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

·57 min read

Q3 2020 ChemoCentryx Inc Earnings Call Mountain View Nov 11, 2020 (Thomson StreetEvents) -- Edited Transcript of ChemoCentryx Inc earnings conference call or presentation Monday, November 9, 2020 at 10:00:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Susan M. Kanaya ChemoCentryx, Inc. - Executive VP, Chief Financial & Administrative Officer and Secretary * Thomas J. Schall ChemoCentryx, Inc. - Founder, President, CEO & Chairman ================================================================================ Conference Call Participants ================================================================================ * 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 * Joori Park SVB Leerink LLC, Research Division - Associate * Michelle Lim Gilson Canaccord Genuity Corp., Research Division - Analyst * Steven James Seedhouse Raymond James & Associates, Inc., Research Division - Research Analyst * Tessa Thomas Romero JPMorgan Chase & Co, Research Division - Associate * Yanan Zhu Wells Fargo Securities, LLC, Research Division - Associate Analyst * Steve Klass ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Good afternoon, and welcome to the ChemoCentryx Third Quarter 2020 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 Steve Klass of Burns McClellan. Mr. Klass, please go ahead. -------------------------------------------------------------------------------- Steve Klass, [2] -------------------------------------------------------------------------------- Thank you, operator. Good afternoon, and welcome to the ChemoCentryx Third Quarter 2020 Financial Results Conference Call. Earlier this afternoon, the company issued a press release providing an overview of its financial results for the third quarter ended September 30, 2020. This press release is available on the Investor Relations section of the company's website at www.chemocentryx.com. Please note there is a slide deck to accompany this call, which can also be found on the company's website. 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, will provide an overview of the company's financial highlights for the third quarter before turning the call back over to Tom for closing remarks. During today's call, we will be making certain forward-looking statements. 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 10, 2020, and quarterly report on Form 10-Q filed on November 9, 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, November 9, 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. I will now turn the call over to Tom. -------------------------------------------------------------------------------- Thomas J. Schall, ChemoCentryx, Inc. - Founder, President, CEO & Chairman [3] -------------------------------------------------------------------------------- Thank you, Steve. And good afternoon to everyone listening. Thank you for joining us on our third quarter 2020 conference call. I am pleased to report to you today that we continue to accomplish the goals that we laid out at the start of this year despite the subsequent arrival of a global pandemic. As this grim challenge wears on, our deep sympathy goes again to those who have lost loved ones or who have been otherwise affected by COVID-19. And our admiration and gratitude increases daily for those that are meeting the challenges in the clinic, in the laboratory and in our community. Our resilience as a society will eventually prove to be the key to victory in this battle. For ChemoCentryx, we are now at a very important time of accomplishment, a time when we have our very first ever new drug application under review for avacopan in ANCA vasculitis. A time where we have results in Hidradenitis Suppurativa that define a clear development and registration path forward and a time where top line data will be soon available in a third avacopan indication as well. So today, I will cover, in brief, 3 main topics. I will add some clarity and additional insights on the Hidradenitis Suppurativa or HS result, where there is evidence of clinical benefit and a clear fruitful path forward for avacopan. I will discuss the ACCOLADE trial of avacopan in C3 glomerulopathy, on which we expect top line data before the end of this year and how we propose to look at that trial. And I'll conclude with an update on where we stand on avacopan in ANCA vasculitis as we approach potential commercialization in 2021. I'll start first, by talking about next steps following top line data we reported very recently at the end of October from the AURORA Phase II clinical trial of avacopan in Hidradenitis Suppurativa or HS. HS is a chronic, disabling, painful, disfiguring skin disease described in brief on Slide 3. The sole FDA-approved drug is viewed as only moderately effective, requires infusions or even injections, but nevertheless, accounted for more than $1 billion in sales for this indication last year. This is a clear sign of the unmet need, indeed, some would say desperate need for innovative new therapies in HS. And yet, Hidradenitis Suppurativa is an area that poses questions for many. Yes, even some consternation. It is probably fair to say that this is not an attractive indication to many in the investment community. To this, I respectfully disagree. I would like to explain briefly my conviction for avacopan in this space and that, that conviction is high and clear away some strenuous items that may cloud the opportunity -- the view of the opportunity. I'll focus on some simple and emerging concepts in the pathobiology of this disease that helps me see a clear path forward for avacopan. There is ample independent research demonstrating that complement activation and in fact, the terminal complement fragment C5a is implicated in Hidradenitis Suppurativa. Hence, the relevance of avacopan, since its mechanism of action is designed to stifle the activation of neutrophils via selectively targeting and inactivating the C5a receptor. Aside from other outside reports, we at ChemoCentryx also presented data at the recent Fifth Annual Symposium of Hidradenitis Suppurativa Advances or SHSA Conference, with our colleagues at Stanford University, showing evidence for complement dysregulation in the blood and skin of HS patients. All of that is summarized on Slide 4. Now the AURORA clinical trial has extended our knowledge as to how avacopan might benefit HS patients. In fact, in my view, AURORA has given us so far, the 3 most important things a Phase II trial can yield. One, we have found an effective dose of avacopan; two, we have defined the precise patient population; and three, we have demonstrated safety. Those who seem clearly to benefit from avacopan are the Hurley Stage III population. The sickest of the sick, if you will, in HS, for lack of a better term, and those who have virtually no effective treatment options. The avacopan benefit in this group is evidenced by the data reprised in Slide 5, a snapshot of the fuller top line data picture that we provided very recently and the basis of our now clear going-forward path in HS. But the key question is this, why Hurley III? Why is the clinical signal with avacopan there? What is the opportunity in that group? And what will be required to realize that opportunity? In fact, a major distinction between these most severely afflicted Hurley III patients and the far less severe -- frequently, far less severe, but certainly less severe Hurley II, and of course, Hurley I patients, is the extent of the network of dermal tunnels, also known as sinus tracks or fistulae that connect the abscesses, nodules and lesions in the affected areas of the body in HS. In Hurley III, these tunnels are extensive and also, there is little-to-no space among the interconnected skin disruptions that are in evidence on the surface of the body. Dermal tunnels are structures unique to Hidradenitis Suppurativa. They have not been identified in any other inflammatory systemic skin disease and the presence of tunnels is associated with a more aggressive course of Hurley Stage III disease. Slide 6 refers to some features of advanced HS that we think are pertinent to avacopan and its mode of action in Hidradenitis Suppurativa. Dermal tunnels are laden with pus. Pus is primarily neutrophils and neutrophil nets or neutrophil extracellular traps that form when activated neutrophils degranulate. In Hurley Stage III, there is also more tunnel associated infiltrated, proliferative gelatinous mass or IPGM, which has a distinct, active inflammatory set of characteristics. IPGM is an opaque white, reddish or violet, jelly-like material found in the lumen of HS tunnels, and it contains a mixed population of potently highly pro-inflammatory cells, such as neutrophils and macrophages, cells, which I will add and reiterate, express the C5a receptor. This is evidence for increased C5 pathway terminal activation products in Hurley Stage III disease as the multiple sores, dead neutrophils and pus components intensify the cycle of tissue destruction, tissue remodeling and opening exposure to external environmental pathogens and insults as well, a classical formula for complement activation. We have seen in our own work an exuberance of neutrophils in Hurley III skin biopsies, some of which or one example of which is on that same slide, and researchers such as John Frew and colleagues in New York and Sydney have recently published elegant studies, such as in the Clinical and Experimental Dermatology Journal just this September, demonstrating that these sinus tracks and tunnels in Hurley III are strongly correlated with a decreased responsiveness to anti-TNF therapy as well as more rapid loss of anti-TNF therapeutic effect. We believe that the deactivation and depletion of neutrophils, the reduction of neutrophil NETs and other neutrophil activation products occurs as a consequence of avacopan therapy. Thus, the pus-laden tracks and chambers dry up, much like lava leaving the magma chambers in a rumbling volcano and the surface manifestations of HS, scored clinically by such instruments as HiSCR score and IHS4, et cetera, improve. Or to put it another way, I think of avacopan in Hurley Stage III Hidradenitis Suppurativa as the light at the end of the tunnel. AURORA has fulfilled the promise of a Phase II clinical trial, enabling us to identify a clear path forward. Armed with data from AURORA on dose, on patient selection and on excellent safety, we will discuss the AURORA data with regulatory authorities, and we are planning for a pivotal Phase III trial in Hurley Stage III HS patients. And recall again that these are the sickest of the sick in this disorder, for whom treatment options are de minimis. Our plan is to assess avacopan against placebo at a 12 weeks primary endpoint using the HiSCR as the primary endpoint, since frankly, that is the only regulatory path approval to date. AURORA evidence shows that this should be eminently achievable. We will also include secondary endpoints, such as IHS4, et cetera, depending on agency input. We will likely need as few as 100 or 150 patients in each arm; in 2 arms, 1 study should suffice. You can see from Slide 7 that Hurley Stage III represents a considerable market opportunity for us. Hurley Stage III prevalence is estimated anywhere between 35,000 to 50,000 patients in the United States alone. And while preparing for the Phase III trial, we plan to file with the FDA for an orphan disease designation just on Hurley Stage III, enabling a potentially more streamlined path to market. I would invite you to do the math on how many patients would be required to reach $1 billion in the U.S. alone, in Hidradenitis Suppurativa alone in annual sales using a typical orphan drug price of somewhere between $100,000 and $200,000 per year. There is a clear unmet need. Patients have few treatment options and represent a large underserved population. In summary, evidence confirms that HS represents a huge opportunity for avacopan, which, in our view, requires an extremely modest investment when weighed against a striking potential upside of marked returns for patients and investors. Turning now to another potential indication for avacopan. We expect to release top line results in the Phase II ACCOLADE trial in C3 glomerulopathy, or C3G, before the end of the year. C3G is a potentially life-threatening affliction with no FDA approved therapy, an overview of which is discussed on Slide 8. Our approach to C3G, in my view, has been unique in the industry. Generally, other clinical studies have been small; single-digit numbers of patients is not uncommon. Frequently, they are open label, and they typically measure only biomarker endpoints such as proteinuria, serum creatinine, eGFR and the like. This is not a knock on other studies, it is essentially a necessity of the rare nature of this disease, which is only somewhere between 1,000 and 5,000 people with this affliction in the U.S. at this time. So clinical trial subjects are limited. Nevertheless, we took a different route at ChemoCentryx. We were determined to do a large -- at least for this indication trial, we designed this trial to be a randomized, controlled and blinded trial for the primary endpoint period, and we collected and measured kidney biopsy at baseline and at 6 months to determine the primary endpoint. Slide 9 depicts how we went about this. It shows the design of the ACCOLADE trial -- I'm sorry, it shows that the design of the ACCOLADE trial as I mentioned, is a randomized blinded controlled trial. The original and still core design of ACCOLADE is on this slide. The enrolled subjects are intended to have high levels of circulating C5b-9 complexes in their blood. This is a stable marker of complement activation down the C5 pathway. These individuals are presumed to have C3G from kidney symptomatology, and then they have to be proven to have active inflammatory C3G by biopsy at baseline. And in fact, this group of high C5b-9 subjects enrolled at a fairly good rate for such a rare disease and the group's near fully enrolled. They biopsy-confirmed at the time of biopsy. So while we do, turning to the -- now Slide 11, there was a second stratum that we added after the start of this trial. And this second stratum was based on the hypothesis that some individuals with actual normal levels of circulating C5b-9 might also have active C3G and, in fact, might be confirmed as such by kidney biopsy. Interestingly, after many months, indeed years, we now know generally that these normal C5b-9 individuals do not biopsy-confirm as active C3G when they go through this [stratum]. So while we do have some patients in the second stratum, it would take an additional decade or more at this rate to enroll the full complement of this normal peripheral complements stratum. Hence, we will proceed with the data analysis as originally envisioned in the stat analysis plan and we will present data on all patients, both the high and the normal peripheral complement strata, who have passed the 26-week primary endpoint determination. As summarized in Slide 11, look for 26-week biopsy-based primary endpoint data from ACCOLADE before the end of the year, accompanied by the traditional biomarkers of such things as proteinuria and eGFR. Turning now to avacopan in the treatment of ANCA-associated vasculitis. As summarized in Slide 12, in Q3, we hit an historic milestone when the FDA notified us in September of their acceptance for review of our new drug application. The FDA set a PDUFA date goal of July 7, 2021. As for the question of an advisory committee, we intend to provide an update following the mid-cycle review meeting of the FDA, and we are preparing for one, nevertheless. The FDA's acceptance for review was followed by the announcement, just last week, of the European Medicine Agency's acceptance for review, known as validation, of the marketing authorization application for avacopan in ANCA vasculitis, with a decision expected in the second half of 2021. As many of you know, the cornerstone of our submission to the regulatory agencies has been the data from the pivotal Phase III ADVOCATE clinical trial, which demonstrated statistical superiority of the avacopan group and sustaining remission at 52 weeks compared to the prednisone group. The results of the ADVOCATE study were presented last month in an oral abstract session during the American Society of Nephrology's Kidney Week 2020 Reimagined Meeting. They were presented by the renowned nephrologist, David Jayne, MD, Professor of Clinical Autoimmunity at the University of Cambridge in England. Dr. Jayne's presentation highlighted the potential of avacopan to offer new hope to patients who suffer from this incurable orphan disease. And just this last Friday, no less an expert than Professor Peter Merkel, MD, the Chief of Rheumatology at the University of Pennsylvania, gave a plenary session at -- on the ADVOCATE results at the American College of Rheumatology Convergence 2020 Meeting. Professor Merkel delved into many important aspects of the avacopan data set, including highlighting some important features at both weeks 26 and weeks 52 in the trial result. As Dr. Merkel put it, and I'm alluding now to slide -- the next slide in the deck that you can see with the week 26 and 52 data. As Dr. Merkel put it, there are some intriguing findings to explore in the subgroups. Patients who had relapsing disease had even better benefit from avacopan at 26 and week 52. However, this should not imply that patients with newly diagnosed disease did not benefit from avacopan, because while remission rates with avacopan in newly diagnosed were about the same as the Prednisone group, remember, the patients receiving avacopan achieved this benefit without receiving daily glucocorticoids and their negative consequences. Similarly, said Professor Merkel, there were findings that patients who were MPO-positive received extra benefit and the patients who received rituximab as background therapy, seemed to receive extra benefit as well. One more note on avacopan. It was heartwarming to consider very recently a newly published case report in the British Medical Journal Case Reports of a now young lady who had struggled since the age of 9 years old with ANCA vasculitis for over 7 years at the time. As she explained in her own words, after multiple surgeries, loss of most of my sinuses, loss of my left lung and multiple long-term side effects from medication, I survive. I finally graduated from Toronto Sick Kids Hospital, where she had spent the -- as she puts it, the majority of her evenings her -- of her life as a child. I finally graduated from Toronto Sick Kids Hospital and moved to adult world at Mount Sinai Hospital in Toronto. At this point, she is about 16 years old in her story. At Mount Sinai, she was given avacopan on a compassionate use basis. And the case documents that since then, she has been free of relapses for 35 months and counting on continuous dosing of avacopan and is on the verge now of getting her degree, now a woman in her very early 20s. A duration of 3 years relapse-free with avacopan is a notable achievement. There have been a growing -- there has been a growing awareness in the clinical community of the fact that patients in the ADVOCATE trial initially treated with avacopan and rituximab as a background medication were receiving, in fact, only avacopan essentially during the last 48 weeks of treatment, following their initial rituximab background medication dose. In this stratum, patients who did not receive rituximab thereafter, that is after the first 4 weeks, indeed had a sustained remission rate at week 52, as alluded to by Professor Merkel in his presentation of 71% in the avacopan group compared with 56% in the same comparator, the prednisone group that had rituximab as background therapy. And by the way, these are all ITT, intent-to-treat analysis numbers. So it's important to note here that we were not setting out in the ADVOCATE trial to test avacopan as a monotherapy but it is nonetheless an interesting observation that could have future implications in terms of the duration of therapy and potentially the lack of need for continued immunosuppression in ANCA vasculitis. While our regulatory submissions are under review on both sides of the Atlantic, we're building our commercialization infrastructure in preparation for potential launch in the United States, and we are coordinating closely with our partner, Vifor Pharma, in their preparations, ex-U. S., in international markets. And I will remind you that Vifor would pay us royalties in the teens to mid-20s, that's percentage, on net sales in one aggregate net sale line outside the U.S. as well as potential milestone payments linked to ANCA regulatory events in their territories up to about $75 million. The data presented at ASN and ACR included impressive data from the ADVOCATE trial on avacopan's ability to preserve kidney function as well, as you know, as measured by estimated glomerular filtration rate or eGFR, which is a well-known predictor of long-term kidney survival. I'll remind you that in the chart on the right side of Slide 12, the avacopan group is represented in the red line and the active comparator prednisone group by the gray line. The chart shows, again, the sickest tertile of patients all prespecified in the analysis, those with an eGFR when they started the trial below 30 ml per minute. In fact, this subgroup had an average eGFR of about 21 ml per minute, evenly balanced between the 2 groups. That's fairly close to the 15 ml per minute rate that would tag someone as a candidate for dialysis. So those people are not that many months away if their current rate of decline continue from being dialysis candidates. However, 52 weeks later, there was an overall improvement in the avacopan group of nearly 14 ml per min, significantly better than the prednisone standard of care group. The improvement in the avacopan group increased to nearly at the end of that trial, 35 ml per minute, effective moving the average patient from a stage IV to a stage III chronic kidney disease, really quite a striking improvement. And that really reflects where we may go next with avacopan, and the next kidney indication we have targeted is lupus nephritis, as alluded to on Slide 14. LN shares many key characteristics with ANCA vasculitis. It is a complement-mediated disease, poorly controlled with broad immunosuppression, leading to the deterioration of kidney and the risk of progression to end-stage renal disease and transplant. With the prevalence estimated at between 65,000 and 100,000 in the U.S. the clinical and economic burdens of lupus nephritis are indeed severe. We believe the improvement seen with the ADVOCATE trial in terms of avacopan in terms of eGFR and renal function, has the potential to translate to LN and other kidney disease and we plan to initiate a trial in lupus nephritis in the first half of 2021. Finally to conclude, looking beyond avacopan, which has obvious potential to be a pipeline in a drug itself, we are on track to introduce our small molecule, orally administered PD-1/PD-L1 checkpoint inhibitor for cancer into clinical development in the first half of this coming year 2021. Our preclinical data suggests that CCX559 may be able to penetrate the tumor microenvironment better than antibody-based checkpoint immunotherapies, among other advantages over antibody therapeutics. And CCX559 has, in our view, the potential to be a next-generation cancer treatment used alone or in combination with other oncology therapies. The momentum we have generated in recent quarters is, in my view, only the start of our path to become a fully-integrated pharmaceutical enterprise providing novel therapies in critical diseases. Our unique platform has the potential and indeed has generated multiple drug candidates in multiple disease states. We will follow where the science leads us and focus on the areas of greatest promise, greatest need and greatest opportunity. I will now turn the call over to Susan Kanaya to outline our third quarter 2020 results and our financial strength. Susan? -------------------------------------------------------------------------------- Susan M. Kanaya, ChemoCentryx, Inc. - Executive VP, Chief Financial & Administrative Officer and Secretary [4] -------------------------------------------------------------------------------- Thank you, Tom. Our third quarter 2020 financial results were included in our press release today and are summarized on Slide 12 (sic) [Slide 15]. Revenue was $5.1 million for the third quarter compared to $10.6 million in the same period in 2019. The revenue is recognized proportionately based on actual costs incurred as a percentage of total budgeted costs as we complete our performance obligations under our agreements with Vifor. As such, the revenue decrease was driven by lower costs incurred in 2020 due to the completion of the avacopan ADVOCATE Phase III pivotal trial. Research and development expenses were $18.6 million for the third quarter of 2020 compared to $18.1 million for the same period in 2019. The increase in R&D expense was primarily due to professional fees associated with the avacopan NDA submission for the treatment of ANCA vasculitis and higher research and drug discovery expenses associated with those with the advancement of CCX559, our orally administered small molecule checkpoint inhibitor. These increases were partly offset by lower expenses in 2020 due to the completion of the avacopan ADVOCATE Phase III pivotal trial and the CCX140 LUMINA-1 Phase II clinical trial. General and administrative expenses were $10.4 million for the third quarter of 2020 compared to $6.1 million for the same period in 2019. The increase from 2019 to 2020 was primarily due to higher employee-related expenses, including those associated with our commercialization planning efforts and higher professional fees. These results produced a net loss for the third quarter of 2020 of $24.1 million compared to $12.9 million for the same period in 2019. Total shares outstanding at September 30, 2020, were approximately 69.1 million shares. Cash, cash equivalents and investments totaled $485.8 million at September 30, 2020, and we expect to end 2020 cash, [cash equivalents and investments] in excess of $460 million. Tom? -------------------------------------------------------------------------------- Thomas J. Schall, ChemoCentryx, Inc. - Founder, President, CEO & Chairman [5] -------------------------------------------------------------------------------- Well, thank you, Susan. To summarize, as you can see on Slide 13 (sic) [Slide 16], we are forging ahead with our lead candidate in avacopan in 3 distinct orphan diseases, each of which has a market opportunity in the hundreds of millions of dollars and beyond. The FDA is reviewing our NDA for avacopan in ANCA vasculitis and the European Medicines Agency is reviewing the MAA. We plan to conduct a pivotal Phase III trial of avacopan in severe Hidradenitis Suppurativa patients, following the clear signals we saw in the AURORA data and to make an orphan drug application for Hurley Stage III disease in HS. We expect to report top line data from our ACCOLADE trial of avacopan in C3 glomerulopathy before the end of the year. And we face the prospect of another banner year for ChemoCentryx in 2021, perhaps our most significant one yet, with the potential FDA approval for avacopan in ANCA vasculitis with the PDUFA date set for July of this coming year and the MAA approval expected in the second half of 2021. The potential launch of avacopan in ANCA vasculitis and the next cycle of pipeline advancements, which begins with 2 more clinical programs, an orally administered checkpoint inhibitor of the PD-1/PD-L1 pathway, CCX559 and avacopan in lupus nephritis. Frankly, we have the funding to accomplish all of this, and we see this virtuous cycle repeating in the future, given our unique discovery platform, which has the proven potential to produce multiple drug candidates for multiple diseases. Ladies and gentlemen, in my view, ChemoCentryx has never been stronger than now. And with that, I will turn the call back over to the operator, and we will look forward to your questions. Operator? ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) For our first question, we have from Joseph Schwartz from the SVB Leerink. -------------------------------------------------------------------------------- Joori Park, SVB Leerink LLC, Research Division - Associate [2] -------------------------------------------------------------------------------- I'm Joori dialing in for Joe. My first one is on HS. So thank you for the introduction on possible differences between Hurley Stage III patients and milder patients. And my question is, to your knowledge, how homogeneous are the dermal tunnels in HS patients and Hurley Stage III? And how easy or difficult do you think it will be to identify these patients in Stage III? -------------------------------------------------------------------------------- Thomas J. Schall, ChemoCentryx, Inc. - Founder, President, CEO & Chairman [3] -------------------------------------------------------------------------------- Well, I do agree that the dermal tunnels -- and I think this would be a widely held view. Look, dermal tunnels are extremely prevalent in Hurley Stage III. Yes, they occur in Hurley Stage II but far greater in III. They are not always perfectly easy to identify, but by the time someone is in a Hurley Stage III condition, again, with very little normal skin space between the overt lesions on the surface of the body, I think that is fairly certain that Hurley III Stage diagnosis is made with the inclusion of these dermal sinuses in mind. So just as the way that the net is cast in Hurley III, you are going to capture more dermal tunnels. Now the question about would we be better off to see if we could devise a method actually looking for tunneling. I think there is some pretty good literature on this recently. I've really been impressed, again, with the kind of new wave of thinking around HS. I mentioned Dr. Frew and his colleagues at Rockefeller and Sydney. There are others as well, [Dr. Prince] in Europe has done some interesting work with his colleagues. It's harder to actually say let's includes certain number of tunnels or certain width of tunnels. I think that's just not the nature of the beast yet. But these are far from scarred-over vessels, frankly. I think there's a lot more going on. Why are these dermal tracks so filled with neutrophils, dead and dying, so filled with pus, so filled with these infiltrated proliferative masses. There's a lot more activity going there than we may have thought even 2 or 3 years ago. So I'm pretty convinced that crude as the Hurley designations are, that we will capture, a, more severe disease with Hurley III diagnosis and defacto, we're going to capture a lot more tunnels. I think that's going to be to an advantage for avacopan. And by the way, there has been analysis that adalimumab, again, with more tunnels corresponding roughly with severity in Hurley III, but more tunnels means less efficacy. Adalimumab seems to be better with the less severe patients. So I think there's a super important niche for avacopan. And I do believe that crude as our methodology is now with both Hurley III and yes, HiSCR, but the FDA insists on it so far, we're in a great position to capture the signals that we need to capture. And I think other emerging science will help us define that as we go along, but we're certainly going to be mindful of it as we design this Phase III and think about inclusion/exclusion criteria. -------------------------------------------------------------------------------- Joori Park, SVB Leerink LLC, Research Division - Associate [4] -------------------------------------------------------------------------------- Okay. Great. And then for AAV, I was just wondering, how does your intriguing ADVOCATE subgroup analysis data at weeks 26 and 52 potentially impact your regulatory path? Do you see it possibly impacting how physicians could use avacopan or your label? I was just wondering what your view was on the possible impact. -------------------------------------------------------------------------------- Thomas J. Schall, ChemoCentryx, Inc. - Founder, President, CEO & Chairman [5] -------------------------------------------------------------------------------- Well, I hate to even presume to think about what the agency might think or say and certainly don't want to think -- to discuss any discussions with them until those are all done. But let me put it this way. Look, fundamentally, this is the longest randomized trial ever done in ANCA vasculitis, right? The randomized blinded trial, 52 weeks, continuous dosing and following. Look, that's not been done before. So we've got the biggest data set by 6 months. That's important because it informs a lot of discussions. So without thinking yet about what the agency may or may not say, they'll look at the data in their own way, obviously, but the data kind of speak for themselves. But I will tell you this, it sounds like we're already informing new discussions in the physician community, because the fact of the matter is, if you have, a, evidence that the hardest people to treat, the anti-MPO relapsers are pretty -- are notoriously difficult to treat. The MPA diagnosis, which goes along more or less with MPO-positivity, really difficult to get a handle on, especially with relapsers. But fundamentally, I think the more subtle and for me, the more profound point is that, my goodness, when you look at the fact that avacopan not only had a really just a general improvement in relapse risk -- reducing relapse risk by some 54% and those were 2 charts shown in these meetings as Kaplan-Meier graphs where avacopan was clearly advantageous in the population. And part of that comes from that really interesting advantage that avacopan has with -- when given with rituximab as background therapy versus daily prednisone with rituximab as background therapy. 71% still in remission at week 52 versus 56% with the prednisone group. The important point here is we ran this trial according to rituximab's label at the time. And it was fully enrolled under the old rituximab label, which was you don't give rituximab except for that first course of therapy, that's 4 weekly infusions, spaced by a week. So they get up to 4 weeks. You don't top them up after that under the original label. This data, some people have criticized us for that, like we had a choice to begin with, which we didn't. But in fact, the more enlightened discussions that I've heard, especially recently are no, the data actually show you don't need to keep immunosuppressing people with rituximab. That's a large end, 107 people per group were following. So they didn't get ritux -- they're totally matched except for prednisone versus avacopan. They didn't get any additional rituximab. So avacopan was kind of monotherapy, right? They didn't get any azathioprine or anything else after the ritux. And people are really, really markedly in remission at the end of 52 weeks. So that's an important discussion to have. So I don't know how that will play out. And again, I don't want to make too much or too little of that observation, but I think it's compelling, and I think it's starting to inform some new discussions. -------------------------------------------------------------------------------- Operator [6] -------------------------------------------------------------------------------- (Operator Instructions) And for our next question is from Steve Seedhouse from Raymond James. -------------------------------------------------------------------------------- Steven James Seedhouse, Raymond James & Associates, Inc., Research Division - Research Analyst [7] -------------------------------------------------------------------------------- I have one very quick one and then part two of the question. The first one is just want to get your updated current thoughts on pricing this drug in the ANCA vasculitis market? And then, Tom, given your confidence in -- that you just highlighted nicely in avacopan as a potential maintenance therapy to prevent relapse even without rituximab. I'm curious about your view of using avacopan in patients that are just currently in remission, so not in a post-induction setting, but just using it outright to prevent relapse. Is it a study that you would ever consider doing? And is there a reason to believe that, that would be effective if you would or could do such a study? -------------------------------------------------------------------------------- Thomas J. Schall, ChemoCentryx, Inc. - Founder, President, CEO & Chairman [8] -------------------------------------------------------------------------------- Steve, I was impressed by some of the research done by one of your other eminent colleagues in your community, the analyst community. And she mentioned to me when we do our work, it seems like as many as 30% of the total ANCA population in the United States never gets off of some sort of maintenance therapy to try to keep them in remission. So in other words, these people in this community of ANCA vasculitis, they are really -- they're kind of always, in my opinion, subclinical, frankly. They're always -- got a disease that's just under the surface, probably causing accumulated vascular damage and so on. And frankly, yes, 30% -- as many as 30% of those people in the United States are walking around on some sort of broadly immunosuppressive therapy, right, with its own very big consequences. That's because remission in this disease does not mean disease-free, by the way. Remission in this disease historically does not mean walking around well and having a reasonable life. No, far from it. I hope avacopan will change that, and I think the evidence from ADVOCATE says it might. So the answer to your question is, yes, I think that depending in this first tranche, and hopefully, we will get our license. Of course, that's up to the FDA. But should we get a license and if we get a label that does not talk about time or -- then I think that there will be a movement in the field to use avacopan as a long-term therapy to keep people quiescent or prevent, again the -- an overt flare. Flares can mean literally having life-threatening organ-threatening episode. So it's pretty serious, which is why, again, 30% of this -- of the population approximately are walking around with some fairly toxic therapy. So yes, I think that's an important consideration. If our label is for whatever reason, more constrained in the first step, we will certainly investigate this clinically in due course and sooner rather than later, I would say. So I believe fundamentally that the -- because we are so mechanism based, because our mode of action is so targeted, we can provide the advantages to people to literally, I would believe, keep them out of a flaring state indefinitely with chronic therapy. And I think we can do that safely, absolutely. So that's somewhere where we're going. You talked about price. Boy, I would love to give you a total and more comprehensive update. I am a little bit constrained. I will tell you this. The advantages, not just with certain things we've seen in the data from ADVOCATE, the superiority in keeping people "in remission." And again, remission is defined by that narrow Birmingham Vasculitis Activity with avacopan, but in a superior way to glucocorticoids, which has pharmacoeconomic implications. But in addition, when we talk about the broader total burden of disease, we added quality of life. We added measurements of reduced glucocorticoid toxicities. It does appear that we're making people better, well to some degree with avacopan, where they're not having that in the standard of care. And then finally, the kidney implications of improving the renal function steadily over 52 weeks, those had profound effects. So I would say this, we've always guided towards a normal orphan pricing corridor, upwards of $200,000 per patient per year; at the lower end, $100,000 per patient per year. I think our demand research and our payer primary research to date is supporting what certain correspondents have been telling us. The data set might support something more towards the top end of that than the lower end. But we're just sticking for the moment with a normal orphan pricing corridor, and I think that provides enough raw material to build some really important models given the numbers. -------------------------------------------------------------------------------- Operator [9] -------------------------------------------------------------------------------- For the next question, we have Ed White from H.C. Wainwright. -------------------------------------------------------------------------------- Edward Patrick White, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [10] -------------------------------------------------------------------------------- So Tom, you painted quite the picture of Hurley Stage III patients in lesions, but I'm going to stay away from that with my 2 questions and perhaps focus the first question to Susan. You had mentioned that the commercial planning efforts are underway, and one of the reasons for G&A to accelerate in the quarter. I just wanted to get your thoughts on where you are in your commercial planning efforts, the number of people that have been hired, and your thoughts on cash burn and building the team up, where the cash burn will be for 2021, if it's not too early for that. And then the second question, Tom, would just be on 55 -- the 559. You're going into oncology, but we always think of you as an orphan drug company. And I just want to get your thoughts on how you're approaching the oncology indication? And perhaps, is this something that you will only take to a certain level before perhaps partnering it off? Or what is your strategy with that one? -------------------------------------------------------------------------------- Susan M. Kanaya, ChemoCentryx, Inc. - Executive VP, Chief Financial & Administrative Officer and Secretary [11] -------------------------------------------------------------------------------- Sure. So yes, indeed, our commercial planning efforts are coming along quite nicely and hiring quite rapidly, Ed. So including the Head of Commercial, as you know, a lot of effort in our market access, including market commercial analytics. Quite a few of our medical affairs folks hired as well as our Head of Sales and even at the regional level, bringing on the regional sales folks, too. So making tremendous progress and planning for success for that launch. In terms of burn, for 2021, we haven't provided guidance yet, but we will certainly give you some indication for that. But I think it's fair to say, though, given the strength of our balance sheet, what we've projected to end 2020, in excess of $460 million, we are very well positioned to prepare for an assertive launch of avacopan in ANCA vasculitis as well as support the other indications behind avacopan as well as our pipeline program. -------------------------------------------------------------------------------- Thomas J. Schall, ChemoCentryx, Inc. - Founder, President, CEO & Chairman [12] -------------------------------------------------------------------------------- And Ed, you were asking about cancer. So we're going to flesh this out a bit more in an upcoming call. So I'm not going to go into all the details right now. Other than to say, sufficed to say, with this kind of mechanism, a first entrée into cancer, there are some very super high-value niche indications, which are, frankly, not yet separated with other checkpoint inhibitor approaches that we might exploit as the first foray into cancer, keeping the potential indication numbers rather more modest and maybe even in the orphan range. I believe the way to build the highest value for this program is to continue to push forward, building that value with clinical data. We've got some really very striking preclinical data. And I think the off-clinical studies are really very, very supportive of potentially a very big product here. So to partnership, look, I never go out prematurely to partner with something. I'm always looking for the right doctrine in terms of control of development of the asset and, of course, the right return on the investment for us and our investors. So always have eyes and ears open. But what we've done really successfully before is proven stuff in the clinic and show the signals and only then think about what the right kind of partnership is with us in the driver seat. So that's our doctrine for the moment. We'll keep you posted on any updates around the clinical development path. And I hope very early in the new year to be able to lay out some of those plans in more detail. -------------------------------------------------------------------------------- Operator [13] -------------------------------------------------------------------------------- For our next question, it's from Ted Tenthoff from Piper Sandler. -------------------------------------------------------------------------------- Edward Andrew Tenthoff, Piper Sandler & Co., Research Division - MD & Senior Research Analyst [14] -------------------------------------------------------------------------------- I wonder if we can go into a little bit more detail. And again, my congrats on the HS Data too. But with respect to the commercial prep, maybe you can tell us a little bit more about kind of how you intend to educate physicians here. How much of a jump-start do you get, just because it is such a focused community. And what kind of spillover will there be between sort of build-out for AAV and then potentially C3G and ultimately, HS? Just trying to get a sense for sort of really where these diseases are treated. -------------------------------------------------------------------------------- Thomas J. Schall, ChemoCentryx, Inc. - Founder, President, CEO & Chairman [15] -------------------------------------------------------------------------------- Well, Ted, we do have somewhat of an advantage because these are very tight-knit communities in ANCA vasculitis, both in rheumatology and nephrology. And in fact, they cross communicate quite extensively. The fact that there's really been little, to date, else like avacopan has caused a lot of buzz. As we mentioned, even at recent meetings like the ASN and the ACR, there was just a lot of discussion and a lot of curiosity. We will have a paper out in a top-tier journal soon. I don't know the exact date, but I will just say, watch for that in not-too-distant future. That will again catalyze more discussions around ANCA vasculitis. And our commercial and marketing team is -- and our med affairs teams have integrated some of the efforts as well. They've launched a recent campaign for medical education called Rethink ANCA. That's been a spectacular, I think, achievement, beautiful look and feel of that. It's not about avacopan, of course, but it's about ANCA vasculitis and what happens there. Physicians do need to be brought up to speed on this. The specialists are pretty expert, although not as impeccable always. But the fact is there's a big patient population, larger than we thought, out there in the community as well. And those practitioners are very thirsty for knowledge. And they're very quick studies. So we've been gratified already with how they're absorbing the information. With C3G, again, because big part nephrology, there'll be a lot of overlap from the ANCA nephrology community to the C3G community, one hopes and further into the lupus nephritis community, and we've already seen some of that. So those are unifying threads which are very gratifying. The derm community is going to be a little bit different. And -- but in fact, again, it's a fairly small consortium of investigators that start disseminating bigger message much more widely. And I think we know a lot of these individuals and are getting to know more of them by the week. Particularly with the AURORA data, which has been embraced with great interest and enthusiasm by the derm community so far, at least the ones that have reached out to me, and I'm getting some really excellent ideas from these folks. So that may be preparations to come at the level of our corporation, for education there. But again, we've got a great head start with some of the stuff we've already built in the other indications. Susan, do you have anything to add to that, by the way? -------------------------------------------------------------------------------- Susan M. Kanaya, ChemoCentryx, Inc. - Executive VP, Chief Financial & Administrative Officer and Secretary [16] -------------------------------------------------------------------------------- No, I think you've done an excellent job in capturing that, Tom. No. -------------------------------------------------------------------------------- Thomas J. Schall, ChemoCentryx, Inc. - Founder, President, CEO & Chairman [17] -------------------------------------------------------------------------------- Well, yes, we made a big investment. We made a big investment in the company today. -------------------------------------------------------------------------------- Edward Andrew Tenthoff, Piper Sandler & Co., Research Division - MD & Senior Research Analyst [18] -------------------------------------------------------------------------------- I'm looking forward to the C3 data -- C3G data. -------------------------------------------------------------------------------- Operator [19] -------------------------------------------------------------------------------- For the next one, we have Michelle Gilson from Canaccord Genuity. -------------------------------------------------------------------------------- Michelle Lim Gilson, Canaccord Genuity Corp., Research Division - Analyst [20] -------------------------------------------------------------------------------- To start off, could you maybe give us a little bit of color around your NDA acceptance for avacopan? Did the FDA indicate any review issues? And is there any update around the agency's view around an AdCom? It's a question that keeps coming up in our discussions, so I figure I'd pose it to you. -------------------------------------------------------------------------------- Thomas J. Schall, ChemoCentryx, Inc. - Founder, President, CEO & Chairman [21] -------------------------------------------------------------------------------- All of our interactions with the agency so far, again, without going into any real detail because we are under review. But to my mind, have been straightforward and expected. And I think we have ready access and have had ready access to all the answers so far for the queries. So I have not seen personally anything unusual or anything that, again, we did not fundamentally anticipate and for which we've been, quite frankly, ready. So I think it's going forward in a very reasonable, straightforward, logical way. And again, I won't say anything more than that because I'm sensitive to making sure we're not talking too much about a file under review. AdCom, we expect to know something more definite after the FDA's mid-cycle meeting. And I think probably the public calendars will tell you what that is. As soon as we know, we will let the community know. We have always, even before we filed the NDA, been presuming and preparing for an AdCom. Why is that? Number one, this is a new medical entity. It's not been reviewed or approved for any other indication, already kind of putting you into the presumptive AdCom bucket, at least in my view, historically. Second, we're dealing with an orphan indication in ANCA vasculitis. And frankly, the agency has only truly reviewed an ANCA registration package but once before. And that was when rituximab, given in combination with the daily glucocorticoids was offered as an alternative to cyclophosphamide given in combination with daily glucocorticoids. And that was some time ago. So it's not as if it's a garden-variety indication where it's formulaic in terms of how to review an application. So again, oftentimes, that will trigger an AdCom. When COVID hit, we also realized the pragmatic aspects of further burdens on the agency might also want to potentially gather outside expert opinion. All of those have been just speculation, and we will let you know when we hear back from the agency, presumably after their mid-cycle meeting about what the AdCom details will be, when it will happen, if it will happen. But we're preparing for it, nevertheless, we're presuming that we will have an AdCom. -------------------------------------------------------------------------------- Michelle Lim Gilson, Canaccord Genuity Corp., Research Division - Analyst [22] -------------------------------------------------------------------------------- Okay. And one more for me. What is the bar for success for ACCOLADE? What's clinically meaningful here? And also from a competitive standpoint, what are you looking for from these data that would indicate that avacopan would be competitive with other programs moving through the clinic for C3G? -------------------------------------------------------------------------------- Thomas J. Schall, ChemoCentryx, Inc. - Founder, President, CEO & Chairman [23] -------------------------------------------------------------------------------- Well, I'll say, as I alluded to in the presentation, I think our data package will be much more extensive, rather, extensive than any other sponsor today. I think we'll have more blinded data. We'll have a hard endpoint in histology, match with proteinuria and match with the eGFR and other kidney markers. So I just fundamentally believe we're going to have a bigger, richer data package than any other sponsor. Now the thing is, and I mentioned this, too, in the remarks, and others have mentioned it, other sponsors. Look, it's -- this is one of those areas where we're, again, we're blazing a new trail. There is no defined regulatory path. There is no precedent, if you will, for lack of a better word. This really is an area where you kind of bring all the data to the FDA and say, here's what we see. Here's our interpretation. Let's talk about what this means clinically. There are a number of reasonable papers about histology and what decreases in histology, in terms like the inflammatory infiltrates, the decrease in the size of the glomerular basement membrane, endocapillary proliferation decreases, where if you compare to groups or you compare one time point versus another and see something like a 20% reduction in some of those acute inflammatory indices in and around the glomeruli, that is significant clinically. It's been correlated with as much as a 18% extension in time to end-stage renal disease or dialysis. So stuff like that matters, but it's just not a well-trodden path yet. So true to form, your friends at ChemoCentryx are out there in a new area, a new territory, and we're trying to do some really definitive clinical science. I just think that the breadth and depth of our data, if we get some signals, is just going to be just that much greater than the next team's. And frankly, there is some fatigue in this area. I mean, it's just not going to be possible to do additional blinded trials that take 5, 6, 7 years. I just don't think sponsors are going to go there. And it will be interesting to see what the agency's feeling is with data from any sponsor about giving conditional licenses. But I think it will be key to innovation for the agency to be in more of a discussion mode around that. Because, again, there is no precedent at this point. It is a big opportunity though. I mean it's -- look, if you have 1,000 people, again, let's just say, even in this quite rare disease. But if you can treat 1,000 people at a normal orphan drug price, again, you're going to add incrementally a fairly substantial piece of revenue to the top line. And of course, the obligation to patients who really have very little else in this incredibly debilitating and quite expensive disease, both for society and for them and their families. So it's not trivial, this opportunity. That's why people are interested in it. It's something that needs to be done. I'm glad that people like ChemoCentryx and some of our colleagues and other sponsors in this space are doing it. So we'll see how it turns out. But I think the FDA and other agencies are really going to have to be in dialogue mode about how you have conditional licenses in this indication. -------------------------------------------------------------------------------- Operator [24] -------------------------------------------------------------------------------- For the next, we have Yanan Zhu from Wells Fargo Securities. -------------------------------------------------------------------------------- Yanan Zhu, Wells Fargo Securities, LLC, Research Division - Associate Analyst [25] -------------------------------------------------------------------------------- I'll limit to 2 questions. So the first one is on the HS study. So thanks for elaborating on the potential role of avacopan in reducing draining fistulae. Can you talk about how that factors into the HiSCR response rate? I understand that HiSCR response criteria only tracks changes in abscesses and inflammatory nodules. For draining fistulae, the HiSCR response criteria only requires no increases in draining fistulae. So it seems not very straightforward for a reduction in draining fistulae to contribute into increasing HiSCR response rate. And also, when you are talking about this, could you maybe talk about what you saw in your data so far that can help make the case for draining fistulae impact? -------------------------------------------------------------------------------- Thomas J. Schall, ChemoCentryx, Inc. - Founder, President, CEO & Chairman [26] -------------------------------------------------------------------------------- Yes. Yanan, that's a very insightful question. You're absolutely right. For the uninitiated, the HiSCR really takes the sum of total number of abscesses, total number -- plus total number of inflammatory nodules, that can be shorthanded as the AN count as well, and the number of draining fistulae at baseline. And then you're looking for a 50% reduction in the AN count. And you're quite right, no increase in the number of draining fistulae. So in a strange way, you're asking, well, gosh, Tom, how would the drying up of these -- the tunnels really help on this. In 2 ways, I think, Yanan, and I'm thinking about it a little bit more than just each of these specifics. But in 2 ways, I think. Number one, if you're drying up these big chambers of interconnecting sinus tracks, right, which are percolating up and around and under and connecting the abscesses and lesions. Number one, you're not going to have a likelihood of increasing a new draining fistulae because, in fact, you're drying up the ones that are either subdermal or getting close to the surface to become draining, right? And you're -- and you're actually getting rid of the pus which is going to become draining anyway. So it helps HiSCR as the aspect of contributing to no increase in the number of draining fistulae. And in fact, I, again, think of it as a network: an underlying interconnecting set of chambers, which are probably percolating and pushing up, if you will, for lack of a better image, the other lesions and nodules, which are palpable on the surface of the skin. So I think once you start draining those magma chambers, it's like -- a bit like walking through Volcanoes National Park on the big island of Hawaii. These bubbling surface features will also regress, and that may well lead to a decrease in AN count of 50% or greater in the Hurley Stage III. So that's a sort of general and kind of very crude way of looking at it, but I think not an imprecise way, frankly, given the crudeness of the HiSCR itself. So I think that's one way we see with the Hurley Stage III, this very nice and clear signal. And I want to remind everybody, look, this is a randomized controlled study. We intentionally made it big and powered to see differences in these various groups. We did it in a very blinded way, and we're using quite crude tools. HiSCR is crude. Hurley designations, classifications are also fairly crude, but we're seeing a signal pop out very, very significantly. The secondary observations to your other point, Yanan, are also supportive of the fact that these Hurley Stage III people are showing a nice improvement in IHS4, which does, to some degree, take in the draining fistula factor, and it's a continuous variable, not a categorical one. We see -- again, changes from baseline in the percent median change in the AN counts and the lesion counts, et cetera. So all the signals point in exactly the same direction. That's why we were encouraged by this. I have other data we're beginning to analyze around things like subset lesion counts, draining fistulae and other severity indices. We don't have that all analyzed yet, but we'll be presenting that, I think, in future calls such as this and at some meetings, I hope, in the near future. And again, the preliminary read, in my view, is that they support, they support this idea that the tunnels, what's happening in these tunnels is important in Hurley Stage III, and avacopan is alleviating that. So that's why I think we're seeing these big picture improvements in that severe -- most severe patient population. -------------------------------------------------------------------------------- Yanan Zhu, Wells Fargo Securities, LLC, Research Division - Associate Analyst [27] -------------------------------------------------------------------------------- Tom, that's super helpful. And my second and final question is on C3G. From a mechanistic perspective, is the reduction of complement deposition expected for the ACCOLADE trial? And also, is it necessary to achieve clinical benefit? -------------------------------------------------------------------------------- Thomas J. Schall, ChemoCentryx, Inc. - Founder, President, CEO & Chairman [28] -------------------------------------------------------------------------------- Wow. So complement deposition, I don't think necessarily we will reduce the deposition of, say, C3, for example. Because we are downstream of C3. Would C3 depositions be relevant? I think that's the big question. We have this general idea of complement deposits sort of gumming up kidney function. But ultimately, I think it's not mechanical. I think it really is an inflammatory event. And I think C3 be more a marker, right, upstream of C5 pathway activation, ultimately leading to the activation of C5a, through C5a receptor on destructive granular sites, neutrophils, basophils, eosinophils, maybe even on some other cells in the glomerular environment. That's still under investigation, but there's some good preliminary evidence for it. But I think it is an active destruction. And I think that's what biopsies tell us when you look at C3G. You see a lot of active inflammation. And I don't want to get into the differences between inflammation and chronicity. But frankly, time and time, again, when we look at these things, it's things like glomerular crescent formation as a consequence of infiltrating inflammatory cells; it's things like endocapillary proliferation, thickening of the glomerular basement membrane. These are all classical kind of things that happen through destruction as a consequence of inflammation. So I think -- no one knows. C3G is again, a kind of uncharted frontier, but a really super important medical question and a medical science question. I believe will dampen down the inflammation. I do think that, that will have a real good chance of reducing glomerular destruction and therefore, converting to glomerular enhancement of function. Proteinuria reduction should be exemplified. I'm hoping eGFR starts to stabilize. And I don't know about the deposition. I'm kind of not caring about C3 or C4. I don't even care that much about the MAC complex because we're downstream of all that. And we've showed, by the way, in ANCA vasculitis that in terms of soluble MAC complex, that's not inhibited, which was by design, by the way, we didn't want to predispose to infection with such things as glomerular -- I'm sorry, Neisseria meningitidis. So all of that is to the good with our design and our hypotheses. Clinical benefit, again, the FDA will decide how much the extrapolation data that's come from the field in terms of improvements in glomerular histology, proteinuria reduction and even short-term stabilization of eGFR is needed to suggest that you have a clinical benefit. But I think the data are pretty good so far from long-term follow studies and meta analyses. We'll see where that goes. -------------------------------------------------------------------------------- Operator [29] -------------------------------------------------------------------------------- For the next we have Anupam Rama from JPMorgan. -------------------------------------------------------------------------------- Tessa Thomas Romero, JPMorgan Chase & Co, Research Division - Associate [30] -------------------------------------------------------------------------------- This is Tess on the call tonight for Anupam. So we've been thinking about some of the regulatory dynamics around avacopan and AAV. And we were wondering if you were able to comment as to why you think you got standard review instead of priority review in AAV? We were a bit surprised just given the unmet need. And then second quick question would be on the lupus program for avacopan, what are the gating factors here to getting that into the clinic? -------------------------------------------------------------------------------- Thomas J. Schall, ChemoCentryx, Inc. - Founder, President, CEO & Chairman [31] -------------------------------------------------------------------------------- Standard review didn't surprise me very much at all, and I think a lot of other sponsors. Again, once COVID came into play, we found, pragmatically speaking, many burdens on an agency who is doing actually a very good job dealing with those burdens. But frankly, I think that, that may, may, I can't say for sure, but it seems as if priority review has gone down in most divisions other than, of course, outside oncology. Which still seems to be moving along at a reasonable clip with priority reviews versus standard reviews. So again, we had fairly early on once we realize what was going on in the COVID world, thought that standard review is a real possibility. And in fact, had just accepted that was the likely outcome, and indeed it was. I will again stress that, yes, the unmet need is high, but this is also not a garden-variety indication. The FDA needs time to understand how ANCA vasculitis is treated. And again, they have not reviewed an ANCA registration package in 10 years, nearly. So again, I'm not entirely surprised. I read very little, if anything, into it, frankly. And again, in -- most of it, I just put off to the pragmatic demands on the agency in this present era. You had a second question, I'm sorry. I blanked on the second question. -------------------------------------------------------------------------------- Tessa Thomas Romero, JPMorgan Chase & Co, Research Division - Associate [32] -------------------------------------------------------------------------------- Yes. No problem, Tom. That was helpful. Just a quick one. Just on what are the gating factors to getting the lupus program for avacopan into the clinic? -------------------------------------------------------------------------------- Thomas J. Schall, ChemoCentryx, Inc. - Founder, President, CEO & Chairman [33] -------------------------------------------------------------------------------- We want to make a definitive statement in lupus nephritis of the type potentially that we did with ANCA vasculitis. And there are so many similarities in those 2 maladies and how they've been treated historically. There have been some advances at the agency and regulatory path. Clearly, there have been some other very nice drugs that have come along that will add to the armamentarium. And that's all to the good. Glucocorticoids are still fundamentally a part of the equation in lupus nephritis. So we are trying to develop, with our experts and one hopes with the blessing of the FDA at whatever level that can come. We want to be able to have the most definitive trial that contributes fundamentally to an advance in care in lupus nephritis that can be done as expeditiously as possible and, of course, safely as possible. So there's a lot of different threads of opinion that you have to pull together and weave into a tapestry of consensus here. So that's where we are. We could be in lupus nephritis a month from now, if we wanted to take the sort of traditional, steady, tried and true path. And you and I would be having a similar discussion to this in about 10 years, about what are the gating items getting it approved. I don't want to be in that position. I think we have shown such dramatic kidney benefit in ANCA vasculitis I think we've shown we can eliminate essentially the need for daily glucocorticoid. We need to find a path in lupus that allows us to take that data and safely incorporate it into a lupus development path that matters. That matters for patients, that's meaningful for us as a sponsor and meaningful for our investor base, while also being palatable to regulatory agencies. So that is what we are doing. And I'll have more to say about that as we get into the new year. No doubt. -------------------------------------------------------------------------------- Operator [34] -------------------------------------------------------------------------------- (Operator Instructions) We don't have any further questions at this time. [Speakers] on the call, please continue. -------------------------------------------------------------------------------- Thomas J. Schall, ChemoCentryx, Inc. - Founder, President, CEO & Chairman [35] -------------------------------------------------------------------------------- Well, thank you very much. It's been such a pleasure to talk to you all today and update you on our program. It's been a pleasure again to share with you my view that ChemoCentryx has never been stronger. And I very much thank you for all the great questions and discussion. I look forward to talking to you again in our next quarter conference call. Thank you, and have a great evening. Bye now. -------------------------------------------------------------------------------- Operator [36] -------------------------------------------------------------------------------- Thank you all for joining our today's call. We look forward to updating you to our top line data from ACCOLADE trial in the coming weeks. You may now disconnect.