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Presentation

FibroGen, Inc. misses on earnings expectations. Reported EPS is $-0.57 EPS, expectations were $-0.42. FibroGen, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Thank you for standing by and welcome to FibroGen’s Fourth Quarter and Full Year 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today’s call is being recorded. I would like to turn the call over to your host, Mr. David DeLucia, Vice President of Investor Relations. Please go ahead.

David DeLucia: Good afternoon, everyone. Thank you for joining today to discuss our fourth quarter and year-end 2023 financial and business results. I’m David DeLucia, Vice President of Corporate FP&A and Investor Relations at FibroGen. Joining me on today’s call are Thane Wettig, our Chief Executive Officer; Juan Graham, our Chief Financial Officer; Dr. John Hunter, our Chief Scientific Officer; and Chris Chung, our Senior Vice President of China Operations. Following our prepared remarks, we will open the call to your questions. I would like to remind you that remarks made on today’s call include forward-looking statements about FibroGen. Such statements may include but are not limited to, our collaborations with AstraZeneca and Astellas; financial guidance; the initiation, enrollment, design, conduct and results of clinical trials; our regulatory strategies and potential regulatory results; our research and development activities; commercial results and results of operations; risk related to our business and certain other business matters.

Each forward-looking statement is subject to risks and uncertainties that could cause actual results and events to differ materially from those projected in that statement. A more complete description of these and other material risks can be found in FibroGen’s filings with the SEC, including our most recent Form 10-K and Form 10-Q. FibroGen does not undertake any obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise. The press release reporting our financial results and business update and a webcast of today’s conference call can be found on the Investors section of FibroGen’s website at www.fibrogen.com. With that, I would like to turn the call over to Thane Wettig, our Chief Executive Officer.

Thane Wettig: Thank you, Dave. Good afternoon, everyone and welcome to our fourth quarter and year-end 2023 earnings call. Although 2023 posed numerous challenges for our organization, we are excited about our prospects in 2024 which we believe to be a pivotal year marked by a number of important clinical readouts across our oncology pipeline and continued growth of our roxadustat franchise. On today’s call, I will focus our stakeholders on the 4 strategic pillars shaping our company’s future trajectory. Additionally, I’ll offer insights into the progress of our pamrevlumab and roxadustat programs. Dr. John Hunter, our Chief Scientific Officer, will then review our exciting oncology pipeline. Last, Juan Graham, our CFO, will review the financials.

After which, we will open the call for your questions. Starting on Slide 3. FibroGen has 4 key strategic pillars that we believe offer significant value today. First is pamrevlumab, where we are expecting readouts from 2 pivotal Phase 3 studies in pancreatic cancer in the coming months. In January, we announced the graduation and completion of the pamrevlumab arm in Precision Promise, Pancreatic Cancer Action Network’s Phase 2/3 adaptive platform trial for metastatic pancreatic cancer, where we anticipate top line data in the second quarter of this year. We are now anticipating top line data from our ongoing LAPIS Phase 3 trial in locally advanced pancreatic cancer in the second quarter of 2024 as well. Pancreatic cancer is a disease with substantial unmet medical need and represents a significant commercial opportunity for pamrevlumab which has demonstrated effect in both preclinical and early clinical studies which we will detail in a moment.

Second is roxadustat. Roxadustat is approved in over 40 countries, generates significant net revenue and positive cash flow and provides FibroGen with material and growing economics through our partnerships with AstraZeneca and Astellas Pharma. Today, we announced that FibroGen has regained the rights to roxadustat from our partner AstraZeneca in the U.S. and ROW territories, excluding China and South Korea. This allows us the opportunity to potentially partner roxadustat in certain indications with high unmet needs, such as anemia and myelodysplastic syndromes which I will touch on later in the call. Third is our early-stage oncology pipeline. We are very excited about the potential of these programs. FG-3246 is a first-in-class, potent antibody drug conjugate, or ADC, for the treatment of metastatic castrate-resistant prostate cancer.

This program also includes the development of an associated CD46-targeted PET biomarker. We anticipate releasing additional data from our FG-3246 Phase 1 monotherapy trial in the coming weeks. In addition to FG-3246, we are also undertaking IND-enabling activities on two innovative oncology antibodies, with the intention of filing an IND for FG-3165, our anti-Galectin-9 monoclonal antibody in the first quarter of 2024; and FG-3175, our anti-CCR8 monoclonal antibody in 2025. The fourth pillar is our strong cash position. We finished the year with approximately $248.1 million in cash, cash equivalents and accounts receivable. In the fourth quarter, one quarter earlier than expected, we successfully executed on our company-wide cost reduction plan which provides us with the ability to achieve several key milestones across our portfolio.

We have taken the necessary steps to improve our strong financial position and we’ll continue to focus on financial discipline. In summary, we believe there are a few biotechnology companies of our market cap that have such a compelling mix of commercial, late-stage and early-stage assets. When you combine our assets, our strong balance sheet and the quality of our talented colleagues at FibroGen, we believe that we have a strong foundation to drive significant shareholder value creation today and into the future. Moving to Slide 5. Pamrevlumab is a novel anti-CTGF human monoclonal antibody in clinical development for the treatment of metastatic pancreatic cancer and locally advanced unresectable pancreatic cancer or LAPC. Pamrevlumab has demonstrated dose and exposure-related responses in an early-stage pancreatic cancer trial and, having been studied in over 1,000 patients across various conditions, a favorable adverse event and safety profile.

I would now like to discuss the pamrevlumab opportunity in pancreatic cancer in more detail starting on Slide 6. Pancreatic cancer represents one of the largest unmet needs in oncology, with an annual incidence of nearly 0.5 million patients across the major regions combined. This includes approximately 60,000 PDAC patients in the U.S. There is an overall 5-year disease-free survival rate of only 12.5%. And for metastatic cancer, the survival rate is approximately 3%. Unfortunately, there have not been any major therapeutic advances for quite some time. On Slide 7, we provide an overview as to why we believe pamrevlumab can provide benefits to patients diagnosed with pancreatic cancer. Based on preclinical data, CTGF plays an important role in the growth and progression of pancreatic tumors.

Mouse pancreatic tumor studies have shown that pamrevlumab can have both direct antitumor effects and effects on the surrounding stroma, providing a strong clinical rationale for use in both locally advanced and metastatic pancreatic cancer. Moving to Slide 8. We would like to reference the data from our open-label dose escalation Phase 1/2 trial in patients with locally advanced stage 3 or metastatic stage 4 pancreatic cancer. Almost 90% of these 75 patients were, in fact, metastatic, with only 9 having locally advanced disease. Pamrevlumab was evaluated in combination with gemcitabine and erlotinib as first-line therapy. An important observation in the study was that enhanced clinical benefit was observed at higher drug exposure levels. Once drug plasma levels reached a trough threshold of 150 micrograms per ml, a number of important results were found.

The most notable result in this study was that 1-year survival was 37% for patients who had circulating pamrevlumab levels of 150 micrograms per ml or higher, versus 11% for those with lower plasma levels. These results in the higher-dose cohort patients included improved median overall survival and improved median progression-free survival. Moving to Slide 9. Pivotal trials are being conducted with pamrevlumab in both locally advanced and metastatic patients. These patients represent almost 90% of all diagnosed pancreatic cancer patients today, giving pamrevlumab the potential opportunity to treat a vast majority of patients across this devastating disease. Moving to Slide 10. In January, we announced the completion of the pamrevlumab arm in Precision Promise, Pancreatic Cancer Action Network’s Phase 2/3 adaptive platform trial for metastatic pancreatic cancer which evaluates pamrevlumab in combination with the chemotherapy treatments, gemcitabine and nab-paclitaxel, for patients with metastatic pancreatic ductal adenocarcinoma.

The Precision Promise trial is a Phase 2/3 registrational study that is being executed at the top pancreatic cancer centers in the United States. The primary endpoint of the Precision Promise trial is overall survival. Pamrevlumab is being evaluated in both first- and second-line therapy for metastatic disease. Moving to Slide 11. The Precision Promise study is comprised of 2 stages. In the initial stage of the study or stage 1, at least 100 patients with metastatic pancreatic cancer receive pamrevlumab in combination with gemcitabine and nab-paclitaxel. Guided by Bayesian principles, the graduation threshold for pamrevlumab was a protocol prespecified greater than or equal to 35% predictive probability of success for the primary endpoint of overall survival at the completion of the trial.

The pamrevlumab arm successfully graduated to Stage 2 in the third quarter of 2022 and an additional 75 patients were enrolled, receiving the same pamrevlumab treatment regimen as in Stage 1. All patients were dosed until disease progression and the final analysis is based upon the data collected for all patients up to 12 months after the last patient initiated treatment. The pamrevlumab arm of the study completed stage 2 of the trial last month in January of 2024. Pamrevlumab is the first experimental arm in the Precision Promise trial to meet this required threshold for graduation to stage 2 and we now expect to report top line data on 213 pamrevlumab-treated metastatic pancreatic cancer patients next quarter. On Slide 12. We provide an overview of the global Phase 3 LAPIS trial, a double-blind, placebo-controlled trial in 284 patients with locally advanced unresectable pancreatic cancer, comparing pamrevlumab to placebo in combination with standard of care chemotherapy.

The primary endpoint is overall survival and we now expect top line data from this study in the second quarter of 2024. As LAPIS is an event-driven trial, we have revised our timing based upon the latest information available to us. Since our last update, the pace of events has decreased which is a common occurrence in this type of oncology study. We are currently waiting for a sufficient number of events to lock the database and we’ll continue to provide regular updates to our stakeholders as the study nears completion. Moving to Slide 13. We show a snapshot of both pamrevlumab registrational Phase 3 studies. One important difference between the 2 studies is the dosing regimen of the Precision Promise study. Pamrevlumab is dosed in 28-day treatment cycles until disease progression or discontinuation which is distinct from LAPIS, in which pamrevlumab was delivered in a neoadjuvant setting and where it was dosed for up to 6 months.

We believe the ability to dose patients until disease progression in the metastatic setting provides the potential opportunity to amplify clinically meaningful increases in overall survival, driven by those patients benefiting from pamrevlumab treatment. On Slide 14, we review the U.S. commercial opportunity for pamrevlumab in pancreatic cancer. There have been limited treatment advances over the last 2 decades in both locally advanced and metastatic diseases, with immuno-oncology therapies providing benefit to a small subset of metastatic patients. Using straightforward assumptions, the total addressable market for pancreatic cancer in the U.S. represents a multibillion-dollar opportunity for pamrevlumab, if it can demonstrate a significant improvement in overall survival in either locally advanced or metastatic patients.

In fact, metastatic pancreatic cancer alone represents a larger market opportunity in the U.S. for pamrevlumab than we were previously forecasting for the IPF indication. Looking ahead, we expect results from both the Pancreatic Cancer Action Network’s Precision Promise registrational adaptive platform trial evaluating pamrevlumab in metastatic pancreatic cancer and from the LAPIS Phase 3 study in locally advanced disease in the second quarter of 2024. Moving now to roxadustat and Slide 16. Roxadustat continues to perform extremely well in China, where it is indicated for anemia of chronic kidney disease. Full year 2023 total roxadustat net sales in China by FibroGen and the distribution entity jointly owned by FibroGen and AstraZeneca was $284.1 million compared to $208.8 million a year ago, an increase of 36%.

This growth was driven by an increase in volume of 41%. Fourth quarter total roxadustat net sales in China by FibroGen and the distribution entity jointly owned by FibroGen and AZ was $66.5 million compared to $53.1 million in the fourth quarter of 2022, an increase of 25%. This growth was driven by an increase in volume of 36%. In July of 2023, our supplemental new drug application for roxadustat in patients with chemotherapy-induced anemia was accepted by the China Health Authority and we continue to expect an approval decision in mid-2024. If approved, FibroGen would receive a $10 million milestone payment from AstraZeneca. We believe this indication represents a meaningful incremental net revenue opportunity on top of the anemia of CKD indication.

Moving to Slide 17. Roxadustat continues to expand its category leadership in brand value share in China, rising to 42% in the most recent 3-month period ending in December of 2023. The potential addition of the chemotherapy-induced anemia indication would create a meaningful catalyst to both continued share and volume growth of roxadustat in China. Given that there have been several generic applications filed in China; I would like to reiterate the dynamics of the generic market more broadly in China and the exclusivity of roxadustat. The impact of a generic approval and launch in China is meaningfully different than in the U.S. market. Generic players face lead time and execution risk of market adoption after approval, as they need to be admitted into individual hospital formularies one listing at a time.

Originator products do not experience a meaningful deterioration in revenue until at least 4 generic products are approved. Even then, originator products in China have historically been able to maintain a stream of net revenues and profits after generics enter the market. Despite the expiration of our composition of matter patents in June 2024, we do not expect meaningful deterioration of the roxa business in the near term. In addition to the continued outstanding performance of roxadustat in China, the roxadustat launch in Europe has accelerated, showing robust quarter-over-quarter growth. We expect this growth to continue to accelerate given the fact that roxadustat is now fully reimbursed in all EU5 countries. Roxadustat is the only HIF-PHI indicated in the EU for the treatment of anemia of CKD in both non-dialysis and dialysis patients.

And with GSK’s decision to withdraw the MAA for daprodustat, roxadustat maintains its strong competitive position in the EU. Of note, we have recently been successful in defending roxadustat’s patent portfolio and now believe we have exclusivity into 2036, positioning roxadustat to continue its growth and market leadership over the next decade plus in the EU. Moving to Slide 18. Today, we announced that AstraZeneca returned all U.S. ROW roxadustat rights to FibroGen with the exception of South Korea and China. FibroGen’s collaboration agreement with AstraZeneca for roxadustat in China remains in place. Regaining the rights to roxadustat in the U.S. ROW territories allows us to pursue roxadustat development opportunities with potential partners in indications such as anemia associated with myelodysplastic syndromes.

On Slide 19, we highlight the potential opportunity for roxadustat in patients with anemia associated with MDS. There is a well-defined patient population and a clear clinical need given the current therapeutic alternatives which translates into a significant commercial opportunity. We look forward to initiating partnership discussions for roxadustat immediately. Moving on to Slide 20. In December, we presented data from the Phase 3 MATTERHORN study of roxadustat in patients with anemia of lower-risk myelodysplastic syndromes at the American Society of Hematology Annual Meeting. Although we missed the primary endpoint of transfusion independence, roxadustat demonstrated a numerical advantage relative to placebo. And looking specifically at results in patients with a higher transfusion burden at baseline, there was a statistically significant and clinically meaningful advantage in transfusion independence in patients treated with roxadustat versus placebo.

Based on these results, we continue to believe that roxadustat represents an important potential therapy for patients in the U.S. and other territories where it has not yet been approved. I will now hand it off to John Hunter, our CSO, to cover our early-stage pipeline. John?

John Hunter: Thank you, Thane. Moving to Slide 22 in a snapshot of our early-stage oncology pipeline, consisting of one Phase 2-ready ADC program for metastatic castration-resistant prostate cancer and 2 preclinical immuno-oncology programs. For today’s call, I will be focusing on FG-3246, a CD46-directed antibody drug conjugate in development for metastatic prostate cancer and potentially other solid tumors. To briefly address our immuno-oncology programs, we anticipate an IND filing for FG-3165, our Galectin-9-targeted antibody that prevents Gal9-mediated immune suppression later this quarter. We are currently performing IND-enabling activities for FG-3175, our anti-CCR8 antibody for depletion of tumor-infiltrating T regulatory cells and expect to file an IND in 2025.

On Slide 23 is an overview of FG-3246. FG-3246 is a potential first-in-class ADC for metastatic castration-resistant prostate cancer, colorectal cancer and other tumor types. FG-3246 binds to a cell receptor target that internalizes upon antibody binding and is present at high levels in prostate cancer and other tumor types but that demonstrates very limited expression in most normal tissues, making it an ideal ADC target candidate. Moving to Slide 24. FG-3246 is comprised of an anti-CD46 antibody, YS5, linked to the anti-mitotic agent, MMAE which is a clinically and commercially validated ADC payload. FG-3246 has demonstrated efficacy against CD46-expressing tumors in both preclinical and clinical studies. An associated PET imaging biomarker, PET46, utilizes the same targeting antibody as FG-3246 and is under clinical development at UCSF.

It is comprised of the YS5 antibody coupled to the radionuclide zirconium 89 and in preclinical studies, demonstrates specific targeting of and uptake by CD46-positive tumors. We plan to explore its potential use for identifying FG-3246 responsive patients in a Phase 2 trial that I will touch upon shortly. Moving to Slide 25. As we have stated in previous earnings calls, FG-3246 has demonstrated monotherapy clinical efficacy in multiple myeloma and metastatic castration-resistant prostate cancer. Interim data presented at ASCO 2022 from the Phase 1 trial in prostate cancer showed that 4 out of 21 evaluable patients had partial responses based on RECIST criteria at the 2 highest study doses. It also showed a PSA50 response rate of 45% in heavily pretreated patients who had a median of 5 prior therapies.

The safety profile for FG-3246 was consistent with other MMAE-based ADC therapeutics, with neutropenia being the most common adverse event. Additional data from this recently completed Phase 1 trial will be reported later this quarter. On Slide 26, we show ongoing and planned clinical trials for FG-3246. In addition to the Phase 1 dose escalation and expansion study referenced on the previous slide, there is also a combination study with enzalutamide that is currently being run at UCSF. The rationale for this combination is based on preclinical data demonstrating up-regulation of CD46 in tumor cells following enzalutamide treatment, therefore, potentially making them more responsive to treatment with FG-3246. Interim data from this trial is expected in mid-2024.

A trial for the PET46 biomarker in prostate cancer is in progress at UCSF. The goal is to develop a screening assay to select patients with high CD46 expression who are most likely to benefit from treatment with FG-3246. The biomarker will be part of a Phase 2 study run by FibroGen, in which approximately 100 patients will be enrolled following a PET scan with PET46. Patients will not be stratified at the start of the study but the correlation between PET positivity and FG-3246 efficacy will be assessed at the end of the study, with the potential to use the PET46 biomarker to stratify patients in a pivotal Phase 3 trial. We anticipate the initiation of the Phase 2 trial in metastatic castration-resistant prostate cancer in the second half of 2024.

I will now turn the call over to Juan Graham to discuss the company’s financials. Juan?

Juan Graham: Thank you, John. Before providing our financial update, I would like to remind everyone that full financial results are in our press release and our recently filed 10-K. I will begin my remarks with a revenue summary for both full year 2023 and fourth quarter of 2023, subsequently providing financial performance detail on our China business for 2023, along with 2024 guidance for our China operations. Finally, I will wrap up with operating and expense results and our cash outlook. For the full year 2023, total revenue was $147.8 million compared to $140.7 million for the same period in 2022, an increase of 5% year-over-year. These figures highlight the sustainability of the revenues from our roxadustat franchise as we have transitioned from higher development and license revenue in 2022 to higher commercial revenue in 2023.

For the fourth quarter of 2023, total revenue was $27.1 million compared to $34.4 million for the same period in 2022. The fourth quarter’s $7.3 million year-over-year revenue reduction was primarily driven by shipment timing of drug product revenue to Astellas of $5.4 million, reduction of development revenue from our roxadustat partners of $1.9 million and from changes in the assumptions of our China single-performance obligation model which adjusts prior and future revenue for changes in many variables such as forecasted future volumes sold, forecasted future price and forecasted foreign exchange amongst other assumptions. Diving deeper on the financial performance of our business in China, 2023 full year net sales of roxadustat by FibroGen and the joint distribution entity or JDE, owned by AstraZeneca and FibroGen, was $284.1 million compared to $208.8 million in 2022, a significantly healthy growth of 36% year-over-year.

In Q4 2023, FibroGen and JDE net sales were $66.5 million compared to $53.1 million in the fourth quarter of 2022, an increase of 25.2% year-over-year. Q4 revenue reflects distributor inventory adjustment due to the renewed NRDL price, representing an impact of $5.3 million or a 10% impact on growth year-over-year. As a reminder, our recent inclusion into the 2023 NRDL list came with a 7% price reduction. The sales performance of roxadustat in China substantiates the achievement of the highest-value shares since launch, at 42% of the category in Q4 2023. From total roxadustat net sales in China, FibroGen’s net transfer price from sales to the JDE was $88.6 million and $21.3 million for the full year of 2023 and Q4 2023, respectively. This compared to $68.8 million and $17.2 million for the full year and fourth quarter of 2022, respectively, an increase of 28.8% in full year 2023 and 23.8% in the fourth quarter of 2023.

As a reminder, net transfer price is the best approximation of FibroGen’s portion of the cash in our China operations. As a result, for full year 2023, FibroGen recorded $89 million in net revenue from roxadustat sales to the JDE and $11.9 million of direct-to-distributor sales from FibroGen China, totaling $100.9 million on a U.S. GAAP basis. For Q4 2023, Fibrogen revenue from roxadustat sales to the JDE was $20.7 million and $2.8 million of direct-to-distributor sales from FibroGen China, totaling $23.5 million in a U.S. GAAP basis. Our revenue growth highlights the continuous robustness in commercial execution and physician and patient adoption of roxadustat in China. For full year 2024, we are forecasting FibroGen China product revenue to be in the — to be between $120 million to $135 million on a U.S. GAAP basis which assumes an underlying forecast of roxadusat net sales in China to range from $300 million to $340 million.

Now moving down the income statement. Our operating costs and expenses for the fourth quarter of 2023 were $81.3 million compared to $100.5 million for the fourth quarter of 2022, a decrease of $19.2 million year-over-year, reflecting our reduction in expenses as previously communicated through clinical trial shutdowns, SG&A efficiencies and U.S. headcount reductions. Approximately 65% or $51.7 million of our operating expenses was on R&D expenses. Of this, approximately 59% was related to pamrevlumab, 32% allocated to support of our early-stage pipeline and the remaining 9% directed towards roxadustat development activities in the United States and China. During the fourth quarter of 2023, we recorded a net loss of $56.2 million or $0.57 net loss for both basic and diluted share, as compared to a net loss of $66.2 million or $0.70 per basic and diluted share for the fourth quarter of 2022.

On Slide 28, we highlight our performance against our prior savings guidance. I am pleased to announce that we have successfully achieved our cost reduction plan of approximately $120 million in total annualized expenses or approximately $30 million per quarter, one quarter earlier than expected. We now forecast our total operating expenses, including COGS, to be between $70 million to $80 million per quarter for the first half of 2024. Our operating expenses in the second half of 2024 will be determined by the outcomes of our 2 pivotal clinical trial readouts for pamrevlumab in pancreatic cancer. Now shifting towards cash. As of December 31, we reported $248.1 million in cash, cash equivalents, investments and accounts receivable. As we move forward, we expect our quarterly cash burn rate to reflect the reduction in operating expenses that we have been able to successfully achieve.

With the reduction in operating expenses and maintaining a disciplined capital allocation approach, as previously communicated, we expect our cash, cash equivalents, investments and accounts receivable to be sufficient to fund our operating plans into 2026. Thank you. And now I would like to turn the call back over to Thane.

Thane Wettig: Thanks, Juan. In closing, we are excited about our near-term prospects and the potential value they provide to stakeholders. To recap, we expect top line data from the following 2 pamrevlumab pivotal studies: the Phase 2/3 Pancreatic Cancer Action Network Precision Promise trial in metastatic pancreatic cancer in the second quarter of 2024 and the Phase 3 LAPIS trial in locally advanced pancreatic cancer also in the second quarter of 2024. Roxadustat continues to perform very well in China, where our sNDA has been accepted for the chemotherapy-induced anemia indication and our partner, Astellas, continues with the commercialization of roxadustat in Europe, Japan and other markets. Additionally, we are excited to regain the rights for roxadustat for U.S. ROW territories from AstraZeneca and we’ll be exploring potential partnering opportunities in MDS.

With our early-stage pipeline, we expect additional data from the Phase 1 monotherapy study of FG-3246 in metastatic castration-resistant prostate cancer later this quarter. We anticipate the initiation of a Phase 2 trial in mCRPC in the second half of 2024. We anticipate filing an IND for FG-3165, our anti-Gal9 antibody, in the first quarter of 2024. And we anticipate filing an IND for FG-3175, our anti-CCR8 antibody in 2025. Additionally, we have a strong balance sheet and expect our current cash position, as Juan said, to fund operations into 2026. In summary, we will continue to execute against our strategic priorities as we strive to attain a valuation that we believe is more reflective of our current and future roxadustat revenue stream, near-term pamrevlumab readouts in pancreatic cancer, our oncology pipeline and our strong balance sheet.

I would like to thank all the employees of FibroGen for their continued hard work and perseverance over the last few months. I would now like to turn the call over to the operator for Q&A.

Operator: [Operator Instructions] Our first question comes from the line of Andy Hsieh of William Blair.

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Andy Hsieh: Very intriguing development with the roxadustat right — or regaining roxadustat rights. So starting with roxadustat, looking at your guidance of 12% growth based on the JDE revenues, combined with the price reduction, so can we kind of extrapolate that you’re anticipating roughly about a 20% volume growth this year? And moving on to the CD46 ADC, look forward to the KOL call that you’re scheduling. The waterfall plot that was presented in — at ASCO 2022, there’s a pretty clear dose response. I’m curious about the Phase 2 program, at which dose you’re thinking about starting. I think in the presentation, it says something about the 1.2 milligram per kilogram as the minimally efficacious dose. But I guess, the dose response really was demonstrated at the 2.4. Just curious about the dosing scheme that you’re thinking about. And one thing about the Phase 2 design. Are you thinking about the prophylactic G-CSF administration for patients?

Thane Wettig: Andy, thanks much for your question. Regarding roxa volume growth in China, I think if you were to look at kind of the midpoint of the $300 million to $340 million guidance, then you’d be right in that ballpark from a volume growth perspective. We will be able to provide more guidance when we have clarity on the CIA indication and the approval of that indication as well. But I think that your math works out pretty well. As it relates to the Phase 2 design, regarding dose and prophylactic G-CSF, I’ll let John handle that question.

John Hunter: Thanks, Thane. Yes, just with regards to your question, so the 1.2 mg per kg in the Phase 1 trial was the dose where they saw biologic activity, as evidenced by the PSA50 responses. And they did see PSA50 responses in stable disease escalating up to those higher doses of 2.7 and 3 mgs per kg. With regards to the Phase 2 dose, we do want to dose at what we think the highest tolerable dose is. So we’re really going to try to balance the efficacy that we saw in the Phase 1 trial, along with some of the adverse event profiles that we’re seeing in our analysis of the data. We will share that information probably about the time that we are presenting the results from the Phase 1 trial.

Andy Hsieh: Got it. And if you don’t mind, let me squeeze in one more for pamrevlumab. So for the Precision Promise study, how does the top line results logistics will work out? So do you have to go back to PanCAN and kind of formulate some sort of disclosure strategy? Or it’s up to you or it’s up to them? So just kind of talk about that, just to inform investors what to expect.

Thane Wettig: Yes. Good question, Andy. And after I answer that question, I’ll turn it back over to John to address the G-CSF piece of your previous question as well. And so because it is a PanCAN-sponsored study, PanCAN will, in association with Berry and associates which is the world leader in Bayesian statistical design and analysis, they will do the analysis of the primary OS endpoint and then communicate that to us. And so again, because they are the sponsor of the study, they’re accountable for the statistical analysis plan. Now we’ll be working in close collaboration with them and we’re still working through some of the details as it relates to how the top line primary OS result will be communicated. But because it is a PanCAN-sponsored study, they’re responsible for that.

John Hunter: And Andy, just to address your question about the prophylactic G-CSF. We are looking at having prophylactic G-CSF as part of the Phase 2 study design. This was incorporated into the investigator-sponsored combination trial that’s currently running at UCSF. And so we’re looking at the results from that trial as we plan out our Phase 2 and start thinking about having G-CSF to prevent neutropenia in our patients.

Operator: Our next question comes from the line of Paul Choi of Goldman Sachs.

Paul Choi: I have two on 3246. And I guess with the Phase 1 monotherapy results imminent here, I guess, how would you direct investors in the Street to sort of think about interpreting the results? Would you just focus, as you seem to be emphasizing, just on the highest doses as potentially the most therapeutically relevant here or is the focus also on demonstrating a broader dose response? And then I had a follow-up question on the combination study.

Thane Wettig: Thanks, Paul. John, do you want to go ahead and take?

John Hunter: Yes. Thanks for the question, Paul. So in looking at the broader data set that was presented at ASCO and also what we plan on rolling out with the completed Phase 1 trial, the objective responses were all seen at the highest doses. But the PSA50 responses which are also considered very important in this disease, we’re seeing down to 1.2 mgs per kg. And then looking at the progression-free survival data which we’ll be sharing later this quarter, we have seen that there were some durable responses even at some of the lower doses. So I wouldn’t focus entirely on the highest doses. I would look at the broader data set. Obviously, we’re going to need to settle on a Phase 2 dose that we move forward with. But as I had mentioned in my previous answers, we are taking safety into account together with the efficacy that was seen.

Thane Wettig: Yes. And then Paul, maybe one other comment to tag on to what John said. Recognizing that the Phase 1 cohort was a heavily pretreated patient population with a median of 5 lines of therapy prior to receiving FG-3246, I think there are some things you can interpret relative to the Phase 1 data and perhaps some things that we’ll have to wait until we see the Phase 2 results because we’re going to be studying this in a different patient population. We’re not going to be waiting for patients who have been pretreated with that many courses of therapy prior to exposing them to FG-3246.

Paul Choi: Great. And then as a follow-up, you referenced the UCSF-sponsored study in combination with Xtandi here and recognizing that study is investigator-driven and not totally in your control but it is an earlier population. So I guess, as you think about the pending results from the monotherapy study versus potentially going in earlier lines with the combination program with Xtandi and/or other agents, how would you rank order prioritizing those developments in terms of advancing to Phase 2 studies? Would you want to wait till you see the combination results out of UCSF?

John Hunter: Yes. Thanks, Paul. Great question. We do want to see at least some of the data out of UCSF before we would prioritize that relative to the monotherapy trial. Obviously, if we do see a really decided clinical benefit with the combination, that would be a pretty high priority for us moving forward in planning our clinical trials.

Thane Wettig: And then knowing that there’s just tremendous opportunity across the entire spectrum of patients with prostate cancer, so I hope we have to make those trade-off decisions, Paul.

Operator: Our next question comes from the line of Jason Gerberry of Bank of America.

Unidentified Analyst: This is Gina [ph] on for Jason. I just had a couple on FG-3246. So on the Phase 1 top line data, could you just frame the scope of the update in terms of patient number and duration of follow-up? And if you get, say, 2 to 4 responses in this dose expansion cohort, would you consider this a favorable advancement given how heavily pretreated the patients are? And I just have one follow-up to that.

John Hunter: Yes. Thanks for the question. Just with regards to the scope of the data that we’ll be talking about when we release the results, we’re going to focus pretty much on the same readouts that were shown at ASCO 2022, with the objective responses and the PSA50 responses. But really, a pretty standard way of looking at data currently in metastatic castration-resistant prostate cancer is the composite response rate that includes either the PSA50 responses and/or the objective responses. One thing that we will have more mature data on will be in progression-free survival. A lot of the patients who were on study at the time of ASCO, obviously, have extended out in terms of their treatment cycle. So we will have that data as well.

In terms of what we’ll see as being favorable, as Thane mentioned, this is a very heavily-pretreated group of patients, so — and it’s hard to do direct comparisons against other drug trials because the patient populations vary. But given the data that was presented at ASCO, we viewed that as very favorable. And I think an extension of those results to the end of the Phase 1 trial, we would view as, in fact, very favorable.

Unidentified Analyst: Got it. And just curious if there’s a reason that in the initial data cut of the Phase 1 data, there wasn’t a correlation between PSA50 response rate and CD46 expression. Curious if you have an explanation for that? And also, maybe how we should be thinking about how that data fits into the context of identifying patients with CD46 expression as a part of your development plan?

John Hunter: Yes. No, that’s a very good point. The IHC assay that was used to assess CD46 expression in those patients may not be representative of what we would have seen had we been able to do the IHC with the targeted antibody itself because there are some differences that have been noted in IHC with YS5, the targeting antibody and some of the commercially available reagents that work better on formalin-fixed tissue. One of the reasons we’re very excited about the PET biomarker is that we do use the same antibody. It sees the same epitope. And we think that, that will be a much more reliable indicator of how expression correlates with efficacy.

Operator: Thank you. I’m showing no further questions at this time. I’d like to turn the call back over to CEO, Thane Wettig, for any closing remarks.

Thane Wettig: Yes. Thanks, everyone. We appreciate your participation in today’s call and your continued interest in FibroGen and we’d love for you guys to enjoy the rest of your day. Thank you.

Operator: Thank you. Ladies and gentlemen, this does conclude today’s conference. Thank you all for participating. You may now disconnect. Have a great day.