FGEN (2022 - Q1)

Ladies and gentlemen, thank you for standing by and welcome to the FibroGen's First Quarter 2022 Earnings Conference Call. At this time all participants' lines are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your first speaker for today, Michael Tung. Thank you. Please go ahead sir. Michael

Thank you, RJ, and good afternoon everyone. I'm Michael Tung, Vice President of Corporate Strategy and Investor Relations at FibroGen. Joining me on today's call are Enrique Conterno, our Chief Executive Officer; Dr. Mark Eisner, our Chief Medical Officer; Juan Graham, our Chief Financial Officer; Dr. John Hunter, our Chief Scientific Officer; Thane Wettig, our Chief Commercial Officer; and Chris Chung, our Senior Vice President of China Operations. The format for today's call includes prepared remarks from Enrique and Juan, after which we will open up the call for Q&A. I would like to remind you that remarks made on today's call include forward-looking statements about FibroGen. Such statements may include, but are not limited to, our collaborations with AstraZeneca and Astellas, financial guidance, the initiation, enrollment, design, conduct and results of clinical trials, our regulatory strategies and potential regulatory results, our research and development activities, commercial results and results of operations, risks related to our business and certain other business matters. Each forward-looking statement is subject to risks and uncertainties that could cause actual results and events to differ materially from those projected in that statement. A more complete description of these and other material risks can be found in FibroGen's filings with the SEC, including our most recent 10-K and Form 10-Q. FibroGen does not undertake any obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. The press release reporting our financial results and business update and a webcast of today's conference call can be found on the Investors section of FibroGen's website at www.fibrogen.com. With that, I would like to turn the call over to Enrique Conterno, our CEO. Enrique?

Thank you, Mike. Good afternoon everyone and welcome to our first quarter 2022 earnings call. On today's call, I will provide a high level summary of the most important accomplishments and developments in the first quarter of 2022. Juan Graham, our CFO, will then review the financials after which we will open the call for your questions. Starting with Slide 3. FibroGen is positioned to create significant value for patients and shareholders by executing on our three areas of focus: number one, accelerating the development of pamrevlumab in three indications with significant unmet medical needs, idiopathic pulmonary fibrosis, or IPF, locally advanced unresectable pancreatic cancer, or LAPC, and Duchenne muscular dystrophy, or DMD; number two, ensuring commercial success of roxadustat in patients with chronic kidney disease outside the U.S., while continue to explore a path forward in the U.S.; and number three, increasing our research productivity to advance novel programs that leverage internal expertise and accessing external innovation for additional pipeline opportunities. Now let's move to our clinical trials focusing on pamrevlumab on Slide 4. Pamrevlumab is a wholly-owned asset in Phase III clinical trials for three high value indications, IPF, LAPC and DMD. Each one of these diseases represents an important unmet medical need and each constitutes a significant market opportunity. As we recently announced, we have completed enrollment of our ZEPHYRUS-1 Phase III study of 356 patients with idiopathic pulmonary fibrosis. The ZEPHYRUS-1 Phase III study is largely based on our Phase II PRAISE study, which demonstrated a meaningful reduction in lung function decline. Enrollment continues in our second ZEPHYRUS Phase III study. This is ZEPHYRUS-2. And we look forward to updating you as that trial progresses. We completed enrollment of the LELANTOS-1 Phase III clinical trial of pamrevlumab in non-ambulatory patients with Duchenne muscular dystrophy, DMD, in the first quarter and expect to complete enrollment of the LELANTOS-2 Phase III clinical trial of pamrevlumab in ambulatory patients with DMD in the second quarter. It is very exciting to be expecting data readouts for LELANTOS-1, 2, and ZEPHYRUS-1 in 2023 and I want to thank our clinical development team for their efforts. Moving now to locally advanced pancreatic cancer. As discussed previously, we plan an interim analysis of event-free survival in the second quarter. Depending on the results and in consultation with the FDA, we will decide whether to file for accelerated approval. After making this decision, we will provide an update later this year. Regardless, the trial will continue to the primary endpoint of overall survival and we expect top-line data in the first half of 2024. I'd now like to spend a few minutes highlighting our perspective on the significant commercial opportunity we see with pamrevlumab in each of the three disease areas, on Slide 5 beginning with IPF. With a diagnosed prevalence of approximately 330,000 patients across the U.S., EU, China and Japan, IPF represents a significant opportunity with the two approved IPF therapies generating almost $4 billion in net revenue in 2021. Despite this market size, there remains significant unmet need with these two approved therapies as characterized by continued disease progression and challenging tolerability. There is a sentiment in the IPF community of limitations with the current therapies and a desire for additional therapeutic options. If the Phase III ZEPHYRUS program produces similar results to the Phase II PRAISE trial, we believe pamrevlumab has the potential to help a sizeable number of patients with IPF and be a very significant product for FibroGen. In the middle column, you can see that locally advanced pancreatic cancer opportunity. Pancreatic cancer represents one of the greatest unmet needs in oncology, given the diagnosed prevalence of almost 140,000 patients across the major regions combined with the low five year disease-free survival rates of around 10%. There have been limited treatment advances in the non-metastatic setting over the last two decades with the immuno-oncology therapies failing to demonstrate survival benefits over the current standard of care. Similar to IPF, there is limited late-stage development activity in non-metastatic pancreatic cancer, which creates a meaningful opportunity for pamrevlumab if it can demonstrate an improvement in overall survival. As we said earlier, the LAPIS Phase III trial is fully enrolled and we look forward to seeing if pamrevlumab could provide an important new treatment option. And finally, in the third column, we wrap up the pamrevlumab market section with a snapshot of the DMD opportunity. While the prevalence of DMD is the lowest of the three indications we're pursuing, giving the devastating nature of its diagnosis and the relentless disease progression, we're hopeful that the LELANTOS clinical trial program can lead to an approved therapy that is so needed by the DMD community. With corticosteroids as the current standard of care, patients commonly deal with troublesome side effects as they continue to experience disease progression and loss of ambulation. While the currently approved exon-skipping therapies produce an increase in dystrophin levels, they are targeted at the small proportion of DMD patients and have yet to demonstrate a meaningful clinical improvement in symptoms or disease progression. There is a clear need for therapies that can improve muscle function and prolonged ambulation by targeting the downstream pathological changes of DMD. We believe the antifibrotic mechanism of pamrevlumab may be a solution that can help these patients and their families. Now let's move to roxadustat on Slide 6. Following the European Commission approval of EVRENZO for the treatment of adult patients with symptomatic anemia associated with chronic kidney disease, Astellas has launched in Germany, the UK, Netherlands, Austria and the Nordic countries. While uptick has been slower than expected, the early feedback from healthcare providers prescribing EVRENZO has been positive. The anemia of CKD opportunity in Europe is significant, and EVRENZO has an important first-mover advantage relative to other HIF-PHIs. Launches will commence in the other major EU market later this year, pending positive reimbursement decisions. Despite significant discussions with AstraZeneca, we have not been able to find a path forward for AstraZeneca to fund further roxadustat development of anemia of CKD in the U.S. We continue to believe roxadustat can address an admin need for patients with CKD anemia. It's important to note that we continue development of roxadustat in MDS with top line Phase 3 data expected in the first half of 2023. Moving now to China. Roxadustat was renewed in the NRDL for another two years, beginning, January 2022. As expected, this relisting was accompanied with the price reduction. As you can see on Slide 7, we are reporting first quarter, total roxadustat net sales in China of $43.5 million by FibroGen and the joint distribution entity, which is flat compared to the first quarter of 2021. This was driven by a greater than 70% increase in volume offset by the recent NRDL price reduction. We expect roxadustat net sales growth for the full year in China, driven by significant growth in volume. FibroGen portion of roxadustat net product revenue in China was $18.9 million for the first quarter on a U.S. GAAP basis. Juan will dive into further details in the finance update. Turning now to updated external market data on Slide 8, roxadustat continues to be the number one branded treatment for anemia, CKD as measured by value sharing the category, which includes all ESA products on roxadustat. We expect this category leadership to continue as roxadustat volume continues to grow at a fast pace. Next Slide 9 provides a snapshot roxadustat unit growth as indexed to December, 2020 on the chart on the left, as well as year-over-year growth in the table on the right. Of note is the consistent unit growth of roxadustat, while the leading ESA brand is slightly up, reflecting the anemia, CKD market expansion that has been driven by roxadustat since its original NRDL listing in 2020. Now it is worth taking a minute to comment on the COVID situation in China. As you're aware, lockdowns have been implemented to reduce the spread of COVID in a number of cities, including Shanghai and Beijing. Thus far, we have not seen an impact on roxadustat demand in China, where we have seen an impact is in some of our clinical trial involvement in China. We are and we will continue to monitor the situation closely as it evolves. And our thoughts are with our China employees during this difficult time. I will now turn the call over to our CFO, Juan Graham for the financial update. Juan?

Thank you, Enrique. Before I provide my financial remarks, I would like to thank the FibroGen team in continuously challenging themselves to move our clinical trials forward. Despite an evolving and challenging COVID environment, our team has been able to complete enrollment of ZEPHYRUS-1, a clinical trial for the treatment of idiopathic pulmonary fibrosis, as well as for LELANTOS-1 clinical trials for treatments of Duchenne muscular dystrophy. I also want to acknowledge the efforts of our team in China that has been working tirelessly to support patients with CKD, anemia in China. As mentioned, volume and access to roxadustat has significantly increased offsetting the NRDL price impact while this result was what we had expected. I nonetheless want to acknowledge the efforts in this achievement during the first quarter. Now getting into our results for the quarter, total revenue for the first quarter was planned at $60.8 million compared to $38.4 million for the same period in 2021, and representing a growth of 58% quarter-over-quarter. The breakdown of revenue sources are as follows. We recorded $25 million in milestone payments from Astellas related to the Russian Federation approval of roxadustat or EVRENZO for the treatment of adult patients with symptomatic anemia associated with CKD. This amount is allocated as $22.6 million in license revenue, and $2.4 million as development revenue. We recorded $18.9 million net product revenue for roxadustat sales in China compared to $15.4 million in the first quarter of 2021. During the quarter, we also recorded development revenue of $11.8 million associated with codevelopment efforts for roxadustat with our partners as compared to $14.6 million during the first quarter of 2021. Finally, we recorded $7.6 million in drug product revenue for roxadustat bulk drugs or active pharmaceutical ingredients sold to Astellas as compared to $8.5 million in the same period last year. Diving deeper into the operating results of our roxadustat business in China, as previously stated by Enrique, total roxadustat net sales from the joint distribution entity jointly owned by AstraZeneca and FibroGen or JDE was $43.5 million for the first quarter in 2022 remaining flat as compared to the first quarter of 2021. This revenue is resulting from a significant volume increase of roughly 70% offsetting the recent price of reduction due to the NRDL renewal. We continue to be encouraged by the growth for China operations and expect continued strong market penetration as experienced during this quarter. Revenue from the total roxadustat net sales in China, FibroGen’s net transfer price from sales to the JDE was $13.9 million for the first quarter, consistent with the 30% to 45% range of the JDE’s roxadustat net sales, which we have continuously guided. During this quarter, we recorded $2.3 million released from deferred revenue due to change in our future estimates as per U.S. GAAP. As we have communicated in the past, the deferred revenue balance in FibroGen China fluctuates based on estimates of future revenue. As a result FibroGen recorded $16.2 million in net revenue for the quarter from roxadustat sales to the JDE and $2.7 million of direct to distributor sales from FibroGen China. As we continue down the P&L, operating costs and expenses were $123.8 million compared to $108.9 million for the first quarter in 2021. This increase in operating costs is primarily driven by R&D expenses supporting our Phase 3 clinical trials, including drug supply costs associated with our pamrevlumab programs. While we continue to look for ways to accelerate activities related to our pamrevlumab program, we also continue to maintain strong focus on cost control as evidenced by our flat year-over -year SG&A line. During the first quarter of 2022, net loss was $63.2 million or $0.68 net loss per both basic and diluted shares as compared to net loss of $71.8 million or $0.78 per basic and diluted shares for the first quarter last year. At March 31, we reported $565.4 million in cash, cash equivalent, investments and accounts receivable. As we look forward, we estimate our 2022 ending cash – ending balance of cash, cash equivalents, investments, and accounts receivable to be in the range of $310 million to $340 million, which is an improvement over the previously communicated range of $270 million to $300 million. While we believe we're appropriately financed through key initial pamrevlumab data readouts, we are privileged with a wide array of options to consider as we continue to look for opportunities to strengthen our cash position over time. Thank you. And now we'd like to turn the call back over to Enrique.

Very good. Thank you, Juan. And in closing, we remain committed to advancing pamrevlumab of potential first-in-class medicine in Phase 3 development in three indications with significant unmet medical needs, idiopathic pulmonary fibrosis, locally advanced unresectable pancreatic cancer and Duchenne muscular dystrophy. Roxadustat continues to perform very well in China. Our partner Astellas is moving forward with commercialization of roxadustat in Europe, and we have additional regulatory submissions under review in other geographies. We're exploring options for roxadustat in the U.S. I believe patients would benefit from having access to this treatment. As shown on Slide 10, we continue to have a strong financial position with approximately $565.4 million in cash and expect to end 2022 with $310 million to $340 million in cash. We have a strong cash position and have multiple options to consider to further strengthen our balance sheet to ensure our long-term success. But we are properly financed. We are privileged to be able to look at a number of those opportunities. Now I would like to turn the call back to the operator for questions.

Hi. I am Mike Yee. Thanks all. Appreciate the update. We have two questions. With respect to pamrevlumab in pancreatic cancer, I know there is an interim coming up shortly. Can you just remind us if it's positive you would announce and say something and say you're going to go talk to the FDA and then you'd have to come back to us later with what the FDA says? Or if it's not positive, then you would hear nothing or what? Just sort of remind us of the scenario tree there. And then second question is on roxadustat, you made a very important comment about AstraZeneca and not having an agreement yet to fund another Phase III. What is the next step there? If there is a disagreement or what is the next step and one would be an update. Thank you.

Very good. Let me – thank you for your question, Michael. Let me first address the second part of your question on roxadustat in the U.S. Clearly, AstraZeneca has exclusive rights in the U.S. for roxadustat. So we – FibroGen and AstraZeneca have to work together to find a path forward for this product in the U.S. in anemia of CKD. Keep in mind that our Phase III trial for myelodysplastic – anemia due to myelodysplastic syndromes continues. And as we – relating to this call, we expect the readout in the first half of next year. As we look at roxadustat and as we've mentioned before, we have had meetings with the FDA. So we do think there is a path forward in terms of a what is the clinical trial that will be required, but we clearly need to be able to agree with this plan with AstraZeneca and funded in order to move forward. I'm going to allow now Mark Eisner to provide – Dr Eisner to provide an answer to your question on the interim of LAPC on event-free survival and what are the different scenarios here? So he will provide a little more color.

Yes, thanks for the question, Michael. So as you said, we plan an interim analysis in Q2 of event-free survival. This will be conducted by an independent statistician as we at FibroGen will remain blinded. And the independent DMC will receive this analysis. The DMC will then be able to inform us whether or not the data meets stringent, predefined, efficacy and safety criteria. If so, they will inform me as CMO and I will review the data and potentially consult with FDA about next steps. So if the data meet these predefined criteria and FDA is agreeable, we would then consider filing for an accelerated approval. If not, then we would just continue the trial to overall survival. And just to clarify, regardless, the trial will continue to overall survival and we should be able to update you later in the year.

Got it. Thank you.

Your next question comes from the line of Andy Hsieh with William Blair. Your line is open.

Oh, great. Thanks for taking my questions. So I have two. One is, you know, I really appreciate the granularity you provided across the three indications for pamrevlumab looking for the pancreatic cancer specifically there are two standard of care as we kind of think about the potential TAM for pamrevlumab. I'm just wondering if there is any sort of market research done on the distribution between Gem/Abraxane usage and the FOLFIRINOX usage.

Yes, that is a really important question. Clearly, those are the background therapies that are being utilized in the trial. So it is pam on top of Abraxane/Gem or FOLFIRINOX in one of the arms vis-à-vis FOLFIRINOX or Abraxane/Gem in the control arm. So clearly that is – something that is evolving and it really matters whether it's metastatic or locally advanced unresectable pancreatic cancer. But what we're seeing is basically a - somewhat of a split. It varies with geography. FOLFIRINOX usage has been increasing over time, which is why we made an amendment in our clinical trial to ensure that that background therapy was available for patients. So, we've conducted some more research and we will provide further update and more detail in this maybe during our next turning call. Thank you for your interest.

Got it. Thanks. And then for my second question, obviously for us who are more familiar with the Western pharmaceutical markets is kind of a 70% increase in usage is kind of unheard of. So just looking at Slide number 8, about the ESA and HIF market dynamics in China, there appears to be kind of an inflection point as we go from Q4 to Q1. Just curious about any additional information that could provide us with the market dynamics. It seems like the ESA usage has been ticking up as we head into 2022? Roxa has been going down. So any sort of additional context you could provide will be much appreciated there.

Yes, I think, as we mentioned, we've seen in China continued growth in our overall volume. The reason why you see a slight decline is because we are measuring value share. And when it comes to value share, given the price reduction of roxadustat in the NRDL that impacts the overall value share for roxadustat, but it's not a reflection of the overall growth that we're seeing with roxa. In the market in China, I'm going to ask Chris Chung, I know she's in China now, and she is on the call on the phone. So I'm going to ask Chris if you like to provide maybe some more color on our performance in China as how we started the year in Q1.

Absolutely. Thank you, Enrique. So we started off very strongly in China in the year 2022 with the price decrease as a result of NRDL. As all of you know roxadustat was priced above Duchenne. There is a very strong value proposition. There has been affordability issues that I think with the lower pricing has been addressed. The volume uptick of 70%, of course, or it's very low for the rest of the year. So we continue to be very optimistic about what we could do for the rest of 2022. We believe this momentum is durable and we are expecting net growth of 2020 to over 2021.

Got it. Thank you very much. I know it's difficult for you, Chris. So hang in there just best wishes to you.

Thank you.

Your next question comes from the line of Yaron Werber with Cowen. Your line is open.

Great. Thanks for taking. I have a couple of questions. Maybe just to start with on China, can you give us a sense maybe where you are now in terms of placement in hospitals and the community based on CKD in dialysis maybe as a percentage of your targeted market. And then secondly, when you think about it's – moving to pamrevlumab for IPF and the ZEPHYRUS-1 study. When you look at the Phase II, I believe about 8% to 12% of patients were receiving pirfenidone or TKI previously. What do you expect – so it was much more of a naïve population, what do you expect that distribution to be in the Phase III in the ZEPHYRUS-1 and 2 studies. Thank you.

Okay, very good. I'm going to ask Chris Chung to answer the first question on China and then Dr. Eisner will answer the second question on IPF and our Phase three study.

Thank you, Enrique. So with respect to adoption and market potential, one thing, if you've looked at the slides that FibroGen has provided over time since with launch in China, the total market of ESA [ph] roxadustat has actually increased. So, we believe the [indiscernible] market is not the same as the ESA market, very significant unmet medical need that was previously not addressable with ESA. So we think there is a net growth in market size. If you look at the three segments, we think we're still very early in the adoption curve and there's tremendous growth opportunity in front of us in terms of what percentage of the market we currently have in the dialysis market. Obviously, the ESAs market to get are the hyporesponders, people who are not performing as well as one would like on ESAs. We are doing very, very well in that market as well as in the incident market. In the peritoneal dialysis market, given the oral administration nature of oxygen, that we have a clear advantage. The wide open market is non-dialysis because in the past it was very difficult for ESAs to penetrate it and we have a clear efficacy and safety advantage over ESA market. So I think we're still very early on in the adoption curve and we expect the total market to grow as adoption continues.

So regarding your…

Enrique, if I can sneak in a question, maybe just on China. Is there any thought to monetize that JV either by spinning it out or selling it to Zeneca? Is there any discussion? Or is that core to your business and you'll keep it?

Yes, I think, we clearly have a very strong business in China right now. So there are no such plans at this stage. I'm going to have now Mark answer the second part of your question on IPF.

Right. So just to remind everyone, the ZEPHYRUS IPF Phase III program is pamrevlumab monotherapy, but it does enroll treatment naïve and treatment experienced patients in the program suffers one explicitly allows treatment naïve suffers two is going to be mostly treatment experienced patients who have discontinued therapy. I think it’s worth noting though that most patients discontinue standard of care with Esbriet, Ofev because of tolerability from GI, side effects and other things rather than treatment failure per se, or progression of their lung function. So we actually expect both naïve and experienced patients to potentially respond to pam level to similarly, this is our theory based on what we know about the disease. So thanks for your question. Operator?

Operator?

Yes, sir. Your next question comes from the line of Annabel Samimy with Stifel. Your line is open.

Hi. Thanks for taking my question. I had a couple. So for the lab trial in the pancreatic cancer, when you go to FDA to discuss the trial results, I guess, if it’s supportive. Is there any overall survival that you can draw from the prior resective patients or resectable patients from earlier trials that could potentially support that acceleration? And can you share any data from those patients now are there any updates from those patients? And then the second question I have obviously it seems like you’re having trouble getting – coming to an arrangement with AstraZeneca on the U.S. side. And it seems like the – maybe the competitive landscape has improved a bit with the QBS CRL. So can you maybe go into some detail about what options you may be exploring? And is there any kind of clause for non-performance from on the AstraZeneca side, given that they have exclusivity, do they have some kind of onus to proceed or let it go? Thanks.

Yes. Thank you for your question, Annabel. I’m going to ask Mark to answer the first question on LAPIS and I will answer the second question on roxadustat.

Yes. Thanks for the question. So just to remind everyone, the primary endpoint of the LAPIS trial is overall survival, and regardless of the EFS outcome, we will continue the trial until the OS endpoint. But it’s important to note that OS is part of the EFS endpoint. Mortality is part of it. So that will be part of the evaluation at the interim analysis. And in terms of your specific question about updates on OS from earlier trials, we don’t have any specific updates at this time. But we’ll be able to share that in the future.

Yes. Regarding the second part of your question you are correct. Clearly, AstraZeneca has exclusivity rights in the U.S., and as part of that, which is very in common in this type of agreements, they need to make commercially reasonable efforts. So thank you for your questions Annabel.

Your next question comes from the line of Jason Gerberry with Bank of America. Your line is open.

This is Perry on the line for Jason. Thanks for taking our questions. First, I just wanted to get an idea of the volume increase from 4Q 2022 to 1Q or 4Q 2021 to 1Q 2022. I know you said 70% increase in volume from the previous year. But could you discuss the difference between the previous quarter and this quarter? And then also whether the volume growth you’re seeing is I guess, what the breakdown between non-dialysis patients and dialysis patients is. And then I just have one other brief question on pamrev and IPF after that.

Yes. I’ll ask Chris to start with a question to talk about maybe some of the color in China when it comes qualitatively to talk about where are we seeing the business increase. And then I have one comment on the first part of your question.

Sure. Thank you, Enrique. And thank you for the question. So with respect to the spike in January there is just a significant spike. We believe in part, this is unit growth. So the NRDL prices was implemented from effective January 1. We believe that created a spike in demand, which was seemed to be durable. The percentage of growth continued January into February into March, which is something we’re very happy about. In terms of the volume increase in the first quarter relative to Q4, I believe was the question. It was over 30%. So with a significant growth quarter-to-quarter, just to be clear, the reason why we don’t quarter – we don’t do a quarter-to-quarter comparison is because there’s tremendous seasonality in the calendar in China because of national holidays, because of how the reimbursement budget is done at the local level. So I really did not focus on that. This is why we choose to compare quarter one 2021 over quarter one 2022. In terms of the adoption, we were very pleased to see adoption in NDD, which we believe is the growth segment for this population. The number of patients treated on NDD picked up much more significantly than in dialysis, which would make sense because dialysis is about 90% reimbursed by the government. So it tends to be much less price sensitive. NDD is about 50% to 60% reimbursed. And also the oral feature is very advantageous if the affordability equation could be addressed. So we’re very happy to see what we expected the lowering price to bring, which is a very high adoption increase in NDD. [ph] I hope I answered your question. Enrique, back to you.

Yes, no, thank you.

Yes. Sorry, Perry. Just I think Chris highlighted some of the major points related to the dynamics of roxa in Q1, I think another point to highlight as you may have seen a performance for roxa and sales in China as well in Q4 was and anticipation and as well movement in terms of revenue associated with an impending NRDL renewal, right. So difficult to compare Q4 to Q1, given all those dynamics. In addition to, as Chris mentioned, this – the seasonality of revenue due to holidays and so on, that happens in Q1. But please I think we’ll continue to analyze this piece and provide perspective as we move forward.

Okay. Thanks. That’s very helpful. And then just a brief question on pamrev. So the – so it sounds like the – I’m just curious about the proportion of patients that are – that typically are either unsuccessful in treatment with current standard of care or it sounds like the majority of patients that move off therapy are due to intolerance. And then so I guess the proportion of patients that, that covers, and then in terms of the $4 billion market size, do you expect that the entry of pamrev to increase that market size, or is it more kind of taking away share from the current standard of care, the current standard of care?

Yes. I’m going to ask Dr. Eisner to answer the first question, I assume your first question refers to IPF and in terms of looking at the – yes, treatment of the current standard of care, and what are some of the failure rates and now I’m going to have same Thane Wettig answer your second question on the commercial side.

Yes. It’s a really good question. I mean I think as you can appreciate given that it’s an ongoing Phase 3 trial. We really don’t have firm estimates of the different patient subgroups, but we will do by the end of ZEPHYRUS-1 and of course the program overall. And I think we’ll be able to speak to all of those subgroups with the data that we generate. So stay tuned.

And hi, Perry, this is Thane and just a follow on to what Mark just said and your question around patients who aren’t able to tolerate it. I guess pretty good documentation that says within a year after starting either one of the anti-fibrotics about 40% of patients have stopped due to tolerability or other reasons primarily due to tolerability, but there are a whole host of other reasons associated with taking a chronic therapy, especially when it involves multiple pills multiple times a day. And that’s where we think we could have a really nice advantage for pamrevlumab based upon its administration. In terms of where we believe the patients will come from, we think we have the ability to both capture share from existing anti-fibrotics, as well as expand the market. It’s pretty clear that there are a number of patients who are categorized as mild, who don’t get treated with anti-fibrotics primarily because clinicians have indicated to us at least in a research setting, that they are weighing that the benefits of the anti-fibrotic therapy relative to then the downsides of issues with tolerability. And they want to make sure that they understand how quickly a patient is progressing, but it’s really because they think that the downsides outweigh the potential benefits. And so there are probably 45% of mild patients with IPF who are not treated with current anti-fibrotics. There’s also a decent portion of the moderate categorized patients who are also not treated. And then in even larger portions of the patients who have progress to the severe stage of the disease that aren’t treated with the current anti-fibrotics either because clinicians again don’t view the risk benefit as being favorable or because they’ve fallen off therapy for tolerability or other reasons. So we think we’ve got an ability both to capture patients who would’ve otherwise gone on an anti-fibrotic once pamrevlumab is available as well as capture patients who would not have gone onto an anti-fibrotic.

Got it. Thank you. It’s very helpful.

And there are no further questions over the phone line at this time. I would now like to turn the call back to Enrique for any additional and closing remarks.

Very good. Thank you very much to everyone. We appreciate your participation in today’s investor call and your interest in FibroGen. Please enjoy the rest of your day. Thank you very much.

Ladies and gentlemen, this concludes today’s conference call. We thank you all for participating and you may now disconnect.