Aurinia Pharmaceuticals Inc. R&D Day
Oct 20, 2017 AM EDT
AUP.TO - Aurinia Pharmaceuticals Inc
Aurinia Pharmaceuticals Inc. R&D Day
Oct 20, 2017 / 12:30PM GMT
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Corporate Participants
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* Bradley J. Dickerson
Aurinia Pharmaceuticals Inc. - General Manager of Americas & Global Commercial Lead
* Celia Economides
Aurinia Pharmaceuticals Inc. - VP of Corporate & Public Affairs
* Michael R. Martin
Aurinia Pharmaceuticals Inc. - Co-Founder and COO
* Neil Solomons
Aurinia Pharmaceuticals Inc. - Chief Medical Officer
* Richard M. Glickman
Aurinia Pharmaceuticals Inc. - Founder, Chairman & CEO
* Robert B. Huizinga
Aurinia Pharmaceuticals Inc. - EVP of Corporate Development
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Conference Call Participants
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* Antonio Eduardo Arce
H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst
* Douglas Miehm
RBC Capital Markets, LLC, Research Division - Analyst
* Elemer Piros
Cantor Fitzgerald & Co., Research Division - Analyst
* Joseph Patrick Schwartz
Leerink Partners LLC, Research Division - MD, Biotechnology
* Vernon Tolentino Bernardino
Seaport Global Securities LLC, Research Division - MD of Equity Research & Equity Research Analyst
* James Tumlin
* Joseph Tauber
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Presentation
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Celia Economides, Aurinia Pharmaceuticals Inc. - VP of Corporate & Public Affairs [1]
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Good morning, everyone. Thanks so much for joining us today. My name is Celia Economides, I'm the Vice President of Corporate and Public Affairs at Aurinia Pharmaceuticals. Just a quick reminder that we will be making forward-looking statements during the course of this presentation. Also, a couple of housekeeping items. This presentation is being webcast live on our website and will be available following the presentation.
With that, I would like to turn it over to our Chairman and CEO, Richard Glickman.
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Richard M. Glickman, Aurinia Pharmaceuticals Inc. - Founder, Chairman & CEO [2]
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Thank you, Celia, and thank you all for coming out this morning. And also, thank you to those that are listening on the webcast for taking the time this morning to listen to what is a very important day for us.
This is really, for us, a milestone day, and it's really a chance to look forward as a business. Over this last year, we've made a lot of progress in different areas, I think, clinically, financially by raising the capital we required, but also in resourcing the organization, growing ourselves into a real company. And now as a consequence of that, we're finally in position to take the next step in terms of our growth. And more specifically, I'm referring to our intent to expect a lot greater value out of our lead compound, voclosporin. So today's presentation is really about our future.
I'm going to start off with a little bit of housekeeping stuff as well. I'll walk you through the agenda, and then I'm going to give you a little bit of a background, the company history, and a bit of issues around -- with respect to vision and how we see ourselves building out.
After I do a short presentation on the history of the company, we're going to have an update on the lupus nephritis program. Then we're going to spend some time talking about the commercial opportunity and plan around this drug.
Now the company is transitioning. Most investors now begin to look like I think this drug is going to work, now tell me what you're going to do with it. So we're spending a bit of time looking at what the commercial strategy looks like for this company and how we would execute it.
People ask a lot about intellectual property now as well, and so we have a very robust platform. But we're going to show you also what else we're doing to expand that platform.
There are going to be some level setting on voclosporin again, what makes it a differentiated calcineurin inhibitor. At the end of the day, it's a differentiation that makes the difference between us being hugely successful or not. And so we really believe in this molecule. And you'll see on the basis of that differentiation why it make sense to apply it to different disease states. And then we get to the fun stuff, what are we going to do to expand our renal franchise. That's a major focal point of today, and we're going to view a great, I think, background. We've some excellent speakers who could understand, skilled, if you're not familiar with some of the new diseases. And then we're going to introduce an entirely new product. It is based on voclosporin, but it is an entirely different product. It's got different intellectual property associated with it, and it's in the area of dry eye. So we don't intend to be an ophthalmology company, but we own this asset, and we believe we can invest in it and eventually we can monetize. So it's a really monetization strategy for that asset. And then we'll have a Q&A.
So in terms of who we are. Headquartered in Victoria, British Columbia, office down here in Fort Washington. Dual-listed company, NASDAQ and Toronto. And as most of you know, founded by the members of the Aspreva Pharmaceutical management team.
So I talked about resourcing, and we've been hiring and building out medical affairs, compliance offices, sales in terms of marketing, really where it needs to get done. This team has a lot of experience in renal diseases, in lupus as well as now has the capacity to be able to look at commercialization and build that commercialization strategy for the company. So -- and also, specifically, expertise in the rare disease area.
So a little bit more about our sort of mission and our vision. I think we've been clear from the beginning, we are really focused on delivering treatments for people living with debilitating diseases, but we have a 5-year vision for this company, and that is we wish to be a global pharmaceutical company. We are going to be focused on [renal] and autoimmunity space, and we want to have a commercialization capacity.
From a core value perspective, we are incredibly patient-centric, and you'll see that on the work we do, and you'll see that when you get out there and talk to the community. And we're focused excessively on quality.
As investors, you give us money, and we spend every dollar of that money. we got to spend it wisely. And we know in this business you get one shot at it, really, and so we really do focus on the quality. We're very passionate about what we do, and we think that what we do needs to be done at the highest degree of integrity. So we're very proud of our company and actually very excited about the next step that we're taking.
A little history on the time line of this business. Many of you never really have been exposed to this. Aspreva, the company that I cofounded back in 2000, was acquired in 2007. It was a company, as mentioned, was developing (inaudible) standard of care. We were acquired by a Swiss company called Galenica Vifor. For about 3 years, they ran and 4 years they ran the entire group. And I got a phone call one day from their CEO as well as my 2 colleagues and cofounders, Mike Martin and Neil Solomons, saying that the lupus legacy that we created there was at risk because they were finished with the clinical program. And when I helped them launch a new organization focused on lupus, and looking at the activities, I knew the people, it would have been just disastrous not to keep that team together.
And so we got together and formulated and created the concept of building Aurinia, and we went out and in-licensed from Isotechnika our first asset. In the process of doing that, we also recognized the complexity around some of the intellectual property and the need to consolidate the IP under a single company. There was just too many players, too many licenses, so we just consolidated it all, merged into Isotechnika and became Aurinia, the public company.
So now in 2017, we're a very different company. We're a late-stage clinical company. We are well-capitalized. All the programs I'm going to present to you today or being presented are funded on our current budget. We did not have to go and raise additional capital right through to the process of submission, as we've always said we would do. We're now focused on building our commercial competencies. It's a gated process. We'll speak to that. And we're focused on pipeline expansion.
In terms of strategic goals, someone could argue some are strategic, some are kind of not, but the reality is these are things we need to do right now.
First and foremost is we are staying focused on the execution of the Phase III clinical program, and we're doing so without compromise, that is our future, that is where the greatest return for you as investors is going to come from in the near term, and so that's moving forward as you see extremely well. We intend to leverage that expertise, and you'll see how in terms of new opportunities, but really maximizing the value of about voclosporin. And what does that mean? It can be done in 2 basic ways for us. One is from an intellectual property perspective. So a lot of work has gone into IT. Furthermore, and more exciting and more interesting to talk about is the new indications and how these new indications really, really affect the company. And so we're going to go into some depth on those new indications, a little bit of market review on the new indications. But mostly, the science and clinical aspects of why it makes sense to go in these new directions. In the long run, we see bringing in additional products into our company as we build out our business.
With that, I'm going to turn it over to Dr. Neil Solomons, our Chief Medical Officer, to talk about our lupus program.
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Neil Solomons, Aurinia Pharmaceuticals Inc. - Chief Medical Officer [3]
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Thank you very much, Richard, and good morning, ladies and gentlemen. So what I'm not going to tell you about this morning is a detailed review of the AURA Phase II lupus nephritis state. You'll be aware of that, you've heard it, and it's been presented at medical conferences and investor conferences. What I am going to tell you is give you some insight into the preparedness of my team in the rolling NDA process. Also an update on where we are with the AURORA Phase III trial.
So just a reminder as to some of the unmet needs in lupus nephritis, early rapid control of disease is crucial in affecting the long-term outcome in lupus nephritis. And we believe that this has been addressed, at least, so far by the AURA-LV data.
In addition, we hear from patients and physicians the problems, and big, big problems, with corticosteroid administration at high doses that are frequently used in lupus nephritis therapy. Again, we believe this low -- the low steroid burden, which we've reported as part of the AURA-LV trial, is going to be critical in addressing that need. And obviously, we have a convenient oral-administrated treatment regimen.
So an NDA, a New Drug Application, what has been happening and why is a rolling NDA so important. This is a big, big chunk of work. We don't just get to the end of the AURORA trial reported and submitted and then get your approval. There's an awful lot of other information that needs to be submitted, and it takes up a lot of time, a lot of research, resource, a lot of efforts and a lot of expertise as well, which we have in our company.
So the top bit of the slide is the nonclinical section. Now this includes the toxicology or the animal work and all the stuff that -- the background work that's been done on this drug. We completed that already. That's already done and will be submitted early next year. Not only submitted, it would be reviewed by the agency as well. So in some ways, it's a modular checkmark here that we will have done that, and that allows the team then to move on, concentrate on other stuff like the [CMC], the important chemistry manufacturing process, which again will be complete and be submitted the year after, the beginning of the year after. We just wait until the end of the AURORA trial to get the final pieces of the CMC . But even in that area, the bulk of it is already done. So that means that we're not going to get any curveballs that's it's going to come back and bite us at the end that may delay launch of this drug.
And then the clinical piece. Even the clinical piece is not as straightforward as people may imagine. It's not just the AURORA -- excuse me, I mean, AURA trial. We have safety data on the left-hand side from all the programs that have been executed on this drug. Over 2,400 patients have been treated with voclosporin, and all this can be integrated into one safety package. And then from the clinical data package, I'm going to come onto, in a little bit more detail on the next slide, the key components here, the AURA trial, but also the ongoing AURORA trial. Like I say, I'm going to be coming onto those in a little bit more detail, so conveniently split into completed studies and ongoing studies.
The completed studies, you'll be largely aware of the AURA trial. To remind you, exhibited the highest ever reported complete remission rate at 48 weeks. 49.4% of patients achieved complete remission after 48 weeks of therapy in this active lupus nephritis trial.
The AURION study looked at early biomarkers and our ability to predict longer-term outcomes as well. And then we have 2 major components of up-and-coming trials. The first is the AURORA trial. I'm going to just remind you of the design of that and then give you an update on that in the next couple of slides.
But also, you'll see we're performing a 2-year extension. We're really excited about this. This is going to be able to give us and then, obviously, treating clinicians a longer-term view on the efficacy and safety and the utility of the combination of voclosporin and MMF and low-dose steroids and the treatment, up to 3 years of treatment in lupus nephritis. And also, we've decided to perform a drug-drug interaction study, looking at MMF and voclosporin.
Now we found in the [transform] program, there was no interaction between MMF and voclosporin, but we're confirming that in the doses that are going to be used in the lupus nephritis study. That's a 2-week study and will be performed at the beginning of next year.
So the design of the ongoing AURORA trial, very, very similar to the AURA trial. This is a study that looks at biopsy-proven lupus nephritis. And subjects get randomized into 1 of 2 arms, either voclosporin 23.7 milligrams twice daily or placebo, with every patient taking background MMF and corticosteroids. We're using exactly the same rapid stereotype at the bottom of the screen there that we used successfully in the AURA-LV trial where subjects are titrated down to a low-level steroid by 16 weeks. Now this is a 52-week study. The primary endpoint is at 52 weeks and is renal response. The definition of renal response in this trial is almost identical to the definition of complete response that we're so successful in the AURA trial at 48 weeks, and then patients rolling to the continuation trial.
I should add at this point, while we're talking about rolling NDAs and preparedness of the team, that the 2-year extension study will not compromise the timing for approval of this drug and of the end submission. This -- we will submit the data as it comes available, and that will supplement our data package when we submit this to the FDA.
Next slide. I'm just going to give you an update on where we are with this important AURORA Phase III trial. So we have 113 sites initiated worldwide: 39 in the U.S., 43 in Europe and rest of -- and Eastern Europe, Asia and Latin American sites are also initiated. But by initiated, we mean are actively recruiting as we speak. Almost all the countries, projected countries have now been initiated with a few left. And we have completed a number of investigator meetings.
Now the reason I tell you about all the investigator meetings that are being completed is that this is an ideal opportunity not just to train investigators and study site staff on the complexities of performing a lupus nephritis clinical study, but actually, part of the meeting and a really crucial part from our perspective is the information sharing of best practice on how to get the right patients into the study at the right time. And we completed all those already. We've been very busy. We got one further meeting that's going to be occurring next month in Brazil.
So the last slide is just a summary of the clinical regulatory time lines, including the rolling NDA preparedness and the potential launch date of this drug.
So on the top line, the drug-drug interaction study will be performed early next year. It's just a 2-week study. And then towards the end of next year, we're still on track to complete the AURORA study recruitment. If we move along 52 weeks from the last patient in, next year, we get the AURORA data readout towards the end of 2019. And in the background, the 2-year extension study will be performed. So patients will be rolling into 2 further years of therapy.
The rolling NDA submission starts early next year with the nonclinical section, the CMC section, the clinical section. And then, finally, the final piece in the jigsaw puzzle is the AURORA data, and then the entire dossier will have been submitted successfully. With a priority review and, obviously, if the results of the AURORA study reproduce the results from the AURA trial, we expect approval towards the very end of 2020 or the beginning of 2021. And then the drug will be ready to be launched.
And to tell you a bit more about the commercial aspects of this drug, I'm going to hand over to Brad Dickerson, our Head of Commercial.
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Bradley J. Dickerson, Aurinia Pharmaceuticals Inc. - General Manager of Americas & Global Commercial Lead [4]
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Well, thank you, Neil, for the introduction. Good morning, everybody. My name is Brad Dickerson, Global Commercial Lead here at Aurinia. And as Richard mentioned, we are building out our commercial competencies to be able to launch this product.
I'm going to spend a little bit of time with you today reiterating the commercial opportunity, but also giving you vision into our commercial strategy and planning going forward. So when I look at the opportunity of our product in lupus nephritis, I see it being an ideal opportunity, and there's a number of reasons why I say that.
First and foremost is limited competition. Obviously, we know today there is nothing approved to treat lupus nephritis. And we believe that there's the potential for us to be the first product to this market. Now obviously, that provides you a lot of advantages as being the first approved treatment in a market. That can really help you have a successful launch.
Secondary, what we're doing and how we're studying this drug is additive to existing therapies versus seeking to displace anything. So physicians who were very used to using certain treatments say, "We're not looking to rock that boat. We're simply adding something on top of that." Additionally, we're looking at an established and defined market. Now I don't mean there's established competitors, but I do mean it's a very organized market. You have patient, have groups organized at a national and regional level. You have a clearly defined patient out there and you have the specialties who are treating them So we're able to clearly see the market we're going after.
We're also targeting with lupus nephritis a very costly disease burden, costly both in terms of dollars to the system as well as costly to a person living with lupus nephritis and their quality of life. And lastly, reimbursement for value. So essentially, there is a benchmark of value being created in the marketplace today by therapies that have little to no data in lupus nephritis. And we believe, with the data that we have, we will have the opportunity to have attractive pricing.
So let's talk about population a little bit in the U.S. We see an estimate of around 200,000 diagnosed patients, 40% of the overall lupus population. If you think globally about these numbers between Europe, between Asia, these numbers can easily double. But the one thing to keep in mind is we're looking at around 40% of the lupus patient population with lupus nephritis. Studies have shown up to 60% of patients with lupus will develop a renal involvement at some point in their journey. Secondary to that, lupus is often a tricky diagnosis to make, even by trained specialists. And in talking to them, in a research, we hear that there's a large percentage that may be undiagnosed, upwards 25 percentage -- 25% of patients. So these are numbers, but they may, in some regards, be conservative.
With lupus nephritis, what you're dealing with is a flaring and remitting disease, one in which specialists are using multiple therapy combinations ultimately to get these patients into remission. Now again, we talked about it earlier, we're being layered on top of some of these therapies. So we're not looking to change the paradigm necessarily. But the key here is to quickly get these patients into remission, now why is that important? Well, over time, if a patient is unable to get into remission, the long-term health consequences are significant. And in many studies, you see that patients who don't respond to therapy, 10 years out in this paper, 87% of those that didn't respond ended up on dialysis.
So in terms of the cost, what we're looking at here is a paper that examine the average cost of lupus nephritis relative to some other well-known autoimmune conditions, and what you see is quite staggering. Lupus nephritis and the cost involved with it, upwards of 3x many of these commonly known ailments. Now there's a couple of things I want to call out here. The papers from 2009 and -- between 2009 and now, (inaudible) cost haven't gone down, but rather up.
Second, I mentioned on an earlier side, you've got patients that may end up in dialysis or need a renal transplant. This is the average cost. If you think about a patient on dialysis, upwards of $85,000 a year for treatment dialysis, and a impact that may need a renal transplant, with that procedure costing upwards of $200,000 to $250,000. So again, this is the average. But if you think about a patient in those conditions, it gets even more desperate.
So the dollars that we saw on the previous slide really can't tell you what a person living with lupus nephritis is going through. Fortunate for us, we were able to hear from patients and what they're going through. Aurinia attended the lupus patient focus drug development meeting with FDA last month, a meeting put on by the 3 largest national lupus patient groups. One in which they brought hundreds of patients together to educate the FDA on what it's like to live with lupus nephritis, what current treatments, what they think of current treatments, what they think of trials and what they're looking for in future treatments. And one of the things we heard loud and clear was an ultimate desire for a better quality of life, which, in some cases, means less steroids. And obviously, as Neil shared with you, we're doing everything we can to drive that steroid dose being used down. Why is this important? These are some of the burdens that we heard from patients at that meeting as it related to steroids. Issues with osteoporosis, fractures, we heard double hip replacement a number of times, glaucoma, cataracts, emotional issues, cardiovascular issue and infections. And I advise everyone here, if you do have a little bit of time to go for yourselves and watch this, watch the proceedings from this meeting, you can go do that at lupuspfdd.org.
So in terms of this being an established and defined market, we can use tried-and-true means to really dig in and understand it. We can dig into medical claims and prescription claims databases to really understand and learn more. So what can this tell you? Well, it can tell you more about who the patients are that are out there, it can tell you who's treating them, it can tell you where they're going to seek their care and what therapies they're on. And what we see here are some things that are common, too. Look at the therapies, again, we're being layered on top of some of the most commonly used therapies. In terms of the condition, well, we know it's a condition that impacts females far more than males. In terms of the specialties that are treating this, very clearly defined between rheumatology and nephrology. And then the facilities that patients are going to, to seek care. We see here the physician office, but you also see the hospital. You see both inpatient hospital claims, outpatient hospital claims. Now remember, the earlier slide where I talked about cost, hospital as a site of care is far more costly than a physician office.
So in terms of competition, we believe we have the potential to be the first product approved in the market. Now there are other products currently in Phase III but these products don't have any existing or pre-existing successful data in lupus nephritis. And even if they do move forward, may not necessarily be competition, but there may be opportunities for synergistic or combination use in treatment. Beyond that, there are other therapies in development, but we don't know if these therapies will be successful, given the challenges that exist in lupus drug development.
In terms of pricing and reimbursement, well, the market is essentially setting benchmarks out there right now. This is just a listing of some of the therapies that are used in lupus nephritis and the prices of those therapies. And again, keep in mind, these therapies have limited to no data in lupus nephritis. So we believe, if we're able to continue an replicate the impressive data we've seen thus far, that provides us an attractive opportunity relative to pricing for the product.
So this is an ideal commercial opportunity, and we are executing against it and executing against our strategy. Right now, we're doing extensive work on continuing to position the product and establish the key differentiator, some of which you're going to hear Rob Huizinga speak to later on. We're working to continue to identify, refine and better validate the targets that are out there, the key traders we need to go talk to and educate. Doing extensive work in terms of pricing assessment, talking to payers, talking to physicians, looking into reimbursement and coverage policy, and most importantly, building relationships in the community.
In terms of building relationships, we are engaging with the key stakeholders out there, the key stakeholders being the people living with lupus nephritis and the physicians. Just last week, here in New York City, Aurinia was recognized by the Lupus Foundation of America for the corporate visionary work for the work we've been doing in lupus and lupus research. In addition to that, we work with all of the large national patient organizations to support their efforts in disease awareness. We've also run our own advisory boards to hear firsthand from patients what their needs are, what their understanding is of their condition. In terms of the physician relationships, we are actively out at all of the major medical conferences that deal with lupus. And some of these ACR, ASM we will be at later this year. But this is important because not only are we there in terms of being able to interact, we are there sharing the data that we generated thus far to educate these folks on what voclosporin is doing.
So in terms of thinking about the commercial organization size and scope, obviously, the biggest piece of that organization is going to be our sales team. And thinking through how many potential sales professionals we would need, well, we have to start to look at the universe and think about, all right, how many rheumatologists and nephrologists are out there. Well, around 14,000 of them. But yes, you have to start asking some questions and doing more work. Well, how many of these actually see and treat lupus nephritis patients? Guess what, not all of them do. So there's a percentage out there, in our research, thus far, around 15% who don't. So of the remaining treaters out there, well, how many patients do they see and take care of? In our research, we're seeing a high concentration of these patients to a relatively lower number of treaters, so somewhere around 80% of patients in 40% of the treaters. Well, this gives you a much more manageable number to use in terms of your planning for a sales organization. In my opinion, 50 to 60 sales professionals, experienced sales professionals, can easily manage this number of calls.
In terms of additional hiring, we're following a gated commercial hiring plan, which is focused around key inflection points for the organization. So as we go forward, the 2 key inflection points will obviously be the readout of our data from Phase III in addition to FDA approval. So upon the readout of data, the ability to bring on a remainder of commercial leadership functions in the U.S. and then data bringing on the sales team very quickly after that. Now just because these are inflection points doesn't mean that you hit the inflection point and then you start all the work to recruit and hire these folks. No. You work well ahead of the inflection points to identify your candidates, to interview them and, when necessary, place offers out there contingent on the inflection points. The key being that you can quickly pivot once the inflection point occurs to build your organization out.
So just in closing, we do have a fantastic opportunity here in terms of sales opportunity. Initial estimates at this point in terms of our global peak sales, potential lupus nephritis yield easily in excess of $1.4 billion. And this number here, keep in mind, is not inclusive of any of the additional programs that you're going to hear more about this morning.
And at this point, I'd like to invite Mike Martin, our Chief Operating Officer, up to go over our current patent portfolio and intellectual property strategy going forward. Mike?
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Michael R. Martin, Aurinia Pharmaceuticals Inc. - Co-Founder and COO [5]
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Thanks, Brad. My name is Mike Martin, and I'm the Chief Operating Officer of Aurinia, and it's actually a pleasant surprise to see so many familiar faces in the room today, some of you have been following us for quite some time.
Nevertheless, one of the responsibilities of being the Chief Operating Officer at Aurinia is to manage the current patent portfolio, and we do that with both internal folks and external folks on a daily basis. And so, today, I'm going to talk to you a little bit about our current patent portfolio. I'm going to touch on some Hatch-Waxman provision step we can -- that we can rely on and we do rely on. And I know that some of you might fall sleep on that, but I think it's important just to review some of those issues. And I'll talk about patent term extensions and regulatory data exclusivity.
So just a review of some basic Hatch-Waxman provisions. Hatch-Waxman was brought in about, I think, 1983, so it's over 30 years old. And basically, what it did, as a reminder, was it enabled innovative -- or branded pharmaceutical companies to have an incentive to bring patents -- or bring innovative products to market, while at the same time, allowing generics to gain -- or incentivize them to gain approvals.
So If I ask you to focus on the right-hand side of this slide, we rely to a certain degree on patent term extensions. And this is basically a quid from the regulators to compensate branded pharmaceutical companies for spending time in clinical development and for regulatory delays. And so you can maximize this patent term extension to 5 years. And given the fact that the initial IND for this product was submitted to the FDA sometime in the decade prior to this one, we believe and we are confident that we will qualify for the maximum 5-year patent term extension.
If you look on the left side of this slide, this is another provision that Congress had given innovative pharmaceutical companies to bring new molecular entities or new chemical entities to market. And in the United States, if you bring one of these entities to market, you automatically get 5 years exclusivity for your product. So at a very minimum, a new chemical entity gets 5 years exclusivity.
Now the European Union has a very, very similar provision. It's called something else. But they call their patent term extensions supplementary protection certificates, and they also have data exclusivity provisions that actually are quite beneficial to branded companies and are twice as long as the U.S. provisions. So I'll review those in more detail in a couple of minutes.
So our portfolio consists of over 180 patents worldwide, and they involve the compound patent for voclosporin, isomeric mixtures, synthesis patents and formulation patents. The bulk of our patents rely in the composition of matter area, specifically under the isomeric mixtures. Now we have a broad suite of patents that covers the high ratio transformulation of voclosporin, and that's why we have an extended patent life from the original compound patents that were filed. And this is important, and Rob is going to get into some details about how important this particular formulation is and how it's performing in the clinic.
Composition of matter patent as a overall summary, we expect coverage to last until April 2028. The FDA has asked us to do a pediatric study in lupus nephritis. We will be executing that study upon launch of this drug, and we're going to comply with that requirement, and that actually gives us an extra 6 months of protection. No matter if it passes or fails in the pediatric study, we will get an extra 6 years exclusivity. So we're looking at a most conservative case with respect to the patents of having exclusively out to sometime in the middle of 2028. And that, I think most of you would agree, is a significant amount of time for investors and particularly the company to make back as investment on this indication.
In Europe, a very similar situation exists with the isomeric patents, again out till mid-2028.
So just to review with you some of the data exclusivity provisions provided in major markets, you'll see here that, in Europe, it's 10 years market exclusivity. And this is from the date of launch. And this is -- the launch dates here on the left are really just illustrative to show you that we're likely not going to launch in Europe the same date as we are in the United States. But once we launch, that's when the data exclusivity provision starts. And so 10 years from launch in Europe, 10 year -- 8 years from launch in Japan. It's slightly different parameters there, but the idea is exactly the same.
And also, in China, there's a 6-year data exclusivity. So there's more work to do in China, and we wouldn't expect to launch near the time in the U.S., a little bit later.
Nevertheless, you can see here that some of these exclusivity provisions actually, particularly in Europe, go beyond the actual patent expiry date. So this is really important and near and dear to my heart because there's been a lot of work over the last 6 months as we reviewed the AURA-LV data.
You guys are familiar with this data, it is one of the largest registration qualities in lupus nephritis study ever done. And in case you didn't know, it had outstanding results. And it's actually the first study in this disease to show a treatment effect.
So we've been mining this data very, very closely. Voclosporin has some very, very unique attributes particularly within this class of calcineurin inhibitors. And so we've learned a lot about how to use this drug, how not to use this drug, and these can be basically translated into utility inventions. And so I can tell you that we've filed a broad suite of use patents with the U.S. -- sorry, broad suite of use patents. These are provisional filings with the U.S. Patent Office. No additional guarantee in the patent world. We will prosecute these to the fullest extent, and we hope that we can get some use patents out of this, out of the data we generate on how to use this drug and hopefully be able to file these patents on the orange book.
On the other side of this slide is the manufacturing patents. Now we've been working with Lonza for an excess of 15 years on this process. The starting material to manufacture voclosporin is cyclosporine. There's a 5-step process here. This is not an easy drug to manufacture. It actually involves one of those steps. It's a high-pressure, high-temperature (inaudible) reaction. There are very, very few facilities in the world that can actually do this, in particular, to a commercial scale.
And there's some unique learnings here that are trade secrets with respect to temperature, with respect to reagent flow rate and the output that you get. So there's a time in a product's life cycle when some of these trade secrets and know-how, we start to consider converting those to patents, and I think we're ready for that. So in the next number of months, we will also be filing some provisional patents on our manufacturing know-how.
I don't want to leave out the capability of Lonza in this process. They are very, very well-known as a company. We can't say enough positive things about them. We actually have a long-term exclusive manufacturing agreement for this product with them that takes us well into the 2030 time frame. So we're excited to be working with them. There are incentives built in for both of us to stay together long term because we think, outside of them, the manufacture of this product will be extremely, extremely difficult.
So to summarize, with respect to our exclusivity positions in major markets, in some cases, the data exclusivity goes beyond 2028 and covers additional exclusivity for the product. In the United States, we've got very solid protection up to 2028. We think that this is a plenty amount of time for the company to realize its return on investment.
I've only outlined the major markets in this slide. There are other markets. For example, Australia, New Zealand, Singapore, Malaysia, Argentina, Brazil, South Africa. All these other countries have additional data exclusivity provisions. We also have our patents in those countries. Remember, I told you there's 180 patents listed or granted for this product. But this is not exclusive of those other countries, I'm just outlining the major markets here. So there are other exclusivity provisions worldwide, but these are the important ones.
And right now, I'll turn it over to Rob to talk to you a little bit about voclosporin and dovetail into the uniqueness of the asset. Thank you.
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Robert B. Huizinga, Aurinia Pharmaceuticals Inc. - EVP of Corporate Development [6]
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Well, good morning, everyone. We've had the opportunity to do some level setting in terms of where we are with the clinical program in lupus nephritis, where we are with our commercial opportunities and where we are with the IP strategy. I like to take a few moments to do some level setting in terms of voclosporin to make sure we understand the unique properties of this drug. I understand that some of you are new to voclosporin story. And this drug, we believe has different characteristics than the other calcineurin inhibitors. And then we're going to talk about what we've learned in lupus nephritis with voclosporin and how that translates into new opportunities with the drug.
So you already heard, voclosporin is a novel calcineurin inhibitor with the number of advantages over the legacy calcineurin inhibitors that offers us some unique therapeutic opportunities. It has a very predictable concentration effect relationship and a type PK and PD, so pharmacokinetic and pharmacodynamic relationship. It has lower rates of diabetes and head-to-head studies in renal transplantation versus tacrolimus. It has improved lipid profile versus cyclosporine. And we also know that calcineurin inhibitors have exhibited efficacy in a number of autoimmune conditions. In other words, their use can be beyond lupus nephritis. So I'm going to impact this in the subsequent slides. firstly, it's a calcineurin inhibitor, but it has a double-carbon bond on the top of amino acid 1. So if you just imagine your head a ring, at the very top of this ring is this double-carbon bond. That binds very completely into the latch region of calcineurin, between calcineurin alpha and calcineurin beta. On your slides, if you looked at the pink ball there in the center, that's actually the latch region of calcineurin. So it binds more completely to calcineurin than cyclosporine does, for example, and then makes it a more potent drug. But it also changes how this drug is metabolized and shifts metabolites away from amino acid 1 to amino acid 9. Now some metabolites that we see are inert, they're just baggage, some metabolites actually are competitive antagonist of calcineurin, and so you have to use more drug. And some of them we think causing the side effects we see clinically with the legacy calcineurin inhibitors. But I want to drive your fact to an important learning in lupus nephritis and in other proteinuric diseases that calcineurin inhibitors have a dual synergistic mechanism of action, right? There's the immunosuppressive action I've just talked about where we see the reduced cytokine activation, specifically in IL-2, interferon gamma and TNF alpha. But there is also a physiologic effect right in the podocyte. Now Dr. James Tumlin is going to expand on the importance of the podocyte in the disease. But suffice it to say, that if we can keep the podocyte, the shape of the podocyte inside the kidney, that's very important to how proteinuria develops in these patients.
So this is the summary slide. I'm going to just unpack here now. It's 4 key benefits of voclosporin, the increased potency, the limited inter- and intra-patient variability, the improved lipid profile and improved glucose profile versus the legacy calcineurin inhibitors. Let's talk about the PK/PD relationship. In its dosing range, this drug has a very linear PK profile. That means that we -- with confidence, knowing that amount of drug that we give to patient understand how much drug is in the patient's blood, in other words, dose to concentration. And that means that we don't have to use therapeutic drug monitoring in diseases like lupus nephritis and that's in contradistinction to the other calcineurin inhibitors. We can also look at the dose and look at percentage of calcineurin inhibition. We'd also look at dose and look at clinical effect, in terms, that impact on renal function, blood pressure, for example. And you could see on the slide here, when we compare the 3 calcineurin inhibitors, that we have a far approved PK and PD relationship. That makes it a much cleaner drug and easier drug to use in the hands of clinicians.
Let's talk about some of the side effects that we've seen exhibited in head-to-head studies. So we can see here on the left-hand side the screen, against cyclosporine, we see there is no impact on cholesterol, and that there is a reduced impact on triglycerides. Now why will we talk about that? So in diseases like lupus nephritis and other proteinuric kidney diseases, we have to look at cardiovascular risk profile. That's very important to us. We have to think not for a 6-month study or a 1-year study or even a 2-year extension study, we have to think about the lifetime potential treatment for these patients. And anything we can do to reduce the cardiovascular risk profile is extremely important to us as treating clinicians and to the patients as well, too.
Let's talk about glucose. Now this is not head-to-head data. I want to be very clear. This is a reported data with tacrolimus 1-year use in rheumatoid arthritis, tacrolimus monotherapy. And you've seen the rates of diabetes are up 21%. Now that number is fairly consistent [like anywhere] Something 20%, 30% of patients develop diabetes after the use of tacrolimus. Using the AURA-LVs, the lupus nephritis data set against voclosporin, 1.49% of patients develop glucose intolerance, which was actually less than that seen in the placebo group. So we can see a distinction between voclosporin and tacrolimus in terms of diabetes, and again, this goes back to the cardiovascular risk profile. Anything we can do to decrease the comorbidities of a patient is a good thing in a lifelong disease. Now there's a good biologic reason for why we see the differences between tacrolimus and voclosporin. And Jim is going to highlight this in more detail. But again, we believe that tacrolimus and voclosporin inhibit calcineurin and prevent NFATc activation through different mechanisms, and that may be why we see the differences in the clinical diabetes picture.
So that's a level setting of voclosporin. And what we've done is we've had to take the learnings from lupus nephritis studies and what we know about voclosporin and then apply them to future proteinuric kidney diseases. And this allows us the opportunity to expand the renal franchise for Aurinia that we're very, very excited about. Because there is a number of renal diseases that are characterized by proteinuria. And as Neil's told you already, voclosporin exhibits a rapid and profound decrease in proteinuria compared to the control arm in the AURA-LV study. Now we know that time is nephrons. The faster we get patients into a low-level proteinuria and the longer we sustain that lower level proteinuria is good for the lifespan in the kidney. We also know through investigator initiative studies and through small randomized studies, that legacy CNIs are effective in reducing proteinuria diseases. And so we believe that voclosporin may exhibit a number of advantages over this legacy CNIs in those diseases, and so we're able to maximize voclosporin's value.
But we need to do this strategically. We're a very small company, and we need to look at each disease specifically and see if it fits within the wheelhouse of Aurinia and whether we have the ability to execute effectively on it. And so we use 4 lenses to look at new indications. I'll just walk us through that; a strategic lens, a clinical lens, a regulatory lens and a commercial lens. So the strategic lens, excuse me, where indications with high disease, morbidity and mortality, where there are limited or no approved treatment options, and treated by the same type of specialty physicians that we're interfacing with now, in other words, rheumatologists or nephrologists. In terms of clinical lens, we're looking for validated, highly objective clinical endpoints. Let's take proteinuria as an example. Proteinuria in the hands of a central lab is dichotomous, you either do redose proteinuria or you do not redose -- reduce, excuse me, proteinuria. And so we're looking for objective endpoints like that. We're also looking for biologic rationale based on the product voclosporin and the disease characteristics. In terms of regulatory pathway, we're looking for indications that have the potential for straightforward or expedited regulatory review program. And in terms of commercial opportunity, we're thinking of, I clearly defined, patient populations with limited or no approved competition, as I've mentioned earlier, and potentially, the ability to strengthen the IP position of voclosporin. But we also have to believe that we've seen with voclosporin to date must hold true in these new indications. In other words, the advantage of a CNI with an improved PK/PD relationship should allow for that decreased inter- and intra-patient variability, in other words, not having to use therapeutic drug monitoring to all these patients. And as well, the decreased drug exposure in these patients should equal less off-target toxicities. So we believe this allows voclosporin to exhibit improvement in adverse events compared to the legacy CNIs.
So we have looked at the number of indications. I want to walk you through this slide here. If you go to the right-hand side of the slide, we've already demonstrated in the AURA-LV study that we saw reductions in SLEDAI scoring, overall marker of lupus activity in that patient population. The problem with lupus, while it's very, very attractive from the commercial opportunity, it'll be a very capital extensive program at this point for us to take a look at and the endpoints are not as crisp, for example, as proteinuria. We have looked at renal diseases like IG nephropathy or even renal transplantation. And there is advantages and disadvantages to all of those either in terms of generic competition or lack of hard endpoints or a lack of regulatory pathway. We've even looked at nonrenal diseases like systemic sclerosis, which are very interesting, but the CRISS scoring, which is a physician's assessment score makes for high variability and low signal. So that's very problematic for us to go into at this point. It doesn't mean that these opportunities are not available to us in the future. It means at this point, we're looking at diseases like FSGS and minimal change disease because they have good outcomes, which I'll talk about in just a minute, and a patient population that's well-defined. So FSGS is Focal Segmental Glomerulosclerosis and MCD is Minimal Change Disease. There may be the same disease on the continuum of a spectrum of proteinuria kidney disease, and we believe there is about 60,000 patients that could be effectively treated with voclosporin.
Now in a recent publication by Sim et. al. in 2016, we know that with better diagnosis comes increased prevalence. That's sort of makes sense. As we get better at biopsying patients that come to the clinic with nephrotic syndrome, and I want to make this point just for a minute, these are patients that come to the physician's office with a clinical symptomology, they have proteinuria, they have decreased albumin, they have peripheral edema, and we do a biopsy and we find out they have FSGS or minimal change disease. And as we continue to get more aggressive and more clear on doing biopsies in these patients, we find that the rates of these diseases continue to decline. Now those numbers are important because that was done in a Kaiser Permanente analysis, about 4 million people, which result in about 2,500 biopsies, for which they found those percentages. That data has been also replicated in a near 1,000 patient registry from NephCure that was recently presented, 2017, or we see about 50% of nephrotic syndrome patients have either FSGS or minimal change disease on biopsy.
When we look at the literature, this is an evolving epidemiology literature. It's sort of like where we were when we started the lupus nephritis studies, as we continue to study diseases, the numbers become tighter. But at present, about 5,400 to 9,500 incident patients are diagnosed with FSGS every year, with an additional 1,000 patients with Minimal Change Disease. The prevalence is somewhere between 80,000 to 100,000 globally, but 40,000 each in the U.S. and the EU and about 50,000 minimal change disease cases as well, too, globally. Now the majority of the minimal change disease cases are seen in children, but there are still a number of adults who come into the clinic with nephrotic syndrome and have minimal change disease. But I want to draw your attention to the fact that both of these are podocytopathies. Now I've talked about the podocyte very, very briefly, and Jim Tumlin is going to impact that in greater detail, but both of these are podocytopathies. In other words, the impact of the podocyte in these diseases is becoming more and more important to us over time as the literature develops.
Now I like to stop there. I'm going to introduce Dr. Jim Tumlin to stand here. He's the Director of the Georgia Nephrology Center for Glomerular Diseases and the Founder of NephroNet. Importantly, Jim is an investigator both in the AURA study and in the AURORA study and has a very rich basic science background in calcineurin inhibition and these diseases. Thanks very much.
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James Tumlin, [7]
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Thanks, Rob. Well, good morning, everybody. I've been charged by Dr. Huizinga and his team to go over a disease that I'm very familiar. We're treating and most nephrologists treat, which is focal segmental glomerulosclerosis, it's a companion disease, which is minimal change. And how the CNIs have evolved in the therapy of this particular disorder. So I am an investigator of the AURA and the AURORA trials. I'm also a consultant with Aurinia Pharmaceuticals.
So let's startup by giving you a real-world case. This is a case I had about a year ago. I was asked to see a young African-American male that was referred to the Georgia Center for Glomerular Diseases because he was put on medical leave by his high school football coach, when at the end of practice, he noticed that his legs were beginning to swell. So at the time he came to see me in my office, he was markedly hypertensive, his blood pressure is a 190 over 115, very common problem. Lungs were clear, regular -- he's actually a very healthy strapping young man except for the fact that he had some lower extremity edema, which I'll show you in the next slide. His laboratory data showed that he was already in acute renal failure. His creatine was 2.1. His hemoglobin -- he was anemic at 9.1. His hematic was 26. I'll point out to the audience that this is going to become very important in a moment, he was profoundly hypoalbunemic due to spilling industrial-strength level of proteinuria at 23,700 milligrams of protein. And his physical exam basically showed this, a moderate amount of edema. And you'll see this very commonly that in patients with incredibly high-grade level of proteinuria may have a small degree of edema to very widespread edema. It's quite variable actually. So a kidney biopsy was performed. And what we demonstrated was this, which is focal segmental glomerulosclerosis, NOS, which is just an acronym by (inaudible) nomenclature called not otherwise specified. And let me just guide you a little bit on renal pathology. So this entire structure here is the glomerulus. This is the single filtering unit in the kidney. We have roughly 2 million of these between both our kidneys. This structure here, this is a normal glomerular capsular lupus where the filtration occurs. This is actually Bowman's capsule here. And if you look here, this is an area of sclerosis where you could see that the capsular lupus has been completely occluded and replaced by collagen and scar tissue. There's also a high degree of mesangial expansion here. This is what's called a hyalinosis area. This is an intense area of fibrosis. And you can also appreciate that the glomerular tuft is now adherent to Bowman's capsule. This is a progressive process. It starts out small, eventually leading to progressive sclerosis and destruction on the glomerulus over time.
So 1 week later, the young man was going to eat -- kind of went against medical advice, went back to basketball practice and was practicing and unfortunately collapsed on the field. He was successfully revived and then transported to a local emergency department where a procedure was performed. And unfortunately, this young man died of a saddle pulmonary embolus. And so one of the complications of this disorder is under conditions of low albumin, you become and develop a hypercoagulable state. And major thrombotic events are very common in this disorder, and some of them unfortunately can be lethal. So here's a take-on point. With the usage of CNIs, it is a very common clinical goal to do anything, to raise that albumin level to where you don't have to put a young athlete on to a blood thinner for the rest of their life.
Okay, now what is a nephrotic syndrome? Rob kind of went over this with you. So it's a compilation of several 5 different clinical criteria. It is protein over 3.5 grams per 24 hours, that's by definition, the level of it. It's associated with hypercholesterolemia, hyperlipidemia. It is shown with lower extremity of swelling, sorry about that. Little help. I apologize. Just kind of went dark. While they're trying to fix this, let me explain a couple other things about regarding the complications in nephrotic syndrome. So again, what happens when you have a high-grade proteinuria, you lose Antithrombin III. Protein C and protein S, these are proteins that are normally not excreted into the urine as a consequence of glomerular pathology. In cases like FSGS, the loss of these anti-coagulation proteins contributes to a hypercoagulable state, which leads to, and sometimes the development of these complications, including pulmonary embolus.
So again, moving forward, so the nephrotic syndrome has multiple pathways that can be caused. FSGS, minimal change, membranous. Don't forget that in fact nephrotic syndrome is also commonly seen in our patients with diabetic nephropathy. Many of these patients would also can spill extreme levels of proteinuria. I personally have had patients that have spilled as much as 15 to 20 grams of protein simply due to diabetes. So the problem is widespread and sort of begs the point that the podocyte becomes a very common and central aspect of the disorder. So thank you for correcting that. So back to where we were. FSGS, as Dr. Huizinga mentioned, is actually on the increase. And interestingly, it is predominantly seen in people of African descent. Why that is, is really unknown. There's been a recent gene called APL1, which is predominant in the African-American community, which also leads to the supposition that in fact contributes to the advanced progressive disease in diabetics in this patient population.
This is a really important point. In contrast to lupus where the latest data seems to indicate that the optimal benefit is to get a patient to complete remission, which is defined as less than 300 milligrams of protein per 24 hours, there is a clear benefit based on Daniel Cattran's older data that if you achieve a partial remission, which is evidenced by this line here, you significantly improve the renal survival compared to those patients that had no response to clinical input. So said another way, anything that you do to reduce the proteinuria in FSGS patient is a benefit to that individual.
Okay. So why is FSGS referred to as a podocytopathy, Rob mentioned this a little bit. And the reason for that is that it's important, to be honest, that FSGS is actually not one disease. It's 10 or 11 different diseases, all of which then eventually come back and gives you the morphology, that I showed you on the slide, focal sclerotic lesions. And the reason for that, is that all these different pathways impinge upon this incredibly important cell in the kidney called the podocyte. The podocyte is the final barrier to proteinuria infiltration within the kidney. And without this function, what happens is there, it leads to progressive sclerosis of the kidneys. Whenever you have any type of injury to the cell, there is a loss of this tent-like shape, which is typical, leading to a rounding up and a loss of what's called the food processes, which is part of this barrier process. I'll show you more of this in a minute.
So our friend the podocyte, unfortunately, is a target of multiple types of injuries, including the drugs that we block with the ACE inhibitors, angiotensin II and aldosterone, effect podocyte viability. Certain cytokines like TGF-beta can cause cell death and apoptosis of these very important cells. Rage receptors also cause injury to it. So these are variety of pathways that can lead to a podocyte damage. And so whatever you do to stabilize podocyte function and viability, irrespective of the primary disorder, is a benefit to the patient.
So what are the consequences of podocyte damage in the [policemen]. The first one is proteinuria. As I mentioned, the normal process of a podocyte is it interdigitates what are called the food processes and the creation of the slit pore that causes the final barrier to proteinuria. So when you lose that function, you in fact see that, in fact, proteinuria actually goes up. And this is very important that Stewart Shankman has shown that there is a threshold. If you lose more than 20% of your podocyte density within the glomerulus, you begin to have this rising level of proteinuria. This is a cartoon to give you an idea of this. When you have podocyte injury, you lose the ability of the podocyte to be attached to the base of the membrane. So normally, this is the blood component. Protein would come through the endothelial fenestrations through the base of membrane and it will allow to have a direct conduit to the urinary space because of the loss of these podocytes interdigitation. It's important for the audience to know that a unique aspect of the CNIs is that by blocking calcineurin activity, you stabilize this very important protein called synaptopodin. Synaptopodin is central to formation of this shape and integrity of the podocyte as well as its ability to bind to the alpha 3 integrins and remain attached to the basin membrane. In the absence of that function, podocytes literally fall off the glomerulus and are excreted into the urine, allowing for contributing to proteinuria. And also, they contribute to focal sclerotic lesions. Let me show you this. This is a cartoon again. Here is a normal glomerulus. Here's the podocyte sitting on the outside of the capillary loops. And as you lose podocytes, they lose density, you begin to develop adhesions and sclerotic attachment of the Bowman's space to Bowman's capsule. As you move forward in time, you have further loss of podocytes, there is hypertrophy on the opposite side, the sclerosis increases. And when you drop below a magic level of 40% podocyte density, you begin to develop a progressive and irreversible form of sclerosis to the glomerulus.
This is an actual set of slides from Warram's paper. This is a seminal study where they looked at the ability to deplete podocytes by diphtheria toxin. These are human glomeruli that are actually embedded into an animal. And then what you actually see here, these blue areas of the podocytes, the red is a normal glomerulus. The pink is areas of sclerosis. When podocyte drops to a level of 25%, you begin to see the development of sclerosis. When you get to 55%, you can see that basically half of the glomerulus is now consumed by fibrotic material. And when you had near complete podocyte depletion, the podocyte base, the glomerulus becomes effectively nonfunctional.
And again, this is Stewart Shankman's concept, that if you are between 20% reduction in podocyte density, there is a chance that the glomerulus can't regenerate. Now whilst the audience will understand, this is in direct contradistinction which has been the paradigm in nephrology for the past 40 years, that in fact there was no chance for regeneration in the glomerulus once an injury was started. That may not be true. It's still under investigation, but very encouraging. When you see a value between 21% and 40%, you begin to see the formation of these sclerotic lesions. And above 40% depletion there may be a rubicon, if you will, where glomerular repair is no longer possible.
So what's the current standard of care for treatment of FSGS in nephrotic syndrome? So let's talk about the glucocorticoids and the KDIGO recommendations. So currently, the KDIGO recommendations are that a person receives steroids at 1 mg per kg, roughly 60 to 80 milligrams of prednisone per day for a total of 16 weeks to monitor for a -- for complete or partial remission. If you've achieved that, you slowly taper the steroids over 6 months, and then wait for a poss remission. I'll tell you this is my personal experience. I quit using steroids in FSGS when I literally had a young woman in my practice, at Emory at that time, who gained literally 100 pounds. She developed avascular necrosis of both hips requiring a treatment with hip replacements, also developed steroid-induced diabetes. And I swore I'd never do it again. I actually find that the steroid complications are way, way in advance of the most difficult portion of it. And myself and many other nephrologists around the country will typically start with a CNI as primary therapy.
Now this is a data from Steve Korbet, Sim et. al. paper, where he looked at steroid responsiveness in patients with the primary FSGS. And I wish to emphasize that this is not 1 trial. This is a compilation of 4 different studies that listed and had similar outcomes. Roughly 50% to 60% complete or partial response rate after 16 weeks of therapy. Ironically, this has not been that well studied. Claudio Ponticelli did a study, where he did a prospective trial of patients and found a complete or partial response rate, again, in the [VD50] rate. The recurrence rate of the disease was over 1/3 when you discontinue the prednisone. But here's a clinical point that's really quite true to my experience. When you went to retreat those patients who had a remission with steroids again, the majority of the patients did not respond. So you really get one shot at it with steroids in general.
Now what about the CNIs? Okay, so this is the Gregory paper. This is a study in pediatric nephrology with nephrotic syndrome, and the CNIs are highly effective. This has been known for a long period of time. About 85% of children had a complete response rate. Partial response rate was 83%. The time to response was just about 2 months. But here's the problem and this is what's held back CNIs for a long period of time is that even at 14 months, 17% of those children developed signs of CNI toxicity in the kidney. So if it were possible to develop a drug that was a CNI inhibitor without the nephrotoxicity, it would be a major advance in the treatment of these diseases.
What's the difference between cyclosporine and tacrolimus in treating nephrotic syndrome? Not much. The 2 drugs are actually very comparable in their response rate. Again, 70% response rate, this is in adult, at 6 months, highly effective. The problem is, when they become dependent on the drug, can you leave the drug on for a long period of time? If you could reduce that toxicity profile, again, that'd be a win.
All right. So in summary of this portion of the talk, FSGS and minimal change are common findings in the biopsy. FSGS is now the predominant form of glomerular disease with nephrotic syndrome in the U.S. They're both involved in podocyte damage and podocytopathies. Rapid control of proteinuria is key, and early response -- partial response leads to a benefit for the patient.
Okay. What about the side effects? Where do I begin? I already gave you an idea of this. Corticosteroids are really difficult drugs to work with. Steroid-induced diabetes is very common. Avascular necrosis, this is the one that when oftentimes, I get a patient to remission, what I deal with every day is that patient with bone disorders as a consequence of their steroid therapy. Cataract. Steroid-induced myopathy is not discussed enough. I see this quite commonly where patients literally have inability to walk because of a proximal myopathy. CNIs have their own toxicity profile. They can be acute and chronic issues. Interstitial fibrosis of the kidney has been what has held this group of drugs back. Peripheral neuropathy and as Dr. Huizinga mentioned insulin-dependent mellitus. Cyclophosphamide is still a mainstay therapy for many of us, but of course, it is fraught with complications, bone marrow failure and fungal and viral sepsis. Rituximab, not really a benefit in the FSGS world, but certainly beneficial in other areas.
Okay. So what is the clinical complications of the calcineurin inhibitors? So we mentioned that cyclosporine and tacrolimus both could cause a dose-dependent reduction in GFR, a rise in your serum creatinine that could cause a dose-dependent elevation of potassium, a dose-dependent reduction in magnesium. And long-term again, I've intimated this several times, you can get what is called stripe fibrosis. So this is a fibrotic component that is brought about to the drug, which has a very characteristic feature when on the biopsies and is quite commonly seen in most patients on CNIs.
Insulin-dependent diabetes mellitus. So this is some Flavio Vincenti's study in a large transparent trial with FSGS comparing cyclosporine to tacrolimus. Cyclosporine had about 26% incidence insulin-dependent diabetes. Tacrolimus had 33%. Rob mentioned some of the mechanisms of that involving NFATc. And it does appear that different CNIs had different responses on this. The data that showed a better glycemic profile in the lupus AURA trial with voclosporin is very encouraging. I'm going to show you some other aspects of that study.
So what are some of the clinical benefits of the calcineurin inhibitors in the kidney? Stabilizing the podocyte, I mentioned this before. This is the very same cartoon. So now this is ostensibly when you've corrected the problem. So if you've corrected the cell cytoskeletal problem by allowing phosphorylation and stabilization of synaptophysin, you restore its normal shape and morphology. You restore the slip portion pore between adjacent cells, and you do this by voclosporin binding to and blocking calcineurin's deep phosphorylation of this very important protein. Moreover, it allows for stabilization of binding to the base of membrane and blocks protein from being excreted between the cells.
How about this data that shows that, in fact, this process is real? So this is a very interesting data that's published by Peter Mandell, so where he took a (inaudible) stained them and forced synaptophysin with a red staining dye. And then for calcineurin in the same animal, he stained with a green dye, you -- by photomicroscopy, he merged the 2 images, the red plus the green gives you the yellow. And what this does tells you is that the calcineurin colocalizes with the synaptophysin and is consistent with the data that is a substrate for that very important enzyme. If we do it and cultured cells, you get exactly the same thing.
So this is a diagram that demonstrates this that when synaptophysin is in a phosphorylated state, it is bound to a docking protein called 1433. When bound to 1433, it is not degraded by cathepsin. So this means that if you block the dephosphorylation of that protein via voclosporin, you stabilize the phosphorylation stage, you reduce the degradation of synaptophysin and maintain the cell cytostructure, very important concept to obtain.
Now in transplant, again, this is human beta islet cells transplanted into a mouse. This is low-power microscopy, high-power microscopy. Here's the animals, the human beta data islet cells in the animals staining faint red. When the animals are treated long-term with tacrolimus, the beta islet cells are actually destroyed. And giving you this idea, there's a direct beta islet cell toxicity to certain types of voclosporin. The data showing a normalization of glycemic control in the oral trial is extremely encouraging for a clinician.
This is something again that was mentioned by Rob that the pathway that is being exploited -- is the differences between segueing between NFATc. These are important transcription factors that regulate a variety of factors, including IL-2 production but also insulin production and insulin secretion.
Now this is -- I'm going to hope that the audience guess, there is evidence that the calcineurin inhibitors can block podocytes' detachment. I'm just going to -- this is a complicated diagram, but calcineurin has a variety of different effects. The same kind of motif of docking the 1433 is also seen with a very important protein -- proapoptotic protein called BAD. When BAD is phosphorylated, it docks the 1433 and does not lead to mitochondrial leakage, cytokine release and subsequent apoptosis. If you block calcineurin's dephosphorylation of BAD, you maintain its docking to 1433. Additionally, calcineurin also, in conjunction with protein kinase, it regulates the dynamic protein like 1, which causes the fusion of mitochondria and subsequent cascade toward apoptosis. So what this says, if you have the calcineurin blockade, you have the potential to truly stabilize apoptosis -- podocyte viability.
So voclosporin benefits. Increased potency versus cyclosporine, lower dosing regimens, limited inter and intrapatient variability in drug dosaging, better lipid profile and better glucose profile. And what I would also submit is that, in fact, we're hopeful that it has other potential benefits, and let me show you some of that. So number of years ago, my lab in Emory, we looked at the effect of the calcineurin inhibitors on sodium-potassium-ATPs. And remember your basic biology, without sodium pump activity, you cannot excrete potassium. So if you block sodium pump activity, hyperkalemia is a common complication of that disorder. And so what we found was, in fact, that the terminal step in the kidney, the collecting duct, tacrolimus has potently inhibited the sodium pump activity, and in part explains the hyperkalemia that is so commonly seen with cyclosporine and tacrolimus. Now the good news is in the recent oral trial, voclosporin did not demonstrate hyperkalemia. When this data was first shown to me, pretty exciting, and it may, in fact, indicate that there's a selective advantage to this particular CNI. Moreover, it did not cause a reduction in GFR over the 48 weeks that it was seen. That is encouraging. And it also had a favorable hypertension profile.
So in summary, nephrotic syndrome remains a very important unmet need. Early proteinuria reduction is the key for clinicians. If we achieve a partial remission, we know that we've at least in part slowed the progression of that patient toward dialysis. Integrity of the podocyte is central to this process. We suggest that guideline exists and there's no approved therapy for FSGS and minimal change. Therapies used in clinical practice aim to elicit a response for patients, but minimize the side effects. Based on these difference in characteristics, voclosporin may have the potential to increase this unmet need.
Thank you so much for allowing me to speak with you.
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Robert B. Huizinga, Aurinia Pharmaceuticals Inc. - EVP of Corporate Development [8]
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Okay, so that was a master class on podocyte biology. There will be a test afterwards. In order to leave the room, you have to pass the exam. All right. You can see why we're so excited about nephrotic syndrome and the impact of the podocyte in that disease. So I want to remind you of something very briefly that I told you earlier that voclosporin acts rapidly in proteinuria, kidney disease based on the AURA LV data. So whenever patients have reduction in proteinuria quickly and they're able to see that in proteinuria -- and I'm just showing you the 24-week data. You've already seen the 48-week data. Why am I showing you the 24-week data? Because we believe that an adequate study needs to be done in the Phase II setting for -- excuse me, for focal segmental glomerulosclerosis, and then we'll change these with the 24-week study. So our clinical strategy time line is to execute a proof-of-concept study, while conducting the background regulatory interactions and preparing for global Phase III study. That means in the first half of next year, we're submitting our IND, and we're initiating that study and completing through the course of 2018. That allows us to talk to regulators in the background, get consensus and alignment on clinical endpoints and expedite potential pathways and then initiate that global Phase III program.
So what basically could that study look like in nephrotic syndrome? We're talking about biopsy-proven FSGS or minimal change disease. With proteinuria greater than or equal to 3 milligrams per milligram or basically 3 grams in 24 hours, these are patients with nephrotic syndrome. But importantly, and in contradistinction to the other programs you've heard about, this is a steroid-free program. Now you've heard a lot from Brad and from Jim Tumlin about the impact of steroids on these patients. And certainly, in the clinic, we've heard it for many, many years, how deleterious steroids are in these patients. This is a steroid-free program. And the primary outcome measure, again going back to Jim's talk, is either patients achieving a complete remission or partial remission at that 6-month endpoint. So complete remission is defined as a UPCR of less than or equal to 0.5 at 6 months, or a partial remission is a 50% reduction in UCPR in the patient's own baseline. And that's that learning that even a partial remission in this disease makes a difference to the podocytes into the renal function long term.
So FSGS in minimal change disease do meet those 4 lenses I talked about at the beginning of my talk.
It means that strategic lens is an indication of high disease morbidity and mortality with no approved options at this point and treated by nephrologists, the same type of nephrologists we're seeing lupus nephritis patients are also interested in, in other proteinuria kidney diseases.
It has a validated, highly objective endpoint, proteinuria, at 24 weeks. It has biologic rational based on voclosporin in the disease characteristics. It has the potential for a straightforward and expedited regulatory review pathway and has a clearly defined patient population with limited approval -- it has no approval at this point, and the ability to strengthen the IP of voclosporin.
Whoops, there we go. So when we project this on top of where we are with lupus nephritis, we've said that we expect lupus nephritis to be complete with its program somewhere around 2020. We believe that with the program that we are initiating that we could have nephrotic syndrome (inaudible) kind of 24 months after that.
There are other compounds in development in FSGS or minimal change disease in some of the different aspects of it. We don't see these programs as a threat to our programs. Some of these compounds may be used synergistically with voclosporin later on. And so that allows us an opportunity to really look at patients and, again, in a steroid-free environment, which is so important to the patients.
So we have a strong biologic rationale given the similar endpoint to lupus nephritis. We have this dual-complementary mechanism of action. Remember, we have an immunosuppressive mechanism of action and a podocyte impact as well, too. We believe we're differentiated in key safety aspects versus the legacy CNIs at our targeted voclosporin doses.
It's a highly clinically relevant development approach with a focus on efficacy, again, with no steroids. And lastly, we have the internal infrastructure and the expertise to execute this program successfully. We have a strong background in renal disease for many of us. And it's the opportunity to expand the renal franchise.
That's a lot of information at this point. I'm actually going to now change gears and talk about a compound we have already under our wing at Aurinia, voclosporin ophthalmic solution. It's a unique aqueous, nanomicellar solution of voclosporin 0.2%. And it's used in the treatment of dry eye syndrome, which impacts over 20 million patients in the U.S. We already have some animal safety toxicology studies, and we already have a single Phase I human study I human study completed with IP to 2031.
Now I'm going to stop there and call up the ocular specialist, Dr. Joe Tauber, from the Tauber Eye Center in Kansas City, Missouri. He also has experience with voclosporin and a deep, deep science background in this disease. So Joe, I'll turn it over to you.
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Joseph Tauber, [9]
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Well, thank you. Now that you've all become specialists in the renal disease, I truly feel like the odd duck in the room being an ophthalmologist. You're probably wondering why I'm here. I've -- sorry, I'll share some slides just with my background in a moment. I have -- I do a lot of work with a lot of companies in the ophthalmic space, none of which interact with exactly what we're doing here.
My mother is convinced that I fit eyeglasses for a living. I'm actually fellowship-trained in corneal disease and ocular immunology and deal with the most severe ocular diseases that exists. Things that melt, things that fall apart and bad things. I've got a long background in clinical trials, I've done over 100 multicenter studies, and I've been involved in essentially every important dry eye study that has occurred.
In clinical practice, I've got something close to 5,000 dry eye patients in my practice. And I'm referred very bad things to take care of, so that's why I'm here. My task is really to convince you that there's a reason you should be paying attention to this therapeutic area when you're looking at a company with a primary focus in renal disease, and I think there are some very good reasons.
So I'm going to speak about dry eye, which may seem to you as an insignificant, trivial, nondestructive disease, and it's certainly not that. I try to explain things in very simple ways to my patients. One thing I say is, you can see through a smooth body of water easily. You can see the fish at the bottom, but if the surface is rough, you can't see anything through it. That's really quite true.
The primary, as we call it, refracting surface on the eye, the surface that bends light is the tear film. And if you have a poor quality tear film, you can't see. There are actually quite a few other things that happened when someone has severe dry eye.
We've gone through many, many definitions of exactly what dry eye is. It's quite technical as it turns out. It's a multifactorial disease. I'll just draw your attention to the highlighted phrases. Symptoms are required to diagnose dry eye, but it's a problem with tear film instability, a change in the osmolarity of the tear film and involves inflammation on the ocular surface. And now that I've said inflammation, you have a sense of why we're talking about this on a day like this.
Showing a picture of Jennifer Aniston is always good. There's a very large marketing campaign that's going on, raising everyone's awareness about the significance of dry eye and about the prevalence of dry eye. And I show this just so you have a sense of what this disease means to an average person who suffers with this problem. It is truly more than a nuisance problem.
Patients complain of the symptoms listed there: blurred vision; eye strain; contact lens intolerance; a variety of phrased discomforts, burning, stinging, scratchy, gritty, discharge, itching. They have trouble working. They are making multiple visits to their eye doctors. They are dependent on eyedrops to get through every day.
And utility analyses have been done. And these are studies that ask patients to compare how much of their life they would be willing to sacrifice to be rid of a clinical problem. And in studies like that, moderate dry eye is graded as just as impacting as moderate angina.
So this is truly not a trivial problem. It's also a very prevalent problem. Dry eye accounts for 40% of visits to eye practitioners. I've listed some of the more serious categories that we see. Sjogren's syndrome is an autoimmune condition. The numbers are there for how many patients have this.
Dry eye affects all perimenopausal women. It also affects men as they get older. Patients who have refractive surgeries, including LASIC. You see the magnitude of the numbers we're speaking about. 15% of women over age 65, a little over 7% of men, 1 in every 10 dry eye patients has this autoimmune variant called Sjogren's syndrome; over 1 million rheumatoid arthritis patients; 1/3 of patients with diabetes suffer with dry eye.
And this is not a U.S. problem only. This is a global problem. We represent less than 6% of the dry eye in the world. So if you have a product that effectively addresses dry eye, you're going to do well in the marketplace.
Over 26 million in the U.S. suffer with this, 7 million classified as moderate to severe. In terms of market magnitude, over $3 billion of sales of products in the dry eye space. At this point, it's about $1.6 billion for RESTASIS, owned by Allergan. The lubricant market is about $0.5 billion, and this is a growing market, perhaps as much as 20% to 25% per year.
It's growing for companies that market pharmaceutical products. It's also growing for practitioners who do a variety of procedures in the office. And there are lots of good reasons why doctors care about diseases, including that we'd like to make our patients better, but there are some who really focus on, "Well, what is this doing for me?"
And if you want a sense of what this is doing for doctors, the numbers add up rather quickly. You can just go right to the bottom. If you've got only 500 dry eye patients in your practice and you have a normal career, you're looking at over $2 million of revenue. I have 4,500 dry eye patients in my practice, so I care a lot about this disease, not because of the dollars, although I don't mind. I like making people better, and I think we do a very good job at that.
This is truly a financial burden to patients. For moderate to severe -- so I'm not speaking about the mild dry eye patient, this is what a patient may be spending to deal with everything they have to do in a year. And these are relatively modest estimates. Doctor visits can get more expensive than this.
Mechanistically, let me try to explain why we're talking about dry eye in a company that's dealing with an immunologically active product. If I say dry eye as an immune disease, you say, "What are you talking about? You get older, your gland that makes tears kind of dries up or wears out, and you produce less tears. And we actually believed that for quite a few decades.
It's 10 or 15 years ago we started to understand that after the initiation of something in the environment or it could be an inflammatory stimulus, it could be being in a dry environment, there's upregulation of the immune system, activated T cells traffic to the regional lymph node -- sorry, where further activation goes on, those activated cells home back to the target tissue, which, in this case, is the ocular surface and initiate damage, both direct toxicity interferes with the nerve communication from the ocular surface to the CNS and you create a problem in what we call the functional loop between the ocular surface and the central nervous system. We have both reduced production of tears and an abnormal quality of tears.
Shifting for a moment to what we do about this, just in a very 5,000-feet overview. As we say to patients, we can supplement the tears that your body's not making. They can stimulate you to make more tears. We can do things to help you keep tears around longer. None of these, by the way, address the process of inflammation.
Cyclosporine, $1.6 billion-product in the dry eye space, works by addressing each of the aspects in the so-called functional loop. It does reduce inflammation by mechanisms you've been hearing about and can learn much more about in the lacrimal gland and on the ocular surface. It does, what I mentioned before, restores neural communication from the ocular surface back to the CNS and a number of very important aspects have been reported as well.
Cyclosporine prevents T-cell activation; reverses the process we call, apoptosis; program cell death, by which active immunologic cells which normally die very quickly are essentially immortalized, and they stay around to make damage in a much more prolonged fashion. And the healthy cells on the ocular surface die much faster.
In twice-a-day use, and this is the key point they've got us pass the FDA, 15% of patients receiving cyclosporine increased their Schirmer production by 10 millimeters. The Schirmer test is the paper strip measurement of how much water is produced by the lacrimal gland. Improvement by 10 millimeters is essentially restoration to normality. So that's a very big clinical effect.
15% achieved that, essentially cured. 59% have a clinically significant improvement of 4 millimeters. So please don't think that it's only 15% of patients that get the clinical benefit. It's not just the tear production that improves, it's the things we can measure on the surface: corneal staining; goblet cells which produce mucin, another important component of the tears; goblet cell density increases by 193% with cyclosporine use.
But in clinical practice, RESTASIS is the only product we have right now. 15% of patients really cannot tolerate this because of the burning they have. There is another product on the market called lifitegrast, the brand name is Xiidra. It's an LFA-1 blocker and interferes with T-cell binding with receptors that allow the T-cell to home in to the target tissue.
So lifitegrast binds 2 LFA-1 that prevents binding of LFA-1 to ICAM-1, another adhesion molecule. This interaction is what allows the T-cell to go ahead and produce its mischief. So a normally -- in the normal state, a T-cell just rolls through blood vessels and also lymphatics. It's adhesion that allows the T-cell to both get through the wall of that vessel, go into target tissue and release the cytokines that cause a problem. So blocking that initial interaction between the 2 receptors is how that other product works.
So we have 2 approved pharmaceuticals in dry eye. You think we've got this under control, but not at all. Cure is extraordinarily rare. At the moment, anyone using these medicines is on them for life. The degree of symptomatic improvement, everyone would describe is essentially inadequate. In fact, the best we can say with only 1 of the 2 products on the market, 20% of patients will say, this is incredible, this is the best I've ever felt, which leaves another 80%.
The overall space is growing because of the aging population. Menopause seems to be unavoidable as far as we can tell. Other treatments we use in dry eye, including prostaglandin as prostaglandin is for glaucoma, and this is the dominant mode of therapy in glaucoma, are pro-inflammatory and, likely, worsen dry eye.
And as society continues, everyone wants everything right now. Patients don't want to be a little bit better, they want to be a lot better and they want it immediately. Cataract surgery has had an amazing change in the past decades. You know you can now pay out of pocket to get the better lens implants. And when people pay out of pocket, they expect perfection. What seems to limit the results after cataract surgery is their dry eye. So there's a far greater demand even from surgeons who could care less about dry eye to deliver good results by addressing dry eye.
So I mentioned we've got 2 products on the market. Each of them struggles with 15% intolerance. Xiidra considerably more severe than RESTASIS. Both are costly. There's a different onset of benefit. RESTASIS, the cyclosporine product, takes from 2 to 4 and sometimes even up to 6 months to deliver an effect while lifitegrast seems to be faster. I mentioned the wow response gets about 20% of patients treated with lifitegrast and 0% of patients treated with RESTASIS.
RESTASIS evidence, the way that got approved, is by improvement in Schirmer test result. It was never shown to improve patient symptoms. It was never shown to improve patient signs. Same is not true for lifitegrast where improvement in symptoms was impressive and rather weak evidence of improvement in clinical signs.
The vials are small sized. Patients can extend RESTASIS several days. Xiidra has now managed to trim that down, so you get 1 day per vial.
I'll include just a little bit more, so you understand the kind of metrics we look at as a drug tries to get approved in the dry eye space. Approval in all regulatory trials is very, very complex. I'd like to think of complex things as not very complex. And if you try to make a patient better, well, that's how you're going to get a winning drug.
So it's really all about symptoms. No patient has ever come in and said, "Thank you for reducing my corneal staining. This is wonderful." So if you don't get symptomatic improvement, you're not going anywhere. FDA wants more than that, of course. The classic is one symptom, one sign.
We produced in 2 studies, and we've had 1 drug approved in 13 years until Xiidra 1 year ago with those criteria. So the FDA has loosened a little bit. They'll now -- they don't require symptom and the sign in the same study. You can have 2 studies that show symptom, 2 studies that show sign. You can show this return to normality, and that's actually what was used in the Inspire diquafosol trials. If you can show things like, we call it, the responder rate, having Schirmer increase of 10 millimeters or more, you may not have to show anything else.
So the path to regulatory approval has really simplified just in the past several years. We score symptoms in many ways. These are details you don't need to know, but there are several instruments we use, categorical scales because patients don't describe the same symptom in the same way.
This is one of the larger problems in dry eye. You see this all over -- I'll throw just an anecdote, my own father-in-law has a different neurologic condition, and I asked him, "Do you have any pain?" He says, "No, I don't have any pain, but I have terrible discomfort." And I really struggle to understand what it is he's trying to tell me.
And this is what we see in dry eye, where some, "No, I don't have any dryness. I have terrible grittiness. No, it's burning." Well, if you're the company trying to build the trial, what symptom do you want to query, and that has stopped many companies from accomplishing this.
We look at global scores called visual analog scales. We ask patients just to grade what they're experiencing on a 0 to 100 regardless of choosing a word. That symptom on signs we look at the effect of certain vital dyes, liquids that we've put on the surface of the eye. If the eye is healthy, it has a barrier effect. It keeps these dyes from doing anything. If the cells on the surface are not healthy, the dye is soaked in. We see little dots, we count the dots, we score the dots. And that's a metric that's most commonly used in dry eye.
I mentioned the Schirmer test. We take a little piece of paper and tuck it over the edge of the eyelid and allow it to soak up tears. It's a five-minute test, and we measure tear production. It's not the best test. 65% sensitive and specific, lots of methodological variation.
And even though the field of ophthalmology has been around a long time, clinical trials have really not standardized things to the level that they need to reach as best evidenced by the fact that we have 2 drugs approved in the space of dry eye.
This is the graveyard of other companies that have tried and failed to get things approved. As I mentioned, you need symptom and a sign. And the only place you see that is cyclosporine or RESTASIS on the very top -- sorry about the typo, I just noticed -- and lifitegrast or Xiidra at the very bottom, which did show improvement in both symptoms and signs. Symptoms, I've shown as positive on RESTASIS, it was not significantly significant and was not considered by the FDA.
So maybe I've made dry eye sound simple to you. It's not the least bit simple. Besides tear production and all the consequences that happened from that, right next door to the cornea is the eyelid. And there are eyelid-derived diseases called meibomitis, blepharitis, that produce dry eye complaints, 100% indistinguishable from dry eye, and those are treated with completely different approaches. So separating patients in the clinical trial has been a gigantic problem and is likely another reason why trials have not been terribly successful.
So in this horrible marketplace I've described, which happens to include many millions of patients, CNIs are not going anywhere. CNIs are a critical product in what we can do for dry eye. Because some of the things that have been demonstrated very definitively for CNIs have never been shown for lifitegrast or anything else.
In particular, inhibition of T-cell activation, the anti-apoptotic effect that I mentioned and the 190% goblet cell regrowth regeneration. Those are big deals, and that makes ophthalmologists rather dogmatic and even religious about keeping patients on these products.
I tell my patients, "Even if this doesn't make you feel better, you need to be on it. This is helping your tissue." So how could we make these better? 15% intolerance is still a bad number. We need better efficacy with regard to making patients feel better and also what we're seeing on the purpose -- on the surface. And the amazing effect, what we call the wow effect in ophthalmology, 20% is nice, better would be better, and better compliance is better. So if we can get drugs down to once-a-day, twice-a-day as opposed to 3, 4 with the topical lubricant patients are using them 4 to 6x a day, by the way.
So should you have an immune active product that's effective in dry eye? I throw this just as even more forward thinking. This is not the only inflammation-based disease that we have in ophthalmology. And I think there's potential to look at many other conditions that are also rather sizable marketplaces just from the patient point of view.
So some of what I've told you is right. Some of this, I'm not positive which one, and I apologize if I have misdirected you from the renal disease you want to pay attention to. So thank you.
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Michael R. Martin, Aurinia Pharmaceuticals Inc. - Co-Founder and COO [10]
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Thank you very much, Dr. Tauber. I appreciate you coming from Kansas City and teaching us about dry eye. Something certainly new to some of the people in the audience, who's focused on autoimmune in renal disease.
And I just wanted to introduce you to voclosporin ophthalmic solution I'll call it VOS. And this is a project that's relatively near and dear to my heart. Early on when we kind of resecured the rights to this asset, I've been excited about it and wanted to move it forward, but the company has had a very much a singular-minded focus about executing lupus nephritis project to a high level, to high standards. And I think that's definitely the right thing to do, and we've shown that results, positive results, can come from that.
And so over the last number of years, I'll also mention, too, that I've been involved in raising several million dollars for the company to move these projects forward and kind of 3 questions come up from people that are handing their money over is, "How much money do you want? How derisked is it? And when do I get my money back?"
And so I'd like you to keep this in mind throughout this presentation because for a very modest investment in this asset, which is really outside the scope of our existence -- we don't claim to be an ophthalmology company or want to be an ophthalmology company. We have hired and engaged global experts in this area, including Dr. Tauber, to help us through this. But we think for a very modest investment, we can create some data that will really substantially increase the value of this asset, and then after that, we can contemplate a monetization strategy, which could come at a very critical time in the company.
So let me just get into the business case here. Dr. Tauber mentioned there's over 20 million patient suffering from this disease worldwide. There is substantial opportunity for improvements in this therapeutic area to treatment of these patients. RESTASIS was approved in 2002. These [cells] are approaching $2 billion annually, the last moving annually total was $1.7 billion. The growth is substantial.
And a couple of years ago, we had contemplated this project at the board level and everyone was really concerned about the Xiidra launch and the [ra-ra] about the Xiidra, Shire's product for dry eye syndrome. And everyone was very, very hesitant about what this product is going to do to the marketplace and what it's going to do to RESTASIS. And RESTASIS is going to lose share, and this product is going to go away.
But what we really have seen since this drug launched is that the RESTASIS sales volume has actually increased, and it's increased substantially. About 15% to 20%, it's increased. This is not all price increases that Allergan has been taking, about 1/2 of that growth is basically just due to market growth.
Yes, they're losing market share. But the whole market is expanding. The pie is getting much, much bigger. When you look at RESTASIS out there today, we see, again, excellent sales progression, even better sales progression since the Xiidra launch. There's over 9 million prescriptions that have been written last year for RESTASIS.
As Dr. Tauber mentioned, it's only approved for a sign and that's basically increasing tear production in patients suffering from dry eye. The onset of action as per the label is about 3 to 6 months, which it's not that impressive when patients are paying their deductible and out-of-pocket expenses for a drug and they're in pain on a daily basis. So that's not the best thing about RESTASIS, certainly.
The efficacy on a responder analysis is about 15% to 20% of patients versus 5% for placebo. When we ask physicians on qualitative market research about how good RESTASIS works, we get higher numbers than that. And that's not surprising because oftentimes clinical and regulatory requirements for drugs to get approved can be harder to achieve than the actual patient saying they're feeling better.
As per the label, about 17% of patients have burning, sometimes severe upon application. That's a big problem with RESTASIS.
When we look at IMS data, we see about 70% of patients are not on therapy at a year. And that obviously is driven by 2 things. One is that patients aren't tolerating the drug very well and that it's painful to apply. And two, it just doesn't work very well. So clearly, there is substantial areas where a product with some of these attributes that are at fault for RESTASIS could potentially be impactful.
Now calcineurin is very much a validated target for the treatment of various ocular surface diseases. It's not only RESTASIS or 0.05% cyclosporine that's approved in the United States.
There's also multiple formulations of cyclosporine approved in Japan for vernal keratoconjunctivitis. And also, there's tacrolimus approved for allergic conjunctivitis in Japan. And also, in Europe, there's 0.1% cyclosporine product approved for -- a couple of indications for ocular surfaces diseases in Europe.
So very much a well-validated mechanism of action for this disease. And when we ask physicians, as Dr. Tauber mentioned, "Will calcineurin inhibitors always have a place in the treatment of dry eye?" 90% of them say, absolutely, yes.
So this is what we're after. We have a reason to believe that we can be a best-in-class calcineurin inhibitor in this market. And I'm going to go into some data that supports this hypothesis. But first, I wanted to review broadly the market out there, and the 2 products that we could potentially be competing with upon approval.
So both RESTASIS and Xiidra are not very effective. If we can get to the right of this little arrow here, perhaps we can be better than those products and be an option for patients suffering for this disease. Onset of action, Xiidra is pretty good. 2 weeks, that's pretty good for this patient population. Again, 3 to 6 months for RESTASIS, although there are benefits even though the patient's saying they're not seeing benefits. There are some benefits there.
Tolerability, I think Xiidra potentially has the edge here, subjectively, and this is from our market research. Dosing regimen, these are both twice-a-day. So a high level of unmet medical need exist in this patient population, and there's multiple areas where voclosporin could potentially fill a need.
So what is voclosporin? It's a clear, aqueous, preservative-free nanomicellar solution containing 0.2% voclosporin. Now RESTASIS has 0.05% cyclosporine. And inter-development, they try to get higher doses -- higher concentrations but ran into some tolerability issues.
These are self-assembly micelles that're pretty consistently about 12.5 nanometers in size. So we're basically able to get 4x the concentration of voclosporin into a clear, preservative-free solution as compared to cyclosporine 0.05% or RESTASIS. And so that's encouraging. The patent, the formulation of this product is patent-protected up to 2031, and there are avenues work and we can extend that as well.
So just to give you a background and to answer that question, "Well, how derisked is this?" And this is not only what investors ask, but it's what the board asks as well. On the left-hand side, that's the area that's shade out, this is just a representation of our current toxicology package. And we have an extensive package put together that basically supports our filing for the oral formulation of voclosporin in lupus nephritis.
And it's very important we can transpose this into the treatment of ocular surface diseases. However, we also have in our possession a number of safety and toxicology studies done with the ocular formulation. We have some proof of principle -- I'm going to show you this data in a minute in dogs.
We also have 2 studies that support efficacy. One is a human Phase I dose escalation study that's already been done. So this is a Phase II-ready asset. We also got some work done that was done under a material transfer agreement with Merck Animal Health versus the standard of care.
So about 2 years ago, we entered into this some material transfer agreement with Merck Animal Health, and they did some studies. And subsequent to that, we closed a license deal with Merck Animal Health for this use in canines. Now -- right now, there's a drug globally called Optimmune, and this is a 2% formulation of cyclosporine that they use in dogs. And some of you have dogs. And if there's 10 dogs in here, probably 2 or 3 of them have dry eyes. It's very common in dogs. It's a very good model for efficacy for dry eye products.
So this was a study that was done a number of years ago and basically looked at dogs that were suffering -- it's a small study, dogs that were suffering from canine dry eye syndrome. And basically, theoretically, if you took off the Optimmune, you would expect the Schirmer score -- Dr. Tauber described the Schirmer score.
If you took them off of Optimmune, you'd expect the Schirmer score to go down, so less tear production. So we did this -- what we did with these dogs was, we took them off of Optimmune and put them on VOS, voclosporin ophthalmic solution 2% to 0.2% versus just 2% cyclosporine. And we saw that, basically, the Schirmer score was level. So that gives us good push principle that this is working in these dogs.
Some other work that was done that was published some years ago with this formulation was looking at tissue concentrations of voclosporin after a single topical administration of 0.2% voclosporin. And so what we see here is very, very rapid levels, high levels of voclosporin in the target tissues, the conjunctiva, the cornea, the lacrimal gland, the lower eyelid and the submandibular lymph node.
And so what we see here is if we look at other studies and we looked for therapeutic concentrations, the concentrations will give a therapeutic effect in these animals. We see it's about 50 to 300 nanograms per gram -- or sorry, milligrams, nanograms per gram in the conjunctiva and the cornea.
And if you look at these 2 tissue types, we see here that VC has concentration in the conjunctiva and the cornea is much, much higher than when we start to see a therapeutic effect on these animals. So this gives us a good reason to believe and keep in mind this is a log scale. This gives us reason to believe that we cannot only dose this once daily because it extends out over 24 hours. But that potentially, we could have a much faster impact on these patients and address that onset effect.
This is a Phase I dose escalation study to assess the safety and tolerability of VOS in healthy volunteers. It basically involved 30 subjects, okay. And the treatment arms were placebo, VOS 0.02% and our target dose, 0.2%. And so these are 10 patients in each arm.
And just to describe how this scale or how these graphs work, the patients were asked about foreign body sensations about 4x after their dose. And we see here that 9 patients in the placebo experienced none. 10 in both the VOS groups experienced none, and 1 in the mild.
And so I'm not going to do this for every graphic. But what this shows is that our target dose of VOS 0.2% and even 0.02% was basically identical to that seen in placebo. So the tolerability of this drug appears to be extremely good. You can see here with respect to photophobia and visual fluctuations with Blink, you can see here that there was no negative response from patients. There was no mild, there was no moderate, there was just no effect.
So this is really, really encouraging to us and gives us reason to believe that this asset has potentially superior tolerability head-to-head versus cyclosporine or RESTASIS. There was also a third cohort to the study that specifically looked at dry eye patients. Very -- I warn you, very, very small patient numbers, it was just 5 patients. This looked at patients with actual mild to moderate dry eye, okay?
Unfortunately, these error bars overlap, but it gives us good indication here that at screening as particularly in signs -- Dr. Tauber mentioned signs and symptoms are important, in signs in the small patient numbers that we see an improvement in the Schirmer score testing at 14 days. This is exciting because we know that Xiidra works in a subset of patients in 14 days. So could we potentially match Xiidra's onset of effect? Possibly. We'll see.
On the symptomatology side of things, we looked at the ocular OSDI, which is ocular symptom disease activity score index, and we see here again that -- this is a score in both eyes, we see here again that there's a reduction from baseline to day 14. Again, some of the airbrush overlap. We can't translate too much into this. But these are encouraging signals that this drug is working, which is not a surprise because we know that these mechanism of action works in ocular surface diseases.
So we will be executing at the beginning -- first half of next year a small study. It'll be a randomized, active control, parallel group study of ocular tolerability of VOS in dry eye syndrome patients. And this is going to be head-to-head versus RESTASIS. So we've got a lot of pride in our company. And we just want to deliver me(inaudible) 2 drugs in this marketplace.
There are multiple other formulations of cyclosporine in development. But our plan is to show, hopefully some definitive evidence, within a 2- to 4-week period that voclosporin ophthalmic solution is better tolerated than RESTASIS. And we think for a minimal investment that we could create some significant value for our shareholders here and potentially to pursue a monetization strategy.
The key inclusion criteria of this study, we're looking primarily for a real-world study. They must have a dry eye diagnosis in both eyes. They must have a symptom score of greater than 30 on a visual analog scale, a Schirmer score of greater than 5, but less than 10. We don't want these patients too severe because oftentimes in dry eye syndrome, when the patient is too severe, they have nerve damage, and they can't feel anything anyways. So we want these patients that are mild to moderate. And of course, we want some evidence of ocular surface staining, and this will be [floor] in staining but at least 3 in the 0 to 15 scale.
The primary outcome will be ocular tolerability versus RESTASIS. And we'll look at secondary outcomes whether it be adverse events or other symptomatology or sign scoring just to give us a read as to how it's comparing versus RESTASIS. But our real kind of reason to believe here is the tolerability. We think that if we can show this in this patient population that we'll be able to keep more patients on therapy for longer and get better results long term.
So we do have an FDA meeting schedule prior to the end of this year. We plan to open our IND shortly thereafter. We're working on a clinical trial supply. Over the last couple of years, we have been working on 9 GMPs. So we can easily manufacture this product. It's very stable for long periods of time. And we just need to finish off a GMP clinical supply.
And we will do this Phase IIa, started in, hopefully, in the second quarter of this year. And subsequent to that, we will be discussing this Phase II study with the FDA. Although we don't have plans to execute that right now because we're looking more of this as a monetization strategy, however, we are in the planning stages.
So to close out here, we have a calcineurin inhibitor that's 4x more potent than cyclosporine that which is in RESTASIS. We can get much higher concentrations of this drug into solution than RESTASIS. Now we know that in transplant or autoimmune diseases that cyclosporine works really, really, really well if you can get it in really, really, really high doses. It cures patients, problem is they die.
So we don't know if this is the case in ocular surface diseases if higher means more efficacy. We'll see. As Dr. Tauber said to me in his office a couple of weeks ago, show me the data. But we think there's certainly reason to believe here that it might impact onset of action and potentially efficacy, but we'll see.
So we can achieve very high concentrations in the target tissue. This is referenced by the rabbit model preclinical data. We've demonstrated excellent tolerability in Phase I studies in man. And we think we have the potential here to be dosed once-a-day, which could be an advantage to these patients.
So we think this is an asset that potentially is very well differentiated in this disease and could potentially have a significant position of the calcineurin inhibitor market in ocular surface diseases.
Thank you very much for listening, and we look forward to answering some questions a little bit later.
------------------------------
Richard M. Glickman, Aurinia Pharmaceuticals Inc. - Founder, Chairman & CEO [11]
------------------------------
Thank you, Mike, and thank you all for being so patient. It's kind of a marathon. A lot of stuff being thrown at you today. I took over this role, 9 months, actually, February 6, as CEO. And it was actually kind of a controversial time because there's this philosophy that the minute you finish Phase II, then maybe we'd just get acquired, and that's what we were going to do. And it was a pretty, I think, a naïve approach. And I have gone into the boardroom, and I basically said, "Look, if you want to create real value for shareholders, you build your business. You put your head down. You build your business. You add your products. And one day, someone might want to acquire you. But the value you create for shareholders is so much more." So what you're seeing today is in fact that strategy being executed. More importantly, right now, though, we're currently on track for our lupus nephritis program. The idea is coming together. The sites are up and running, and patient accrual is going well. We said we'd aggressively pursue intellectual property development, and we're doing so. We also said we're going to new indications to create real value. These 2 indications, FSGS, minimal change disease, are significant opportunities for us. They're right in our space. Same clinicians. Same treater population. Makes perfect sense for us, and really, I think potentially creates a much, much larger peak sales potential for this company.
We also introduced a new product. We own this asset. It was really troubling, all of us tend to be sitting on the shelf here. We think this drug is going to benefit patients. We think it's not just about the monetization strategy. We talk about that because we don't want people to be nervous that we're going to become an ophthalmology company. The reality is we think this is a better drug, and it's going to work better in this disease and really potentially change the way patients get treated here and maybe have a significant clinical outcome that would make us all proud. At the same time, it provides that monetization strategy, which we are going to execute. So I was supposed to remember to say this because everyone is really nervous over going back to markets and raising capital. The reality is we raised a lot of money a while back, and people gave us quite a hard time because we raised so much money, but we knew we needed it. And so when the opportunity came, we raised the capital necessary to run our clinical programs to launch our drug, at least the beginning of the launching anyhow. All this medication expansion, new product development, are within our current financial resources. We do not have to raise any additional capital to run these programs.
If I look at the next year, we have a really exciting 2018. There's a lot of activity, and we should have some really excellent news flow from the company. We will initiate the nephrotic syndrome proof-of-concept study in the first half of the year. We'll initiate the VOS Phase IIa study in the first half of the year. And most importantly, in the second half of the year, we will be able to announce, I expect, the complete recruitment of our AURORA study. We will also have interim data that comes out of the nephrotic syndrome study as well as data coming out of the VOS Phase IIa study. So I also expect, actually, that we'll have several publications of the clinical research that we've done to date. So I think it's going to be a really, really exciting 2018 for us. And I think now that kind of wraps up the formal part of this, and we can open it up for Q&A.
Thank you for being here, for listening for this period of time.
==============================
Questions and Answers
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Celia Economides, Aurinia Pharmaceuticals Inc. - VP of Corporate & Public Affairs [1]
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All right. Who's first up? All right, Ed -- no, Joe.
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Joseph Patrick Schwartz, Leerink Partners LLC, Research Division - MD, Biotechnology [2]
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Ed can go first.
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Celia Economides, Aurinia Pharmaceuticals Inc. - VP of Corporate & Public Affairs [3]
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It's okay. You got the mic. Go for it.
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Joseph Patrick Schwartz, Leerink Partners LLC, Research Division - MD, Biotechnology [4]
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All right. Joe Schwartz, Leerink Partners. I guess my first question is probably directed towards Dr. Tumlin but maybe also the company can opine on why are different thresholds for remission required to impart a clinical benefit in lupus nephritis versus FSGS.
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James Tumlin, [5]
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Yes. Great question. Probably not fully known, but I'll give you a framework for thinking about it. Again, remember that FSGS is really not so much an inflammatory condition as it is a primary post nephropathy due to a number of genetic diseases. Lupus is a panoply of full-blown immunologic response. And clearly, some of the part that comes in with this is that if you do not eliminate macrophage and monocyte infiltration, the glomerulus, there is a constant stimulus to bring in inflammation, which leads to progressive fibrosis over time. So there's a greater threshold to get that immunologic suppression to achieve the long-term benefits to the kidney.
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Joseph Patrick Schwartz, Leerink Partners LLC, Research Division - MD, Biotechnology [6]
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Okay. And then knowing what you know, and -- well, first of all, it would seem like the bar for remission is easier to achieve numerically in FSGS just because of where it's set. The threshold is higher, I believe. So on the one hand, it might be easier to achieve just naïvely that way, but then mechanistically, knowing what you know, do you think voclosporin will be more or less or similarly active in FSGS versus lupus nephritis?
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James Tumlin, [7]
------------------------------
Right. So the answer to that is really quite complicated. Some of the data that will help us to fully answer your question is not quite developed yet. But the short answer is, that on the cytoskeletal component of it, the differences between the previous CNIs and voclosporin should be equivalent. So do I think that I will be able to achieve the same level of reduction in proteinuria? I do. I think that its pharmacokinetic patterns are clearly better. It's really this -- or the difference is that the side effect profile that may be going through selective blockade, and this is still to be determined, the alpha and beta isoforms of calcineurin catalytic subunit, that's where the real science and encouraging aspects of this drug lie. But the short answer is, yes, in terms of the threshold, it should be equivalent to achieve that number.
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Antonio Eduardo Arce, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [8]
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Ed Arce, H.C. Wainwright. Thanks for the detailed presentation and congrats on moving forward with new indications. I wanted to focus on FSGS, given how there's so much similarities and overlap in development with LN. And firstly, just broadly, in terms of time lines, I think you mentioned that the Phase II would be initiated second half of next year as a proof-of-concept study. And then at some point, in another slide, there was mention of a projected launch in 2022 for that product. So wondering if you could walk us through sort of big-picture time line.
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Celia Economides, Aurinia Pharmaceuticals Inc. - VP of Corporate & Public Affairs [9]
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Rob, do you want to take that?
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Robert B. Huizinga, Aurinia Pharmaceuticals Inc. - EVP of Corporate Development [10]
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Sure, why not? So we indicate that we will start the Phase II proof-of-concept in the first of 2018. It's a 6-month study. We're hopeful that it'll be a 6-month enrollment for this projected patient size. And what's really important to this whole conversation is the conversations with the regulators and having conversations about expedited approval pathways. And that will really allow us to get a sense of where we'll be in terms of launch, looking at what other companies are doing in terms of expedited approval pathways. We're looking for those conversations.
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Richard M. Glickman, Aurinia Pharmaceuticals Inc. - Founder, Chairman & CEO [11]
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Okay. I would say that in an ideal situation, we'd like to have about a -- no more than about a 24-month gap between the initial approval for lupus nephritis and the follow-up approval for it, that will be our target. That maximizes the value, I think, of the asset with respect to the intellectual property we have available. And this strategy is really focused on on-label additional products that can be properly marketed. And so that's the goal.
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Antonio Eduardo Arce, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [12]
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And I just thought of this until now, but is there any need for overlap in terms of commercial marketing and sales infrastructure there in terms of the target markets?
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Richard M. Glickman, Aurinia Pharmaceuticals Inc. - Founder, Chairman & CEO [13]
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It does. The reason it was selected is because it's virtually -- they overlap.
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Antonio Eduardo Arce, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [14]
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Right, okay. A couple more questions on that before I turn it over. Early proteinuria reduction was mentioned as key to improving the long-term outcomes. I am aware, though, that a lot of these patients present when they're already fairly severe in their disease. So that presents somewhat of a challenge commercially. And I was just wondering if, although early, you could address perhaps, how you would view that challenge in terms of the education necessary?
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Celia Economides, Aurinia Pharmaceuticals Inc. - VP of Corporate & Public Affairs [15]
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Brad?
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Bradley J. Dickerson, Aurinia Pharmaceuticals Inc. - General Manager of Americas & Global Commercial Lead [16]
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Yes. Well, I think we can effectively tackle that through raising the bar of disease awareness. And you can do that on 2 fronts, obviously, with physicians, but more so with patients and getting the word out there. So you're right. In the day you see patients that ultimately come in, and they -- they're in a flare. They're in the hospital. But I can tell you, just being out in the patient community, out in focus groups, that there are patients that will identify as lupus. And when you mentioned things like proteinuria, they recognize that, but no one has told them about lupus nephritis. So I think that's really an opportunity for us. And like I said, these are things we can focus on as we go forward.
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James Tumlin, [17]
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Can I jump in? I'm going to just try to give your question an answer from a clinical standpoint. Your comment would be spot on, for example, if we were talking about IgA nephropathy. Because unfortunately, a lot of clinicians don't understand that low-grade proteinuria of 500 milligrams has meaning in that disease, and they tend to overlook it. And they don't get referred. They don't get VOS. They don't get treated. FSGS is real different. It is a light switch. When it comes on, it is flagrant. They come to the attention of clinicians rather quickly. So in that regard, we do catch them typically very early.
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Antonio Eduardo Arce, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [18]
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Okay. One last question then is, a mention was made also that a common either hard outcome is some thrombotic events. And I'm just curious if you thought about in your development, if this is an area of interest for perhaps secondary measures and looking at the additional benefit there?
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Robert B. Huizinga, Aurinia Pharmaceuticals Inc. - EVP of Corporate Development [19]
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Certainly, clinically, the thrombotic events are very important to us. I'm not sure -- and it takes so much probably to see a difference in thrombotic events. So they may have to be accounted for maybe in a longer study, even potentially post Phase III and a long-term marketing strategy in our Phase IV program. But the thrombotic events, as Dr. Tumlin mentioned, are very, very important in this patient population. Anything they do to reduce proteinuria is a big deal in terms of long-term consequence for that.
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Joseph Patrick Schwartz, Leerink Partners LLC, Research Division - MD, Biotechnology [20]
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So I have a few. How does voclosporin avoid the toxicity that's been associated with other calcineurin inhibitors with respect to the kidney? And then what does the GFR profile of patients who are treated with voclosporin look like, given most of the attention has been paid, it seems, in these diseases, to proteinuria. Yes, that's my first follow-up.
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Robert B. Huizinga, Aurinia Pharmaceuticals Inc. - EVP of Corporate Development [21]
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I think one of the advantages of voclosporin versus the legacy CNIs, that PK/PD profile that I talked about earlier. One of the concerns we have with a drug that has a lot of variability is that it's very hard to find the sweet spot of the drug. You either end up giving inadvertently too much drug, where you get renal events, or too little drug where you get complications of the actual disease you're trying to treat. Because this drug has a very linear relationship at the doses that we're studying, we have, as I said in my presentation, a great sense of confidence as to the concentration in patients. So it removed that need for TDM. We also have an understanding of where that efficacy is. In terms of the impact on GFR, we look at the AURA-LV study. We saw a decrease in mean eGFR in the group -- low dose group, about 5 ml per minute, happened in the first 2 to 4 weeks. That goes back to that apparent vasoconstriction that Jim Tumlin talked about in his talk. And then the GFR appeared to remain stable over that first 24 weeks and up to the 48 weeks. When we take patients off drug at that point, they appear to return back to baseline, if they're not already there at that point. Now it may be something because we have found the sweet spot of the drug or may go back to something that Jim Tumlin had alluded to in terms of its differential alpha-beta selectivity.
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James Tumlin, [22]
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So to take a couple of questions there. So Rob had mentioned that in fact the pharmacokinetics of the drug are cleaner. So if you have metabolites of cyclosporine, those metabolites can actually have their own capacity to induce nephrotoxicity. So it's a tighter drug metabolically in terms of its metabolism. And this, again, not to beat up the audience too badly, but just a little bit deeper on the primary. Cyclosporine has -- I mean, calcineurin has 2 isoforms of the catalytic subunit. The beta is a later form, evolutionary speaking, it's associated with T-cell receptor signaling. That's where the money is in terms of immunosuppression. Most, not all, but most of the toxic effects of the CNI seems to come through the alpha receptor -- alpha catalytic subunit pathway, including the fibrosis and also including the diabetic component of it. So this is not fully known yet, whether voclo is a selected beta antagonist, but some of the clinical data would suggest that's a possibility. Did that help to answer...
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Joseph Patrick Schwartz, Leerink Partners LLC, Research Division - MD, Biotechnology [23]
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Very helpful. And then for the company, you highlighted that a pretty broad, I think, it was like a tenfold range in the cost of -- I don't know if you call them analogs or other comps for drugs in renal diseases, ranging from like $40,000 a patient in a year to $400,000 a patient in a year. I was wondering, can you talk about any pharmaco-economic work you've done for -- to try to quantify the degree of benefit that you could deliver to patients with lupus nephritis and how that might translate or inform where you might end up on pricing?
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Bradley J. Dickerson, Aurinia Pharmaceuticals Inc. - General Manager of Americas & Global Commercial Lead [24]
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Yes. So good question. So obviously, that was a range of therapies being used today. We're working on that economic work, and we've done extensive pricing research. In terms of that range, looking very closely between, say, $50,000 and $100,000. But this is work that's currently ongoing, something we're going to focus a lot more on and put a lot more resource into as we go forward. Obviously, this is something that's a costly disease burden and something we've got to really understand as we go forward to properly assess that.
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Joseph Patrick Schwartz, Leerink Partners LLC, Research Division - MD, Biotechnology [25]
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Great. And then one more for the company as well. It's -- you highlighted that there are many more opportunities out there for the technology embedded in voclosporin that you could address on your own, some of them quite large. So I was wondering -- I don't want to imagine here, you're getting interest from larger players to entertain some approach to targeting some of these opportunities. So can you highlight for us, do any partnerships at all makes sense? Or how do you envision the right strategies to maximize the footprint but also shareholder value by not encumbering the asset in any way?
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Richard M. Glickman, Aurinia Pharmaceuticals Inc. - Founder, Chairman & CEO [26]
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So I guess I'm going to grab that because -- we did one of the first sort of split indication type deals. So I try to avoid that kind of transaction. I prefer to keep all the IP with us and not split it up amongst different indications for that very fundamental reason. That said, I think we're better off keeping everything together at -- as one IP base, and we stay focused on the renal. That, for us, really does open up an issue, which is we have many other potential indications for this drug. And how many should we be doing? How much capacity can we be doing? So it's a balancing act between 3 or 4 factors. One is the reverse this fiscal. Second is the life of the patent and how long some of these trials will take and the risk we're willing to take on them. So the strategy that we're really working forward is on-label strategy. At the same time, we're often approached by various scientists who wish to do smaller studies in various patient populations. And so we are very open to do that as well. So we will be supporting programs that might look at diseases like lupus, but not from a regulatory strategy at this point in time. Now if our IP strategy gives us a really meaningful extension to the life of those programs, it becomes a game changer. And you can really begin to look at either the life cycle management, the new IP, the combination of a regulatory strategy with your IP and take a look at how you could extend additional indications that way, and then they become economically viable. And so it's an ongoing process. Clearly, we're very focused on these right now. I think these will keep us busy for a while. If we're successful with the IP, you can imagine us also taking additional steps into additional diseases.
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Joseph Patrick Schwartz, Leerink Partners LLC, Research Division - MD, Biotechnology [27]
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Okay. Great. Maybe one last question.
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Celia Economides, Aurinia Pharmaceuticals Inc. - VP of Corporate & Public Affairs [28]
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Just one.
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Joseph Patrick Schwartz, Leerink Partners LLC, Research Division - MD, Biotechnology [29]
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So clinical development has been pretty challenging in the past in the orphan renal diseases and larger renal diseases, both of which you're targeting. But seems like there's been some significant advances at the FDA for their appreciation for the needs here as well as in a community with patient advocates and CROs and the like, organizations like the nephrology organizations that you mentioned. So can you talk a little bit about where we stand now that you're in Phase III? And then maybe also, Dr. Tumlin might have some thoughts on how all these resources, whether we're at a point of critical mass here for executing trials, like your Phase III [call in there]?
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Neil Solomons, Aurinia Pharmaceuticals Inc. - Chief Medical Officer [30]
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So I'll answer that with respect to lupus nephritis. Joe, we took a very traditional path, a regulatory path for interactions with the FDA. Don't forget, we have fast-track designation already, being an unmet need, which means you have enhanced access to data. And so we have them all along right before our end of Phase II meeting. We had our end of Phase II meeting about a year ago. We reported that publicly, and we got a broad alignment to do one further study to confirm the results that we saw in AURA-LV. Nothing's changed that. We continue our discussions with the FDA by the fast-track designation. That's something that we would do. So I would say that some of the kind of breakthroughs and advances that you speak about don't necessarily affect our current lupus nephritis program. We have, like I say, broad alignment. And we're continuing, and we believe that with the -- in the event of a successful AURORA data, then we'll have a very, very good chance of gaining approval in lupus nephritis.
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James Tumlin, [31]
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Yes, so I think you politely alluded to the fact that nephrology has done a rather poor job in clinical trials, in the past, it's quite true actually. And that's actually how Dr. [Massy] and I met. I ran an organization called NephroNet. And so we have multiple sites around the U.S. both academic and private to just address that problem, to get organized, to work with our industry colleagues, to bring about trials that really make a difference. And so, I mean, hopefully that will be better in the future. And so your point is well taken.
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Elemer Piros, Cantor Fitzgerald & Co., Research Division - Analyst [32]
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This is Elemer Piros from Cantor Fitzgerald. What I'd like to ask is, you had quite a -- or you had quite a bit of experience with the oral formulation in uveitis, if any of that information is usable or applicable or you could utilize in other ophthalmic indications such as dry eyes. And the part B to this question, was the topical formulation available at that time?
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Richard M. Glickman, Aurinia Pharmaceuticals Inc. - Founder, Chairman & CEO [33]
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Yes. I guess maybe you're right. Actually, some of the data that's generated is useful from a safety perspective that clearly. Lux was, at the time we sort of intercepted with them, was already really sort of out of money. They were financially quite tight. And they had run the studies. They couldn't afford to do this type of a program. And they really focused on their oral program because they thought that would bring it home. But it didn't. This program is actually separate from that program and probably would've been wise for them to invest more in it earlier, clearly, in hindsight for them. We have been working with the scientists and individuals that have worked with them with them through that program. So yes, there are things that are applicable. There's IP that's applicable that's been really important to us. But the uveitis data, really, I think the safety has no real value to us because it's such a different disease treatment protocol.
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Unidentified Participant, [34]
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(inaudible) So on the -- maybe a question for Dr. Tauber on dry eyes. So with cyclosporine with RESTASIS, are the adverse events that we see, are those on-target or off-target effects?
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Joseph Tauber, [35]
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I'm not sure what you mean by on target, off target. The side effects we see are intolerance, instillation-induced discomfort. There's really no complication of the drug that we're seeing. It's one of the safer pharma products we have.
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Unidentified Participant, [36]
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Right. But the discomfort that we're talking about, the -- whatever it is, 20% of people have ocular burning or whatnot? Is that related to -- what's that related to?
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Joseph Tauber, [37]
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That's very hard to answer whether that's formulation-specific. It's an emulsion product the way it's formulated right now. Allergan spent 3 years working on that after an earlier Sandoz version that was even worse. But I'm not sure I know how to answer that other than to say formulation-related, very low concentration...
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Unidentified Participant, [38]
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Okay. So the emulsion is mostly related to the mechanism of action of the cyclosporine.
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Joseph Tauber, [39]
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There's no speculation that it's related to mechanism of action.
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Unidentified Participant, [40]
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Okay, great. And then the speed of onset, is that related to dose? Or is that again -- is that just a mechanistic issue in terms of T cells dying off in the market space?
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Joseph Tauber, [41]
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Again, hard to say. No one has ever investigated that specifically. It's a -- we marketed RESTASIS as 0.05%, so very, very low concentration. Certainly, competitor companies that are looking at cyclosporine products enhanced molecules are all looking at higher percentage products. So I think delivery -- drug concentration is relevant.
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Vernon Tolentino Bernardino, Seaport Global Securities LLC, Research Division - MD of Equity Research & Equity Research Analyst [42]
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Vernon Bernardino with Seaport Global. And thanks for putting this event together. A question I might have is also multipart. First part is, perhaps, a dumb question. And that is, I assume you're thinking that you might have an Ad Com because voclosporin will be considered a new chemical entity.
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Neil Solomons, Aurinia Pharmaceuticals Inc. - Chief Medical Officer [43]
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So not a dumb question at all. This is, we believe, are likely to be the first drug that's got to the NDA phase in lupus nephritis. And our experience and our regulatory advice is that, that would necessarily require an Ad Com for that reason.
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Vernon Tolentino Bernardino, Seaport Global Securities LLC, Research Division - MD of Equity Research & Equity Research Analyst [44]
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Okay. And I'm not familiar with past FDA reviews of CNIs. Just wondering -- or maybe even at CellCept, what can you say as far as details or how such reviews have gone in the past for CNIs in particular?
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Neil Solomons, Aurinia Pharmaceuticals Inc. - Chief Medical Officer [45]
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So again, just following up on that, there have obviously been no reviews for any drug in lupus nephritis, number one. CNIs, there are 2 approved, renal and other solid organ transplants, but over many years ago...
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James Tumlin, [46]
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1986 is when cyclosporine was first known.
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Neil Solomons, Aurinia Pharmaceuticals Inc. - Chief Medical Officer [47]
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And I was still in short trousers at that point. I don't know if anybody (inaudible). There's kind of little I can say about that. But those drugs are still the mainstay of being (inaudible) in the solid organ transplant world.
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Vernon Tolentino Bernardino, Seaport Global Securities LLC, Research Division - MD of Equity Research & Equity Research Analyst [48]
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I have another question, if I may. This is addressed for Dr. Tauber. So it's interesting that RESTASIS sales increased after a competitor drug came onboard. What -- I didn't see what perhaps was the driver of that. And then as far as the market is concerned, signs and systems, but what would be the perhaps key factor or -- of those 2 that you would look for as far as the current environment is concerned, as far as the entry of a new drug, like VOS?
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Joseph Tauber, [49]
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If I had the right answer to your second question, quite a few companies would have been hiring me a long time ago, so that's a very difficult one. As far as why the market has been growing, I think we honestly gave a lot of credit to the program relating to Jennifer Aniston. It's really -- I'm only half joking. It's really raised awareness, willingness of people to speak up about something they've been living with and just simply thinking this is normal. And she's out there saying this is not normal. You're allowed to complain about this, and there are things we can do about it. And the fact it's a -- it's not product-specific, the entire campaign, it's simply a disease awareness campaign. No one expected the entire market to grow. Everyone expected lifitegrast to cannibalize some of the market from RESTASIS, and that's not what's happened, and that's not -- that has not happened even prior to lifitegrast achieving good representation in the Medicare Part D sphere. So I think there's even more growth opportunity. And no one thinks the majority of dry eye patients are currently under treatment. Perhaps, no more than 30%, 40% of potential patients are receiving treatment. So I think there's a lot more upside than downside. As far as what to look at, that really requires a crystal ball, symptom and a sign, if you don't show symptomatic improvement, you're certainly not getting approval In terms of sign, the ones that have been looked at are a narrow group, conjunctival staining, cornea staining, Schirmer test production. That's kind of the -- there are some proxy measures that have been proposed in recent years, and no one has succeeded using those. And I don't think it would be more than speculation to say that's what's going to work. Cornea staining is the one people have looked at mostly. Conjunctival staining has been successful for more than a few companies. I think you'll see more of that in coming trial submissions.
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Celia Economides, Aurinia Pharmaceuticals Inc. - VP of Corporate & Public Affairs [50]
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There's a question back there.
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Douglas Miehm, RBC Capital Markets, LLC, Research Division - Analyst [51]
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Doug Miehm, RBC Capital Markets. Two questions. One with respect to the ongoing Phase III clinical trial in terms of clinical sites and the investigators. Have they participated in lupus trials before? Are we looking at 50%, 60%, 100% of the investigators that are knowledgeable with these types of drugs? And the second question has to do with -- well, to Dr. Tauber. When you look at the dry eye market, it looks like we're going to see RESTASIS generic-ing early next year based on some recent legal decisions and even Allergan's own commentary. How differentiated do you think VOS is going to need to be to make significant inroads in this marketplace?
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Celia Economides, Aurinia Pharmaceuticals Inc. - VP of Corporate & Public Affairs [52]
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So Neil, do you want to take the first part?
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Neil Solomons, Aurinia Pharmaceuticals Inc. - Chief Medical Officer [53]
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Yes. Thanks, Doug. The first question, yes, the answer is relatively straightforward. Many of the sites were signs that -- certainly, good signs that we -- that were involved in the AURA Phase II study. Many of the sites that have experience in lupus nephritis trials but weren't necessarily involved in the AURA study maybe we decided not to go to these countries for other reasons. And then there's other sites that were not involved in lupus studies before or AURA-LV, but who are very careful analysis and intense feasibility process that deemed them to be good potential candidates to get patients into this trial. So we did a very, very intensive feasibility. And you can see the breadth of the study, the size of the study. But the one benefit that we've had over when we initiated Phase II is we've got data now. We've got data, Phase II data, and people are genuinely seeing this as a chance to get involved in something that they're going to be prescribing in a few years' time. So I think that's really, really helped us especially in the United States.
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Joseph Tauber, [54]
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It's a very interesting time in ophthalmology for cyclosporine, and by extension, for CNI inhibitors. We don't have very many blockbuster drugs in ophthalmology. RESTASIS has certainly been one. The cost to patients is really not a problem right now, and that's really what generics offer, it's lower patient costs. With the rather aggressive programs that Allergan has now, they have a My Rewards program where many, many patients pay absolutely nothing for the drug on a monthly basis. And Medicare coverage is excellent. What I've seen is 84% pay between $40 and $60 a month. So cost is just not an impediment. And personally, I think generics are not going to make very significant inroads into that marketplace. There are a number of companies looking at enhanced cyclosporine molecules that may be higher concentration, that may be some nano-modulation of surface, that may be better mucous membrane penetration to get better bioavailability. But this is all about efficacy, and a better CNI can take this entire marketplace. I personally think generic cyclosporine is relevant in this space.
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Richard M. Glickman, Aurinia Pharmaceuticals Inc. - Founder, Chairman & CEO [55]
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Just further in your question in terms of the clinical trial experience, and we learned a lot from the Phase II program. And so particularly where we choose our sites. But some of the things that are done that actually make it work for us is human disease like lupus nephritis, the endpoints are very hard. If you're trying to do a lupus study, you try to use as many sites, for example, much more difficult, it's much more subjective. But having objective endpoints, a centralized laboratory, makes it a lot better and easier to control, very heavy medical monitoring. We're out there very heavily with these sites. So we recognize when you have a large number of sites that's a risk in the trial. You want consistency in results. And that's how we manage it, and it actually works quite well for us.
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Celia Economides, Aurinia Pharmaceuticals Inc. - VP of Corporate & Public Affairs [56]
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Any last questions? Okay. Well, thank you, everyone, for joining us. A replay will be available on our website along with the slides. Thank you.
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