ProKidney Corp. (NASDAQ:PROK) Q3 2023 Earnings Call Transcript

ProKidney Corp. (NASDAQ:PROK) Q3 2023 Earnings Call Transcript November 16, 2023

Operator: Good morning, ladies and gentlemen, and welcome to the ProKidney Corporate Update Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded. At this time, it is now my pleasure to introduce your host, Dr. Glenn Schulman, Senior Vice President of Investor Relations. Please go ahead, sir.

Dr. Glenn Schulman: Thank you, Rob. Good morning, everyone, and welcome to ProKidney’s corporate update conference call. Yesterday evening, after the market closed, we issued a press release that provided several corporate updates, and then this morning released our third quarter 2023 financial results, press release and 10-Q filings. Please note a replay of today’s call will be available on the Investors section of our website approximately one after — one hour after its completion. Joining us on the call this morning are ProKidney’s Chairman of the Board, Pablo Legorreta; ProKidney’s Co-Founder and member of the Scientific Advisory Board, Dr. Tim Bertram; and ProKidney’s new Chief Executive Officer, Dr. Bruce Culleton. Following some introductory comments by Pablo and Dr. Bertram, prepared remarks by Dr. Culleton on REACT-002, interim results and the clinical development program, we will open up the call for your questions.

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Also joining us today on the call is our Chief Financial Officer, James Coulston; and our Chief Regulatory Officer, Dr. Darin Weber. Before we begin, I’d just like to remind everyone that during this conference call, we will be making forward-looking statements about the Company. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those forecasted. Actual results could differ materially by those stated or implied by these forward-looking statements due to risks and uncertainties associated with the Company’s business. These forward-looking statements are qualified by the cautionary statements contained in today’s press release, 10-Q filing and our other SEC filings, including our annual report on Form 10-K and subsequent filings.

Please also note that these forward-looking statements reflect our opinions only as of today, November 14, 2023, and except as required by law, we specifically disclaim any obligation to update or revise these forward-looking statements to lay or future events. Moving to Slide 3 and our agenda for the call today. We’ll open with a few comments from Pablo Legorreta and Dr. Bertram, hope for providing opening remarks and introduce our incoming CEO, Dr. Bruce Culleton. We’ll then review the REACT Phase II RMCL-002 Data, discuss the objectives of our Phase III program and conclude with our comprehensive clinical plan, including milestones. Afterwards, we’ll open it up — the call for your questions. With all that, I’d like to now turn the call over to Pablo Legorreta, ProKidney’s Chairman of the Board.

Pablo?

Pablo Legorreta: Thank you, Glenn, and thank you all for joining. As you all may know, I partnered with Tim Bertram to support the vision for the future of the CKD therapy and I believe that our Renal Autologous Cell Therapy, also known as REACT, has the potential to truly disrupt the chronic kidney disease treatment landscape. Before we introduce Bruce Culleton and subsequently review the promising data emerging from REACT clinical development program, I first want to take a moment to thank Tim Bertram for all of his dedication and contributions to Prokidney. As one of the inventors of REACT, Tim has invested nearly 20 years into this technology and advanced REACT, a truly novel approach to preserve kidney function for those with advanced chronic kidney disease, [indiscernible] and into Phase III human clinical development.

During his tenure, Tim has done an impressive job shepherding this company and the REACT technology from inception into human clinical development. Tim has left ProKidney well positioned for the future. I believe I speak for everybody here at ProKidney when I say thank you, Tim, for all that you have accomplished here. While we wish him well in his future endeavors, we’re very happy to say that he will be staying with us in a scientific advisory role. Again, our deepest gratitude to you, Tim and all that you have accomplished. I would like to now briefly provide a bit of background on Bruce and why I am together with our Board and the ProKidney team, really excited about Bruce becoming the new CEO of ProKidney. I have known Bruce for several years, but two of ProKidneys directors, Brian Pereira and Alan Lotvin have known him for around 20 and around six years, respectively.

Both worked closely with him and both have suggested about a year ago that we hired him at ProKidney. Both felt that Bruce had the ideal background as a nephrologist, having treated patients and having worked at various top companies in leadership roles in the renal space that he will be ideal to take ProKidney forward. So after about a year of courtship, we succeeded in hiring Bruce at ProKidney about four months ago. I’d like now to share a few details about Bruce’s background. Bruce had more than 25 years of dedication to improving the lives of patients with kidney disease. Bruce completed medical school training and training as an Internist and Nephrologist in Canada. He completed a fellowship in Clinical Epidemiology at the world famous Framingham Heart Study in Massachusetts.

For close to 10 years, Bruce then worked as a Nephrologist and Clinical Researcher at the University of Calgary in Alberta, Canada. He provided direct care to patients with CKD and acted as Medical Director of the Progressive Kidney Disease Clinic. Bruce has published more than 100 scientific papers including clinical trials, epidemiology, health outcomes research and cost effectiveness. Bruce then moved to Chicago to join Baxter Healthcare, where he spent eight years, holding multiple global roles at — all within renal including oversight of global clinical studies and medical leadership of the renal therapeutic area. After Baxter, Bruce was recruited by Alan Lotvin, one of kidney director who has famous running CVS Caremark, the largest PBM in the country, as Vice President and General Manager of CVS Kidney Care, where he provided oversight to the development of products and services for patients with kidney disease.

I will now pass on the call to Tim Bertram. Tim, I’m sure you have a few words that he would like to share as well.

Dr. Tim Bertram: Pablo, thank you for your support of the mission and vision of ProKidney. Since founding ProKidney, we have been focused on bringing the possibility of dialysis-free living to patients with late-stage CKD. And importantly, you have walked with us on each step of that journey. Now with mature REACT data firmly in hand, we increased the possibility for our mission to bring an advanced therapy to patients facing real potential going on to end-stage kidney failure and dialysis. Bruce, I’m excited about the leadership you will bring to ProKidney. I now turn it over to you to take us forward to the next stages of our journey and I look forward to each step that we will take.

Dr. Bruce Culleton: Thank you for the warm welcome, Pablo and Dr. Bertram. I really want to thank Dr. Bertram for all his contributions to ProKidney and the genuine support he’s provided to me over the last four months since joining the Company. I also want to thank the Board of Directors for placing their trust in me at this very important time in the Company’s evolution. Today, it’s my absolute pleasure to present exciting data from our Phase II RMCL-002 study. Our analysis reveal a safety profile in line with previous Phase I and Phase II REACT trials, which REACT showing a safety profile similar to that of a kidney biopsy. The updated analysis also showed the potential to preserve kidney function in several patient groups with advanced CKD caused by type 2 diabetes with the most notable potential benefit shown in patients who had the highest risk of kidney failure those patients with stage 4 chronic kidney disease and severe albuminuria.

Here, there remains a significant unmet clinical need. Based on these emerging results, we plan to update our ongoing proact 1 Phase III clinical study protocol to focus on patients with higher risk of kidney failure. We will modify the EGFR enrollment range from the current range of 20 to 50 milliliters per minute to a new range of 20 to 35 milliliters per minute, to focus on the most severe patients, to better align with our Phase II results and external clinical feedback. We do not intend to modify the other Phase III trial proact 2. The modification to the EGFR enrollment range in our proact 1 Phase III study will cause a further delay in enrollment of the study and we expect to resume enrollment during the first half of 2024. We believe this delay is warranted as it increases our probability of overall success.

We are also pausing manufacturing to address the very recent EU qualified person audit. Importantly, this pause is not due to a clinical safety event. Our recent audit performed by our contracted qualified person to evaluate its readiness for release and distribution of REACT to the EU, while still in progress, identified certain deficiencies in the documentation of the quality management systems that must be addressed prior to release and distribution to EU clinical sites. Many of these improvements to GMP systems and control activities were ongoing, but had not yet been completed at the time of the audit. We expect to resume manufacturing in the first half of 2024. Over this period, we plan to optimize our capabilities to meet EU and global standards for our Phase III program and future of commercial manufacturing.

We are implementing these manufacturing documentation improvements concurrently with the 006 pause for protocol changes such that we expect proact 1 to resume and proact 2 to commence enrollment in the first half of next year. Despite these delays, I truly believe we have a bright and exciting future ahead of us. I started ProKidney in July of this year with some degree of optimistic skepticism. Now that I deeply understand our Phase II data and our product, I’m definitely more optimistic about our future. We can move to Slide 5. Let’s take a step back and review why we believe REACT is so special. As you can see, chronic kidney disease is a significant problem, while one in seven adult Americans have some degree of chronic kidney disease. They are more than 3 million Americans who have type 2 diabetes and advanced stage IIIb or stage IV chronic kidney decease.

These are patients that have few kidney treatment options and are at very high risk of progressing to kidney failure. Within this large population, I’d note that more than 135,000 CKD patients in the U.S. continue to progress to dialysis every year. We believe there is a substantial opportunity with our product REACT as we believe we can preserve kidney function to delay or eliminate time on dialysis. The REACT cell therapy is different than other small molecules and biologics, and we’ll walk through data this morning that will show why we believe REACT may be able to preserve kidney function and possibly provide greater benefit in high-risk CKD patients. The data will review — we will review support to our exciting Phase III clinical program and we believe it will demonstrate REACT’s ability to potentially change the treatment landscape for patients with stage 3B and stage 4 diabetic kidney disease.

Slide 6. As Pablo mentioned, REACT is an innovative approach to preserving kidney function. It’s a proprietary autologous cell therapy that’s generated from the patient’s own kidney cells. The patient cells are harvested via traditional kidney biopsy and expanded in our manufacturing facility isolating three key cell types. These expanded cells are then cryopreserved ahead of being reimplanted via a percutaneous outpatient procedure. Patients then receive reimplantation of REACT where the cells are injected back into the patient’s renal cortex. In the 002 Phase II trial, we evaluated REACT and planted into the biopsy kidney 2x, six months apart. In our ongoing 007 trial and our Phase III program, we are evaluating one injection of REACT into each kidney or bilaterally three months apart.

Here on Slide 7, we see a robust clinical trial program with REACT as highlighted in this pipeline chart. We’ve previously published data showing REACT potential to delay dialysis from the Phase II 003 study of patients with stage 4 and 5 CKD. This combined with preclinical data and data from study 002 that you’ll see today, we initiated our pivotal Phase III program, our proact 1 and proact 2 trials. Today, we’ll be focusing on data from our 002 study that is near completion and how this data informs our proact 1 and proact 2 Phase III trials. Further, I’d like to point out that our 007 program, which is different from 002, as mentioned earlier, will also be helpful in providing us confidence in our Phase III program. I’ll touch on the 007 study and related milestones much later in the presentation.

For additional context, let me share with you a framework for the classification of chronic kidney disease. The foundation of this work started over 20 years ago by the National Kidney Foundation. I’m humbled to have played a very small role in that work. For the first time, it provided standard definitions for CKD and an approach to risk stratification. This general approach is now used globally and is accepted by guideline committees around the world. If you look at this heat map, the rows represent kidney disease function and the columns represent kidney injury. Together, they predict the risk of kidney failure as shown in the different colors. As a company, we are focused in the highest risk area, patients who have moderate to high kidney injury and moderate to severe decrease in their kidney function.

This is an area where we believe is distinctly different from where many small molecules and biologics operate, as shown here with a dashed oval line. Today, clinical priorities for patients with stage IV kidney disease, G4 on this chart are largely focused on treating comorbidities, such as anemia or abnormalities in mineral metabolism and preparing patients for dialysis or kidney transplantation. We also know that payers acknowledge a specific pain point with stage 4 chronic kidney disease. They know these patients have the highest risk to progress to kidney failure and the need for dialysis. As I stated earlier, this is a goal of ProKidney to reduce or eliminate time and dialysis, which is life altering for patients and their care partners and cost payers between $110,000 to $240,000 per patient per year.

On Slide 9, further focus — our focus — to further support our focus on these high-risk patients, we took a look at several landmark CKD studies that have been published over the last several years. Here is a selection of them. Of note three papers use SGLT2 inhibitors, all published in the New England Journal of Medicine, a paper using selective MRA as well as baseline paper using GLP-1. As you can see in all of these landmark papers, there is very little focus on patients with stage 4 chronic kidney disease. And that’s where our focus is. On Slide 10, we go into more detail on one of these published studies, specifically the study that looked at the SGLT2 Dapa versus placebo that was published a couple of years ago, again, in the New England Journal of Medicine.

There are three key points here that I want to draw your attention to. The first is although these new SGLT2 inhibitors are a step forward, patients still lose kidney function. And this is shown on the right-hand panel of this slide, which looks at change in estimated glomerular filtration rate over time. This is also the same efficacy measure in our Phase II study that I will present shortly. The second point, also on the right-hand panel is the fact that patients who are treated with SGLT2 inhibitors or ACE inhibitors or angiotensin receptor blockers for that matter. There is an initial short-term abrupt decline in kidney function and it takes 12 months for the EGFR to actually catch up to placebo and then another 6 to 12 months before separation of the SGLT2 inhibitor from placebo.

My point here is that it takes some time for patients on these agents to see a benefit in kidney function. The last point is that even after two years, there’s only a very small difference in eGFR between patients treated with Dapa and placebo, less than 1 mL per minute per year. Please keep this number in mind as we present our 002 results today. Despite this very small improvement, a reduction in clinical events is still observed and as shown on the left panel. Like our Phase III program, these patients were randomized to receive an investigational product or placebo. Patients were then followed over time to determine any difference in the occurrence of the composite end point. In this case, a 50% decline in eGFR, incidence of kidney failure or incidence of cardiovascular kidney death.

While this blue line shows that DAPA reduces those events versus placebo, it’s important to recognize that these events on Dapa that patients on Dapa still had events still ended up on dialysis and still succumb to their disease. In fact, 19 patients need to be treated with Dapa to prevent one primary outcome event, highlighting the fact that there remains a big unmet need in this population. Now that we’ve clearly articulated the opportunity for ProKidney, let’s walk through the latest update of our Phase II RMCL-002 clinical trial. On Slide 12, we believe the data in hand demonstrates the potential for preservation of kidney function in diabetic patients with advanced chronic kidney disease. REACT’s benefit was most notably observed in the sickest patients, those who had stage 4 CKD with a high UACR or severe kidney injury.

Consistent with previous study data, REACT was well tolerated and continues to demonstrate a safety profile in line with the traditional kidney biopsy. With this updated data in mind, we are modifying one of our Phase III pivotal trials proact 1 study to focus more closely on patients with the highest risk of kidney failure. Patients who have late stage 3b and stage 4 CKD with an eGFR between 20 and 35 ml per minute. Let’s revisit the design of RMCL-002, a Phase II study, which is fully enrolled and near completion. Patients with CKD caused by diabetes were randomized after kidney biopsy to one of two treatment arms, the active treatment arm or the deferred treatment arm. Active group patients received two REACT injections. The first as soon as REACT was available and again, approximately six months later.

Follow-up visits were scheduled every three months after the second REACT injection until 24 months after the second injection when the study ended for each subject. Deferred group patients received standard of care for the first 12 months after randomization. At the 12-month mark, they were eligible to receive the first of two REACT injections with the second injection administered six months after the first. Follow-up visits also occurred every three months for 12 months following the second injection. Notably, the biopsy and the two injections were performed in the same kidney. This differs from our Phase III studies, which I’ll explain later. Please also note that we still have 13 participants who will receive their last kidney function measurement in their end-of-study visit this year.

Given that these patients have already had 18 or more months of follow-up, we do not believe our results will materially change upon study complete. Finally, it’s worth noting that we received RMAT designation partially based upon early data from this study. And our Phase III study program was designed and initiated before completion of this Phase II study. As the Phase II trial, the study objectives were focused on the safety and efficacy of two REACT injection six months apart and delivered into the biopsy kidney using a percutaneous approach. Study endpoints included procedural and REACT-related adverse events, along with change in kidney function as assessed by change in estimated glomerular filtration rate or eGFR. On Slide 15, we show the characteristics and demographics of the 002 study population.

They were well balanced with patients with higher-risk CKD comprising a significant portion of both treatment groups. In fact, 43% of all enrolled subjects had stage 4 chronic kidney disease. The average baseline eGFR was 33.9 and 31.8 ml per minute and UACR of 740 and 598 milligrams per gram in the active and deferred arms, respectively. On Slide 16, we described a number of subjects in our analysis at different time points, 20 subjects dropped out of the analysis for protocol-related reasons including an earlier protocol version that followed patients for a shorter period of time, new comorbidities that prevent an injection with REACT and our protocol design that limited REACT injections to patients with an eGFR of 20 ml per minute or more.

The rates of dropouts due to dialysis and death were typical for this high-risk comorbid population. All patients are expected to complete study visits by end of this year with final safety and efficacy results anticipated in the first half of next year. The safety of REACT remains a significant focus for us as we understand the highest risk gating patient population often has multiple comorbidities and tend to be older patients on many medications. The biopsy and REACT injections continue to be well tolerated and we are pleased to report that there were no significant REACT-related serious adverse events. Procedure-related events occurred in six of 83 REACT patients and are consistent with published reports of the events observed during kidney biopsies, which are commonly done to assess and diagnose CKD.

As we move on to efficacy data in the 002 update, this slide shows the average EGFR in patients randomized to the active and deferred groups. Patients in the active group as shown on the blue dotted line showed no clinically meaningful decline in average EGFR out to 30 months. Overall, the change in average eGFR in this active group where 90% of patients had grade stage 3b and stage 4 CKD was a cumulative minus 3.2 ml after 30 months. Patients in the deferred group that only received standard of care had a decrease of minus 3.4 ml after just 12 months. The reduction over 12 months for this deferred group is in range of what we would expect for patients with advanced diabetic chronic kidney disease. As we move to the next slide, please look again at this deferred group of patients on standard of care.

Here on the left side of this graph is the deferred group again as they received standard of care. And then 34 of these patients received REACT at month 12 and again at month 18. They’re followed out to 12 months after their second injection. As stated on the previous slide, patients in the deferred group who received standard of care showed a minus 3.4 ml decline in average eGFR over 12 months. But after a REACT injection, their average eGFR decline was only 0.2 ml over the next 18 months. We feel confident that stabilization of eGFR after REACT injection in this high-risk population reflects the potential for preservation of eGFR in patients with diabetic chronic kidney disease. And it’s one reason why we feel excited and confident in our Phase III program.

The next two slides are Post-Hoc analysis of the 73 patients that received at least one REACT injection. The first slide here looks at average eGFR over time in two groups of patients. We divided these patients into those who had no decline in their individual eGFR slope over 18 months and those who had an individual eGFR slope of less than 0. What we found was 27 of 73 patients, impressive 37% of all participants had no or minimal decline in their kidney function over the course of 30 months of follow-up. As you can see in the gray box on the right, the change in average eGFR in this group was only 0.5 ml. Notably, 56% of these patients had stage 4 chronic kidney disease. On Slide 21, we show a — we perform a very similar analysis but more rigorously, we look at change from baseline kidney function in the same two groups.

The graph looks very similar to the previous slide. At each time point, we present the average change in eGFR from baseline instead of the average eGFR at different time points. We present this over to 30 months of follow-up after first injection. Again, 37% of all subjects injected had minimal or no change in their kidney function from baseline over this period of time. As we move to Slide 22, here we highlight the CKD stage 4 patients with severe Class III — Class A3 albuminuria. On the left, we have 13 patients meeting this criteria who are in the active group. And as it turns out, 13 patients in the deferred receiving standard of care also met these criteria. In this left panel, over 12 months, the average change from baseline in eGFR in the active patient group was minus 1.6 ml.

In contrast, the average change in eGFR in the standard of care group was minus 6. The same standard of care group is also reflected in the bottom line on the right panel. As we previously described, these same patients then receive REACT. Their eGFR baseline was reset at the time of REACT injection and their change from this new baseline is reflected in the top line on the right panel. Their average change from baseline after REACT injection was essentially zero compared to minus 6 mL for the 12 months before REACT injection. As you could see in these subgroup analysis of high-risk stage 4 CKD patients, treatment with REACT was associated with the stabilization of kidney function as assessed by change in eGFR over a one-year period. We feel this data strongly supports REACT, having its biggest impact on the highest-risk CKD subpopulation.

We believe the data in hand demonstrate REACT potential for the preservation of kidney function in type 2 diabetic patients with advanced kidney disease. REACT’s benefit was observed for up to 30 months most notable in the sickest patients, those who had stage 4 chronic kidney disease with a high UACR. Consistent with previous study data, REACT was well tolerated and continues to demonstrate a safety profile in line with the kidney biopsy. With this updated data in mind, we will be modifying one of our Phase III pivotal trials, the proact 1 trial, to enrich the number of patients with the highest risk of kidney failure. In light of the data we have shared today, our first react Phase III pivotal trial designated proact 1 is being modified to include the following, as shown in the box at the bottom of the slide.

Focusing on stage 3b and 4 by limiting the range of eGFR for eligibility to between 20 and 35 ml per minute. This is a change from our previous design of 20 to 50 ml per minute. We’re limiting the range of UACR for eligibility to 300 to 5,000 for patients with an eGFR between 30 and 35 ml. And these are patients who are likely to become a stage 4 patient in short order. We’re updating our standard of care expectations given the changing CKD treatment landscape, and we’re increasing enrollment for an additional 600 incremental patients. There are approximately 50 patients who have already been enrolled that meet the updated protocol requirements. The second REACT Phase III pivotal trial designated proact 2, which is enrolling patients — which will be enrolling patients primarily outside of the United States is not anticipated to have any further modifications at this time.

The trial is already designed to include advanced CKD patients who have an EGFR between 20 and 44 and a UACR greater than 300. We are allowing this study to proceed with an upper EGFR inclusion threshold that is higher than our 006 study to help us with future product labeling and addressable market sizes. Finally, on Slide 26, we show our clinical study accomplishments for 2023 and updated milestones for 2024 and beyond. We reported today the encouraging updated interim Phase II results from 002, which continues to show REACT’s potential to preserve kidney function with the notable activity observed in those diabetic patients with stage 4 CKD. As discussed, the last patient visits for the study will be completed by end of this year and we look forward to presenting full results in the first half of 2024.

Looking forward, the Phase II 007 clinical trial was fully enrolled earlier this year. This study was conducted to provide some insight into our Phase III development program. Importantly, these diabetic patients with stage 3 and 4, CKD are being treated with our commercial-ready cryopreserved formulation of REACT with patients receiving REACT injections bilaterally with the second injection three months after the first in the contralateral kidney. This mirrors our approach in our Phase III program. We anticipate reporting interim results from this study around mid-2024 with the final study results anticipated in the first half of 2025. For proact 1 and proact 2, our two registrational Phase III studies, we are implementing changes, as discussed earlier to proact 1 only focusing the eGFR range to 20 to 35 ml per minute.

The modification to the EGFR enrollment range to our proact 1 Phase III study will cause the delay in enrollment of the study and we expect to resume enrollment during the first half of next year. We believe this delay is warranted as it increases our ability to recruit patients and our overall probability of success. We are also pausing manufacturing to address the very recent EU qualified person audit. Importantly, this pause is not due to a clinical safety event. A recent audit performed by a contracted qualified person to evaluate its readiness for release and distribution of REACT to the EU while still in progress, identified certain deficiencies in the documentation of the quality management systems that must be addressed prior to release and distribution of product for EU clinical sites.

Many of these improvements to GMP systems and control activities were ongoing before the audit, but had not yet been completed at the time of the audit. We expect to resume manufacturing in the first half of 2024. Over this period, we plan to optimize our capabilities to meet EU and global standards for a Phase III program and future commercial manufacturing. We are implementing these manufacturing and documentation improvements concurrently with the 006 study pause with protocol changes such that we expect proact 1 to resume and proact 2 to commence enrollment in the first half of 2024. We anticipate completion of both studies in 2027. As Pablo mentioned during his opening remarks, this is a very exciting time here at ProKidney. Building upon what Dr. Bertram and the team have done to bring REACT forward as a truly novel cell therapeutic approach to preserving kidney function, I am excited to lead ProKidney through this next phase.

The team is focused on getting our global Phase III program back on track and enrolling patients and resolving the issues raised by the QP auditor. Lastly, we are fortunate to be well capitalized well into 2025. And in the interim, we have a couple of potential financing catalysts. With that review, I’d now like to open up the call to your questions.

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Q&A Session

Operator: [Operator Instructions] Our first question is from the line of Yigal Nochomovitz with Citi.

Yigal Nochomovitz: I had a bunch of no particular order. First of all, for the patients that were already enrolled in proact 1 above 35 — 35 to 50, are they — what happens to them? Are they included or not in the analysis? And then secondly, regarding the delay in the enrollment for proact 1, I mean, obviously, you’re already enrolling 20 to 35 eGFR anyway, even though you’ve lowered the upper bound down to 35 from 50. So I’m just wondering if you could explain in a little more detail why that would the delay per se, given that, that range was already open for enrollment. And then I think at the end, you mentioned that both studies are completing in 2027. Could you comment on whether there will still be interim analysis, I believe, originally, the proact 1 interim was scheduled for the end of 2024.

Dr. Bruce Culleton: Thanks, Yigal, for your questions. I’ll address them, I think, in order. We do have patients already enrolled, as you noted, in study 006 that may not meet the inclusion criteria that we’re moving forward. We will obviously continue to follow those patients and they’ll be treated as per protocol and will be part of a final analysis set that we submit to the FDA. As for why we’re delaying enrollment in the study, while we execute on enriching our program with patients with higher risk of CKD, really there’s twofold here. The first response is we do want to ensure as we complete the changes and modifications in the protocol that these patients that we really do truly enrich and don’t enroll any further subjects who may be outside of those criteria.

The second is, as you did here, we’re pausing manufacturing to improve our systems for all the reasons that I’ve outlined. And in pausing that manufacturing, we’re also pausing the Phase III 006 study over that same period of time. And then finally, I think from a question around interim data, we will complete our studies in 2027. We previously communicated to you that we would perform an interim analysis, I think, in 2024. We haven’t committed to see yet on when we’ll perform an interim analysis for our Phase III program now that we’re performing this modification but we will get back to you in the future.

Pablo Legorreta: So a couple of additional comments to Bruce’s excellent answers. One is, if you modify enter criteria in a study, you have to be filed with FDA. So that’s why we’re actually doing this right, and going to take a little bit of time, not much, but it will take a little time. And we — as we said, we got to resume next year. The other thing that I think is really important to mention is that focusing the patients in the study to the sicker patients, 20 to 35 is beneficial on many fronts. It’s — as you saw from the data, what’s really remarkable is that we have data that is telling us about 23 out of the 73 injected patients, which is close to 30, have preservation of function and these are the highest risk patients where you never see this kind of evolution or preservation of function.

But the other thing that’s exciting about concentrating the study in that patient population is that what we have seen as we’re talking to the sites and patients is that there’s huge interest among the clinician stream patients to enroll patients with this kind of disease because there’s no alternatives. So when you go and talk to them about enrolling patients that have, for example, 3A, which we had a few, it’s harder to get them excited about it. But when you tell them, the study is going to focus on patients that are at stage 4 and a little bit of stage 3b from 30 to 35. There’s a big interest in that. So it’s going to accelerate the enrollment of the trial for us by doing — making the change to the enrollment criteria.

Dr. Bruce Culleton: Pablo, just one more thing on that. Having cared for patients and stay close to patients for my — for kidney patients for my whole professional career. There’s also a — when patients reach a GFR of 30 around that period of time, that’s also a period when patients are being told a lot about preparing for dialysis. And that’s when those discussions become very meaningful. And patients do look for options. And we do have an option for patients to enter into a clinical study where there’s a possibility that they may receive some benefit.

Yigal Nochomovitz: And then just a quick follow-up. So you have had or have not had the discussion with FDA with respect to the slight modification to the enrollment criteria for correct one? And then secondly, I take your point regarding the retaining the 44 at the higher end for the proact 2 to maintain optionality in the commercial setting, but I do wonder how much of an internal debate there was with regard to just aligning both and having them both be 20 to 35 to maximize the probability of success for proact 2 as you outlined, Pablo, that is the most interesting in terms of enrollment kinetics and likely clinical benefit.

Dr. Bruce Culleton: So I’ll address your second question first, Yigal, if I could. So first, we believe based upon the data that we see, that REACT works across multiple different patient groups. And so we do believe that even including those patients up to an eGFR 44, we might see a possible benefit. So we did want to include them for the reasons that were outlined. And then second, from an FDA perspective, we do not see our change or modification to the study, the 006 study as being a significant modification and we plan to submit a notification letter to the FDA. We — based upon our regulatory feedback internally, we do not believe that this will require an in-person or a specific meeting to discuss this modification. So we think it’s a lower risk and can be managed with the letter.

Operator: Our next question is from the line of Justin Zelin with BTIG.

Justin Zelin: Congrats on the data here. I just wanted to hear your latest thoughts on the durability of effect of the treatment. And how does that fall into your thinking about potential redosing after two years? And I have some follow-ups.

Dr. Bruce Culleton: Thanks, Justin, for your question. We — the data that we have — that we showed you today there’s a suggestion, but keep in mind that Phase II data, and we don’t have a control group out to 24, 18 or 24 months. There’s a suggestion that some benefit may tail off towards the end. We can’t be confident about the durability of REACT based upon this data. We do think we’ll see with a parallel control group in our Phase III program, we’ll get more insights from that program on the durability of REACT. And it’s quite likely that we may need to redose at some point, 18 to 24 months after first injection. But more to come on that, Justin, in the future.

Justin Zelin: Great. And if I could ask, it looks like you had 27 patients here for preservation of eGFR. Of those 27, do you have the data as far as whether they fit into that new enrollment criteria of 20 to 35 stage 4 CKD.

Dr. Bruce Culleton: Yes, Justin, I think 56% of those are in stage 4. And I don’t have the data off hand on how many of those are in that 3b category of 30 to 35, but it’s already a majority of patients already included in that group. We can follow up with you on that question.

Pablo Legorreta: But it’s 23 of the 73 that actually are stage 4 with ACR greater than 300 that are actually pretty stable. I mean some of those, you see maybe a slight decline. But relative to the similar group in the standard of care, which declined by 6 points, it’s actually quite impressive.

Operator: Next question comes from the line of Kelly Shi with Jefferies.

Unidentified Analyst: This is Clare on for Kelly. So for the [indiscernible] Phase III trial enrollment as you mentioned the CKD premium landscape is evolving. So would you expect more patients having received treatments such as GLP-1 before coming to REACT cell therapy. What kind of GLP-1 drop impact would have on REACT activity for kidney preservation.

Dr. Bruce Culleton: Thanks for the question, Clare. So I understand you’re asking about our Phase III program and the changing CKD landscape, including GLP-1s, we will — so several points on that. So the first, just from a study perspective, we will be — we think it’s extremely important for us to ensure that standard of care as defined by clinical practice guidelines is instituted across both arms of those studies and we’re working to make sure that, that will happen. The second, with regards to the GLP-1 effect within the chronic kidney disease space. We do understand based upon published data that the FLOW study, which I think some of you may be familiar with, the percent of patients with stage 4 kidney disease included in the FLOW study was a small amount compared to the rest of the CKD subjects in that study.

It’s — I know this — the FLOW study was stopped early for efficacy. And it’s hard for me to comment on what that actually means at this point. We do know that GLP-1s do have a favorable cardiovascular event profile. But we’ll have to wait until that data is actually published for me to have a more educated answer to your question.

Operator: Our next question comes from the line of Jonathan Miller with Evercore.

Jonathan Miller: Okay, let’s start with maybe some housekeeping. How many patients that are already enrolled aren’t meeting the new criteria? I just want to get a sense for how many folks in total that are going to be in that — in the final analysis to the FDA, but maybe not on the primary endpoint? And then secondly, I would love to probe a little bit deeper into the assertion that it’s the stage 4 patients that are getting the most benefit. I noticed that none of the presented analysis directly compare the benefit patients are getting to the severity at baseline, you’re pulling out that subgroup. So I guess I’m looking at the entire deferred cohort and it seems like they also see stabilization — similar stabilization of that stage 4 cohort. So I’d love to dive a little bit deeper into what’s underlying the assertion that stage 4 is getting the most benefit.

Dr. Bruce Culleton: Thanks for your questions, Jonathan. So I’m sure you can appreciate that our 006 or proact 1 study is an ongoing Phase III program. And we are not analyzing that data on a day-to-day basis because of the nature of it being a Phase III program. We’re also blinded, as you could — as you know to the treatment groups. What I can say is that based upon the information we can have access to that we’ve enrolled over 80 subjects. And we believe that approximately 50 of those subjects will meet our new inclusion criteria. And then, Jonathan, on your other question, you rightly do point out that we see a very impressive stabilization preservation of eGFR in patients who were crossed over and received react for out to 18 months, in that group after their first react injection.

We believe REACT works in different subgroups, but the focus on stage 4 moving forward. And we have tortured this data, if you like, inside out and we’re very confident in our decision that we want to move forward with the stage 4 an advanced 3B population for proact 1. And part of it is based upon — part of it is based upon the data that you saw here today, part of it is based upon medical feedback, which Pablo mentioned around nephrologists recognizing that these patients are on a slippery slope to dialysis and we need an option for these patients. Part of it is for the lack of better word, some desperation from patients and not having other options within this group. And finally, having worked at CVS and sitting close to Aetna and understanding how payers think about this space and also understanding how other CMOs and other large health plans think about the space.

They clearly say that stage 4 kidney disease is their pain point. And so it’s for all those reasons, we’re refocusing our proact 1 study.

Pablo Legorreta: Actually, when they talk about the different stages, what you hear is that patients that are in stage 3 and 3b are patients that cost less than the premiums they collect but it completely changes when you get into stage 4, where actually the premiums that get paid do not cover the cost of stage 4 patients. So it creates opportunity for us. But I think the other key thing is that we feel confident that we’re going to actually enroll quicker but also hit events quicker because this stage 4 patients must — are having events much more quickly than other patients. But the data is quite interesting because we do see good responses from not only the stage 4 patients, but the other patients in the study also.

Operator: [Operator Instructions] The next question is coming from the line of Jason Gerberry from Bank of America.

Jason Gerberry: So if I heard you right, for proact 1 you enrolled 50 out of a target 600, I just wanted to confirm that. And it sounds like you think even with the new enrichment criteria that won’t slow enrollment, it actually will speed enrollment. And so then just a follow-up on the question about interim just to make sure, is it more a question of when, not if? We get an interim. I’m ultimately wondering you talked about multiple financeable catalyst before your cash runs out. What do you think are financeable catalysts if you don’t offer an interim before the cash runs out?

Dr. Bruce Culleton: Just for clarity, we’ve enrolled over 80 people in proact 1, not 50 — we think there’s about 50 that meter new inclusion criteria. Second is we believe we have multiple financing catalysts. Notably our study 007, which is, as stated earlier, diabetic patients who are biopsied, injected into the biopsy kidney and then three months later injected into the contralateral kidney with our commercial product. We think that mirrors more closely our Phase III program and we’re going to be happy to share with you an interim look at the data in mid-2024. We think that will offer a potential catalyst and final data for that we believe, in the first half of 2025. We’ll also bring to you final results of 002 in the first half of next year.

So we’ll have multiple opportunities to present publicly data from several different studies in the next couple of years. With regards to the interim analysis, I can give you some insight into how we’re thinking about it, the decisions haven’t been made, and we will share with you the decision in the future. But we received some feedback — I received some feedback and someone that’s led a global SGLT2 inhibitor trial, who essentially said you may want to think about an early IA in case the benefit is even bigger than what you expect. But I want to make it clear to everyone that when we do in IA, all we would get from our safety committee is a letter that says, continue to move forward or not. We’re not able to share with you any analysis at that interim analysis given the Phase III nature of the program.

And the endpoints that were chosen within this Phase III program are the eventual endpoints that will be adjudicated for FDA approval.

Jason Gerberry: And if I could just ask one follow-up here. You mentioned the 80 versus the 50. So does your — do you need to have 600 patients that meet the new inclusion criteria? Or is that adjusted to 570 patients that have to meet the criteria?

Dr. Bruce Culleton: Jason, we’re targeting 600 new incremental patients.

Jason Gerberry: Okay.

Pablo Legorreta: One topic that hasn’t been discussed that I think is worth just mentioning so that everyone understands what’s going on here is that proact 2 has not changed and the enrollment here is 20 to 44, which really will have all of the stage 3b range from 30 to 44. And what we see us positive of having the other study, the other Phase III study with that range of enrollment criteria, 20 to 44, is that it will give us the possibility of actually having a broader label, right, because it’s going to have a lot of stage 3b patients. So I think by having the two studies with slightly different ranges of enrollment criteria, we see that as beneficial.

Operator: At this time, we have reached the end of the question-and-answer session. And I’ll now turn the call over to Dr. Bruce Culleton for closing remarks.

Pablo Legorreta: Bruce, before you do that, I’d just like to share with all of you perspective I have on what’s going on here. I’ve been investing in life sciences for about three decades. And one of the things that I’ve seen over and over again in my history, investing in so many different drugs and so many therapeutic areas is this view of how many patients get benefit when you have a product. And what has been a common theme in my investment history is, and I can reflect back and look at our investments in TNF inhibitors, in rheumatoid arthritis, Crohn’s, psoriasis, in multiple sclerosis, in many, many other areas. And when I see in those cases that — because it’s super hard the things that are very difficult to treat for more than half of the patients to get benefit.

It just doesn’t happen. So take cancer, for example, it’s actually even lower, right? 20%, 25% of patients responding and we get excited — certainly, we get very excited. So when you see a situation where a meaningful number of patients is doing well, I get very excited. And I think what’s great about what we’re seeing here is exactly that when I go and work with ProKidney at that time, what I was hoping was that about certain patients would respond and that we would actually slow the decline, which at the time, it was somewhere in the 5 points of eGFR per year on treated patients and the SGLT2s showed about 4 points of decline per year went through with SGLT2. And at Royalty Pharma, we actually looked at several of those drugs and actually have a Royalty in one of them, but in Royalty [indiscernible] inhibitors.

So space that we followed closely. But what’s really exciting of what we’re seeing today with REACT is not only a slowdown of the decline in function but a preservation of function, which is really unique and unprecedented. And I think from that perspective, I think what we’re seeing today in a small trial, 80 patients, but it’s a good number of patients is this preservation of function, which is unprecedented. And I’ll stop there and pass it back to you, Bruce.

Dr. Bruce Culleton: Thanks, Pablo. I’d like to just thank everyone for joining today and your insightful questions. Sure, you can tell that I’m excited to lead ProKidney during this next phase of its development. A final thank you to Dr. Bertram for everything that you’ve done, Tim, for the last 20 years to get us to where we are today. And for everyone on the call, I look forward to our future interactions.

Operator: Thank you. This will conclude today’s conference. You may disconnect your lines at this time. We thank you for your participation.