Thank you for standing by and welcome to FibroGen's Fourth Quarter and Full Year 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today's call is being recorded. I would like to turn the call over to your host, Mr. David DeLucia, Vice President of Investor Relations. Please go ahead.

Good afternoon, everyone. Thank you for joining today to discuss our fourth quarter and year-end 2023 financial and business results. I'm David DeLucia, Vice President of Corporate FP&A and Investor Relations at FibroGen. Joining me on today's call are Thane Wettig, our Chief Executive Officer; Juan Graham, our Chief Financial Officer; Dr. John Hunter, our Chief Scientific Officer; and Chris Chung, our Senior Vice President of China Operations. Following our prepared remarks, we will open the call to your questions. 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; risk 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 Form 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 Thane Wettig, our Chief Executive Officer.

Thank you, Dave. Good afternoon, everyone and welcome to our fourth quarter and year-end 2023 earnings call. Although 2023 posed numerous challenges for our organization, we are excited about our prospects in 2024 which we believe to be a pivotal year marked by a number of important clinical readouts across our oncology pipeline and continued growth of our roxadustat franchise. On today's call, I will focus our stakeholders on the 4 strategic pillars shaping our company's future trajectory. Additionally, I'll offer insights into the progress of our pamrevlumab and roxadustat programs. Dr. John Hunter, our Chief Scientific Officer, will then review our exciting oncology pipeline. Last, Juan Graham, our CFO, will review the financials. After which, we will open the call for your questions. Starting on Slide 3. FibroGen has 4 key strategic pillars that we believe offer significant value today. First is pamrevlumab, where we are expecting readouts from 2 pivotal Phase 3 studies in pancreatic cancer in the coming months. In January, we announced the graduation and completion of the pamrevlumab arm in Precision Promise, Pancreatic Cancer Action Network's Phase 2/3 adaptive platform trial for metastatic pancreatic cancer, where we anticipate top line data in the second quarter of this year. We are now anticipating top line data from our ongoing LAPIS Phase 3 trial in locally advanced pancreatic cancer in the second quarter of 2024 as well. Pancreatic cancer is a disease with substantial unmet medical need and represents a significant commercial opportunity for pamrevlumab which has demonstrated effect in both preclinical and early clinical studies which we will detail in a moment. Second is roxadustat. Roxadustat is approved in over 40 countries, generates significant net revenue and positive cash flow and provides FibroGen with material and growing economics through our partnerships with AstraZeneca and Astellas Pharma.…

Thank you, Thane. Moving to Slide 22 in a snapshot of our early-stage oncology pipeline, consisting of one Phase 2-ready ADC program for metastatic castration-resistant prostate cancer and 2 preclinical immuno-oncology programs. For today's call, I will be focusing on FG-3246, a CD46-directed antibody drug conjugate in development for metastatic prostate cancer and potentially other solid tumors. To briefly address our immuno-oncology programs, we anticipate an IND filing for FG-3165, our Galectin-9-targeted antibody that prevents Gal9-mediated immune suppression later this quarter. We are currently performing IND-enabling activities for FG-3175, our anti-CCR8 antibody for depletion of tumor-infiltrating T regulatory cells and expect to file an IND in 2025. On Slide 23 is an overview of FG-3246. FG-3246 is a potential first-in-class ADC for metastatic castration-resistant prostate cancer, colorectal cancer and other tumor types. FG-3246 binds to a cell receptor target that internalizes upon antibody binding and is present at high levels in prostate cancer and other tumor types but that demonstrates very limited expression in most normal tissues, making it an ideal ADC target candidate. Moving to Slide 24. FG-3246 is comprised of an anti-CD46 antibody, YS5, linked to the anti-mitotic agent, MMAE which is a clinically and commercially validated ADC payload. FG-3246 has demonstrated efficacy against CD46-expressing tumors in both preclinical and clinical studies. An associated PET imaging biomarker, PET46, utilizes the same targeting antibody as FG-3246 and is under clinical development at UCSF. It is comprised of the YS5 antibody coupled to the radionuclide zirconium 89 and in preclinical studies, demonstrates specific targeting of and uptake by CD46-positive tumors. We plan to explore its potential use for identifying FG-3246 responsive patients in a Phase 2 trial that I will touch upon shortly. Moving to Slide 25. As we have stated in previous earnings calls, FG-3246 has demonstrated monotherapy clinical…

Thank you, John. Before providing our financial update, I would like to remind everyone that full financial results are in our press release and our recently filed 10-K. I will begin my remarks with a revenue summary for both full year 2023 and fourth quarter of 2023, subsequently providing financial performance detail on our China business for 2023, along with 2024 guidance for our China operations. Finally, I will wrap up with operating and expense results and our cash outlook. For the full year 2023, total revenue was $147.8 million compared to $140.7 million for the same period in 2022, an increase of 5% year-over-year. These figures highlight the sustainability of the revenues from our roxadustat franchise as we have transitioned from higher development and license revenue in 2022 to higher commercial revenue in 2023. For the fourth quarter of 2023, total revenue was $27.1 million compared to $34.4 million for the same period in 2022. The fourth quarter's $7.3 million year-over-year revenue reduction was primarily driven by shipment timing of drug product revenue to Astellas of $5.4 million, reduction of development revenue from our roxadustat partners of $1.9 million and from changes in the assumptions of our China single-performance obligation model which adjusts prior and future revenue for changes in many variables such as forecasted future volumes sold, forecasted future price and forecasted foreign exchange amongst other assumptions. Diving deeper on the financial performance of our business in China, 2023 full year net sales of roxadustat by FibroGen and the joint distribution entity or JDE, owned by AstraZeneca and FibroGen, was $284.1 million compared to $208.8 million in 2022, a significantly healthy growth of 36% year-over-year. In Q4 2023, FibroGen and JDE net sales were $66.5 million compared to $53.1 million in the fourth quarter of 2022, an increase…

Thanks, Juan. In closing, we are excited about our near-term prospects and the potential value they provide to stakeholders. To recap, we expect top line data from the following 2 pamrevlumab pivotal studies: the Phase 2/3 Pancreatic Cancer Action Network Precision Promise trial in metastatic pancreatic cancer in the second quarter of 2024 and the Phase 3 LAPIS trial in locally advanced pancreatic cancer also in the second quarter of 2024. Roxadustat continues to perform very well in China, where our sNDA has been accepted for the chemotherapy-induced anemia indication and our partner, Astellas, continues with the commercialization of roxadustat in Europe, Japan and other markets. Additionally, we are excited to regain the rights for roxadustat for U.S. ROW territories from AstraZeneca and we'll be exploring potential partnering opportunities in MDS. With our early-stage pipeline, we expect additional data from the Phase 1 monotherapy study of FG-3246 in metastatic castration-resistant prostate cancer later this quarter. We anticipate the initiation of a Phase 2 trial in mCRPC in the second half of 2024. We anticipate filing an IND for FG-3165, our anti-Gal9 antibody, in the first quarter of 2024. And we anticipate filing an IND for FG-3175, our anti-CCR8 antibody in 2025. Additionally, we have a strong balance sheet and expect our current cash position, as Juan said, to fund operations into 2026. In summary, we will continue to execute against our strategic priorities as we strive to attain a valuation that we believe is more reflective of our current and future roxadustat revenue stream, near-term pamrevlumab readouts in pancreatic cancer, our oncology pipeline and our strong balance sheet. I would like to thank all the employees of FibroGen for their continued hard work and perseverance over the last few months. I would now like to turn the call over to the operator for Q&A.

[Operator Instructions] Our first question comes from the line of Andy Hsieh of William Blair.

Very intriguing development with the roxadustat right -- or regaining roxadustat rights. So starting with roxadustat, looking at your guidance of 12% growth based on the JDE revenues, combined with the price reduction, so can we kind of extrapolate that you're anticipating roughly about a 20% volume growth this year? And moving on to the CD46 ADC, look forward to the KOL call that you're scheduling. The waterfall plot that was presented in -- at ASCO 2022, there's a pretty clear dose response. I'm curious about the Phase 2 program, at which dose you're thinking about starting. I think in the presentation, it says something about the 1.2 milligram per kilogram as the minimally efficacious dose. But I guess, the dose response really was demonstrated at the 2.4. Just curious about the dosing scheme that you're thinking about. And one thing about the Phase 2 design. Are you thinking about the prophylactic G-CSF administration for patients?

Andy, thanks much for your question. Regarding roxa volume growth in China, I think if you were to look at kind of the midpoint of the $300 million to $340 million guidance, then you'd be right in that ballpark from a volume growth perspective. We will be able to provide more guidance when we have clarity on the CIA indication and the approval of that indication as well. But I think that your math works out pretty well. As it relates to the Phase 2 design, regarding dose and prophylactic G-CSF, I'll let John handle that question.

Thanks, Thane. Yes, just with regards to your question, so the 1.2 mg per kg in the Phase 1 trial was the dose where they saw biologic activity, as evidenced by the PSA50 responses. And they did see PSA50 responses in stable disease escalating up to those higher doses of 2.7 and 3 mgs per kg. With regards to the Phase 2 dose, we do want to dose at what we think the highest tolerable dose is. So we're really going to try to balance the efficacy that we saw in the Phase 1 trial, along with some of the adverse event profiles that we're seeing in our analysis of the data. We will share that information probably about the time that we are presenting the results from the Phase 1 trial.

Got it. And if you don't mind, let me squeeze in one more for pamrevlumab. So for the Precision Promise study, how does the top line results logistics will work out? So do you have to go back to PanCAN and kind of formulate some sort of disclosure strategy? Or it's up to you or it's up to them? So just kind of talk about that, just to inform investors what to expect.

Yes. Good question, Andy. And after I answer that question, I'll turn it back over to John to address the G-CSF piece of your previous question as well. And so because it is a PanCAN-sponsored study, PanCAN will, in association with Berry and associates which is the world leader in Bayesian statistical design and analysis, they will do the analysis of the primary OS endpoint and then communicate that to us. And so again, because they are the sponsor of the study, they're accountable for the statistical analysis plan. Now we'll be working in close collaboration with them and we're still working through some of the details as it relates to how the top line primary OS result will be communicated. But because it is a PanCAN-sponsored study, they're responsible for that.

And Andy, just to address your question about the prophylactic G-CSF. We are looking at having prophylactic G-CSF as part of the Phase 2 study design. This was incorporated into the investigator-sponsored combination trial that's currently running at UCSF. And so we're looking at the results from that trial as we plan out our Phase 2 and start thinking about having G-CSF to prevent neutropenia in our patients.

Our next question comes from the line of Paul Choi of Goldman Sachs.

I have two on 3246. And I guess with the Phase 1 monotherapy results imminent here, I guess, how would you direct investors in the Street to sort of think about interpreting the results? Would you just focus, as you seem to be emphasizing, just on the highest doses as potentially the most therapeutically relevant here or is the focus also on demonstrating a broader dose response? And then I had a follow-up question on the combination study.

Thanks, Paul. John, do you want to go ahead and take?

Yes. Thanks for the question, Paul. So in looking at the broader data set that was presented at ASCO and also what we plan on rolling out with the completed Phase 1 trial, the objective responses were all seen at the highest doses. But the PSA50 responses which are also considered very important in this disease, we're seeing down to 1.2 mgs per kg. And then looking at the progression-free survival data which we'll be sharing later this quarter, we have seen that there were some durable responses even at some of the lower doses. So I wouldn't focus entirely on the highest doses. I would look at the broader data set. Obviously, we're going to need to settle on a Phase 2 dose that we move forward with. But as I had mentioned in my previous answers, we are taking safety into account together with the efficacy that was seen.

Yes. And then Paul, maybe one other comment to tag on to what John said. Recognizing that the Phase 1 cohort was a heavily pretreated patient population with a median of 5 lines of therapy prior to receiving FG-3246, I think there are some things you can interpret relative to the Phase 1 data and perhaps some things that we'll have to wait until we see the Phase 2 results because we're going to be studying this in a different patient population. We're not going to be waiting for patients who have been pretreated with that many courses of therapy prior to exposing them to FG-3246.

Great. And then as a follow-up, you referenced the UCSF-sponsored study in combination with Xtandi here and recognizing that study is investigator-driven and not totally in your control but it is an earlier population. So I guess, as you think about the pending results from the monotherapy study versus potentially going in earlier lines with the combination program with Xtandi and/or other agents, how would you rank order prioritizing those developments in terms of advancing to Phase 2 studies? Would you want to wait till you see the combination results out of UCSF?

Yes. Thanks, Paul. Great question. We do want to see at least some of the data out of UCSF before we would prioritize that relative to the monotherapy trial. Obviously, if we do see a really decided clinical benefit with the combination, that would be a pretty high priority for us moving forward in planning our clinical trials.

And then knowing that there's just tremendous opportunity across the entire spectrum of patients with prostate cancer, so I hope we have to make those trade-off decisions, Paul.

Our next question comes from the line of Jason Gerberry of Bank of America.

This is Gina [ph] on for Jason. I just had a couple on FG-3246. So on the Phase 1 top line data, could you just frame the scope of the update in terms of patient number and duration of follow-up? And if you get, say, 2 to 4 responses in this dose expansion cohort, would you consider this a favorable advancement given how heavily pretreated the patients are? And I just have one follow-up to that.

Yes. Thanks for the question. Just with regards to the scope of the data that we'll be talking about when we release the results, we're going to focus pretty much on the same readouts that were shown at ASCO 2022, with the objective responses and the PSA50 responses. But really, a pretty standard way of looking at data currently in metastatic castration-resistant prostate cancer is the composite response rate that includes either the PSA50 responses and/or the objective responses. One thing that we will have more mature data on will be in progression-free survival. A lot of the patients who were on study at the time of ASCO, obviously, have extended out in terms of their treatment cycle. So we will have that data as well. In terms of what we'll see as being favorable, as Thane mentioned, this is a very heavily-pretreated group of patients, so -- and it's hard to do direct comparisons against other drug trials because the patient populations vary. But given the data that was presented at ASCO, we viewed that as very favorable. And I think an extension of those results to the end of the Phase 1 trial, we would view as, in fact, very favorable.

Got it. And just curious if there's a reason that in the initial data cut of the Phase 1 data, there wasn't a correlation between PSA50 response rate and CD46 expression. Curious if you have an explanation for that? And also, maybe how we should be thinking about how that data fits into the context of identifying patients with CD46 expression as a part of your development plan?

Yes. No, that's a very good point. The IHC assay that was used to assess CD46 expression in those patients may not be representative of what we would have seen had we been able to do the IHC with the targeted antibody itself because there are some differences that have been noted in IHC with YS5, the targeting antibody and some of the commercially available reagents that work better on formalin-fixed tissue. One of the reasons we're very excited about the PET biomarker is that we do use the same antibody. It sees the same epitope. And we think that, that will be a much more reliable indicator of how expression correlates with efficacy.

Thank you. I'm showing no further questions at this time. I'd like to turn the call back over to CEO, Thane Wettig, for any closing remarks.

Yes. Thanks, everyone. We appreciate your participation in today's call and your continued interest in FibroGen and we'd love for you guys to enjoy the rest of your day. Thank you.

Thank you. Ladies and gentlemen, this does conclude today's conference. Thank you all for participating. You may now disconnect. Have a great day.