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Edited Transcript of CCXI earnings conference call or presentation 10-Mar-20 9:00pm GMT

Q4 2019 ChemoCentryx Inc Earnings Call

Mountain View Apr 5, 2020 (Thomson StreetEvents) -- Edited Transcript of ChemoCentryx Inc earnings conference call or presentation Tuesday, March 10, 2020 at 9:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Susan M. Kanaya

ChemoCentryx, Inc. - Executive VP, Chief Financial & Administrative Officer and Secretary

* Thomas J. Schall

ChemoCentryx, Inc. - Founder, President, CEO & Chairman

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Conference Call Participants

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* Dae Gon Ha

SVB Leerink LLC, Research Division - Associate

* Edward Andrew Tenthoff

Piper Sandler & Co., Research Division - MD & Senior Research Analyst

* Edward Patrick White

H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst

* Michelle Lim Gilson

Canaccord Genuity Corp., Research Division - Analyst

* Steven James Seedhouse

Raymond James & Associates, Inc., Research Division - Research Analyst

* Tessa Thomas Romero

JP Morgan Chase & Co, Research Division - Associate

* William S. Slattery

Burns McClellan, Inc. - VP

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Presentation

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Operator [1]

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Good afternoon and welcome to the ChemoCentryx Fourth Quarter and Full Year 2019 Financial Results Conference call. (Operator Instructions) As a reminder, this conference call will be recorded.

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

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William S. Slattery, Burns McClellan, Inc. - VP [2]

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Thank you. Good afternoon, and welcome to the ChemoCentryx Fourth Quarter and Full Year 2019 Financial Results Conference Call. Earlier this afternoon, the company issued a press release providing an overview of its financial results for the fourth quarter and full year ended December 31, 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 fourth quarter and full year 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 of -- 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 to be filed on March 10, 2020.

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, March 10, 2020. 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?

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Thomas J. Schall, ChemoCentryx, Inc. - Founder, President, CEO & Chairman [3]

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Thank you, Bill, and good afternoon to everyone listening. Thank you for joining us on our fourth quarter and full year 2019 conference call. In 2019, the world witnessed a tectonic shift for our company. That is we drove events of massive significance for the patients we seek to serve, for the clinicians who also toil on their behalf and for our shareholders.

Today, let's focus first in part on how this happened, but, more importantly, what it means in the advancing of our unique programs to even greater values. Our discussion today might be called a tale of 2 compounds. That is our narrative surrounding 2 novel medicines, the unique proprietary orally administered small molecules, known as avacopan and CCX140, and these are overviewed in Slide 3.

This title is apt, insofar, as we will discuss the achievements and progress in these 2 programs and then talk about what will happen next with avacopan and CCX140, including potential future disease indications in the expansion of the utility of avacopan. But the title is also somewhat incomplete because we ought not to stop there with avacopan and 140, indeed, I will close later by reminding us all that there is an entire pipeline at ChemoCentryx, not just in these 2 novel medicines, but in other innovative work that feeds a robust clinical pipeline and an expansive value landscape of the near future.

To begin, last quarter, in a stunning result for our pivotal Phase III clinical trial, top line data from the ADVOCATE study in anti-neutrophil cytoplasmic auto-antibody, or ANCA-associated vasculitis, revealed that avacopan achieved superiority over the daily steroid containing active comparator, standard of care therapy in sustaining remission in patients with ANCA-associated vasculitis over 52 weeks of treatment, in addition to showing a wide range of other benefits with avacopan that were not seen with the incumbent standard of care.

The ADVOCATE results are remarkable in many ways, some more nuanced, but perhaps no less important than others. For example, the ADVOCATE result validated our pioneering approach at ChemoCentryx, that of highly selective, chemoattractant receptor inhibition for the treatment of human autoimmune and inflammatory disease. Specifically, to my knowledge, the ADVOCATE trial with avacopan is the first demonstration of a chemoattractant receptor inhibitor for autoimmune and inflammatory disease to show clear clinical benefit in a worldwide, multi-centered, randomized, controlled, blinded pivotal trial.

And this provides profound validation that a highly targeted therapy, with precise inhibition of a single chemoattractant receptor target, can lead to robust and broad clinical benefits in a complex human patient population with a complicated autoimmune disease.

For those long time aficionados and enthusiasts, who have been following this field for some years or even decades, I suggest we now pause and pay a moment of respectful silence for the grateful demise of the so-called redundancy theory. They now stay well buried in the past. These results validate the rest of our pipeline approach and, again, I'll allude to that at the end of my talk.

In a moment, I will come back to avacopan and ANCA vasculitis and other diseases. My other focus today, as I mentioned, will be on our next lead drug candidate, another unique asset known as CCX140. CCX140 is an inhibitor of the chemokine receptor known as CCR2, which we are now studying for the treatment of patients with focal segmental glomerulosclerosis, or FSGS. CCX140 has an extensive and increasing scientific support behind it as well as a previous successful Phase II trial in diabetic nephropathy.

We now enter this year of 2020 with an unprecedented clinical momentum as we were prepared to deliver on our "2020 4-Sight" plan, that is our plan to announce top line data from 4 further clinical trials, all of which involve either avacopan or CCX140.

Coming back to avacopan and ANCA vasculitis, an orphan disease where clinicians and patients are desperate for a modern remedy, as you can see from Slide 4. The current standard of care, which we used as an active comparator in the ADVOCATE trial, includes high doses of daily steroids, such as prednisone or methylprednisone, combined with an immunosuppressant such as rituximab or cyclophosphamide. This standard of care treatment regimen must be restricted in actual clinical practice to 6 months because of the significant mortality and morbidity it causes, contributing strikingly to the ninefold increased mortality risk for ANCA vasculitis patients as compared to healthy people. It is high time for a new treatment paradigm, and we may now have the answer.

The result of the ADVOCATE trial surpassed all of our expectations and could mark a critical turning point in the treatment of this devastating, debilitating and life-threatening disease. The avacopan value proposition that we tested in the ADVOCATE trial was fourfold, as shown on Slide 5.

One, to stop the acute active vasculitis crisis in ANCA patients by stifling the activation of disease-causing neutrophils. These neutrophils are thought to be driven by the C5a receptor, which is the molecular target of avacopan. Two, by using avacopan instead of chronic daily steroids to eliminate illnesses caused by the current standard daily steroid therapy. Three, to stop the accumulation of organ damage, particularly and notably in the kidney. And four, to improve the all too often miserable quality of life of ANCA patients.

So let me briefly summarize the top line results, which you can find on Slide 6. First, you'll see that avacopan was numerically superior and statistically non-inferior to the daily steroid-containing active comparator at 26 weeks in achieving remission that is in stopping active vasculitis as measured by the Birmingham Vasculitis Activity Score, or BVAS, which was the tool used for the primary efficacy endpoints used in this trial.

After 52 weeks of treatment, the avacopan therapy sustained remission at a rate of 65.7% compared to 54.9% in the active comparator arm. Not only was this numerically and statistically non-inferior to the incumbent standard of care, but this result was highly statistically significant for the superiority of avacopan in terms of sustained remission after 1 year.

Next, avacopan has achieved statistical superiority in reducing the illnesses that are associated with the use of steroids in the active comparator treatment, as compared -- or as measured, rather, by the Glucocorticoid Toxicity Index, a comprehensive quantitative scoring system developed by expert clinicians over the course of some years.

Third, avacopan showed a statistically significant improvement over the active comparator in Estimated Glomerular Filtration Rate, or eGFR. While our goal was originally to stabilize kidney function to save the kidney, it looks as though with avacopan, kidney function actually improves. This perhaps is the single data point that nephrologists are most interested in, and it has been a key factor as we contemplate future opportunities for avacopan, of which I will speak momentarily.

Finally, you can see that avacopan therapy was numerically superior to the active comparator standard of care in all 10 of 10 of the measurements and at each of the time points measured, while showing a statistically significant improvement in 6 of the 10 measurement categories assessed by the SF-36 validated quality of life instrument. Moreover, avacopan was also statistically significantly better in the European index, EuroQOL-5D-5L.

Avacopan thus demonstrated the ability to actually improve the quality of life over 1 year of treatment compared to a deterioration for those in the daily steroid-containing active comparator arm, a remarkable change in how patients perceive and report their health with an instrument validated by regulatory authorities.

Avacopan superiority here includes physical and emotional functioning, including a significant improvement in the crucial category of vitality, which is so important in allowing patients to return to normal lives, with obvious socioeconomic benefits.

The top line safety results revealed an acceptable safety profile in the serious and life-threatening disease, with fewer subjects having serious adverse events in the avacopan group than in the daily steroid-containing active comparator. Putting this all together, we believe avacopan has a very strong value proposition as it demonstrated progress in all 4 key elements of the total burden of a disease, which leads thousands of lengthy -- two thousands of lengthy hospitalizations each and every year.

We aim to share full ADVOCATE Phase III data at the annual meetings of the European League Against Rheumatism, or EULAR meeting, and also the European Renal Association, European Dialysis and Transplant Association, or ERA-EDTA meetings, in early June of this year. We intend also for several refereed full publications beginning to be published this year.

We have assembled an impressive team of internal and external regulatory experts and are on track to file our NDA, or New Drug Application, with the U.S. FDA in mid-2020. Our partner in Europe, Vifor Pharma expects to make a regulatory submission to the European Medicines Agency later in 2020.

We, at ChemoCentryx, are gearing up for the anticipated commercialization of avacopan in the United States, where we own 100% of the rights, while Vifor Pharma does the same for international markets in an alliance in which we benefit from excellent economics with teen to mid-20s royalties on aggregate net sales in the Vifor territories.

Although the commercialization opportunity here in the U.S. is very large, it is eminently feasible for a company of our size because of the limited number of rheumatologists and nephrologists, who manage the bulk of the patients with ANCA-associated vasculitis. We envision a field force in the range of 50 to 75 people. As depicted on Slide 7, we expect normal orphan drug pricing for avacopan in ANCA vasculitis, reflecting the potential clinical and pharmacoeconomic benefits of this medication for patients and for health care systems.

I'll turn now to our second unique asset, CCX140, which is generating a lot of interest among clinicians and other members of the community. CCX140 is a selective inhibitor of the chemokine receptor known as CCR2.

CCX140 is now being studied in the treatment of focal segmental glomerulosclerosis, an orphan kidney indication with no approved therapy, in which the kidney's filtration units, the glomeruli, develop scarring, which can lead to end-stage renal disease. FSGS patients have excess proteinuria, or protein in the urine, due to the breakdown of the kidney's filtration system.

CCX140 has an excellent clinical pedigree. We published a paper in The Lancet Diabetes & Endocrinology a few years ago, showing the results of a randomized, double-blind, placebo-controlled, 52 weeks continuous dosing Phase II trial of CCX140 in more than 300 patients with diabetic nephropathy or diabetic chronic kidney disease.

In that study, CCX140 achieved a statistically significant reduction in proteinuria, which was the primary endpoint. It exhibited a good safety profile and was well tolerated. Since that trial, new science has reinforced our hypothesis that CCR2 inhibition is effective in protecting podocytes and improving kidney structure and filtration with the latest new science being presented in post reform at the 2019 meetings of the ERA-EDTA meeting and the American Society of Nephrology.

For example, CCR2 inhibition provided significant and rapid renal protection in murine models of chronic kidney disease, including both diabetic nephropathy and nondiabetic models such as FSGS models. In fact, these beneficial changes can be seen even at the visual level, at least by electron microscope analysis.

Slide 8, for example, shows an electron micrograph view made by CCX scientists, which shows striking improvements in the integrity and structure of the specialized filtration cells of the kidney, the podocytes, which tenderly wraps the extravascular surface of the capillaries in the glomerulus or filtration unit of the kidney. You can see the difference in the podocytes and the glomeruli when FSGS resulting from a surgical consequence is inflicted in the model, and when CCR2 inhibition is employed in these animals, this inhibitor being a close analogue of CCX140.

In summary, the new science at CCXI strongly supports the podocyte as the culprit and that podocyte preservation via CCR2 inhibition suggests a likely mechanism for the decreased proteinuria in both diabetic nephropathy and FSGS models and likely the diabetic nephropathy result we saw in human clinical trials, which we believe should translate to human FSGS trials as well.

So the LUMINA-1 and LUMINA-2 trials will assess CCX140's ability to reduce proteinuria levels from baseline in human primary FSGS, and the FDA has indicated that proteinuria lowering in FSGS could potentially be a registration endpoint for this indication. These studies are outlined in Slide 9.

The patient need is great. There are more than 100,000 people in the United States believe to live with this affliction. There are over 5,400 new cases of FSGS each year in the U.S., and there are approximately 1,000 kidney transplants annually involving FSGS patients.

We completed enrollment last year of 46 patients in our LUMINA-1 randomized placebo-controlled, dose-escalation Phase II trial of CCX140 in sub-nephrotic primary FSGS patients. We are on track to report top line data next quarter, Q2. The primary endpoint of the LUMINA-1 trial is reduction in proteinuria 12 weeks, and secondary endpoints include estimated glomerular filtration rate.

We believe that we have also addressed a somewhat unusual dose response from the original Phase II diabetic nephropathy trial, in which the 5-milligram once-daily dose demonstrated somewhat better reduction in proteinuria than did the 10-milligram once day dose at week 52.

As explained in a November 2019 Journal of Immunology report and 2019 ERA-EDTA poster presentation from ChemoCentryx scientists, our data suggests that the antagonist-induced increase of the natural ligand can occur sometimes with the blockage of the clearance of that ligand by CCR2. We identified a sweet spot in terms of balancing podocyte preservation and renal function versus MCP-1, the natural ligand for CCR2 being produced by monocytes and macrophages in the body.

Our pharmacological data suggests that we can readily dose at levels, for example, the 15-milligram twice daily dose in the LUMINA trials, to provide more than enough receptor coverage to overcome the elevation of MCP-1 in the body in the presence of the CCR2 inhibitor, thus stabilizing podocytes function.

The LUMINA-1 trial elevates doses from 5 mgs once daily and 10 and 15 mgs twice daily in order to test this finding and to best -- and to find the best dose over 12 weeks. This study will also look at subsequent results after the following 24 weeks. And as I mentioned, results from LUMINA-1 are expected in the second quarter.

The LUMINA-2 trial, next, is a single-arm, open-label clinical trial with more severe forms of primary FSGS. In fact, those with nephrotic levels of proteinuria, which is a rarer condition. Patients will receive doses escalating from 5 milligram once a day to 15 milligram twice a day, and we expect top line results from LUMINA-2 later this year in 2020.

The LUMINA trials are part of our "2020 4-Sight" plan to report top line data on 4 clinical trials in 2020, as displayed in Slide 10. As I just mentioned, 2 of these are the LUMINA-1 and LUMINA-2 trials, and the other 2 trials involve avacopan.

First, as shown on Slide 11, is the ACCOLADE trial of a life-threatening, complement dysregulated orphan kidney disease for which there are no approved treatments, C3 glomerulopathy, or C3G. Half of all C3G patients experience kidney failure and relapses even after kidney transplant are also all too common.

Compassionate use cases showed that avacopan's action on the C5a receptor could have a positive effect on this disease, stopping the activation of the destructive neutrophils, which are known to be present in C3G. So we initiated the ACCOLADE trial and, in 2019, we were awarded a $1 million grant by the U.S. FDA to support that trial.

The primary endpoint is based on changes in the C3G histological index following 6 months of treatment. There are 2 placebo-controlled blinded strata in the trial. The high-complement stratum is nearly fully enrolled, and we expect top line data by the end of 2020, along with some data from the lower complement stratum as well.

Turning to the AURORA trial, and if you'll turn to Slide 12, this features avacopan in the treatment of a disfiguring skin disease, hidradenitis suppurativa, or HS. This disabling autoimmune condition is a neutrophil-driven disease in which the complement system has been implicated. Avacopan's proven ability to target the C5a receptor and stop C5a neutrophil activation offers strong potential here. Avacopan's mechanism of action is designed to bolt the door before the activated neutrophils can escape. And patients will be assessed after 12 weeks of treatment with the hidradenitis suppurativa clinical response or HiSCR clinical instrument.

We are closing in on the 390 patient enrollment, and we expect to report top line results in Q3 of this year. The momentous success of the ADVOCATE trial in Q4 and the 4 additional top line data readouts expected in 2020 represent only the beginning of our plans to bring the benefit of chemoattractant inhibition to clinicians and to patients.

In the ADVOCATE trial, avacopan demonstrated in effect an improvement of kidney function as measured by the estimated glomerular filtration rate, or eGFR. And as you can see from Slide 13, this opens up a number of very interesting expansion possibilities for avacopan and renal indications, characterized by complement activation and inflammation.

We are looking first, for example, at lupus nephritis, given the strong parallels with ANCA vasculitis, and we will update you on our thinking in the coming weeks. We believe avacopan is at the threshold of breaking through to become a franchise, a pipeline within a drug.

Overall, 2019 has set us up for an extraordinary year as we expect to execute the first of our New Drug Application filings, also our "2020 4-Sight" plan of 4 top line data readouts and clinical preparations to broaden avacopan's indications. All of this is fueled by a very healthy financial position, as Susan Kanaya will now describe.

We ended the year with more than $200 million on our balance sheet and, since then, added a non-dilutive credit facility of up to $100 million more. Susan?

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Susan M. Kanaya, ChemoCentryx, Inc. - Executive VP, Chief Financial & Administrative Officer and Secretary [4]

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Thank you, Tom. Our fourth quarter and full year 2019 financial results were included in our press release today and are summarized on Slide 14.

Revenue was $10.1 million for the fourth quarter compared to $9.3 million for the same period in 2018. For the full year ended December 31, 2019, revenue was $36.1 million compared to $42.9 million in the previous year.

Research and development expenses were $9.2 million for the fourth quarter of 2019 compared to $15.1 million for the same quarter last year. For 2019 as a whole, R&D expenses increased to $70.3 million from $62.7 million in 2018. These increases were primarily attributable to higher Phase II clinical study expenses, driven by patient enrollment of the avacopan AURORA trial in patients with HS and the 2 CCX140 LUMINA trials in patients with FSGS as well as an increase in Phase I expenses due to avacopan ancillary studies.

These increases were partially offset by lower research and development -- research and drug discovery expenses in 2019 and decreased Phase III expenses at the ADVOCATE pivotal trial, which was fully enrolled in 2018.

General and administrative expenses were $7 million in the fourth quarter of 2019 compared to $5.6 million we reported in the same period last year. Full year 2019 G&A expenses increased to $24.2 million from $20.4 million in 2018, primarily due to higher employee-related expenses, including those associated with our launch preparedness efforts and higher professional fees.

We recorded a net loss for the fourth quarter 2019 of $15.1 million compared to $10.8 million in the same period last year. Our full year 2019 net loss was $55.5 million compared to $38 million in 2018.

Total shares outstanding at December 31, 2019, were approximately 60.2 million shares. We ended the year with $202.2 million in reported cash and investments, excluding the credit facility, of up to $100 million, which we secured in January 2020, as Tom mentioned.

Lastly, in terms of guidance, we expect to utilize cash and investments in the range of $85 million to $95 million in 2019. Tom?

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Thomas J. Schall, ChemoCentryx, Inc. - Founder, President, CEO & Chairman [5]

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Thank you, Susan. To summarize, as you can see from Slide 15, 2019 truly was a breakthrough year for ChemoCentryx as we reported top line data from our pivotal Phase III ADVOCATE trial, showing superiority in sustaining remission at 52 weeks for avacopan over the daily steroid-containing active comparator and accruing other benefits to avacopan patients not seen in the traditional standard of care.

We plan to file an NDA for avacopan in ANCA vasculitis with the FDA mid-year, and our partner, Vifor Pharma, plans to submit a licensing application to the EMA later in the year. We and Vifor Pharma are preparing for commercialization in the U.S. and international markets, respectively.

We completed our enrollment in the LUMINA-1 trial of CCX140 in FSGS, which we expect to be the first of our "2020 4-Sight" series of top line data readouts, followed by readouts avacopan in 2 more indications, C3 glomerulopathy and hidradenitis suppurativa and the LUMINA-2 trial of CCX140 in a rarer form of FSGS.

Our track record of strong execution gives us great confidence and has attracted the financial resources that enable us to move forward on so many fronts simultaneously. This bright future is enhanced by the prospect also of expansion of our clinical development into further indications, with avacopan and lupus nephritis, for example, as a first likely indication to emerge over that horizon.

In addition, I would be remiss were I not to remind all of us that there exists a robust pipeline. Slide 16 will remind us of that, beyond avacopan and CCX140, additional volumes, if you will, to be added to the tale of 2 compounds. I look forward with relish in the near future to be able to discuss the details of some of these other value-creating innovations and novel medicines that the rigor and power of the CCXI approach is ready to unleash.

In closing, some of you are reminded of the imagery of voyages, sometimes storm-tossed, but ultimately, where we had a fair strong win filling our sails. Here now, we find that voyage has landed us on an untrammeled shore with a new dawn suffused in the golden glow of opportunity. It is here that we intend to build our new world of health and prosperity for patients and for shareholders alike.

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

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from Steve Seedhouse with Raymond James.

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Steven James Seedhouse, Raymond James & Associates, Inc., Research Division - Research Analyst [2]

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Some beautiful prose there, Tom. I wanted -- yes. I wanted to -- I don't want to distract from the pipeline you guys highlighted, but I think it's probably prudent to ask about coronavirus, if I can, just because, obviously, of the situation unfolding in the market and in the world. And Tom, as you know, there's a literature implicating C5a in acute lung injury, in mice at least, following infection with, in fact, coronaviruses. And we're aware also of a company in China that's generating a C5a antibody to test in COVID-19 and, just saw a couple of minutes ago, Regeneron plans on starting a trial for KEVZARA. So a different anti-inflammatory approach. So the question is pretty straightforward. I was just hoping if you could clarify if, in fact, there is a coherent rationale for avacopan in COVID-19. And specifically, have you received any requests? Or do you have any plans to test it in treating pneumonia associated with COVID-19?

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Thomas J. Schall, ChemoCentryx, Inc. - Founder, President, CEO & Chairman [3]

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Yes, Steven, a great question. In fact, as you know, and others may know, but just to recap, there is ample evidence that what happens, in not just coronavirus, but even other forms of severe viral infections, in the cases that ultimately lead to mortality, there's a kind of acute respiratory distress syndrome which occurs, massive lung injury, which ultimately leads to pulmonary failure. And typically, that is the cause of death in those cases. That -- the acute respiratory distress syndrome is often accompanied by massive complement activation and therefore, the activation of destructive granulocytes, including neutrophils downstream of C5a. Interestingly as well, and that's been shown in animal models, as you say, of various viral infections, there's fairly good evidence in human beings as well. There's fascinating evidence in certain individuals in China with a variant of CD55 or decay accelerating factor, which -- the dysregulation of which can lead to greater complement -- terminal complement activation, including downstream of the alternate pathway, where C5a receptor is found. Those variants seem to be represented in a cohort of folks that experience high-mortality rates consequent of ARDS.

All that's by way of saying, yes, there's a very reasonable hypothesis, and it still is hypothesis at the moment, that C5a receptor inhibition might be able to help with advanced cases of coronavirus. The challenges are daunting, as you know. Number one, it is a hypothesis. The timing of administration would be absolutely critical. There's an argument to be made that all of these immune defense mechanisms early in the infection are what actually may control infection ultimately. And the reason that, in most cases, even the most cynical estimates of survivability, the opposite of mortality is 95%.

So one doesn't want to mess up the 95% survivability ratio, that's for sure. So we've done a lot of research. We are deeply looking at this. We are consulting with experts all around the world about what might be done if we might employ some of our approach to assisting in this crisis. So it would be premature of me to say anything more than that at this point. And we're just -- we need to continue to sort of gather data and watch how the crisis unfolds.

I will say, too, that we do have a PO drug. And so, sometimes, the administration in the most dire cases can be difficult. So work on IV formulations has been something we've been doing it for a long time, but we have not had any clinical validation yet of our IV formulations. So as I said, as all of us, both internally in the scientific and medical world at large, discover more about corona, we are going to be right in the discussion. And if we have more to say about that that's material, we'll bring it to the community immediately.

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Steven James Seedhouse, Raymond James & Associates, Inc., Research Division - Research Analyst [4]

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Okay. And just back to the discrete pipeline then. Susan, you mentioned an increase in Phase I clinical study expense due to some avacopan ancillary studies. I was just hoping you can elaborate on what those studies include and clarify if they're completed or if they are still pending and, therefore, gating factors to the midyear submission.

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Thomas J. Schall, ChemoCentryx, Inc. - Founder, President, CEO & Chairman [5]

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Sure. I'll let Susan handle that question.

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Susan M. Kanaya, ChemoCentryx, Inc. - Executive VP, Chief Financial & Administrative Officer and Secretary [6]

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Sure, Steve. Now those are just some additional studies that were initiated in Q4 and actually all complete. So no, we don't expect those to impact the timing of our filing.

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Operator [7]

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Our next question comes from Edward Tenthoff with Piper Sandler.

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Edward Andrew Tenthoff, Piper Sandler & Co., Research Division - MD & Senior Research Analyst [8]

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And thanks for the thorough update. A lot of exciting progress, and I appreciate you reminding us of the richness of the pipeline because I think there's a lot more to come.

I wanted to focus in on LUMINA-1 and just get a sense for what you would see as a positive outcome, kind of understanding what your expectations and/or goals might be.

And I'm curious, too, just kind of looking at sort of the regulatory approach, would you ultimately wait for LUMINA-2 data for filing? Or what would be sort of next steps once you have those data sets in hand?

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Thomas J. Schall, ChemoCentryx, Inc. - Founder, President, CEO & Chairman [9]

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Great questions, Ted. Thank you. So with LUMINA-1 in FSGS, first, it's important to remember, there's just no currently approved drug for FSGS. So there's really no established benchmark or framework for success. If we look at one of our colleagues in the field is doing, for example, the sparsentan's regulatory path, which comprises a Subpart H accelerated approval process, if successful, is based on the proportion of patients achieving a UPCR, European -- I'm sorry, urinary protein creatinine ratio, less than a certain threshold, in this case, less than 1.5 grams per gram, and a 40% drop or so in proteinuria at week 36. They will have to do a confirmatory endpoint based on percentage change in eGFR slope thereafter at the -- basically at week 1, 12 or 2 years.

So that's all informative. I think that we know that we can -- a proteinuria drop at 12 weeks is something we've seen in humans. We see really rapid drop in our animal models. So anything approaching a 30% to 40% drop above what we see with the layering this on top of standard of care, which are ACEs and ARBs, which is how the protein will be read out, will have to have in addition to what standard of care provides would be very interesting to us. And it would allow us to design the next step of the -- essentially the registration step, which will be a 2-arm, double-blind randomized controlled trial with an optimal dose of 140 against just the underlying therapy in con meds.

So that will -- we've already got that sort of design sketched out. We think we know what it looks like. We know how big it is. Obviously, we'll have very, as soon as possible after LUMINA-1, discussions with FDA to confirm what we think our previous understanding was and this trial design based on the results of LUMINA-1. And we hope that we can find a quick path to registration, at least conditional registration based on proteinuria lowering.

FS -- the LUMINA-2 with the nephrotic syndrome FSGS, no, it's not a gating item for proceeding with primary FSGS. We had certain special hopes for that nephrotic syndrome population, including being able to enroll somewhere between 6 and 13 in fairly short order and maybe keeping them off of the rescue steroid regimen. It's proven to be a very difficult trial to enroll. These are really sick people. And it's kind of an intense trial because we watch them very carefully for protein increases and as we step them up. So I would say that -- and I don't have any data yet from that trial, by the way. So -- but certainly, the nephrotic syndrome open-label study, is not a gating item to primary FSGS registration in any way. And I believe both LUMINA-1 and LUMINA-2 results will support each other ultimately in the discussions with FDA.

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Edward Andrew Tenthoff, Piper Sandler & Co., Research Division - MD & Senior Research Analyst [10]

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That's very helpful. And then if I may, just a quick one for Susan. It looks like maybe there were some ATM drawdown in the first quarter, just looking at sort of the share count from the 10-K versus the commentary of about 60.2 million. So I'm curious, did you take down some? And can you give us some general estimates of what the ATM utilization was during the first quarter?

And then secondly, have you accessed any of the $100 million credit facility? Or is that still fully available?

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Susan M. Kanaya, ChemoCentryx, Inc. - Executive VP, Chief Financial & Administrative Officer and Secretary [11]

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Sure. So to just to be clear, there is no ATM facility or equity distribution agreement in place. The activity that you see there is primarily stock option exercises in the fourth quarter of 2019. So that is to clarify the source there for you.

In terms of the -- sure, of course. And in terms of the $100 million credit facility, again, that being essentially available at our option for the most part. $5 million was taken down this month in March. The balance of the $20 million would be available to the essentially end of this year.

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Thomas J. Schall, ChemoCentryx, Inc. - Founder, President, CEO & Chairman [12]

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The first tranche?

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Susan M. Kanaya, ChemoCentryx, Inc. - Executive VP, Chief Financial & Administrative Officer and Secretary [13]

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Yes, the first tranche of $20 million. We have another tranche of $20 million upon NDA submission and an additional $30 million upon NDA approval, and then the $30 million balance subject to credit approval.

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Edward Andrew Tenthoff, Piper Sandler & Co., Research Division - MD & Senior Research Analyst [14]

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So it's fair to say, though, that none of that's been taken down as of this moment?

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Susan M. Kanaya, ChemoCentryx, Inc. - Executive VP, Chief Financial & Administrative Officer and Secretary [15]

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No. As I stated in the beginning, just $5 million, that will be taken down later this month.

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Operator [16]

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Our next question comes from Michelle Gilson with Canaccord Genuity.

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Michelle Lim Gilson, Canaccord Genuity Corp., Research Division - Analyst [17]

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I was just hoping to dig in a little bit more to the LUMINA-1 study. What are you planning to report next quarter? Anything beyond the primary endpoint? And then you touched on kind of the magnitude of effect that you're expecting, but should we also be looking for a dose response, especially at such an early time point at 12 weeks? And kind of following this line of thinking, and you addressed this a bit on the call, Tom, but can you also elaborate on how you chose -- used dosing cohorts and the data that support the safety of CCX140, and maybe remind us on why the duration of the study is appropriate for FSGS?

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Thomas J. Schall, ChemoCentryx, Inc. - Founder, President, CEO & Chairman [18]

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Absolutely. All good questions, Michelle. Thank you. So the -- what we'll report we're committed to reporting the 12 week data, which is the 3 dose active dose arms versus placebo, we may well -- again, depends how we can get all the data together appropriately. But there's a crossover at week 12 to 24 weeks of additional open label. And they all crossed over to the highest safe dose, which I'm delighted to say was the highest dose. So we might have some inflection kind of point data this year as well. We'll have to see how that plays out.

So definitely, the top line data proteinuria reduction baseline change from 0 to week 12 and maybe some things beyond that will -- it's a very short time frame for any real change in eGFR, frankly. And as you know, it's a fairly small study. So your other -- and that sort of is a factor in the discussion of your other question. So would we expect a dose response? Not necessarily, but we do have a sort of mixed measures statistical analysis across all dose groups versus placebo. We would like to see maybe some trends of a dose response, that would be interesting, but not -- perhaps not essential. We'll probably end up going with the dose that's best tolerated. And again, we have no tolerability issues so far.

The selection of the dose was interesting. So we took, as a base case, the 5 mg once a day dose because that showed rapid and sustained proteinuria reduction in the diabetic chronic kidney disease study over 52 weeks. So they dropped very quickly. We could detect significant changes in proteinuria by week 4. Certainly, they were well established by week 12 and statistically different from the underlying therapy, the stable doses of ACE and ARBs. And they continued. It was a sustained difference over 52 weeks at the 5 mg dose.

As I said, there was some variation in what happened at 10 mg once a day. We analyzed that in the laboratory, and it was all about, again, equilibrating the amount of endogenous ligand being released at slightly higher doses of the CCR2 antagonist and dosing through that, if you will. So this trial, we said, okay, great. We understand this really well at the level of cell biology, which we published at the level of in vivo pharmacology, which we've discussed.

So we translated that to this trial design and said, "Let's do 5 mg a day, 10 mg twice a day and 15 mg twice a day." And so those are the results that, again, we'll be reading out at week 12 in Q2. And they'll fundamentally either validate or provide new light on the pharmacological and cell biology data we have. But the 5 mg once a day was anchored to the original DN study, where we successfully hit our primary endpoint.

So I think those are most of your questions. And again, the data we'll be presenting will be both the mixed analysis of cumulative separation with all doses versus placebo control, but we'll probably be presenting some vignettes as well, in other words, just spaghetti grafts of patient-by-patient data, which are sometimes in smallest trials as revealing as the statistical analysis. And naturally, we'll get safety -- top line safety as well and other features that are relevant to the biological effect.

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Michelle Lim Gilson, Canaccord Genuity Corp., Research Division - Analyst [19]

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Okay. And then I also have a quick question on COVID-19. Is there any opportunity to make avacopan available to patients on an early access basis in light of the current epidemic? I know many patients are probably quite worried, given their high immunosuppression, and especially probably with respiratory manifestations of ANCA-associated vasculitis.

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Thomas J. Schall, ChemoCentryx, Inc. - Founder, President, CEO & Chairman [20]

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Yes, it's a great question. It's one we've been discussing very, very deeply. As you know, one of the complexities we have is we have an international relationship as well with a partner. So without going into too many details, the ability to work with avacopan in these kind of extraordinary settings, we'd have to make sure both parties, all parties fulfill their relationship obligations to each other. We also -- we have additional complexities by being essentially finding a registration package right now, which is kind of like, I guess, it would -- if you had to give me a less than perfect time to have a public health crisis, where you might want to do something extraordinary with your agent, right, as you're finding your first registration package would not be my first choice. Having said all that, we do, again, fundamentally, understand the deep obligations that we might have. And if there's something we can do to help and do it in a way that's responsible and safe, we are going -- we will find that way. But again, it would be premature of me to talk about any more details on that today.

Let's just say that we have a deep desire to help, if at all possible. And at the same time, we have to be extremely sensitive to the obligations to ANCA vasculitis patients as well, where we know, based on the data, certainly, that's our strong belief based on evidence that we can help those people, save lives in ANCA. And we have to be very mindful of trying not to do experimental medicine, for example, in a public health crisis and -- unless we have really good reasons to believe that we can do that safely and have some help of providing a benefit.

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Operator [21]

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Our next question comes from Dae Gon Ha with SVB Leerink.

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Dae Gon Ha, SVB Leerink LLC, Research Division - Associate [22]

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Congrats on all the progress. So I just wanted to touch upon the LUMINA studies and then maybe one for ACCOLADE as well. So Tom, if we go back to your prepared remarks, I think you mentioned that the -- highlighting the unmet need for FSGS in excess of 100,000 patients in the U.S., some of the other companies have given a different number, so I just wanted to make sure that I heard that right.

And in terms of trials going forward, I know you're currently running LUMINA-1 and 2. The competitive landscape seems to be intensifying, and you also mentioned sparsentan, which is now in Phase III. So just wondering, do you envision any kind of expedited time lines once you get Phase III underway, assuming you get positive data? And if so, I guess, how should we think about the overall time line towards reaching that NDA submission?

And then in terms of ACCOLADE , on a similar vein, I guess, you mentioned Stratum 1 and Stratum 2., with Stratum 1 data expected by year-end of 2020 and a little bit of Stratum 2 data by year-end. I guess, when can we expect the full data from both strata? And also, is there any kind of limitation as to what the potential labeling could be if you only presented Stratum-1 for the registration grade trial?

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Thomas J. Schall, ChemoCentryx, Inc. - Founder, President, CEO & Chairman [23]

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Yes. Thank you, Dae Gon. Really insightful questions. So FSGS, to the first point, you were asking about the -- forgive me. You were asking about the numbers of the prevalence, yes. It's -- I think FSGS is probably one of the most frustrating areas to try to get a real handle on this because the literature is difficult, and it is highly variable depending on the source you read. One of the sources of variability is the distinction between primary and secondary FSGS. And so as you know, but many people may not be aware of this, FSGS is not a disease. It's actually a histological sign of kidney damage. So it's one of these strange, I call it, an indication because it is. It's an indication defined by a histopathologist readout, a very specific kind of readout.

And so that's already a little unusual. But the second bit of unusualness is that you can have that lesion, so focal or segmental scaring -- sclerosis. So it really means when we look at a tissue section slide under a light microscope in 2 dimensions, we have evidence for either localized regions of scarring in the glomerulus or whole segments of the glomerulus scarring. So there are different ways to get that, right?

So the FDA is very careful how they define what's called primary FSGS.

Primary FSGS is also kind of weird. That means you either have a defined genetic lesion known to lead to this kind of scarring in the kidney. And those are fairly rare, although not vanishingly rare, but fairly rare lesions. Or there's no other known reason you should have these lesions. So it's kind of like a diagnosis of default or ignorance, if you will.

Secondary FSGS can happen in any one of a number of ways. You can have prolonged diabetes and high severe disease that can lead to kidney scarring. So there's actually the likelihood in our diabetic chronic kidney disease trial, our DN trial of years ago, that we had a few -- in fact, maybe more than a few of a number of secondary FSGS people in that trial. You can get it from drug abuse. You can get it from viral infection, et cetera. Probably, it doesn't matter whether it's primary or secondary in terms of the therapeutic effect if you have an agent that controls proteinuria by modifying or repairing glomeruli and the specialized cells within the glomeruli, which is what we think we're doing, by the way. Then it doesn't matter whether it's primary or secondary, but it will certainly affect the numbers.

So we are trying to use fairly reasonable estimates, maybe conservative estimates of primary FSGS in the U.S. because the regulatory authorities here in this country are very, very clear that they want to separate out primary from secondary in terms of the potential to license new therapies. So I think our 100,000 or so, and, again, I know it's a fairly big number, is reasonable for primary FSGS in the U.S. And I know others might cite a lot higher, and there are some that might cite lower if they're just counting the genetic lesion as their definition of primary. But I think it's a defensible number for our purposes and certainly the purposes for regulatory discussions.

Competition, you're absolutely right. I mean, I mentioned sparsentan for more than one reason. They are farthest along now in a Phase III study. Their agent is an interesting agent that both blocks angiotensin receptor as well as blocks the endothelin pathway. These are both nodes in the same kind of pathway in the kidney known as the renal -- the renin-angiotensin-aldosterone pathway, or RAAS pathway, if you will. So they're taking multiple bites out of the same pathway. And they're certainly having a nice protein lowering effect. At least that's my interpretation of their human data. They have some problems with this to deal with, and these are well known.

So endothelin-1 inhibition, whether it's sparsentan or other sentans or -- molecules of the same class, do tend to cause edema. Fluid retention can manifest itself in many ways, but this is a big problem to be managed and particularly difficult in a renal situation because that's one of the things we're actually trying to control with renal dysfunction is trying not to have fluid retention, as you can well imagine.

We've made and done comparisons -- again, back to competition, we've done in-house, pharmacological direct comparisons between the sparsentan approach and the CCR2 inhibition approach. Both will lead to a robust and rather marked and rapid proteinuria reduction. The difference is that we do not see any of the edema. Our pathway is entirely different than the sparsentan pathway.

That may well allow us to -- to the next part of your question, that may well allow us enroll the next trial, the registration step of the pathway very rapidly. Because I don't think we're going to have to battle the resistance that one sees in the clinic as patients are running into this fluid retention management issue, which we think is happening in the other approach.

I'm not concerned so much about the other competition. Again, I think our pathway is very, very well differentiated. We are explaining week-by-week the mechanism of action and how CCR2 controls distressed podocyte function, how CCR2 is a direct molecular switch that talks to the glomerulus about repair versus scarring function. And we'll be publishing more of that data this year very soon. And in fact, the tolerability of the agent continues to be excellent in humans. So I think that we'll do -- in fact, we'll do us well or better than our competition in enrolling trials and getting them done.

I won't prognosticate on time lines before we talk to the FDA after our end of Phase II meeting this year. And then I'll come back to you more with some of that on FSGS. So I think that probably covers the FSGS questions. You had one other question? I'm ..coming back to...

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Dae Gon Ha, SVB Leerink LLC, Research Division - Associate [24]

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Yes. So...

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Thomas J. Schall, ChemoCentryx, Inc. - Founder, President, CEO & Chairman [25]

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Yes? The...

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Dae Gon Ha, SVB Leerink LLC, Research Division - Associate [26]

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Right. On ACCOLADE, very similar.

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Thomas J. Schall, ChemoCentryx, Inc. - Founder, President, CEO & Chairman [27]

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ACCOLADE, yes, thank you. Thank you for reminding me. This is a really fascinating issue. So again, no approved agents for C3 glomerulopathy, as you probably well know. So there is no regulatory pathway, number one. There's precious little information about how to set up trials. So we developed a 2-strata approach. And this was actually done in an interesting -- the rapid sequential fashion when we first set up ACCOLADE a little while ago, Dae Gon. So there was an -- the original reports from the experts and a couple of published papers. Again, this is a rare disease, only about 4,000 to 5,000 prevalent cases, maybe 700 to 1,000 new cases in the U.S. per year. So there's not a lot of material to work with and not a lot of clinical trial literature.

The idea that came out in a couple of really good published papers early on was C3G, which is, again, a kidney biopsy diagnosis, will also have lots of evidence in the bloodstream for consumed or activated complement. Therefore, the easiest way you can measure a presumptive C3G patient before you do a biopsy to confirm him or her is to actually say they have a lot of circulating C5b-9, which is the soluble membrane attack complex. We use soluble membrane attack complex, not because of any special reason, other than it is a very stable marker in the periphery that's easily measured of the activation of the complement cascade right down through -- to the point of C5a, which is where we are on C5a receptor, as you know. So that stratum was the original approach to our ACCOLADE trial, 2-arm study randomized controlled trial, where people had to have high levels of circulating complement.

Another couple of papers came out right after that saying, well, you know, maybe it's not circulating complement that counts. It's what's happening in the kidney. So maybe you shouldn't focus just on high levels of circulating that complex. So we amended our trial. We enrolled a second stratum, figuring we were alone in the world and having the ability to answer this question clinically with a randomized blinded controlled trial of some scale and a couple of different endpoints, including a hard endpoint of biopsy improvement after 6 months compared to a blinded control.

So we enrolled the second stratum, to your point. So here's the deal. First stratum is enrolled -- virtually enrolled, and those data will be really -- will be very easy to analyze for us, I mean, as easy as any clinical trial. And so we'll have that data.

The second stratum, what we would do is we'd screen people first for presumptive C3G. We would take their levels of circulating soluble MAC complexes. Then they would go to biopsy. We always left biopsy to the end, unless they were already biopsy-proven. And what's happening is that people with low-circulating soluble MAC just converted a much, much lower rate. What that tells us -- and this is the beauty of clinical medicine in a pioneering area, it tells us the original hypothesis is in the main correct. If you have biopsy-proven C3G, you're likely to exhibit evidence in your blood stream of activated complement cascade for the alternative pathway. And it's the rare exception, but they're not nonexistent, but it's much less common to have low circulating complement.

So we're going to provide the data for what we have. And frankly, even as we sit here today, we have the largest data set in the world on C3G from our randomized-controlled trial. It's all still blinded to me, so I don't know what the result is, but the -- there's a lot of people in the community of experts saying, "Please just do your analysis. Tell us what you've got." Because we really think that there's going to be an answer here. And we'll know once and for all, whether this pathway is the way forward for clinical benefit. So that's what we'll report. We'll continue to get as many people as we can. We're obviously going to consult with the FDA before any of this is -- the unblinded and analyzed and so on. We really want a database whose integrity is protected, so it can support registration, even if it's conditional registration, but that's what we're going to provide.

So I hope that provides clarity. Sorry about the long-winded answer, but it required a little bit more details than many answers would, only because this is such an uncharted area.

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Operator [28]

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Our next question comes from Anupam Rama with JPMorgan.

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Tessa Thomas Romero, JP Morgan Chase & Co, Research Division - Associate [29]

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This is Tessa on the call today for Anupam, and I will just ask one. Is there any more granularity you are willing to provide on pricing bandwidth for avacopan behind -- beyond kind of in the orphan range? And more broadly, what does your latest payer market research suggest?

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Thomas J. Schall, ChemoCentryx, Inc. - Founder, President, CEO & Chairman [30]

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Thank you, Tessa. Also excellent questions. And I would love to be able to provide more granularity, but it's the one thing that we just cannot -- will not do at this point until we get closer to launch. We are having -- we do have some really great and interesting payer research going on. The pharmacoeconomic picture is really fascinating. And I -- again, people ask me after the ADVOCATE data, we talk about normal orphan pricing corridor of anywhere upwards towards $200,000 a year total down to $50,000 a year total.

The strength of the ADVOCATE data, many observers said to me, "You can't be down in the lower part of that range anymore, that's for sure, if you ever were." Again, I won't comment on that, but I will say that the robustness of the data, the superiority to the standard of care; the elimination of the problems that standard of care brings to the table with glucocorticoid toxicities; the improvement in the quality of life, which does have direct pharmacoeconomic impact; and the renal improvements, which really -- many nephrologists said that's the game changer, and that value is unprecedented according to a couple of very, very informed people in the nephrology community, that might suggest that our price should be robust.

We're not looking for anything extraordinary, though, that's for sure. But the economics are supported. I mean, I'm staggered by some of the data that we get even early on. For example, if you look at incidence and prevalence in just in the U.S., people will debate whether that total number is somewhere between 55,000 to 85,000. It doesn't matter. Let's just take -- you can take any number in that range, there's still 15,000 hospitalizations each year in the U.S. where ANCA vasculitis is involved. And these are lengthy hospitalizations on the average of 10, 11 days. Upwards of 1/3 of these people develop an infection in the course of this hospitalization or have an infection as part of the hospitalization. We can guess, and we have some data to support, that much of that comes from standard of care.

And of course, those hospitalizations are super expensive. There's almost a 5% -- well, let's just say, to be fair, somewhere approaching 4% to 5% mortality of these very closely watched people. So tons of hospitalizations, lots of hospitalization days, lots of infections, lots of mortality. And that's just a fraction of the picture in the United States. So I'm not worried about pricing too much because I think we will absolutely be able to show the value. And we'll certainly have lots more to say about that and the payer research as we get to -- certainly go through the year, but certainly closer to launch, we'll make it very clear what we're thinking.

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Operator [31]

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Our next question comes from Ed White with H.C. Wainwright.

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Edward Patrick White, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [32]

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So maybe the first question I have is on AURORA. You're greater than 95% enrolled now. What should we be thinking of for looking at the -- when the top line data comes out? Will there be any of the crossover data for the additional 24 weeks? Or will this just be the 12-week data? And then what are you looking for? What would you think would be a positive result there? And then just on the secondary endpoint of quality of life, Tom, again, just wanted to get your thoughts on what you view as positive quality of life for that trial.

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Thomas J. Schall, ChemoCentryx, Inc. - Founder, President, CEO & Chairman [33]

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Great question. I'll have a little more granularity around the first point. We're really focused on the 12-week data from the blinded period for the Q3 readout head. And so that's what we're committing to. That's what we'll see. And we were -- we've been talking about the 12-week data from the start only because that is the registration endpoint with HiSCR.

What are we looking for with HiSCR? I mean, this is an index that's driven largely by investigator assessment. Some would say it's a very subjective index. There's certainly amount of subjectivity in it. And so one has to rigorously control the HiSCR, which we will be obviously presenting as the primary endpoint data at 12 weeks. And if one does that, if one trains the investigators to a high degree, certifies both investigators and sub-investigators on the HiSCR assessment. If one then secondly standardizes the way those assessments are done, both within a site and between visits and between all sites, that is absolutely the second essential endpoint to getting a good, clean HiSCR. And then third, one must monitor during the blinded phase the dose assessments that are coming in and making sense. And if not, they have to be called out and the investigators contacted. And that's actually a lot of work, but it is not an intractable amount of work. If one does that, one ought to be able to see a separation that indicates clinical benefit or at least clinical meaningfulness in the HiSCR. And that's what we're aiming to do. There's one drug approved, as you know, Humira, that used a HiSCR endpoint at 12 weeks. They showed they had 2 trials. That was before they had an orphan drug designation, but in any case, 1 trial showed on the average of 20%, 25% difference between the active arm Humira and the background medication arm in those pioneer trials.

So if one shows a difference of 20% or more, I think that will be a very interesting effect. So the way to do that is to make sure HiSCR is giving you the best readout possible. That placebo response is controlled. We've done a lot of work on controlling placebo response as well. And as I said, training, training, training, standardize, standardize, standardize, monitor, monitor, monitor, and you'll get a result that's interpretable. That's what we'll be focused on for 12 weeks in Q3 of this year.

We'll have other secondary endpoints, including something called the IHS4 to look at. There is a quality of life index that's adapted for the hidradenitis suppurativa patient population. That does focus in more on the things that matter to them. I hesitate to say what I think success will look like there, Ed, because it just hasn't been well validated yet in these trials. So I think we're just going to have to see where the data take us. We're continuing to talk to experts, who developed this index, about really what are the most important features? And we'll certainly be talking about the elements that we have information on in Q3. But that's what we're committed to do for Q3 2020.

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Edward Patrick White, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [34]

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Okay, great. And then if you can just tell us where you are as far as preparing for U.S. commercialization. You did mention the field force of 50 to 75 people. Just wondering where you are as far as hiring them, the medical science liaisons, et cetera, and then also if you can compare how you think the launch in the U.S. will compare to the launch in Europe, and how more difficult it could be to launch in Europe.

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Thomas J. Schall, ChemoCentryx, Inc. - Founder, President, CEO & Chairman [35]

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Well, all good questions. We're making really wonderful progress. I'm very pleased with how much of the commercial infrastructure we've laid down so far. We did that a lot before data, but we've really totally accelerated since the data, as you can well imagine. So our med affairs team is shaping up beautifully. We've got a great new medical executive there. Our head of commercial has done a great job in bringing in our market access people and other key positions. Every day, we seem to have 5 or 6 new people around the infrastructure. That's a tiny exaggeration, but not much.

Naturally, we're -- the field force is the most -- well, it's the piece of the puzzle that you kind of slot in the last before your launch. But even there, we're making great progress because the hirers of that talent are being actively recruited or are already in place. So I feel great about the commercial launch and the structure we have in place so far and where we're going with that.

Launching in the U.S., we've really got a beat on that. I think you saw the little graphic in the slide deck. We know, personally, as an organization, and me personally, as an individual, so many of these top prescribers -- and they're not that many. I think the chart showed that 30% of the prescriptions are driven by a couple of hundred docs and a few centers. Those people are almost all personally known to our company. And of course, the nodes go out from that network to get to about 80% of the prescribing physician population, rheumatologists and nephrologists the major focus.

So again, I think we're in great shape. We have a wonderful core presence in the community of both rheumatology and nephrology to be able to reach out, I think, very quickly to the majority of the ANCA vasculitis patient prescribers. And of course, we have one system, if you will, in U.S. to help us understand that, although state-by-state, there are some different licensing requirements, as you can well imagine. But it is a much more straightforward operation than Europe, where, of course, each jurisdiction, while they have a European Medicines Agency, the local health authorities in each country are the ones that negotiate separately for how the drug is marketed and priced, and they all have their own standards. I must say, our partners at Vifor Pharma have a deep and long experience in Europe. And I've been super impressed by how they've been planning the European launch and getting out ahead of the questions with the local -- the health authorities and having these discussions insofar as is possible with each of the country-specific payer organizations.

So it is going to be more daunting, but they've had -- they've been at it for a while. And they've realized both from their experience with other products as well as the evolving landscape with Europe that they have to start in earnest a lot of their discussions and analyses a lot sooner. And I'm pleased to say they seem to have been doing that really well. I'll defer any specific question to them, of course, but I've got great confidence that they're going to have great launches in -- throughout Europe as well.

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Operator [36]

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Thank you. And I'm not showing any further questions at this time. I would now like to turn the call back over to Tom Schall for any further remarks.

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Thomas J. Schall, ChemoCentryx, Inc. - Founder, President, CEO & Chairman [37]

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Well, I wish just to thank everyone again for their time that they've spent with us on this afternoon's call. I know that we're all faced with a number of challenges, both short-term tactical challenges and longer-term challenges. I'm convinced that together, as a community, we'll meet all the challenges that are confronting us certainly in the public health situations that are in front of us right now and ultimately be able to get back to the core business of long-term growth and value creation for all of our patients and shareholders.

I very much, again, thank you for your great questions, your attention, and I look forward to speaking to you again in a few short weeks. Thank you very much. Bye now.

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Operator [38]

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Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.