Provention Bio, Inc (PRVB) Q1 2021 Earnings Call Transcript

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Provention Bio, Inc (PRVB)
Q1 2021 Earnings Call
May 7, 2021, 8:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning. My name is Kaylee, and I'll be your conference operator today. At this time, I would like to welcome everyone to Provention Bio call. [Operator Instructions] Please be advised that this call is being recorded at the company's request.

I would now like to hand the conference over to Mr. Robert Doody, Vice President of Investor Relations for Provention Bio.

Robert A. Doody -- Investor Relation

Thank you operator, and thank you all for joining us on Provention Bio's first quarter 2021 financial results conference call. Joining today's call from Provention Bio team is Ashleigh Palmer, Chief Executive Officer and Co-Founder; Andrew Drechsler, Chief Financial Officer; and the other members of the Provention Bio leadership team. Before we begin, let me remind you that the various remarks we will make today constitute forward-looking statements. These include statements about our future expectations, clinical results, regulatory and other developments and timelines related to our product candidates. Including for the teplizumab BLA. Such as our plans to work with the FDA to resolve their PK comparability concerns and expectations for the upcoming advisory committee meeting. The potential safety, efficacy and commercial success of teplizumab and our other product candidates.

The potential COVID-19 impact on our clinical studies and business plans. Financial projections, including our anticipated use of cash and our cash runway. And our business plans and prospects, including planned free commercial activities across the company and preparation for the potential approval of teplizumab and projected timing for the same. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the risk factors section of our most recent quarterly report on Form 10-Q, which we filed with the SEC this morning, and in other filings that we may make with the SEC in the future. Any forward-looking statements represent our views as of today, only.

While we may elect update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our views change, except as required by law. Therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today. There is more complete information regarding forward-looking statements, risks, and uncertainties, in the reports Provention files with the SEC. These documents are available on Provention's website at www.proventionbio.com, under the investor section. We encourage you to review these documents carefully.

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

Ashleigh W. Palmer -- Co-Founder, President, Chief Executive Officer and Director

Thank you, Bob. And good morning to all of you joining us today. We greatly appreciate your support and attention. As we continue our mission to develop and commercialize pioneering therapeutic options, to intercept or prevent serious life-threatening and life-impacting auto immune diseases. In founding Provention Bio just four years ago, our intention was to disrupt how the bio pharma industry and healthcare systems around the world typically wait for patients with auto immune disease to present to clinicians with symptoms. Often by this time, irreversible tissue damage has already taken place. Precious cells and organs have been damaged or destroyed. It's simply too late. It's not good enough. And we believe that patients and their families deserve better in this modern world of medicine. As with all pioneering endeavors, we recognize that our path to accomplishing our mission is not without its obstacles, hurdles and resistance.

As such, we've built our company from the ground up with like-minded professionals and industry experts capable of addressing those challenges head on. We have established a resilient and tenacious culture dedicated to improving the lives of patients and their loved ones. Ultimately, we believe we will prevail. I open our call this morning with these comments, to put into context, the current status of the ongoing review of our BLA for teplizumab, for the delay of progression to stage three clinical type one diabetes in at-risk individuals.

When we acquired teplizumab just three years ago, we took on the challenge of reviving a potential therapeutic option that had been long de-prioritized by others. Our original strategic intent was to do so by focusing on the preservation of beta cells in newly diagnosed patients by way of our Phase three PROTECT study. At the time of acquiring teplizumab in 2018, the TN-10 trial, conducted by the NIH-sponsored academic consortium TrialNet, had already been fully enrolled and was waiting for the progression of a threshold number of patients to clinical stage disease before opening up the blind. The drug product administered in the TN 10 study had been manufactured using drug substance produced by Eli Lilly, more than seven years beforehand, now over a decade ago.

An involving plant and certain processes that are no longer available. Importantly, when Provention acquired teplizumab, we also acquired the original cell lines used to manufacture the original Lilly drug substance, along with the original batch records, specifications, and other know how necessary to transfer this process to our manufacturing partner and into the modern biotechnology era. We believe we have produced a quality and comparable teplizumab drug substance by way of an up-to-date, well-controlled, reproducible, and validated commercial-scale manufacturing process. Additionally, throughout 2020, all the physico-chemical testing and analysis required for our manufacturing partner, AGC Biologics, to release that drug substance, fulfilling, met all the requisite specifications and parameters. Thereby enabling the completion and submission of our BLA's CMC module.

Before introducing new drug product containing AGC drug substance into our Phase three PROTECT trial in newly diagnosed T1D patients, we conducted a single low dose PK/PD bridging study in healthy volunteers. And we observed a PK area under the curve, or AUC level below the target comparability range, indicating that, in this particular study, the new drug product might be clearing from the bloodstream faster than drug product manufactured from the old Lilly drug substance. Importantly in this study, we believe that other relevant PK/PD parameters such as the peak concentration or C-Max, the clinically relevant PD marker of transient lymphocyte drop, the immunogenicity, and the safety profile all fell within acceptable ranges of comparability. As we stated previously, based upon very extensive PK/PD modeling and taking into account the totality of the information available to us at this time, it is our firm belief that the observed difference in PK AUC is not clinically relevant and should not impact clinical efficacy or safety since the predicted exposure for the intended commercial product remains above the requisite threshold for beta cell protection. Based on its review to date, the FDA is not comfortable with our conclusions.

The agency have informed us that it does not yet consider the two drug products to be sufficiently comparable and cannot be certain that the PK AUC shortfall observed in our single low dose PK/PD bridging study in healthy volunteers might not translate into clinical relevance. Nevertheless, under our breakthrough therapy designation, the FDA continues to be very engaged, very helpful, and very cooperative, and has agreed to work closely with us to figure out our next steps and the path forward to a solution, which we anticipate will likely require our provision of additional data to support PK/PD comparability. One potential pathway, may be to access PK/PD data from patients in our ongoing PROTECT study, which has begun enrolling patients to receive either drug product using the original Lilly drug substance or drug product intended for commercialization using AGC drug substance.

We have also stated that we expect to need to provide the agency with additional data, will result in a delay of the expected timelines within which teplizumab has the potential to be approved and made available to patients. We are continuing to discuss next steps with the FDA, and we'll keep you apprised and updated as to our progress. These comparability discussions are occurring in parallel with preparations for the upcoming advisory committee meeting in three weeks' time on May 27th. And the FDA notified us of its intention to mention the comparability considerations in its briefing materials, along with an affirmative statement that the agency is actively working with us to find the solution.

We believe the FDA's intent is to focus the advisory committee meeting on an examination of type one diabetes unmet need and the safety and efficacy of teplizumab from the TN-10 trial, supported by data from other historic studies in newly diagnosed patients. Our understanding is that, since the FDA's comparability considerations do not bear on the benefit-risk assessment of the TN-10 study clinical data package, no comparability-related questions or discussion topics are planned for the meeting. We are also fully aligned with the FDA's recommendation to remove the term Provention from the wording of teplizumab's initial indication. And instead, focus exclusively on delaying the progression of disease. We believe this will help to reinforce the fact that, while pre-symptomatic, T1D patients with two auto antibodies and dysglycemia already have the disease and may benefit from therapeutic options targeting the preservation of functional beta cells. Our team has been working diligently, for quite some time now, preparing for this advisory committee meeting, as we realized the pioneering importance of having an opportunity to present the first disease-modifying therapy for type one diabetes to reviewed by this committee.

We look forward to standing alongside scientific key opinion leaders, endocrinologists, immunologists, and other treating physicians, diabetes nurse educators, and other members of the T1D clinical community as well as patient advocacy organizations, patients, and their families who for so very long have hoped and waited for a disruptive innovation that has the potential to delay clinical stage disease and the burden and risks of insulin dependence. Such a therapeutic advance would be a critically important breakthrough, especially for younger patients, otherwise facing a lifetime of continuous blood sugar monitoring and insulin therapy.

We understand that much of our investors' focus and attention this year has concentrated on the nearer term regulatory pathway to the potential commercialization of teplizumab for the at-risk patient population. However, that is certainly not all that ProventionBio about. And I would now like to spend a few moments providing you with an update on the progress and momentum that is taking place throughout our organization with our impressive pipeline of other immunology therapeutic programs. Importantly, our previous guidance with respect to our programs remains on track. Beginning with our PROTECT Phase three trial of teplizumab in newly diagnosed patients.

As you know, randomization into this trial was paused for some time last year due to COVID-19. However, upon resuming randomization, enrollment has steadily increased. The various sites and countries have come back online and we are now on track to complete enrollment of this trial in the second half of this year. Importantly, this will position us to have top-line results available in mid 2023. Now turning to PRV-3279. This is our humanized, bi-specific scaffold targeting both CD32B and CD79B receptors, designed to inhibit B cell function and suppress auto antibody production without causing B-cell or platelet depletion.

In addition to the strategic collaboration agreement we announced in the first quarter of this year with Huadong Medicine, for development and commercialization in greater China, we continue to progress preparations toward the initiation of our PREVAIL Phase 2A lupus trial in the second half of this year. Also with respect to PRV-3279, we reported preclinical data and results from a model of Pohnpei disease, showing improved efficiency of transfection of a gene therapy product by reducing its immunogenicity with a PRV-3279 surrogate. PRV-015, our partnered, fully human anti-IL-15 monoclonal antibody program, continuous enrollment in the Phase 2B proactive trial and we expect top line results in 2022.

As a reminder, after this Phase 2B trial is completed, Amgen has an option to take the asset back for Phase three development and commercialization. At which point, if exercised, we would receive a payment of $150 million along with subsequent milestone and royalty payment. Lastly, we are excited to announce that we have completed enrollment in the first inhuman Phase one healthy volunteer trial for PRV-101, our vaccine against Coxsackievirus B. We expect to have the top-line results for this trial in quarter four of this year.

As discussed previously, it is believed that Coxsackievirus B is one of the main triggers of the immune cascade that results in pancreatic beta cell destruction in type one diabetes and gluten exposure driven gastrointestinal auto immunity in celiac disease. Overall, we continue to make significant progress advancing all of our auto immune disease therapeutic programs, while at the same time, concentrating on the teplizumab regulatory pathway and potential commercialization preparation.

I'm now going to turn the call over to Andy to provide you with details on our financial results for the first quarter, before returning for closing remarks and questions. Andy.

Andrew T. Drechsler -- Chief Financial Officer

Thanks, Ashleigh and good morning everyone. Before I begin, I would encourage you to read our 10-Q that was filed today. 10-Q includes our financial statements, risk factors, as well as management's discussion and analysis of our financial condition. I would also like to call your attention to the earnings press release, which was issued prior to this call. Let me start with the P&L. We generated a net loss for the first quarter of 2021 of $32.4 million or $0.52 per basic and diluted share.

The increase in net loss compared to the first quarter of 2020 is a result of increases in research and development expenses of 10.6 million, driven primarily by costs for our teplizumab program, including the PROTECT Stage three trial manufacturing and regulatory activities, as well as the build-out of our medical affairs infrastructure to support teplizumab, which includes type one diabetes, disease state awareness, and screening education programs. The increase in net loss also resulted from an increase in general and administrative costs of nine million, which includes 5.1 million in pre-commercial expenses. Checking now to cash, as of March 31, 2021, our cash position was $207.2 million. Our net cash base operating expenses were $29.5 million for the first quarter, ended March 31, 2021.

During the first quarter we completed a follow-on offering, which generated approximately $102.3 million of net proceeds. In addition, during the quarter, we also received a $6 million upfront payment related to our strategic collaboration with Huadong to develop and commercialize PRV-3279 in Greater China. Please note that from an accounting perspective, we expect to recognize the upfront payment and other R and D funding from this agreement on a proportional performance basis over the next three years, as we conduct the development activities contemplated by the agreement. Finally, we expect to use between $30 million and $35 million of cash for operations in the second quarter of 2021.

We expect our current cash, cash equivalents and marketable securities will be sufficient to fund projected operating requirements for at least the next 12 months. And that will enable us to actively develop all four of our programs with teplizumab for type one diabetes, PRV-3279 for lupus, PRV-015 for celiac, and PRV-101, the Coxsackievirus B vaccine. We plan to provide additional cash guidance on each quarterly call as we continue to progress toward the potential regulatory approval and commercial launch of teplizumab. With that, let me turn the call over to Ashleigh for closing comments. Ashleigh.

Ashleigh W. Palmer -- Co-Founder, President, Chief Executive Officer and Director

Thank you, Andy. Before we open the call up to address any questions you may have, I want to share my deep appreciation for all our colleagues here at ProventionBio for their hard work, expertise, and dedication. You demonstrate each and every day, the highest levels of commitment, tenacity, and professionalism as together, we fulfill our mission of becoming the disruptive, catalytic, game changing industry pioneer we set out to create four years ago. I am also thankful to the team of officers and reviewers at the FDA for their level of collaboration they've shown our company as we strive to bring teplizumab closer to becoming a disease modifying option for patients with stage two type one diabetes.

There will always be challenges along the path of innovation and change. However, the cooperation we have witnessed to date provides us with optimism and confidence. I especially want to thank our shareholders, both new, and those who have been with us from the very beginning. Your support enables us to continue to progress our mission and make the significant strides we have witnessed over the past 12 months. Sincerely, thank you. And finally, I want to acknowledge, in fact, the patient advocacy organizations, clinicians, patients, and their family members impacted by type one diabetes and other serious auto immune diseases. We believe your cause goes beyond worthy and deserving, it's essential and has compelled us to create and found ProventionBio four years ago. It is your needs and your courage that inspires and propels us forward each and every day.

Questions and Answers:

Operator

Your first question comes from Alethia Young with Cantor.

Alethia Rene Young -- Cantor Fitzgerald -- Analyst

Just a couple, so this kind of pre-specified 80% to 125% area under the curve range, I guess, can you just kind of give us background or walk us through how -- obviously it was pretty specified, so it was kind of known, just how did it become kind of a significant consideration for the FDA? And why did it happen now? And then maybe another question, just what's your hypothesis on why these comparability issues exist, basically in the first place? And then maybe just the third one on the panel. Do you think that effectively, this kind of now puts a little bit more significance on the panel because it seems like if you have a positive panel, there'll be a little bit more focus on trying to sort this out?

Ashleigh W. Palmer -- Co-Founder, President, Chief Executive Officer and Director

Thank you for the questions, Alethia. Let me answer the last one and then hand over to Francisco to answer the question regarding what I understand is a very typical comparability range and address the question as to why. Yes, the significance on this advisory committee meeting is now exceptionally important at this juncture. A very positive advisory committee and community support will create a context in which the company and the agency will work together under a breakthrough therapy designation to find a solution as quickly as possible.

And if the advisory committee is not positive, then essentially the comparability issue becomes a moot point. So you're exactly correct there. Francisco, could you speak to the 80/125 comparability range and any thoughts as to why?

Francisco Leon -- Co-Founder and Chief Scientific Officer

Alethia, so the 80% to 125% is the target that is typically required for bioequivalents. Even though we are not obviously a biosimilar, we are an innovative product, it was used as a target as well in our study. As to why we were below that target, the honest answer is we still don't know. But this was a single low dose study in healthy volunteers. And we do believe that if there's no clinical relevance, especially when you think of multiple higher doses in patients, which is our intended use, so we are working toward trying to understand it and also working toward providing additional data and analysis, pharmacodynamic inputs, etc, that might ameliorate FDA's questions and concerns.

Alethia Rene Young -- Cantor Fitzgerald -- Analyst

This is a follow-up, so effectively, I guess it's kind of like perhaps you guys didn't think that the low-dose would be something that the FDA would be so focused on, or I guess I'm trying to figure out how it kind of all came together that it was now this new focus in the past couple of months, versus maybe eight months ago.

Ashleigh W. Palmer -- Co-Founder, President, Chief Executive Officer and Director

We conducted the PKPD study specifically to bridge to the inclusion of the AGC originated drug product in our PROTECT study. All of the physical chemical analyses, and that includes assays, potency assays, and so on conducted by AGC Biologics and ourselves that were submitted into the BLA showed comparability. As did many of the other parameters of the PKPD study itself. The reason that it has appeared at the same time as the BLA is being reviewed is because that PKPD studies results became available at the beginning of the year. And so the first time we had an opportunity to discuss this study, which has to be submitted to our IND and our BLA. We can't not disclose that to the agency while at the mid cycle review in February. And at that time they had indicated to us that they were evaluating the results and doing their own modeling. And as you know, it was only in last month, April, that we had meetings with the agency that indicated their conclusions, that they were not comfortable with the comparability. And that's where we're at today.

Operator

Your next question comes from Gregory Renza with RBC Capital.

Gregory James Renza -- RBC Capital -- Analyst

Ashleigh, maybe just to build on question. I'm just curious if you could comment a little bit on some of the mention of the reliability of the analytical methods or one of the analytical methods to release to present have in your filing today, as well as just some commentary on the form 480 freezer issued to AGC, which sounds like there would be required to be resolved prior to any decision on to put them up. Any additional call you have on those findings would be helpful. Thank you.

Ashleigh W. Palmer -- Co-Founder, President, Chief Executive Officer and Director

Yes, certainly. So the agency, as part of its priority review has asked questions regarding an assay that's used to assess the stability of the product in order to establish exploration and shelf life. These are questions that we believe we can answer, and will be able to answer in a satisfactory manner to them. And then as you'll appreciate, the agency has done a pre-approval site inspection of AGC biologics. It was part of an inspection for products for other sponsors as well. And in the process of finalizing that inspection, they reported some observations in 483. These appear to be relatively straightforward. We're working with AGC biologics to answer those, and we believe that they will be able to do that.

Gregory James Renza -- RBC Capital -- Analyst

That's helpful. And maybe just one more, as you've spoken about the possibility of using data from the PROTECT trial to address the comparability question, I'm just curious what would be the best protocol to conduct such an analysis without unblinding? Maybe some of the more tactical steps and thinking about leveraging that study in order to fulfill some of the voids or the additional data, would be great.

Ashleigh W. Palmer -- Co-Founder, President, Chief Executive Officer and Director

Thanks, Greg. Yes. So we have not discussed the specifics of how we can make that data available. I can tell you that we are collecting PKPD data from the protect study in anticipation of its being able to assist the agency in its review. And we intend to have a discussion with them in parallel with the continuing preparations of the outcome, to get their input, to ensure that we do evaluate that data and present it to them in a way that's useful to them without undermining the integrity of the protect study. And we believe we can do that.

Gregory James Renza -- RBC Capital -- Analyst

That's great. I appreciate, and if I may, maybe I'll sneak one more in perhaps for Jason, just on the commercial side. So how should we think about some of issues that are raised now at the 11th hour impacting potentially any commercial receptivity of, and how docs could sort of view the comparability issue, but just also some of the proceedings along with what has been certainly a winding road for now. Thanks again, Ashleigh.

Jason Hoitt -- Chief Commercial Officer

Yes. Thanks -- I'm sorry, Ashleigh.

Ashleigh W. Palmer -- Co-Founder, President, Chief Executive Officer and Director

I was going say, I'll let you answer that, but we, we don't think that the compatibility issue has any impact on the market potential or the clinical benefits, benefit risk assessment, or any considerations that would drive commercialization other than the timelines, but please carry on Jason.

Jason Hoitt -- Chief Commercial Officer

Yes. Thanks, Ashleigh. Thanks for the question, Greg. I think if the drug's approved, we don't see this being an issue for many physicians and during recent advisory boards, we haven't heard it come up a single time yet. So obviously we're tracking it, but under an approval, we don't see it being an issue.

Operator

Your next question comes from Ram Selvaraju with H.C. Wainwright.

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

So firstly, I just wanted to clarify, there's no possibility that the Ad-Comm discussion will even touch at all on the comparability issue, or it's something that could come up in discussion, but it's not part of the official list of items that the Ad-Comm is supposed to render a vote on. Just wanted to clarify.

Ashleigh W. Palmer -- Co-Founder, President, Chief Executive Officer and Director

We can never guarantee what will come up in the discussion around, but the agency has informed us that they intend to include a brief mention of the comparability considerations in their briefing documents with an affirmative statement that the agency and the company are collaborating to find a solution. And the reason they're doing that is to compartmentalize it, and allow the Ad-Comm to focus on the key considerations that Ad-Comm typically focus on, the need, the efficacy and the safety.

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

Have you asked the agency, whether it would be possible to include a question for the Ad-Comm, regarding whether they would consider it advisable to approve the drug, even though all the comparability questions have not been fully answered simply because the efficacy profile and the at-risk study was so compelling and T1 D is such a significant unmet need?

Ashleigh W. Palmer -- Co-Founder, President, Chief Executive Officer and Director

We have not discussed questions specifically with the agency related to that. It would not make sense to me in so far as the comparability issue as a technicality agency is fully staffed, and capable and qualified of addressing as it does with any comparability biosimilar change in manufacturing, facility formulation, etc. And the members of the panel do not typically have that background or expertise and wouldn't be able to provide the agency with any additional advice.

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

Okay. With respect to Europe, as you look toward the filing of the MAA, do you think that it might be advisable to discuss with the European regulators, whether, if they do consider, the comparability data to be deficient or they need additional information along the same lines as the FDA does, you could conceivably apply for conditional marketing authorization instead, until and unless the additional comparability data that the FDA is asking for, and that European regulators may off-course has been furnished, is that a viable option? At this point.

Ashleigh W. Palmer -- Co-Founder, President, Chief Executive Officer and Director

We are in the middle of our scientific advice discussions with the EMA and with the NHLA. We have received non-binding advice and guidance on a number of subjects. We have not discussed, yet, the comparability; but I think it's reasonable to assume, given how closely regulatory agents fees now interact throughout the world, that we will have to solve this comparability issue for them in the same way as we will have to solve it for the FDA, but it's to be determined. And we haven't yet had those discussions with regulatory authorities in the UK or Europe.

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

Okay. Then just lastly, to clarify on the timeline for reporting of top-line data from the protect study, just wanted to be reminded, what you're targeting now. And if you could also just provide us with some additional granularity on how that trial is progressing overall, in terms of enrollment, in terms of any logistical challenges you're encountering, or there has been an absence of that, and everything's going as smoothly as it might be expected to go.

Ashleigh W. Palmer -- Co-Founder, President, Chief Executive Officer and Director

Thanks, Ram. Yes. So our guidance is still the second half of this year for the completion of enrollment. And then there is an 18 month follow-up for the study to close. And so the top-line results we anticipate will be available in the middle of 2023. We've seen a steady increase in enrollment rates as a result of better management of the COVID pandemic in countries and sites and vaccination.

And so we're encouraged by that as we go into the summer months and believe that we will in fact, be on track to complete the targeted enrollment in the second half. I would just like to point out that we, having discussions with the agency regarding PKPD data from the PROTECT study and we not yet know the details, but we shouldn't assume that we have to wait until the top line results to get that data. That data can be accessed much more quickly than waiting for the final results of the study.

Operator

Your next question comes from Justin Kim with Oppenheimer and Co.

Isabel -- Oppenheimer -- Analyst

This is Isabel on for Justin. Can you just remind us of what we can expect from the findings of the prevent CVB study, and the strategy to reach patients before exposure of the disease just from a regulatory perspective?

Ashleigh W. Palmer -- Co-Founder, President, Chief Executive Officer and Director

Thank you very much for that question. Francisco, I think you're best to answer that, please.

Francisco Leon -- Co-Founder and Chief Scientific Officer

Yes. I just want to clarify the question. Did you mention prevent CVB?

Isabel -- Oppenheimer -- Analyst

Yes. That's correct.

Francisco Leon -- Co-Founder and Chief Scientific Officer

Or do you mean the proactive celiac study?

Isabel -- Oppenheimer -- Analyst

The prevent CVB study.

Francisco Leon -- Co-Founder and Chief Scientific Officer

Just trying to clarify, are we talking about the vaccine, PRV-101 or the

Isabel -- Oppenheimer -- Analyst

Yes, the vaccine.

Francisco Leon -- Co-Founder and Chief Scientific Officer

Okay. We are targeting, eventually, newborns and infants before exposure to their first encounter with Coxsackie B virus. It's a primary prevention vaccine because we believe based on all the literature that Coxsackie B viruses are a key trigger in type-1 diabetes, celiac disease and other diseases. So just attempting to prevent the first infection.

Operator

Your next question comes from Thomas Smith with SVB Leerink.

Thomas Jonathan Smith -- SVB Leerink -- Analyst

Now that we're about three weeks out from the AdCom, can you just talk to your interactions with the agency regarding the TN10 clinical data? What's your sense for the FDA's comfort or where their areas of concern around the clinical data set and where they plan on asking the panel for more input?

Ashleigh W. Palmer -- Co-Founder, President, Chief Executive Officer and Director

Excellent question, Tom. We're very encouraged by the fact that the agency is continuing with the advisory committee meeting. We believe that's an invitation that and the breakthrough therapy designation, they find the TN10 study clinical data set in the context of the safety database from newly diagnosed and the supporting evidence of protection of beta cells as determined by C peptides from historic studies, has a data set that's worthy of this advisory panel evaluating it and the pining. We believe that the focus of the committee will be on understanding the unmet need and the relevance of a delay in the progression of the disease from stage two to stage 3, then the efficacy and the strength of that signal from the TN10 study, which although a modest study, has a very powerful P value and statistical significance and a very significant delay with a median of two years and in follow-up published data indicating that that is now approximately three years delay. Then finally the safety profile. A safety profile of an immunomodulatory therapy, potentially the first disease modifying therapy for type-1 diabetes and in the context of that, they'll be concentrating on the potential risks of immunomodulatory therapy, but again, we're very keen to point out that this is a discrete exposure. It is a resetting and a rebooting of the immune system. It is not chronic immunosuppression and after the conversion of the autoreactive T cells which destroyed or attacked the beta cells conversion to exhausted regulatory T cells, the course of therapy is over and therefore reduces the prospect or the risk of opportunistic infections and malignancies that might be associated with chronic immunosuppression. That's the discussion that we're expecting and we believe that we will also have a lot of support from key opinion leaders and from patients and patient advocacy groups, we're really looking forward to that coming up in three weeks' time.

Thomas Jonathan Smith -- SVB Leerink -- Analyst

Got it. Got it. Okay. Actually on the manufacturing and the form 483s for AGC Biologics, were the issues cited specific to Teplizumab? Can you describe what the issues are specifically related to Teplizumab and what's your level of confidence that these issues could be resolved ahead of the current July 2nd PDUFA date?

Ashleigh W. Palmer -- Co-Founder, President, Chief Executive Officer and Director

We believe that that they will be satisfactorily addressed by AGC and its response to the 480s. The 483s were typical observations made from a pre-approval site inspection. Some of them pertained to general matters at the sites. Some of them pertained to matters that were related to the products that were manufactured and a few pertained to the process or facility associated with Teplizumab, but as I mentioned earlier, we're working with AGC and we believe that they will be able to satisfactorily address the 483s for the agency to not have those considered as an approval obstacle.

Thomas Jonathan Smith -- SVB Leerink -- Analyst

Okay. Just on the PKPD comparability, can you comment at this point as to how many patients within the protect study have received the Legacy Lilly manufactured product versus the new AGC biologics product?

Ashleigh W. Palmer -- Co-Founder, President, Chief Executive Officer and Director

We've not disclosed that information yet.

Thomas Jonathan Smith -- SVB Leerink -- Analyst

Okay. Can you just comment at a high level, is your expectation that the majority of patients in the study would have received the legacy product or the new product?

Ashleigh W. Palmer -- Co-Founder, President, Chief Executive Officer and Director

The issue isn't necessarily how many patients received the legacy product versus the new product, it's about bringing a PKPD sub-study into a trial, that would a Phase three trial, simply looking at the efficacy, compared between active and placebo and as you may appreciate, a PKPD study is a different protocol. It requires taking blood samples much more regularly, immediately after the therapy has been administered, in order to evaluate how it clears from the blood, for example and early PD biomarkers. What's important is whether we will be able to initiate and complete a sub-study before the clinical trial completes its enrollment and we believe we will be able to do that and provide PKPD data to the agency to assist them in their ongoing considerations.

Operator

Your next question comes from David Hoang with SMBC.

David Timothy Hoang -- SMBC Nikko -- Analyst

I just had one and then a follow-up. First one on the PDUFA date, July 2nd. We know it still stands. If that should need to be revised and moved, is that something that you're going to wait for the agency to give you that guidance or is that something you can have a active conversation around?

Ashleigh W. Palmer -- Co-Founder, President, Chief Executive Officer and Director

Well, we've indicated that there is likely to be a delay based on our understanding of the agency's position on comparability. We've not had discussions on how that delay will manifest itself. Whether it will be within the current review cycle with some extension or after a formal response, but we certainly indicated the potential for that delay. I think a lot will depend on the AdCom and the outcome of the AdCom. I suspect that the agency will wait until the AdCom has taken place, completed clinical review, take into consideration the meetings that we hope to have with them concurrently in regards to additional data we can provide and then, we will obviously update you at the appropriate time when we have material information.

David Timothy Hoang -- SMBC Nikko -- Analyst

Okay. Got it. That's helpful. Just on the celiac disease assets. I understand there is the option for Amgen to take that asset back and pay you a milestone fee. If Amgen elects not to take it back, are they still involved, are you still splitting the cost of development in Phase three or would all that developmental costs come back to you?

Ashleigh W. Palmer -- Co-Founder, President, Chief Executive Officer and Director

The full control of that asset by way of an arms-length license arrangement that would continue after their decision means that we would have the full benefit of the ongoing development and potential commercialization of an asset if merited, but it would also mean that we would have the full burden of development costs or we would have an opportunity to partner that with other parties interested in celiac.

Operator

This concludes our question and answer session. I would like to turn the conference back over to Ashleigh Palmer for any closing remarks.

Ashleigh W. Palmer -- Co-Founder, President, Chief Executive Officer and Director

Thank you, Kaylee, and thank you everybody. Thank you for the questions. We'd, again, like to thank you for your time and we hope that you will have a great day and look forward to speaking to you again soon.

Operator

[Operator Closing Remarks]

Duration: 54 minutes

Call participants:

Robert A. Doody -- Investor Relation

Ashleigh W. Palmer -- Co-Founder, President, Chief Executive Officer and Director

Andrew T. Drechsler -- Chief Financial Officer

Francisco Leon -- Co-Founder and Chief Scientific Officer

Jason Hoitt -- Chief Commercial Officer

Alethia Rene Young -- Cantor Fitzgerald -- Analyst

Gregory James Renza -- RBC Capital -- Analyst

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

Isabel -- Oppenheimer -- Analyst

Thomas Jonathan Smith -- SVB Leerink -- Analyst

David Timothy Hoang -- SMBC Nikko -- Analyst

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