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ChemoCentryx Inc (CCXI) Q2 2019 Earnings Call Transcript

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ChemoCentryx Inc  (NASDAQ: CCXI)
Q2 2019 Earnings Call
Aug. 05, 2019, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good afternoon, and welcome to the ChemoCentryx Second Quarter 2019 Financial Results Conference Call. [Operator Instructions]

I would now like to turn the call over to Mr. Bill Slattery of Burns McClellan. Mr. Slattery, please go ahead.

Bill Slattery -- Burns McClellan

Thank you, operator. Good afternoon, and welcome to the ChemoCentryx Second Quarter 2019 Financial Results Conference Call. Earlier this afternoon, the company issued a press release providing an overview of its financial results for the second quarter ended June 30, 2019. This press release, along with a few slides that you may find helpful, while you listen to this call are available on the Investor Relations section of the company's website at www.chemocentryx.com.

Joining me on the call today is Dr. Thomas Schall, President and Chief Executive Officer of ChemoCentryx, who will review the company's recent business and clinical progress. Following his comments, Susan Kanaya, Executive Vice President, Chief Financial and Administrative Officer of ChemoCentryx, will provide an overview of the company's financial highlights for the second quarter of 2019 before turning the call back over to Tom for closing remarks.

During today's call, we will be making certain forward-looking statements, which those of you following the slides can see if you look at Slide 2. These forward-looking statements are based on current information, assumptions and expectations that are subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements.

These risks are described in the company's filings made with the Securities and Exchange Commission, including the company's annual report on Form 10-K filed on March 11, 2019. You are cautioned not to place undue reliance on these forward-looking statements, and ChemoCentryx disclaims any obligation to update such statements.

In addition, this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, August 5, 2019. ChemoCentryx undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this live conference call.

At this time, it is my pleasure to turn the call over to Tom Schall. Tom?

Thomas Schall -- President and Chief Executive Officer

Thank you, Bill, and good afternoon to everyone listening. Thank you for joining us on our second quarter 2019 conference call. Our market progress toward the ultimate goal of commercializing our unique small molecule therapeutic assets continues to gain momentum.

Today, I will lay out for you the sequence of significant near-term clinical readouts that we see ahead of us, as we plan to release top line data from no fewer than five key clinical trials over the next 18 months.

First and foremost, we look forward to announcing top line data from the pivotal ADVOCATE Phase III trial of our drug candidate avacopan in ANCA-associated vasculitis in the fourth quarter of this year.

Let me break this down a little bit for you. Ultimately, ADVOCATE enrolled 331 patients from 20 countries. Notably, the country of Japan with a fairly late addition to the study, not originally planned for ADVOCATE, but despite a later start to enrollment, the Japan cohort was enrolled very efficiently and they completed enrollment only five weeks later than the rest of the world.

Accordingly, we decided to include this Japan cohort within the global study data sets. This does not change our overall guidance for ADVOCATE data release. We continue to expect the release of results in Q4 of this year, now projecting mid to late Q4.

A reminder of the ADVOCATE trial features can be seen on Slide 3. Informed observers have noted that they are encouraged that ADVOCATE has built on a long and solid foundation of well-controlled pharmacological experiments and in vivo models, as well as uncontrolled clinical data in humans. For example, in ANCA-associated vasculitis, the role of complement inhibition and specifically the C5a receptor is well established in the literature.

There are in fact carefully controlled, genetic and pharmacological in vivo model experiments that demonstrate the mechanism of action of C5a receptor in this disease in great detail. Animal data show that the C5a receptor is necessary to cause end-stage ANCA disease. Accordingly, those same models demonstrate that blocking C5a receptor and specifically C5a receptor is necessary and sufficient in obtaining a beneficial therapeutic result.

An important point is that avacopan targets only the C5a receptor, thus stifling the activation of C5a receptor bearing pro-inflammatory neutrophils that have been shown to cause the disease symptomatology. It is to be stressed that avacopan achieved this beneficial in activation of the C5a receptor, but that avacopan does not block a second receptor for C5a known as the C5L2. This is quite important because C5L2 has been shown to have beneficial or pro-healthy effects, if you will, in many studies, including the best validated in vivo model of ANCA vasculitis.

And to be clear, this is the reason we have endeavored always to target the C5a receptor and not say the ligand C5a, since C5a can give rise to good actions via C5L2. Important human data from previous trials is also in hand for avacopan, specifically from two successful multi-center, randomized placebo-controlled trial Phase II clinical trials in ANCA vasculitis patients. These are the CLEAR and CLASSIC trials.

The CLEAR clinical trial was a randomized controlled study of avacopan, which demonstrated that avacopan rapidly brought neutrophils to normal levels in ANCA patients, while also rapidly reducing proteinuria and stabilizing glomerular infiltration rates, always good signs in terms of treating impaired kidney function and most ANCA patients eventually have kidney dysfunction.

And avacopan brought the acute signs and symptoms of active vasculitis rapidly under control. Avacopan did all of this in clear without the need for daily high doses of noxious steroids, such as prednisone and methylprednisolone that are currently used to control disease symptoms in ANCA patients.

Furthermore, the CLASSIC trial, another randomized placebo-controlled trial with avacopan met its goal of supporting avacopan safety profile even when added on top of the current standard of care regimen.

Our Phase III ADVOCATE randomized controlled trial expands on what we learned in the Phase II trials. ADVOCATE, like CLEAR before, is a double-blind, double-dummy protocol so that patients do not know whether they are receiving avacopan or the steroid-containing regimen, with 165 patients in each arm. It is a truly global study, involving more than 200 sites in 20 countries around the world.

Importantly, with ADVOCATE, like CLEAR, we aim to curb the use of chronic steroids that are responsible for so much of the suffering of ANCA vasculitis patients in terms of both mortality as well as morbidities. Based on the data from the controlled studies today, we believe that avacopan may alleviate the total burden of disease in ANCA vasculitis patients.

As you can see from Slide 4, we have a 4-pronged aim with avacopan. First, a rapid and lasting end to the acute episode of vasculitis. Second the significant diminution of severe consequences from the therapies that form the current standard of care. Third, arresting the damage to organs, notably, the kidney. And fourth, marked improvement in quality of life.

These aims go far beyond the rather limited scope measured in the Birmingham Vasculitis Activity Score or BVAS, which solely measures active and acute vasculitis signs and symptoms, but does not measure if a patient is truly well. And we know that both the FDA and the European Medicines Agency are interested in the broader data concerning the total burden of disease.

So as shown in Slide 5, while the two primary end points are based on remission, as measured by our BVAS score of zero, after being off steroids for at least four weeks, we are confident from discussions that regulators and other experts will also take into account key secondary end points, which help to measure alleviating the total burden of disease.

The primary end points based on BVAS will be first assessed at 26 weeks since the use of steroids and immunosuppressants conventionally runs for this period of about 6 months. And for the first time in a controlled randomized ANCA vasculitis trial, we will also look at BVAS at 52 weeks. The BVAS primary end point, statistical null hypothesis is noninferiority or NI at weeks 26 and 52. This is the appropriate null hypothesis. And in fact, the only one, which pragmatically can be used. NI is the appropriate null hypothesis when a disruptive new therapy is contemplated to unseat an incumbent therapy that is known to have significant liabilities, such as safety, and that is certainly the case with the present ANCA regimen, that includes chronic high doses of steroids and, in fact, the statistical null hypothesis of noninferiority is the only test that pragmatically can be used in this instance, since in orphan diseases, such as ANCA, patient number or N, tends to be small even in pivotal trials, such as ADVOCATE.

This statistical test has previously been well established in ANCA vasculitis, specifically in the only other pivotal study that resulted in an FDA approval for ANCA, that of rituximab in the Phase III pivotal RAVE trial, it is to be noted that rituximab was approved as an alternative to cyclophosphamide that always couple to high doses of chronic steroids solely based on achieving the statistical null hypothesis of noninferiority when compared to cyclophosphamide plus steroids.

Let me now turn to our second unique therapeutic agent, CCX140, our orally administered inhibitor of the chemokine receptor known as CCR2, as illustrated on Slide 6. We recently reached another milestone by completing patient enrollment in our LUMINA-1 trial of CCX140 in patients with primary focal segmental glomerulosclerosis or FSGS. And we expect the final patient to be randomized next week. FSGS is an orphan renal condition for which there is no approved treatment today. It can lead to kidney failure requiring expensive treatment and extensive dialysis.

Our scientific discovery and development team has been working on the role of CCR2 inhibition in FSGS. In patients with FSGS, scar tissue develops on the glomeruli, those parts of the kidney that filter waste from the blood. Proteins begin to leak into the urine elevating proteinuria. CCX140 is an orally administered selective CCR2 inhibitor. And previously we demonstrated a rapid and durable reduction in proteinuria with a good safety profile in our Phase II trial in several hundred patients with diabetic chronic kidney disease, DCKD, or sometimes called diabetic nephropathy, DN.

In fact, proteinuria reduction was the DCKD trial's primary end point, which we successfully achieved with CCX140. We pivoted from DCKD to FSGS because importantly, unlike in DCKD, in FSGS, the FDA has indicated that proteinuria lowering can potentially be a registration end point.

Our LUMINA-1 study is a randomized placebo-controlled trial of FSGS patients, all of whom have high levels of protein in the urine. The primary end point is a drop in proteinuria at 12 weeks. Given our progress in the LUMINA-1 trial, we expect to release top line data in the first half of the coming year.

Meanwhile, we continue to enroll our LUMINA-2 single-arm open label study of patients with nephrotic proteinuria, primary FSGS, a rare and more severe condition. We expect to report out that trial two during 2020.

While partner, Vifor Pharma has been granted the international commercial rights to both avacopan for ANCA vasculitis and CCX140 for FSGS. I'll remind you that ChemoCentryx retains all rights in the United States. We are actively building our commercial capability as we prepare to take the final step in our forward integration.

We're looking forward to another top line data readout in 2020 from our trial of the versatile avacopan in the treatment of C3 glomerulopathy, another rare kidney disease which can be life threatening.

Our ACCOLADE trial of avacopan in C3G has reached overall the halfway mark and can be seen on Slide 7. ACCOLADE is a randomized controlled trial of two strata of 44 patients each, comparing avacopan to the current standard of care after six months of therapy. The primary end point in the trial will be the percentage change in the C3G histologic index after 6 months of treatment.

We are also measuring reductions in proteinuria and changes over time in glomerular filtration rates. It is worth noting that we are receiving very encouraging feedback from KOLs, surrounding our practice of taking biopsies during the trial, which will allow us to track histological changes and relate those changes to clinical measurements.

Other current C3G trials do not require biopsies, while KOLs confirmed that ours is the most rigorous and complete trial of C3G, the price we paid for the slowness is a somewhat slower patient enrollment in this very rare disease.

However, it is fair to say our trial is ahead of other drug trials in C3G. We got off to a fast start as we tapped into pent-up demand from patients who you will remember have no approved therapies. Some experts opined that the total number of patients available for C3G trials is now the rate limiting factor, which is why all C3G trials seem currently to be making slower progress toward their ultimate enrollment goals. Nevertheless, the ACCOLADE trial has enrolled more than the others and has passed the halfway mark overall.

Importantly too, we are nearly 100% enrolled in our original target population those C3G patients with high levels of circulating activated complement. This group Stratum 1 in our ACCOLADE study is regarded by many as having the most pronounced C3G disease and possibly those most responsive to highly selective complement inhibition therapy such as avacopan. We expect to release top line data from the ACCOLADE C3G trial this coming year, 2020.

Finally, in terms of other clinical readouts in this coming year, there is our rigorously planned AURORA trial of avacopan and hidradenitis suppurativa or HS, a chronic disfiguring inflammatory skin disorder featured on Slide 8. HS is thought to be a complement mediated disease driven by C5a receptor activation of inflammatory neutrophils at the site of unremitting pustules and HS lesions. Many regard the C5a receptor as an ideal target and avacopan as a potentially ideal remedy.

During the second quarter, support from key opinion leaders in the HS community for our carefully planned AURORA trial actually increased substantially, contributing to an acceleration in site activation and patient enrollment. We now have more than 50% of sites activated with enrollment at approximately 25%. To the HS patients and clinical community, we at CCXI have committed to provide a definitive answer with data from AURORA, this coming year about how C5a receptor inhibition might benefit people with HS. They, and all of us, deserve no less than such an answer.

Since avacopan is involved in three of the five expected top line data readouts, let me remind you briefly of key advantages that we see in this unique molecule, which are shown on Slide 9.

Patients can take avacopan at home or wherever they happen to be rather than having to go to the clinic for an infusion. As a small molecule, rather than say a much larger antibody, avacopan is ideally suited to penetrate the microenvironment of individual lesions or disease sites.

Avacopan's unique mechanism of action targets only the problematic C5a receptor, leaving intact the C5L2 pathway, which is known to have beneficial effects. We believe that this exquisite selectivity in targeting and convenience offer tremendous potential to patients and clinicians.

In summary, as I have described, we continue to execute on our 2019 goals, fortified by a strong financial position, which Susan Kanaya will outline in a moment. We are optimistic about our near-term inflection points and look forward to providing top line data readouts during the next six quarters.

Our drug discovery engine continues to generate new opportunities, which we look forward to bringing to you in the near future. We are confident in our potential to bring innovative new medicines to patients and to build further value for our investors.

I will now turn the call over to Susan to give you further details of our enviable financial position. Susan?

Susan Kanaya -- Executive Vice President, Chief Financial and Administrative Officer

Thank you, Tom. Our second quarter 2019 financial results were included in our press release today and are summarized on Slide 10.

Revenue was $7.2 million for the second quarter compared to $15 million for the same period in 2018. Revenue was recognized based on the proportion of costs incurred as a percentage of the total budgeted costs to fulfill the performance obligations and there are avacopan and CCX140 commercialization agreements with Vifor Pharma. The decrease from 2018 to 2019 was primarily due to a higher proportion of avacopan-related costs relative to the budgeted costs incurred in 2018.

Research and development expenses were $17.6 million for the second quarter of 2019, compared to $17.8 million for the same period in 2018. Expenses decreased in 2019 for the avacopan ADVOCATE Phase III pivotal trial, as the study was fully enrolled in the second half of 2018, while the Phase II clinical expenses increased, primarily due to patient enrollment of the avacopan AURORA trial in patients with HS and the 2 CCX140 LUMINA trials in patients with FSGS.

General and administrative expenses were $5.6 million for the second quarter, compared to $4.7 million in the same period in 2018. The increase from 2018 to 2019 was primarily due to higher employee related expenses, including those associated with our commercialization planning efforts and higher professional fees.

We recorded a net loss for the second quarter of 2019 of $15.2 million, compared to $6.9 million for the same period in 2018. Total shares outstanding at June 30, 2019, were approximately 58.2 million shares.

Lastly, we ended the second quarter with $223.1 million in reported cash, cash equivalents and investments. We expect to utilize cash and investments for the calendar year in the range of $70 million to $80 million in 2019. Tom?

Thomas Schall -- President and Chief Executive Officer

Thank you, Susan. Before taking your questions, I will summarize our progress and prospects depicted on Slide 11 in two simple sentences. First, we are well on our way to completing our plan to deliver top line data from five clinical trials, by the end of next year. We expect the first to be our pivotal ADVOCATE trial, which represents a summit of announcing a pharmacological and clinical working data in Q4 this year. We'll be holding an R&D Day in New York on October 1, as a prelude to the top line data readouts that will follow. I hope that many of you will be able to join us there and hear from top experts in the field.

Second, as Susan has reported, by judiciously targeting the fruits of our science and the use of funds that investors have entrusted to us, our financial strength gives us the muscle to contemplate filing marketing submissions to both the FDA and the EMA during 2020, assuming that the top line ADVOCATE data are positive.

A strong fair wind is now filling our mainsails in our voyage of value creation throughout this year and next key data readout should provide the coordinates to draw a new map for CCXI and it's growing realm of opportunities to markedly improve the lives of patients and provide an important returns for investors.

I will now turn the call back over to the operator and look forward to your questions. Operator?

Questions and Answers:

Operator

[Operator Instructions] Your first question comes from the line of Michelle Gilson from Canaccord Genuity. Your line is now open.

Michelle Gilson -- Canaccord Genuity -- Analyst

Hi, Tom. Hi, Susan. Thanks for taking my question.

Susan Kanaya -- Executive Vice President, Chief Financial and Administrative Officer

Hi.

Thomas Schall -- President and Chief Executive Officer

Hi.

Michelle Gilson -- Canaccord Genuity -- Analyst

I was just wondering, can you walk us through what we should be expecting in the top line release next quarter? And kind of going along with that, how are the patients from Japan going to be treated within your statistical analysis plan? Do they improve your powering at all? And have those updates been submitted to regulators?

Thomas Schall -- President and Chief Executive Officer

The short answer is yes to all the above. The Japan population will be treated just as part of the unified data set and they do slightly increase the statistical power. Originally, the study was based on 302 arms, Michelle. We ultimately reached in the original 19 country targets, 316, people that got randomized. The Japan cohort actually ultimately added and rounded up that total to 331. So at least we know how many got randomized. Not everyone is done yet with the trial. So I don't have a great -- I mean I won't have the number for you, although I can estimate pretty well, which I won't provide today, the total number that we will finally analyze, but of course, every set of patients adds to power, so that's -- that really works well for us.

The top line data will obviously include the BVAS primary end points. And as I mentioned, BVAS really only measures the acute active signs and symptoms of vasculitis. So while that's important obviously, and is the only thing that regulators have traditionally known look to pay attention to, in addition, there is other very important features of our study, which we will try to spell out as well with the top line data. Obviously, overall safety will be reported. We will be looking at many of the same things that we have looked at in the Phase II CLEAR study. So quality of life, we believe that at least will have the top line quality of life readouts. Glucocorticoid toxicity profile, that is both SAEs and safety events associated with glucocorticoid use and then a number of lab readouts that speak more to preservation of organ function. They include things like the proteinuria values, such as we presented in the CLEAR trial, GFR, glomerular filtration rates over time; shedding of inflammatory markers in the urine; and ultimately, the vascular damage index as well, all which read through to how organs are functioning and whether or not you're accumulating damage with chronic symptomatology either from the vasculitis or from the damaging effects of the standard of care. So I think, in large part, that is the general spectrum that we'll be aiming for in the top line data that we hope to release in Q4.

Michelle Gilson -- Canaccord Genuity -- Analyst

Okay. And then just one follow-up, if you don't mind, also, which will be expecting to focus to really beyond at the R&D Day? And will you be releasing any data around the baseline characteristics of patients in ADVOCATE during that day?

Thomas Schall -- President and Chief Executive Officer

Right now, I can't speak to whether or not we might be releasing data around baseline characteristics. But I will say this, there's a number of things that people find mystifying about ANCA vasculitis from the way BVAS is scored and what it really means to the statistical analysis plan. So we intend to demystify that for the audience. We intend also to describe a little bit more how we are marching through, again, measuring the total burden of disease and why that's important. And we'll review the solid base upon which ADVOCATE is built by reviewing how and why the Phase II results were so key to our understanding and we think to our interpretation of ADVOCATE. I will say, two, that by and large the inclusion/exclusion criteria in ADVOCATE were based on the CLEAR trial. And I think that accordingly, we can expect that the baseline characteristics, generally speaking, will conform to predictions.

Michelle Gilson -- Canaccord Genuity -- Analyst

Okay, thank you so much for taking my questions. Also I look forward to speak.

Thomas Schall -- President and Chief Executive Officer

Thank you.

Susan Kanaya -- Executive Vice President, Chief Financial and Administrative Officer

Absolutely, look forward to it.

Operator

Your next question comes from the line of Dae Gon Ha from SVB Leerink. Your line is now open.

Dae Gon Ha -- SVB Leerink -- Analyst

Great, good afternoon. Thanks for taking the questions. Hi, Tom. Hi, Susan. Just two questions --

Thomas Schall -- President and Chief Executive Officer

Hi.

Susan Kanaya -- Executive Vice President, Chief Financial and Administrative Officer

Hi Gon.

Dae Gon Ha -- SVB Leerink -- Analyst

Just two questions. Two parts each, if I may. So first question is on the ADVOCATE trial. Just wanted to dig a little deeper on the pharmacodynamics. I guess, we'll get a lot of demystifying at the R&D Day. So I don't want to jump the gun here, but in your preparation, as you're gearing up for pre-commercialization and commercialization efforts, what are some of the feedback that you've gotten in terms of the noninferiority? And I guess, what are the scenarios that you envision in terms of giving you the most pricing flexibility that we can look forward to?

The second part of that question is, if you can maybe talk to us about based on your market research how the PEXIVAS trial data has impacted the treatment landscape as of late in AAV? And I've got a follow-up.

Thomas Schall -- President and Chief Executive Officer

Right, so PEXIVAS, I'll start with the reverse. PEXIVAS has done from my perspective almost nothing because number one, I don't think we have the rough read paper out yet. Number two, all PEXIVAS showed it seems to me and others now in the field was that plasma exchange was not an effective therapy for ANCA vasculitis patients with long-term outcomes. Long term meaning death or dialysis. So they all did poorly. Plasma exchange didn't help them. There is a -- there was an idea by the way that emerged from PEXIVAS that said, well, you can kind of lower the dose of steroid regimen to a somewhat lower dose and you see you get the same outcomes. Two things around that, number one, the same outcomes meaning they are all still bad, in my opinion and the opinion of experts. And secondly, the lower dose actually was not defined in a lot of the discussions, the old discussions, but that "lower dose" was about two-thirds the traditional regimen when taken as a total load over six months. And in fact, the lower dose in PEXIVAS is pretty close to what we are using as a standard in the ADVOCATE trial. And we'll step through the details of all that at our R&D Day, again, in an attempt to try to demystify some of this.

So PEXIVAS to me doesn't change anything that we're doing because, again, what it showed is that everyone still did poorly. We hope to change that considerably. Based on, again -- and we're looking at BVAS and other symptomatology. We're not looking at the longer-term outcomes that were not helped by plasma exchange in PEXIVAS study. You were asking also about what's the greatest step, how do we think about flexibility as we go forward to marketing presumably a successful avacopan product. It's really clear that what we'd like to see, obviously, is you asked first about the primary end points. Birmingham Vasculitis Activity Score, as I had mentioned in my remarks, really only measures and focuses on one thing, acute and active signs and symptoms of vasculitis.

So the BVAS is really designed historically to make sure that we can measure how many people we get through the active vasculitic prices, because prior to the rather primitive regimen of steroids with immunosuppression, which is with us to this day 50 years on in the field that it was first tried, prior to that regimen being tried, active vasculitis would kill people very fast, typically within five or six months, I think, greater than 80% mortality during that time frame. So the BVAS was designed to just look at the vasculitic crisis in its acute form.

For that reason, as I mentioned, we're looking at can we induce a so-called BVAS remission by week 26, which is the comparison that we need to look at, even though we think and we hope our drug should work faster than that, but 26 weeks is the standard-of-care regimen and that's the traditional end point because it takes that long for standard of care to exert its maximum effect across a population and convince the observers that those people aren't in fact going to die. So week 26, again, the statistical null hypothesis is noninferiority. We'd like to hit that. We think we handled it well. And of course, our models are based on the RAVE study that I alluded to in my remark.

We hope that we can sustain remission to week 52, and we believe that we ought to be able to do that and, in fact, the numerical separation may start to widen with avacopan treatment, perhaps sustaining at a higher number than the standard-of-care therapy for the reason -- one of the simple reasons is that they have to be weaned off standard care because it's too toxic to take chronically for 52 weeks, it reveals part of the medical need.

So again, we believe from our models that we should handily be able to achieve noninferiority at week 52 and in our statistical plan, we actually have a hierarchical determination to take a glimpse at superiority at week 52, which while a stretch is not beyond the realm of feasible. It'll be great if we hit superiority at week 52 for just the purposes that you're talking about those conversations will be to have around primary end point.

But I stress, that's not the full picture, BVAS is not the full picture. The full picture is, can we show reduced glucocorticoid-associated toxicities, morbidities, indeed maybe mortalities? Can we show an improved quality of life? If it has a direct pharmacoeconomic impact, which we did show in the Phase II and enhanced -- I'm sorry, and enhanced quality of life? And can we show evidence -- objective lab-based evidence for preservation of organ function and for solving additional accumulated organ damage, particularly in the kidney since that's a really expensive thing with ANCA vasculitis patients. As they go through their disease course, many of them end up in end-stage renal disease. And, of course, you know as well as everybody, how expensive that care regimen is.

So we'd like to hit on being able to show an overall picture of reducing. In fact, in a colloquial way, I'd say in a superior way, small s, the total burden of disease across those four categories. And I think if we do that or largely accomplish that as we did in the Phase II, that will be a very compelling argument and provide us with maximum pricing flexibility.

Dae Gon Ha -- SVB Leerink -- Analyst

Great, thanks for all that color Tom. Second question was on HS, the AURORA trial that we're expecting for next year. You provided a color that the enrollment is about 25% complete, over 50% of the sites have been activated. Just wanted to get your take on since the SHINE data readout, have you seen any pickup in terms of enrollment pace or site activations? And also what's the general, I guess, sentiment around the 50% placebo rate pertaining to the C5a inhibition mechanism there? Thank you.

Thomas Schall -- President and Chief Executive Officer

SHINE, what's that. I'm sorry. Interestingly, we have actually seen enrollment pick up since the SHINE result. That's fascinating to me. But what we're getting from our experts in the field are some really important comments. Let me try to restrict most of those what they say about our approach and why they're very high in our approach. They fundamentally believe that neutrophils are the culprit. They fundamentally believe that activated complement is going on in the system. They love an orally active small molecule, because of two things. Number one, that's just the need in this population, but more importantly, at a mechanism level, some of them and including ones that are quite vocal and well versed, fundamentally believe that you've got to get the molecule to the side of the lesion. And these lesions are messy. It's really hard to envision how a large molecule, like a 180,000 dalton protein will get to these microenvironments of the lesions, whereas approximately 500 molecular mass small molecule, which has lovely properties that help it slide into these environments and help it get through potentially these messy gelatinous neutrophil NETs that form parts of these lesions, that's a really appealing idea. So people are really -- again, I was really interested because I was prepared for a decline or a pause, enrollment quite the opposite, it's actually accelerated. And so that's I think very, very interesting to us.

And again, the differences between the large protein and the small molecule are notable. This community has understood more and more the distinction between the small molecule sitting down on the C5a receptor, rather than a large molecule trying to cover C5a, which is a fundamentally different kind of idea. And they were unhappy with the lack of pharmacokinetic -- pharmacodynamic data showing that anybody was getting to all of the target and stopping it up, whereas we published a lot of data on how avacopan is covering the C5a receptor, which is the pro-inflammatory receptor even at trough levels of the drug. So that science and those data matter to that community.

And finally, they also appreciate the mystery of the second receptor, C5L2, is one of those things that simply cannot be ignored. And there's enough data we produced by many good teams, including in allergic skin diseases and autoimmune skin disease models, showing C5L2 as a good actor and you want C5a around to interact with that good actor. So the other approach took out C5a, and therefore, the good actor was also taken off the equation. So there's a debate about whether or not the balance between pro-inflammatory and anti-inflammatory was in force.

I will finally have to say one more thing about the final aspect of your question about the high placebo response rate. Fundamentally, one can expect placebo response rates based on scoring end points to increase when new entrants come in and get approved such as Humira. One anticipates that. Certainly, our model anticipates that. So we have almost 400 people in this trial, but what you don't want to do is create an expectation of response or create an expectation in the patient population that they're going to get active compound, expectation on part of patients and physicians.

I will say that the other trial, to the extent that I understand it, seemed to have 80% chance of getting "active compound" and that can't but help to drive placebo response up in a condition such as that. So we've taken great pains not to do that. We've also taken great pains to make sure that the primary end point training high scores have been very rigid rather and rigorously enforced. And in fact, we have a lot more central communication around the standardization of high scores. So I believe people who've been involved in both those trials, that's another kind of feedback we're getting.

So all of that gives us comfort that at least we are performing, I think, a very careful -- carefully considered and I think a well -- so far a well-executed trial. And as I said, our commitment to the community is let's get an answer, let's not be guessing and that's what we're going to do.

Dae Gon Ha -- SVB Leerink -- Analyst

Great, thanks for all the insights. We'll see you guys on October 1.

Susan Kanaya -- Executive Vice President, Chief Financial and Administrative Officer

Thank you. Look forward to it.

Operator

Your next question comes from the line of Steve Seedhouse from Raymond James. Your line is open.

Steve Seedhouse -- Raymond James -- Analyst

Good afternoon. Thank you. First question on the inclusion -- sorry, inclusion of the Japan cohort in ADVOCATE. Is there anything notable on about the expected PK or effect of avacopan in different patient populations? And I think you might have alluded earlier to only 15 patients from Japan being enrolled. Can you just clarify if I heard that right, or was that referring to just recently enrolled patients, are there more than 15 from Japan?

Thomas Schall -- President and Chief Executive Officer

Yeah. Thank you, Steve. You did some quick arithmetic there and came up with the not unreasonable conclusion that there were 15 from Japan. In fact, there were over 20, probably 21, I think, was the final number, which was kind of a good threshold for PMDA to say, wow, if you guys could actually be involved in the global study, that would be fabulous. And so that's why we cuddled with all of our colleagues and decided that, yes, it would be a good idea to include Japan because they might well -- assuming success, might well be able to in lockstep with FDA and EMA, lead to licensure in Japan, which helps everybody, including ChemoCentryx as well as ANCA patients and all the rest that are involved.

So ultimately, it was over 20, which was good. There were six, and again, I won't go into the complications of this, but there were six Japanese subjects in the original 316. And then by the time the Japanese cohort got fully enrolled, it was somewhat over 20. So that's why you're coming up with the arithmetic, you're coming up with. At the end of the day, it doesn't matter. It's all 1 global data set, and we're going to analyze it all in one common technical document and all those other wonderful things we do for registration. Now your question about PK, really insightful. Thank you. We have done separate studies in Phase I.

And, in fact, our Japanese colleagues did another separate Phase I study and suffice it to say, we're satisfied with their -- the PK response is not going to be materially different in that population as opposed to rest of world. So all that work is done in background.

Steve Seedhouse -- Raymond James -- Analyst

Okay. Great. And my next question -- so your stock obviously got hit hard when SHINE failed. Regarding your AURORA HS study, therefore, you have 25% royalty, have about 100 patients already enrolled there. Given SHINE failed, given no prior data for avacopan in this indication and given lack of relevant animal models as far as I know for this disease, I'm wondering if utility analyses are frankly stopping the study early to analyze the data and if successful moving to a Phase III would be prudent here? What are your thoughts on that or if not what's the advantage of enrolling this all the way to 400 patients?

Thomas Schall -- President and Chief Executive Officer

Great question, Steve. One which I might have predicted coming from the insightful mind over there. So I'd tell you, here's how I think about it. You're right. Interestingly, we didn't get a lot of credit necessarily for being in HS. But we certainly have gotten punished for it. So I think there's a saying in quantum computing that says the future is already here. It's just not evenly distributed yet. And it's kind of strange the quantum entanglement we had from the SHINE study because, again, even though we had nothing to do with that study, its design or the characteristics of that molecule, as I said, it's a strange world that we've suffered so much from the other guy stuff.

But having said all that, your questions are very relevant and apt. So here's how we think of it. There is evidence, and certainly, anecdotal evidences among others, some lab evidence that's emerging from us and others and we hope to present whatever we know in a little bit more detail on October 1. But let's just say the evidence -- there is some evidence, it's not an incomplete hypothesis based on no data that HS is driven by C5a receptor and activated complement at the lesional site. So the evidence is nowhere near as strong as ANCA vasculitis, it's completely correct. So we've taken a long look at this whole situation.

We are running the AURORA trial in a very efficient way, both temporally as well as physically. And so we reserve the right to potentially do an early analysis. I think what's really the reason we would do that, obviously, is to save time and money, but time is money in clinical trials, as you know. So if one is going really fast anyway, that really is the principal driver of cost. So by the time we decided to do a partial analysis, some models might suggest that we could have the full data set.

So the way we look at it at this moment is, again, we are going to talk more about that on October 1 in where we have decided on how we're going to conduct the future of this particular trial. But right now, the expectations are very low from most of the investment world. So the upside could be vast, and our investments are modest and both time and money I think both are very manageable.

So we may well be able to just get the definitive result and if that result is a positive one, while good heavens, we really will have luck toward a very significant and very important and lucrative end point. So again, more details at the R&D Day, but that's how we're thinking of it now.

Steve Seedhouse -- Raymond James -- Analyst

Okay. I appreciate that answer, Tom, and we've covered, I guess, arithmetic and quantum mechanics. So maybe I'll just toss an algebra question. You just finished up on enrollment of the Phase II C3G study, so this is 50% enrolled this quarter and it was approximately 50% last quarter and approaching 50% in the fourth quarter of 2018. So if I draw a straight line there, it's challenging to imagine how you'll have data in 2020 unless enrollment picks up significantly. So I'm just hoping you can maybe crystallize specifically what you're assuming in terms of enrollment changing soon or if the data readout going to be Stratum 1 only? Thanks for taking the questions.

Thomas Schall -- President and Chief Executive Officer

Very good question, yes, you're right. Shot of going through a one hole in the space time continuum, how will we get this thing to look any different. I would say there are two or three things that are relevant. You're absolutely right. We were racing along with that study, and then we just hit a brick wall. In part, I think it's because other competing studies came online that did not require a biopsy end point. And frankly, many of them were smaller and a lot of them were actually open label. So from a patient's perspective, it's a lot easier to go into some of those other studies. I think we were mopping up originally probably the vast majority of the available trial population. And then we -- again, as I said, we and others ran into this limit of what is the available trial population and maybe we just -- we've exhausted that, that's some of the feedback coming from the major sites.

However, having said all that, we have also embarked on now a global campaign to bring on more sites, sites that maybe we overlooked earlier, perhaps we overlooked them because we thought this is going to be easier than we thought to get enrolled. So those are now happening and that may well make a difference in enrollment. And you also perceptively point out that the original hypothesis in C3G was really the folks that have this disease will have lots of activated complement in the periphery. We measured with C5b-9 in the circulation because that's a stable marker and one that's acknowledged to be reasonably easy to measure and reliably easy to measure in clinical trials. That guy is almost -- that's enrolled, virtually enrolled now.

So we would have the potential analysis in our original stats plans as well to look at those two strata separately. So we're going to see how things go for the next few weeks and then, again, we'll reveal to the community what our plan is about how we're analyzing those two strata separately, collectively, or what have you. But thanks for the question.

Steve Seedhouse -- Raymond James -- Analyst

Thank you.

Operator

Your next question comes from the line of Ed White from H.C. Wainwright. Your line is now open.

Ed White -- H.C. Wainwright -- Analyst

Hi, Tom and Susan. Thanks for taking my question.

Susan Kanaya -- Executive Vice President, Chief Financial and Administrative Officer

Hi, Ed.

Thomas Schall -- President and Chief Executive Officer

Thanks Ed.

Ed White -- H.C. Wainwright -- Analyst

Hi. So just maybe for Susan, the cash burn guidance is lower by $5 million from last quarter? So I'm just wondering where that savings came from and then also it appears to me that you have cash runway base through all five data readouts, but I just wanted to confirm your thoughts on that?

Susan Kanaya -- Executive Vice President, Chief Financial and Administrative Officer

Sure, thanks for the question, Ed. So yes, you're correct, I can confirm that the reserve balances of cash and investments do indeed take us through the five anticipated data readouts that Tom reviewed during the call today. And with respect to the lower guidance, it's just that we're just tracking lower as you can see from our actuals for the first six months. It's really largely due to timing, Ed. So just we've got some ancillary studies and things of those sort that are just starting a little later. So nothing too magical about that revised guidance.

Ed White -- H.C. Wainwright -- Analyst

Okay. All right, thanks. And I just want to ask a couple of questions because it seems like some of the data readout time lines have -- you're now saying 2020, where before you had said maybe perhaps like LUMINA-2, mid-2020, or in HS, you had said mid or -- data in mid or second half of 2020, both of those you're now saying 2020. I'm just wondering if it's just semantics or if there's something -- some difference there?

Thomas Schall -- President and Chief Executive Officer

Thank you, Ed. Mostly it's semantics. LUMINA -- the LUMINA-1 study is actually running really well and running according to plan or maybe even slightly ahead. So LUMINA-1 is doing really well.

The HS study we -- we at least temporarily modified our language because, again, we weren't sure what the effect of the other sponsor study would be, but it turns out it doesn't seem to be affecting us much at all or, in fact, maybe slightly positively. So if that trend continues again, we'll start supplying a lot more granularity, but I think we're right in line with the original prediction.

And the thing that has slipped admittedly is the C3G time line for the reasons that we just described. So that one is definitely have -- a little bit more difficult, but again, we are still predicting 2020. So between Q4 of this year and all through 2020, we hope to bring home all these results from the five studies that I alluded to you in the remarks.

Ed White -- H.C. Wainwright -- Analyst

Okay, great. Thanks, Tom and Susan.

Susan Kanaya -- Executive Vice President, Chief Financial and Administrative Officer

Our pleasure.

Operator

Your next question comes from the line of Ted Tenthoff from Piper Jaffray. Your line is now open.

Edward Tenthoff -- Piper Jaffray -- Analyst

Great, thank you very much for the thorough update. Tom, in particular, I really appreciate your differentiation in the HS space. Most of my questions have been answered, but I guess, maybe just sort of checking in on some of the earlier stage pipeline and any progress that we should be anticipating there? Thanks very much.

Thomas Schall -- President and Chief Executive Officer

Great. Thank you, Ted. Yes, we're pretty excited about some stuff that's emerging now in the earlier-stage pipeline. I hesitate to talk about it just yet this quarter because I don't want to deflect the focus and attention on the ANCA vasculitis program, particularly and the other ones we were -- we have been talking about. We may have a little bit to say at R&D Day about some of these other programs and when you might expect some more details around those.

Edward Tenthoff -- Piper Jaffray -- Analyst

Great. Well, I look forward to seeing you in New York on October 1.

Thomas Schall -- President and Chief Executive Officer

Thank you.

Operator

Your next question comes from the line of Anupam Rama from JPMorgan. Your line is now open.

Anupam Rama -- JPMorgan -- Analyst

Hey, Tom. Hey, Susan. Thanks so much for taking the question and congrats on all the progress here.

Thomas Schall -- President and Chief Executive Officer

Thank you, Anupam.

Anupam Rama -- JPMorgan -- Analyst

I have a question about the control group of ADVOCATE, right? So you have the steroid taper over 21 weeks and some of the literature we've been reviewing suggest there could be some incremental benefits of steroids over a short period of time. So help us get comfortable with the 26-week BVAS end point that there isn't any risk around a control arm outperformance. And then

Edward Tenthoff -- Piper Jaffray -- Analyst

[Technical Issues] if a patient goes into remission, but then relapses, it counts as a lapsed observation carried forward, right, so just maybe check my head on that? Thanks so much.

Thomas Schall -- President and Chief Executive Officer

Yeah, so Anupam, excellent questions, and you cut out there for some of it, but I think I got the gist of it. So it's not a risk of the control arm outperforming in ADVOCATE. I'm hoping not and that hope is based on data. So what we did is we've really carefully modeled the ADVOCATE design on the one trial that we really had precedent for which is the RAVE trial. And you know, but others may not be as familiar, RAVE was rituximab plus steroids versus the then standard of care, which was cyclophosphamide plus steroids. And essentially, it was the same kind of taper, although was not quite as protocolized carefully at the start of that trial, but what we did is working with the leaders in RAVE, we very carefully protocolized and regimented the steroid taper, so that we could at minimum compare to the extent possible apples-to-apples, in this case our 26-week remission data from RAVE with whatever we came up with ADVOCATE.

And for your listeners and other colleagues, the RAVE trial at week 26, rituximab plus steroids over the 26-week taper with rituximab, that was a 64% BVAS equal zero plus being off of the steroids for four weeks. That was the remission definition as it is in ADVOCATE versus the standard of care at the time, which was steroids plus cyclophosphamide, that was 53%. And so those two numbers, while numerically different, were statistically similar. So it was a statistical noninferiority for rituximab and that was enough to get an approval because rituximab had some perceived benefits of safety over cyclophosphamide. By the way, none of those benefits were in evidence in the RAVE trial. It was merely approved on the BVAS end point.

But having said all of that, so we work with the guys who ran RAVE, and we said let's have current clinical practice, which is overall trending lower to steroid load as I already alluded to from my comments on PEXIVAS, but certainly, within the range of what was happening in RAVE, we just really protocolized and standardized that and put it into kits so that nobody could vary from that protocolized steroid regimen.

So our model for ADVOCATE is -- the control arm should be somewhere in the middle of what I just talked about. So you could use the number of 60 for the control arm. Do we expect a big variance of that? I don't think so. And if any variance occurs in any of the arms, it would have to come from a significant deviation of non-study supplied glucocorticoids. In this example, we're talking about glucocorticoids and that would be, in fact, a failure and intent to treat failure.

And so relapse is also, again, there's strict rule to get to the second question, strict rules about if it's a major relapse, you're absolutely right, then we carry that forward and that's part of the calculation for ITT. We keep them in the trial because there's much to learn from those patients still obviously, but for the purposes of BVAS, it would be scored that way. You could have minor symptomatology of temporary nature, etc., and you wouldn't necessarily be scored as a relapse. But again, that is strictly protocolized and also there's a consulting committee for BVAS scoring, the BVAS adjudication committee to try to standardize all of these practices all of the calls and the BVAS scoring is adjudicated and standardized by that central committee.

So we think -- to the greatest extent possible, we think we've controlled for the kinds of things that you have alluded to because we were worried about those things from the very start. And I think -- I think expert opinion is that we probably captured it, certainly as well as could be expected in the trial.

Anupam Rama -- JPMorgan -- Analyst

Great, thanks so much for taking our question.

Operator

Your next question comes from the line of Harshita Polishetty from B. Riley FBR. Your line is now open.

Harshita Polishetty -- B. Riley FBR -- Analyst

Hey, Tom and Susan, thank you for taking my questions. Just one on my end with regard to FSGS. Could you shed some color on the relationship between proteinuria and GFR, I guess, what I'm ultimately trying to get at is understanding how important is change in eGFR over time in assessing kidney function alone?

Thomas Schall -- President and Chief Executive Officer

That's a great question and for different kidney diseases, it seems like there are somewhat different answers. Generally speaking, people believe that proteinuria reduction will correlate over time with stabilizations and perhaps even improvements in eGFR over time, estimated glomerular filtration rates.

What had been really interesting is how regulators have tried to look at data sets across various kinds of chronic kidney disease and correlate what kind of reduction in proteinuria might correlate with longer-term outcomes, including, again, stabilization at minimum of GFR.

So that's been a little bit more difficult question, particularly since in rarer chronic kidney diseases like FSGS and IgA nephropathy, that the number, the data sets aren't large even in aggregate because the fact it's an orphan disease, or orphan indications, I should say.

So generally speaking, however, what we know is proteinuria is -- a drop in proteinuria is indicative of better kidney function and you can measure it in a shorter term, which is why it's become very attractive.

And in fact, for some of these indications, the FDA has been pretty clear, that, for example, nephrotic levels of proteinuria that above three grams per day, three grams of urinary protein per gram of creatinine in the blood that nephrotic syndrome, that even showing say, a 30% reduction might be very interesting and could correlate to longer-term benefit. So people are starting to look at 30% reductions as being kind of an interesting feature for some of the rarer disease.

And obviously, the idea is that as protein is being shed from the circulation into the urine, that's not only a symptom of kidney failure to filter properly, but the protein itself becomes an insult to the kidney structures, the tubules so on. So especially in things like FSGS, the reduction of proteinuria is thought not just to be diagnostic and prognostic, but maybe mechanistically related. So it's still an evolving picture, but I think the FDA is paying a lot more attention to proteinuria reduction at least where for whatever reason the evidence seems satisfactory to them, that if you're lowering protein in the first few months and if that is sustained over many months that should relate to stabilization of GFR over a longer period of time, which, of course, will keep people out of dialysis, which is the ultimate outcome that everyone wants to think about.

But dialysis outcomes take many years, as you know, and to be certain about those, it would take many hundreds of thousands of patients, you're simply not going to get that in orphan diseases. So we and others are looking especially in FSGS, IgA nephropathy is another one that the FDA has given some blessing to for proteinuria reduction. We and others are looking at that as an end point. And then what will just remain to be seen in discussion with FDA, whether or not the degree of proteinuria reduction over the time period that we bring in the data set is sufficient for registration and/or at least sufficient for conditional approval and/or finally, at least sufficient to say here's how to do the longer-term and somewhat larger trial to get a license for that agent.

Harshita Polishetty -- B. Riley FBR -- Analyst

Great.

That's very helpful. Thanks again, Tom.

Thomas Schall -- President and Chief Executive Officer

Thank you.

Operator

I'm showing no further questions at this time. I would now like to turn the conference back to Mr. Thomas Schall. You may proceed.

Thomas Schall -- President and Chief Executive Officer

Well, thank you very much. I just want to thank everybody again for taking the time to join us this afternoon. I want to thank everyone for their excellent questions. And I look forward to giving you more updates in the coming weeks and quarters and at our R&D Day in October. Thanks again, for your participation. Have a good afternoon.

Operator

[Operator Closing Remarks]

Duration: 70 minutes

Call participants:

Bill Slattery -- Burns McClellan

Thomas Schall -- President and Chief Executive Officer

Susan Kanaya -- Executive Vice President, Chief Financial and Administrative Officer

Michelle Gilson -- Canaccord Genuity -- Analyst

Dae Gon Ha -- SVB Leerink -- Analyst

Steve Seedhouse -- Raymond James -- Analyst

Ed White -- H.C. Wainwright -- Analyst

Edward Tenthoff -- Piper Jaffray -- Analyst

Anupam Rama -- JPMorgan -- Analyst

Harshita Polishetty -- B. Riley FBR -- Analyst

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