Reata Pharmaceuticals, Inc. (RETA) CEO Warren Huff on Q1 2019 Results - Earnings Call Transcript

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About: Reata Pharmaceuticals, Inc. (RETA)
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Earning Call Audio

Reata Pharmaceuticals, Inc. (NASDAQ:RETA) Q1 2019 Results Earnings Conference Call May 9, 2019 8:00 AM ET

Company Participants

Vinny Jindal - VP, Strategy

Warren Huff - CEO

Colin Meyer - CMO

Jason Wilson - CFO

Conference Call Participants

Yigal Nochomovitz - Citigroup

Adam Walsh - Stifel

Joseph Swartz - SVP Leerink

Maury Raycroft - Jefferies

Brian Skorney - Baird

Operator

Good day, ladies and gentlemen, and welcome to the Reata Pharmaceuticals First Quarter Financial Results and Update on Development Programs. All participants will be in a listen-only mode during the presentation. [Operator Instructions] An audio recording of the webcast will be available shortly after the call today on Reata’s website at reatapharma.com in the investor section.

Before the company proceeds with its remarks, please note the forward-looking statements disclosure on the company's press release. The company will be making forward-looking statements on today's call. There are many factors that could cause results to differ from expectations, including those noted in the company's SEC filings. Today’s statements are not guarantees of future outcomes.

Please also note that any comments made on today's call speak only as of today, May 09, 2019, and may no longer be accurate at the time of any webcast, replay or transcript reading. Following the prepared remarks, we will open the call up for questions. [Operator Instructions]

I would now like to introduce your host for today's conference, Vinny Jindal, Vice President of Strategy. Vinny, you may begin.

Vinny Jindal

Thanks Nova [ph]. Hello everyone. Good morning and welcome to Reata management’s call to discuss our first quarter financial results and to provide a review of our development programs. This morning, we issued a press release with a summary of these results, and the press release can be found on the Investors section of our website at reatapharma.com. I’m joined today by our CEO, Warren Huff; our Chief Medical Officer, Colin Meyer; and our Chief Financial Officer, Jason Wilson.

I'll now turn the call over to Warren.

Warren Huff

Thanks, Vinny. Good morning, everyone, and thank you for joining us for our quarterly call. I’d like to begin our call today by reviewing the significant progress we’ve made over the last year in advancing our development pipeline. As most of you know, we’re currently conducting three registrational studies of our lead Nrf2 activators. The CARDINAL study of Bardoxolone for Chronic Kidney disease caused by Alport syndrome. The MOXie study of omaveloxolone in Friedreich’s ataxia and the catalyst study of Bardoxolone in connective tissue disease associated pulmonary arterial hypertension or CTD-PAH.

In 2018, we completed enrolment in both CARDINAL and MOXie and we expect to report topline results from both studies in the second half of this year. There are no approved therapies for either of these deadly diseases and if the results are positive we’re currently positioned to have the first FDA approved treatments for these patients.

Additionally, we recently produced positive Phase-2 proof-of-concept data in our PHOENIX study and four additional rare forms of chronic kidney disease, including autosomal dominant polycystic kidney, IgA nephropathy, focal segmental glomerulosclerosis and type 1 diabetic CKD.

On the basis of the data in ADPKD, this month we're launching a registration study of Bardoxolone called FALCON. We also plan to pursue the development of our Bardoxolone in the other three rare forms of CKD we studied in PHOENIX.

Starting with our Alport syndrome program, in 2018 we reported long term results from the Phase-2 portion of CARDINAL demonstrating that patients treated with Bardoxolone experienced a significant improvement and estimated glomerulo filtration rate or eGFR after 48-weeks of treatment, and a significant retained eGFR benefit following four weeks of drug withdrawal.

These improvements in eGFR were observed in patients that were actively declining on standard-of-care therapy prior to entry into the study, and the retained eGFR benefit suggests that long term treatment with bardoxolone may safely delay or prevent kidney failure in patients with Alport syndrome.

On the basis of the Phase-2 results, we initiated and fully enrolled the Phase-3 portion of the CARDINAL study. The FDA has provided us with written guidance that a statistically significant placebo corrected retained eGFR benefit after one year of treatment may support accelerated approval and a retained eGFR benefit after two years of treatment may support full approval. We expect top line data from the Phase-3 portion of CARDINAL to be available in the second half of this year.

In the first quarter of this year, we announced top line data from the FSGS cohort of the PHOENIX trial as well as summary data from all PHOENIX cohorts combined, which included a total of 103 patients with ADPKD IgA nephropathy, FSGS or CKD caused by type 1 diabetes.

We’ve reported positive results from all four cohorts with each cohort meeting its primary endpoint of an increase in eGFR at week 12. Across the 103 patients enrolled in PHOENIX, the mean eGFR increased by 7.8 ml per minute at week 12, and 88% of patients treated for 12 weeks demonstrated an improvement from baseline eGFR.

Importantly, these improvements were observed in patients whose kidney function was actively declining despite most patients entering the study on optimized standard-of-care. There was no significant change in urinary protein and mean blood pressure decreased significantly providing strong evidence that Bardoxolone’s effect on kidney function is not mediated through an increase in glomerular pressure.

In the ADPKD cohort of PHOENIX, 96% of patients treated with Bardoxolone for 12 weeks experienced an increase in eGFR with an average increase of 9.3 ml per minute versus baseline.

In prior Bardoxolone trials of at least one year in duration, the 12-week eGFR change from baseline correlated with the eGFR change at one year and in all three studies there was a significant retained eGFR benefit after one year of treatment and a four week washout.

As a result, the 12-week eGFR improvements observed in patients with PKD suggests that the long term eGFR improvements observed in other forms of CKD may translate to these patients. We have now observed significant improvements in kidney function across seven distinct forms of chronic kidney disease; a finding which strongly supports our thesis that Bardoxolone addresses a common, final pathway of progression in CKD that is driven by inflammation, fibrosis and the impairment of mitochondrial function.

In light of this, in January, we announced plans for FALCON, a randomized, double-blind placebo controlled, international Phase 3 study that will enroll approximately 300 patients across sites in the United States, Europe, and Australia. The footprint of this study is similar to that of our ongoing CARDINAL study and Alport syndrome patients and will leverage many of the same investigators and clinical sites.

As in the CARDINAL trial for Alport syndrome, the FDA has provided written guidance that one year placebo corrected retained eGFR data and FALCON could support accelerated approval and the two year placebo corrected retained eGFR data could support full approval in ADPKD.

We anticipate enrolling the first patient in FALCON later this month. Since we will have top line one year data from the Phase-3 CARDINAL study and Alport syndrome patients in the second half of this year, we are in active preparation for NDA submission and commercial launch in the event that the trial data are positive.

The FDA has indicated that we've conducted all preclinical toxicology studies and clinical pharmacology studies required for NDA submission. We are making significant investments in supply chain readiness. We put our marketing and commercial operations and sales leadership in place, and we've initiated our first disease awareness campaigns for Alport syndrome.

Turning now to our neuromuscular disease program, we're studying omaveloxolone, our second generation Nrf2 activator in the ongoing pivotal MOXIe trial for the treatment of Friedreich’s Ataxia or FA.

In the dose ranging part one of MOXIe, we observed at the optimal dose, a statistically significant improvement in the modified Friedreich’s Ataxia rating scale scores or mFARS scores versus baseline at week 12, and a placebo corrected improvement in mFARS scores which approach significance with P value of 0.6

Based on the results of Part 1, and the design of Part 2 of MOXIe, we are optimistic that omaveloxolone has the potential to become the first approved therapy for patients with FA. The MOXIe study is fully enrolled and we expect top line pivotal data from this study to be available in the second half of this year.

Our fourth pivotal study is the catalyst trial of bardoxolone in patients with CTD-PAH. In comparison to patients with the idiopathic form of PAH, patients with CTD-PAH generally have a worse prognosis and despite treatment with Baso [ph] dilator therapies these patients have a five year survival rate of only approximately 44%.

Based on the results observed in our phase 2 LARIAT trials, and the design of the CATALYST trial, we are optimistic that bardoxolone has the potential to become the first therapy approved specifically for patients with CTD-PAH. We expect top line data to be available in the first half of 2020.

I'll now turn the call over to Jason to provide a summary of our financials for the quarter.

Jason Wilson

Thanks Warren. And as noted earlier, this morning we reported financial results for the first quarter of 2019. Net loss for the quarter was $29.2 million or $0.98 per share, compared to a net income of $4.1 million or $0.16 per share for the same period last year.

The net loss for the three months period is driven by both an increase in expenses and decrease in revenue. Higher expenses were driven primarily by an increase in R&D expenses due to clinical and manufacturing activities and an increase in personal expenses as we expand our development activities.

The company incurred total expenses of $36.3 million for the quarter ended March 31, 2019 with research and development accounting for $26.1.million This compares to total expenses of $28.1 million for the same period of the prior year when research and development accounted for $21.4 million. As you likely know, revenue to date has primarily been related to license and collaboration agreements entered into a number of years ago.

The quarter-over-quarter decrease in revenue was primarily due to a sharp uptick in revenue in the first quarter of 2018 that related to partial recognition of a $30 million milestone from KHK. But due to the change in revenue recognition guidance in 2018, revenue from milestones is now recorded across the full performance obligation period of the contract and therefore a large portion of the milestone was allocated to the time period from execution of the contract through the end of first quarter 2018.

This did not occur in 2019. Our cash based operating expenses, a non-GAAP measure we define as total expenses, excluding stock based compensation expense and depreciation expense were $31.9 million for the three months ended March 31, 2019 compared to $25.6 million for the same period ended in 2018.

A reconciliation of this non-GAAP measure to total expenses can be found attached to the press release filed this morning. We expect our cash based operating expenses will continue to increase in the future as we advance our product candidates through ongoing and future clinical trials, scale manufacturing for registration and validation purposes, expand our product candidate portfolio, increase both our research and development and administrative personnel, and plan for commercialization of our product candidates.

At March 31, 2019 we had $313.1 million in cash and cash equivalents, which we expect to fund our operations through data readouts for three ongoing registrational clinical trials. With that, I'll turn the call back over to Warren.

Warren Huff

Thanks, Jason. At Reata, our mission is to develop therapeutics with novel mechanisms of action for severe orphan diseases with no effective therapies. We conduct a battery of phase 2 studies looking for meaningful improvements in key clinical parameters, and we set a high bar for advancing programs into pivotal studies.

This approach has produced our current pipeline of four promising registrational programs in Alport syndrome, ADPKD, Friedreich's ataxia and CTD-PAH along with a series of additional Phase 2 proof-of-concept studies that provide expansion opportunities for molecules.

Over the course of the next 15 months, we expect to achieve major milestones including initiating enrollment in our pivotal FALCON trial in ADPKD later this month, reporting top line pivotal data from our registrational studies in Alport syndrome in Friedreich's ataxia in the second half of this year, and reporting top line data from our pivotal trial and see CTD -PAH in the first half of 2020.

With a strong balance sheet, a portfolio of pivotal programs, an ongoing commercial launch preparation activities, Reata is well positioned to commercialize one or more groundbreaking therapies for underserved orphan diseases in the coming years. We look forward to updating you soon or our progress.

That concludes our prepared remarks, and I'll now turn the call over to the operator for questions.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from Yigal Nochomovitz from Citigroup.

Yigal Nochomovitz

Yes, hi good morning. Thank you for taking the question. Colin, earlier this week I understand you gave a talk at the CKD three meeting to nephrologists. I’m wondering if you could just spend a little bit of time giving us some of the feedback from that talk and more specifically what were the data points both pre-clinically and clinically that you think were worth highlighting or perhaps needs to appreciate it that we're better appreciated after conveying your message to the nephrologists community? Thank you.

Colin Meyer

Sure Yigal. So the meeting was well attended by Global KOLs and the heads of development for the global companies working in the CKD space. And I think, what's of interest to probably the community is that the role of inflammation in CKD is becoming quite evident. There were numerous talks demonstrating that inflammation actually drives remodeling fibrosis, and loss of kidney function and mitochondrial function plays a key role.

And so there were probably five talks before mine about this. And so, it wasn't very surprising, when I spoke about the role of [Indiscernible] 2 and how it can suppress inflammation for mitochondrial function, reduced fibrosis and had broad utility.

I think pre-clinically there are I think two main aspects that were of interest to those who had not been following us. One of which is of course the mechanism by which our drug acutely increases kidney function. And it's very clear now that our drug affects inflammation that affects the volume of the glomerular which is constricted in many forms of CKD. This is not an effect on pressure. There are many drugs that do affect pressure, because an increase in pressure or hyperfiltration is present in many forms and is bad and is addressed by many available therapies.

And so I think just presenting the data showing that our drug does affect volume, and there's no evidence it affects pressure and actually protects them of the pressure, and it was of interest. I think the other element to the preclinical data that was interesting was that we now have data and I presented the data on this basically six different forms of CKD preclinicaly where our drug reduces fibrosis and there's actually additional examples in literature, and so there's broad activity across many different forms of CKD.

I think clinically, what was of interest to people with data was actually presented by Matthias Kretzler, a few talks before mine. He runs a big group at the University of Michigan and his group demonstrated across a large biopsy study that included nine different forms of CKD including Alport syndrome, diabetic CKD, hypertensive CKD, IgA nephropathy and FSGS that inflammation metabolic pathways were disregulated across those nine different forms and those pathways were associated with loss of eGFR. So our clinical endpoint as well as the lab value that physicians use to track patients kidney function and that interact to was the central hub that connects them, and so I think that was well appreciated even though it's published about five years ago.

And I think clinically, what was striking to people was that our drug is active across many different forms of CKD. The effect is durable for up to two years. It's associated with reduction of inflammatory biomarkers. Many people had not seen that data. We've obviously published the data from our BEACON trial showing that actually reduce the newly validated events end-to-end point and then most notably, there's been a lot of interest in new endpoints for CKD.

And so Kerry Willis from the National Kidney Foundation who led the joint NKF, FDA EMA working group is there. Dr. Aliza Thompson, the deputy director of FDA who participated from FDA in that working group, she spoke about endpoints and obviously we and a few other companies now have these new endpoints that give us a much more efficient path to approval.

And specifically about ours, I think most people weren't quite aware that we've actually demonstrated a significant increase in estimated share far after withdrawal this so-called routine benefit in three trials that we've previously conducted. And that's the endpoint for ongoing CARDINAL trial and Alport syndrome and our FALCON trial and ADPKD that we're launching now. And so I think all-in-all, it was pretty compelling presentation, and I had a lot of positive feedback.

Yigal Nochomovitz

Okay, great. Thank you. Just one quick follow up regarding the translation from the 12-week data to the 48-week data. Obviously you've shown that, very nicely with bardoxolone and Alport, what is the level of evidence that would suggest that you can see that translation for omaveloxolone for the MOXIe part 2 that you've shown that the 12-week modified FARS data, but for the 48-week data, I just wondered how you -- how you believe that will translate? Thank you.

Colin Meyer

So we've obviously seen translation into phase 2 Alport syndrome trial eGFR from week 12 to week 48. We've also seen it in our BEAM and BEACON trials. So we haven't really seen a setting where the activity has been lost clinically with longer duration treatment. The pharmacology is the same, obviously molecule is slightly different, but still induces Nrf2 suppresses NF-κB [ph] and restores mitochondrial function.

Yigal Nochomovitz

Great. Thank you.

Operator

Our next question comes from the line of Adam Walsh from Stifel.

Adam Walsh

Good morning, guys. Thanks for taking my questions. So Colin, first a follow up on Yigal’s question. I'm just curious, specifically about the feedback from physicians on the mechanism of action and the degree of acceptance at this point obviously there's been some street debate around the mechanism of action.

So, just the feedback, how are clinicians broadly accepting the mechanism at this point or in the clinical community at the meeting? Is there still a lot of debate around that? And then also, I think, I recall correctly you may have some ongoing work or studies I think laser microscopy studies to kind of prove further, prove out your mechanism of action.

If so, can you check that box for me, and then tell us when you're going to see some data from that trial? Thank you.

Colin Meyer

Sure. So, I only think there's debate in people who are unaware of our -- of our data. And so in all the interactions that we've had with either investigators or KOLs who are willing to listen I think we've adequately addressed all major questions. And speaking to I think you know what was you know I think part of the debate was does our drug cause hyper filtration. And I think as I mentioned to everyone before, and even at the CKD through conference.

Hyper filtration specifically defined as an increase in pressure, that would result in an increase in kidney function and there's actually no evidence of that in any of the preclinical or clinical data and there's many lines of evidence.

And so when I walk people through the data, I think it's quite clear that the drug doesn't do that. There's only two specific mechanisms, I think non-nephrologist are unaware and there's not many ways this can be caused, it’s simply by increasing systemic blood pressure and transmitting that to the kidney our drug does not do that. And then there's relative [Indiscernible] dilation of the AFL [ph] and arterial and there's no evidence that the drug does that. And there's actually no other way to cause hyper filtration.

The only other way to effect eGFR is to effect this parameter called [Indiscernible] which includes the surface area or volume glomerular [ph] and we do have evidence, preclinically that the drug does affect it. And that was actually published in 2013 in Kidney International, which is one of the top kidney journals.

So I think that once people are aware of those data and the fact that in models of hyper filtration, now there's several published models or data there's several published papers across a few models that bardoxolone and omaveloxolone [ph] actually protect, and preserve kidney function reduce fibrosis. And that coupled with our clinical data that I described when answering Yigal’s question provide a pretty compelling picture, to really almost all nephrologists and the only ones that I'm aware who still question it are really unwilling to listen to the data.

And so, I think there's really not much debate and those were informed and once again the clinical picture and preclinical picture is very different. And as far as what the laser microscopy work that you mentioned, yes, I discussed at the CKD 3 meeting that we have what I think is one last set of experiments to address any remaining questions about the mechanism, that is really sophisticated, imaging techniques that allow investigators to visualize the kidney in living animals without any artificial manipulation, sticking probes into them. And many of these physiological parameters can be directly measured. And so, we think, that that work will hopefully be quite definitive and we hope to that will be presented at a future medical meeting.

Adam Walsh

Hey, thanks. That's great. And just one more here, do you have any more granularity on the timing and the MOXIe and the CARDINAL study results beyond the back half of this year, kind of any indication you know which may come first and whether it's going to be third quarter or fourth quarter? Thanks.

Colin Meyer

No, we really don't. We've guided that, but both studies are fully enrolled and that we expect to have top line data in the second half and we really can't say more than that.

Adam Walsh

Fair enough. Thank you.

Operator

Our next question comes from the line of Joseph Swartz of SVP Leerink.

Joseph Schwartz

Great. Thanks very much. So some new studies suggest that there could be some upside bias to the number of patients that are out there with rare kidney diseases. So I was wondering if you could talk a little bit about how the diagnostic protocols are evolving and where in the community do you expect to be able to find the most patients who can benefit from Botox [ph] on treatment for different forms of CKD?

Colin Meyer

Sure. And so I think if you speak to most nephrologists and ask them about Alport syndrome, and you ask them to describe the average patient, they would comment that it's typically a young boy, with kidney function impairment with blood in the urine and hearing loss, and only in the past few years has it been appreciated that the mothers of those boys actually are also affected.

And so, the Alport Syndrome Foundation has suggested there are between 30,000 to 60,000 Alport syndrome patients in the U.S. that primarily comprise those two phenotypes. Fairly recently the International Alport Syndrome Community has come together and many of the global experts published a new, recommended set of guidelines for diagnosis of Alport Syndrome patients. It was published in the same journal I mentioned a few minutes ago, Kidney International in May of last year. It also comprises a few other hereditary patterns including autosomal dominant Alport syndrome which is previously known as thin basement membrane disease. Those patients also have a meaningful risk of reaching end stage communities in our lifetimes. It's about 25% so similar to the mothers of excellent boys. And it appears that that is a maybe a very meaningful population.

And so right now, obviously patients who are the classic phenotype are many of them have been identified, and we're working on efforts right now to better educate the broad nephrology community about the many forms of Alport syndrome.

One telltale sign is blood in the urine. And so, not that many types of conditions the kidney can cause blood in the urine. And so the young boys have it. It's hard sometimes for the nephrologists to identify dots, because the patients don't have hearing loss and they're not, they weren't trained 10, 20 plus years ago that there are other forms, but now it is known and truthfully hematuria is the telltale sign as well as a family member CKD.

There was a study published about four years ago in the Journal of the American Society of Nephrology, the treatment [ph] group took 101 people who had CKD, blood in the urine, and if a family member was CKD, none of those patients were related and they identified Alport syndrome in 80% of the patients. And so that provides a clear road map for us to identify these patients, because I mentioned not many conditions actually caused blood in the urine.

Joseph Schwartz

Okay. Interesting, and then kind of leading into my next question. And, can you talk about your disease awareness campaigns in Alport. I know, you can't market the drug until after it's approved, and materials are approved. But are you able to identify individual patients at this juncture that could ultimately receive the drug, and how many patients have you been able to reach so far?

Warren Huff

So we haven't -- we haven't initiated that campaign to identify specific patients at this point. We have begun disease awareness campaign to simply educate the community about many of the findings and data that Colin has already mentioned. That yes, there is this classic phenotype. But that in particular, the mothers of the boys with the classic phenotype are also at a high risk of being needing a dialysis or a transplant you know during their lifetimes.

Joseph Schwartz

Okay. Interesting. Thanks for taking my questions.

Operator

Our next question comes from the line of Maury Raycroft from Jefferies.

Maury Raycroft

Hi, everyone. Good morning. First question is just on the FDA submission for Alport. Just based on your prepared remarks, I assume you're writing it up already, so provided the Alport syndrome data are positive, how quickly do you think you can file after you report the topline results?

Colin Meyer

Maury, so yes, we’re actively working on the NDAs for Alport syndrome as well as for Friedreich’s ataxia to many month long process, and we want to make sure that to assuming that the data are positive, and so and they support approval that we're able to interact with regulators quickly and expeditiously filed the NDA. At this point, we're not going to provide guidance on timing and we'll provide more guidance once we hopefully have positive data and have had those initial interactions with the regulators.

Warren Huff

But I'll just add that, we're very aware that both of these groups of patients have a deadly disease with no approved therapy. So we'll be doing everything we can to move the programs expeditiously.

Maury Raycroft

Got it, okay. And then for phase 2 CARDINAL and for the phase 2 PHOENIX trials, dose reduction was allowed in both of those studies. I’m just wondering if you have perspective into how much those reduction has occurred in the Phase 3 for Alport syndrome. And if you can remind if dose reducing has any impact on [Indiscernible]?

Colin Meyer

So I can't comment on the ongoing pivotal trials as far as the specific doses, but in the context of the Phase 2 data, we typically see that two thirds or 75% of patients can tolerate their max dose. And so this titration scheme definitely helps compliance but sometimes the goal dose is too high. And so, we would hope that in the pivotal trials that this obviously helps with compliance.

When we look across our prior trials we've conducted, it's often that the patients may be smaller in size or for some reason that may not be clear they have higher exposure at a given dose. And so there does not appear to be at the higher end of the dose range, a difference in dose response.

Maury Raycroft

Okay, great. And last question is just on ADPKD enrollment. I'm just wondering if you can roll some of the patients over from the Phase 2 into the Phase 3 and if so how many of those patients are warehoused and linked to go into the Phase 3?

Colin Meyer

So we do not allow patients who've been exposed to our drugs to participate in future trials, but that was only 31 patients, and we enrolled those patients only from eight sites in the U.S. in eight weeks, with no data in PKD. We have a much larger set of investigators targeting approximately 80 sites globally. Obviously, we’ll enroll the first patients in the U.S. but there is a large amount of enthusiasm and so we haven't provided specific enrollment yet to the PKD trial. But since this is a relatively large rare disease and many of these patients are diagnosed about 140,000 in the U.S. already there's only a single agent that's approved and our drug is not competitive and allows patients to be on standard of care. We're hoping for a quick enrollment.

Maury Raycroft

Got it. Okay. Thank you very much for taking my question.

Operator

Our next question comes from Matt Kaplan from Ladenburg.

Unidentified Analyst

Thank you for taking the question. This is Maria for Matt. I have a couple of questions. The first one in the Catalyst program, they rolled out its first half 2020 and still almost a year away. And it's probably early to speak about commercialization. But I was wondering if for that program, would you need a different salesforce team that is – [Indiscernible] that you are now for CKD and for…

Colin Meyer

Yes. So yes very specifically we would anticipate that we would have a separate dedicated sales force for the pulmonary arterial [ph] dedicated sales force for the pulmonary applications of the drug and obviously for the connective tissue disease associated, PAH the target physician group is different from the other two diseases that we're addressing. We were actually expecting separate forces for Friedreich's ataxia as well as for Alport syndrome and the other rare forms of CKD.

Unidentified Analyst

Okay, great. And then regarding the PHOENIX trial and moving forward to pivotal studies, besides ADPKD you announced your intention to pursue the other rare form of CKD commercially. So would you run a study in CKD caused by Type 1 diabetes or will the Japanese partner include this patient population in their study? And also, for the results, you – I think you said that there were 103 patients enrolled in PHOENIX and 88% of patients showed an improvement from baseline in eGFR, which is obviously a very high percentage. But for the 12% of patients who did not show an improvement, was there a common reason or a common theme or why they didn't respond? Thanks.

Colin Meyer

So maybe starting with your last question. So in the PHOENIX we have 103 patients. Yes 88% showed an increase in eGFR which is we think remarkable and striking how most drugs don't have comparable efficacy. As well as, as far as the 12% who didn't have an increase. We noted that there's a subset of patients, and they are type 1 diabetics CKD cohort, who enrolled with eGFR is about 80, so near normal. And those patients generally showed no change in eGFR and that accounts for the majority of the lack of response.

And there is very few others, and so it's really hard to know. We don't know if there is some exposure just happened to be low, or if there is some particular reason why they were unable to respond. You're correct, our Japanese partner, KHK is conducting a trial in Japan of both Type 1 and Type 2 diabetic CKD. I think, we at this point we have to be thoughtful about what we do next. We obviously are excited that bardoxolone is broadly active and as Warren said, has shown actively in seven distinct forms of CKD. And so we are executing now three pivotal trials. We're launching our FALCON trial this month, and so we need to make sure that we can execute all these programs. And then when additional resources are available later on additional trials, we'd anticipate that for the rare forms of CKD, would likely be a similar approach.

And so as you have heard, the design for our FALCON trial is very similar for Alport syndrome. And so this process is scalable. We just need to make sure that we allocate the appropriate resources at the right time for the additional opportunities.

Unidentified Analyst

Okay, thank you for taking the questions.

Operator

[Operator Instructions] Our next question comes from the line of Brian Skorney from Baird

Brian Skorney

Hey, good morning guys. Thanks for taking the question. Just looking at kind of the timelines that you have set up here, it looks like there might be similar timeframe for getting top line FALCON data and when you can get approval in Alports for bardoxolone. I'm just wondering does it seem to match upright, and how does that determine your initial pricing decision, when you look at the two different patient populations, would we expect it to affect price or do you think at all for price or do you think an all four price can be extrapolated to a polycystic kidney disease price? Thanks.

Colin Meyer

So as far as the timing, we haven't provided specific guidance obviously for NDA submission, for Alport syndrome and potential approval or for enrollment timelines for PKD. But obviously it's within probably reasonably close period of time, and so obviously that we have to be thoughtful about how we approach the nephrology community. As far as pricing, we think they are probably independent, we would figure out what prices relevant for Alport syndrome.

Jason Wilson

Yes, I'd just -- obviously the pricing is going to be informed by the results of both clinical trials. I'd just say that in both cases, the studies are designed to provide information about whether the drugs are modifying the course of the disease and could reduce the risk that these patients go on dialysis or a transplant. And I think as you know you know are each of these studies is designed to treat patients that have been actively declining for years.

Most have lost half of their kidney function prior to entering the studies. And so we're hoping to have, we're hoping that the data will demonstrate that the drugs can significantly reducing their risk of progressing to end stage kidney disease. And so obviously the drug will be priced based on what those results are.

Brian Skorney

Great. Thanks.

Operator

Thank you. Ladies and gentlemen, this does conclude our question and answer session for today. As a reminder, an audio recording of this conference will be available shortly after the call on Reata’s Website at reatapharma.com in the Investor section. Thank you for participating in today's conference. This concludes your call, and you may all disconnect. Everyone have a wonderful day.