Good morning, and welcome to the Calliditas Therapeutics fireside chat. At this time, all attendees are in a listen-only mode. A question and answer session will follow the formal presentations. If you would like to submit a question, you may do so by using the Q and A text box at the bottom of the webcast player, or by emailing your questions to questions@lifesciadvisors.com. As a reminder, this call is being recorded, and a replay will be made available on the Calliditas website following the conclusion of the event. I would now like to turn the call over to Renée Lucander, Chief Executive Officer of Calliditas Therapeutics. Please go ahead, Ren é e.
Thank you very much, and welcome everybody to this fireside chat. With me today, I have some from our partner, Everest Medicines. The people joining us here on the call is Rogers Luo, who is CEO of Everest Medicines. We have Dr. Zhengying Zhu , who is CMO, and we have Ian Woo, who is President and CFO of Everest Medicines. The Q and A is going to be managed by Ashley Robinson from LifeSci when we get to that section. First of all, I just want to give you a very brief, because I know you haven't come to this, to listen to me talk about Calliditas, but I am going to give you a very brief overview of Calliditas, and our lead project there, which is known under the names of both TARPEYO, Kinpeygo, and NEFECON. We can go to the next slide.
As we are, I just want to draw your attention to the very typical disclaimer page with regards to any forward-looking statements. Next page, please. In terms of our lead product at Calliditas, this is in the area of IgA nephropathy, which is an autoimmune disease of the kidney. We are the first and only approved medication in this rare disease, both in the U.S. and in Europe. As I mentioned, it is being marketed in TARPEYO. We are doing this ourselves as TARPEYO in the U.S., and it has been approved and is being marketed by our partner, STADA, in Europe, under the name of Kinpeygo. We can go to the next page, please.
IgA nephropathy, as I mentioned, is an autoimmune disease of the kidney, but it is not known to really start in the kidney, but generally just in the gut where we have the vast majority of our immune system. In this particular disease, the pathophysiology, that is the predominant kind of theory at this point in time, really believes that it starts in the distal part of the small intestine, namely the ileum, where we have a large concentration of Peyer's patches. They produce IgA1, so a secretory IgA antibody that is meant to be there. It has a function. But in this particular disease, there are triggers that either then create an overproduction and/or leakiness of these IgA1s, and they find themselves in the circulation where they are not meant to be.
As they do that, it creates an autoimmune reaction, and it creates large complexes with IgG and IgA autoantibodies. These actually then deposit in the kidney, in the filtration mechanism of the kidney, known as the glomeruli, where they cause this cascade, inflammatory cascade, which ultimately then will result in fibrosis, necrosis, and will lead to end-stage renal disease for many of these patients. Go to the next page. NEFECON is really based on a very specific view of say, we wanted to design a medication that really targeted this origin of the disease. Not just something that was kind of symptomatic or supportive care, but actually really was trying to address this overproduction and/or leakiness in the gut. NEFECON really is a product that is a capsule that contains beads, that are triple-coated a variety of polymers, as well as the active ingredient of budesonide.
This capsule has an enteric coating that allows it to pass through the stomach and the majority of your small intestine, and then come to the area of the ileum where it releases these beads. This is really to try and have a downregulation of this IgA1, and with a view to be disease-modifying. As we know, budesonide is known in other substances. Again, it is a locally active compound used to treat other mucosa, such as the lungs, for example, in Pulmicort. This is something that is well-known as a well-characterized active ingredient, and here it is really being used in the mucosa of the actual intestine to try to really have that kind of disease-modifying effect. If we go to the next slide. Budesonide also does have this benefit of having very limited spillover into the systemic circulation.
This is something, again, that is important from a safety perspective as it is a well-tolerated, and majority of any safety issues really were kind of mild and moderate, cosmetic and transitory in the clinical trial that we ran. In turn, this is a very brief summary of the positive phase III data that we read out with the end point, the primary endpoint was reduction in proteinuria. As you see, the reduction in proteinuria on an intention-to-treat basis was 34%, and this is compared to optimized and stable physician's choice supportive care. What we also then saw is as we had followed patients, quite a few patients were followed for 12 months. Actually they had been without drug for three months.
What you see here is really a unique function of this particular approach, which is the proteinuria continued to reduce in those patients, in all patients in the clinical trial who had been off drug for three months, which we find is really exciting and we think goes to this theory and thesis about it being potentially disease-modifying. We also had a secondary endpoint in terms of kidney function, where again, we saw that there was a very significant benefit in those patients who were treated versus those patients on placebo, which saw a continued decline in terms of their underlying kidney function during the study period. If we go to the next slide. Really, in terms of TARPEYO and Kinpeygo NEFECON, it is a differentiated and targeted approach for IgA nephropathy. The endpoints obviously are the proteinuria reduction.
And obviously, what I have just mentioned is that there does seem to be this very significant continued benefit as patients are taken off drug. It is completely designed to be locally targeting this origin of the disease. And it does have that kind of limited spillover, which may have other kind of limited benefits, obviously, in terms of a general kind of anti-inflammatory effect. From a patient perspective, we believe that this is a benefit in terms of this is a well-characterized active ingredient. Safety is well-known, well understood. And it does offer this opportunity for patients who are often diagnosed in their 20s and 30s not to have to stand on medication for the rest of their lives, but really have this option of having an intermittent treatment, really when it is necessary and needed to protect their kidney.
And we also have seen these kind of very interesting and supportive data in eGFR in terms of underlying kidney function, which we look forward to getting additional information on as we complete our phase III program in the first half of next year. Let us go to the next page. Very briefly, in terms of how we performed, as I mentioned, obviously, we are commercializing this ourselves in the U.S. And so at the end of Q3, our net sales in the U.S. were $20.5 million. We have had 730 enrollments, and we have had prescribers in terms of the nephrologists who had decided to prescribe a drug amounting to 480 since launch. We have a very strong kind of coverage in the U.S. in terms of U.S. lives. This is a very active population.
As I said, they are often diagnosed in their 20s and 30s, and so they are in their 30s and 40s often when this has progressed and they are at risk of potentially ending up in end-stage renal disease, something that we see happening to around 50% of the patient population. We have a high awareness and advocacy, and patient meetings and activities are obviously ongoing, and we look forward to continue to bring this medication to appropriate patients with this rare and difficult kidney disease. So we go to the next slide. Obviously, ex U.S., we have entered into commercial partnerships, both in Japan, in Europe, and obviously in China. Our partner in China, we have been collaborating with Everest Medicines since 2019.
And this is really something where we thought today we wanted to bring you a little bit more from our partner, Everest Medicines, in terms of their thinking of the China market as they have just recently have filed, as well, for approval in China. And with that, I am going to hand over to Mr. Rogers Luo, who is going to actually take you through the Everest Medicines, and actually Ashley Robinson from LifeSci is going to be talking a little bit with Mr. Luo in terms of his background and reasons for joining Everest Medicines. Ashley.
Sure. Thanks, Renée . Rogers, as Renée alluded to, maybe the audience could benefit from learning a little bit more about you. Why don't we start out with discussing a brief background and a part of your professional history.
Awesome. Thank you, Ashley, and thank you, Renée . It's my great pleasure to join this webinar. You can see from this one page kind of introduction of myself, to be very brief, I was trained as a medical doctor and as a surgeon in a public hospital in Shanghai for three years, and I joined the industry up to now it's about 27 years. So I've been working in, up to now, six pharmaceutical companies, including three, let's say multinational, big pharma companies, such as MSD, Novartis, and Roche. Then another three biotechs, Guidant, Brii Biosciences, and now Everest Medicines. So you can see, I have different experience in big pharma companies as well as the startup kind of entrepreneurship-driven kind of biotech companies.
Also I think, in the last 27 years experience in the industry, I have been working in different kind of therapeutic areas as well as in different locations in China and also in headquarters, such as Basel, for Novartis for two years, where I have been working on the strategic development and commercialization of RAS inhibitors, including losartan and also aliskiren at that time. So that's from different functions and regions. Also, in the last 27 years, I launched several very high-profile products in China, including specialty products as well as primary care products brands. So that's a kind of very brief introduction of my last 27 years in the industry and three years in the hospital as a surgeon. Thank you.
I appreciate that. I think you touched on, kind of what part of your background would be helpful in being the CEO of Everest. But I think more importantly, what excited you about joining Everest?
Yeah, I think I joined Everest about three months ago. I think, I would say it's a very important timing, and I would call it as a tipping point of Everest Medicines. We know in the last several years, Everest has been growing from a kind of licensing model, kind of business model company. We licensed a lot of assets to our region and now it's tipping point that we are going to launch two commercial stage products in China. We have two NDAs submitted, including NEFECON, and also we are going to have a full value chain kind of capability from R and D discovery to manufacturing and also commercialization for the next year. So it's a very important timing, and I would call it a tipping point, as I just mentioned.
It's very exciting because we are going to have our, not only about licensing products, we will be very lucky to launch this, I would say, high profile with huge unmet needs in China, such as NEFECON in China. The first launch products in high, I would say top priority therapeutic area in here in renal disease area. So it's a very important time. Also we are having in-house R and D capability building out. We have a pipeline and assets in the renal disease after NEFECON. So I think this is very important and exciting time for me to join.
I think you, again, you touched on this as well, right? But in terms of NEFECON specifically, how do you think it fits into the broader Everest strategy?
Yes, as I mentioned, we are building our commercial capabilities, as well as we are building our in-house R and D capabilities in here for Everest Medicines. Renal disease area is one of, I would say, top priority therapeutic areas. We now have NEFECON as a first launched product in China next year. Then we are gradually building other commercial capabilities as well as for the in-house R and D and build all the, of course, in the last several years with the clinical development for NEFECON, we already built our relationship with the KOLs, specialists in the renal disease area in China and in our region. I think it just fit our overall operating strategy because it's the first testing kind of product, how we can successfully launch the mega brands such as NEFECON in our region.
Appreciate that, Rogers. I know we are going to be hearing from you shortly, but, with that, why don't I hand the call over to Ian Woo, who is the President and CFO of Everest Medicines. Ian, why don't you go ahead.
Great. Thank you, Ashley. Thank you, Rogers. What I will do for the next few minutes is just to walk through a few slides to just give everybody a quick overview about Everest Medicines. Everest Medicines is a China-based biopharma company focused on the Asia Pacific markets, that was really built with the vision to become a top integrated biopharma in our territories. What we really want to do is focus on delivering medicines to particularly unmet medical needs in Asia Pacific regions, and also to close the innovation gap, in the process. At the beginning of the Everest Medicines journey, what we saw is that innovative medicines approved in the U.S. and Europe take many years, five years, 10 years, sometimes even longer, to be approved in China and some of the other Asia Pacific emerging markets.
We really believe that patients in China should be able to have access to the same kind of innovative medicines as patients around the world. This is the vision with which we build the company. Some of the particularly interesting unmet medical needs in China include renal diseases, infectious diseases, and these are some of the areas that Everest Medicines is focused on at the moment. Next slide, please. I just want to walk you through the development of Everest over the last five years. As I mentioned, Everest Medicines was started in 2017 by a private equity fund called C-Bridge Capital. Today it's called CBC. It is the largest healthcare-focused private equity fund based in Asia. In our first couple of years of existence and history, we focused on bringing in licensing innovative medicines from Europe and from the U.S.
One of the deals that we did was with Calliditas around the NEFECON in 2019. Starting from 2020 and 2021, we felt that it would also be important for Everest to start building out our own internal discovery capabilities and to fill in the parts of the value chain to allow us to become a truly, fully integrated biopharma company. We started building our manufacturing capabilities in 2020. We started building our internal discovery capabilities in 2021. This is all supported by the ability to access capital, including a $520 million IPO in Hong Kong. Today, we are listed in Hong Kong, with the ticker 1952. In 2022, this year has been a very important year, as Rogers mentioned.
Not only do we have new leadership in place, we have also executed on a strategic reprioritization of our portfolio, including divesting our rights to TRODELVY to Gilead for $455 million. This is quite important, not only has it created an attractive return on capital on TRODELVY for our shareholders, but I think it also provided the necessary capital for us to be able to invest in areas that we think would drive the future growth of Everest . One of the core areas for us is in renal diseases. Going forward, in 2023 and beyond, we will continue to focus on driving our discovery pipeline. Of course, what will be really important in 2023 is to start building our in-house commercial capabilities, and we think that's the last piece of the puzzle for us to become a fully integrated biopharma company in Asia Pacific.
Next slide, please. This is our pipeline. You can see that the renal pipeline is up on top. We have NEFECON, which we have submitted the NDA in China. We have breakthrough therapy designation for this product, and we have priority review. We are hoping for this product to be approved and launched in the second half of next year. Behind NEFECON, we have a couple of other renal assets. We have a BTK inhibitor that we're developing for autoimmune renal indications. Then we have an active discovery pipeline in this area as well. What I just want to highlight is that whereas the in-licensed products, we primarily have regional rights in APAC.
Because of our discovery efforts and the pivot in the company to have more broader rights, you can see that this pipeline chart, there are a number of assets where we have global rights. I think as you look at Everest and this pipeline chart evolve in the next couple of years, you will see that more and more. Next slide. This is the management team. You have met Rogers. I have been with the company essentially from the very beginning. But I come from a banking background where I worked with global biopharma companies on the M&A advisory. Dr. Zhengying Zhu is our Chief Medical Officer and is in charge of our renal portfolio development. Dr. Jennifer Yang is our Chief Scientific Officer, and she coming on board about 18 months ago really helped us kicked off our own discovery efforts.
Neil is our Chief Operating Officer and the Head of the Vaccine Effort, which I will touch upon a little bit in a couple of slides. Jason has been with us from the very beginning. He's our Chief Business Officer based in San Diego. Sunny is our Chief Medical Officer focused on infectious diseases. Next slide. This is just a picture of our manufacturing facility in China. We started building this at the end of in 2020. This is built to global standards. It will initially focus on the production of mRNA products, as well as NEFECON as we localize some of the manufacturing processes. Typically, for a U.S. biotech or European biotech you don't typically own manufacturing assets, but in China it's quite critical for us to own the full value chain, because China is very much a volume market.
So being able to ensure the stability of supply is exceedingly important and strategically critical for us. Next slide. As I mentioned before, today, Everest, as we look forward, we are a much more focused company, right? We are focused on renal diseases. We are focused on developing our mRNA products, leveraging the platform that we have brought in from a Canadian company called Providence Therapeutics. And we will continue to expand our pipeline through both in-licensing and internal discovery. The next slide, just very quickly, just wanted to share with you what we have built in the mRNA space since our partnership with Providence about a year ago. First of all, you can see the pipeline here. We have both a first-generation COVID-19 vaccine that we are working with Providence on getting it approved in primary vaccination series as well as the booster setting.
We have a M1 product, which is a bivalent product. That is a mixture of PTX-COVID19-B, the first-generation product, and a vaccine specifically for Omicron BA.2.12.1. We are expecting IND approval in the first quarter of next year and initiating clinical development of this bivalent product in China. Behind that, we have a number of as yet undisclosed prophylactic as well as therapeutic mRNA candidates. They are in pre-clinical development. Some of these we partner with Providence and have 50% of global rights, others we have full global rights. On the bottom of the slide, it is important to highlight the fact that we now, through the partnership with Providence, have a commercial scale validated manufacturing process, fully localized in our manufacturing facility that you saw a picture of. This is actually quite important.
In addition to the volume and the ability to ensure stability of supply for vaccine products, it is quite important for us to be able to manufacture in China for policy reasons as well. Okay. Why don't I stop here and pass on to Dr. Zhengying Zhu, who will tell you more specifically about our renal presence.
Yes. Thank you, Ian. I think my part of this discussion or presentation will cover the huge unmet needs in renal disease, especially in IgA nephropathy part, as well as the patient population, patient profile, treatment paradigm, and ends up with an update on the NEFECON development progress in Everest region. Like Ian mentioned in his previous part, that Everest is focusing on the area that with huge unmet needs. I think renal, and especially the IgA nephropathy, is a typical example of that in our region. So many different kinds of disease leads to ultimately loss of renal function, and there are different causes of ESRD. If I may guide you to the right-hand side of the figure, you can tell that pattern of the different cause of ESRD in China, in this region, is very different from U.S. and U.K.
Glomerular disease is the leading cause of ESRD in China, almost account for above 50%, then followed by diabetes and hypertension. Whereas in U.S. and U.K., the leading cause is diabetes and hypertension, then followed by glomerular disease. I think that's a reflection of the very limited treatment option, together with a higher prevalence of such disease in China in the region. If we zoom in a little bit to see the composition of glomerular disease in China, the left-hand side figure is selected from a study with a very big biopsy number cases, more than 40,000 cases. It illustrates that IgA nephropathy is really the most common primary glomerular disease, if you're looking at spectrum of different pathological findings.
This is a study have been done in the past from year 2003 to year 2014, and for the recent smaller scale of the study to observe the spectrum of the disease, it remained the same. Still, IgA nephropathy is the most common type in glomerular disease, with the range proportion from 35%-50%. If we go to next slide. Until now, there is no good epidemiology study can let us to understand what is the total population of IgA nephropathy in China. We did an extensive review on the publication done between 2010 to 2020, to figure out what is the approximate total patient number of IgA nephropathy in China. We start with the prevalence of CKD. The prevalence of CKD, I think it's in the similar range with U.S. and EU, 10.8%, which will equivalent to 120 million in total.
From the China Kidney Disease Network, we understand among the CKD, there are 14.4% are diagnosed as glomerulonephritis, and 70% of them are diagnosed as primary glomerulonephritis, and 40% we believe is as a proportion of primary glomerular disease. We end up with the total estimated total IgA nephropathy patients in the range of 4 million-5 million. Apparently we know, we're all aware that the diagnosis of IgA nephropathy relies on biopsy. From our in-house research, and we did a small sampling scale survey that we understand that annually, we will have 80,000-150,000 newly diagnosed biopsy-proven IgA nephropathy patients in China. When we're looking at patient profile, in China, it's almost half-half, so 52% is male and 48% is female. This is a bit different from Western side.
I think in Western side, male is a little bit higher than female proportionally. Close to 80% of the IgA nephropathy patients, when they diagnose the disease, it's in a very young age. It's between 15 to 44. If you're looking at the median age, it's around 30 - 35 years old. This stage of the age, it has a very strong desire to receive innovative therapies, and they were actively seeking for the good treatment that will prolong the renal survival time. Go to next slide. In terms of the treatment algorithm, in China, mainly we follow KDIGO guideline. Indeed, Chinese experts are part of KDIGO guideline development. Most of the patients will receive a RAS inhibitor once they diagnosed as IgA nephropathy through a renal biopsy.
If the patients cannot reach proteinuria treatment goal less than 0.5 g, or even still maintain as the proteinuria greater than 1 g per day, the physicians will consider to use systemic glucocorticoids. But often some of the patients are reluctant to receive systemic glucocorticoids due to some of the undesirable side effects. TCM is very commonly used in China as well as an alternative, although there is no confirmed efficacy data to prove the reliable proteinuria reduction effect. You may notice there are some small studies have been done in Chinese population and demonstrate the immunosuppressants may be chosen in a small portion of patients, namely with a more active proliferative lesion in the renal biopsy samples.
Although we do not have a China-specific treatment guideline now, I think the new guideline is under development and the drafting, and we are expecting the new guideline will come soon, next year. We also expect, by that time, NEFECON could be recommended in our Chinese guideline as well. If we go to next slide. This is an update on the progress that we made for NEFECON development in Everest regions. I know that you probably were all very well aware of the study design of the global pivotal phase III study of NEFECON, named as NefIgArd, and China, South Korea, and Taiwan are all participating in this global study. In China, we enrolled our first patient back in September 2020, and we opened 20 sites and enrolled 62 subjects from China.
We are very pleased to see the top-line results readout from a Chinese subpopulation Part A results back in early April this year. We are pleased to see that the findings of proteinuria reduction and the eGFR stabilization in Chinese subpopulation is consistent with global Part A results. This is indeed the data set complement with the global Part A results. We filed China NDA in November this year, and we will closely work with the agency to get this product approved as soon as possible. Because the patients, when we talk to the investigators on the field and the nephrologists in the community, all of them are very exciting, looking forward to have NEFECON soon approved and make accessible to the patients in China and in this region. In all, I think it is a reflect of the huge unmet needs in this region.
The accelerated regulatory pathway was all granted by the local authorities in China, South Korea, and Taiwan, and that will shorten the overall review process for the products. Ian mentioned about the BTD grant in China, and this is indeed the first non-oncology product ever been granted the BTD for the special regulatory pathway. I think those are the achievements are really close collaboration with our partner, Calliditas, and made it happen. I think it is a very exciting moment to see the product will get to the patients very soon. I will stop here and pass over to Rogers.
Yeah. Thank you, Zhengying. As just mentioned, the product has also already been granted breakthrough designation in China and fast approval in other countries as well. We expect that the product will be approved second half of next year, and we are now preparing for the commercial launch of the product. If we get the approval second half of next year, then we will be eligible for the National Reimbursement Drug List negotiation next year, after next year. Then we can have the reimbursement nationwide in 2025. Next slide, please. If you are looking overall specifically into the China market, actually, this is a very highly concentrated market.
If you are looking at the chart, right-hand side, you can see most of the market potential, around 60% of market potential is in the, I would say, the coastal area where much more affluent versus other western part of the country. Also, I think the approach we will take is a very focused lean organization driven by medical access and sales marketing. That is the approach we are going to take. If you look at the numbers, every year we have about 346,000 biopsies, then the newly diagnosed IgA nephropathy patient is about 100,000 patients. There are another around 700,000 patients not would like to take the kidney biopsy. We will see, actually, another part of the patients will also have this kind of, about 30% can be diagnosed as IgA nephropathy. Next slide, please. We will have two waves of approval in the following years.
Next year, we expect China and also Hong Kong, Singapore, and the next wave is in South Korea and Taiwan. We know that in these East Asia countries, the IgA nephropathy incident rates is higher than other places. Next slide. We are building the foundation in the renal disease with the launch of NEFECON, but we also have at least several other assets on the way. The number one is the earliest stage, the BTK inhibitor. It is currently in the phase I-B development for the treatment of glomerular diseases, and we also have the in-house discovery team. Actually, there is multiple assets in the discovery and early development phase. Next slide. I will stop here. That conclude our Everest Medicines introduction part. Back to Ashley. Thank you.
Great. Thank you, Rogers. At this time, we will be conducting a question and answer session with our speakers. As a reminder, if you would like to submit a question, you may do so by using the Q and A text box at the bottom of the webcast player or by emailing your questions to questions@lifesciadvisors.com. Our first question comes from Annabel Samimy from Stifel. Please go ahead, Annabel.
Hi. Thanks for taking my question. I had one question about the Chinese population of IgA nephropathy patients. I guess, first, if you could tell us, is there anything that is specific or different about this population? Are they more severe? Do they progress more rapidly? I guess it is a little bit surprising that ESRD. I guess glomerular diseases and IgA specifically comprises such a big component of ESRD. Then separately on the commercial side or on the physician reception side, I guess, what is the attitude of physicians towards steroids for the treatment of IgA nephropathy, and what kind of access or what kind of marketing are you able to do to physicians to be able to, I guess, establish the differentiation of NEFECON relative to what is available to them right now? Thank you.
Zhengying, you can answer the first.
Yeah.
Yeah.
Okay. I will take the first question. Yes, I think, the prevalence of IgA nephropathy is much higher than the Western side. If you are taking a look at the other sort of numbers, I think if you are looking at the incidence rate probably is twofold, or even more than the Western side. There is different theory about the high prevalence. One of them is that the genetic risk alleles has a higher frequency in this region. Basically you will see more patients, right? Your question about progression, whether the disease progression in Chinese patients, whether it is different from Western side.
There are some observations or speculations that one study have been, particular study, the different cohort from different ethnic background, which is from Toronto Registry, and it showed that for the adjusted risk, adjusted number, that the population with Asia Pacific region will have a faster, progressive, faster than Western population. Its hazard ratio is about 1.5. There is some evidence suggesting that the disease progression is a little bit faster in this side of the population.
I guess to that point, does NEFECON have a different impact on these patients? You mentioned the nine-month data were consistent.
Yeah
Is there any reason to believe that NEFECON would perform differently?
Yeah. From the Part A results, actually, I would say, the findings we see in Chinese population is highly consistent with the findings in global. We believe that NEFECON will behave, or have the similar effects as in Chinese population.
Okay.
Yeah. Thank you for the question.
I can answer the second part of question. Regarding how doctors perceive a new treatment, right? I think basically it's several steps. Awareness plus affordability. I think, for the commercial approach, it's very much driven by evidence and also, as Zhengying just mentioned, by guidelines. The China Kidney Association is deriving the guideline for IgA nephropathy. We believe that NEFECON will be in the new guideline if we get approval, whether it's in U.S. or in China, I think NEFECON will be one of the treatment drug of choice, I would say. Then about the evidence, as we have joined the global development program, phase III, we have more than 20 clinical research study sites in China. We engage a lot of KOLs in this area. As I mentioned before, it's very highly concentrated market.
Most of the patients go to a big hospital for kidney disease as well for the kidney biopsy. We already engaged different level of KOLs through our clinical development program. Once we get approved, I think there's two things we are going to do. One is about affordability, how we can get it parked into the National Reimbursement Drug List through this NRDL negotiation process. I would say it's very highly likely. Number one is because the product has granted with a breakthrough designation by CDE and NMPA. This is very important, it will be considered as a factor to get into the reimbursement list. Secondly, we know that there's huge unmet needs here in China with such a big patient population.
I think the government agency will consider that as well as NEFECON is the first, I would say, approved IgA nephropathy treatment in the last many years in terms of innovation. Once we get into their National Reimbursement List, the affordability issue will be lifted. Then I think with awareness, affordability, then we can expand the product access to the patients. Thank you. Back to you.
Thank you for the questions, Annabel. Our next question comes from Maury Raycroft from Jefferies. Please go ahead, Maury.
Hi. Thanks for doing this presentation, and thanks for taking my questions. You mentioned manufacturing in China. Can you talk about where you're at for being ready for this process? Could you potentially supply some of the U.S. market? I guess, could this impact COGS for Calliditas as Everest scales up manufacturing?
Ian, you can comment on this. Then if, Renée, you want to comment on this as well, you can.
Yeah.
Please.
Yeah. Thank you, Maury. Thank you for the question. Our plans are to be able to eventually locally manufacture NEFECON in China. At the time when we launch the product, our plan is to continue to import this and leverage the current supply chain that Calliditas has in place with their CDMOs.
With regards to kind of impacting of COGS, obviously, it's a small molecule kind of COGS level. I don't think that this would, whether it's us doing it or we're kind of getting it from someone else, I don't think that it would be material. Also obviously because to some extent, obviously, manufacturing is a scale game. So obviously just kind of wherever the scale happens to be, I don't think that in this particular case, manufacturing and cost is not going to be the most important component on the cost side.
Got it. That makes sense. Also wanted to ask on what are expectations for pricing in China, maybe on the NRDL and off the NRDL? Are there good proxy or reference drugs in China, either in nephrology or other settings that we should be thinking about as you approach the launch?
I can comment on this. Basically, when we price a product in the market, such as in China, we consider several things. Number one is the pharmacoeconomics, which is the base for the negotiation with the government agency for reimbursements. As well, the second one is about the patient access. As we just mentioned, it is about several million patients looking for treatment. So we are considering the accessibility of the product to benefit as many patients as possible. Secondly, we are also thinking about the sustainable R and D capability, where we have funding to fund our future pipeline R and D capability. So with all this can be considered, there will be some calculation, and there will be a negotiation with the Chinese government. As of now, we haven't finalized our price here for NEFECON.
There may be some reference, but in this case, I think there is also many differences between different therapeutic areas and different products. So that is this current thought on the pricing. Thank you.
That makes sense. Thank you for taking my questions.
Thank you.
Thanks for the questions, Maury. Our next question comes from Ingrid Gafanhão from Bryan, Garnier. Please go ahead, Ingrid.
Hi. Thank you so much for putting this helpful presentation together. I have a couple of questions, if I may. I think in terms, we saw for NEFECON label in the Europe and U.S., it sort of specifies somewhat that it should be used in high-risk population. So I was wondering if you expect, first, a similar label, and second, if so, what is the proportion of patients that you see fitting into that category? And a second question would be around IP protection. Do you see it as a risk, and how can you make sure that you are protecting yourself?
Zhengying, you can answer the first question and Ian, you can answer the second question. If Ren é e, you want to add, please.
Yeah, sure. The first question is about the potential label in China. I think in China, because we joined the global study, and we were referencing U.S. label and EU label during the review. That is saying general practice China label will considering U.S. and EU label. Of course, the final label, it is up to the following discussion with CDE and the agency.
The question about high risk depends, how we define the high-risk population in the guideline. It states, after RAS treatment, if the UPE, the proteinuria level, is still above 0.75 g or 1 g per day, we will perceive as a higher risk population. If we are utilizing sort of referencing that criteria, I think that will still account for majority of the patients will stay with high risk.
Thank you.
And with. Go ahead.
Sorry, go ahead, Renée.
I was just going to comment on the IP questions. Obviously, there is a patent that is approved in China with regards to the formulation of the drug. As we have been saying before, obviously, we have been spending time, resources, and efforts obviously on kind of life cycle management and additional kind of product protection. We have plenty of those plans in process. We are hopeful, obviously, that we will be able to add additional product protection for this product in general, which would also obviously benefit the Chinese market as we go forward now that we have actually a commercially available drug.
Yeah. Thank you, Renée. We obviously have done quite a bit of IP due diligence at the time when we put the licensing deal together with Calliditas. We are quite comfortable with the IP protection situation in China. I would just say that, when we do localized manufacturing, it will only be in our own facilities. We do not intend to use third-party CDMOs. We want to make sure that the manufacturing knowhow stays within Everest.
Okay. Thank you.
Thank you.
Thanks for the questions, Ingrid. Our next question comes from Yigal Nochomovitz from Citi. Please go ahead, Yigal.
Yeah. Hi, thanks for taking the questions. For Ian or Rogers at Everest, just wondering, have you done market research in China looking at the percent of nephrologists today that treat IgAN in China that are aware of NEFECON and aware of the data?
Yeah. Okay. Zhengying, you can comment on that. But I think, we did some market research, but not recently. The market shows that the current practice, as Zhengying just mentioned, basically is not much different from other country, for IgA nephropathy, it is very much using RAS inhibitors as the first line. Then when they maximize the benefit of RAS inhibitor and stabilize and then add on other products. So it is many other choices, but not with very solid evidence, as Zhengying just mentioned. Then the patient is desperately looking for effective evidence-based methods. As of now, there are not much choice. So that is our understanding. And then regarding the NEFECON awareness, I would say as of now, it is not very high. It is mostly among KOLs, and also specifically among KOLs who participate in our clinical trial. Because we developed this product in the last several years.
Along the way, there's many doctors, KOLs know about this product, and even some of the patients, because they are very actively, aggressively looking, desperately looking for treatment options even today, I think. Zhengying, you can comment on this. Zhengying.
Yeah, I think, Rogers, you speak of the key points. I think, for physicians that we, for the investigators, they will perceive, once the RAS inhibitors cannot bring down the proteinuria less than 1 g, or even NEFECON will be as a first target, or target therapy, or we call it, or disease-modifying potential therapy. They will sort of very look forward to that, this kind of a new treatment. Yeah.
Okay, thanks. I just had two other quick questions. I'm not sure if you mentioned this, but did you say exactly how many dedicated reps you're planning to go out with when you launch NEFECON, and as well as what you see as the longer-term size of the commercial sales force for NEFECON in China?
Yeah. I did not mention that. We are still working on this, but I think any new product in China, it launched probably more than 15 new products in China in the last 25 years. I think for this product, it's very special. Number one, it's very highly concentrated in about 1,000 hospital, 1,000 - 1,500 hospitals. Secondly, you actually create this new market because there is not much choice in this area. Basically, you build, shape the market.
It's a kind of shift market efforts. In that sense, we are much driven by medical, much driven by market access, and not so much by I would say, market share . We will not have a huge field force like other new product launch in primary care or other therapeutic area, but we will have heavy medical activities, medical team, and also access. It's just make people, patients can afford and people know about this product. It's not about competing with another product. It's just fulfill the huge amount of needs in the market. That'll be, I would say if you want to have a rough number, it's about probably around 200 some people. Around that.
In the years, because we have other products coming along the way through the pipeline, we probably have a synergistic effect and adding more sales and medical people in the team. That's basically the strategy we have currently. Thank you.
Okay. Thank you very much.
Thank you, Yigal. This concludes the verbal portion of our Q and A session. I'll now turn it over to Ashley Robinson of LifeSci Advisors to read the remainder of the questions.
Thank you, Tara. Why don't we start out with a question from Jacob Michal at Van Kampen. What are some of the reasons why the prevalence of IgAN is higher in China than in other countries?
Zhengying, you can answer the question.
Yeah. Like I mentioned a little bit, there are some hypothesis or data suggesting that the risk allele has a higher frequency in Chinese population or in Japanese, in this region, comparing to Western side. Also, that involves some environmental factors as well. Those are a couple of speculations that why push the prevalence higher in this region than the rest of the Western side. Yeah.
Yeah. A follow-up question, how long does the regulatory approval process usually take in China, and how soon after the potential approval can the commercial launch take place?
Usually, for products, it takes about 12 months, but for this breakthrough designation, we expect it will be faster. That also depends on other factors as well. So it much depends on the CDE's decision. Usually, they will be faster as this breakthrough designation. Then once we get approval, they will take around three months for the commercial launch because this product imported from outside China, then get the product launched after three months after approval. That is common practice.
Next question is, could you also give us some insights on China's reopening impact on your portfolio's near-term commercial potential, including NEFECON, COVID vaccine, and XERAVA?
Yeah. I think, for NEFECON, we will have a dedicated commercial team, so it is different from combine or mix the team. We have a separate team for COVID-19 vaccine. If we get a EUA or approval end of next year or the year after. So it will be very totally separated. So it will not impact each other.
Okay. Next question is from Johan Unnérus at Redeye. Is the private pay/insurance market likely to be a target in China?
Yes. I think before the product gets reimbursed, national reimbursed, gets into the National Reimbursement Drug List, we will pay in the self-pay market. But even in that case, we will use different kinds of tools to drive the access. For example, patient assistant programs or commercial insurance or other means to improve the accessibility of the product. We have different means even in the self-pay market to lower the bar of access.
Our last question here from Ramy Katkhuda at LifeSci Capital. Do you expect a difference in the uptake of novel therapies like NEFECON in rural areas of China compared to larger city centers?
Yeah. Probably they're a little bit different. For example, in the self-pay market, of course, the rural area for the uptake will take a longer time. But this is just one thing, affordability, but also the awareness, diagnose rate, those kind of thing also be taken into account later. That will be a little bit slower than the big cities. But on the other side, I think currently, for the renal disease, people would tend to go to the big hospital and in the big cities to get it treated. Then they can go back to their hometown to continue treatment. For NEFECON, I think the product has the advantage as an oral treatment. They can take the drug back to their hometown and take it for nine months, then come back to the big cities. There will be also other advantage for products like NEFECON.
Appreciate that. I know we're running a little bit over, so why don't we conclude the Q and A session right now, and Ren ée, Rogers, I'll hand it over to you guys for closing remarks.
Thank you. Yes, we have drawn over a little bit, so I apologize for that. I hope you found this interesting. I did. I actually learned something new today again, which is always good. I want to thank everybody from Everest in participating in this. I hope that you all have learned a little bit more and we are all very much looking forward to next year, and hopefully the approval of NEFECON in China. So thank you very much for everybody who have participated and listened.
Thank you.