribution to EU clinical sites. During this pause, we optimized or improved many of our capabilities to meet EU and global standards for our Phase III program and future commercial manufacturing. Effective June 1, we restarted manufacturing under GMP. We've also been closely working with the EU QP auditor, and we anticipate QP Declaration of Equivalence to EU good manufacturing practices by the end of this month. This has allowed us to resume the Phase III clinical study program. For PROACT 1 study, an amendment was filed with the FDA in March to enrich the study with more late-Stage 3b and Stage 4 CKD patients. Central IRB approval for this amendment has been received and sites are now open for enrollment. Just last week, patients were screened under this amended protocol. Sites have also been activated in Europe in anticipation of receipt of QP Declaration of Equivalence to EU GMPs. I cannot be more proud of our internal teams that have delivered ahead of schedule on these critical milestones. We are now advancing our clinical plan. Enrollment is complete in REGEN-007, and you will see interim results today. Additional time is required to allow this data to mature. We expect to present mature data publicly in the first half of 2025. With the resumption of our Phase III studies, we are now focused on accelerating recruitment in those studies. Before I share the 007 interim results with you, for background and context, let me share with you a framework for the classification of chronic kidney disease. The foundation of this work started over 20 years ago by the National Kidney Foundation. For the first time, this work provided standard definitions for CKD and an approach to risk stratification. This general approach is now used globally and accepted by guideline committees around the world. If you look at this heat map, the rows represent kidney function and the columns represent kidney injury. Together, they predict the risk of kidney failure as shown in the different colors. As a company focused in the highest risk area, patients who have moderate to high kidney injury and moderate to severe decrease in their kidney function, that's our focus. This is where we believe we are distinctly different from many small molecules and where biologics may operate, as shown here with the dashed oval lines. Today, clinical priorities for patients with CKD 4, stage 4, are largely focused on treating comorbidities such as anemia or abnormalities in mineral metabolism and preparing patients for dialysis or transplantation. We also know that payers acknowledge a specific pain point with Stage 4 CKD. They know these patients have the highest risk to progress to kidney failure and the need for dialysis. As I stated earlier, this is a goal for ProKidney, to reduce or eliminate time on dialysis, which is life-altering for patients and their care partners and costs commercial payers between $110,000 and $240,000 per patient per year for total cost of care. To further support our focus on these high-risk patients, we took a look at several landmark CKD studies that have been published over the last several years, including the [FLO] study main results, which were released at the end of May. Here's a selection of them. Of note, 3 papers involved interventions using SGLT2 inhibitors, all published in the New England Journal of Medicine. There's a paper using selective MRA, as well as the [FLO] study, which investigated semaglutide, a GLP-1 in patients with diabetic CKD. And as you can see in all of these landmark papers, there was little focus on patients in Stage 4 CKD. That's our focus. And we believe there's an unmet medical need in this population despite the recent advances in CKD therapy. Going into more detail on one of these published studies, specifically the study that looked at the SGLT2 inhibitor, dapagliflozin, versus placebo that was published several years ago in the New England Journal of Medicine, there are 3 key points here that I want to draw your attention to. But first, although these new SGLT2 inhibitors are a big step forward, patients still lose kidney function, and this is shown on the left panel of this slide, which looks at change in estimated glomerular filtration rate over time. This is also the same efficacy measure in our Phase II study that I'll present today. In this panel, here you see the Dapa-treated patients losing approximately 4.5 mls per minute in eGFR by 12 months and 5.5 mls per minute by month 18. We have another slide in the appendix that shows similar results in 2 of the other SGLT2 inhibitor landmark trials. A second point is that, even after 2 years, there's only a very small difference in eGFR between patients treated with Dapa and placebo, less than 1 ml per minute per year. Not shown here, but I'd also like to point out that the difference in decline in eGFR is approximately 1 ml difference per year in the [FLO] study of semaglutide versus placebo. The third point, as shown on the right panel, is the fact that patients who are treated with SGLT2 inhibitors, or ACE inhibitors, or angiotensin receptor blockers, or GLP-1s for that matter, a substantial residual risk remains despite the intervention. While the blue line in the right panel shows that Dapa reduces those events versus placebo, it's important to recognize that these patients on Dapa still had events, still ended up on dialysis and still succumbed to their disease. In fact, 19 patients need to be treated with Dapa to prevent 1 primary outcome event, highlighting the fact that there remains a residual risk, a big unmet need in this population and a gap that we believe we can fill. Now that we've clearly articulated the background and the opportunity for ProKidney, let's walk through the latest update on our Phase II REGEN-007 clinical trial. Let me take you through the design of REGEN-007, a Phase II study. The study began in 2021 and completed enrollment in Q2 of 2023. Patients with CKD caused by diabetes were randomized after kidney biopsy to 1 of 2 treatment groups. Group 1 replicates our Phase III clinical program dosing regimen. initial injection of cryopreserved product into the biopsy of kidney and the second injection 3 months later in the contralateral kidney. The study is designed for follow-up visits every 3 months out to 18 months following the second injection. Group 2 followed an exploratory dosing regimen in which the second dose was provided only after a physiological trigger was hit, in this case, after a sustained decline in EGFR, more than 20% from baseline, or a sustained increase in urine albumin excretion of more than 30% from baseline. The focus today is Group 1 because we believe this treatment schedule gives us an early window into our Phase III clinical study program. We will not spend time on Group 2 today, but I will say that 25 patients received 1 injection in this group, and 12 patients received a second injection anywhere from 5 to 15 months after the 1st. 9 of these second injections followed the UACR trigger and 3 followed the eGFR trigger. Although this data is also maturing, it does appear that we shouldn't wait this long for patients to receive the second injection. This data supports our prior decision to schedule a second injection 3 months after the first injection, as we have done in our Phase III clinical study program. As we've stated over the last 6 months, the primary reason for this interim analysis is to assess efficacy in Group 1 patients who've had 12 months' follow-up after their second injection. We wanted to have a high degree of confidence in this analysis, so we waited until at least 10 participants met this criteria. We also assess safety in all subjects that received at least one injection. Here's a description of the flow of subjects in Group 1 to get our reasonably mature data set for our primary interim analysis. 26 subjects in Group 1 were biopsied, 2 biopsies had insufficient cellular material, and these subjects didn't continue in the study. 24 subjects had an initial injection with rilparencel and 23 subjects had a second injection with one subject developing a bleeding risk and contraindication prior to the second injection. Of the 23 subjects that received 2 injections, 1 subject has died from a cardiovascular cause that was unrelated to rilparencel or the procedures. As of today, we have only this one early termination in Group 1, which provides us even more confidence in the data. 13 subjects have completed at least 12 months follow-up after the second injection. These subjects are the focus of the analysis today. Of note, we anticipate that 9 more subjects in this group will have 12 months follow-up after the second injection in the coming 12 months. We will continue to follow all of these subjects for 18 months after their second injection. The characteristics and demographics of the study population are presented on this slide. Data from all 13 subjects are shown in the middle column. In the right column, data from 10 subjects who met key eGFR and UACR inclusion criteria from our Phase III program are shown. Please note these 10 participants are a subset of the 13. The average baseline eGFR was approximately 30 mls per minute in the 13 subjects and somewhat lower in the 10 subjects meeting the Phase III inclusion criteria. Urine albumin excretion was also a little worse in these 10 subjects. Of note, less than 1/3 of subjects were using SGLT2 inhibitors at baseline, which reflects the slow adoption of these drugs in patients with advanced CKD in the 2021/2022 time frame. 6 patients were treated with the GLP-1 at baseline. 3 of these patients stopped taking this therapy within 4 months of the first injection. REGEN-007 had no within-study control arm. To help contextualize the results, we looked at published data from recent landmark trials, as we presented earlier. In these reports, average EGFR declined from 3 to 6 mls per minute per year for the first year in the active treatment groups and placebo-treated patients. It varied by study and by study population. So we also explored how kidney function would change in match controls of these 13 subjects in this analysis. In partnership with Dr. Nav Tangri, these 13 subjects, one by one, were matched approximately 10:1 with diabetic patients from recent CKD landmark trials. Dr. Tangri and team matched each of the 13 subjects with control subjects using overall kidney failure risk for matching criteria and SGLT2 inhibitor use. On this slide, we provide additional information on Dr. Tangri and the Klinrisk founding team. As you can see, Dr. Tangri is a global leader in risk prediction within the kidney space. The analysis of the data by Klinrisk was independent of ProKidney. And here are the results of the matched analysis. 125 similar subjects from prior landmark studies were identified. 12-month decline in eGFR was 4 mls per minute, and 18-month decline was just greater than 6. This triangulates nicely with historical published data in diabetic patients with CKD. Please keep minus 4 and minus 6 in mind as we present the REGEN-007 data. On this slide, we show the main efficacy results of the interim analysis of REGEN-007. The top panel shows the average eGFR change from baseline and the bottom panel shows average EGFR at each time point. Month 0 is that first injection, month 15, 12 months after the second injection. We also have 3 months of additional follow-up in 12 subjects that we are showing here as well. This takes the data out to 18 months after first injection. As you see, the average decline in baseline with 18 months of follow-up was minus 1.3 mls per minute. As a reminder, in the match control analysis, the 18-month change was minus 6.2 The lower panel here tells the same story, and the curves are almost superimposable. We believe this data reflects the potential to preserve GFR in patients with diabetic CKD-treated patients with rilparencel. This slide is presented in a similar way to the last, but now for the subset of 10 subjects that would have met the eGFR and UACR inclusion criteria in our Phase III program. Numerically, the average eGFR change from baseline is less in these 10 subjects than the full 13-subject analysis. But really, this tells us a similar story and it's one reason why we feel confident in our Phase III program. As you can see, the average eGFR change from baseline in these 10 subjects at 18 months since the first injection was 0.6 mls per minute. This level of decline in kidney function over this time period is similar to what one would expect as part of the normal aging process in older adults. For full transparency on this slide, we show results for all the subjects in Group 1 that received at least 1 injection. This shows average eGFR change from baseline in all subjects in the top panel and Phase III eligible subjects in the bottom panel. Please note the declining number of subjects over time. This is due to subjects that continue to be followed as they progress through the study. The number of early study terminations has been limited to one subject who died of a cardiovascular event 4 months after their first injection. Although this data is immature, we're not seeing anything to make us believe our overall assessment will change. Finally, here, we present a summary of the serious adverse events as of May 2024. All subjects biopsied and injected are shown here. These results are consistent with our existing safety profile and are similar, if not better, than kidney biopsy safety reports in the literature. In summary, in Group 1 participants with at least 12 months follow-up after a second rilparencel injection, kidney function was preserved for 18 months. Similar results were observed in participants who were evaluated under Phase III inclusion criteria. Our bilateral dosing of cryopreserved product showed safety profile consistent with prior studies and comparable to a kidney biopsy. We look forward to providing full results in the first half of 2025. I'd now like to hand this back to the operator. Thank you.

We'll now be conducting a question-and-answer session. [Operator Instructions] Thank you. And our first question is from the line of Justin Zelin with BTIG.

Congrats on the very impressive results here. It's great to see stabilization out to 18 months. Just was wondering about the Phase III PROACT studies. How should we think about the control arm performance here amongst the patients? Is there any good data to look towards? And when might you look to see separation of curves in those studies?

Thanks for your question, Justin, and your comments. In the Phase III program, our primary composite event is onset -- time to onset of dialysis, sustained dialysis, kidney transplantation, renal or cardiovascular death or a greater than 40% decline in eGFR. So obviously, in 007, we looked at a decline in eGFR, which we are very happy with our results in this study. Certainly, if these results are to continue into our Phase III program, then we expect this decline -- this benefit on decline in eGFR to have a direct impact on several components of our primary composite endpoint, including time to dialysis, time to transplant and the 40% drop in eGFR. This certainly -- Justin, this certainly gives us a lot more confidence that we will hit our predefined hazard ratio for rilparencel versus our placebo group. So it certainly gives us a lot more confidence and I think derisks the overall Phase III program.

That makes a lot of sense to me. And if I could just ask about the patient death, that experience in the study, that unfortunate event, can you just elaborate just why you think it was not related to treatment?

Yes. We obviously went back and looked over that data, Justin, and so did the primary investigator at the site. And the cardiac event occurred a month after the second injection, 4 months after the fourth -- after the first injection. And we couldn't see any direct relationship with our therapy or with the procedures. I would like to point out that cardiovascular disease in patients with diabetes and chronic kidney disease is a very substantial problem. And the risk of cardiovascular events is compounded even more when you combine both diabetes and chronic kidney disease.

Congrats again.

Our next question is from the line of Jonathan Miller with Evercore ISI.

Congrats on getting to this data. It's a really important milestone. I'd love to follow up on that question about the Phase III. Obviously, we've seen a lot of results recently from SGLT1s, from the SGLT2s that are not fully reflected in this patient population. You mentioned slow adoption of those in the recent years. But what are your expectations for background SGLT2 treatment in the Phase III population, especially with [Product 1] enrolling in the U.S.?

So Jon, thanks for the questions. So we do expect a greater background use of Group 1s and SGLT2s in this population. Despite the fact that we're studying a more advanced CKD population where some of these agents have yet to be indicated, we understand that that's probably going to reduce the overall underlying risk in both the placebo and the intervention group. Now, when we consider that and we go back through all the data that we could possibly scrub to understand what the underlying baseline risk is, we still think the event rate is going to be high. We still have -- I think our assumption is around 13 events for 100 patient years being treated. So we expect that's still going to remain high, largely driven by some of the residual risk despite the background advances in therapy. So certainly on our mind, Jon, certainly something we've dug into, and we think we're in a good place and perhaps an even better place, looking at this data.

That makes sense. And I know the focus today, obviously, is on Group 1. But for Group 2, and I know this evidence you didn't show, one injection clearly didn't prevent decline entirely, given that there are 9 patients still getting that second shot. But qualitatively, can you at least say that the slope of the eGFR decline in that Group 2 is less than that negative 4 to 6 from the historical controls that you were citing?

Yes. So, Jon, just for your information, we have added an analysis of the Group 2 data in the appendix of the submitted -- of the 8-K deck that's on our website. What I can say about that is that, in patients who got one injection, their change in eGFR seems to be somewhat in between those that got 2 injections in Group 1 and what we'd expect from a placebo. So it seems to be somewhat in between. But it's also obvious, when we look at that data, that it's -- there's really no need to wait for that physiological trigger. It seems like we're on track with regards to our treatment schedule and our Phase III program.

Makes sense. And then maybe just one final one. Obviously, this is something that you've talked about in the past. Can you just remind us, when we look at the SGLT2 trials, what's driving the immediate drop in eGFR in the first measured period? Obviously, we see an immediate drop and then it looks like the slope moderates in SGLT2s. What's driving that initial drop?

Yes. It's -- I know there's going to be -- there's more detail behind what I'm going to say, Jon, but I think it's similar to renin-angiotension systems agents too where there's a hemodynamic effect that has almost like an immediate perfusion, creates an immediate decrease in perfusion within the glomeruli. That leads to an early drop but a protective impact over time. That's my understanding.

Our next questions are from the line of Kelly Shi with Jefferies.

This is [Clare] on for Kelly. Thanks for taking my question. So just looking at the eGFR curve, the curve starts to trend up at 15 months and back down as 18 months and assess [ if ] it's influenced by one patient that are covered measurements at month 15. Could you provide more color on this patient? And have you done any analysis on what the curve might look like without that patient?

Yes. Thanks for your questions. So we are obviously also interested in this time point when we first saw the analysis. And when we dug into the data, it was driven by one patient who had a substantial variability in this EGFR around that time, an abrupt decrease in the eGFR and then an increase in the following months. And given the small sample size, these outliers have more of an impact on summary estimates like the average change in eGFR. It's not uncommon for patients with kidney disease and diabetes, but kidney disease in particular, to have abnormalities of their left ventricular function. And when this happens, should that left ventricular dysfunction worsen, then that has a direct impact on the kidneys because the kidneys rely upon the heart for perfusion. So this is something that you see clinically on a pretty routine basis, at least in subspecialty clinics where a lot of these patients are followed. It's really related to heart function and kidney perfusion that drives some quite substantial, at times, variability in kidney function.

Okay. Got it. And just a quick follow-up. As you start resuming Phase III PROACT 1 and 2 study, would you expect an increased number of patients who are GLP-1 experienced? And also, do you allow GLP-1 use along with the REACT therapy treatment? I just kind of want to get your thoughts on whether this might -- outcome might be confounded by the concurrent GLP-1 use.