PRVB (2020 - Q4)

Good morning. My name is Elisa and I will be your conference operator today. At this time I would like to welcome everyone to the Provention Bio call. There will be a question-and-answer session to follow. 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. Robert Doody, Vice President of Investor Relations for Provention Bio. Robert D

Thank you, operator, and thank you all for joining us on Provention Bio's fourth quarter and full year 2020 financial results conference call. Joining today's call from the Provention Bio team is Ashleigh Palmer, Chief Executive Officer and Co-Founder and Andy Drechsler, Chief Financial Officer, Francisco Leon, Chief Scientific Officer; and Jason Hoitt, our Chief Commercial Officer. Before we begin, let me remind you that the various remarks we will make today constitute forward-looking statements. These include statements about our future expectations, clinical results, developments and regulatory matters and time lines including teplizumab BLA; the potential safety, efficacy and commercial success of teplizumab and our other product candidates, the potential COVID-19 impact on our clinical studies and business plans, financial projections, including our anticipated use of cash and our cash runway, and our business plans and prospects, including planned pre-commercial activities across the company in preparation for the potential approval of teplizumab and projected timing for the same. Actual results may differ materially from those indicated by these forward-looking statements, as a result of the 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 this morning and in other filings that we may 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 except as required by law. 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 at Provention's website at www.proventionbio.com, under the Investors section. We encourage you to review these documents carefully. With that I will now turn the call over to Ashleigh.

Thank you, Bob and good morning to all of you joining us today. To begin with, I would like to state that our team here at Provention made tremendous progress last year, both in advancing our efforts to bring teplizumab to market for the delay or prevention of clinical Type 1 diabetes in at-risk individuals, as well as execution across our entire pipeline of clinical stage autoimmunology drug candidate. And this progress was made despite the enormous logistical and operational challenges presented by the global COVID-19 pandemic that emerged at the beginning of 2020 and which still remains today. The momentum we accelerated throughout 2020 continues to be driven forward into 2021. As we announced at the beginning of last month, the FDA's filing of our biologics license application for teplizumab in our lead Type 1 diabetes at risk indication and this BLA is currently undergoing priority review by the agency with a PDUFA date of July 2, 2021. I will go into more detail on teplizumab's near-term execution and anticipated commercialization targeting the at-risk population in a moment. However, before doing so, I would like to highlight some of the progress being made across our other business priorities. While a significant majority of our focus this year will remain on the at-risk BLA regulatory review and if all goes to plan a potential US launch in the third quarter, we also intend to place more emphasis on the steps being taken to expand our breakthrough teplizumab franchise. As well as continue to advance our other pioneering pipeline opportunities targeting serious autoimmune disease prevention and interception. Beginning with potential label expansion opportunities for teplizumab, our PROTECT study targeting the recruitment of 300 newly diagnosed insulin independent Type 1 diabetics aged 8 to 17 within six weeks of their initial diagnosis, continues to enroll despite COVID challenges. We anticipate enrollment completion for this study in the second half of this year. In this study, newly diagnosed t1D patients receive two 12-day courses of active or placebo therapy administered six months apart. The goal of the study is to see a 40% or greater difference in C-peptide levels at 18 months. The difference in C-peptide levels is a measure of the preservation of a patient's insulin producing beta cells. This primary endpoint is coupled in our study with clinically relevant secondary endpoints such as insulin usage, hypoglycemic events, Hba1c and time in range using continuous blood glucose monitoring. Our expectation is that we will be in a position to report the top line results from this study in mid-2023. In addition to PROTECT, we continue to work on other important initiatives to support the development of teplizumab, including demonstrating safety in pediatric patients below the age of eight years re-dosing in the at-risk population and evaluating teplizumab's combination with other therapies. As well as formulation improvements to enhance patient compliance and potentially facilitate the therapies development for autoimmune disorders other than Type 1 diabetes. In addition to teplizumab, as it pertains to our broader development efforts in the T1D autoimmunity space, we also announced late last year the initiation of the first-in-human study of PRV-101 our coxsackievirus B vaccine candidate. As we've noted in the past, coxsackievirus B infection is first and foremost directly responsible for certain acute conditions and serious complications. It is also a presumed trigger in the development of both Type 1 diabetes and celiac disease. Our Phase 1 PROVENT study is a placebo controlled double-blind randomized study in healthy adult volunteers. We expect the results of the PROVENT study in the fourth quarter of this year. Moving next to PRV-3279, you will recall that last month we released key findings from a preclinical proof-of-concept study for the prevention of immunogenicity associated with gene therapy. For those of you that follow the gene therapy space closely, it is well-known the patient's immune responses to viral vectors and transgene products remain a significant hurdle in the delivery of these breakthrough therapies. Current mitigation strategies to overcome these hurdles also present significant safety challenges. Through its mechanism of action, inhibiting B cell activation without depleting B cells, we believe PRV-3279 has the potential to be used as adjunctive therapy alongside a number of state-of-the-art gene therapy platform. We plan to present the results of our preclinical proof-of-concept study at a medical meeting later this year and look forward to potentially collaborating on this program with relevant industry partners and key opinion leaders in the gene therapy field. We were also very pleased to announce last week our strategic collaboration with the Huadong Medicine Company, to develop and commercialize PRV-3279 in the Greater China region. In addition to cementing a relationship with an excellent partner for the development and potential commercialization of PRV-3279 in China, our Huadong collaboration contributes significantly to funding the PRV-3279 prevail program and progressing our Phase 2a proof-of-concept trial for the prevention of relapse in lupus patients. We currently expect to initiate this trial in the second half of this year and we will provide you with more details in the coming months and upon study initiation. We believe our partnership with Huadong provides further external validation of our pioneering business model focused on identifying, acquiring or licensing, developing and as appropriately commercializing clinical-stage assets that have the potential for intersecting or preventing serious debilitating and live frame autoimmune diseases. Lastly, but certainly not least with respect to our autoimmunology pipeline, we have PRV-015 our investigational anti IL-15 monoclonal antibody that we are developing in collaboration with our partner Amgen. Prior trials in over 300 patients have demonstrated PRV-015 to be well tolerated and have established both proof of mechanism and proof-of-concept for this human monoclonal antibody. We initiated our Phase 2b trial of PRV-015 for the treatment of nonresponsive celiac disease in the third quarter of last year. And we expect top line data from trial to be available in the second half of 2022. Hence, throughout 2020 and into the beginning of this year, we have made great strides advancing our pipeline of autoimmunology therapeutic candidates and all our programs are now in active clinical development. Returning now to Type 1 diabetes or T1D, a serious chronic life impacting autoimmune disease with substantial unmet need for which current medical practice weights and weights until it's too late, until patients finally present to clinicians with symptoms of irreversible tissue damage and end-stage organ failure often in a state of life-threatening metabolic crisis called diabetic ketoacidosis. Following stabilization usually requiring hospitalization and time in an intensive care unit, patients are then referred to an endocrinologist for a lifetime of glucose monitoring and insulin therapy with all of its accompanying risks and complications. The lives of these patients and their loved ones will never be the same again. And this is why it is so important to now look ahead of our activities in preparation for the potential launch of teplizumab in the at-risk T1D patient population. As a reminder, the FDA previously granted teplizumab Breakthrough Therapy designation. And as I noted at the outset of this call, our priority review PDUFA date is July 2nd of this year. We have also announced that the FDA is planning to conduct an advisory committee meeting tentatively scheduled for May 27. As discussed in previous calls, we have been expecting from the outset that the agency would likely make use of an advisory committee meeting given the pioneering nature of teplizumab potentially the first disease-modifying therapy in the Type 1 diabetes treatment space since insulin was introduced a century ago. Our team is currently preparing for the upcoming advisory committee meeting and we'll continue doing so throughout the coming months. Before progressing further, I would like to address a couple of regulatory disclosures made earlier this year. The first being, whether the FDA will require T1D autoantibody tests to be considered companion diagnostics for teplizumab in the at-risk population. Our belief, which we have shared with the FDA, is that auto antibody testing is not the definitive diagnostic tool, by which clinicians will ultimately determine, if at risk patients should be prescribed teplizumab therapy. What we can share with you today, as a result of our ongoing open and constructive dialogue with the FDA, is that while the agency is still considering this method, it remains possible that some companion diagnostic bridging, may be required as a post-marketing commitment, we do not currently believe it will be a gating factor towards approvability of teplizumab. The second regulatory consideration I would like to address pertains to comparability between drug product previously produced from Eli Lilly drug substance and that produced from our current manufacturing partner, AGC Biologics. We believe our assessment of the physiochemical analysis of the two drug products, which we submitted to the FDA in our CMC module, demonstrates these drug products to be comparable. This assessment is also supported by the comparability in PD parameters, evaluated in the PK/PD bridging study we conducted in healthy volunteers last year. However, the single administration low dose study, also showed a slightly lower than target PK area under the curve for the AGC product, indicating that in that particular study, the AGC product may have cleared faster from the blood stream than the Lilly product. Based on our understanding of the relevant data and the extensive modeling, we have conducted to date, we do not believe this observation will have a clinically relevant impact on either the safety or efficacy of the AGC product. As many of you know, we had our BLA mid-cycle review meeting earlier this month. And we had an opportunity to discuss this topic for the first time with the FDA and share our points of view, regarding the interpretation of the data we have submitted. The FDA is still evaluating the PK/PD bridging study and we'll be conducting its own PK modeling to validate our conclusion. As a result of our Breakthrough Therapy designation for the at-risk indication, we continue to enjoy the benefit of frequent constructive and valuable dialogue with the agency on all aspects of our BLA filing and the preparations for our advisory committee meeting in May. Considering that teplizumab potentially represents the first disease-modifying therapeutic advance for T1D in over a century and given the substantial unmet need that remains for these patients and their families, we look forward to continuing to support the agency in its review of our BLA to be able to bring this innovative breakthrough therapy to patients later this year. And with this in mind, I'm now going to turn the call over to Jason Hoitt, our Chief Commercial Officer to discuss the continued advancement of our commercialization planning and execution of prelaunch activities, as the FDA's review proceeds. Jason?

Thanks, Ashleigh, and good morning everyone. Over the course of 2020, we've made significant progress in building our commercial capabilities as an organization. As I've discussed in previous calls, we've built our core commercial infrastructure with amazing talent from across the biotech industry. And I could not be more proud of all that this team has accomplished in a relatively short period of time. In addition to the infrastructure advances and talent acquisition, we've substantially advanced our launch planning and launch readiness company-wide. Through market research, including over 900 participants from key stakeholder groups, including pediatric and adult endocrinologists', pediatricians, certified diabetes educators', mid-level providers, patients, caregivers and at-risk individuals, we have a far deeper understanding of the market than ever before. The insights gleaned from this comprehensive market research have informed our launch planning efforts, the design of our patient services program, our distribution model and our go-to-market strategy. The early learnings from this extensive market research also led to the development and deployment of our two national disease awareness campaigns, connected by T1D and Type 1 tested, laying the groundwork for patients, families and caregivers increase their understanding of T1D and their disproportionate risk of being in the early stages of the disease, as well as the importance of T1D screening and available testing options. As we announced in early December, we're also proud to have been the founding sponsors of JDRF's T1Detect screening initiative. This groundbreaking program is the first of its kind in T1D and the only screening program that offers the option for in-home testing for T1D autoantibodies through dry blood spot technology. In addition to increasing patient and healthcare provider awareness, we've also continued to advance our discussions with payers. You may recall, we first began our payer engagement last May, with an ad board that included medical directors representing approximately 73 million covered lives. Since that time, we've conducted numerous individual meetings with payers that cover in excess of 70 million lives. These payers are from across our anticipated payer mix, which from a claims database analysis we anticipate to be approximately 60% commercial, 35% Medicaid and 5% other. I'm pleased to share that the feedback from those meetings has generally been both consistent and positive. And we also can report that we've seen a further increase in requests for a deeper dive into teplizumab data from our medical affairs team since the BLA was filed and a PDUFA date assigned. Beyond our payer engagement, we finalized our distribution model plans and anticipate a limited network of specialty pharmacies that have home infusion capabilities in all 50 states, along with a single specialty distributor. Finally, we've taken a purposeful approach to our patient services design and are in the process of finalizing it, based on our patient journey work and identification of not only the potential pain points in the process, but also the moments that we believe matter to patients. We've taken a differentiated approach to the validation of this program design by hosting two separate co-creation sessions, one with healthcare providers and their staff, adult and pediatric endocrinologists, nurse practitioners and physician assistance and office managers, and a second with patients and caregivers. We believe this approach will help us create a final program that we plan to offer at the time of a potential launch, that will be meaningful and address the needs and concerns of the patients that we are here to serve. This brief overview provides a very high-level look at some of the initiatives that are going into our preparations for a potential launch, but are in no way exhaustive. I look forward to updating you on future calls, as we prepare to hopefully bring this important medicine to the patients that need it later this year. With that update, I'll now turn the call over to Andy to discuss our financials for the period. Andy?

Thanks, Jason, and good morning, everyone. Before I begin, I would encourage you to read our 10-K that was filed today. The 10-K includes our financial statements, Risk Factors, as well as management's discussion and analysis of our financial condition. I would also like to call your attention to the earnings press release, which was issued prior to this call. Let me start with our current cash position and cash projection. As of December 31, 2020, our cash position was $121.8 million. We recently completed a follow-on offering which generated approximately $102.3 million of net proceeds, including a partial exercise of the underwriter's option to purchase additional shares. We expect our current cash, cash equivalents and marketable securities will be sufficient to fund projected operating requirements for at least the next 12 months, which will enable us to actively develop all four of our programs: Teplizumab, for type one diabetes; PRV-3279 for lupus, PRV-015 for celiac and PRV-101 a coxsackievirus vaccine. Our net cash used in operations for the fourth quarter ended December 31, 2020, was $24.6 million. We expect to use between $26 million and $30 million cash for operations in the first quarter of 2021. We plan to provide additional cash guidance on each quarterly call, as we continue to progress towards the potential regulatory approval and commercial launch of teplizumab. From a P&L perspective, we generated a net loss for the fourth quarter 2020 of $32.6 million or $0.58 per basic and diluted share. The increase in net loss compared to the fourth quarter of 2019 is attributable to increases in research and development expenses of $12.1 million as well as an increase in general and administrative costs of $9.6 million. The net loss for the fourth quarter included $8 million of non-cash stock-based compensation as several vesting milestones related to the BLA for teplizumab were achieved. Net loss for the full year of 2020 was $98.6 million or $1.88 per basic and diluted share compared to a net loss of $43.3 million or $1.06 per basic and diluted share for the full year of 2019. The net loss for 2020 included $13.2 million of noncash stock-based compensation expense, while the net loss for 2019 included $2.8 million of noncash stock-based compensation expense. The increase in net loss in 2020 as compared to 2019 was attributable to teplizumab related CMC costs, PROTECT Phase III study costs, BLA preparation costs, three commercial costs and medical affairs expenses. With that let me turn the call over to Ashleigh for closing comments. Ashleigh?

Thanks Andy. So as you can see 2020 represented a year of exceptional progress for our company and for our mission to fundamentally address the substantial unmet need associated with serious debilitating and life-threatening autoimmune diseases. That progress has translated into an ambitious 2021 for Provention Bio which is off to a really good start. We look forward to keeping you updated on our continued progress throughout the year. And to that end I'm also pleased to that we are planning to conduct an Analyst and Investor Day in April to provide you with both a deeper dive into our teplizumab program and our T1D franchise expansion opportunities. as well as shine a spotlight on the other clinical stage autoimmunology product candidates in our pipeline aimed at intersecting serious life-threatening and life impacting conditions. The details of this event will be sent out soon. And with that operator we'd like to take any questions.

[Operator Instructions] The first question today comes from Alethia Young with Cantor. Please go ahead.

Hey guys, thanks for taking my question. Congrats on the progress. Maybe 2. One just can you talk -- since you have an active dialogue with the FDA, can you just kind of help us think about some of the things that would be a consideration at the panel? I think you referenced a couple in the prepared remarks. But just can you dig a little bit more into that? Then maybe the second question is for Jason. I know you're not prepared to speak about price with some granularity. But I think you can -- I'm just curious, if you kind of have a perspective on kind of now that you're seeing the median be much longer kind of how to think about maximizing that price and what the feedback has been with payers?

Thank you very much Alethia for the question. So we've always anticipated that there would be an ADCOM just by the nature that this is such a fundamental paradigm shift in how type one diabetes is being considered, not only with respect to a disease modifying therapy, but with respect to identifying patients at a presymptomatic stage and administering a therapeutic intervention. So I think the agency is going to welcome an opportunity to discuss that with key opinion leaders, with patients, patient advocacy, groups in order to better understand and appreciate the unmet need and the context of their review. I also think then that as is typical in an advisory committee they will be seeking guidance from experts in the field with respect to the risk-benefit relationship. And we're confident in the results and the data that they will speak for themselves. And believe that when you consider the now three-year median delay in onset and the fact that we're dealing here with a therapeutic that resets the immune system in a discrete 14-day dosing regimen we're not dealing with therapeutic that chronically suppresses the immune system. And so that's a very good safety profile to be considering in an intersection context. So we'll be prepared for experts and the FDA digging deep into the details of not only the TN10 study, but the over 800 patient database that we now have from previous studies in newly diagnosed looking at safety and the consistent signal with respect to C-peptide as an evidence of preserving functional beta cell mass. Jason, could you please address Alethia's question regarding pricing?

Yes, absolutely. And, hi, Alethia. Thanks for the question. So with respect to our payer engagement, our market access team has really done a phenomenal job over the course of 2020 of ramping up our understanding of how payers are thinking about Type 1 diabetes, educating payers Type 1 diabetes because I think one thing that I think is reassuring for us is the consistency of the feedback that we're hearing from payers that as I mentioned in our prepared remarks began with the advisory board that we've discussed previously in May of last year, which was before the ADA meeting in June where the TN10 three year data was announced, which obviously is more favorable than a two year delay. And so the consistency between what we heard in that advisory board and what we heard from the direct payer engagement I think is reassuring with respect to how they anticipate covering a drug like teplizumab, how appreciative they are of an enhanced understanding of the autoimmune nature of Type 1 diabetes and the unmet need the teplizumab can ultimately address in the Type 1 space. So going into pricing research which we just kicked off I think we're really encouraged with how physicians are now both thinking about Type 1 -- or how payers are now thinking about both type one diabetes and how they're thinking about the profile of teplizumab. But again we just initiated that pricing research within the last couple and it will be a process that will go on for the next couple of months as we engage with both payers and HCPs as a part of that process to ultimately come to a final decision around where we're going to price teplizumab, which we would anticipate announcing at the time of our commercial launch.

Just maybe a follow-up on that. Like how do they think about like the cost of insulin and all that -- look on the foregone opportunity cost of -- like what's the kind of financial value to them of delaying a year of a lifetime of insulin?

Yes. It's a great question, Alethia. And a big part of the conversation that we're having with payers is to frame the discussion around the totality of the cost of type one diabetes, right? So it's not just the cost of insulin for a year or two. It's not just the cost of the pumps and the supplies and the CGMS. It's the cost of things like 50% of patients presenting in diabetic ketoacidosis. We know that a single hospital admission for diabetic ketoacidosis can cost anywhere from $18,000 to $27,000. Those direct healthcare costs that aren't necessarily associated with a therapeutic like insulin or a pump that goes along with insulin need to be factored into the equation. And frankly, it really isn't on the top of mind of payers right now because when they think about their diabetes budget 90% of that budget is on Type 2 diabetes. So having that conversation them think more holistically around the totality of the cost associated with type one so that we are avoiding them thinking about this disease just in the context of insulin pricing because that would be a mistake.

Great. Thank you.

The next question is from Gregory Renza with RBC Capital Markets. Please go ahead.

Thanks. Hi, Ashleigh and team, congratulations on the progress. Thanks for taking my question. Ashleigh, I just wanted to follow-up a bit on those FDA interactions to-date? And just in regards to the color on the mid-cycle review, which I really appreciate. Just curious, if you could just layer in perhaps your expectations around the comparability timelines that the FDA is engaging into to do their own work there. And what elements do you use to sort of arrive at your positioning about its current comparability? Thank you.

Thanks Greg. Good morning. So, yes -- so what we're dealing with in terms of the comparability is a very comprehensive panel of physiochemical analyses that release the product from the manufacturer side within specification and from a validated process now at AGC Biologics and comparing that to the specification with regard to the Lilly substance manufactured a decade ago. And in that context the products are comparable. That is our assessment. That is our belief and we believe that the agency will see that also. We then had a situation as you may recall where we started the PROTECT study with Lilly manufactured product and obviously have to transition to the AGC Biologics product. And we did as a single-dose study in healthy volunteers at a low dose because we obviously couldn't administer a full 14-day therapeutic dose to healthy individuals. And we wanted to bridge to the new material in our PROTECT study. As a result of that single dose PK/PD bridging study again all of the parameters were within anticipated target especially the PD parameters which are more indicative of the efficacy and the safety with the exception of this AUC PK area under the curve. And that the AGC Biologics fell slightly below the target indicating that it cleared a little faster. So, what we have done in evaluating internally and in the submissions we've made to the agency is very extensive modeling which is very typical in the industry to show what the consequence of that would be how the two products behave when you take into account 14 days at therapeutic dose? And from that analysis from that modeling, we do not believe that the difference in area under the curve will result in a clinically relevant difference in the safety and the efficacy of teplizumab. And so that we've submitted to the agency the mid-cycle review meeting we had was the very first and only time to date that we've had to discuss that. We laid out our results our interpretation. And obviously they were not going to make a decision at that meeting and they have indicated to us they will do their own modeling and we anticipate that they will make information requests in the coming week -- in the coming weeks in order to enable them to do a comparison between their modeling and our modeling and whether they arrive at the same conclusion that we do. And we are confident in the interpretation that we have submitted to them.

Got it, that's helpful. Thank you. And maybe just one more on the mention of the potential thoughts around companion diagnostics and any post-marketing interrogation potential. I'm just curious maybe for Jason how that may shape the engagement with patients and physicians and as far as that patient journey could be concerned as you think more conceptually about what that could look like knowing that it's early though. Thank you very much,

So I think the primary consideration there is one of the regulatory pathway. And the first thing that we have sort of briefed the agency on is that you don't do a test that whether a patient has two auto antibodies and a clinician then administers teplizumab. It's just the first part of the screening. The screening and the indication that the patient has two auto antibodies, should refer that patient to an endocrinologist for a full workup. That full workup will obviously include confirmation of the autoantibody status. And then the dysglycemia component, which will show that a patient ability to manage glucose levels, when stressed by a glucose tolerance test indicates they're a stage two patient. And so for those reasons the autoantibody tests themselves are not the definitive determinant as to whether a patient will get teplizumab. And for that reason we don't believe that the companion diagnostic scenario applies here. If the agency differs in that opinion they've indicated that this will be a post-marketing exercise to really look at the tests that were historically done in the TN10 study and bridge them to the tests that are available today with respect to autoantibody testing and we're obviously preparing to be able to do that. But very -- very much comfortable that it is a post-marketing bridging type of exercise or commitment and not a hurdle to the approvability itself.

Great. Makes sense. Thank you very much, Ashleigh.

Your next question comes from Thomas Smith with SVB Leerink. Please go ahead.

Great. Thank you very much. This is Dylan Dupuis sitting in for Tom. Congratulations guys on the BLA filing. Just a couple of follow-up questions to Greg's questions. Kind of regarding this companion diagnostic in a way, do you see any pathway to kind of getting approval to use teplizumab in patients as soon as they present with two or more autoantibodies? And maybe if you could just remind us on what the natural history says on where the patients present with two autoantibodies and how long it takes for them generally to start showing evidence of dysglycemia? And whether you can interview at that point as opposed to waiting for them to reach full stage two T1D? And then the second question around the PK/PD work and the AGC products. Just kind of would you anticipate incorporating this product into the PROTECT study? And are you guys planning on reserving any of the Eli Lilly product for the second line of dosing for patients that have already entered the study, or are you just going to go ahead and dose them with AGC product with their second round of dosing? Thank you.

Yes. So let me hand the first question over to Francisco, but take your second question quickly. So we don't anticipate this is about giving the second dose of a two dose regimen using the AGC product. This is about enrolling patients for the first time on the AGC product. And so they would have then -- we would then have them with their first and second dose. And that would keep it nice and clean. We can if necessary do sub-analysis of those patients versus the patients that were given the Lilly derived material. Again, we would not be introducing a change or transitioning, if we didn't believe that the therapy was comparable. And again we're not saying that the material itself isn't comparable, it is. What we're saying is that we did a single low dose study and there was a deviation from the target AUC profile and when it's modeled up to therapeutic dosing it -- we believe that that will not result in any clinical or safety efficacy issues. And so very often with biologics, first and foremost, they're often greatly overdosed anyway. There are changes in them. They're not as simple as small molecules. And so this is something that is regularly has to be done and assessed by the agency as a result of modeling and comparability, but we are very comfortable transitioning to the new material in the PROTECT study.

Francisco with regards to the question on the two autoantibodies, I'd like you to answer that because really it's two autoantibodies alone is stage one type 1 diabetes. And stage two is two autoantibodies plus dysglycemia. And so it's a different indication and you would probably best to discuss what label expansion evaluation would have to be done to bring the use of teplizumab forward to the stage one population versus the stage two. Francisco?

Yeah. Thanks for the question. So when you have two or more autoantibodies, you will eventually develop clinical T1D. It just takes longer because you have to first go through the dysglycemia stage. The probability of developing clinical T1D in stage one to autoantibodies is 44% at five years. Once you have dysglycemia it's 75%. And that is why trial net enrolled these patients in the TN10 study. It's easier to study them because of a faster conversion. As we mentioned, the disease is the same. It's the continuum of T1D the same mechanism of disease, the same T cells destroying the beta cells. So we do have an expectation that teplizumab should potentially help these patients as well. But with regards to studying them, we have to be mindful that this will be a longer study, larger study. And we feel we have better life cycle opportunity in the near-term, which we have indicated in our materials expanding under age of eight years old, et cetera combinations. So it is something that we keep an eye on, but don't have an immediate plan to undertake.

Great. And then one last question real quick for Jason. Just in terms of how large of a sales force, do you anticipate needing in order to affect a good commercial rollout and what your timing is around recruiting and educating the sales team?

Yeah. Thanks Dylan. It's a good question. And I think our original guidance that we're looking at more of a rare disease type sales force size. I still hold somewhere in the neighborhood of 50 to 75 reps. I think during the Investor and Analyst Day that we're planning in April we're going to give additional insights into our market preparedness go-to-market strategy and a lot more details around the commercial planning efforts that have been ongoing over the course of the last 15 months or so, but somewhere in the neighborhood of 50 to 75.

Yeah. Appreciate it. Thank you very much.

You bet.

The next question is from Justin Kim with Oppenheimer & Company. Please go ahead.

Hi, good morning. Thanks for taking the question. Maybe just as a follow-up, just wondering how much of the build for that, sort of, potential commercial launch has already been done? And how much building might we see ahead of a potential approval? Just wondering in terms of the timing of things and maybe for modeling purchases as well?

Thanks Justin. So strategically our approach to the scale-up has been one of a gated approach that, sort of, tracks and is in good alignment with the regulatory pathway and the derisking of that. So I'll hand you over to Jason now to give you some specifics as much as he can, but our intent has not been to put boots on the ground, until we're very comfortable that the approval and the launch is going to be on time for obvious reasons. But at the same time, Jason is very experienced at this and has done a great job with the core leadership team and all of the preparations necessary to do that in a very effective and efficient manner. Jason?

Yes, absolutely. Thanks Justin. Like Ashleigh said, we're taking a very prudent and gated approach to the spend associated with deploying the field team. And I think in particular, the current situation that we're in with the pandemic, monitoring what access is looking like to physicians as we think about deploying a field team. So as it stands right now, we've got our Vice President of Sales, Chris Barley has been on board since the third quarter of last year. He's done a great job in recruiting our first two regional sales directors that both bring wealth of experience to Provention Bio and a perfect example of the type of talent that we're looking for coming from both the rare disease and the type 1 diabetes space. And collectively together the three of them have identified a wealth of talent from across the biotech space that are lined up and actively being interviewed, so that when the time comes and we decide to pull the trigger, we've got the top talent from across both rare disease and type 1 diabetes. And with a significant proportion of those individuals having a direct connection to type 1 diabetes and having that passion that goes along with the potential launch of teplizumab and what that could mean for patients.

Got it. Great. And maybe I just wanted to touch on the collaboration with Huadong. Could you maybe share more light on the genesis of the deal and sort of the rationale for sort of having that partnership currently and in terms of the timing and how you think about the development or your cost of development for the overall program? Thanks.

Yes, absolutely. So obviously we have a business development function. We tend to favor focusing on R&D champions and relationships with companies that fundamentally understand our pioneering approach our technology and so on. And we certainly keep an eye out for opportunities to partner with the industry leaders in regions. And so Huadong was just a wonderful opportunity for us to engage with a company that is building an immunology franchise is excited about 3279 and is an excellent partner for that region. And in the process is willing through the transaction compensation to put some significant funding behind the study in lupus that we want to conduct. In doing so, this enables us to continue the momentum of that program without it competing for funds from the teplizumab commercialization and subsequent label expansion opportunities. So it was a perfect -- it really was a perfect match. We're very pleased. And Francisco, I believe it was your R&D championship and outreach to Huadong that initiated the discussions? Francisco?

Yes. Well, we don't want to take the glory. As you say, we have this strong R&D and outreach to lead our business development conversations. Always, Ashleigh coaches us to start from R&D. And Huadong has a strong immunology presence and otology presence. You might have seen in our press release on PRV-3279 that we have some very nice combination results with sirolimus, turns out Huadong is the number one sirolimus company in China for example. So it's not just the money. They provide a strategic leverage for us to expand into this region.

Got it. Got it, great. I just had what -- maybe just a final question on the immunogenicity of gene therapy programs. Is there a target indication that you think would be a good fit to explore here? Just wondering, when you think about utilizing an agent like 3279 and/or potentially addressing some of the issues of immunogenicity, is it sort of programs that are experiencing safety issues currently or maybe not achieving adequate efficacy? Just wondering, how you think about the types of programs that you would pursue? And where you think you might first leverage this agent in what setting?

Francisco?

Yes. So you're right, Justin. It's primarily for programs that don't want to push the dose of the vector, which we now runs into safety issues. In addition to cost of goods of course. So combining an adeno-associated vector or other types of factors because at the end of the day they're all immunogenic, logically, so combining that with PRV-3279, we believe would allow to use a lower dose and it would allow greater efficacy of the transaction of the tissues greater expression of the transgene. That's what we put out in our press release. So there are benefits on the safety side, there are benefits on the efficacy side and also the potential benefit of allowing redosing because you block the immunogencity of the first course of gene therapy. So the potential here is quite broad and we don't think we're limited to in a specific disease. It's for any systemic delivery of gene therapy product.

But for avoidance of any doubt our intent is to develop this agent for the monotherapy for autoimmune indications and then to negotiate collaborations with gene therapy companies that would lead an adjunctive therapy like this or would want to explore it for them to fund those developments. We're not going to go out and do that speculatively.

Okay. Got it. That’s very helpful. Thanks.

The next question is from Ram Selvaraju of H.C. Wainwright. Please go ahead.

Thanks very much for taking my questions. Just a few here. Could you comment on whether you expect the question around retreatment with teplizumab and the feasibility of studying the impact of retreatment with teplizumab to be a topic that's discussed at all at the upcoming advisory committee meeting, or do you anticipate that this is not really going to be something that the committee considers to me?

I suspect that the observation that what was achieved from the TN10 study with a single regimen will come up at the ADCOM. And I think that there will likely be enthusiasm from the ADCOM, encouraging us to immediately on the other side of a potential approval study redosing, given the potential to extend the delay or indefinitely delay the progression to the disease. I don't think it's a gating item to approvability. However, I think that – I believe that the single dose therapy and the delay of a median of three years is sufficient in and of itself.

Do you have any thoughts at this juncture regarding how the retreatment impact might in fact be studied for example as you suggest in the post-marketing setting?

Yes. Francisco probably is best to speak to this because it can be by a number of means. We see the label evolving and we don't anticipate the label that might be approved in the summer would specify that you can only give one dose. So in a lot of instances, they need to demonstrate the benefit from redosing is going to be driven by advising clinicians on how and when to consider giving us a second or follow-up dose, and advising payers on the justification for doing so. But Francisco, you have perhaps a number of initiatives that can occur post-marketing from our own sponsored studies to other means to provide that information?

Yes, hi, Ram. So, we do have already experience with redosing in the newly diagnosed setting. As you know, we have over 400 patients who were dosed for the second time between 6 and 12 months after the first course and this was done safely. There are no safety issues. So that's very important. We know we can read those safely. With regards to at risk, while we have not done it yet, we do have an extension study which is listed in clinicaltrials.gov where we would provide another course to patients who eventually convert to clinical toned in the original TN10 study that will give us some information. And then as Ashleigh mentioned, we have an ongoing biomarker program in our current trials in PROTECT that is helping us understand the best timing for redosing. And we believe that based on exhausted T cell numbers that could be a great indicator for redosing because they correlate quite closely with clinical response to teplizumab and with delay to clinical toned, even in the natural course of the disease, even in the absence of a therapeutic exhausted T cell numbers appear to be a good tractor for the progression the immune response against the pancreas. So we will be studying that post-approval in a new trial, where we would then read those patients, before they develop into toned in stage two using exhaustive cells as the trigger for the redose.

That's very helpful. Can you also comment on what you anticipate to be engagement of patient advocacy in the context of ADCOM discussion and whether there will be representatives of patient advocacy present at that discussion?

Yeah. So we haven't finalized the agenda with the agency yet, but we absolutely that the patient advocacy organization will be eager to contribute to the outcome and would welcome them doing so obviously.

Okay. And then just two very quick ones. Firstly, when you talked earlier about the differing PK profile between the Lilly generated material and the AGC generated material in a situation where the FDA says to you that they're not sure whether these two different sources of material are in fact bioequivalent what might be some of the ways in which you can address that expediently?

So we'll have those discussions with the agency. It could range from evaluating the material used in the PROTECT study to a post-marketing commitment, but we simply have not had that dialogue with the agency. I've reported the situation following the mid-cycle review transparently.

Okay. And then lastly Huadong mentioned, I think in the press release that, they anticipate 3279 being part of the constellation of autoimmune disease inflammation disease focused therapeutics. Can you give us a sense of what their – the rest of their portfolio looks like and what their experience or track record has been so far in developing and potentially marketing therapeutics that are in related disease areas for those that 3279 would target?

Yeah. Thanks for the question. I think Francisco knows Huadong best. Francisco, could you provide Ram with some color, please?

Yes, Ram, this is all public information in Huadong's website. They are a relatively large company top 20 in China, 12,000 employees, 6,000 sales reps. And their strength is precisely in immunology, endocrinology and oncology. In immunology, they have sales in excess of $1 billion for products used to prevent transplant rejection and treat some other autoimmune disorders. They are drugs that have been on the market for a while. So the partnership with Prevention allows them to be more on the innovative side of development.

Thank you.

The next question is from David Hoang with SMBC. Please go ahead.

Hi, guys. Congrats on all the great progress over the past year. And thanks for taking my questions. So I just want to fit in a couple. My first one, just in terms of prelaunch screening efforts, I know that JDRF has the program going on currently with the fingerstick screening test. And my question is, do you have any goals in terms of getting a certain number of patients screened prior to teplizumab potentially coming to market? Is there anything going on outside of the JDRF in terms of providing screening tests to patients and -- or is it something that you feel that once the product is on the market, you'll get a nice ramp-up in terms of the interest and the screening efforts? A - Ashleigh Palmer So, we'll ask Jason for any specifics that he can give. But strategically corporately our goal is to catalyze change and to use the potential approval of teplizumab to bring awareness to the ecosystem to the community that now screening is meaningful. It has a consequence beyond the primary driver to this point, which has been to be able to anticipate the possibility of DKA and kind of caregivers monitor an individual with two autoantibodies and dysglycemia closely to avoid that acute crisis, if possible. What has been missing from the community up to this point is a meaningful intersection. And we believe that, that is also a key to triggering revisions in guidelines around general population screening and so on, which we're driving. So our goal is to use our situation as a first-mover, as a disruptor, to allow the ecosystem to change and shift its paradigm in thinking and we try and drive that wherever we possibly can and the ability to sponsor the JDRF T1Detect initiative and bring the screening of autoantibodies from what was really an academic type of consortium opportunity, into the hands of the actual patients themselves, especially during a COVID pandemic, where they can do the at home. We're just very proud of being able to sponsor that with JDRF and begin that fundamental change. Jason, do you have any more details?

Yes. All I would add to that, Ashleigh, is I think with the T1Detect program, particularly during a pandemic, I think, JDRF has a really nice initiative here, that includes both educational components and obviously, that in-home drive blood spot screening technology to make things simple as possible for patients to go about getting screening if they want to. I think, the two things that I would add to what Ashleigh said are, that I think, we know through both claims database analyses and what's been published from academic consortia that, even in the absence of the in-home drive blood spot technology, hundreds of thousands of autoantibody tests are being ordered by physicians year. And so, there are patients being screened and that there's also an educational gap out there with respect to the disproportionate risk that patients are in, if they have a family member with Type 1 diabetes. And so, I think there are two components to this that I think are really important. One is, the unbranded disease awareness campaign that we launched at the end of the third quarter of last year and then the educational components associated with T1Detect. They all create a lot of noise in the space around, why people should be screened. Knowing that there's published literature to suggest that diabetic ketoacidosis can reduced from 50%, down to the single digits, which in and of itself is a huge advance for patients' quality of life. And then second, as Ashleigh mentioned, the approval of teplizumab for those patients that don't want to be screened until there's a therapeutic intervention. They can ultimately address the problem. The approval of teplizumab should catalyze even more screening through a number of different mechanisms, which obviously is a good thing for a number of reasons. Those would be the only additions I have on top of Ashleigh’s comments.

Okay. Great. Thanks for that. And then, maybe just quickly, on your conversations with the payers, I'm just curious as to whether you feel like they're sort of criteria for a prior authorization that's emerging from the discussions? And then, how much I guess is the redosing a part of the conversations, is redosing something that payers are factoring in -- does that all at all change their thoughts on the value proposition of the product?

Jason?

Yes. So, with respect to the first part of your question, we've seen a fair degree of consistency with respect to how payers are thinking about, how they would cover a product like teplizumab and it's aligned with our strategic objective, which is a streamlined prior authorization to label. And so, what we heard from payers early on was that based on the profile of teplizumab, this would be a medical benefit that they would anticipate covering with a prior authorization to label. Unless they felt like we price this way out of whack and then they would put additional control on it. But the initial thought was prior authorization of label. And the one comment that we thought was insightful that they gave us at the advisory board was that, they would anticipate covering this with a PA to label because of the unmet need in type 1 that, if they were to deny this product, you would almost surely expect that it would be overturned on appeal. So, our goal similar to any other specialty therapeutic product is that, at launch or shortly thereafter once they've had a chance to review and write a medical policy that we would have a streamlined prior authorization to label.

Okay. And then just on redosing? Is that conversation come up with the payers? And what's their feedback if any?

Yes. So we're not -- because we don't yet have data on redosing, it's really not a part of the conversation at this time.

Got it. Okay. Great. Thanks so much for taking the questions.

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

Thank you, very much again for your time today and attention this morning. We hope you all have a pleasant day and we look forward to speaking with you again very soon.

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