Viela Bio Inc (VIE) Q1 2020 Earnings Call Transcript

Viela Bio Inc (VIE)
Q1 2020 Earnings Call
May 13, 2020, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good afternoon, ladies and gentlemen, and welcome to the Viela Bio first-quarter 2020 earnings conference call. [Operator instructions] As a reminder, this conference call is being recorded. I would now like to hand the conference over to Mr. Mitchell Chan, chief financial officer at Viela Bio.

Please go ahead.

Mitchell Chan -- Chief Financial Officer

Thanks, and welcome, everyone, to our first-quarter 2020 earnings call. The press release reporting our financial results is available on the investor and media page of our corporate website at www.vielabio.com. Joining me on this call this afternoon are Bing Yao, our chairman and chief executive officer; Jorn Drappa, our chief medical officer; and Bill Ragatz, vice president, head of commercial. As a reminder, we will be making forward-looking statements regarding our financial outlook in addition to regulatory product development and commercialization plans and research activities.

These statements are subject to risks, uncertainties that may cause actual results to materially differ from those forecasted. A description of these risks can be found in our most recent Form 10-Q on file with the SEC. Similar to many companies in the biopharma sector, we're closely monitoring the corona pandemic, including the associated restrictions on travel and work that had been implemented as well as its potential impact on our business and clinical trials. The extent to which the coronavirus impact us will just depend on future developments, which are highly uncertain and cannot be predicted including new information, which may emerge concerning the severity of the coronavirus and the actions to contain the coronavirus or to treat its impact, among others.

I would now like to turn the call over to Bing Yao, our CEO.

Bing Yao -- Chairman and Chief Executive Officer

Thank you, Mitch. Good afternoon, everyone. Thank you for joining us today. I'm pleased to report that we had yet another productive quarter and are off to a very strong start in 2020.

With the PDUFA date for our lead product candidate, inebilizumab, approaching in about one month, we are nearing our biggest company milestone to date, our first potential U.S. regulatory approval. While this would, of course, be a pivotal moment for our company, more importantly, it will be a victory for the thousands of patients affected by neuromyelitis optica spectrum disorder or NMOSD. In parallel to launch readiness activities, we continue to make solid progress across our entire pipeline.

Most recently, as you may have seen this afternoon, we announced promising interim results from our ongoing Phase Ib trial of VIB7734. And just several months ago, we initiated a Phase IIb trial of VIB4920 for the treatment of patients with Sjögren's syndrome, a common rheumatic disease for which there are currently no approved disease-modifying therapies. The energy and resourcefulness of our teams are incredible despite the COVID-19 pandemic, which is affecting order budget today. I would like to take a moment to address our company's response to the pandemic, but first and foremost, our thoughts are with the thousands of patients and their families who have been directly impacted and to the healthcare workers helping to keep us all safe, we're immensely grateful.

To the extent that we can help contain the spread of the virus and flatten the curve, we continue to be nimble in our decision making. At the outset of the outbreak, we moved quickly to protect and support our employees and the patients we serve, implementing a work-from-home policy and successfully transition into virtual external stakeholder engagements. While it is still too early to tell how impactful this pandemic will ultimately be, at present, we have been fortunate to experience minimal effects on our business and operations. We have sufficient supply of drug product to supply our launch and to continue our ongoing clinical trials.

However, we have voluntarily paused the enrollment of new patients in some of our trials in order to prioritize patients' health and that of the investigators at our clinical trial sites. Over the coming weeks and month, we'll continue to monitor the situation carefully and to follow guidance from local and the federal health authorities. Despite some adjustment to our day-to-day operations necessitated by COVID-19 pandemic, we are well-positioned for success in 2020 and beyond. At present, our R&D is focused on three distinct signaling pathways, the autoantibody, co-stimulatory and innate cytokine pathways that underline a range of autoimmune disorders.

We believe our approach, which pursues our pipeline within our product, may enable us to develop more precise candidates that have the ability to treat multiple disease. Additionally, our research group continues to study and develop molecules for new pathways. In our brief history, we have built a robust pipeline and today have five molecules in development, three of which are in clinic. Our leading near-term milestone is, of course, the potential FDA approval of inebilizumab in NMOSD, a severe and rare liver inflammatory disease that affects about 10,000 patients in the United States alone.

We know that about 80% of NMOSD patients have autoantibodies to a water channel protein called aquaporin-4. These autoantibodies are produced by plasmablasts and plasma cells that bind primarily to astrocytes in the central nerve system. The binding of aquaporin-4 autoantibodies to central system cells is believed to trigger attacks, which damages optical nerve, spinal cord, and brain. A patient's health and quality of life can decline significantly with just one attack.

In time, many patients succumb to loss of blindness and paralysis and experience progressive worsening of the disability with each subsequent attack. This is a devastating disease. Preventing future attacks and limiting disability are crucial to patient's health. As you may recall, we designed inebilizumab to target and deplete CD19 expressing B cells, which include plasmablast and some plasma cells.

Based on strong efficacy and the safety results from our Pivotal n-MOmentum trial. With demonstrated significant attack reduction as well as reductions in worsening disability, reduction in MRI lesion and reduction in NMOSD-related hospitalizations, we believe that inebilizumab has a potential to be a first-line monotherapy for NMOSD patients. Our open-label extension period has given us insights into how inebilizumab might work long term. The maturation of treatment is two years, with some patients on inebilizumab for up to five years.

Results are consistent with that of the primary analysis, and over 80% of patients remain attack-free. So, we are highly encouraged by the potential long-term benefits of inebilizumab. With that, I would like to hand the call over to Bill Ragatz, our head of commercial, who will provide more details about our launch strategy and readiness. Bill?

Bill Ragatz -- Vice President, Head of Commercial

Thanks, Bing. As you have just heard, with our PDUFA date of June 11 now just weeks away, we are soon approaching a very exciting and momentous time at our company. At the outset of our launch planning, when thinking about the most important characteristics of our field teams, we prioritized experience in rare and neurological diseases as well as relationships with key customers. As this would be our potential first launch, we had the unique opportunity to handpick a team dedicated exclusively to NMOSD.

To support the launch, Viela has assembled seasoned teams, including MSLs, market access and sales representatives,ck with each team averaging over 15 years of experience. The breadth and depth of knowledge of these teams is really impressive. The COVID-19 pandemic has forced us to face some unique challenges, specifically travel restrictions and limited physical access to our customers. However, this has not been a major impediment to our progress as we were able to quickly pivot to remote interactions and alternative ways of disseminating disease education.

Based on our conversations with physicians, including key opinion leaders as well as managed care providers and patients, we believe that inebilizumab meets many of the needs that our customers have in treating NMOSD, and we are confident in our ability to reach those who could benefit most from it. Importantly, despite other approaches on the market or in development, many physicians remain very interested in B cell depletion, and we're continuing to expand our educational efforts. We are also strongly focused on the patient journey, and our patient advocacy team has been working closely with NMOSD-specific advocacy groups, particularly the Guthy-Jackson Charitable Foundation, The Sumaira Foundation, and the Siegel Rare Neuroimmune Association, to better understand patients' needs and provide high-quality disease education. To this end, we have sponsored a series of podcasts to help share knowledge around NMOSD, spanning from diagnosis and treatment to quality of life and what it feels like to live with the condition.

We have heard from patients that this has been immensely helpful in addressing many of their key questions, especially around the management of NMOSD in the face of COVID-19. And looking ahead, if inebilizumab is approved, we'll be focusing on newly diagnosed patients and those experiencing an inadequate response to their current maintenance regimen. Our aim is to help prevent future NMOSD attacks and prevent further worsening of disability. We believe that inebilizumab will provide significant value to the NMOSD community.

And our goal is to ensure patients have access to this important medication. While our immediate focus has been on the development and potential commercialization in NMOSD, we continue to evaluate the potential broader role of inebilizumab in the autoantibody pathway. With that, I would like to hand the call over to Jorn Drappa, our chief medical officer, to provide an overview of the current and future development plans for inebilizumab as well as a summary of our progress in our other clinical programs.

Jorn Drappa -- Chief Medical Officer

Thank you, Bill. I will get into inebilizumab in just a moment, but I would like to start from this part of the earnings call presentation with some data that we have just reported today that involves VIB7734. The VIB7734 is a monoclonal antibody that was designed to target an antigen that is specifically expressed on the surface of plasmacytoid dendritic cells. These are cells that play a multifaceted role in inflammation and at a basic level, they are important in activating other cells and also contribute to a pro-inflammatory state in tissues with patients -- in patients with autoimmune diseases.

For example, in skin biopsies for lupus skin disease, you can see a large enrichment of pDCs. Similarly, also in biopsies, with other autoimmune diseases, such as myositis, pDCs have been found in large numbers that are thought to produce a lot of cytokines and maintain inflammation in these tissues. And therefore, the hypothesis is that by depleting these cells, we can potentially interrupt the pro-inflammatory cycle. So as a reminder, our Phase Ib trial involves three cohorts.

The first cohort included eight patients with a mix of different autoimmune diseases such as lupus, Sjögren's, systemic sclerosis. And the second and third cohort enrolled patients with cutaneous lupus. Cohort 2 contains 12 patients, and cohort 3, 11 patients. And the goal was to test whether VIB7734 not only depletes pDCs in the circulation, which we already knew from our Phase 1a trial, but also in inflamed tissue.

And to that end, we took skin biopsies from these patients with cutaneous lupus before and after treatment so that we can actually enumerate the pDCs before and after treatment. So this afternoon, we reported PD interim data from cohort 2, as well as safety and some clinical outcome measures from a subset of cohort 3. The primary outcome in this trial was safety. We saw that the rate of adverse events, serious adverse events was comparable between active and placebo patients.

There were no unexpected safety findings. We also showed that in cohort 2, VIB7734 was potently able to deplete pDCs in the skin biopsies of patients with CLE after three months of treatment. And finally, we found a dose-dependent improvement in a clinical outcome measure. It's called the CLASI, Cutaneous Lupus Area and Severity Index, which is basically measuring the activity of lupus skin rashes.

We found that the proportion of patients with improvements in the CLASI by even at least four points or 50%, both of which is considered clinically meaningful, was substantially larger in subjects treated with VIB7734 that in the placebo control. We look forward to reporting final results from this trial, including those from cohort 3, which we anticipate toward the end of the third quarter. We are now in the process of preparing for Phase 2 studies in one or more indications that are thought to be driven, in part, by pDCs and the pro-inflammatory mediators they produce. Going back to inebilizumab.

We have made progress on our life cycle program in myasthenia gravis and IgG4-related disease. So, as you know, we are preparing a potentially pivotal trial in both of these implications. And we have submitted INDs as well as scientific advice and similar things in countries outside of United States. We have obtained feedback from regulatory agencies, incorporated that feedback into our clinical plans and protocols.

We have finalized protocols and are currently in the process of starting up sites with the goal of starting pivotal trials in both of these indications toward the middle of this year. But of course, the uncertainty factor being whether clinical trial sites will, at that time, be ready to enroll patients as a result of the COVID-19 pandemic. But currently, we are still expecting to start these trials on time. Most of you are familiar with myasthenia gravis.

It's a neuro inflammatory disorder whose pathogenesis has a number of similarities with NMO spectrum disorder and is also mediated by a pathogenic autoantibody and it results in abnormal muscle weakness and other neurological systems. IgG4-related disease is a heterogeneous disease that is marked by tumor-like swelling and fibrosis of various affected organs which is caused by infiltration of CD19 expressing plasma cells that generate IgG4 antibodies. Many different organs in the body can be involved. Commonly involved organs include the pancreas, salivary glands, retroperitoneum, and kidneys.

So, both of these are important indications that impact relatively large numbers of patients, and we are really looking forward to starting these trials in these two life-cycle indications. Finally, I'd just like to address VIB4920. That is our fusion protein that's designed to bind CD40L on activated T cells blocking the interaction with CD40 expressing cells. The CD40 for the ligand pathway is a key co-stimulatory pathway that is required for the activation of T cells but also plays other important biological roles.

As you know, we have initiated a Phase IIb trial in patients with Sjögren's syndrome. This is the second-most-common rheumatic disease after rheumatoid arthritis and is characterized by mouth and eye dryness, but can also result in fatigue, chronic pain, and other systemic manifestations. Traditionally, trials in this indication are focused on patients with high systemic disease activity, and we are also including these patients in our trial, but we are also looking at another population of patients who have less systemic disease activity but a higher symptom burden related to dry mouth fatigue and other subjective symptoms. We dosed the first patient in this trial at the end of 2019 and enrolled additional patients in early 2020, who continue to be followed in in our trial.

But we voluntarily paused the enrollment of new patients due to the COVID-19 pandemic. We are continuously evaluating the situation at different participating sites and countries and look forward to resuming enrollment as soon as safely possible. With that, I would like to turn it over to Mr. Chan, our chief financial officer.

Mitchell Chan -- Chief Financial Officer

Thanks, Jörn. I would like to refer you to the press release issued earlier today for a summary of our financial results for the first quarter ended March 31, 2020, and take this opportunity to briefly review a few items. Quarter to quarter, our R&D investment totaled $26.8 million as we continue to advance our pipeline. For SG&A, we invested $15.3 million in the first quarter, which includes our U.S.

pre-commercialization investments for inebilizumab and animal SD. In all, our total operating expense for the first quarter was $42.1 million. Together with our other income, our operating loss for the quarter ended March 31, 2020 was $40.8 million, which translate to a GAAP net loss per share of $0.80 for Q1 2020. For cash, we ended the first quarter with approximately $335 million in cash, cash equivalents, and investments.

With that, I'd like to hand it over back to Bing.

Bing Yao -- Chairman and Chief Executive Officer

Thanks, Mitch. Thank you again for joining our call today. As you have heard, we had a strong quarter and are well positioned for a productive and successful year ahead. We especially look forward to our biggest near-term milestone, the potential FDA approval and the commercialization of inebilizumab, which would be a first for our company.

Many thanks to our teams for their continued hard work in ushering this forward, in addition to the development of several other pipeline molecules. Now I would like to open the call to questions. Operator?

Questions & Answers:

Operator

[Operator instructions] Our first question comes from Seamus Fernandez of Guggenheim. Your line is open.

Seamus Fernandez -- Guggenheim Partners -- Analyst

Thanks very much for the questions, and congratulations on the VIB7734 data. Jörn, my one question there, I missed the -- a little bit of the data that you mentioned there in terms of the differential between the arms on the CLASI score, so I was just hoping you could clarify that. And then as you think about the overall development approach for VIB7734, can you just give us your sense -- I know, Jörn, you've studied a lot of products in lupus in the past. How do you feel this -- at least this early data sort of lines up to some of the other therapies that you've seen in clinical development? Then just a quick clarification.

Were there any -- was there any evidence of a meaningful increase in herpes-related reinfection? Thank you.

Jorn Drappa -- Chief Medical Officer

OK. Thanks for your question, Seamus. With respect to the CLASI, we did observe, you know, a dose-dependent separation between active and placebo. There was a little bit of separation in cohort 2.

There was a much clearer separation in cohort 3. I am not going to present numerical values today, but suffice it to say, there was a very clear separation between the active and the placebo. You know, we are currently in the process of prioritizing and designing Phase 2 trials for this molecule. And lupus is clearly included in the list and is high on the list.

You are correct. We have substantial experience in conducting lupus trials, and we know the challenges and pitfalls, but we also think that there is substantial remaining unmet medical need in this indication. There's currently still only one biological proof, which has relatively modest efficacy. And there's still plenty of unmet medical need in patients who have severe manifestations, who have nephritis and other serious symptoms of lupus.

So, it's clearly on our radar screen. We're doing the work currently of discussing what is the most efficient design potentially in a lupus study, but also considering additional indications beyond lupus where pDCs are known to play a role. And with respect to your last question on herpes, we did not see any increase in herpes infections or reactivations.

Seamus Fernandez -- Guggenheim Partners -- Analyst

Great. Congratulations again. I'll jump back in the queue.

Operator

Thank you. Our next question comes from Jeff Hung of Morgan Stanley. Your line is open.

Jeff Hung -- Morgan Stanley -- Analyst

Congrats on the progress, an thanks for taking the question. I guess first is how many patients were in cohort 3 for the interim analysis? And then based on the current data, do you think you've captured the therapeutic window? Or would you want to look at an even higher dose given that the safety was comparable, the placebo even in cohort 3? And then I have a follow up.

Jorn Drappa -- Chief Medical Officer

So, the ends in the cohorts were eight for cohort 1; 12 in cohort 2; and 11 in cohort 3. Out of those 11, there were, I think, nine evaluable in that they had passed the time of the primary end point at day 85. So that is the data that we've included in this interim analysis.

Bill Ragatz -- Vice President, Head of Commercial

[Inaudible]

Jorn Drappa -- Chief Medical Officer

Yeah, for dosing, so we still haven't completed our modeling. So we will input the data into our PK/PD efficacy model. We will wait until we have the complete data set available to make a definitive sort of statement or decision on the right dose. It seems,, from the preliminary data that the higher dose that was tested had a bigger impact on the CLASI.

But whether or not this is the peak or whether potentially a higher dose needs to be looked at, we -- I think we will be guided by the PK/PD modeling.

Jeff Hung -- Morgan Stanley -- Analyst

Great. Thanks. And then you've indicated that upon approval, I'm now talking about inebilizumab for NMO, you're able to begin the commercial launch shortly after. Some companies have decided to push off launches to later in the year, given the challenges in the current environment, including, like, lack of face-to-face interactions and lower patient visits.

So, can you talk about your decision to launch shortly after approval? And what gives you confidence that the current environment won't be a significant headwind to your launch? Thanks.

Bill Ragatz -- Vice President, Head of Commercial

Great question. Obviously, this is a dynamic situation we're dealing with nationwide. The COVID-19 pandemic has affected different parts of the country very differently. The good news is with our experienced sales force, we have some very good relationships that we think we can rely on for different parts.

In addition, we know that there are parts of the country that are opening already. We've done some research recently to understand a little bit about some regional differences. and the regional plans will be very different depending on if you're a hotspot or not. So, we think that we have, you know, a product that is meeting a lot of the needs of our target audience.

And we think that we have some relationships that we can count on to have meaningful interactions with physicians after approval. And therefore, we think the best path for us is to get the product to patients who need it as quickly as we can.

Jeff Hung -- Morgan Stanley -- Analyst

Great. Thanks a lot.

Operator

Thank you. Our next question comes from Paul Choi Toy of Goldman Sachs. Your line is open.

Corinne Jenkins -- Goldman Sachs -- Analyst

Hi. This is Corinne Jenkins, on for Paul. So, as you think about the heterogeneity in lupus as a disease, can you just talk about if there's any settings where you're seeing pDC activity and its completion makes more -- less sense as a therapeutic approach?

Jorn Drappa -- Chief Medical Officer

Yeah. So, you're perfectly correct in pointing out that what are the key issues in drug development in lupus is heterogenous -- heterogeneity, both in terms of clinical manifestations but also potentially with respect to underlying biological pathways. And we're doing actually a lot of work to disentangle some of this heterogeneity. We're looking at several biomarkers that are associated with pDCs.

We're looking at the interferon signature. We're looking at interferon-regulated genes expressed in the skin as well. And so, we try to correlate to the extent possible in this relatively small trial these biomarkers with the clinical outcomes that we have observed. So, this work is still ongoing, and we hope to leverage -- to potentially be able to stratify or focus the Phase II populations to include those patients that were most likely to benefit.

Corinne Jenkins -- Goldman Sachs -- Analyst

That makes a lot of sense. And then when you think about Sjögren's syndrome and, in particular, this population that maybe has high symptom burden but less disease, how has KOLs and maybe patients guided you to think about what symptoms are most important or will be clinically meaningful there? And then kind of as a follow-up to that, what's the size of that population? How does that compare to the more severe group?

Jorn Drappa -- Chief Medical Officer

Yeah. So, if you ask patients, I think you will consistently hear that fatigue is very much on the top of their list of concerns, followed by dryness. So these patients have very unpleasant symptoms caused by dry mouth, dry eyes, and you know, absence of secretions in other organs as well. So, I think these are the key patient-reported outcomes that need to be captured.

And the way we're capturing patient-reported outcomes, is so with a validated instrument that's called the S3, and that includes many of these things. The number of patients in the high-symptom burden subgroup in the trial is, I can't remember it off the top of my head, but I think it's -- no, they're roughly equal size. I think it's a little bit larger than the size in the -- the size with the high disease activity. They're roughly equal.

But they will be analyzed separately. So, one, with an objective outcome, the S10 and one with the patient-reported outcome, the S3.

Corinne Jenkins -- Goldman Sachs -- Analyst

And does that trial kind of correlate well to the real-world population differences? Like what percentage of patients have more severe versus the high symptom burden?

Jorn Drappa -- Chief Medical Officer

No. So, in the real world, the population with the high-symptom burden is much larger than the one with a high disease activity. But the trial size is more driven by statistical considerations, by power considerations, and by end point performance rather than to reflect the real world.

Corinne Jenkins -- Goldman Sachs -- Analyst

OK. That makes a lot of sense. Thank you so much.

Operator

Thank you. Our next question comes from Chris Shibutani of Cowen. Your line is open.

Chris Shibutani -- Cowen and Company -- Analyst

Great. Thank you very much. Congratulations on all the progress. Two categories of question, first on VIB7734.

When we see additional data later in the year, can you give us a sense for what kind of -- how many doses and what kind of follow up we might expect? And also, will you be sharing with us more specifics or can you even comment now about the patients, I believe, from an enrollment criteria standpoint could have been those with and without systemic lupus? And of course, the cutaneous can have various types of manifestations, subacute versus chronic. Any sort of characterization of the types of patients that we'll see would be helpful as we all begin to slowly map out what this could look out from a market opportunity standpoint? Thanks.

Jorn Drappa -- Chief Medical Officer

So, the trial-included patients both with and without systemic lupus, but they have to have cutaneous manifestation. They could have systemic lupus or just cutaneous. And in the trial, it was approximately half-half, those patients with and without systemic lupus. And then in terms of what will we see at the end, in the final analysis, so the final analysis will include the PD analysis of skin biopsies in cohort 3.

So, these will be processed when the last patient in cohort 3 has had their day 85 skin biopsy. And then these skin biopsies will be processed and analyzed, which takes a little bit of time. And then at the end of the trial, we'll have complete data with respect to safety, clinical outcome measures, and PK/PD biomarkers for all three cohorts. Patients -- so the primary end point is assessed at -- after three months at day 85, but there will be additional safety follow-up at least through day 140 for all patients, and depending on the recovery kinetics of pDCs, potentially beyond that in some patients.

Chris Shibutani -- Cowen and Company -- Analyst

Great. We look forward to that. And then on inebilizumab, just to make sure that we're up to date, obviously, very close to the PDUFA date. I think the last time you communicated publicly, you kind of felt comfortable in expressing that you do not expect a black box.

And as far as any last-minute type labeling discussions, is there anything to share with us in that regard? And then secondly, if you do launch, help us get a sense for what you think we'll be able to measure, what kind of metrics will be out there in terms of prescription data, realizing that this is a specialty product, but, you know, how lost are we going to be as we begin to try and figure out how the initial launch is going in this environment? Thank you.

Jorn Drappa -- Chief Medical Officer

I'll take the one on the label. So, there's no updates to share. No status changes since our last call. And then I'll pass it over to Bill for the second part of the question.

Bill Ragatz -- Vice President, Head of Commercial

Yeah. Good question. Obviously, as we've talked about before, from a focus perspective, we're focusing on both newly diagnosed patients and patients who are having inadequate response to their existing immunosuppressant therapy they're on. There are roughly 10,000 actionable patients we see in the marketplace.

And we'll be going after the key institutions, along with some of the community doctors who are seeing a high number of patients as well, too, as kind of our priority focus at the immediate launch period. Again, as mentioned before in one of the last questions, this will vary probably significantly across the nation, depending on the status of opening up with the different areas, but we expect to be able to have good relationships and good discussions with our key target doctors right after launch.

Chris Shibutani -- Cowen and Company -- Analyst

But in terms of third-party prescription tracking data, etc., we're going to be kind of navigating our way through a bit of a fog. Is that fair? Or is there anything that you would comment in terms of how -- the lens that we should be looking through, any kind of prescription progress or data?

Bill Ragatz -- Vice President, Head of Commercial

It's going to be a little bit of foggy to start out with, for sure.

Chris Shibutani -- Cowen and Company -- Analyst

OK. Thanks.

Operator

Thank you. Our next question comes from Laura Chico of Wedbush Securities. Your line is open.

Laura Chico -- Wedbush Securities -- Analyst

Hey. Thanks very much for taking the questions. I guess one on VIB7734. I know you're saving details for later, but could you just talk qualitatively, perhaps, to the degree of pDC depletion in the peripheral blood versus the skin, I guess any distinctions that you might call out there? And then you kind of mentioned the follow-up, but any insight thus far into the durability of action? And then I have one follow-up on 4920.

Jorn Drappa -- Chief Medical Officer

So, the pDC depletion is quite potent, both in peripheral blood and in the tissue. Most patients depletes in the peripheral blood to near -- achieve near complete depletion in the peripheral blood. And we see the same thing in the tissue as well. We see near-complete reduction of pDCs in the skin biopsies when compared to baseline.

And that is true even in cohort 2, despite the fact that the clinical outcomes seem to be better in cohort 3 than in cohort 2. But from a PD point of view, it was already quite a good effect in cohort 2.

Laura Chico -- Wedbush Securities -- Analyst

Wonderful. And I guess one follow up on 4920. Could you just talk to the level of steroid usage in the patients that have more symptomatic disease? And I guess if you could just remind us, how are you looking at or are you evaluating steroid-sparing effects when 4920 is dosed there?

Jorn Drappa -- Chief Medical Officer

So, steroids is really not part of standard of care in patients with Sjögren's. So, steroids will not be on board in the trial, and it's also not commonly used in the real world because it just simply doesn't work very well. And the same is true for many other immunosuppressive drugs that have been tested and found not to work particularly well. So, steroids sparing is obviously very important in diseases where there is a lot of steroid use, such as lupus and other conditions.

It is less critical in disease like Sjögren's syndrome.

Laura Chico -- Wedbush Securities -- Analyst

All right. Thanks very much.

Operator

Thank you. Our next question comes from Raghuram Selvaraju of H.C. Wainwright. Your line is open.

Raghuram Selvaraju -- H.C. Wainwright -- Analyst

Thanks very much for taking my questions. The first one is for Bill. I was wondering if you could elaborate on what virtual events and fora you expect to highlight inebilizumab in post the approval decision.

Bill Ragatz -- Vice President, Head of Commercial

Yeah. Good question. We're still evaluating some of the options there. As I mentioned before, we are doing some webcast, Facebook Live events that have been very successful.

And while they were targeted initially to patients, we've also heard from physicians that they were very helpful with some basic understanding. We're doing virtual detailing, as many people are, from a disease state perspective. We'll continue that afterwards. And we're looking at other options as well, too, that seem to be effective at kind of breaking through the noise given that many people are now in the virtual setting, trying to go after a similar physician basis.

Raghuram Selvaraju -- H.C. Wainwright -- Analyst

And can you comment on the rise of telemedicine and whether that's likely to have any potential near- and -- or medium-term impact, for that matter, on the inebilizumab launch dynamics?

Bill Ragatz -- Vice President, Head of Commercial

Great question. I mean, clearly, we're seeing a lot more televisits going on right now in talking with physicians. They do feel that that is kind of an anomaly that that will go down significantly once things start opening up, but there may be some role for that for more follow-up visits than anything else. However, in the research we've done, physicians are very concerned about their NMOSD patients considering that any attack can be so severe and disabling long-term, permanently disabling.

So, they are more likely to try to get their patients in front of them to do a full evaluation, which is really more difficult to do in telemedicine than it would be face-to-face, obviously. So, we don't expect to have a material impact on our expectations right now with the telemedicine that's going on currently.

Raghuram Selvaraju -- H.C. Wainwright -- Analyst

Great. Thanks. And then the next couple of questions are for Jörn. I was wondering if you could maybe provide us with some additional granular steps you're taking in the ongoing trials of inebilizumab and 4920 to ensure that patients are not lost to follow-up.

And then if you have any sense of with what timing enrollment might resume in the Phase II trial of inebilizumab for kidney transplant desensitization and the trial for 4920 in Sjögren's syndrome where, and as I understood, enrollment has so far been paused.

Jorn Drappa -- Chief Medical Officer

So, we really haven't had much issue with lost -- with losing patients due to follow-ups. So, the largest group of patients that we currently have active in an ongoing clinical trial is the NMO patients in the open-label trial. We have, thus far, not really seen any dropouts or any missed visits as a result of COVID. There are two other trials, so with 4920, one in rheumatoid arthritis, and one in Sjögren's, where there's just a small handful of patients were enrolled prior to pausing enrollment as a -- due to the COVID crisis.

And similarly, in those patients, they have continued to come to the trials, that they have completed their visits on time, and we have been able to conduct dosing visits as well as a follow-up visit. So that didn't seem to be much of an issue. The time frame when we think trials can be resumed is difficult to predict, and it's going to be difficult -- it's going to be different by region. So, we are right now in contact -- in frequent contact with investigative sites, are talking to them to understand what their local situation is, what their institutional policies are on whether or not clinical research is on hold, and you know, how the epidemiology is developing in their various locations.

And there are clearly some locations where the pandemic is on the wane. These investigators and these regions are ready potentially to resume screening and enrollment in the reasonably near future, as early as June or July. And then there are other regions where the pandemic -- the epidemiology is still very much on the rise or remains at a very high level. And so those regions are not anywhere close to ready to resume clinical research.

So, it's -- the answer is going to be different in different parts of the world and even in different parts of the country.

Raghuram Selvaraju -- H.C. Wainwright -- Analyst

OK. That's very helpful. And then just very quickly on VIB7734. You mentioned that there could be multiple Phase 2 settings in which this molecule might be explored.

I was just wondering if you could give us an idea of specifically what you consider to be the highest-priority ones within the Phase 2 context specifically and whether or not you think any of those studies might potentially start before the end of this year, or if we should be looking toward those as potentially 2021 start events.

Jorn Drappa -- Chief Medical Officer

So, I think we are -- as I said earlier, we are still really in the process of prioritizing indications. So, I think at this stage, it's a little bit premature to give you, like, a prioritized list. With respect to trial start, I think next year is more likely.

Raghuram Selvaraju -- H.C. Wainwright -- Analyst

Thank you.

Operator

Thank you. Our next question comes from Yatin Suneja of Guggenheim. Your line is open.

Yatin Suneja -- Guggenheim Securities -- Analyst

Hey, guys. Appreciate the opportunity, and congrats on all the progress. Just a couple of questions on inebilizumab front. Could you guys comment on the level of engagement you've had with the regulators on the labeling front? Is the base case still going to be for the seropositive patient, which is about 80% of the market? Can you just comment what sort of interactions you've had there?

Jorn Drappa -- Chief Medical Officer

There's no updates to share on this at this stage.

Yatin Suneja -- Guggenheim Securities -- Analyst

OK. And then on the European front, any update in terms of the European regulatory discussions?

Bing Yao -- Chairman and Chief Executive Officer

Yeah. For European, there are two aspects. One is on the partnership. We are in active discussions with potential partners for Europe.

Second one is on the filing of the -- on the filing. It's still the case, intended to file the mid-year of this year.

Yatin Suneja -- Guggenheim Securities -- Analyst

And then just on the launch dynamic, you know, given that you have convenience advantage relative to the new drug that has been out there on the market, Soliris, can you talk about how you are set up to leverage that? Is there any new market research that you've conducted, and any new learnings now relative to the pre-COVID environment in terms of the convenience? And then the other part of the question is, talk about the willingness of patients to start this -- of physicians to start patients on a B cell depleting therapy in the COVID environment when these therapies tend to be a little bit more immunosuppressive. So just talk about these two dynamics, if you could. Thank you.

Bill Ragatz -- Vice President, Head of Commercial

So, it's a very good point. Clearly, one of the advantages that we have against the existing therapy that's out there is a dosing advantage. You know, I think that it is something that I think resonates well with physicians, given especially now that patients do not want to go to an institution to get infusions. But clearly, that is one of several elements of our product profile that's very attractive to physicians.

The safety, the efficacy, the multiple efficacy end points that we have, along with the familiarity of the mechanism of action are all strong elements here that really combine together to give us a very strong overall product profile and one that physicians have told us is very attractive to them for their NMOSD patients, both their new patients and for patients who would be thinking about switching. So, while convenience may play a little bit more of a role short term, we feel that that is, you know, one of many elements that we have going for us in our positioning of this product. Jörn, do you want to talk about B cell therapies and COVID?

Jorn Drappa -- Chief Medical Officer

Yeah. So, I think in this disease, it's quite clear that patients need to be on some immunosuppressive regimen, given their risk of attacks that are potentially devastating -- consequences of an attack. So, I think there's consensus in the community that some type of immunosuppressive regimen must be instituted. And there's really not great data at the moment whether certain regimens are more immunosuppressive or are associated with a greater risk of COVID than others.

There's actually numerous efforts ongoing currently to better understand this, including an initiative by the Guthy-Jackson Foundation, a survey of experts in this field. From our discussions with experts, we did get the sense that a lot of people think that there does not appear to be an increased risk of COVID in patients who are currently on B cell depleters. So, the data still is quite scant. And we're looking forward to getting better data on this, but that is sort of the gestalt that we're receiving from talking about this exact issue with experts in the field.

So there does not seem to be a whole lot of -- I mean, there is certainly some concern, but there's not a whole lot of data to suggest that B cell depletion is associated with any particular risk there.

Yatin Suneja -- Guggenheim Securities -- Analyst

Got it. And just one final question, this is on the payer front, specifically as it relates to inebilizumab. Given that we are in the COVID environment, are you able to sort of conduct all the required meetings over phone? Or are there any required meetings that needs to be conducted in person, just from payer perspective? Thank you.

Bill Ragatz -- Vice President, Head of Commercial

Great question. Clearly, a lot of the meetings move to a more virtual environment. The nice thing is, from the payer side of things, a lot of the meetings already were virtual. So, we have not seen an impact -- a real impact on the frequency or the quality of the meetings we've had in discussions with payers.

Yatin Suneja -- Guggenheim Securities -- Analyst

Thank you very much.

Operator

Thank you. I'm showing no further questions. I'd like to turn the call back over to management for any closing remarks.

Bing Yao -- Chairman and Chief Executive Officer

Yeah. I just want to thank you all again for joining our call today. We appreciate the good questions you asked. Have a good evening, and please reach out to us if you have any additional questions.

Thank you.

Operator

[Operator signoff]

Duration: 48 minutes

Call participants:

Mitchell Chan -- Chief Financial Officer

Bing Yao -- Chairman and Chief Executive Officer

Bill Ragatz -- Vice President, Head of Commercial

Jorn Drappa -- Chief Medical Officer

Seamus Fernandez -- Guggenheim Partners -- Analyst

Jeff Hung -- Morgan Stanley -- Analyst

Corinne Jenkins -- Goldman Sachs -- Analyst

Chris Shibutani -- Cowen and Company -- Analyst

Laura Chico -- Wedbush Securities -- Analyst

Raghuram Selvaraju -- H.C. Wainwright -- Analyst

Yatin Suneja -- Guggenheim Securities -- Analyst

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