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Edited Transcript of PRVB.OQ earnings conference call or presentation 7-May-20 8:30pm GMT

Q1 2020 Provention Bio Inc Earnings Call

May 9, 2020 (Thomson StreetEvents) -- Edited Transcript of Provention Bio Inc earnings conference call or presentation Thursday, May 7, 2020 at 8:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Andrew T. Drechsler

Provention Bio, Inc. - CFO

* Ashleigh W. Palmer

Provention Bio, Inc. - Co-Founder, President, CEO & Director

* Francisco Leon

Provention Bio, Inc. - Co-Founder & Chief Scientific Officer

* Jason Hoitt

Provention Bio, Inc. - Chief Commercial Officer

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Conference Call Participants

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* David Timothy Hoang

SMBC Nikko Securities America, Inc., Research Division - Research Analyst

* Li Wang Watsek

Cantor Fitzgerald & Co., Research Division - Research Analyst

* Raghuram Selvaraju

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

* Thomas Jonathan Smith

SVB Leerink LLC, Research Division - Director of Immunology and Metabolism & Senior Research Analyst

* Samuel Martin

Argot Partners, LLC - MD

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Presentation

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Operator [1]

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Good afternoon. My name is Kate, and I will be your conference operator today. At this time, I would like to welcome everyone to the Provention Bio Call. (Operator Instructions) Please be advised that this call is being recorded at the company's request. I would now like to turn the call over to Mr. Sam Martin from Argot Partners.

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Samuel Martin, Argot Partners, LLC - MD [2]

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Thank you, operator, and thank you all for joining us on Provention Bio's first quarter financial results conference call. Joining today's call from the Provention Bio team are Ashleigh Palmer, Chief Executive Officer and Co-Founder; Jason Hoitt, Chief Commercial Officer; Andrew Drechsler, Chief Financial Officer; and Francisco Leon, Chief Scientific Officer and Co-Founder. On today's call, Ashleigh will provide a corporate update with a focus on PRV-031, or teplizumab, and PRV-3279. Jason will update us on the commercial landscape, Andy will review financials, and we will then open the call for questions.

First, let me remind you that the various remarks we will make today constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These include statements about our future expectations, clinical developments, regulatory matters and time lines, the potential success of our product candidates, financial projections and our plans and prospects. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of our most recent annual report on Form 10-K, which is on file with the SEC, and in other filings that we make with the SEC in the future.

Any forward-looking statements represent our views as of today only. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views change. Therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today. There is more complete information regarding forward-looking statements, risks and uncertainties in the reports Provention files with the SEC.

These documents are available on Provention's website at www.proventionbio.com under the Investors section, and we encourage you to review these documents carefully.

I will now turn the call over to Ashleigh Palmer, Chief Executive Officer and Co-Founder, who will provide an update on Provention's corporate, clinical and business development activities. Ashleigh?

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Ashleigh W. Palmer, Provention Bio, Inc. - Co-Founder, President, CEO & Director [3]

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Thank you, Sam, and thank you all for joining us today. We hope you and your loved ones are safe and healthy during these unprecedented times. While there has been tremendous disruption across all areas of daily living due to COVID-19, I am pleased to report that our team at Provention has continued to execute our mission. As a virtual company, Provention has been able to seamlessly pivot to the new operating environment, and we remain on track to achieve our key goals for 2020, completing the submission of our rolling biologics license application, or BLA, for teplizumab, also known as PRV-031.

Let me now review with you the recent progress that has been made on our path to becoming a commercial organization as well as our compelling plans going forward. Provention is dedicated to transforming the way people think about type 1 diabetes, or T1D, and other life-threatening or life-impacting autoimmune disorders. Our mission is to create a new treatment paradigm for T1D, a disease, for which, there has been no significant advancement in therapy since insulin was first introduced in 1922.

Our lead therapeutic candidate, teplizumab, an anti-CD3 monoclonal antibody, has the potential to delay or, with timely redosing, possibly even prevent the onset of clinical stage T1D. Much like we reboot a computer to eliminate malware, mechanistically, a single course of teplizumab reboots the immune system to neutralize pathogenic autoreactive T cells that would otherwise destroy the precious insulin-producing beta cells in the pancreas.

We are preparing to bring teplizumab to the U.S. market based on the results of the TN10 trial, which were published in the New England Journal of Medicine Last June. This remarkable trial demonstrated that a single 14-day course of teplizumab administered to at-risk individuals delayed the onset of clinical stage T1D by a median of at least 2 years when compared with placebo. This study was highly statistically significant, and the result is highly clinically relevant.

The corresponding potential benefit for patients and their families cannot be denied.

For the first time, we have an opportunity with teplizumab to intercept or with timely redosing, indefinitely delay or prevent the progression of type 1 diabetes to end-stage insulin-dependent disease in individuals identified as being at risk by having at least 2 or more T1D related autoantibodies.

As you might expect, the potential for this first ever disease-modifying therapy is generating tremendous enthusiasm and excitement within the T1D community, and we remain laser-focused on bringing teplizumab to market as rapidly and responsibly as possible. We are extremely pleased with our progress over recent months in charting our course to potential regulatory approval and commercialization.

Having last year obtained breakthrough therapy designation for teplizumab for the delay or prevention of clinical T1D in at-risk individuals, last month, we announced our filing of the nonclinical module of the company's rolling BLA submission to the U.S. Food and Drug Administration.

Rolling submission allows for completed modules of the BLA to be submitted and potentially reviewed by the FDA in a sequential manner.

Next, we expect to submit our clinical module in quarter 3 of this year. And finally, the chemistry manufacturing and controls, or CMC module, in quarter 4. Our timing of the CMC module represents the critical path for completion of our rolling BLA submission. To this end, we successfully completed transfer of teplizumab's commercial scale manufacturing process from Eli Lilly's historic manufacturing plant in Ireland to Provention's contract manufacturing partner, AGC Bio, in Seattle, Washington. Following completion of an engineering run in quarter 4 of last year, I'm delighted to report that in the first quarter of this year, we reached another important CMC milestone with AGC Bio's successful completion of a current good manufacturing practice, or cGMP, production run of teplizumab.

We now intend to submit the analytical data from both the engineering and cGMP runs to our teplizumab IND to allow the FDA to review and comment with respect to the comparability between material made at AGC and that previously made by Lilly.

Going forward, we expect to proceed with 3 commercial scale process performance qualification or PPQ batches at AGC Bio this summer. These will support the CMC module and enable the completion of the rolling BLA submission by year-end. Once we submit the final module, the FDA will determine if our filing is acceptable and set a Prescription Drug User Fee Act, or PDUFA, date. Assuming a priority review for which we are eligible to file in connection with teplizumab's breakthrough therapy designation, the stage could be set for a potential approval in mid-2021.

Recall last year that in addition to Breakthrough Therapy Designation received from the FDA, we also received prime designation from the European Medicines Agency. In the first quarter of this year, we held a kickoff meeting with the EMA to discuss the regulatory pathway and the scheduling for teplizumab review in Europe. As with the FDA, we believe that data from the TN10 At-Risk Study, along with our database from historical studies of teplizumab in newly diagnosed T1D patients, will support an EMA Marketing Authorization Application, or MAA. We expect to be able to submit this MAA in the second half of 2021.

To date, the company has not experienced any COVID-19 related interruption in our interactions with the EMA or the FDA or in the scheduled rolling submission of our BLA for the at-risk indication here in the United States. However, in March, due to rapidly deteriorating public health and clinical research conditions brought about by the COVID pandemic, we elected to temporarily pause the randomization of subjects into our global Phase III PROTECT study of teplizumab in newly diagnosed T1D patients. We took this proactive and protective measure out of an abundance of caution and care for our patients and their caregivers, for the clinical site staff and for our clinical operations, employees and contractors.

Patients who at the time were undergoing study therapy were allowed to complete their course of study drug as recommended by the PROTECT study's data monitoring committee, which we expanded to include an infectious diseases expert.

While we do not yet have any specific guidance regarding when PROTECT study randomization will recommence, we anticipate that it will do so in a sequential manner as local conditions permit within each country and at each site.

Let me now turn the call over to Jason to provide an update on the progress being made with our teplizumab commercialization planning. Jason?

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Jason Hoitt, Provention Bio, Inc. - Chief Commercial Officer [4]

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Thank you, Ashleigh, and good afternoon, everyone. We're excited about the advancements we've made in Provention's commercial operations since the beginning of the year. We've built a strong leadership foundation with a Vice President of Market Access and Distribution, who I mentioned on our last quarterly call. And more recently, a Vice President of Marketing, who joins us with more than 20 years of industry experience, having been the Chief Marketing Architect of multiple blockbuster product launches. Collectively, we have extensive experience in rare disease product launches as well as launches in nascent markets and novel therapeutic indications and a deep understanding of the type 1 diabetes space.

We are laying the foundation that will position us for the most effective path toward commercialization of teplizumab. This month, we will engage a payer advisory board, representing more than 79 million covered lives, to assist us in building the most effective messaging to communicate our vision of a new standard of care for T1D treatment. We will also gain insights and feedback on the burden of disease, burden of illness as well as how they view the T1D market currently.

On our last quarterly call, we discussed the importance of screening patients as it relates to commercialization of teplizumab. In addition to engaging a payer advisory committee, we're also building a health care provider awareness campaign, intended to encourage physicians to proactively offer screening to family members of their T1D patients, which we plan to launch in the third quarter.

Our efforts coincide with broader recognition among the scientific community about the importance of screening. A recent study published in JAMA highlighted the positive impact of a mass screening effort in Bavaria. Similar efforts are underway in Northwestern Germany and in U.S. states such as Colorado. The potential for a therapy that could impact the course of the disease in patients with 2 or more autoantibodies is also helping to shift attitudes on Provention. In a recent article in Science Magazine, Dr. Olga Kordonouri, who specializes in pediatric diabetes at Children's Hospital in Hanover, Germany, stated that the teplizumab data from the TN10 study "changes the thinking" around screening.

As previously stated, our initial commercial strategy at launch will focus on a subset of at-risk patients who are direct familial relatives of known type 1 diabetics.

We know from the published literature that 15% of newly diagnosed patients have a relative with T1D. In total, we believe there are 200,000 stage 2 patients in the United States. And if you apply that 15% having a familial relative with T1D, it would amount to an initial addressable market for treatment with teplizumab of roughly 30,000 patients. Family members of T1D patients will be screened for 2 autoantibodies and subsequently, dysglycemia to identify as many as possible of these 30,000 individuals.

Standard blood tests are readily available, and more than 1.5 million people have been screened in recent years. In addition, there are hundreds of thousands tested every year given risk factors or in the differential diagnosis of T1D.

To be clear, initial feedback from families and caretakers with experience managing clinical T1D understand the burden of this disease and are generally highly motivated to screen their loved ones. Ultimately, we will further expand screening into a broader patient population. And to this end, we look forward to working closely with advocacy groups, such as JDRF, Beyond Type 1, the Helmsley Foundation and other groups who share this goal. Over time, we believe this will allow us to identify a greater proportion of stage 1 and 2 individuals who have not progressed to clinical T1D and who are not direct familial relatives of known type 1 diabetics, thus increasing the market size dramatically.

Longer term, through life cycle management, we will seek to broaden the market potential by exploring repeat dosing, expanding the targeted age group and eventually looking at subcutaneous formulations and combining teplizumab with other therapeutics and potentially with islet beta cell transplantation.

We are excited about the many opportunities ahead for teplizumab and the T1D community, and we look forward to updating you on our commercial progress, planning and insights throughout the remainder of the year.

Back to you, Ashleigh.

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Ashleigh W. Palmer, Provention Bio, Inc. - Co-Founder, President, CEO & Director [5]

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Thank you, Jason. We could not be more pleased about your arrival at Provention, the elite commercial leadership team you're building and the progress you are making. Before Andy discusses Provention's first quarter financial results, let me provide you with a brief update on another one of our pipeline programs as we continue to make progress advancing the development of our other therapeutic candidates targeting life-impacting autoimmune diseases, such as lupus and celiac disease.

On our last call, in early March, we discussed the positive top line results of the Phase Ib healthy volunteer stage of the PRV-3279 PREVAIL trial. PRV-3279 is a humanized bispecific scaffold, targeting the B cell surface proteins, CD32B and CD79B. We believe that PRV-3279 has the potential to intercept B cell-mediated autoimmune diseases and we have prioritized lupus as our lead indication. Lupus is a chronic autoimmune disorder with a clear unmet need and for which therapeutic proof of mechanism for CD32B agonism has already been established. At least 1.5 million Americans are afflicted with all forms of lupus, which can affect nearly every major organ system with tissue-damaging inflammation that, in some patients, results in severe organ dysfunction and failure.

We look forward to commencing the Phase IIa portion of our PREVAIL study in lupus patients during the first half of 2021, and we will keep you updated along the way.

PRV-3279 has the potential to address other autoimmune conditions in which B cells play a pathophysiological role, including more prevalent indications than lupus, such as rheumatoid arthritis as well as rare orphan diseases, such as idiopathic thrombocytopenic purpura, neuromyelitis optica, pemphigus and myasthenia gravis. PRV-3279 also has the potential to prevent or reduce the immunogenicity associated with biotherapeutics, including gene therapy products, and we anticipate presenting results from animal studies supporting this opportunity in the second half of this year.

I will now turn the call over to Andy, who will discuss Provention's financial results for the first quarter. Andy?

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Andrew T. Drechsler, Provention Bio, Inc. - CFO [6]

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Thank you, Ashleigh. Good afternoon. Before I begin, I would encourage you to read our earnings press release and our 10-Q that was filed today. The 10-Q includes our financial statements, risk factors as well as management's discussion and analysis of our financial condition.

Let me start with our current cash position and cash projection. As of March 31, 2020, our cash balance was $76.6 million. Our cash-based operating expenses for the 3 months ended March 31, 2020, was $11.6 million. We continue to expect to use approximately $24 million to $29 million in operations for the first 6 months of 2020, and we continue to expect that our current cash, cash equivalents and marketable securities will be sufficient to fund projected operating requirements to the middle of 2021.

From a P&L perspective, we generated a net loss for the first quarter of $12.6 million or $0.26 per basic and diluted share. The increase in net loss compared to the same period in 2019 is a result of greater general and administrative costs, including the build-out of our corporate and pre-commercial infrastructure.

Lastly, in April, Provention received $523,000 from the sale of a portion of the company's New Jersey state net operating losses. The program was administered by the New Jersey Economic Development Authority and allows qualified technology and biotechnology businesses in New Jersey to sell certain NOLs for cash.

With that, let me turn the call over to Ashleigh for his closing remarks.

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Ashleigh W. Palmer, Provention Bio, Inc. - Co-Founder, President, CEO & Director [7]

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Thank you, Andy. Provention has demonstrated outstanding progress to date this year. Throughout the remainder of 2020, we will continue to focus on teplizumab manufacturing and our BLA rolling submission. In parallel, we will transition and transform the company into a commercially viable organization in anticipation of the potential launch of teplizumab in 2021.

We are driven by the possibility of creating the first ever disease-modifying therapy treatment for type 1 diabetes.

In addition to teplizumab, our pipeline is rich with potential opportunities to fundamentally address the unmet need associated with other autoimmune diseases, and we are passionate about advancing these therapeutics to help patients and their caregivers. And now we will open the call to take your questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) The first question is from Alethia Young with Cantor.

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Li Wang Watsek, Cantor Fitzgerald & Co., Research Division - Research Analyst [2]

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This is Li on for Alethia. I guess, first, just on PROTECT study. Just wondering what are the milestones that you're looking for relative to COVID-19 that will sort of drive you to restart the study again? And then I know we still have some time from commercial launch, but can you just talk about things that you're working on to educate physicians so that they're more comfortable with using an immune-based therapy to treat their at-risk patients?

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Ashleigh W. Palmer, Provention Bio, Inc. - Co-Founder, President, CEO & Director [3]

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Thank you very much for the question. So the criteria that we will use to reestablish the randomization of patients in to PROTECT will be at a local level as each country comes through the crisis and begins to lift the lockdown procedures and other measures that they have in place.

We will be relying heavily on our data monitoring committee, including a expert infectious disease key opinion leader who will be helping us assess each country's status. And then with respect to each site, because as you can appreciate, there's great diversity in each country, it may be some time before sites in the middle of New York or San Francisco, for example, may be ready to begin randomization again, whereas sites in other states that have a different local situation and the confidence of local site personnel that they can manage patients and their caregivers safely, we'll allow those sites to be switched on or switched back on more quickly.

I'm going to ask Jason if he could comment, please, with respect to the particular education that will be done to get endocrinologists and related clinicians comfortable with immunomodulatory therapy in an indication that has not previously seen that type of therapeutic intervention.

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Jason Hoitt, Provention Bio, Inc. - Chief Commercial Officer [4]

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Yes. Thanks, Ashleigh, and thanks for the question. So I think the approach that we're going to be taking on the commercial side is primarily focused around screening, awareness and ensuring that endocrinologists and pediatric endocrinologists are encouraging their -- the family members of the type 1 diabetes patients that they currently have under care to get screened. While simultaneously, on the medical affairs side, our Head of Medical Affairs, Rob Adamoski, is putting together a robust continuing medical education plan that will include both virtual and live events that will be driving education to meet the unmet needs that exists in the market with regard to the evolving paradigm in type 1 diabetes treatment.

As you know, on the commercial side, we won't be able to actively promote a product like teplizumab until the FDA gives us the approval.

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Operator [5]

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The next question is from Thomas Smith of SVB Leerink.

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Thomas Jonathan Smith, SVB Leerink LLC, Research Division - Director of Immunology and Metabolism & Senior Research Analyst [6]

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Congrats on the progress and kicking off the rolling BLA submission. A couple of questions on the teplizumab manufacturing. Can you just talk about how your CMO partner, AGC Biologics, is navigating the COVID-19 pandemic? Have they seen any notable disruptions across any of their operations? How comfortable are you, I guess, that they aren't going to run into any COVID-related issues?

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Ashleigh W. Palmer, Provention Bio, Inc. - Co-Founder, President, CEO & Director [7]

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So thank you for the question, Tom. So the AGC Bio contractors put together a great program. They are an essential manufacturing facility and remain open. And they manufacture many products, not just teplizumab, at commercial scale throughout their manufacturing facilities and, in particular, at the site in Bothell. To date, we have seen no indication that they have encountered any issues. To the contrary, our confidence grows as the Seattle area gets on the right side of the COVID-19 peak crisis.

I think we remain very confident in so far as anyone can be confident in this environment. Obviously, supply chain can be quite long and differentiated in biologics manufacture, and we keep our eye on that, and we're doing everything we can proactively, putting in place contingencies and making sure that we avoid possibilities of delay. And the rest is really watching how this global pandemic evolves in the coming weeks and months.

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Thomas Jonathan Smith, SVB Leerink LLC, Research Division - Director of Immunology and Metabolism & Senior Research Analyst [8]

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Okay. Got it. That's helpful. And then Jason talked about kicking off payer engagement this quarter. I guess, can you just walk us through how you're approaching these meetings? What sort of pharmacoeconomic work you've undertaken to engage in these conversations? And then I guess, any updated thoughts on how you're thinking about teplizumab pricing?

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Ashleigh W. Palmer, Provention Bio, Inc. - Co-Founder, President, CEO & Director [9]

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Jason, can you answer that for us, please?

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Jason Hoitt, Provention Bio, Inc. - Chief Commercial Officer [10]

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Yes, sure. Thanks for the question, Tom. Yes. So as I mentioned, this month, we'll be engaging a payer advisory board. And the participants in that advisory board represent over 79 million covered lives. And the intent of that ad board is to help shape both the pharmacoeconomic need and story that we're actively working to build but also to get additional insights into the way that payers are currently thinking about the type 1 market, how they view teplizumab, so we'll be showing them a target product profile of teplizumab to have them be able to give us feedback on the core data and how they'll think about coverage at the time of a potential approval.

So those are really the intent of the advisory board is to gain insight on the messaging, insight on the data that we're actively working to prepare from a health economic standpoint, and then get an initial read on how they're thinking about coverage in the context of the way the market exists today, but setting the stage and helping them understand how the treatment paradigm is going to evolve with a potential approval of teplizumab, and how that factors into their thinking and decision-making around coverage.

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Ashleigh W. Palmer, Provention Bio, Inc. - Co-Founder, President, CEO & Director [11]

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And have you seen, Jason, any indication to date why the analog pricing that we've given guidance on in the past is not appropriate?

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Jason Hoitt, Provention Bio, Inc. - Chief Commercial Officer [12]

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No. So today, that's -- and thanks for the reminder, Ashleigh. No, we haven't seen any reason to believe that the analogs that have been previously discussed are no longer valid. But as you know, Tom, I think we talked about this, but the formal pricing work that we'll be doing, we want to do as close to the approval so that it's as relevant as possible. So we wouldn't think about doing the formal pricing work until we've engaged this advisory board, evolved our thinking, evolved our messaging, engaged more payers and then have a well-informed group of participants in the pricing research to be able to give us the most relevant and up-to-date knowledge as possible, leading into a potential approval, at which point, we would announce the final price.

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Thomas Jonathan Smith, SVB Leerink LLC, Research Division - Director of Immunology and Metabolism & Senior Research Analyst [13]

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Sure. That makes sense. And if I could just sneak in one last question. Just with ADA, I guess, switching to a virtual format here in June. I was wondering if you could give us a sense of how you're approaching the meeting? How you're thinking about engaging the KOLs there? And what we should be watching for at that meeting.

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Jason Hoitt, Provention Bio, Inc. - Chief Commercial Officer [14]

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Ashleigh, do you want me to take that one?

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Ashleigh W. Palmer, Provention Bio, Inc. - Co-Founder, President, CEO & Director [15]

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I'm sorry, I was on mute. My apologies. If that's exactly what I said, Jason, would you mind taking that one?

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Jason Hoitt, Provention Bio, Inc. - Chief Commercial Officer [16]

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Yes. So Tom, so for ADA, it -- it's unfortunate that given the circumstances out there, so many of the major medical meetings have been canceled. Fortunately, ADA has found a really innovative way to move their meeting to a virtual environment. So obviously, we'll be actively watching and participating in viewing the presentation. And while we don't know specifically what data will be presented, we would hope that there would be an update on teplizumab coming out of the trial in that group. As you know, they have full responsibility for publication of the data. But it does, in fact, limit how we're able to engage KOLs. So we're thinking about ways to augment the fact that we can't engage KOLs live at the meeting and thinking about putting together virtual advisory boards in the latter part of this year following ADA, so we can engage them that way in the event that things don't open up by then. Obviously, if things open up, we'll start to really rapidly advance our engagement of KOLs, both at a national and a local level.

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Operator [17]

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Next question is from Ram Selvaraju of H.C. Wainwright.

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Raghuram Selvaraju, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [18]

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Queries on the commercial, regulatory and clinical front. So let's start with the commercial. I was wondering if you could elaborate on the principal differences that you see in the sales and marketing strategy that would be brought to bear, targeting the at-risk population versus the early onset population? And -- I mean, this may be a bit premature since we don't know what the time line is for the PROTECT study at this juncture. But what learnings can you apply from the work you're doing to effectively target the at-risk population and position the company for the launch of teplizumab in that population that could be applied to the early onset population as and when you have the PROTECT data and, potentially, a label for teplizumab in that indication?

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Ashleigh W. Palmer, Provention Bio, Inc. - Co-Founder, President, CEO & Director [19]

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Thanks, Ram. So again, Jason, if you could explain how you're looking at this because they are very different markets. One is a nascent market, which requires screening to identify individuals at risk. The other, newly diagnosed within 6 weeks of presentation, with the symptoms of clinical stage type 1 diabetes, 50% of which is very often diabetic ketoacidosis. So a market where we're looking for patients versus a market where we know exactly where they are and how they're going to be referred to an endocrinologist. Jason?

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Jason Hoitt, Provention Bio, Inc. - Chief Commercial Officer [20]

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Yes. Thanks for the question, Ron. So I think Ashleigh hit a lot of the key points there, right? I think we've discussed that our initial launch focus for the at-risk indication is going to be for the direct familial relatives of other type 1 diabetics and really being able to leverage the specific knowledge that families and caregivers and patients have on both the diagnosis, progression and ultimate implications of type 1 diabetes. And having that group really advocate for their loved ones to get screened, while simultaneously going about educating HCPs, as we talked about during the prepared remarks, and ensuring that pediatric endocrinologists are well educated on specifically what screening protocols they should be using and offering that screening to those relatives.

When we think about the newly diagnosed population, I think as our commercial team gets out there and starts to engage with the pediatric endocrinology community, starts to engage with the broader community that are caring for these direct familial relatives, we will have tremendous insights that we will learn about the pathways to care, about referral networks and a lot of the work that we're starting right now. But we won't necessarily have to do all of the legwork with regard to screening just because of the way the patients are presenting to the health care system. And I think one of the things that is really attractive from a commercial perspective about this is the fact that I don't envision us needing to have a scale-up in our commercial infrastructure to adequately cover the newly diagnosed market since we're likely going to be engaging the exact same physician groups in the pediatric endocrinology community to target both populations. And by the time the newly diagnosed indication is approved, we will have significantly well-established relationships with those providers, and they will have a deep understanding of Provention Bio and how specifically to go about acquiring and administering teplizumab.

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Raghuram Selvaraju, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [21]

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That's very helpful. On the European front, I was wondering if you could answer a couple of questions that are both relevant to the commercial as well as the regulatory aspects here.

Firstly, maybe, Jason and Ashleigh, I'd be curious to know how your views are evolving regarding the best way to optimize teplizumab's value in Europe, whether you're thinking about the go-it-alone strategy, the distribution strategy or the partnership strategy, or some combination of the above?

And then also on the regulatory front, I was interested to know, in your discussions with European regulators to date, whether you have a sense at this juncture of who the rapporteur countries might be on the MAA? And at what juncture you might actually begin to start seeing interactions with the CHMP as well, even perhaps ahead of the formal MAA submission?

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Ashleigh W. Palmer, Provention Bio, Inc. - Co-Founder, President, CEO & Director [22]

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Thanks again for the great question. So we have categorically stated that we will not be doing this ourselves in Europe. So it will be a combination of regional partnership or distributorship or ships. And we have a sort of 12-month lag from the time the therapeutics could be approved here in the United States and that in Europe. And so whilst time is of the essence, we do have more time to share what we are learning here in the United States and progress those partnering or distributorship discussions.

Do you want to comment, Jason, on the difference in value and how we're looking at the value of this therapy in Europe as compared to the United States?

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Jason Hoitt, Provention Bio, Inc. - Chief Commercial Officer [23]

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Yes. So as Ashleigh mentioned, we have no intention of building our own infrastructure in Europe, and we'll be looking to partner, depending on the nature of what the ex-U. S. partnership looks like, whether it's a regional European partner and then other geographies working through distributors, I think remains to be seen based on how the partnering discussions evolve.

With that being said, we know that the likely pricing and value that we will be able to get in Europe will, in all likelihood, be lower than that of what we're able to get in the United States. But we're just starting some of that work now to engage some of the European payers to talk through some of what they will want to see on the value side as we start working through what European pricing may look like. And that's work that, I think, we're doing independently because we know that it will help add value to the discussions that we're having with potential partners.

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Ashleigh W. Palmer, Provention Bio, Inc. - Co-Founder, President, CEO & Director [24]

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With respect to the regulatory interactions to date, we have indicated we have the kick-off meeting with the EMA following prime designation, but we have not yet provided any guidance regarding the details of the scientific review meetings or the rapporteur, but we will in short haul.

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Raghuram Selvaraju, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [25]

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Okay. Perfect. And then just 3 quick items on the clinical front. Can you comment at this juncture on what steps you are taking to effectively mitigate against the risk of data integrity issues or in particular, loss to follow-up issues relating to patients who had already been randomized into the PROTECT study before you paused randomization? And also if you can give us a sense of kind of how far into the PROTECT trial you were at the time that randomization was paused? And then also, I just had a quick question on the lupus program. To what extent do you anticipate being able to specifically explore the efficacy profile of the drug in lupus nephritis? And what specific readouts you are contemplating that would allow you to elucidate that?

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Ashleigh W. Palmer, Provention Bio, Inc. - Co-Founder, President, CEO & Director [26]

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Thank you very much, again, for a great question. So we do not have, Leni Ramos, our Chief Medical Officer with us today. But Francisco is perhaps the closest to the details regarding the data integrity, the question that you asked. And he's also the best person, obviously, leading the program to discuss the lupus 3279 protocol. Francisco, could you please take both of those questions for us?

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Francisco Leon, Provention Bio, Inc. - Co-Founder & Chief Scientific Officer [27]

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Yes. So in terms of the integrity of the data, we have provisions in place to ensure that all that's happening is not going to affect interpretation of the data-appropriate statistical method that has been and will be discussed with regulators. And there are guidance that has come out on this specific topic from both FDA and EMA to ensure that all the analysis are done appropriately taking into account the situation.

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Ashleigh W. Palmer, Provention Bio, Inc. - Co-Founder, President, CEO & Director [28]

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And we did not -- and we have not provided guidance on where we were with enrollment. At the time when randomization was paused, we had indicated that we were on target to conclude the enrollment by the end of this year. So it's not unreasonable, at this point, to assume that however long we're paused will be the indication of how much further into next year we would expect enrollment to be completed. And then as you know, with the 18-month follow-up, the actual top line results are 18 months after an announcement of enrollment completion. Francisco, do you want to speak to the lupus protocol?

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Francisco Leon, Provention Bio, Inc. - Co-Founder & Chief Scientific Officer [29]

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So for lupus, as you know, we recently reviewed the top line data, which is very exciting. And we want to take some time to digest these data and to share with our KOL and design the Phase IIa trial appropriately. At this time, the most likely scenario is that we are going to evaluate subsets of lupus patients, which are readily and objectively identifiable such as arthritis, dermatitis, et cetera. It hasn't been determined if nephritis will be part of the Phase IIa.

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Operator [30]

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Our next question is from Gbola Amusa of Chardan.

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Unidentified Analyst, [31]

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It's [Sam Lee] calling on behalf of Gbola Amusa. I have 2 questions, and I have a follow-up. First question. Would you update us on any advantages you've seen in the midst of COVID-19 pandemic of having breakthrough therapy designation on teplizumab as you're hoping to finish your rolling BLA and then a U.S. approval? And second, so it's obviously more difficult to run combination trials when both products in the combo are not yet approved. But given that, were teplizumab to be approved in 2021, do you think there'd be increased interest from external parties seeking to fund combination trials?

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Ashleigh W. Palmer, Provention Bio, Inc. - Co-Founder, President, CEO & Director [32]

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So we've seen no indication that there would be a delay in our schedule as presented in our fixed remarks at the beginning of the call. Due to the COVID-19 pandemic, we intend to file the remaining module, CMC module, in quarter 4, on schedule, assuming that we complete the 3 PPQ runs, the commercial scale batches back-to-back in the summer. And again, based on my comments regarding our manufacturer, we're on schedule to do that and at this point in time, see no indication of any disruption.

So the combination question, our philosophy and strategy at this point is that all additional development is best done on the other side of an approval for the at-risk indication. So we're talking about combinations to enhance the delay in progression of the disease and/or redosing.

Our goal is to get this therapy approved based on the amazing breakthrough therapy designation results of a 2-year median delay in the onset of type 1 diabetes from a single course. And then having gotten the approval and have then a population of patients who will have received one dose, we can then divert those patients into sponsored studies, into registry, into KOL studies evaluating not only combination but also redosing.

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Unidentified Analyst, [33]

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So to follow-up on the combination, I was more thinking more of cell therapy-based approaches that people are trying to work on right now. So in regards to stem cell therapy, companies out there trying to figure out how to protect the transplanted cells from being attacked by the immune system, such as through gene editing. Do you see teplizumab as an alternative to those immune evasion strategies? Or would you be synergistic to those protection strategies?

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Ashleigh W. Palmer, Provention Bio, Inc. - Co-Founder, President, CEO & Director [34]

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Thanks very much. So again, Francisco is best to answer this, but we definitely see the established market of type 1 diabetics who have essentially lost their insulin production capabilities in their beta cells where transplantation and cell therapy opportunities present. As those therapies are developed by other companies, we believe that teplizumab can play a very significant role in maintaining the rebooting of the immune system that will be necessary to protect beta cell individuals who have lost them due to autoimmunity, lost their original cells. It still is a very relevant therapy at that stage, perhaps even more so to protect the establishment of new cells in the body. Francisco?

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Francisco Leon, Provention Bio, Inc. - Co-Founder & Chief Scientific Officer [35]

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Yes. Thank you, Gbola, for the question. Obviously, the better job those companies developing cell-based therapies do, the more of those cells will look like beta cells and the more they were subject to attack by the immune system. And despite gene editing advances, there are certain antigens that you cannot edit out. So for example, T1D patients have autoimmunity against insulin, very common. They have anti-insulin antibodies and T cells against insulin. So you cannot edit out insulin because that's the purpose of making those cells, so they can make insulin. So we absolutely see teplizumab as an important adjuvant in this kind of therapies.

We don't know if it's going to be entirely an alternative or synergistic. We do know that teplizumab has been used in combination with islet cell transplant, and it's been published with good results. But we haven't had experience with the new stem cell-derived cells. We will look forward to getting some experience in that field in the future.

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Operator [36]

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The next question is from David Hoang of SMBC.

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David Timothy Hoang, SMBC Nikko Securities America, Inc., Research Division - Research Analyst [37]

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Really great to recap all the progress. I had a couple. So you had mentioned in certain geographic regions, there have been, I guess, broader format screening campaigns. You mentioned Bavaria in Germany and then the Denver area in the U.S. I'm just curious as to how those campaigns kind of were driven forward? Maybe a little bit more color on kind of what they look like? And is there any, I guess, agreement among these endo docs in terms of the best way to do a broader screening campaign? What age should we be looking at? How many times should we be screening in childhood? And then I guess, are general pediatricians the ones that would need to do that type of screening?

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Ashleigh W. Palmer, Provention Bio, Inc. - Co-Founder, President, CEO & Director [38]

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It's a great question, and it is diverse and ranges from full-blown general population screening for autoantibodies to type 1 diabetes and celiac in a country like Finland, and then less so in the United States, except for pockets around Centers of Excellence like Barbara Davis or as part of a research consortia like TrialNet. But Francisco really is our expert in screening, and maybe Francisco, you could give some indication as what the drivers are behind that diversity? And what role teplizumab is going to make as a catalyst in driving familial screening and general population screening in those areas where it currently is not established?

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Francisco Leon, Provention Bio, Inc. - Co-Founder & Chief Scientific Officer [39]

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Yes. David, so we have a number of consortia in the U.S. and in Europe, determining risk of T1D, identifying subjects at risk either with genetic HLA typing or, for the most part, the most common method is the autoantibody determination and oftentimes in conjunction with celiac disease autoantibodies, as Ashleigh said. In total, there are about 1.5 million subjects, which have signed up through this academic consortia, so a very substantial amount of patients and subjects in the general population. Some are family members, some are general population. So what drives those subjects to participate?

We know that despite knowing that you have risk of T1D, you can reduce the incidence of diabetic ketoacidosis, DKA, a very serious complication of undiagnosed T1D, which is life threatening and have substantial morbidity, mortality and health care costs. So one of the main drivers of screening have been reduction in DKA in purely academic research. Now we know based on what all of these key opinion leaders and organizers are telling us that once teplizumab is on the market, screening is going to grow exponentially because now you have some intervention that can change the trajectory of the disease in these patients. And we expect that, in addition to clinical-indicated screening, which is happening at the doctor's offices, and this academic consortia, there will be a ground swell of screening worldwide. And hopefully, one day, we'll all be like Finland, where they are currently covering half of the population with screening for T1D, and they are planning now to cover the entire country.

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David Timothy Hoang, SMBC Nikko Securities America, Inc., Research Division - Research Analyst [40]

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Okay. Great. That was very helpful. And then I just had one other follow-up. So I think in our past conversations, you mentioned looking at sort of the T cell phenotype and really detecting an exhausted phenotype that could be an indicator of whether teplizumab effects are persisting over time. So in terms of looking at T cell exhaustion, is that something that's really only available in kind of the academic arena? Or is that something that physicians in the clinic would be able to take advantage of either through a lab test or something similar in determining maybe when to redose teplizumab?

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Francisco Leon, Provention Bio, Inc. - Co-Founder & Chief Scientific Officer [41]

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Yes. So it's a very accessible test because, on one hand, any hospital or clinic that has a flow cytometer can do it locally. Flow cytometry is used, for example, to determine the CD4, CD8 ratio in HIV or to phenotype leukemia to lymphoma. It's a very common technique. Every hospital of importance or a secondary, tertiary hospital has a flow cytometer. And for those who don't have a flow cytometer, they can just send the sample to the [Russian's] lab and the sample is just peripheral blood that is shipped at room temperature. So it's a simple mail envelope and it goes to a central lab. So it's something that we believe is going to be very easy to implement to help guide redosing decisions.

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Operator [42]

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This concludes our question-and-answer session. I would like to turn the conference back over to Ashleigh Palmer for closing remarks.

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Ashleigh W. Palmer, Provention Bio, Inc. - Co-Founder, President, CEO & Director [43]

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So thank you all for joining us today. We look forward to updating you, again, soon on our continued progress, and we sincerely hope that you and your loved ones stay safe and well at this time. Thank you.

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Operator [44]

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The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.