We're going to get started with our next session. I'm Andrew Tsai, Senior Biotech Analyst at Jefferies. Welcome to day two of our Healthcare Conference, and it's my pleasure to have the ProKidney team with me. To my direct left, James Coulston, CFO.
Coulston. Yeah.
Coulston, CFO. Anthony Conway, Head of R&D, and to his left, Ethan Holdaway, VP of IR. Welcome, all of you.
Thank you, Andrew.
There could be some people who are less familiar with the ProKidney story, so could you take a couple minutes talking about what you're working on, what your strategy is, what you're trying to go after, and the milestones over the next 6-12 months would be very helpful.
Yeah, sure. I'd like to start with thanking you, Andrew, for inviting us, and Jefferies for inviting us to the conference, and updating you and everybody on ProKidney. ProKidney's developing an autologous cell therapy, rilparencel, for the treatment of chronic kidney disease, a disease that affects over 30 million people in the U.S. We're currently in phase III clinical development with rilparencel in advanced CKD patients, those patients that are at the highest risk of advancing to kidney failure and potentially leading to dialysis. We have 250 employees based in North Carolina and in Boston, dedicated to manufacturing rilparencel and delivering rilparencel to our clinical patients as well as completing our clinical study and working on BLA submission in early 2028.
Our goal at ProKidney with rilparencel is for these patients that are at the highest risk of advancing to kidney failure and ultimately potentially dialysis, is to delay dialysis or in some cases, actually prevent dialysis in these patients and give them more time. More time with their families, more time with a higher quality of life, and more time to potentially find a donor for transplantation. You asked about the next 6- 12 months, the next 6- 12 months at ProKidney is pivotal. Later in 2026, we will complete enrollment in our phase III clinical study. Throughout 2026 and early 2027, we'll share data on some ongoing studies that will further elucidate our mechanism of action story. Ultimately in the second quarter of 2027, we'll have phase III data for the surrogate endpoint of eGFR slope and accelerated approval. Importantly, we are funded to that data readout.
Perfect, 30 million patients, you're in the non-dialysis market. The end goal here is to delay time to dialysis for advanced stage three, four patients. Is that correct? In terms of the marketplace, I guess there's ACEs, ARBs, SGLT2s. Where are those used specifically? What drugs are being used in stage three, four right now?
I can take that. Yeah. Thanks, Andrew . Today for patients with CKD and diabetes, there are four pillars of care, ACE/ARB, SGLT2, finerenone, which is a non-steroidal MRA, as well as GLP-1 with the recent FLOW study in the past few years. Those are the four pillars of care. In an ideal world, a patient would be on all four of those therapies to delay the progression of their CKD. I think one thing that's important to note is if you look at the clinical data generated across those four pillars, they were largely studied in more moderate CKD patients. I think baseline eGFR was in the mid-40s in several of those studies.
While patients can stay on those agents as they continue to progress into later stages of kidney disease, there's certainly a need for more treatment options for patients who are further along in the more advanced stage three, four . Where the conversation with their nephrologist shifts from managing or preserving their kidney function to, "Hey, dialysis is a real possibility," or, "Do you have a relative who could offer a kidney for transplant?" Our goal with rilparencel, it's not a mutually exclusive therapy. It should be viewed more as an add-on therapy as these patients continue to progress. Can we do something here to help them preserve their kidney function, delay or prevent that need for dialysis?
The last thing I'd mention with respect to the pillars of care, if I may, is that in the real world, there are practical challenges that make it tough for patients to be on all four of these agents at the same time. There's tolerability challenges. There could be cost challenges. There's pill fatigue. There's adherence or compliance challenges with this patient population. Again, our focus is really to give those who have continued to progress more time.
Right. At its core, you guys are a two-time cell therapy or two administrations and that's it, kind of thing. Okay. I think you mentioned 30 million non-dialysis patients overall in the U.S. Of those, how many have stage three, four which is essentially the population you're targeting. Of that, how many have Type 2 diabetes? I think that's also the subpopulation you're targeting.
Yep. There's about 3.2 million patients in the U.S. with Stage 3B or Stage four CKD. You can look that up on the USRDS data site. Depending on the literature, you're looking at around 35%-40% of these patients have diabetes as well. The rilparencel TAM is over one million patients, which is a really large market opportunity, especially in the context of a cell therapy.
Yep. On one hand, when I think novel cell therapies, they cost hundreds of thousands, I guess, high hundreds of thousands. On the other hand, this is a million patient population, it's a little bit different from when I think the cancer CAR-Ts, for instance. What could the pricing bookend be in your guys' view, ultimately?
Yeah, we haven't provided any formal guidance on pricing at this point. You're correct in that the CAR-Ts on the oncology side are priced in the $500,000-$600,000 range. That's one way to think about it, I guess. The other way to think about it, though, is what is the potential value that we're delivering to these patients and the healthcare system overall? Dialysis on the Medicare side is typically over $100,000 a year. It's even more expensive for Medicare Advantage, and it's even more expensive on the private side or the commercial insurance side, where payers are often paying several hundred thousand dollars a year when patients initiate dialysis.
We think there's value to the system in delaying the need for dialysis and delaying kidney failure, and of course, of utmost importance for patients and their families and their caregivers, improving their quality of life and giving them hope to stay away from dialysis for some time.
Right. On paper, it doesn't take much in terms of market penetration at this kind of pricing level to get to a large sales number, should this be approved. Maybe another question, just fundamentally, how does the drug work? Maybe it sounds like you're going to share more mechanistic work later this year or next year, so maybe talk about those dynamics, please.
Right. Yeah, I can handle this. The way the therapy works is we take a biopsy from a patient. This is an autologous kidney-derived cell therapy. We process those biopsies in our manufacturing site in Winston-Salem, North Carolina, and process those to around 50,000- 200,000 cells. These cells phenotypically resemble cells that naturally exist within the adult kidney that are involved in repair of injured tubules. We expand those cells to over a billion cells, and then we inject the cells back into the patient's kidney, into the kidney cortex, and then three months later into the contralateral kidney cortex. This is all caveated. This is all through pre-clinical studies.
What we're observing is that in the context of co-culture with injured kidney cells, rilparencel is able to essentially increase the overall health of those injured kidney cells, and this is assessed through a variety of different metrics. It's lowering the oxidative stress, lowering innate inflammatory signaling, and increasing mitochondrial functionality. We're also evaluating this in pre-clinical rodent models of CKD and observing similar sorts of effects, as well as increased angiogenesis in the vicinity of rilparencel administration. We'll also actually be doing a study with a New York group here on evaluating a human decedent model of injecting autologous rilparencel into this model and taking serial kidney biopsies and paired urine and blood collections to really interrogate what mechanistic effects our drug is having in a human autologous kidney context.
We'll be releasing our first new MOA data actually at the European Renal Association annual Congress on Friday. Stay tuned for that. As well as just submitted several additional MOA abstracts to ASN Kidney Week for this year. Stay tuned.
Thank you. Okay, I'll stay tuned for that. Now the phase III trial almost is nearing enrollment completion for the accelerated approval. Maybe speak to the design because it's efficiently designed, it sounds like, to support both an accelerated approval and eventually a full approval. What do you need to show on the endpoints to support both? Yeah.
Yeah, that's correct. Our phase III PROACT 1 study was designed to support both accelerated and confirmatory approval of rilparencel. We're expecting data on the accelerated approval endpoint, which is eGFR slope, in the second quarter of next year. I think you asked about the assumptions behind that endpoint, Andrew. The study is adequately powered at 80% to detect a 1.5 mL difference between the sham arm and the treatment arm in that study. A little bit more around the assumptions, the sham arm, we're expecting or modeling a -3 mL per year decline, and in the treatment group, we're modeling a -1.5 mL decline.
I'd remind you that we believe that we've reflected an element of conservatism in these assumptions because the effect size that we observed in our phase II study, namely the REGEN-007 study that we reported on last year, was much greater than that. We wanted to make sure that we designed the study with an element of conservatism. We've made it this far at this point. Then the study would continue on after the accelerated readout, and we effectively are accumulating events throughout the study. That's what would serve as the confirmatory endpoint. It's a composite time-to-event endpoint. Very similar, actually, to the other recent landmark CKD studies, FLOW study in GLP-1, and the other SGLT2 studies. It's a 40% decline in the eGFR is one of the event endpoints, renal or cardiovascular death or the initiation of dialysis or kidney failure.
That analysis, which is also powered at 80%, would be triggered after 122 events. Our guidance for the timing of that readout is the second half of 2029.
Yeah. Okay. Thank you. Maybe to dig a little bit deeper based on the prior phase II data that you've produced. You've powered it, but with the assumption of -1.5 mL Per minute for drug. In phase II, what did you see specifically on that on an absolute basis?
In the most recent phase II study, which was the REGEN-007 study, we had two groups, and the two groups had different dosing regimens. Group one is the group that we mostly focus on because that dosing regimen, whereby patients got two injections, one in each kidney three months apart, mirrors the dosing regimen in the phase III. That group had 24 patients. What we did is we looked at this group of patients' kidney function in the two-year period prior to receiving rilparencel treatment, and then we looked at their kidney function for 18 months as the median follow-up after completing treatment with rilparencel. What we saw is in the pre-treatment period in group one, patients lost 5.8 mL per year. 5.8 mL per year of kidney function.
After treatment with rilparencel, these patients lost 1.3 mL per year of kidney function. The difference that we observed in the phase II study in group one was 4.6 mL per year. We were certainly very pleased with that effect size, hence why we believe that there's an element of conservatism reflected in our phase III assumptions.
Right. I always have to think about it, but the more positive value, the better. Is that correct?
Yes. I'm glad you bring it up because we're looking at an improvement in the decline of kidney function. Again, we saw in the pre-treatment period in these patients, - 5.8 mL per year. After treatment with rilparencel, they were only losing - 1.3 mL. If you do the math, - 5.8 mL, minus - 1.3 mL, that's how you get the 4.6 mL treatment effect.
Right. As for the sham in this phase III, well, in phase II there was unfortunately no sham, so how did you model or assume 3.0 for sham in the phase III?
Yeah. We triangulated looking at prior clinical studies, as well as our clinical data. One of the challenges with the other clinical studies that I mentioned before is that the four pillars of standard of care were largely studied in more moderate patients. We did a very robust amount of work to come up with what we thought was a reasonable assumption for sham.
I see. I guess through your work, you looked at the other SGLT inhibitors, what they showed in those studies. Specifically, there's a whole bunch of SGLT inhibitors approved. Did you look at multiple studies or just one drug to help you with your assumptions of -3 mL ?
Yep. Well, we looked at multiple studies, as well as the clinical data that we've generated in the more high-risk patients to come up with the modeling assumptions for sham. Again, for the phase III, just a reminder, for the accelerated analysis, our assumption's - 3 mL per year in the sham and - 1.5 mL per year in the rilparencel. Again, that gets you to that 1.5 mL treatment effect difference that we assume.
Great. On the safety side, what have you seen exactly on safety AEs? Any SAEs? What special AEs are you guys looking for?
Yes. Far through the phase II data, the safety profile has been comparable to a routine kidney biopsy. We didn't observe any SAEs related to the rilparencel product itself. We did observe some AEs, some bleeding in the kidney, hematoma, that you might see with the biopsy. Otherwise, overall, the message is that safety profile has been favorable and comparable to a routine kidney biopsy.
Okay. Got it. To be crystal clear, I should've asked earlier, the phase II that you generated, despite being open label, you were able to get an RMAT designation from the FDA on that data set. Is that correct?
The RMAT designation came from an earlier phase II study, RMCL-002. We received the RMAT designation in late 2021 based on that 002 data. What we saw in that data was that patients in RMCL-002 that were treated with rilparencel, the decline of their kidney function as compared to those patients that remained on standard of care was favorable. In addition to that. What we saw in that 002 data was also a favorable safety profile.
Got it. As we talk things through, going back to the sham, just one question, what do you think drives sham behavior? I know you've looked at other studies, just fundamentally, what drives a -4 versus a -1, for instance, on the sham? Can these patients exercise better or something like that? Operationally, are you doing anything to help ensure sham is closer to -3 than, let's just say -1, ultimately, kind of thing?
I think these patients in general, when they get to this point, a lot of them are doing everything they can to preserve kidney function, so trying to eat right, exercising if they can. It's hard to say, to get into this specific level of detail, Andrew, on the numbers of the sham, beyond sharing how we came up with our assumption and what our assumption is.
I'd make one comment, though, with respect to standard of care. We aligned with the FDA last year in a Type B meeting on the accelerated approval pathway for rilparencel. It's important that patients are on optimized standard of care. We expect those in the sham arm to be on optimized standard of care, and we're stratifying for SGLT2 use in our study. In fact, if a patient's not on a stable dose of SGLT2, it needs to be documented as to why. We're controlling what we can control, if you will. That's how we're operating.
Okay, very good. Good luck on the eGFR data in Q2 of next year. The plan is to file a BLA by early 2028, is it? Can you explain the gap? What else do you need to accomplish before you file a BLA?
Yeah, nothing specific to accomplish. I think that six-month period will really be time for us to complete everything that needs to go into the BLA submission. Right? We'll complete the clinical data package, we'll complete all of the manufacturing requirements and the CMC section in order to put the complete package together, and that'll take us a few months.
Okay. As I think about the real-world uptake, should you be approved, one million's a huge number, and so realistically, are there bound to be patients who may not want to take two biopsy or pricks, or get two infusions, basically, in their kidneys? Maybe talk about your phase III enrollment, maybe how many patients planned to get enrolled but ultimately backed out. Is that a good extrapolation of the real world, for instance?
We haven't provided any specific numbers on how many patients weren't able to follow through with the injection in the phase III. These are advanced CKD patients, and there are a lot of comorbidities and other health challenges associated with these patients, so it's not a surprise to us that a portion of patients were not able to follow through with the injection or the biopsy after randomization. Stuff happens in these patients. I think in the real world, assuming if the data are positive and the risk-reward profile of the product is compelling, I think we would expect significant demand. Given the size of the TAM, I think the opportunity's quite large. Also, if they're a member in the phase III, there is a 50% chance of patients randomized to sham.
There's a couple of months gap between consent and actually receiving the product, and that allows for time for people to think long and hard about being in a clinical study. It's just one of the challenges of being in a study. In terms of the market opportunity, post-data, we feel really good about what rilparencel could potentially do for these patients.
Andrew, I'll add there, too. I think that given the size of the patient population, I think that with the continued data, if phase III looks anything like phase II, I think there's a potential that the demand could actually outpace the capacity that we have. I think the way to think about it is really our manufacturing capacity. We haven't given specific numbers, but we have shared that our current manufacturing facility, which we only own 180,000 sq ft facility of manufacturing space in North Carolina, we're able to manufacture all the product for our phase III study and also plan to launch from that facility.
In addition to that, we have ongoing construction on an additional suite that will expand our manufacturing capacity further and then have additional space that we can continue to expand as we ramp our product. Ultimately, I think that 1 million- 1.5 million patients, it would be very aggressive for a cell therapy.
I see. Actually, one more question back to the phase III. Again, you've assumed a 1.5 mL per minute benefit over sham. Can you give us a frame of reference what the other drugs, SGLT2s, for instance, ACE/ARB show, all while appreciating they're being used in the earlier lines, but just a frame of reference could be helpful on a placebo-adjusted or sham-adjusted basis.
Sure. Most of the recent studies showed approximately one ml per year difference. I think DAPA-CKD was 0.86. That's the one that's in our corporate deck right now. Broad strokes, around one ml per year, and that resulted in a clinically significant reduction in events in those patients.
A plus 1.5 mL per minute benefit for you guys would be inherently clinically meaningful, full stop. It gives you the confidence about the confirmatory approval as well. Okay. Going back to commercialization then, COGS, cell therapies, when I think cell therapies, low margins to start, maybe talk about the evolution of COGS, if you can.
Sure. We haven't shared lately any specifics around COGS. We don't have any immediate plans to share specifics around COGS. I think one way to think about it is our manufacturing process, which I believe is likely more straightforward than a lot of cell therapies, particularly CAR-T therapies. We don't require any type of viral vector in the process. I think because of the more straightforward process, our COGS are likely a little bit lower than maybe some of these other cell therapies, and CAR-T therapies. I do think, I'll go back to a point Ethan made, which is that, I think with continued success in the clinic, I think there'll be the demand for rilparencel, and, I think with that demand, rilparencel will be a profitable product.
Very good. Back to the confirmatory. Again, accelerated approval data on eGFR is Q2 of 2027. The confirmatory data as you're launching, it would be second half 2029, give or take, based on events. You're 90% powered to show what kind of hazard ratio, to be clear?
We have 80% power for both the accelerated and confirmatory analysis. The confirmatory analysis will be triggered after 122 events occur. The hazard ratio assumption is 0.6, so a 40% reduction in the treatment arm.
I see.
in the event.
I think there's three things you listed earlier that defines an event.
Yep. Is a 40% decline in eGFR, renal or cardiovascular death, or a sustained eGFR less than 15, dialysis transplant.
Right. Okay. Should your cell therapy work in Q2, what's next for the product or do you expand to other indications?
I'll start with saying that we're 100% focused now on completing enrollment in our phase III clinical study in delivering phase III data in second quarter 2027 and BLA filing in early 2028. I think beyond that, we'll be focused on commercial launch and then the confirmatory readout in 2029. I think it is a large patient population as we've talked about, so I think we'll have plenty of opportunity to continue to grow within this patient population. All that being said, I think depending on what our clinical data readout looks like, and also our MOA activity looks like, or MOA data looks like, we may have the opportunity to expand into other indications as well.
Okay. Was there anything else you'd like to point out before we wrap up?
No, just thank you again for inviting us and maybe reiterate that we're really excited about the phase II data that we've shown so far and looking forward to sharing phase III data in second quarter 2027.
All right. Very good. Thanks for the discussion and thanks everyone for listening.