Welcome to the FibroGen, Incorporated Third Quarter 2017 Financial Results Conference Call. My name is Adrien and I'll be your operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] Please note that this conference is being recorded. A webcast of this call will be available on the company website for two weeks from today's date. For opening remarks and introduction, I will now turn the call over to Karen Bergman, Vice President of Investor Relations and Corporate Communications. Please go ahead.

Thank you, Adrien. Good afternoon everyone and welcome to FibroGen's financial results and corporate update call for the third quarter of 2017. An archive of this webcast will be available on our website under Events and Presentations for two weeks. Joining today's call are Tom Neff, our Chief Executive Officer who will start the call by discussing corporate update, strategy and execution in our product development programs. Dr. Seth Porter, Vice President of Fibrosis Program who will provide update on our Pamrevlumab program across disease indications. Dr. Peony Yu, Chief Medical Officer, who will discuss our recently accepted new drug application filing by the China Food and Drug Administration for roxadustat. And Mr. Pat Cotroneo, Chief Financial Officer who will review financial performance in the third quarter. Following our prepared remarks, we will open the call for Q&A where we will also be joined by Dr. Elias Kouchakji, Vice President, Clinical Development, Drug Safety and Pharmacovigilance. On this call, we expect to make forward-looking statements regarding our business, including our collaborations with AstraZeneca and Astellas, financial guidance, the initiation enrolment, design, conduct and results of our clinical trials, our regulatory strategies, our research and development activities and certain other business matters. For risks and uncertainties regarding our business and statements made on the call today, as well as factors beyond our control that may cause differences between current expectations and actual results, we refer you to our Form 10-K for the fiscal year ended December 31, 2016 and quarterly reports, including our Form 10-Q for the period ended September 30, 2017 filed with the Securities and Exchange Commission. Copies of these filings can be found in the Investors section of our website. We undertake no obligation to update any forward-looking statement whether as a result of new information, future developments, or otherwise. The format for today's call will include remarks from FibroGen's management team, and then we'll open the lines to answer your questions. A webcast of this conference call again will be available for replay again on the Investors page on FibroGen's website, at www.fibrogen.com. And with that it's my pleasure to turn the call over to our CEO, Tom Neff.

Thank you, Karen. Good afternoon. Thank you all for joining us today. The time period since July has been highly productive. We reported positive Phase 2b data from our randomized placebo-controlled double-blind study of Pamrevlumab in IPF and presented these data at the European Respiratory Society International Congress in September. We also achieved major milestones in our roxadustat program. First, the CFDA has accepted our new drug application or NDA to support the registration of roxadustat for the treatment of anemia associated with CKD and dialysis and in non-dialysis patients in China. This NDA submission triggered a milestone payment of $15 million from our partner, AstraZeneca, which was earned in Q4. In addition, last week, Astellas and FibroGen reported positive top line results from a Phase 3 peritoneal dialysis study, which is the first completed Phase 3 roxadustat study in Japan. Last quarter, we shared top line IPF results from our Phase 2B study of pamrevlumab as well as some analysis of that data. Today, I'll provide a couple of additional observations underscoring the impressive safety results. Perhaps, the most striking result was that the number of pamrevlumab patients who experienced decline in lung function of FEC percent predicted of 10% or more, resulting in discontinuation of therapy was less than 15% of what was observed in the placebo arm. Another notable result was this study's safety profile mirrored the results seen in our prior exploratory study in the same subgroup of FVC percent predicted of 55%, percent predicted at entry and received the same dose of 30mgs/kg every three weeks. These are the only two studies with this impressive safety record any of the trials involving all the companies to date. We have been focused on further bolstering our strong IP position in pamrevlumab for treating IPF. We will…

Thank you, Tom. As Tom mentioned, the positive results of our randomized double-blind phase 2 study in idiopathic pulmonary fibrosis were presented in an oral session at the European Respiratory Society International Congress in September of this year. In the study main portion, 103 patients were randomized one to one to receive either Pamrevlumab or placebo for 45 weeks. Pamrevlumab met the primary efficacy endpoint of change of course by capacity for FVC percent predicted, a measure of change in lung volume from baseline to week 48. Pamrevlumab demonstrated statistically significant reduction in FVC decline, using a linear slope analysis method in the intent to treat population. This is the same method used for the Nintedanib Phase 3 primary analysis and in published sensitivity analysis of the pirfenidone phase 3 ascending trial. The average decline in FVC percent predicted from baseline to week 48 was 2.85 in Pamrevlumab arm compared to 7.17 in the placebo arm with a statistically significant difference of 4.33. At week 48, Pamrevlumab treated patients had an average decrease in FVC of 129 millimeters, significantly lower than an average decrease of 308 milliliters in the patients receiving placebo. We observed that 31.4% of placebo patients experienced disease progression, defined as a decline of 10% or more in FVC percent predicted for death compared to only 10% of Pamrevlumab treated patients. Pamrevlumab was well tolerated and slowed IPF progression as monotherapy in this study and in our previous phase 2 IPF clinical study. And in the 067 sub-studies, Pamrevlumab was also well tolerated when administered in combination with either pirfenidone or Nintedanib. At the ERS meeting, we also presented results from a mouse model of radiation induced lung fibrosis. Study findings showed that Pamrevlumab monotherapy reduce fibrosis to a greater extent than did either pirfenidone or Nintedanib…

Thank you, Seth. Our next speaker will be Dr. Peony Yu to go over the anemia program. Peony.

Thank you, Tom. As you know, roxadustat is our first in class HIF-PHI, an innovative RO agent for coordinated erythropoiesis. Our roxadustat Phase 3 program in PKD anemia in partnership with Astellas and AstraZeneca include 15 phase 3 studies with a total sample size of nearly 10,000 patients. This large program has been designed to meet registration requirements in four regulatory jurisdictions worldwide. I'm pleased to update you on our progress. In the US and EU Phase 3 PKD program, we have enrolled a substantial number of patients and continue to accumulate patient treatment data

Sorry. Is there an interruption?

Adrien, did we lose you?

No. You're still speaking.

Okay. Sorry, we had a momentary blip. Yeah. I think we're fine. Adrien, the lines are working well.

Yes. Everybody is still connected.

Let's continue. Thank you.

Okay. So sorry about any earlier interruption. So I will start the sentence over. In the US and European Phase 3 PKD program, we have enrolled a substantial number of patients and continue to accumulate patient treatment data in these seven ongoing Phase 3 studies. Our Phase 3 safety data has been undergoing multiple periodic reviews by our independent data safety morning board or DSMB and in the most recent review, in the past week, they again recommended continuation of all trials without modification to current protocols. In the Japan Phase 3 program being conducted by our partner, Astellas, FibroGen and Astellas jointly reported positive top line results from the first completed Phase 3 trial. This study evaluates the roxadustat in 56 peritoneal dialysis patients, 13 ESA naïve and 43 ESA conversion patients. In this study, ESA naïve patients first underwent anemia correction and 92.3% of them along with 74.4% of the ESA-conversion patients maintained their average hemoglobin levels within the target range of 10 to 12 grams per deciliter during the weeks of 18 to 24. Roxadustat was well tolerated and the preliminary safety result was consistent with roxadustat safety profile reported in previous clinical trials. As far as CKD anemia program in China, we report the great news that our roxadustat NPA for treatment of CKD anemia in dialysis and in non-dialysis patients have been accepted for review by the CFDA in China. The results from both Phase 3 studies, 806 and 808 are included in this NDA. Having met the primary endpoint in both Phase 3 studies, we also demonstrate the efficacy and safety roxadustat over the 26-week study period. In addition, the efficacy and the dose requirements in roxadustat treated patients were comparable in patients without any dose, without inflammation in both the dialysis and the…

Thank you, Peony. Pat Cotroneo, our Chief Financial Officer will now walk through financial highlights for the second quarter of the year. Pat?

Thank you, Tom. As announced today, total revenue for the quarter ended September 30, 2017 was $27.3 million. For the same period, operating expenses were $63.3 million and net loss was $37.7 million or $0.50 per basic and diluted share. Included in operating expenses for the quarter ended September 30, 2017 was an aggregate non-cash portion totaling $11.5 million, of which $9.6 million was a result of stock-based compensation expense. As of September 30, 2017, FibroGen had $762.7 million in cash as compared to $356.8 million for the same period last year, reflecting the net returns of our two recent financings. For these purposes, total cash refers to cash including cash, cash equivalents, receivables, investments, consisting primarily of investment grade corporate debt and restricted time deposits related to our building lease. On our balance sheet, the category of long term investments consists entirely of investment grade corporate debt with remaining maturities of fewer than two years. With the submission of our NDA filing for roxadustat in China, we earned a $15 million milestone from our partner AstraZeneca during October 2017. This milestone payment will be recognized as license and milestone revenue in the fourth quarter of 2017. On August 24, 2017, FibroGen closed a financing that raised net proceeds of $356.2 million. Following the announcement of positive top line results from our Pamrevlumab Phase 2b clinical study in IPF. A strong balance sheet allows us to invest and/or partner optimally in the development of our pipeline. We are currently projecting yearend cash balance in a range of $750 million to $760 million. I will now turn the call back over to Tom.

Thank you, Pat. We are pleased to be able to share this progress with you today. I would now like to preview our upcoming milestones. Looking out over the next year, milestones for Pamrevlumab include an IPF, we expect to unveil our Phase 3 program in the first half of 2018 once our team has developed optimized Phase 3 study protocols in [indiscernible]. In pancreatic cancer, we plan to gain FDA input on a registrational study in 2018. As to roxadustat, for CKD anemia, we are at an exciting point of clinical development in all four regions. We have submitted our NDA in China as you heard today, and the Phase 3 studies are progressing in Japan. The US and EU Phase 3 programs are advancing on track. FibroGen, as the IND holder, will be responsible for US NDA submission with support from our partner AstraZeneca, while our partner Astellas will take the lead in the MAA submission. For roxadustat, lifecycle management strategy, we are making clinical development plans for expanding anemia indications beyond CKD, especially into oncology related and inflammation related anemias for myelodysplasia or MDS anemia in the US. We expect to initiate our Phase 3 clinical study in Q4 '17. For MDS anemia in China, the team is expecting to dose the first patient in this trial before Chinese New Year, which may land in fourth quarter 2017 or first quarter 2018 on the Western calendar. We and our partner AstraZeneca continue a strategic plan on oncology-related anemia indications and inflammation anemic conditions and hope to have a plan agreed upon by Q2 2018. With that let me turn this call back to Karen for Q&A. Karen please.

Thank you, Tom, operator if you could kindly open up the line for questions.

[Operator Instructions] And the first question comes from Michael Yee from Jefferies.

Questions on two areas, one is on Pamrevlumab, can you just comment about where you are with the HRCT imaging data. When you think you could present that and what the expectation should be around that data. And then on Roxadustat, I know you keep commenting about how the DSMB keeps having looks with no recommended changes. Can you just remind us if that's blinded or unblended, what they're looking for and what types of things would be a requirement to stop the study if there was actually a problem. Thanks so much.

I will offer a response for IPF question and Seth can follow up with more appropriate and then Peony will do the DSMB question. With regard to HRCT, we have been very focused in the past few weeks on getting certain IP filings or patent filings completed. This has been primary focus for the team to get it out of the way. But the filings offer the prospect of considerably longer period of time. We estimate seven to nine years more than what would normally happen with biologics and generics in terms of property, protection - intellectual property protection and proprietary position on antibodies. And so that work I think as of two or three days ago, our IP team and our key members of Pamrevlumab staff and IPF gone through most of the analysis and we're almost done. So I expect that we will move on to matters such as the HRCT evaluations as the next step here in the process. During Q4, probably is the most likely scenario there. Seth, you want to add anything to that?

I think that's right, obviously we're very interested in the HRCT outcomes, they look very promising in the previous phase 2 study. As we said, the changes in FDC were remarkably similar between the 067 and 049 study and so we're anxious to see how the 067 data looks with regard to HRCT.

Peony, would you like to take on Michael's question about how the DSMB is structured, what data they are looking at, how they do it, characterization.

Michael, the DSMB as you know their role is to protect patient safety. And it consists of experts in various specialties including nephrology, cardiology statistics and neurology as well as internal medicine. So, these DSMB members are very knowledgeable and established in their field. So in terms of the data that they evaluate includes the seventh phase 3 studies we use for support regulatory approval in the US and Europe plus one study - one phase 3 study that Astellas uses for reimbursement purpose. And they evaluate the totality of the data cumulative from the very first day up until the data that were transferred for that DSMB evaluation. They evaluate patient safety that by looking at adverse event as well as serious adverse events by patient treatment arm, which the sponsors are not open to. In other words, we do not look at data by treatment arm, versus the DSMB member evaluate safety data summarized by treatment arm. At the end of each DSMB evaluation, they advise us on whether it is safe to continue these studies.

And the next question comes from Terence Flynn from Goldman Sachs.

Hi, this is actually Holly on for Terence and I have two questions. One, can you outline for us the next steps of commercialization of Roxa in China, now that the NDA has been accepted. And then can you also talk about where you are with respect to building out your commercial footprint in China?

Clarify the first question please, what were you asking.

Asking about the next steps for commercialization of Roxa in China?

The first part was about the drug approval process, I just want to make sure I understood the question you're asking.

So basically what you're going to be doing to commercialize Roxa in China.

So, we have a drug review and assessment process that goes on from now until sometime early next year at the staff level and then at the top of Center For Drug Evaluation, CFDA. We think sometime by May, June next year. On the commercialization side, there has been planning ongoing for a couple of years now. Key focus here is will be to get the manufacturing licenses in Beijing as quickly as possible after we have the drug approval. Currently, estimate is that we are looking at September, October next year for in Beijing. We are also because of the air pollution in Beijing, synthetic chemistry manufacturers have been requested to move their activities to areas outside of Beijing. And in doing that we have been building a factory in Changzhou, China which is about two and a half hours by fast train from Beijing to the northwest. In Changzhou, we expect to have licenses for API production in the first quarter of 2019. So as far as the matrix for manufacturing and supplying the drug, those two sites in Beijing and in Changzhou will be providing in bulk drug to AstraZeneca at their site in Wuxi in China. The AstraZeneca team is by contract responsible for the launch and marketing activities in concert with FibroGen in areas such as medical affairs. And so there is an extensive plan that is in place with regard to the rollout of Roxadustat. It's a very substantial amount of activity, so let me just try to summarize that. We expect in the first year or so, we will be selling without national level reimbursement. Just because of the timing of the reimbursement activities, however, we are planning on provincial level reimbursement grants as rapidly as we can acquire them. Progressively over time in years two and three we expect to see more and more and more hospitals as customers and we expect to get the reimbursement in place. And so these activities have been planned out very extensively. We'll be talking about them more in future calls.

Your next question comes from Geoffrey Porges of Leerink.

First, I want to ask about manufacturing for Pamrevlumab, you've made some new risk statement disclosure. Do you have the manufacturing capacity and process that you can proceed to phase 3, is that ready or are you still working on the process and/or the sources of supply such that they - that needs to be resolved before you can start phase 3? And then secondly, Tom, you made some comments about the NDA, the US NDA for Roxadustat suggesting that it was conditional upon further recruitment to the pivotal trials. Can you tell us what the assumptions are for those CKD studies in the US that are required or getting to an [indiscernible] next year, is that just continuing the card rate, or do you have to accelerate the recruitment into those trials in order to make the 2018 timeline.

With regard to production of antibody, we have had a long-term relationship with a very capable CMO, contract manufacturing organization. About a year and a half ago, we decided to commission them to make a higher production version of Pamrevlumab. That activity goes on until early next year, when we expect to do the validation runs on that higher productivity version of the Pamrevlumab. Depending on the circumstance in the phase 3 program, there is really two different activities here, one in IPF and the other in pancreatic cancer. We believe we could start phase 3 in either one next year at the appropriate time given existing stock of antibody. If indeed we are doing large studies on IPF for instance combination, with existing approved medicines. We will move to the new version of Pamrevlumab at some juncture, prior to reaching the 50th percentile of patients being treated with antibody in phase 3. We also have an ongoing set of negotiations with additional suppliers of antibody who are quite interested in joining our primary CMO. So that's the picture, it's been relatively static for a while. We've been doing these things over a long-time period, progress has been good and next key data points are optimized process for the more efficient Pamrevlumab and then the upscaling, validation and FDA sign off on that version would be the key steps really next year.

Tom, just to clarify, you will start phase 3 in both of those indications based on the inventory of existing process material?

We will be able to start either or both with existing inventory of material either study or both studies. There are scenarios where we don't need to do the upscaling to get approved, but that will be some addressed later and will be based on the facts at hand as they come. With respect to the questions on the anemia program, sometimes investors forget that these are event driven studies. So we have to be accountable for an adjudicated mass of unique patient MACE events, meaning a patient with one or more MACE events counts as one and we have a count that we're agreed to deliver for both dialysis studies and that's versus ESA. And then on dialysis that's versus placebo. As we get closer those counts take over the timetable because we need to hit the events and up to now we've had a single forecast into '18. I expect in the next few months we'll get better granulation on each of these counts as they are needed. Inside of the dialysis number, a portion is incident dialysis and the whole arena of inflammation, which we'll also be looking at and commenting upon it at the appropriate time. But for the moment just think of two big studies one versus ESA in dialysis, the other versus placebo in non-dialysis. And we're looking at the counts as we get to the end and it's a very intricate calculation of the adjudication number that is performed and the teams are all looking at it and cross validating numbers and so on by the month as we get close. So that's the picture.

And our next question comes from Andy Hsieh from William Blair.

This is kind of a follow-up to Holly's question about the China regulatory and reimbursement environment. So it appears to me that there are three steps. So approval, a pending licensure, and followed by reimbursement. Do you have any sort of visibility about when these three instinctive events are going to hit? And the second question has to do with reimbursement. So, it seems like there's a lag time between approval and getting the full reimbursement both on the national and local level. Is it possible for you to book sales before actually getting reimbursement decisions?

So to go over the steps you've defined. I think it's a useful way to think about. The drug approval is certainly one thing, the licensure for manufacturers is another, we've been given a framework where we can provide both the dialysis and non-dialysis data in one review. And so the drug approval will be for each of dialysis and non-dialysis, the licensure for our facilities is mainly focused on making the drug in bulk and getting it to our partner Astra Zeneca for the downstream activities. Reimbursement, there are a couple ways to do reimbursement, one is nationally, the other is provincially in China. There's a long history on these things and there is added layer that the Chinese are reforming many practices around drug development now. So we expect various reforms to come soon. In general the national level reimbursement is once every five to ten years, it looks like in provincial level is more frequently in terms of new names being added. And as a regards other sales, yes, it is possible to book sales before the reimbursement is gained. This is both in respect of us shipping drug to AstraZeneca, in any case we're booking sales. But also as it relates to downstream demand, there's a pretty substantial private market in China for drug particularly with foreigners, diplomats and so on, and other categories of people that have reasons to have what amounts to. What you see in the US is insurance policies as a small part, not a large part, but a small part of the market. Our primary focus on China is to make and sell in China for China and so these reimbursement events important. And we do expect it will take a couple of years from initial drug approval to get the reimbursement all in place and negotiated, it's intricate and elaborate process. So I hope - does that answer your question?

And your next question comes from Joel Beatty from Citi.

So first one is regarded to the way the data will be rolled out from the phase 3 trials of Roxadustat. Given that there is a number of trials, would we see it rolled out the same way that we saw that first study from Japan announced last week with five more to come later on or could they be more grouped together by MACE pools. And then a second question is, could you help us understand what's important in pancreatic cancer data that will be coming over the next couple of months or so. And what is left to show given that earlier in the year, I believe there was a statistically significant overall survival benefit showing at that time.

Joel, so I'll handle the first question, but let me say that I'll have Dr. Kouchakji address the pancreatic cancer and what's going to be coming up here. With respect to your question of Japan, we had a first study and reported it when we received the information. This reflects the fact that in Japan just like in Europe, we have licensed the rights to Roxadustat to Astellas. And particularly in Japan, they inform us when the study reports are completed. The discussion about whether it's an announcement within is taken at that time. And so this is a seriatim process, it's likely to be one by one in Japan. In the US and in Europe, in part because of the pooled MACE arrangement, it's much more likely that results will be announced in groups of studies. We haven't decided for sure, but the focus is on executing pooled MACE safety requirement properly and in general both the unblinding and reporting of data as people attempt to make it as coordinators possible. So I think that that's really the focus in US and Europe. Does that answer your question, Joel on that, front after…

Yes.

So on pancreatic, Elias please.

Hi Joel, the study is completed enrollment, so we know this is now way out following these patients in collecting this data. The result is very promising as continue as you know we published in ASCO GI at the beginning of a year some of our results. And currently we are in discussion with our key opinion leaders in this field is a key biostatistician to take a look at what is our next step for a pivotal study that is could be considered as registration study. So, we are in the process now of looking at the data, cleaning the data, accumulating the results and understandings where we go next in this program. And we are very helpful that the results as we seen it that is still consistent that we will have a good program for registrational process.

And we have to for the questions at this time. I'll turn the call back over to Tom Neff for closing remarks.

Thank you all for joining the call today. I'd like to express my thanks to our FibroGen teams in the US and in China, and to our partners, and most of all to our investors. We are greatly gratified to see the support that we have gotten. It's an exciting time to be part of FibroGen with the global advancement of our product programs across multiple indications, our important work in China and the strategic management of our resources. We look forward to keeping you posted on our progress in coming quarters and years. I'd like to wish everyone a good afternoon and evening.

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