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Momenta Pharmaceuticals Inc (NASDAQ:MNTA)
Q2 2020 Earnings Call
Aug 10, 2020, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning, everyone, and welcome to the Momenta Pharmaceuticals' Second Quarter 2020 Earnings Conference Call. [Operator Instructions] Please also note, today's event is being recorded.

At this time, I'd like to turn the conference call over to Patty Eisenhaur, Vice President of Investor Relations and Corporate Communications. Ma'am, please go ahead.

Patty Eisenhaur -- Vice President of Investor Relations and Communications

Thank you, Jamie, and good morning, everyone, and thank you for joining us today for Momenta's conference call to discuss financial results and operational highlights for the second quarter of 2020. Today's call is being webcast and will be available for replay on the Investors section of our website at momentapharma.com.

Joining me on the call with prepared remarks are Craig Wheeler, President and Chief Executive Officer and Young Kwon, our Chief Financial and Business Officer. Also available for the Q&A portion of the call are Santiago Arroyo, our Chief Medical Officer and Tony Manning, our Chief Scientific Officer. Following our remarks, we will open the call for questions.

Before we begin, I'd like to mention that our call will contain forward-looking statements about our financial outlook, business plans, and objectives and other future events and developments, including statements about the timing of regulatory filings and meetings for clinical development and marketing approval; the market potential and reception of our products and product candidates; potential competition and revenues for our product candidates; product development strategies, goals, and timelines; design, timing and goals of clinical trials and availability; timing and announcement of data and results; the use, efficacy, safety, potency, dosing, tolerability, convenience, and commercial potential of our product candidates, including their potential as best-in-class agents; hypotheses regarding certain effects of our product candidates in clinical study; and non-GAAP operating expense guidance, including our anticipated collaborative revenues and restructuring charges. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected. These risks and uncertainties include the risk of the impact of COVID-19 pandemic on the timing, enrollment or the results of our clinical trials, operating expenses, business and the supply of our manufactured drug materials; the final and quality-controlled verification of interim data and related analyses, those described in the slide entitled Cautionary Note Regarding Forward-Looking Statements, included in the presentation accompanying this call and under the heading Risk Factors in our most recent quarterly report on Form 10-Q filed with the Securities and Exchange Commission, as well as other documents that we may file from time-to-time with the SEC. Any forward-looking statements speak only as of today's date and we assume no obligation to update any forward-looking statements made on today's call.

On the call, we may also discuss first quarter 2020 non-GAAP operating expense. Please see the presentation accompanying the call for further information and reconciliation of this measure.

With that, I will now turn the call over to Craig.

Craig A. Wheeler -- President and Chief Executive Officer

Thank you, Patty, and good morning, everyone. I hope you're all doing well during these challenging times. Momenta continues to prioritize the health and safety of our staff, healthcare workers and patients, as we persist through this ongoing COVID-19 pandemic.

While we continue to implement the necessary measures, we have made progress in advancing our portfolio, as I'll touch on in a moment. Following my update, Young Kwon, our Chief Financial and Business Officer, will discuss our second quarter 2020 financial results, after which I'll close with some final comments and then we'll open the call to your questions.

As most of you know, Momenta has three novel drug candidates in the clinic for autoimmune and rare disease. Each of our molecules has been designed to possess best-in-class properties and franchise potential, with applicability across a wide range of immune-mediated diseases. Our research pipeline is also advancing as Momenta continues to leverage our platform technologies to build our pipeline for the future.

This past quarter has been an exciting one for our company. We released top line data from an interim analysis of our Phase II Vivacity-MG study, which demonstrated proof-of-concept for nipocalimab in myasthenia gravis. And we recently completed the Part B of our four-part Phase II trial of M254 in ITP. We are now ramping up our final data analysis for Part B and look forward to updating you later in the third quarter.

Let me now dive into the details of these programs and further updates across the portfolio.

I'll begin today with nipocalimab, our FcRn candidate, and a brief review of the topline interim data from Vivacity-MG. We designed nipocalimab to offer a best-in-class profile with potentially superior safety, efficacy and convenience versus standard-of-care agents in MG, as well as other agents in this class. Our primary goals for Vivacity-MG were to develop a full understanding of the relationship between IgG levels and efficacy as measured by ADL score, to explore the dosing and efficacy advantages that nipocalimabs maximal IgG lowering, long dosing intervals and rapid infusion characteristics might deliver, and to further demonstrate the strong safety profile of this molecule.

Our results demonstrated proof-of-concept in MG, provided a blueprint for subcutaneous formulation, and provided a strong dosing correlation that lays the groundwork to pursue nipocalimab in other indications.

The data we presented in June met all of our objectives. Nipocalimab achieved a rapid and significant lowering of IgG autoantibodies, which translated into durable reductions in the MG activities of daily living scores across all doses tested. Specifically, the trial met its primary efficacy endpoint, showing a highly statistical, significant and linear correlation between IgG lowering and durable MG-ADL reductions, with a p-value of less than 0.0001. This has always been our hypothesis and bodes very well for our drug candidate as it demonstrated the maximum IgG reduction possible, about 85%.

I won't go through all of the data here. But as a reminder, nipocalimab demonstrated efficacy across all doses tested with pooled data showing a durable response of 51.9% versus 15.4% placebo. That's a 36.5% improvement with the statistical p-value of 0.017.

Our highest two doses, 30 mgs per kg monthly and 60 mgs per kg every two week showed average improvement of 3.9 points on the MG-ADL scale at the two-month primary endpoint measurement, and nipocalimab was also well tolerated with no infusion reactions and no withdrawal from trial due to adverse events.

Nipocalimab continues to show a best-in-class profile which we expect will help position it, if approved, as the treatment-of-choice in MG. We observed efficacious once-monthly IV dosing with a benign safety profile. And based on our early modeling, we believe, what we've learned about the dosing relationships, should enable us to deliver a strong efficacy with a relatively low volume subcu option.

We're currently compiling the full dataset, which includes data from the eight-week follow-up period and expect to present these results at a medical conference later this year.

Furthermore, we are preparing for an end of Phase II meeting with regulators before the end of the year, which together with these results will inform the design of our Phase III trial, which we're targeting to initiate in the first quarter of 2021.

As you know, we have two other ongoing trials of nipocalimab. The first is Unity, our global multi-center Phase II clinical study of nipocalimab in hemolytic disease of the fetus and newborn.

This is a major differentiator for us, as we are the only company pursuing FcRn inhibition in feto-maternal disorders in the clinic. We believe nipocalimab's ability to maintain full receptor occupancy should enable total blockage of pathogenic auto and alloantibodies from crossing through the placenta from the mother to the fetus.

We are continuing to treat patients already enrolled. And due to the life-threatening nature of HDFN, this study continues to enroll new patients at sites where they can be safely accommodated. Currently, our European sites are enrolling patients and our U.S. sites are expected to reopen later this year.

We are about halfway through enrollment and we remain on-track for proof-of-concept data from this study in 2021. If successful, this proof-of-concept study has the potential to transform the treatment landscape in HDFN. Importantly, it should also validate our approach in feto-maternal disorders more broadly. If we demonstrate that we can safely block antibody transfer across the placenta to the fetus, we expect these results would be duplicated in studies with any pathogenic, allo or autoantibody.

Moreover, this data could open the door to reproductive freedom for the 30% of MG patients who are females of childbearing age. Nipocalimab's methods in this population could help make our drug candidate the agent of choice for prescribing physicians. This is a cornerstone of our strategy to build nipocalimab into the leading FcRn agent in the class.

Of note, we recently reported that the USFDA has granted both rare pediatric disease and orphan drug designations for nipocalimab in HDFN. Shows the agencies recognition of the significant unmet need in this population and offers Momenta various benefits, including extended patent exclusivity and eligibility for a priority review voucher.

Our third ongoing study of nipocalimab, the Energy Study, is an adaptive Phase 2/3 clinical study in hemolytic anemia. We have the most advanced FcRn candidate in this indication. We continue to activate clinical sites globally, but due to the COVID-19 pandemic, patient enrollment remains suspended.

We anticipate reopening patient enrollment in the fourth quarter and have amended the study protocol to provide patients the flexibility to have some of their study visits at home in order to best protect our study participants and healthcare staff. Top line data from this study is expected around the end of 2022.

Our successful Phase II study and the broad safety database that we are developing across our trials, provide a strong foundation for us to confidently advance our broader strategy for this molecule.

Our initial indications, MG, Hemolytic Anemia, and HDFN were selected to demonstrate proof-of-concept in smaller patient populations, where biomarkers are clear. In the future, we plan to explore a broader landscape with nipocalimab.

Our goal is to add a new indication every 12 months or so. We will look to broaden our autoimmune franchise by expanding in diseases in different therapeutic categories such as dermatology or rheumatology, and potentially explore larger indications which fall outside of the rare disease category. We also plan to expand indications in the maternal feto space.

Now, I'll talk about M254, our hypersialylated IVIg candidate. M254 is a novel agent manufactured from IVIg. We enzymatically modify IVIg to change the structure of the glycans on constituent IgG by extending the Fc glycans and terminating them with sialic acids. Our goal in developing M254 for ITP is to establish a high potency agent that could reduce dosing and infusion times versus IVIg, while maintaining IVIGs efficacy.

We are currently conducting multi-part Phase 1/2 clinical trial in idiopathic thrombocytopenic purpura or ITP. We're ramping up our data review for Part B and have initiated enrollment of patients in Part C.

As a reminder, Part B is a signal-seeking study composed of a single ascending dose cohort of ITP patients each followed by a standard 1,000 mgs per kg dose of IVIg. It's intended to provide an initial look at safety and efficacy and to aid us in dose selection for a larger cohort in Part C.

Part C is a cross-over design, in which we direct the two most promising doses from Part B in a larger cohort of patients. We intend to hold a conference call before the end of this quarter to discuss the data from Part B. Early data we shared in January from Part B showed clinically meaningful platelet response in approximately 80% of patients, in line with IVIg response rates. And in all doses tested from 43 mgs per kg to 250 mgs per kg, we also noted that there was some variability in performance versus IVIg in this early data.

Based on this initial dataset, we made the decision to expand Part B to explore lower dose cohorts and to add patients to each of the previously tested cohorts, to better understand if we could detect a dose response in this highly variable population.

As a reminder, the primary endpoint for this trial is platelet levels over 50,000 per microliter and a rise from baseline of at least 20,000 per microliter.

The data continues to show good efficacy as well as variability in performance versus IVIg. This drove our decision to advance to Part C with its randomized crossover design and larger 10-patient cohorts for each of two doses. Part C will help us better understand dose performance as well as provide data on the possible effects from the order of dosing.

From a commercial standpoint, ITP is an acute indication where most patients are hospitalized and speed of onset and a high response rate are important for clinicians. Once patients are stabilized, they will typically transition to other therapies such as TPO agonists for maintenance.

We're also beginning to plan for a Phase II study in chronic inflammatory demyelinating polyneuropathy or CIDP. Pending the results from Part C of our Phase II ITP trial, our goal is to initiate this study in 2021.

Next, I'd like to share an update on our exploration of the potential benefit of necuparanib to help fight COVID. On our MG call in June, we disclosed that we were researching necuparanib, a novel drug candidate we had previously tested in pancreatic cancer to evaluate if it could block the COVID-19 virus by binding to the spike protein.

Recent academic publications have reported a demonstrated therapeutic rationale for heparin-based drugs, potentially delivering strong antiviral activity in addition to the established anticoagulant and anti-inflammatory properties of heparins. In laboratory assays, heparin was reported to deliver up to four times more potency in blocking the ability of SARS-CoV2 to infect respiratory cells when compared with Gilead's remdesivir. If our drug shows similar benefits to other heparins being tested in the clinic, we believe it could have multiple advantages, including, first, necuparanib was designed to be a low molecular weight agent that retains many of the protein-binding properties with heparin but without the anticoagulant binding sequence. The low molecular weight could provide many advantages, including reliable subcu PK and potentially a nebulized delivery to the lung, if nebulized drug is needed.

Second, one of the big drawbacks of most heparins is that they are anticoagulants, so they cannot be dosed at high levels, as they will cause bleeding. Our agent is a non-anti-coagulant heparin derivative designed to be used in high doses for cancer patients without causing excessive anticoagulation.

Third, our agent already has a full toxicology package, GMP manufacturing supply chain for drug substance and drug product and demonstrated safety in Phase 1 and 2 clinical trials. So, it could be about faster than other new agents being tested.

To-date, we have confirmed the ability of necuparanib to bind the SARS-Cov2 spike protein, which is the protein used by the coronavirus to enter and infect cells. We have now begun cell-based assays with test viruses to see if necuparanib can block viral infection of the cell. We have seen a strong ability to block infections using RSV as a test virus, and now have advanced to testing the drug with coronaviruses. We're excited with the progress to-date and we'll keep you updated.

I'll now touch briefly on M230 and M710, our two partnered programs. For M230, our third clinical candidate, our collaboration partner CSL has been approved by MHRA to initiate a Phase I study, evaluating the safety and tolerability of a subcutaneous form of M230 in healthy volunteers.

As we've noted previously, a subcu formulation provides meaningful advantages, including self-and-home administration for autoimmune patients, many of whom require chronic lifelong treatments of their conditions. CSL expects to begin the study before the end of this year. CSL also formerly terminated the IV formulation of M230.

Our other partner program is M710, a biosimilar to EYLEA. Mylan expects to complete Phase III enrollment by year-end and to file a BLA in 2021.

Preclinically, we continue to advance M267 through IND-enabling studies. This is our first program to utilize our SIFbody technology, which uses our multiple Fc construct to enhance an antibodies Fc dependent and complement effective functions to effectively deplete target cells. M267s fab region binds to CD38, a target on plasmacytes responsible for generating autoantibodies and protein.

Preclinical data suggests this candidate has the potential to be best-in-class therapeutic for management of plasmacyte-mediated diseases such as multiple myeloma, AL amyloidosis and rare autoantibody-mediated diseases.

We recently demonstrated that M267 has high bioavailability and activity following the subcutaneous administration, and we plan to introduce a subcu version early in the development program. We expect to submit an IND in 2021, and we are confident this will provide significant opportunities, another high-value program with franchise potential.

With that, I'll now turn the call over to Young, to review our second quarter 2020 financial results. Young?

Young Kwon -- Chief Financial and Business Officer

Thanks very much, Craig, and good morning, everyone. With regard to the company's financials, while we have had to adjust some of our clinical plans in 2020 due to the COVID-19 situation, we continue to believe we should have sufficient cash to fund operations through at least the third quarter of 2021.

In the second quarter, we reported a net loss of $57 million compared to a net loss of $114 million for the same quarter last year. The decrease was primarily due to lower G&A costs, offset by increased manufacturing and clinical trial development costs. The reduction in net loss also reflects a $42.9 million manufacturing charge we took in the second quarter of 2019.

Product revenue for the second quarter totaled $6.6 million compared with $3.3 million for the same period in 2019. The increase was primarily due to higher net sales of Glatopa.

R&D revenue for the second quarter was less than $0.1 million compared to $1.8 million for the same period in 2019. The decrease was primarily due to lower reimbursement revenue for Glatopa expenses and lower revenue recognized from Mylan's upfront payment associated with the biosimilar collaboration.

Second quarter total GAAP operating expenses were $64 million compared to $121.8 million for the same period in 2019. Second quarter R&D expense increased to $38.8 million compared to $32.1 million in the same period in 2019. This was primarily due to an increase in manufacturing and clinical trial costs for M254, and an increase in share-based compensation expense, offset in part by lower lease costs.

Second quarter G&A expense decreased to $25.3 million compared to $46.6 million in the same period in 2019. This was primarily due to a payment of $21 million in June of 2019, reflecting the company's portion of a settlement payment, lower legal fees and lower depreciation and rent costs due to the modification to the Bent Street lease in 2019, partially offset by an increase in share-based compensation expense.

For the second quarter of 2020, our non-GAAP operating expense was $44.6 million. As a reminder, our non-GAAP operating expense is defined as total operating expenses less stock-based compensation, restructuring costs and collaborative reimbursement revenues.

Finally, we ended the second quarter with $450.6 million in cash, cash equivalents and marketable securities compared to $545.1 million at the start of the year.

Turning now to our guidance for 2020. Due to decreased clinical trial enrollment trends as a result of the COVID-19 pandemic, we expect our full year non-GAAP operating expenses will be lower than the range of $220 million to $240 million, as previously guided for 2020, and will now be in the range of $200 to $220 million.

Craig?

Craig A. Wheeler -- President and Chief Executive Officer

Sorry, I was on mute. Thanks, Young. As you can see, we remain in a strong corporate position and despite the challenging backdrop of COVID-19, we continue to make meaningful progress across our portfolio, in particular with our first proof-of-concept data for nipocalimab.

We look forward to reporting data from our Part B of the Phase 1/2 study of M254 in ITP later this quarter along with the complete results from Vivacity-MG later this year.

I look forward to keeping you updated on all of our progress. And thank you again for joining us. I'll now turn the call back to the operator to get Q&A under way.

Questions and Answers:

Operator

[Operator Instructions] And our first question today comes from Derek Archila from Stifel. Please go ahead with your question.

Derek Archila -- Stifel -- Analyst

Hey, good morning, guys, and congrats on the progress. Just a couple of questions on M254, and then one on nipocalimab. So just on MT254 first, so you noted you initiated Part C of the trial. Just wanted to see if you could provide any color on the high and low dose you might have brought forward there?

The second one being, can you just remind us on M254 in terms of the patent coverage you have there. We saw some recent patent filings that included some of the earlier data from earlier this year for the 43 mgs per kg dose, so just wanted to get your thoughts there.

And then lastly on nipocalimab, when do you think we could get an update on the subcu development strategy for that molecule? Thanks.

Craig A. Wheeler -- President and Chief Executive Officer

Sure. I think I've mastered my mute button Derek, so thanks. Yes, on Part C, I think you can take confidence that we have taken forward doses in Part B. And I was mentioning that we are to continue to see consistent results. I'm not going to talk about specific doses in details, because it's kind of -- we want to make sure we have all the data analysis wrapped up and then talk to you about the whole trial. But we did see -- continue to see good results. And so, that gave us the confidence to advance into Part C.

In terms of the patent coverage, as we said before, we have patents and will continue to build our patent estate. We also have a fair amount of know-how in what's a very complex manufacturing process to be able to titrate this enzymatic reaction properly, so. So, we feel we have pretty good coverage. I really don't have all of the details in front of me of all the different patents and how they're working, but yes, we'll continue to build that patent estate but also make sure we keep trade secrets as tight as we can on some of the manufacturing processes.

In terms of subcu, we probably will talk about it when we put it into the clinic. I mean, we don't want to tip our hand too much competitively. But we're looking at a whole series of things that we can think about with that program. And once we nail our doses and nail our bridge study, that's probably when we'll talk about it. We have done the formulation and we know we can formulate at quite high concentrations just as others have shown. And our modeling indicates that we should be able to get quite an efficient volume subcu's, but we're going to hold off on that until we specifically have the bridge trial designed and then we'll talk about all the details with you.

Derek Archila -- Stifel -- Analyst

Got it. Great. Thanks, Craig. And congrats again on the progress here.

Craig A. Wheeler -- President and Chief Executive Officer

Thanks, Derek.

Operator

And our next question comes from Robyn Karnauskas from SunTrust. Please go ahead with your question.

Robyn Karnauskas -- SunTrust Robinson Humphrey -- Analyst

Good attempt. Thank you so much for taking my question and I appreciate it. So, just to follow-up a little bit on the 254 doses. When you took them forward, are you confident in your cost of goods that it will be affordable for you to manufacture the process?

And then regarding FcRn, when you look at like your doses and as the data comes through with the IgG lowering, how are you thinking about what the profile might look like, what would be the ideal profile that you'd like to take forward for the IV as first dose frequency and how many different doses would you like to offer doctor [Phonetic]? Thank you.

Craig A. Wheeler -- President and Chief Executive Officer

Sure, thanks. Yes, on 254, yes, we are quite confident in the cost of goods. As I -- again, I'm trying not to talk about too much of the details of it, but we told you that we continue to see results similar to what we saw before. And if you recall, we were seeing strong results across all of our dose cohorts.

So, we continue to feel that we are well within the effective cost of goods for the doses that we're looking to taking forward. And so, we're not -- I'm not too concerned about that side of things.

On FcRn, we're still working through the dosing models. Remember, we have the second set of data, that -- the eight-week extension, that will give us a lot more information on how the longer-term doses lasted. And so, we're still working through all of that data as well as we have to have conversations with the FDA.

Obviously, we'd like long dosing intervals. And we also want to make sure that we have the evidence that we can actually enhance efficacy. So, we're looking at both pieces of that. And as I think Santiago talked about in one of our prior calls, the ability to actually treat with low volumes are going to be able to increase doses for some patients, also is a real nice thing that we can do with the dose curve.

So, we haven't got it all nailed down yet, but suffice to say, long dosing and as well safe -- safe dosing, as well as a high potency is obviously what we're looking for in our Phase III.

Robyn Karnauskas -- SunTrust Robinson Humphrey -- Analyst

And just a follow-up, just for clarification, because you -- roughly, what timing -- at what time do you think you'll have clarity from the FDA on subcu and clarity on the dosing schedule? Do you think that would be by the end of the year or a little bit longer? Do you have a sense of when that would occur?

Craig A. Wheeler -- President and Chief Executive Officer

Yes, our intent is to meet with the FDA this fall. We'll be ready to start these trials in the first quarter of next year. Santiago, would you like to comment on any of the timing?

Santiago Arroyo -- Senior Vice President, Development and Chief Medical Officer

Yes, we are aiming to meet with the FDA on the fourth quarter of the year. And so, at that time, we will have more clarity about the dose and dose interval.

Craig A. Wheeler -- President and Chief Executive Officer

And if we do have that meeting, that will mean that we can start the trial right up in the first quarter.

Santiago Arroyo -- Senior Vice President, Development and Chief Medical Officer

Yes, yes.

Craig A. Wheeler -- President and Chief Executive Officer

Yes.

Robyn Karnauskas -- SunTrust Robinson Humphrey -- Analyst

Great. Thank you, guys.

Craig A. Wheeler -- President and Chief Executive Officer

Sure.

Operator

Our next question comes from Stacy Ku from Cowen. Please go ahead with your question.

Stacy Ku -- Cowen & Company -- Analyst

Good morning. Thank you for taking my questions and congratulations on the progress. So, to follow up on an earlier question, so when could we expect initiation of Part D for M254? Would it occur somewhat in parallel to Part C?

And then, you commented on the manufacturing process. What would be the potential manufacturing or scale up gating factors for broad commercialization? I guess asked another way, have we passed the gating factors that might have stalled other hypersialylated programs? Thank you.

Craig A. Wheeler -- President and Chief Executive Officer

Sure. Thanks for the question. The first is on Part D, I think you were asking about our trial, which is the multiple dose extension. We will make a decision on that once we actually see the data from Part C. As you recall, we also are planning to start CIDP trial, which will be multiple dosing. And so, we may ultimately be able to use the CIDP trial for the multiple dose, and not have to do the Part D extension. But we haven't made a final decision on that and it really is going to depend.

I mean, we're obviously anxious to see the broader numbers in the crossover data from Part C just to kind of better understand this molecule. And I think that will answer a lot of questions for us in terms of how we would handle Part D versus how we would think about what we can get out of a Phase II CIDP trial.

The second part of your question was really around manufacturing. And I think it's a strong yes, that we have overcome the technical hurdles. We -- it's basically a scale up of volume at this point in time. We have very good control over the enzymatic reactions and we can make very reliable and reproducible products, product at multiple scales. And so, we feel quite confident about the technology side of it in terms of being able to maintain control over it.

I mean, as we scale up and the larger scale we get to, cost of goods gets better and better. So, we feel -- at least technically -- on the process, we are in good shape.

Stacy Ku -- Cowen & Company -- Analyst

Thank you.

Craig A. Wheeler -- President and Chief Executive Officer

Thank you.

Operator

And our next question comes from Alexander Duncan from Piper Sandler. Please go ahead with your question.

Alexander Duncan -- Piper Sandler -- Analyst

Hey, good morning. Thanks for the question. Santiago and Tony, could you address how you approach clinical development for the nipocalimab and M254 franchises? From a scientific and clinical perspective, it appears that both agents could have efficacy potential across numerous indications and in many cases overlapping indications due to the precedent of IVIg usage. So, in your view, is there certain profile for an indication that makes it a better fit for nipo or 254, and could we see combination therapy development in select indications in the future? Thank you.

Craig A. Wheeler -- President and Chief Executive Officer

Sure. Let me start and then I'll turn it over to the guys, the technical guys to answer your question, fully. But we understand that there may be places where these drugs actually could both be effective in indication or potentially work together in indications. And so, that's -- we're acutely aware of that. We do look at our initial indications for our FcRn agent in terms of places which we know that they are primarily antibody-driven and we know that we're potentiating more of an anti-inflammatory activity on hypersialylated, so that kind of points us in different directions.

But on the longer-term development piece, I would ask maybe Tony to comment a little bit his thoughts and then Santiago on the development strategy.

Anthony Manning -- Chief Scientific Officer

Yes. Maybe just to begin this. Autoimmune diseases are chronic, are lifelong, are generally treated with a combination of therapies that evolve over time. So, I think as we've thought about how our particular molecules could fit into the treatment algorithm, we've had a very-very broad view. There's a very high unmet medical need. Patients will need different therapies at different times. And so, whereas we primarily have been sitting our molecules where we think the mechanism of action, presence of autoantibodies -- for instance -- is appropriate. I think we have a much broader view that says, over time one could see these agents being used together in a treatment algorithm used in many-many similar indications but many-many-many different one.

So, I think we have a very-very broad view of the potential for these two franchise agents. But I think Santiago has a much more realistic view about how in the short- to- medium-term we will be developing these agents. And so, I think I'll pass to him to be able to provide you a bit more color on that.

Santiago Arroyo -- Senior Vice President, Development and Chief Medical Officer

Yes. Thank you for the question. I mean, M254 and nipocalimab are particularly differentiated assets. M254, right now the strategy that we have for development is basically to be a substitution of IVIg in autoimmune disorders, and obviously the first indication will be CIDP and ITP the second indication, the two indications that we are working with. With nipocalimab, we have a strategy for the autoimmune disorders, for the alloimmune disorders. The alloimmune disorders represent feto-maternal -- feto franchise. We are starting with HDFN, with early onset HDFN. We will progress to a broader HDFN population and to other alloimmune disorders, and there are many of those.

In the autoimmune area, we are working right now in two large franchises, the neurology starting with myasthenia gravis; hematology, starting with warm hemolytic anemia. And as Craig was mentioning, we are thinking about a third indication that we would like to develop, and again, as you know, a therapeutic area in which we could propose the use of nipocalimab.

Alexander Duncan -- Piper Sandler -- Analyst

Thank you, guys.

Operator

Your next question comes from Eric Joseph from JPMorgan. Please go ahead with your question.

Eric Joseph -- JPMorgan -- Analyst

Hey, guys. Thanks for taking the questions. Just a commercial-related question for 254. It seemed like the distribution of IVIg is a little more regulated than other biologics being partly derived in some regions kind of classified as blood. And so, to the extent that that's the case, would you expect a similar regulation for 254? Correct me if I'm wrong there. And what if any manufacturing considerations are unique here, if say you were to pursue globalization -- sorry, global commercialization independently? Would there be opportunities to centralize manufacturing of M254? Thanks.

Craig A. Wheeler -- President and Chief Executive Officer

Sure, thanks. Thanks, Eric. And that's a question which isn't fully answered yet, but what we have done is demonstrated that we can get equivalent 254 using different sources of IVIg's. So, from a technical activity of the drug perspective, it looks pretty good. The way to think about how we look at IVIg is it's a raw material. So, that's the raw material that we buy and then we actually use, enzyme inspection, and modify the structure of that to make M254.

So, as a raw material, it's going to have to meet all the specs, whatever we buy of IVIg's in the markets that it's in. And so, there are regional as well as global players in IVIg. And so, the regulatory pathway is going to have to be defined by us, because I think we're the first that have used IVIg as a raw material, and so that'd be with us and the regulators.

And a lot to us depends upon exactly how we take this asset forward. If we partner this program, then we actually are working with the companies that whatever company has their global supply chain intact. And if we're on our own, then we would actually be working in sourcing, more likely if we did that from a smaller regional or a smaller global player. And so, there's a lot yet to be told in that story, though the data we have scientifically, shows that we can actually make the same effective drug from multiple sources of different IVIGs. And as a raw material, we're kind of a little bit in uncharted territory, but we feel pretty good about the fact that we can guarantee activity of our compounds. So, we'll learn a lot more as we go forward.

Eric Joseph -- JPMorgan -- Analyst

Okay, great. Thanks for taking the question.

Craig A. Wheeler -- President and Chief Executive Officer

Thanks.

Operator

Our next question comes from Graig Suvannavejh from Goldman Sachs. Please go ahead with your question.

Graig Suvannavejh -- Goldman Sachs -- Analyst

Yes, good morning. Thanks for taking my questions. Congrats on the progress. Just a few if I could. I just wanted to ask about the [Technical Issues].

Craig A. Wheeler -- President and Chief Executive Officer

Hello? Hello? Could anybody hear that question?

Patty Eisenhaur -- Vice President of Investor Relations and Communications

No. I think Graig fell off.

Craig A. Wheeler -- President and Chief Executive Officer

Okay.

Patty Eisenhaur -- Vice President of Investor Relations and Communications

Operator, could you update the queue?

Operator

[Operator Instructions] Graig's line has been rejoined. Graig, you can continue with your question.

Graig Suvannavejh -- Goldman Sachs -- Analyst

Hey, can you hear me now? Sorry about that.

Craig A. Wheeler -- President and Chief Executive Officer

We got you.

Graig Suvannavejh -- Goldman Sachs -- Analyst

Okay. Congrats on the progress and thanks for taking my questions. If I could just ask about Phase III in MG, I realize you don't have your dosing down just yet, but are there any details you can share in terms of perhaps what your primary endpoint would be, inclusion/exclusion criteria's, sample size. Just want to know how similar you're planning on designing that study relative to the other Phase III trial that's out there in MG?

And then just the second question has to do with next indications for nipocalimab. I know you talked about dermatology potentially and rheumatology. And so, is the strategy to go into indications where others are already playing in terms of additional indications for the other FcRn's or might there be an opportunity to think differentially about where to go in those other areas? Thanks.

Craig A. Wheeler -- President and Chief Executive Officer

Sure, let me frame the first one and send that over to Santiago, and then will come back and do the second one on indications. And first thing I'll say is, you can be assured that we're not going to put drug holidays into our Phase III study for MG. But Santiago, do you want to comment a little bit on the design?

Santiago Arroyo -- Senior Vice President, Development and Chief Medical Officer

Yes. I mean, I think it will be premature to talk about the time, because we are working through it. Right now, we are working through the results. I mean, we recently locked the main database, so it would be premature. Obviously, we'll use as primary endpoint ADL, change from baseline ADL, in similar ways that that endpoint can be defined, and I would prefer not to go over it right now, because we actually haven't made up our mind.

And similarly, with the exclusion/inclusion criteria, I think at some point we will be able to discuss about that. Right now, we are still working through it.

Craig A. Wheeler -- President and Chief Executive Officer

Yes, thanks. And I will just add that we view this as a chronic dosing. And so, you can expect us to use a standard repeat dosing strategy as opposed to dose and then take patients off. That's kind of our view, the right way to dose in this disease.

Your second question was on indications. And first I'll say is that we already are doing differentiation. We're first in hemolytic anemia. We're the only folks in feto-maternal at this point, but I'll let Young provide just a little more color in terms of he's thinking. Young, also as our Chief Business Officer has the commercial aspects of the company. So, I'll ask him to comment a little bit in terms of how he's thinking about indications prospectively.

Young Kwon -- Chief Financial and Business Officer

Sure. Hey, Graig, it's Young here. Certainly, as we think about additional indication opportunities beyond the ones that we're in, we're looking at diseases that are rare, which has been the strategy we've had to-date, but also indications that may be other specialty autoimmune disorders outside the rare space. And I would say that by and large, certainly as our peer companies generate clinical data in indications that we're not in, we think that we have a great opportunity to pursue those if we chose, because we believe we have the best-in-class agent care.

So certainly, the derisking in those indications would be something that would be in our favor. However, I guess, all things being equal, and I don't think we have -- this is an either/or answer, because I think we can do both. But personally, I think that the opportunity to kind of break ground in some of these other indications, allows us to be obviously have a first-in-class potential and that's something which we are looking at quite a bit as well.

So, I think we can do both. If we only had to pick one, personally I'd pick the differentiated new indication.

Graig Suvannavejh -- Goldman Sachs -- Analyst

Okay. Thank you. And if I could just have a quick follow-up on 254. I just want to go back to, I think in your prepared comments, Craig, you mentioned about you continue to see variability in the data. Can you just maybe comment a little bit more whether that's around a particular dose or if there are multiple doses where you see the variability?

Craig A. Wheeler -- President and Chief Executive Officer

No, it's across the doses. And it's -- we said that earlier too, that's when we talked about the early data. This is a highly variable disease, both inter and intra patients. And so, we're trying to see if we can interpret what we're seeing vis-a-vis IVIg. But also, it's evident that there, when we start looking at the biology of what we're doing, we're dramatically enhancing at least one aspect of what IVIg does, but higher volumes are going to have different effects. And so, we're still trying to sort of all that out, the -- I think I commented in one of the earlier meetings that if you look at our efficacy just blindly, looks pretty good, right? And when you start looking at it in comparison, you're saying why are some up, some down and that kind of stuff. And that's what I mean by variability.

So, we'll be able to paint all that picture for you when we talk to you about it once we get all our data analysis done. So, I guess the bottom line as you continue to be confident that we're hitting our endpoints of the trial and that the comparison to IVIg is puzzling at some point, I would say, so.

Graig Suvannavejh -- Goldman Sachs -- Analyst

Okay. All right. Thank you very much.

Craig A. Wheeler -- President and Chief Executive Officer

Yes. Thank you.

Operator

And our next question comes from Douglas Tsao from H.C. Wainwright. You can go ahead with your question.

Douglas Tsao -- H.C. Wainwright -- Analyst

Hi, good morning. Thank you very much for taking the questions. Craig, maybe as a starting point, just on the HDFN trial, I think you sort of characterized as sort of like a proof-of-concept, although I think in the past you've sort of indicated you think it could be a registrational study. I'm just curious in terms of the thoughts in terms of the sizing of the study of 15 patients. I mean, was there ever consideration of sort of maybe increasing the size a little bit and sort of really putting yourself on a track to file with it, especially given the fact that your nipocalimab, you had such good results in MG, certainly would perhaps give us all more confidence in terms of the outcome for the molecule?

Craig A. Wheeler -- President and Chief Executive Officer

[Technical Issues] question. The challenge of where we are in feto-maternal is that we're in a very rare -- we're in severe early onset [Technical Issues]. So, it's a small population, which is a nice opportunity for us, but it takes a lot to enroll the trial. And so, I think how we think about [Technical Issues] and how we might broaden it out would really depend on how strong results are.

The possibility in a population this small of seeing of an early approval exists, and because we see strong efficacy and we hope that we will continue to see strong efficacy with this trial and this indication. It's something that has a lot of weight, because it's basically life-changing and lifesaving. But it is early, right? We -- the FDA would never really do something like that and make a decision like that until most of or all of your data are in.

And so, we're a little guarded in saying this is going to happen or is not, is going to be breakthrough. But all the results so far and certainly the awarding of pediatric and breakthrough from the FDA, I think gives us -- I mean, a pediatric and orphan for us, gives us real confidence that the FDA is paying good attention here, right?

So, that story is going to probably told in the first half of next year, once we actually get more of the patients through and really have a dataset that we can talk about with the FDA.

Douglas Tsao -- H.C. Wainwright -- Analyst

In-house, I know you sort of indicated in the past that enrollment had been a little affected by COVID. Has there been some progress as states have reopened, although kind of [Speech Overlap]

Craig A. Wheeler -- President and Chief Executive Officer

Yes, there are. What I said in my prepared remarks, Doug, is that we have -- the European sites never closed and we've continued to enroll. And so, we're about halfway enrolled in that trial right now. And the U.S. sites that we're working with are anticipating reopening soon, probably later this quarter, the fourth quarter.

The one -- this is the one trial where we kept open. Because if these women get pregnant, they don't have a lot of options. And so, we've got it because of the life-threatening aspects of this disease. Our investigators thought it's important to keep this option open for patients and that's why we've been able to continue to enroll it. So right now, it's still on-track for next year, which is really nice to see.

Douglas Tsao -- H.C. Wainwright -- Analyst

Okay, great. And then just one quick follow-up in terms of 254. The question sort of came up in terms of supply of IVIg and whether your, sort of, strategy -- and obviously a multiple different sort of options as that program advances in terms of whether you partner with somebody and so forth. Just curious at what point do you think you'll need to want to make a firmer commitment or should define your strategy in terms of how you're going to supply IVIg your raw materials?

Craig A. Wheeler -- President and Chief Executive Officer

Yes, we're already working that issue hard, obviously with positive data. We've had conversations. People are paying attention to us. And so, we'll probably make that decision within the next six to 12 months. We'd renegotiate a partnership for this.

There's a whole bunch of considerations. One is supply of IVIg, and the other is just cost of goods. If you put it into an existing IVIg supply chain, it's probably a cheaper product than making it with finished IVIg. And so, there's lots of -- from a cost of goods perspective. So, this -- there's lots of considerations and we're actively pursuing them, and we will probably have that figured out in the next six to 12 months.

Douglas Tsao -- H.C. Wainwright -- Analyst

Okay. And is that something that would take place before you went into pivotal trials with the molecule?

Craig A. Wheeler -- President and Chief Executive Officer

Not necessarily. So, we haven't made a final decision, but not necessarily. It might be a good thing if you could nail that strategy first, and we have some time with the Part C ongoing.

Douglas Tsao -- H.C. Wainwright -- Analyst

Okay, great. Thank you so much.

Craig A. Wheeler -- President and Chief Executive Officer

Sure. Thanks.

Operator

And ladies and gentlemen, our final question today comes from Yanan Zhu from Wells Fargo. Please go ahead with your question.

Yanan Zhu -- Wells Fargo -- Analyst

Hi, thanks for taking my question and congratulations on the progress. So first on the M254 study. Just want to get a sense of how many patients have you enrolled in Part D? And is the remaining item before data release really just the follow-up of -- like one-month follow-up after the IVIg treatment in perhaps more remaining number of patients?

Craig A. Wheeler -- President and Chief Executive Officer

Yes. So, thanks for the question. We didn't give you the specific numbers. We had told you we're going to add cohorts in that and look at different cohorts, and we'll give all of that when we do the release. But we did say earlier that we were wrapping up enrolment, so, yes, we are now kind of getting all that that last data in from the one-month follow-up and making sure we get the analysis properly understood and validated and then we'll do a call for everybody to understand it better.

Yanan Zhu -- Wells Fargo -- Analyst

Got it. And then on Part C, have you talked about the size of the trial? And also, with regard to the variability on the platelet counts endpoint, would the size of that portion of the trial, the Part C, be sufficient to address that variability? And also, probably, will the trial be -- sorry, blinded? I understand that volume is different, so maybe it's difficult to blind. But would there be blinding for the Part C of the trial?

Craig A. Wheeler -- President and Chief Executive Officer

Sure. I'm going to turn that over to Santiago to just talk about -- what he can talk about that Part C. Santiago?

Santiago, you may be muted.

Santiago Arroyo -- Senior Vice President, Development and Chief Medical Officer

I'm sorry. I was muted. So, Part C is not blinded, is a randomized study, which we will crossover a dose of 254 versus one gram of IVIg. We'll have two crossover cohorts within that part of the study. Each cohort will have approximately 10 patients and we are aiming to have that done over the next several months.

Yanan Zhu -- Wells Fargo -- Analyst

I see. So, if you look at the variability and do a statistical analysis, would the 10 patients per cohort be kind of powered sufficiently to address variability?

Santiago Arroyo -- Senior Vice President, Development and Chief Medical Officer

It will be powered sufficiently in the setting of Phase II study to understand what will be the variability, yes.

Yanan Zhu -- Wells Fargo -- Analyst

Got it. Thank you. And on the HDFN side -- sorry, on nipocalimab, in terms of the HDFN rare pediatric disease designation, orphan drug designation; has FDA seen clinical data from the Unity study and has -- there was any data factored into the designations?

Craig A. Wheeler -- President and Chief Executive Officer

Sure, as a rare disease, we are in frequent engagement with the FDA around the study. And so obviously, they are aware of where we are as business. But Santiago, you want to talk a little bit about how you work with the FDA in these rare diseases?

Santiago Arroyo -- Senior Vice President, Development and Chief Medical Officer

We are actually working very closely with the FDA. I mean, obviously, this indication is a high-risk indication. It's a very delicate indication in which we are working with the patients that are pregnant, and we actually have had several meetings and interactions with the FDA, are under way.

Yanan Zhu -- Wells Fargo -- Analyst

Got it. Very helpful. And lastly, for the subcutaneous strategy for nipocalimab, is a subcu injection the only option you're considering? Or could there be a subcu infusion version being considered? Thanks.

Craig A. Wheeler -- President and Chief Executive Officer

Sure. And I would say that depending on the dose, both of those are feasible. Our goal is to have a simple injection, maybe with an autoinjector that could -- the patients could continue to use at home. We may be able to extend timelines if we -- even further if we use some kind of subcu injection device or pass, but we are looking at all of that with our delivery team. But we haven't made any final decisions on that yet.

Yanan Zhu -- Wells Fargo -- Analyst

Got it. Very helpful. Thank you so much.

Craig A. Wheeler -- President and Chief Executive Officer

Sure. Thank you.

Operator

And ladies and gentlemen, with that, we'll end today's question-and-answer session. I'd like to turn the conference call back over to Craig Wheeler for any closing remarks.

Craig A. Wheeler -- President and Chief Executive Officer

Okay, thank you, guys. I know this is all tough when we're working from our living rooms. But I do appreciate everybody. Obviously, we're working really hard to make sure we can keep everything on-track in the company and I look forward to updating you in the coming quarter and at the next earnings call. Thank you. Bye-bye.

Operator

[Operator Closing Remarks]

Duration: 57 minutes

Call participants:

Patty Eisenhaur -- Vice President of Investor Relations and Communications

Craig A. Wheeler -- President and Chief Executive Officer

Young Kwon -- Chief Financial and Business Officer

Santiago Arroyo -- Senior Vice President, Development and Chief Medical Officer

Anthony Manning -- Chief Scientific Officer

Derek Archila -- Stifel -- Analyst

Robyn Karnauskas -- SunTrust Robinson Humphrey -- Analyst

Stacy Ku -- Cowen & Company -- Analyst

Alexander Duncan -- Piper Sandler -- Analyst

Eric Joseph -- JPMorgan -- Analyst

Graig Suvannavejh -- Goldman Sachs -- Analyst

Douglas Tsao -- H.C. Wainwright -- Analyst

Yanan Zhu -- Wells Fargo -- Analyst

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