ChemoCentryx's (CCXI) Tom Schall on Q2 2014 Results - Earnings Call Transcript

Aug. 5.14 | About: ChemoCentryx (CCXI)

ChemoCentryx Inc. (NASDAQ:CCXI)

Q2 2014 Earnings Conference Call

August 5, 2014 5:00 p.m. ET

Executives

Susan Kanaya - SVP, Finance, CFO and Secretary

Tom Schall - Chairman, President and CEO

Analysts

Eric Schmidt - Cowen and Company

Brian Klein – Stifel Nicolaus

Michael Ulz – JP Morgan

Operator

Welcome to the ChemoCentryx Second Quarter 2014 Financial Results Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question-and-answer session. As a reminder, this conference call will be recorded.

I would now like to turn the call over to Susan Kanaya, Senior Vice President and Chief Financial Officer at ChemoCentryx. Ms. Kanaya, please go ahead.

Susan Kanaya

Thank you. Good afternoon and welcome to the ChemoCentryx's second quarter 2014 financial results conference call. This afternoon we issued a press release providing financial results and company highlights for the second quarter ended June 30, 2014. This press release is available on our website at www.chemocentryx.com.

Joining me on the call today is Dr. Thomas Schall, President and Chief Executive Officer of ChemoCentryx, who will provide a brief corporate update and review upcoming anticipated milestones for the second half of 2014. Following his comments, I will provide an overview of the financial highlights for the second quarter before turning back the call over to Tom for closing remarks.

As a reminder, during today's call, we will be making certain forward-looking statements. These forward looking statements are based on current information, assumptions and expectations that are subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements.

These risks are described in our filings made with the Securities and Exchange Commission, including our Annual Report on Form 10-K filed on March 14, 2014. You are cautioned not to place undue reliance on these forward-looking statements, and ChemoCentryx disclaims any obligation to update such statements.

In addition, this conference call contains time sensitive information that is accurate only as of the date of this live broadcast, August 5, 2014. ChemoCentryx undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call.

I will now turn the call over to Tom.

Tom Schall

Thank you, Susan, and thank you everyone for taking time to join us for our second quarter financial results conference call. Today I will discuss our development pipeline programs which we often refer to as our four pillars of value, then review accomplishments of our second quarter of 2014 and finally highlight expected milestones for the remainder of the year.

We’ve had a productive second quarter and made important progress in a number of our clinical development programs. We have continued to expand our reach in renal and orphan diseases while building out a deep and diverse clinical portfolio.

First, let me begin with an update of our first pillar of value, the complement C5a receptor program. Our lead drug candidate in this program is CCX168, a potent orally available and highly specific small molecule inhibitor of the C5a receptor. CCX168 is currently in a Phase 2 clinical trial in Europe, named the CLEAR trial, in patients with anti-neutrophil cytoplasmic autoantibody or ANCA associated vasculitis, which if left untreated is a severe and often fatal autoimmune disease.

In December of last year, we reported that patients treated with CCX168 showed greater improvements consistently across a number of clinical parameters than those patients who were on standard of care, which is high doses of corticosteroids and cyclophosphamide. These clinical parameters included improvements in renal response rates, reductions in proteinuria, reductions in renal inflammation as well as improvements in the Birmingham Vasculitis Activity Score or BVAS.

BVAS is a validated and commonly used index of overall ANCA disease activity, which measures ANCA vasculitis in nine specific body systems, such as renal, pulmonary and ear, nose and throat, which are organ systems commonly affected by this disease.

Additional positive CCX168 data were recently presented at two key scientific meetings in Europe, the ERA-EDTA meeting as well as the EULAR meeting, which enhanced the existing CCX168 data reported in December. The body of data from the first two steps of the CLEAR trial demonstrated that patients receiving CCX168 showed greater improvements in the BVAS than those patients who were on standard of care alone.

Specifically treatments with CCX168 demonstrated greater improvements in both the renal and non-renal components of the BVAS as compared to patients who received only standard of care. These data suggest that CCX168 may have broader utility beyond the renal manifestations of ANCA associated vasculitis. We will investigate this further in our CCX168 clinical development program.

As we mentioned in our last quarterly call, we are enrolling patients in the third and final step of the CLEAR trial and are expanding the number of clinical sites to approximately 50 throughout Europe. Additionally, step three of the CLEAR protocol is being amended to include background therapy use of rituximab as an alternative to cyclophosphamide in all treatment groups. Also, we will include all the dose groups that we used in steps one and two of the CLEAR trial and anticipate broad implementation of this shortly.

In other favorable news this quarter, the US FDA granted orphan drug designation to CCX168 for the treatment of ANCA associated vasculitis which include Wegener's granulomatosis, microscopic polyangiitis and Churg-Strauss syndrome

As you are all aware, the orphan drug designation provides certain regulatory, marketing tax and other incentives for drug developers targeting rare diseases. Given the broader orphan drug designation granted by the FDA as well as the activity seen in both the renal and non-renal components of the BVAS in the CLEAR trial, we are expanding our present and future clinical development program to include patients with ANCA associated vasculitis who do not have renal disease activity. We expect this change to facilitate patient enrollment and to increase the number of patients that the drug will ultimately serve.

Looking ahead, we will be expanding our Phase 2 clinical trial program with CCX168 in the U.S. and Canada by the end of the year, based on our recent discussions with the FDA. This work will take place at several of the leading vasculitis centers throughout North America.

We believe that there is a strong momentum around CCX168 and our recent meetings with key investigators have confirmed that there is significant interest in finding a safer, efficacious alternative to the current standard of care that includes high-dose corticosteroids.

As we seek to expand our C5a receptor inhibitor program we are exploring potential other indications beyond ANCA associated vasculitis in which the C5a receptor may play a key role. As an example, other drugs that block related parts of the C5 system have been approved recently for the treatment of atypical hemolytic uremic syndrome or aHUS, a life-threatening disease that causes chronic blood vessel damage, thrombosis or clotting within blood vessels, hemolysis or red blood cell rupture and sudden progressive organ failure, such as kidney failure. The disease is caused by genetic defects and factors that control the activation of the complement system.

Orally administered CCX168 targets the complement system further downstream than the currently used intravenously administered anti-C5 antibody. As a more targeted oral C5a receptor inhibitor, CCX168 may offer safety advantages over existing modalities. Specifically it does not interfere with the formation of other complement components such as C5b and the resulting membrane attack complex which is an important factor in defending against infection such as Neisseria meningitis. Accordingly C5a receptor therapy unlike C5 inhibition is not thought to include an infectious disease risk.

We believe CCX168 may offer a safer treatment alternative in aHUS and other orphan diseases involving the C5 complement pathway, such as IgA nephropathy and lupus nephritis. We look forward to providing more information about these development opportunities in the coming months.

Turning to our next pillar of value, our chemokine receptor CCR2 program. I will first provide a brief update on CCX140, an inhibitor of the chemokine receptor known as CCR2. CCX140 is currently in a randomized double-blind Phase 2 clinical trial for the treatment of patients with diabetic nephropathy, a progressive kidney disease that ultimately can lead to kidney failure and/or the need for kidney transplantation. We remain on track to have 52-week data from this trial in approximately 200 patients in the fourth quarter of this year. The data set will include results of the drug's effects on improvements in renal function, including proteinuria as measured by urinary albumin creatinine ratio or UACR and estimated glomerular filtration rate or eGFR based on serum creatinine levels as well as glycemic parameters such as hemoglobin A1c or HbA1c.

As a reminder, our Phase 2 study enrolled a broad patient population with albuminuria ranging from 100 mg per gram to 3000 mg per gram of creatinine and then an eGFR of at least 25 mill per minute. Therefore we plan to evaluate the effect of CCX140 in several pre-specified subsets of patients, including patients with high albuminuria and high GFR. As appropriate following the outcome of the 52-week data, we will schedule an end of Phase 2 meeting with regulatory authorities to discuss the next steps regarding clinical development.

Further, consistent with our development and business strategy for this program, we plan to develop and commercialize CCX140 in North America and seek a partner for rest of world rights. We are also examining potential indications for our second-generation CCR2 inhibitor, CCX872 which I will address in a moment. CCX872 is currently in Phase 1 clinical development.

I will now turn to our third pillar of value, our CCR9 program, which includes Vercirnon and CCX507 both of which are inhibitors of the chemokine receptor known as CCR9. As mentioned on our last call, we remain optimistic about partnering opportunities for our CCR9 program, which could include both Vercirnon and our second-generation CCR9 inhibitor, CCX507.

With respect to Vercirnon, we plan to present data from the so-called SHIELD program, which was run by our former partner GlaxoSmithKline at medical meetings this fall. The SHIELD-4 study which examines two dosing regimens of Vercirnon 500 milligrams once daily and 500 milligrams twice daily in the induction setting of Crohn's disease, enrolled approximately 250 patients until the time GSK discontinued the SHIELD development program.

In addition to the SHIELD-4 data, we will present data comparing the results in the SHIELD-1 GSK run study to the results of the previous PROTECT-1 trial which was conducted by ChemoCentryx. These data will help inform Vercirnon’s potential in the treatment of patients with Crohn's disease.

Recall that our Phase 2 study PROTECT-1 showed that Vercirnon was effective in the maintenance of remission of Crohn's disease. Unfortunately the SHIELD program did not provide an answer regarding efficacy in the maintenance of remission. Therefore we are still keen on finding a way to further develop Vercirnon in this setting.

As for our second-generation CCR9 inhibitor, CCX507, we successfully completed a Phase 1 clinical development this quarter and plan to present these data as well as preclinical data from CCX 507 in combination with protein therapeutics in inflammatory disease models at gastroenterology meetings this fall. As you are aware, TNF alpha inhibitors and more recently an anti-alpha-4 beta-7 antibody have been approved for the treatment of patients with Crohn's disease as well as ulcerative colitis. Combination treatment with a CCR9 inhibitor may offer an improved efficacy profile over single agent treatment and we look forward to further exploration in these settings.

Finally, I’d like to address our emerging immuno-oncology program. A growing body of research continues to validate the diverse roles that chemoattractant receptors such as CCR1 through CCR6 as well as CXCR7 among others may play a role in cancer growth, metastasis, angiogenesis and the composition of the tumor microenvironment. We have been assessing how best to employ our broad portfolio of potent chemoattractant receptor modulators with emerging immunotherapeutic agents to maximize clinical benefit. For example, one target we find particularly intriguing due to our work and the abundance of published data is CCR2 which has been linked recently to breast, pancreatic and other cancers.

Many regulatory immune cells such as myeloid derived suppressor cells or MDSCs, which suppress inappropriate immune response to tumors, have been shown to be CCR2 positive. Blocking these cells from entering into or persisting in the tumor microenvironment by using one of our CCR2 inhibitors such as CCX872 could remove the suppressing effects of MDSCs and enhance the effector immune response against tumors. Accordingly that could provide a productive approach in cancer immunotherapy.

We believe that our second-generation CCR2 inhibitor, CCX872 which is nearing completion of its Phase 1 clinical program, could be an excellent candidate to evaluate in the cancer setting.

With that, I'd like to turn the call back over to Susan.

Susan Kanaya

Thank you, Tom. As I mentioned earlier, our 2014 second quarter financial results were included in our press release provided earlier this afternoon. There was no revenue recognized for the three months ended June 30, 2014 compared to $1.9 million recognized in the same period in 2013. The decrease in revenue from 2013 to 2014 is primarily due to funding of clinical support in 2013 from our former partner GlaxoSmithKline for CCX168, our C5a inhibitor for the treatment of ANCA associated vasculitis.

Our product development and commercialization agreement with GSK ended in November 2013 and therefore no revenue was recognized in 2014. Research and development expenses for the three months ended June 30, 2014 were $9 million compared to $8.7 million in the same period in 2013. The increase from 2013 to 2014 was primarily attributed to higher expenses associated with CCX168 as this program advanced into the third and final step of the Phase 2 clinical trial for the treatment of ANCA associated vasculitis in the fourth quarter of 2013 and higher expenses associated with CCX507, our second-generation CCR9 inhibitor, as this program completed Phase 1 clinical development in the second quarter of 2014. These increases were partially offset by lower expenses associated with CCX140, our CCR2 inhibitor as the Phase 2 clinical trial in patients with diabetic nephropathy nears completion, and lower expenses associated with developing CCX872, our second-generation CCR2 inhibitor, is the timing of Phase 1 related activities.

General and administrative expenses for the three months ended June 30, 2014 were $3.4 million compared to $2.8 million in the same period in 2013. The increase from 2013 to 2014 was primarily due to higher employment related expenses, including stock-based compensation expense and higher intellectual property related expenses and professional service fees relating to our business development effort. Cash, cash equivalents and investments totaled $133.2 million at June 30, 2014.

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

Tom Schall

Thank you, Susan. In closing, we have made considerable progress in all of our development programs in the first half of this year setting the stage for continued momentum in renal and orphan diseases, which otherwise have very limited treatment options.

Looking forward to the second half of this year, we anticipate the following milestones. In our complement C5a receptor program with our drug CCX168, we look forward to continuing recruitment of patients in our European Phase-II CLEAR trial in patients with ANCA-associated vasculitis as well as expanding our efforts in ANCA-associated vasculitis by initiating additional Phase-II work in the U.S. and Canada by the end of the year.

We also plan to expand clinical development of CCX168 into other orphan indications such as aHUS and IgA nephropathy. In our CCR2 program, we look forward to announcing a 52-week data from our Phase-II clinical trial of CCX140, our lead CCR2 inhibitor in approximately 200 patients with diabetic nephropathy in the fourth quarter this year and also advancing CCX872, our second generation CCR2 inhibitor for the treatment of cancer signifying our first drug candidate to enter the clinic in our immuno-oncology program.

In our CCR9 program, we look forward to presenting additional data regarding vercirnon, our lead CCR9 inhibitor from the SHIELD clinical trials at upcoming scientific meetings and presenting our CCR9 inhibitor, CCX507, Phase-I data as well as preclinical data of the drug in combination with protein therapeutics at upcoming scientific conferences.

We remain highly focused on strategic partnering opportunities and hope to be able to share news on this front in the upcoming months.

As always, thank you for your continued support. And now I’d like to open the call up to any questions. Operator?

Question-and-Answer Session

Operator

(Operator Instructions) The first question comes from Eric Schmidt from Cowen and Company.

Eric Schmidt - Cowen and Company

Good afternoon and thanks for taking my questions. Tom, on CCX168, was the U.S. IND filed in Q2?

Tom Schall

Hi Eric, yes. Thanks for the question. I’m also joined here today by our senior VP of Medical and Clinical Operations, Pirow Bekker, so it’s a delight to have Pirow here as well answer some of the questions. Yeah, we did file the IND earlier this year and it was cleared by the FDA. So we’re free now to proceed with our clinical work in the U.S. and Canada and we intend to do so certainly by the end of the year.

Eric Schmidt - Cowen and Company

Okay. It wasn’t clear to me when we might see the next readout in terms of data set from the CLEAR trial.

Tom Schall

The step three of the CLEAR trial is ongoing in Europe and we’re also attempting to add more sites to that trial in Europe as well. So it’s a little bit early at this time to predict when the patient population that we intend to enrol in step three will be done, but I think we’ll have a much better handle on that in the coming weeks and we will be talking about that pretty soon.

Eric Schmidt - Cowen and Company

Okay and then in the two newer indications for 168, aHUS and IgA nephropathy, were you going actually start trials in those indications this year?

Tom Schall

Our goal, Eric, is to start dosing patients in both those indications by the end of the year.

Eric Schmidt - Cowen and Company

Okay. And lastly I promise on 168 as well in terms of your FDA discussions, do you have a sense yet whether BVAS would be an approval endpoint in a people [ph] trial?

Tom Schall

I think I’ll let Pirow opine on that.

Pirow Bekker

Eric, yeah. So I think certainly as you know the BVAS has been used in previous clinical programs, most notably the Rituxan program and BVAS was fairly accepted as an efficacy measuring in that program.

Eric Schmidt - Cowen and Company

Great, thanks a lot.

Tom Schall

Thank you.

Operator

The next question comes from Brian Klein from Stifel.

Brian Klein – Stifel Nicolaus

Hi guys. Thanks for taking my questions. So first on 168, can you give us a sense of your enrolment plans in terms of aHUS and what exactly you’re going to be looking at in terms of endpoint?

Pirow Bekker

Brian, this is Pirow again. Thanks for the question. I think as Tom pointed out we’re very excited about the opportunity to expand the CCX168 program in certain of this disease, especially a strong scientific rationale for testing CCX168 in the setting. We’re planning take an approach where we’ll be looking at some in vitro assays initially and then starting to dose patients and collecting some blood from these patients to also test that in various in vitro systems, as well as measuring the effect of treatment on, for example, platelet count and other measures and so stay tuned in terms of the exact details as we move forward with this program.

Brian Klein – Stifel Nicolaus

Is it fair to say then that these trials will really be hypothesis generating and you’re not quite sure what effects you’ll have at this point?

Pirow Bekker

I think little bit -- I would say little bit more beyond about hypothesis generating. If you look at the signs around this, there’s actually a strong rationale for why working C5a receptor would actually be effective. I think we see this first trial as certainly a pilot clinical trial, but I think we have in a good scientific basis to work from.

Tom Schall

I agree with Pirow on that, Brian, I think evidence exists that C5a probably works in concert with some of the other complement components to help build membrane attack complex on the surface of some of the affected cells, which certainly leads thrombogenic response. Those data are already enhanced, so the hypothesis has already been generated. In addition, there is some data from patients’ sample to suggest that this is an important cascade that occurs in the real world in patients. So the first step is to actually dose the human beings and see if we can get the readouts that we believe that the science already generated in the ex vivo setting. So again we’ll have more details on that trial design in the coming months.

Brian Klein – Stifel Nicolaus

Great, thanks. And then moving just to 140, I know that we’re expecting the data in the fourth quarter, but can you give us a sense of the dropout rate in the trial over the last few months?

Pirow Bekker

Yes, Brian. This is Pirow again. I’m very encouraged by a very low dropout rate in this clinical trial. If you look at the 12-week timepoint to the 52-week timepoint, the dropout rate is trending to be around 4%, which I think is actually very good.

Brian Klein – Stifel Nicolaus

Great. That’s very good news. And then lastly on your new compound, 872, can you give us a better direction as to which oncology indication you might be leaning towards and the role that CCR2 is playing in terms of impacting [indiscernible]?

Tom Schall

Certainly, Brian. I’ll go first to some of the mechanism and Pirow can address perhaps the indication specifically. So it’s very clear that CCR2 in the tumor micro environment is driving the so called myeloid derived suppressor cells, there is a great deal of evidence for that that can constitute in fact the majority of the number of cells and the tumor mass in certain situations and these cells are actually suppressive. They dampen down an immune response so that tumor sort of calls the man, if you will, to insulate the tumor with a clog of what appear to be immune cells but are in fact ineffective cells. So there’s a great deal of science from many sources that suggests CCR2 is one of the major drivers of those myeloid derived suppressor cells. We hope to stop their ability to be imported to the tumor micro environment, stop their persistence in that environment and thus enhancing more effector immune response against the tumor. Ultimately, this might be tried with other combination therapies like checkpoint inhibitors and the like. In the meantime, we will be looking at a number of cancer settings, but we have our sight set on certain indications based on the evidence to date and Pirow, you might want to talk about what some of that evidence is and the indications?

Pirow Bekker

Sure. Brian, so I think any type of tumor where there is evidence that monocytic myeloid derived suppressor cells are sort of a predominant cell population and the ones that are sort of close to the top include pancreatic cancer and some of the breast cancer especially triple-negative breast cancer and then melanoma as well, but as you saw by the literature, you would find evidence that there could be others like glioblastoma and so on as well.

Brian Klein – Stifel Nicolaus

Great. Thank you for taking my questions.

Tom Schall

Thank you.

Operator

The next question comes from Geoff Meacham from JP Morgan.

Michael Ulz – JP Morgan

Hi. This is actually Mike in for Geoff. Thanks for taking the question. In June, you guys presented data from the Phase-II trial of one fixated to European meeting. Just wonder if you could share some of the feedback you’ve gotten from physicians at the meeting and then subsequently since then? Thanks.

Tom Schall

Thank you Mike. I’ll say from my part I was at one of those meetings directly and the feedback seemed to be very enthusiastic indeed when we showed quite clearly that we could strip away steroid dosing and the standard of care, which involves high-dose steroid and cyclophosphamide and that’s a traditional regimen for standard of care going back some years now. Our protocol was designed in the first step to take away two-thirds of the dose of the steroid and a double-dummy, double-blinded control trial against standard of care compared to standard of care. We got successfully through that and the second step was actually taking away all the steroid dose and replacing that with the drug CCX168. In both steps, not only did we appear to do that without introducing the safety consequences, but the measures of efficacy as read out by renal improvement endpoints as well as BVAS both for renal component and the non-renal components seemed to actually trend towards being better than the standard of care. So that engendered lots of enthusiasm from the investigators in the ANCA vasculitis space and as a knock on effect in fact created a groundswell of enthusiasm for related disorders such as the IgA nephropathy indication that we suggested that’s more of a demand driven from the clinical investigators and even the concepts and the science around the atypical haemolytic-uremic syndrome. Again it’s coming predominantly from the clinical community. So from my perspective, those were excellent meetings that generated lot of interests and enthusiasm from the clinical community. Pirow, you may have other observations as well.

Pirow Bekker

I think Tom you summarized it well, but I would also add lupus nephritis to that and lupus nephritis as you know has been an area of high unmet medical need and I think that’s an area also characterized by high proteinuria, hematuria and based on the results from the ANCA vasculitis trial where we showed encouraging results on those perimeters, that excited the lupus nephritis community.

Michael Ulz – JP Morgan

Great, thank you.

Operator

The next question comes from Navdeep Singh from Goldman Sachs. There said Navdeep has left the queue. (Operator Instructions) The next question comes from Yaron Werber from Citi.

Unidentified Analyst

Great. Thanks for taking the question. This is Christian for Yaron. On your CCR9 program, you’ve mentioned that you’re potentially seeking a partner for that program for both vercirnon and your second generation compound. Would you develop those programs by yourself or would you only develop with the partner moving forward?

Tom Schall

Thank you, Chris for the question. I think our preferred model is to develop this with a new partnership, partnership that we would envision doing some risk-sharing of course and sharing the upside. The indications would include to, as far as we are concerned based on the data, maintenance of remission in Crohn’s disease which is untested in Phase-III with vercirnon but gave us some very interesting positive data in Phase-IIB in our PROTECT I trial. and of course ulcerative colitis is an unexplored territory with vercirnon or CCX507 at this point, but the mechanism of CCR9 inhibition is one of great interests to the ulcerative colitis community in large part because of data generated about CCR9 directly both in our shop and with others, but also the cross-validation of the recent approval of vedolizumab, the alpha-4/beta-7 antibody which was approved in both Crohn’s and colitis. That antibody targets, as I said, the adhesion molecule and alpha-4/beta-7 and in IBD both in Crohn’s and especially colitis as well, the thought is that those cells are also largely overlapping with the cells, the very same cells that there are CCR9 so that the idea of inhibiting the trafficking process either at the adhesion level or the migration level first with the vedolizumab and the later with our RCCR9 inhibition pathway, I think, is one that generated great interest. So we’d like to move that program forward in both those indications and the idea why we would be in a new alliance and we’re working very hard on that.

Unidentified Analyst

Thanks. Then on 168, can you just remind us in little bit more detail what you’ve been looking for in terms of efficacy in step three and then the change in protocol to include Rituxan, was that based on feedback from the FDA or is it something you did? Any on rationale, that would be helpful. Thanks.

Pirow Bekker

Chris, thanks. So step three, I think we’ve indicated before is essentially an expansion of the size of the study. So we want to have more patients enrolled in this step. We’re also going to be enrolling patients in each of the three groups so that’s the standard of care group, the CCX168 plus low-dose group penicillin group and the CCX168 plus no penicillin group. I think the other concept as Tom has pointed out is to now also allow patients who do not have any renal disease since we have good evidence that the drug actually has potentially efficacy on that aspect.

And in your question with regard to Rituximab, at the time we launched this study Rituximab was not approved for treatment in this disease. Since that time it obviously received approval and the use is beginning to expand in both the U.S. and Europe. So based on feedback from our investigator community, we’ve decided to include Rituximab as background treatment instead of cyclophosphamide. This was not something that was mandated by FDA. We certainly discussed this with them and they agreed with our proposal to move forward with that.

Tom Schall

And just as an aside as well to clarify for those they are not [indiscernible] of AAV, Rituximab is really used in place of cytoxan or cyclophosphamide. It has not been envisioned there’s something that will replace the steroid part of the standard of care. So we’re asking at least in initial parts of our development of CCX168, the steroid effects that are being able to eliminate steroid. So it’s really a very complementary set of approach as I believe.

Unidentified Analyst

Thanks very much.

Operator

The next question comes from Navdeep Singh from Goldman Sachs.

Unidentified Analyst

Hi. This is Lisa in for Navdeep. Sorry about earlier. I think the call dropped off, but thanks for taking our questions. First is on CCX140. Can you just help set our expectations heading into the updated Phase-II data readout in fourth quarter? What would you view as a positive outcome or would warrant further development and kind of what should we be focused on?

Tom Schall

Thank you, Lisa, for the question. Pirow will have, I’m sure, his observations on this, but you recall that we’re looking at a couple of different parameters that are going to give us a glimpse of kidney function. Certainly, a reduction in proteinuria is something we’ve been following early on and is something we see consistently across all of our animal models. We had a Phase-IIA study as well where we saw reduction in hemoglobin A1c in diabetics without kidney disease and that seemed to also trend in the 12-week data that we saw in this trial. So we’ll continue to follow that.

I think one of the primary things that we’re focused on now in the 52-week data is how serum creatinine is changing in these patients and that’s how we’ll make the measurements of estimated glomerular filtration rate. So I think it’s going to be the preponderance of the data including whether or not we can see kidney function improving or at least not decaying with respective to the standard of care group and that will be really what we’re going to look at in total. Pirow, I am sure you have more thoughts to add to that.

Pirow Bekker

Thanks Tom. I think that I want to emphasize that point. So serum creatinine is obviously the basis for calculating so called estimated glomerular filtrated rate or eGFR and this is the endpoint that would be used in pivotal trials based on recent developments in this field in discussions with FDA. And so I think we’ll be looking at the trend over time in eGFR. I think in terms of expectations, I think people need to realize eGFR is something that changes relatively slowly and this is something that over a course of one year we would expect and hope to see at least a trend for reversal of this decrease in eGFR in these patients that I think would be very encouraging to us. Furthermore, as Tom pointed in the introductory comments, we want to look at the subgroups of patients. We are very, very keen to evaluate again the efficacy in patients that have high albuminiria and relatively normal-to-high eGFR. So I think it’s going to be important to evaluate the efficacy signal in that group.

Unidentified Analyst

Okay. That’s great. And just following up on that, do you expect now that you have longer followup that we seek after dose response?

Pirow Bekker

Certainly, when you include more than one dose in these types of studies that the goal is to demonstrate some kind of dose response. I think it has been challenging in the field looking at other trials that have been done with regard to specifically urinary albumin excretion not always to show a very, very clear dose response, but I think obviously that would be our hope in next preparation for the study.

Unidentified Analyst

Okay. And then last question is depending on the dataset. When do you believe it would be like an appropriate time to partner the compound and kind of would you look to partner CCX145 immediately or wait to run a Phase-III trial and then what are some learnings from your former partnership with GSK that you would apply to your partnership discussions going forward?

Tom Schall

Excellent questions. So I think that given favorable data with CCX140 after this Phase-II analysis, we would then seek to look for partners. We think that our rest of world partnership is the preferred model for us where we continue to control the development past and certainly be able to work with the drug in North America even as we get past approval. I think that would be an entirely different kind of relationship than previous alliances that we’re forged including the GSK alliance and so far as again we would retain under the circumstances that I just outlined the ability to control the development path of the drug principally and certainly in North America at least to specialists be able to market the drug post approval, so entirely different kind of alliance really.

Unidentified Analyst

Great. Thanks again and congrats on the progress.

Tom Schall

Thank you Lisa.

Operator

As I’m showing no further question, I would now like to turn the call back over to Dr. Thomas Schall.

Tom Schall

I wish to again thank all of the participants for being with us today and all of the excellent questions and discussions that we’ve had. I look forward to our conference call next quarter and I wish you all a very pleasant day. Thank you very much.

Operator

Ladies and gentlemen, that does conclude the conference for today. Again, thank you for your participation. You may all disconnect. Have a good day.

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