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FibroGen Inc (NASDAQ:FGEN)
Q3 2020 Earnings Call
Nov 5, 2020, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the FibroGen Third Quarter 2020 Financial Results Conference Call. [Operator Instructions]

I would now like to hand the conference over to your first speaker, Mr. Michael Tung. Thank you. Please go ahead.

Michael Tung -- Vice President of Corporate Strategy and Investor Relations

Thank you, Robert, and good afternoon, everyone. I'm Michael Tung, Vice President of Corporate Strategy and Investor Relations at FibroGen. Joining me on today's call are Enrique Conterno, our Chief Executive Officer; Dr. Percy Carter, our Chief Scientific Officer; Pat Cotroneo, our Chief Financial Officer; Thane Wettig, our Chief Commercial Officer; Dr. Peony Yu, our Chief Medical Officer; Chris Chung, our Senior Vice President of China Operations; and Dr. Elias Kouchakji, our Senior Vice President of Clinical Development, Drug Safety and Pharmaco Vigilance. The format for today's call includes prepared remarks from Enrique and Pat, after which, we will open up the call for Q&A. I would like to remind you that remarks made on today's call include forward-looking statements about FibroGen. Such statements may include, but are not limited to, our collaborations with AstraZeneca and Astellas; financial guidance; the initiation, enrollment, design, conduct and results of clinical trials; our regulatory strategies and potential regulatory results; our research and development activities, commercial results and results of operations; risks related to our business and certain other business matters.

Each forward-looking statement is subject to risks and uncertainties that could cause actual results and events to differ materially from those projected in that statement. A more complete description of these and other material risks can be found in FibroGen's filings with the SEC, including our most recent Form 10-K and Form 10-Q. FibroGen does not undertake any obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. The press release reporting our financial results and business update and a webcast of today's conference call can be found on the Investors section of FibroGen's website at www.fibrogen.com.

And with that, I would like to turn the call over to Enrique Conterno, our CEO. Enrique?

Enrique Conterno -- Chief Executive Officer

Very good. Thank you, Mike, and good afternoon, everyone, and welcome to our third quarter 2020 earnings call. We're making strong progress on our commitment to bringing our potential first-in-class medicines to patients suffering from chronic and life-threatening conditions, despite the challenges presented by the COVID-19 pandemic. I will begin today's call by providing a high-level summary of the most important accomplishments and developments from the last few months. Pat Cotroneo, our CFO, will then review the financials, after which we will open up the call to your questions. Today's call will include a high-level review of the roxadustat data from the recent American Society of Nephrology Conference, our continued strong China results and updates on roxadustat and our clinical trial programs. So let us get started with the recent ASN meeting. This year at ASN Kidney Week, alongside our partners, AstraZeneca and Astellas, we presented new analysis on roxadustat, our investigation of first-in-class oral treatment for patients with anemia of CKD. Together with our partners, we had 42 presentations, including 10 oral, which add to the understanding of roxadustat's efficacy and safety profile and the unmet need -- and the unmet medical need in anemia of CKD.

The roxadustat clinical data demonstrated consistent efficacy and reassuring safety results across the continuum of CKD patients with anemia, adding to the established body of evidence highlighting roxadustat as a potential foundational treatment for this condition affecting millions of patients. We also presented data on the significant burden of anemia of CKD, a reminder that new treatment options for these patients are sorely needed. On the efficacy front, a major goal in treating anemia is to reduce the risk of red blood cell transfusions, a significant risk for CKD patients. And roxadustat demonstrated a statistically significant improvement in this important clinical measure. The efficacy results were consistent across a wide range of patient populations, including nondialysis dependent instant dialysis, dialysis-dependent and peritoneal dialysis and included analysis in patients with diabetes, heart failure and systemic inflammation. Roxadustat demonstrated the ability to consistently maintain hemoglobin levels above 10 in the vast majority of patients. And data from the trial suggest that the risk of transfusion increased four to five fold in patients with hemoglobin levels less than 10 versus those with hemoglobin levels greater than 10, regardless of treatment. Moving to safety to late-breaking abstracts, explore cardiovascular outcomes of patients with anemia of CKD treated with roxadustat, including the associations of MACE and MACE+ rates at various hemoglobin levels. In this post hoc analysis, patients who achieved hemoglobin levels above 10 had lower rates of MACE and MACE+ than patients who achieved hemoglobin rates below 10.

Another presentation of an exploratory analysis showed a lower rate of hospitalization for heart failure in dialysis-dependent CKD patients treated with roxadustat when compared with epotein alpha. Finally, multiple presentations reinforced roxadustat's safety profile related to neoplasm, hypertension and ophthalmological effects. In summary, roxadustat was a highlight of the ASN conference with 20 of the top 10 viewed posters, including the top 2. We appreciated a widespread interest with the potential for roxadustat to transform the treatment of patients with anemia of CKD. Moving now to China. In China, we're pleased to report net sales of roxadustat of $22.7 million for the third quarter versus 15.7% in the second quarter. We're seeing an increase in uptake, which is being driven by both an expansion in hospital listings and broad adoption with enlisted hospitals. Hospital listings continue to be a key focus of our launch efforts. Notably, as of the end of the third quarter, roxadustat was listed at hospitals representing approximately 55% of the CKD anemia market opportunity in China. This is in comparison to the 45% reported at the end of the second quarter. We continue to see significant roxadustat utilization across the range of different patient populations with anemia CKD. About 2/3 of patients from roxadustat are on dialysis, split between hemodialysis and peritoneal dialysis. And within hemodialysis, initial adoption has been in patients who do not respond well to ESAs as well as instanticipate dialysis patients. This broad utilization pattern bodes well for long-term success, and provides important learnings as we prepare to launch roxadustat in the U.S. and other countries. We look forward to keeping you updated as we advance our long-term goal of making roxadustat, the standard of care in treating China's CKD anemia patients. Let us turn now to the U.S. regulatory review and commercial preparation for roxadustat.

We continue to be pleased with the cadence of and engagement with the FDA. And as we have discussed previously, we will not be making comments on the ongoing interactions with the FDA. We and AstraZeneca are working closely on U.S. launch preparation activities. Assuming a positive decision by a PDUFA date of December '20, the plan is to immediately apply for the transitional drug add-on payment adjustment, or TDAPA, which would provide reimbursement for roxadustat for dialysis-dependent patients outside of the prospective payment system bundle. The earliest roxadustat could receive TA dapa coverage would be April 1, 2021. And should that occur, the official launch within the dialysis organization would commence. Assuming approval, roxadustat will be available in the first quarter of 2021, and we plan to officially launch in a non dialysis-dependent setting in the second quarter of 2021. This is awareness activities and discussions with payers are well under way. We have submitted manuscripts covering the Phase III data for publication, both for the individual trials and pooled data sets, and expect to have them at the time of launch. Finally, we continue to work with large dialysis providers on our two ongoing Phase IIIb roxadustat clinical trials in the U.S. dialysis setting. In Europe, the filing for roxadustat for the treatment of anemia in adult patients with CKD, both on dialysis and not on dialysis, is under review by the European Medicines Agency. In Japan, the sNDA filing for the indication of anemia CKD in nondialysis-dependent patients is under review, and we continue to expect the decision by year-end. Moving now to our pipeline. I would like to provide time line guidance for our clinical trials. Please note that the COVID-19 pandemic continues to present challenges to the conduct of clinical trials across our industry, and we continue to monitor the situation and will take actions as necessary. Starting with roxadustat. For our Phase III trial in myelodysplastic syndromes, or MDS, we expect top line data in the first half of 2022. For our Phase II trial in chemotherapy-induced anemia, or CIA, patients, we expect top line data in the second half of 2021, and if successful, we plan to quickly initiate a Phase III program. Moving now to pamrevlumab.

As we have mentioned over the prior months, the most affected of our trial continues to be pamrevlumab's suffers IPF trial in which we paused enrollment due to the vulnerability of these patients with severely compromised lung function. Unfortunately, the current COVID situation continues to be extremely challenging for enrollment and has also delayed the initiation of 2. As such, we will be providing guidance for pamrevlumab in LAPC and DMD, but not on IPF at this time. Given the different covet scenarios, there is variability in our projected IPF enrollment time lines, and we will continue to evaluate and plan to update you at the appropriate time. In August, we initiated Le Lantis, a Phase III trial of pamrevlumab in approximately 90 patients with nonambulatory Duchenne muscular dystrophy or DMD. And we expect top line data in the second half of 2022. We also plan to initiate a second Phase III trial, Le Lantus II, approximately 70 patients with ambulatory DMD. Finally, for Lapis, our Phase III trial in locally advanced and resectable pancreatic cancer, we expect top line restriction data in the second half of 2022. We remain focused on accelerating enrollment of all of our ongoing clinical trials while ensuring patient safety. Lastly, I want to welcome Kirk Christopherson, who has just joined FibroGen as Chief Business Officer with responsibility for business development and alliance management and reporting to me.

I will now turn the call over to Pat Coronel, our CFO, to review the financials. Pat?

Pat Cotroneo -- Chief Financial Officer

Thank you, Enrique. As announced today, total revenue for the third quarter of 2020 was $44 million as compared to $33.2 million for the third quarter of 2019. The current quarter revenue consists of net product revenues of $22.7 million for roxadustat sales in China, $20.7 million in development revenue, $2.3 million for sales of bulk drug product to AstraZeneca and a net reduction of $1.7 million for certain adjustments. For the same period, operating costs and expenses were $11.7 million and net income was $33 million or $0.36 per basic and $0.35 per diluted share as compared to operating costs and expenses of $86 million and a net loss of $49.4 million or $0.57 per basic and diluted share for the third quarter last year. As mentioned in our last quarter's call, we recently amended our China collaboration with AstraZeneca. The new agreement more optimally aligns both FibroGen and AstraZeneca to maximize the economic value of the roxadustat franchise and will result in improved and more predictable economics and profitability for FibroGen. Under this amendment, in September 2020, FibroGen, Beijing, and AstraZeneca completed the establishment of a joint distribution entity that will perform roxadustat distribution as well as conduct sales and marketing through AstraZeneca.

We amended the collaboration in a number of ways, including establishing the cap on sales and marketing expenses. Historically, these copromotion expenses were billed to FibroGen PAUSE and payment was deferred until certain profitability and liquidity provisions were met. At that time of the amendment, we also settled the historical copromotion costs for both parties to reflect an equal sharing of historical losses and made an adjustment of the copromotion expenses. As a result of these changes, we reversed approximately $84.4 million of copromotion expenses, which were recorded as a reduction to selling, general and administrative expenses in the third quarter of 2020. Once the distribution entity is fully operational, FibroGen is expected to recognize revenue based on its sales to the distribution entity, while AstraZeneca is expected to consolidate the distribution entity and recognize revenue on sales to customers. This amendment better aligns the parties' interest and is expected to enable profitability for roxadustat commercialization in China at an earlier point in time. Included in operating costs and expenses for the quarter ended September 30, 2020, was an aggregate noncash portion totaling $23.6 million, of which $17.9 million was a result of stock-based compensation expense as compared to an aggregate noncash portion of $19.6 million, of which $14.8 million was a result of stock-based compensation expense for the same period in the prior year.

At September 30, FibroGen had $719.3 million in cash, cash equivalents, restricted time deposits, investments and receivables. Looking ahead, we have a total of $245 million in potential milestones expected over the next nine months for anticipated U.S. and EU approvals and first commercial sale in the U.S. At this point in time, we have no changes in expectations in any of the anticipated milestones between now and mid-2021. Based on our latest forecast data, we now estimate our 2020 ending cash, cash equivalents, restricted time deposits, investments and receivables to be in the range of $770 million to $780 million, assuming U.S. NDA approval in Q4 2020.

Thank you. And I would now like to turn the call back over to Enrique.

Enrique Conterno -- Chief Executive Officer

Thank you. And in summary, FibroGen is well positioned to continue to make progress in the current environment. Our business continuity plans are in effect, and we're seeing some impact to progress in the current environment. Impact to operations resulting from COVID-19, we have the capabilities and resources to navigate through these uncertain times and achieve our stated goals. Our roxadustat sales ramp-up in China, our financial position is strong with approximately $720 million in cash at the end of the third quarter and a total of $245 million in approval and first commercial sales milestones expected over the next nine months. We received full partner reimbursement for all development and commercialization of roxadustat in all geographies except China, where we shared these expenses 50-50 with AstraZeneca. We have an excellent cash position with which to advance our research and development agenda and are looking forward to the roxadustat regulatory decision in the U.S. by year-end.

Robert, if you could now open the lines for questions?

Questions and Answers:

Operator

[Operator Instructions] We'll have our first question coming from the line of Michael Yee with Jefferies.

Michael Yee -- Jefferies -- Analyst

Your line is open. Hey, guys. Thanks and Congrats on the progress, particularly in China. I had a 2-part question. One was regarding the big-picture implications of whether a drug has a black box or not. And while AstraZeneca had some very nice comments this morning, I guess, for investors, is there an implication to the opportunity? Or do they use, I'm sure you've thought about this, whether a drug has a black qbox or not. So maybe just run through what those things might mean. And then the second question relates to the ASN presentation, which you nicely summarized. And I guess, the idea that having less cardiovascular events is hemoglobin goes up was very good, but that's, of course, how Amgen maybe gotten trouble later on. What is the implication of that toward thinking about cardiovascular safety? And don't you need to show the control arms as well?

Enrique Conterno -- Chief Executive Officer

Very good. Thank you, Michael. And let me try to address the first question. I'll try -- we'll try to answer the second question here with Peony as well. In terms of the box warning, there are a number of scenarios. And let me just remind everyone that we are not planning to comment or speculating on what our interactions with the FDA are right now. But there are a number of -- you can speculate about a number of potential scenarios, if you wish. So on one side, you can take basically no box warning on -- across any of the indications. Maybe to the other end, you can say, well, we have a box warning that reads like the box warning that ESAs have. Clearly, somewhere in between maybe a box warning that maybe reads a little bit differently than what the ESAs box warning is. As we think through this, clearly, when -- first, when we look at the dialysis setting, PAUSE it is pretty clear that, today, I think the products that are being utilized for treatment, and patients are treated for anemia in the dialysis setting in the vast majority, we have those products being having a box warning. So in this particular setting, having a box warning, it is not a disadvantage for us, right? So clearly, not having a box warning is even better, but it's -- I view that as something very manageable given the current setting. When it comes to NDD, we are -- in this particular setting, we have most of the patients being untreated. So it's an opportunity to basically build the market and make the case for roxadustat as a compelling value proposition to be able to treat these patients. But it's a different situation because we are trying to increase treatment rates and ensure that instead of having one out of every 10 patients being treated in the setting that we can move truly the needle over time.

Clearly, in that setting, a box warning actually would slow the uptick, in particular, the initial uptake as physicians get more comfortable with utilizing the product. So that's maybe some of the frame that [Indecipherable] I don't see longer term, when we think about the absolute addressable market, that being a huge issue, but it will slow down the uptick in the near term. In terms of your second question, or ASN, and I think you are referring to the data that we presented on achieved hemoglobin levels and corresponding MACE outcomes. Just to recap what the what our interpretation of this analysis say is basically that we basically saw higher rates at the hemoglobin levels below 8, very high rates of MACE. Rates of MACE decrease as hemoglobin increased. And for hemoglobin above 10, we basically saw the lowest rates of MACE and MACE+ events. And this data was quite consistent. This pattern was quite consistent in both DD and NDD. We -- our intent of that analysis, I think, it's important data.

But to me, I think the number one interpretation of that analysis, and let's keep in mind that this is a post hoc analysis, right, so we need to view it that way. It's just mining the data that we basically have from Phase III trials, we should do so. They are exploring -- we should view them as exploratory analysis. But I think the #1 take is that anemia needs to be treated. And we need to treat it seriously because, clearly, what we basically see is that for low rates -- when hemoglobin is low, we basically see high rates of anemia. By the way, this -- also below 10, we saw transfusion rates increase almost four to five fold. So it is basically -- our own interpretation is basically around treatment of anemia and the importance of doing so from a medical perspective.

Michael Yee -- Jefferies -- Analyst

Yeah, makes sense. Thank you.

Operator

Thank you. Next question will be coming from the line of Jason Gerberry with Bank of America. Your line is open.

Fadi -- Bank of America -- Analyst

Hi, This is Fadi [Phonetic] on for Jason. thanks for taking our questions. Can you help explain the market dynamics in China. Based on data from AstraZeneca today, the patient numbers more than doubled from 40,000 to 90,000 from 2Q to 3Q, but sales -- the sales increase did not match that rise in the number of patients. Can you help explain that?

Enrique Conterno -- Chief Executive Officer

Yes. Let me try to provide some color on China. And then I'm going to ask Chris Chung to also help provide some additional commentary. Clearly, we're very pleased with our China launch. We achieved reimbursement at the beginning of the year. And as of the end of Q3, we are already listed in 55% of the hospital. This is PAUSE really quite extraordinary as we look at comparable launches, even of products that have become very significant products in China. So very significant listing progress. And that is key, and I think it's a great signal for long-term success. In addition to that, of course, we're seeing the adoption within those listed hospitals. And we just reported basically $22.7 million in the Q3 versus the $15.7 million that we reported in Q2. So good consistent progress. And when we look at the underlying business fundamentals, I consider them to be very, very strong. Right now, I think we view that roxadustat has the potential to become what I would describe as a blockbuster in China. I would define that as a product that has revenue north of $0.5 billion, so $500 million. So very significant opportunity, and we're launching well to be able to try to aim toward that.

Clearly, we also see our utilization across a breadth of patients, which I think is very important as we think about long-term success, many different opportunities for us to grow with different segments. As it relates to your question, my understanding -- I'll ask Chris to confirm because -- but the number of patients that were reported by AstraZeneca, they were cumulative patients as opposed to the patients in the quarter. And as you know, the duration of -- there are some patients -- treatments, some patients that stop treatment so I don't think that we will be able to just do a calculation that we increase the number of patients, and we're going to double the demand. But we're very pleased in terms of where we are and the opportunity to have roxadustat start benefiting so many patients in China. And Chris, maybe if you could comment?

Christine L. Chung -- Senior Vice President, China Operations

Sure, Enrique. So very quickly to supplement what Enrique said, the sales we report are ex factory sales. I think patient points more to demand sales in terms of what is actually sold to the hospitals and what's actually prescribed. So I don't know that we could directly link the two in that linear of a manner. As Enrique said, there's tremendous uptake, but still we're at the early launch stage, where there are some new patients, new prescribers who are just getting on drug. We're trying to track the DOT as best we can, but there's a lot of variability. At this time, it's very difficult to link demand to the number of patients. But as you can see from our ex factory sales, it's a very robust trajectory, and we remain very optimistic in terms of what this tells us about the market opportunity.

Fadi -- Bank of America -- Analyst

Okay, that's helpful. Thank you.

Operator

Next question will be coming from the line of Annabel Samimy with Stifel. Your line is open.

Annabel Samimy -- Stifel -- Analyst

Hi. Hi, thanks for taking my question. So I had a question about what you expect the launch trajectory. I know that in the dialysis population, you expect to ramp relatively quickly. Can you talk a little bit about how you expect -- or how AstraZeneca expects to build the nondialysis population. Just beyond some of the reimbursement challenges or hurdles, where do you expect the primary adoption hurdles to be? Given the wealth of data that you have, it seems like physicians can understand the benefit rather quickly, notwithstanding a black box or no black box. What are some of the considerations you're thinking about in the NDD population?

Enrique Conterno -- Chief Executive Officer

Yes. Clearly, the two settings are different, and they also respond to different reimbursement mechanisms. First thing, I think, for a launch anywhere, we need to ensure that roxadustat is going to be reimbursed. We need to work toward reimbursement in both the dialysis setting. I've commented as part of my my initial comments on our plan to submit for TDAPA and expect that the earliest date that we could get reimbursement will be April 1, 2021. In the case of NDD, we are also in discussion with payers. And in this particular case, I think we need to be placed in formularies, in the different formulary. So those arrangements will need to be made, and we want to make sure that we are supporting AstraZeneca to be able to have those arrangements as quickly as possible. So that's an important part of thinking about -- just ensuring that there's going to be adequate reimbursement over time. We need to think about, as we think about NDD, that in this particular case, it is not just about treating the current patients that are being treated. So we need to basically educate the overall marketplace on the importance of treating anemia. And that's why I'm insisting on the comments of some of the benefits when it comes to anemia and some of the comments that I made during the initial comments in this conference call.

That is incredibly important that we are upfront. Now roxadustat has, as you mentioned, a number of benefits. So we think that it has the right efficacy, safety profile to be able to have a really good uptake in the NDD setting and be able to be a catalyst for the overall expansion of that market. We -- over time, we're not going to be satisfied with just trading 20% more patients, or we need to be thinking about a scaler in terms of expanding this marketplace. And this is going to happen, of course, over time. And to do that, yes, we will need to make sure that we're reaching the appropriate physicians, not only the physicians that are prescribing and treating anemia today but the ones that we think could -- are seeing those patients that could benefit from roxadustat. But in addition to that, we need to be thinking about patient activation, ensuring that patients understand that there is a new treatment option that is up. So we have a great partner in AstraZeneca, and we look forward to supporting them and ensuring that that we can be as successful as we can be in that setting. I'm going to ask Thane if he has any additional comments.

Thane Wettig -- Chief Commercial Officer

Yes. Thanks, Enrique. Just a couple of additional comments. When we think about the NDD market, we don't think about it as a market build, we think about it as a market rebuild just because of the number of patients who previously have been treated with an ESA that are now not being treated. And you've heard the statistics where about one in seven patients in the 12 months prior to dialysis are treated with an ESA. At one point in time, it was about one in 3. And so our first goal will be to ensure that we can rebuild that market on the way to then, as Enrique talked about, scaling the opportunity in a much different kind of scenario as well. And the second thing is the advantage of working with a partner like AZ is the significant presence that they have from a patient support and affordability program perspective with their internal EZ 360 hub, which we believe will be an important mechanism to ensure eligible patients have the patient support and reimbursement mechanisms in place to assist them in getting and staying on therapy.

Annabel Samimy -- Stifel -- Analyst

Okay. Great. And if I could just follow-on one more question. You have quite a bit of cash building that are going to get better. You don't have a tremendous amount of expense with the launch. So is there any thought beyond just financing your R&D programs, any additional thoughts to business development and things you need to build out?

Enrique Conterno -- Chief Executive Officer

Yes. So we're not going to be commenting on business development. But yes, that's something, as I mentioned at previous earnings calls, that after this initial phase, the first nine months or so, which, by the way, I've been now, I think, on my job now 10 months, there will be, I think, an opportunity for us to start thinking about that and be able to think about business development and, in particular, bringing assets or signs that we believe can create significant value for patients and shareholders.

Operator

Next question will be coming from the line of Geoffrey Porges with SVB Leering. Your line is open.

Geoffrey Porges -- SVB Leering -- Analyst

Thank you very much on appreciate all the answers. A couple of quick questions. First, and I apologize if you've answered this, but what is the latest thinking on the time for the pamrevlumab pancreatic cancer study readout? And then secondly, could you just confirm, Enrique, what you said about the launch timing for NDD and DD, specifically next year, assuming success at the FDA. And then lastly, is the data about LDL reduction, meaningful to physicians and potentially helpful to launch? Or is that something that might be something that you'll be featuring?

Enrique Conterno -- Chief Executive Officer

Very good. Thank you, Jeff. Just let me first address your question about LAPC. When do we expect a readout? And we mentioned that we expect top line resection data in the second half of 2022. When it comes to -- your second question was about or last question was about LDL and impact of LDL we think that is a nice marker to have. But at the end, LDL is mainly utilized as a marker for cardiovascular risk. And to that extent, we have cardiovascular outcomes that in a certain way are comprehensive to the entire product. So yes, it's good to have the LDL data that we have, showing decreases in LDL. But I think even more importantly, is basically to be able to showcase our overall cardiovascular safety data.

Geoffrey Porges -- SVB Leering -- Analyst

Okay. And then, sorry, just the timing, specifically for the two indications or populations?

Enrique Conterno -- Chief Executive Officer

And in terms of launch for the tow, for both DD and NDD, what we are determining the official launch, right, because clearly, we expect to make the product available as soon as we can after approval. But we expect that the earliest that we would get TADAPA approval would be April 1, 2021. So that's basically what we're targeting the official launch, given that's really what would be the catalyst for the dialysis organizations to incorporate their products or using the product in the way that they -- we think they could. When it comes to NDD, we expect that the official launch would be also in the second quarter of 2021.

Geoffrey Porges -- SVB Leering -- Analyst

Thank you very much.

Operator

Next question will be coming from the line of Yaron Werber with Cowen. Your line is open.

Yaron Werber -- Cowen -- Analyst

Yeah, hi, good afternoon. So I have a couple of questions, Enrique. One is basically a follow-up to what you just saw were highlighting. With Fresenius and Davita, these better than me, are big clinics, and they have pathways, and they typically will run pilot programs before they adopt a new drug. I know you've commenced a couple of studies, and you're enrolling those studies in those sites. Can you give us an update on that? And how long do you think before you have data? And is it sort of a pseudo or an official pilot program? And then secondly, on TDAPA, when we look historically some of the drugs, whether the irons and you can argue, they're not that innovative or even Parsabiv and you can argue sensipar was out, but launches in dialysis have been pretty slow. And the profit incentive under TDAPA, really it's a small and mid-cap -- mid-chain dialysis providers that typically adopted, but not the big ones. Why would it be different with roxa?

Enrique Conterno -- Chief Executive Officer

Yes. I'm going to ask Peony to comment on our Phase IIIb studies, which we are conducting with dialysis organizations. Piani, would you like to make some comments?

K. Peony Yu -- Chief Medical Officer

Yes. Thanks, Enrique. Yes, we are working with some of the largest dialysis organizations, and the two studies are going exceptionally well. This is a an opportunity for the U.S. dialysis organizations to further study our product. And the studies are expected to be finished in the first half of 2021, and will be in time to support our launch.

Enrique Conterno -- Chief Executive Officer

And in terms of -- thank you, Peony. And in terms of TDAPA, if I understood your question, you're looking at other examples. I will share what my view is here, but having reimbursement doesn't mean that you're going to get use, right? The reason why we believe roxadustat will be utilized is because of the overall clinical profile that it offers, not because it has a favorable -- necessarily favorable reimbursement scheme. So we think that roxadustat offers a number of benefits. I think if we think about straight off the bat in incident dialysis, the excellent data that we have with showing basically reduced cardiovascular outcomes in this population, so that's extremely important. Clearly, there are a number of patients, we estimate maybe about 20% of patients on dialysis that do not respond well to ESAs or are in very, very high doses in many cases, we think those are also patients that would be given the experience that we have in China. And we see patients that would be candidates for roxa right away. So tous, I think it's the overall benefit -- risk-benefit profit that the product offers. TDAPA in itself, I think, is important because it allows for the product to be used and to ensure that there's not going to be a negative incentive or negative economic driver. So if anything, I think it's a positive driver from a reimbursement perspective for the use of the product. So I would look not to TDAPA but really to the profile of the product to see why we believe that product will be utilized.

Operator

Next question will be coming from the line of Difei Yang with Mizuho. Your line is open.

Alex Bouilloux -- Mizuho -- Analyst

Hi, good afternoon, everyone. This is Alex on for Difei. First one, I guess, given that you will be potentially first to market in dialysis, could you give us a bit of color on how you're engaging with the large dialysis providers in the U.S.? And if you would expect to secure contracts with the two large providers following approval, or would you expect to secure contracts maybe in a more staggered manner, or just with one of them? And then I have a follow-up.

Enrique Conterno -- Chief Executive Officer

Yes. Clearly, we want our -- the utilization of the product to be broad. We're not going to be commenting on where are we on our discussions with a different provider. Clearly, we need to make sure that the products will receive approval. But it is pretty clear that we've been working with them pretty closely for quite some time. Keep in mind that we conducted our Phase III clinical trials with them. We are also conducting this IIIb -- Phase IIIb studies with dialysis organizations. So I feel like we are in a really good position. And also what is what is the overall profile of, once again, the medicine that we're offering, and we think that it can be a significant value from a medical perspective, so to patients and to healthcare organizations. We feel good in terms of where we are, I think, in our discussions. Our intent is not to -- is to try to offer the product to -- and be able to reach as many patients as we can. And clearly, getting TDAPA being effective will be critical toward that goal.

Alex Bouilloux -- Mizuho -- Analyst

Okay. Great. And then just a quick follow-up, another question on China. I'm wondering if you could provide a bit of color around roxa's uptake, specifically in stable dialysis patients who are already on ESAS. Are you seeing a bit more conversion to roxa from these patients today versus compared to, let's say, six months ago?

Enrique Conterno -- Chief Executive Officer

Yes, I'm going to ask Chris to maybe provide some comments on that.

Christine L. Chung -- Senior Vice President, China Operations

So the way we look at the maintenance dialysis market, first of all, is those with controlled hemoglobin levels and uncontrolled hemoglobin levels and also peritoneal dialysis and hemodialysis. So first of all, we'll look at the PD population. We've done extremely well in the PD population. It speaks well to the clinical profile. Roxadustat, the oral administration feature obviously is additive and attractive to this population for very obvious reasons. So we're doing particularly well in PD. In terms of HD, there is a very different value proposition for those with uncontrolled hypertension -- uncontrolled hemoglobin and controlled. For those that are uncontrolled really is the initial adoption population and a target launch population. It speaks very well to the differentiation based on ion mobilization and inflammation. So the clinical value proposition there is very, very strong, and that's where we see a lot of the early adopters. We are seeing migration into the controlled population, and the thesis there is it's important to treat. It's important to treat to target. It's important to maintain so that there's very little low variability. But as a matter of pricing, we are higher than ESA. So the value proposition and the differentiation there is a little bit different, but we're very happy to see migration into that population, which frankly was not the initial focus. But with the maturing launch, we're seeing adoption. So we're delighted to see that.

Enrique Conterno -- Chief Executive Officer

The last thing that I would say, and you did not ask this question, but clearly, in addition to looking at the stable patients on the houses, clearly, I think, what we see is really good adoption within the instant dialysis patients, which, at the end, I think, is a great predictor of what the brand could be in the future.

Operator

We have our final question from the line of Joel Beatty with Citi. Your line is open.

Joel Beatty -- Citi -- Analyst

ASA and Akebia presented data for vadadustat on their nondialysis patients, showing that the U.S. MACE looks quite a bit better, and it was the ex U.S. MACE that was really hurting their MACE outcome. I guess, with that in mind, could you characterize how your nondialysis data looks in terms of any differences between the MACE in the U.S. patients versus patients enrolled ex U.S.?

Enrique Conterno -- Chief Executive Officer

Yes. Maybe let me just make some overarching comments because, clearly, our trial is designed a little bit different from [Indecipherable] in terms of we were going, as you know, relative to placebo. But importantly, also, we treated 11 plus/minus 1, whether it was in the U.S. or OUS. So we utilized the same treatment targets for roxadustat. Now when it comes to roxa, I think what's important is when -- first, when we look at the overall trial, we basically see that in NDD, we were comparable to placebo. So that's when it comes to MACE. So that's critically important. We showed noninferiority. The best trial for us to look at, which is not part of our pull study, but the best trial that will be most comparable to the Akebia trials will be dolomites, which is a trial where we compared against an active comparison in darbepoetin, and it was conducted outside of the U.S. So that's -- you're hitting on both points. And the hazar ratio that we saw -- and by the way, we treated to once again, 11 plus/minus 1, OK? We saw hazard acceleration in MACE of 0.81. So honestly, we feel very good about our data. And I don't know, Peony, if you want to add anything else to that.

K. Peony Yu -- Chief Medical Officer

Yes. Thanks, Enrique. Yes, we -- so that -- as Enriquestion said, that DOLOMITE study is 100% ex U.S. and we had a very reassuring hazard ratio. And now in our -- in the placebo control, which is our main program, we saw consistency in the U.S. data with -- that is consistent with the overall MACE program. So we've -- and as you know that placebo is a high standard for a measurement of safety, and we are glad that we have chosen this standard.

Joel Beatty -- Citi -- Analyst

Maybe one other question is also on the competitive landscape. And I think recently, on clinical trials.gov, GSK moved sooner that the time lines for the readouts for looks like November 2020 for dialysis and April 2021 for nondialysis. Any predictions there for how the results could look, whether they could resemble your data, or are there differences to consider?

Enrique Conterno -- Chief Executive Officer

I think that's a good question for them.

Operator

All right. We don't have any more questions on the line. Speakers, please continue.

Enrique Conterno -- Chief Executive Officer

Very good. Once again, I appreciate everyone's time today as we report our third quarter results. We're very pleased with the progress, as I mentioned, across a number of fronts. And of course, we are looking forward to the action date of December 20 for roxadustat, which is the roxadustat PDUFA date here in the United States. Thank you very much.

Operator

[Operator Closing Remarks]

Duration: 55 minutes

Call participants:

Michael Tung -- Vice President of Corporate Strategy and Investor Relations

Enrique Conterno -- Chief Executive Officer

Pat Cotroneo -- Chief Financial Officer

Christine L. Chung -- Senior Vice President, China Operations

Thane Wettig -- Chief Commercial Officer

K. Peony Yu -- Chief Medical Officer

Michael Yee -- Jefferies -- Analyst

Fadi -- Bank of America -- Analyst

Annabel Samimy -- Stifel -- Analyst

Geoffrey Porges -- SVB Leering -- Analyst

Yaron Werber -- Cowen -- Analyst

Alex Bouilloux -- Mizuho -- Analyst

Joel Beatty -- Citi -- Analyst

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