Good afternoon, and welcome to the ChemoCentryx Second Quarter 2020 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 Bill Slattery of Burns McClellan. Mr. Slattery, please go ahead.

Thank you. Good afternoon, and welcome to the ChemoCentryx second quarter 2020 financial results conference call. Earlier this afternoon, the company issued a press release providing an overview of its financial results for the second quarter ended June 30, 2020. This press release, along with a few slides that you may find helpful while you listen to this call, are available on the Investor Relations section of the company’s website at www.chemocentryx.com. Joining me on the call today is Dr. Thomas Schall, President and Chief Executive Officer of ChemoCentryx, who will review the company’s recent business and clinical progress. Following his comments, Susan Kanaya, Executive Vice President, Chief Financial and Administrative Officer of ChemoCentryx, will provide an overview of the company’s financial highlights for the second quarter 2020 before turning the call back over to Tom for closing remarks. During today’s call, we will be making certain forward-looking statements, which those of you following the slides can see if you look at Slide 2. 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 the company’s filings made with the Securities and Exchange Commission, including the company’s annual report on Form 10-K filed on March 10, 2020 and its Form 10-Q filed on May 11, 2020. 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 10, 2020. ChemoCentryx undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this live conference call. With that, it is my pleasure to turn the call over to Tom Schall. Tom?

Thank you, Bill, and good afternoon to everyone listening. Thank you for joining us on our second quarter 2020 conference call. I will report to you today on what I believe is the impressive progress in executing on the 2020 goals that we laid out for you at the start of the year. But who could have guessed how far and fast this pandemic would spread, or how long it might last? Our hearts go out to all of those affected, their friends, families, and to all the healthcare workers who are fighting COVID-19. The COVID crisis has affected us all. Here at ChemoCentryx, we were already at or near full enrollment in our current cycle of clinical trials when the full force of the pandemic struck, and we expect to initiate our next cycle of clinical trials next year. We have, therefore, been able to meet most of the milestones that we set for ourselves this year, with relatively little impact, while taking actions to safeguard the health of our employees. We are continuing to make key hires and build out a team ahead of the anticipated commercial launch of avacopan in 2021. The coronavirus has led to heightened awareness of the importance of the body’s own defense mechanisms and to the crucial role that the immune system plays. As you can see from Slide 3, our discovery and development efforts focus on small molecule therapeutics that target specific chemoattractant receptors. These are the receptors that activate inflammatory cells in autoimmune diseases. We started in renal disease, but have leveraged our science into dermatology as well and have now even branched out into a new era in oncology. At the core of it all is the belief that a precise mechanism of action helps achieve precision medicine. Our drug candidates are designed for anti-inflammatory properties without broad immunosuppression, so that the immune system can remain fully focused on its mission to resist illness and disease. This is an important differentiating feature from other currently standard therapies for the diseases in which we at ChemoCentryx are developing new medicines. Our lead candidate, avacopan, selectively targets the C5a receptor, switching off the inappropriate activation of harmful neutrophils in complement-driven diseases. In early July, as shown on Slide 4, we submitted our new drug application to the FDA for avacopan in the treatment of patients with ANCA-associated vasculitis. We expect to hear back from the FDA later this quarter with regard to next steps in the FDA-review process. We are working also intensively with our partner, Vifor Pharma, as we and they gear up for the potential commercialization of avacopan outside of the U.S. Vifor will pay us royalties in the teens to the mid-20s on net sales outside the United States. Vifor plans to file a marketing approval authorization with the European Medicines Agency by the end of this year 2020, and we are working closely with them as they prepare their MAA using our core technical document from the FDA preparations as the key source. Our applications to regulatory agencies and our preparations for the anticipated commercialization of avacopan are built upon the key findings in the ADVOCATE pivotal trial. As a reminder, ADVOCATE compared our new targeted therapy of avacopan against what has been the current standard of care, which contains high and chronic doses of glucocorticoids such as prednisone. We looked at clinical effects in the avacopan therapy group in comparison to the prednisone or steroid therapy group in a randomized, blinded, controlled worldwide Phase III trial of ANCA vasculitis patients. We believe the ADVOCATE findings demonstrate a compelling value proposition in terms of avacopan’s potential to meet the four major unmet needs of ANCA vasculitis patients. First, stopping ANCA vasculitis. Avacopan therapy was statistically superior in sustaining remission of ANCA vasculitis at 52 weeks compared to the prednisone-containing standard of care group. Second, eliminating the need for chronic steroid therapy and the many illnesses associated with that current chronic steroid-containing standard of care. In the ADVOCATE trial, avacopan patients achieved a significant reduction in the toxicities and illnesses known to be related to steroids. Third, stopping the accumulated organ damage that comes with this deadly and debilitating disease. Avacopan therapy led to improved kidney function and its use produced a statistically significant improvement in the estimated glomerular filtration rate, a key metric of kidney function. Fourth, an improvement in quality of life. Too many ANCA patients experienced poor quality of life, feeling listless, ill, and lacking in anything like normal vitality. From ADVOCATE, there was good news here too, a statistically significant improvement in clinically validated measurements of quality of life on avacopan therapy. And overall, avacopan also demonstrated a favorable safety result in this serious and life-threatening disease, with fewer subjects experiencing serious adverse events in the avacopan group than in the steroid standard of care group. Results of the ADVOCATE trial were featured in oral plenary sessions during the annual meetings of both the European League Against Rheumatism and the European Renal Association - European Dialysis and Transplant Association meetings. At ERA-EDTA, for example, Dr. David Jayne from Addenbrooke’s Hospital in Cambridge, England, presented some remarkable data on EGFR improvements from the ADVOCATE trial. Slide 5 shows that 80% of ADVOCATE patients who entered the trial had defined renal impairment. In this group, their baseline EGFR, which was well balanced between the two groups, was on average about 45 ml per min. Avacopan therapy improved that EGFR by nearly 8 ml per min over 52 weeks of therapy, which was significantly better than the prednisone-containing active comparative group. Avacopan therapy boosted their EGFR by almost 14 ml per min over the 52 weeks for those patients whose baseline EGFR was below 30 ml per min. This result shows that we have not only met our goal of stabilizing or preserving what kidney function remains in this disease state, and in so doing, potentially sparing patients from dialysis. But, in fact, the data suggests that avacopan may actually improve renal function over time in a significant way. We believe that avacopan therapy offers new hope for patients suffering from ANCA vasculitis and importantly, could rid them of the toxic consequences of the use of steroids. There were some other subtle, but notable findings from the ADVOCATE study. One of these, for example, is that patients on avacopan therapy performed very well in the second six months of the trial. During this period, avacopan was essentially a monotherapy since the standard concomitant background therapies, such as cyclophosphamide or rituximab have ceased. The data suggests that avacopan alone may suffice in controlling ANCA vasculitis over time, perhaps without the need for repeated administrations of background immunosuppressive drugs such as rituximab. While more clinical data may be needed to draw firmer conclusions, given the importance of preserving immune function as we anticipate vaccines in the era of COVID-19, this could be a crucial benefit. We are continuing to move forward with our plans for potential commercial launch, as you will see on Slide 6. Our aim is to be ready to launch soon after FDA approval. We have secured commercial batches of avacopan that we need for launch. We continue to hire well-qualified candidates for key positions, expanding the capabilities of our commercial operation. And we broadened and deepened our knowledge of the structure and dynamics of the U.S. ANCA vasculitis market through intensive market research. We’re also taking appropriate educational opportunities to present data on the disease and on the findings from the ADVOCATE study to clinicians in both nephrology, rheumatology, and other relevant disciplines. And we’ve initiated discussions with key payers to raise their awareness of the current unmet needs and burdens of ANCA vasculitis. We plan to field a specialty force of approximately 60 to 75 people to launch avacopan in the U.S. ANCA vasculitis is a disease that is estimated in the published literature to impact anywhere between 40,000 and 100,000 people in the U.S., with an estimated 4,000 to 9,000 new cases diagnosed each year. Given the strong value proposition suggested by the ADVOCATE data, we believe that avacopan’s utility could extend beyond ANCA vasculitis, making avacopan a pipeline drug and with strong patent protection. Given the strong kidney benefit finding in ADVOCATE, we continue to refine our pipeline and expect to introduce avacopan for lupus nephritis into clinical development in the first half of 2021. And as you can see from Slide 7, we expect to report top-line data for two more indications this year. Indeed, avacopan’s ability to stifle the activation of destructive neutrophils by jamming the C5a receptor represents a precision approach that is relevant not only in kidney diseases, but potentially outside the renal space as well. In fact, the first top-line data that we will report this year is in Hidradenitis Suppurativa, a disabling skin disorder. HS is driven by neutrophils that are thought to be activated by the C5a receptor. Endovasculitis complement dysregulation is almost universal in HS patients. Our AURORA study, depicted on Slide 8, is a double-blinded, placebo-controlled Phase IIb clinical trial of approximately 390 patients with moderate to severe HS, with patients randomized to one of three arms. The primary endpoint is the Hidradenitis Suppurativa Clinical Response Score, or HiSCR, after 12 weeks of treatment. We designed the trial to be powered to a registration grade level and decided to slightly over enroll in order to provide some cushion for anticipated COVID-related patient follow-up loss. As I mentioned earlier, the COVID crisis has affected us all. We at CCXI are no exception, but the impacts have been less grievous for us than for others. Still while the majority of our subjects had already enrolled in the AURORA trial before the full impact of the pandemic, the summer resurgence of COVID-19 has led to the renewed, if temporary, restrictions of some of the clinical sites. It is, therefore, likely that this will impact somewhat the normal processes of data collection and verification that then lead to database locking and subsequent data analysis. These processes, which are routine to any clinical study, are likely to incur modest delays in AURORA owing to COVID. Thus, we predict that the reporting of the 12-week top-line results originally forecast for Q3 is now expected in early Q4. To be clear, no unblinded data are yet in hand. No unblinding or any other unblinded analyses have yet occurred in this trial; we are merely predicting a modest delay in reporting as a consequence of COVID delays. I’m often asked how we are dealing with the placebo issue in HS. The primary endpoint assessment known as HiSCR has an unavoidable element of subjectivity. It is the standard that the FDA expects sponsors to use in determining clinical effects in HS and ultimately, the standard by which they will assess for the approval of a new therapeutic agent. We have been very careful to attempt to minimize subjectivity in HiSCR. For example, we have carefully selected sites, which are all in the U.S., allowing a high touch approach and also in a healthcare system, which tends to keep placebo responses in check. We have engaged in a training program of intensive training, standardization, and monitoring. For example, first to training. Suffice it to say, we train, train, train, and principal investigators had to pass a certification test on HiSCR to qualify to enroll patients. Standardization, we developed and mandated the use of standardized records and continuous worksheets across the clinical sites. Finally, monitoring. During the blinded data collection phase, our resident medical monitor scans for anomalies in the data collection nearly daily and is in frequent contact with the investigator who is also still blinded, and they jointly address any recording anomalies using our standard protocol. In all of these ways and more, we are scrupulously attempting to control what we can control to reduce variability and placebo response in the HiSCR assessment. Our other current avacopan trial is in another kidney indication, C3 glomerulopathy. C3G is a rare and devastating kidney disease. There is no FDA-approved therapy for C3G. ACCOLADE is a randomized, blinded controlled trial, the design of which is shown on Slide 9. The trial is unique in many ways, including that we will collect and carefully measure kidney biopsy data as a measure of efficacy and couple this with other traditional markers of kidney function. Many experts suggest that we are already in possession of the largest and most comprehensive data set, albeit still blinded, for C3G yet assembled for this life-threatening illness. We aim to announce top-line data for the ACCOLADE trial by the end of this year. Innovation in life sciences does not come without its setbacks, and our risk came with the disappointing top-line results from our LUMINA-1 trial of CCX140 in focal segmental glomerular sclerosis. We don’t see a way forward for CCX140 in FSGS. In the interest of biomedical innovation and completion, we will report more detailed LUMINA-1, as well as the smaller LUMINA-2 data sets in due course. On a brighter note, see Slide 10. In the second quarter, we announced that we have identified an orally administered checkpoint inhibitor, CCX559, formerly referred to as CCX6559, which we plan to advance in clinical development in the first half of the coming year in 2021. Data presented in June at the Annual Meeting of the American Association for Cancer Research showed that our optimized checkpoint inhibitors lead to a marked inhibition of the PD-1/PD-L1 interaction in vitro, and importantly, produced potent anti-tumor effects in vitro in pharmacological models. We believe that CCX559 has the potential to be used alone or in combination with antibody therapy or other oncology therapies. Our small molecule checkpoint inhibitor is designed to address at least two limitations of current antibody checkpoint inhibitor therapy: one, a small molecule may achieve better penetration of the tumor microenvironment, where some tumors are currently resistant to antibody therapy; two, a small molecule brings the convenience of a flexible dosing capability. Before I turn the call over to Susan Kanaya for our financial results, let me add that during the quarter, we have further strengthened our balance sheet with a follow-on offering that yielded net proceeds of almost $326 million. We report today over $0.5 billion in cash and cash equivalents on the balance sheet as of the end of the second quarter. This financial strength supplies many important degrees of freedom in pursuing our ultimate mission. We believe that we have the resources we need for the potential commercial launch of avacopan and ANCA vasculitis and beyond. We can pursue the simultaneous further development of avacopan and other high-need, high-value clinical indications, as well as additional formulations. And we can follow the science and invest in other novel and highly innovative drug candidates, such as our orally-administered checkpoint inhibitor, CCX559. My warmest thanks to all my colleagues at ChemoCentryx, especially in these difficult times, for their tireless work in advancing us to this stage and to the many clinicians involved in our clinical trials. I think, especially of the patients and their families, who have devoted so much to our controlled-blinded trials, not knowing if an active agent was part of their personal plan, but doing so for the benefit of the community as a whole. Susan?

Thank you, Tom. Our second quarter 2020 financial results were included in our press release today and are summarized on Slide 11. Revenue was $49.4 million for the second quarter, compared to $7.2 million for the same period in 2019. The increase in total revenue was primarily due to the acceleration of revenue recognition associated with the CCX140 agreement with Vifor. Following the decision to discontinue the development of CCX140 in FSGS, $47.2 million of deferred revenue was recognized as contract revenue. Research and development expenses were $18.8 million for the second quarter of 2020, compared to $17.6 million in the same period last year. This increase was primarily due to patient enrollment in the avacopan AURORA trial in patients with Hidradenitis Suppurativa, professional fees associated with the preparation of our avacopan NDA for ANCA-associated vasculitis, and higher drug development or drug discovery expenses, including those associated with CCX559, our orally-administered small molecule PD-L1 inhibitor. These increases were partially offset by lower expenses due to the full enrollment of the CCX140 LUMINA-1 trial in 2019. General and administrative expenses were $10.3 million for the second quarter, compared to $5.6 million in the same quarter last year. The increase was primarily due to higher employee-related expenses, including those associated with our commercialization planning efforts and higher professional fees. Net income for the second quarter was $20.3 million, compared to a net loss of $15.2 million in the same quarter of 2019. Total shares outstanding at June 30, 2020, were approximately 68.8 million shares. Lastly, we closed the quarter with $504.6 million in cash, cash equivalents, and investments, including the $325.7 million in net proceeds from the June 2020 equity follow-on offering of our common stock. Tom?

Thank you, Susan. To summarize, as you can see on Slide 12, we have filed an NDA for avacopan for ANCA vasculitis and our partner, Vifor, expects to file an MAA in Europe by the end of 2020. We continue to build our commercial capability. We are on track to release top-line results from two further clinical trials of avacopan in patients with HS by early Q4 and with C3G by the end of the year. We are preparing for our next cycle of pipeline advancements, and we anticipate initiating clinical programs in the first half of 2021 for our orally-administered checkpoint inhibitor, CCX559, as well as for avacopan in patients with lupus nephritis. We have attracted the financial resources that we need, with now over $0.5 billion on the balance sheet at the end of Q2, to drive us to the next phase of our growth as we seek to become a fully integrated pharmaceutical enterprise that brings fundamentally new medicines to patients that need them most. This ChemoCentryx enterprise is built on biomedical innovation, determination, integrity, and purposeful resilience. With science and data illuminating the path ahead, I look forward to a future filled with the bright light of hope and prosperity. With that, I will now turn the call back over to the operator, and we look forward to your questions.

And our first question comes from the line of Steven Seedhouse. Your line is now open.

Good afternoon. Thanks so much for taking the question. My question is on the analysis of AURORA, given the different moving parts you highlighted on the call. So I was hoping if you could quantify the net impact of COVID, any discontinuations, or patients missing their final visit versus over enrolling the study and where it leads you really with respect to study power? And also wondering, is the primary analysis here an ITT analysis or a protocol analysis on those patients that haven’t deviated from protocol? And then last, how are you treating the patients who may have missed their final study visit because of COVID impact? Are those responses imputed from prior measurements, or are they just censored? Thank you.

Yes, great question, Steve. So it is – all of our analyses are intended as ITT, because as I said, we made this trial kind of a registration grade trial, since it’s a Phase II or IIb trial. Our intention will be to report the stats as intent to treat. We will obviously do and have in our stats plan pre-specified various kinds of protocol analyses. So those data will be informative and meaningful as well. Currently, we’ve been – and obviously, we and others have been really careful in documenting the effects of COVID on patients, particularly for primary endpoint determination, working very carefully with the FDA and documenting in real-time what we’re doing with those folks. At the moment, we do not intend the last observation carry-forward necessarily for those that missed their 12-week visit owing to COVID. But we will certainly capture all the data we can from those folks, particularly if they’re still on the trial and are measured thereafter. So those might be eliminating data as well. But I think the good news is that the first part of your question, which is, I think, probably the most important part. Although, yes, it is clear that, that dropouts and some loss data owing to COVID is going to be higher than what we and others might have modeled. The fortunate news is I don’t think it’s going to materially impair our ability to still have very good power in this trial. So that’s, I think, for us, the excellent news. We really made a big trial with big groups. It was very highly powered to detect the differences that historically we might be led to expect and certainly highly powered to detect statistical differences between the groups. So even a doubling, if you will, and I’m not saying that’s the number, but even if we had twice the number of dropouts or lost data at 12 weeks, I think we’ve still got really good power discrimination. So I fundamentally believe that we’ll be able to return a meaningful and clean result from the 12-week data, even with the fact that COVID has messed with some of that data a little bit. And really, the biggest impact for us is a slight delay as we get into the sites and do our data verification and collection process.

I appreciate the detailed answer. Thank you.

And our next question comes from the line of Dae Gon Ha with BTIG. Your line is now open.

Great. Good afternoon. Thanks for taking our questions, and congrats on all the progress. So, Tom, if we can go to AURORA protocol, I just wanted to ask, can you remind us what the protocol allows in terms of antibiotic usage? Because, I mean, I guess, PIONEER 1 and 2, they did have a little bit of that antibiotic usage versus non-antibiotic usage. And as we look forward in terms of the regulatory front, can you update us on your latest thought process regarding maybe orphan drug designation or conditional filing or accelerated approval based on AURORA data alone?

Sure. Thank you, Dae Gon. Without going into all the details on the antibiotic use, I can tell you that we’re much closer to the PIONEER studies than we were to any other studies. We realized that concomitant antibiotic use can be a confounding feature in the short-term in ascribing effects to the HiSCR. And so we were pretty careful about looking back at what had happened in PIONEER 1 and 2 and trying to adhere to those guidelines, and also making sure that to the extent possible, we didn’t have imbalances in antibiotic usages between the groups. So, again, I think we’ve been very cognizant of that as a complicating feature and trying to avoid it as a complicating factor in our interpretation. Back to the regulatory strategy, the history is clear on what’s gone before. We’re evaluating the Hurley stage II/III patient population, as did the PIONEER studies, which are the only Phase III pivotal trials that led to the registration of a drug in this space, that for adalimumab, the anti-TNF drug Humira. Hence, we want to try to avail ourselves as much as we can from information from that precedent. Interestingly, that sponsor got an orphan drug designation for Hurley stage II/III, because that patient population is under 200,000 people in the U.S., and that is still the case. We’ve been attempting and continue to work on our orphan drug designation. We don’t yet have that designation at ChemoCentryx yet. But there is precedent, and we’ve certainly been working on that continuously. So we do not yet know if we will get that orphan drug designation. But again, there is precedent for it. We fundamentally believe that Hurley stage II/III patients are still fewer than 200,000 in the United States at this juncture. With all of that in mind, getting back to one of the main points of the question, we set up this trial to be big enough and highly powered enough, where we got really good data with a highly differentiated agent, particularly one which at that time was not yet in registration for another indication. But we were confident that it would be. That has come to pass, and that we have filed; we have actually a filing under review for registration of avacopan and ANCA vasculitis. We have been hopeful that with strong data, we could have an interesting discussion with the FDA about potentially a conditional registration, or at least how to get to an accelerated path to registration, again, with strong data. So, again, without going into a lot of details, and certainly, I do not at all speak for the agency, and the agency will just have to see what data we have as we will, and then we will discuss from there. I think it’s really great news, though, that there’s huge demand, not just for new therapy in HS, but new orally active therapy. So, again, even COVID notwithstanding, but certainly prior to COVID, we rapidly enrolled in this study. I think that again speaks to the eagerness of folks in this community to have new therapeutic options. So we’ll see how strong the data is. We’ll have discussions with the agency. In light of positive data, we will do everything we can to bring the drug to registration in this indication as quickly as possible.

Great. Thanks for taking our questions. Look forward to the data.

And our next question comes from the line of Michelle Gilson with Canaccord. Your line is now open.

Hi, Tom. Hi, Susan. Congratulations on the progress this quarter. I was hoping you could expand a little bit on what might be considered a clinically significant result in HS, or perhaps what is a strong enough result that would give you confidence to move the program forward either to registration or to registration-enabling studies? And then could you also help us understand what you might report in the fourth quarter as far as data goes? Maybe what per protocol analyses you might present? And if you specifically will be breaking out Humira failures, and maybe remind us of the powering of the study, if you don’t mind as well?

Sure. All of those are really excellent questions, Michelle, thank you for them. We have so little precedent in the world of Hidradenitis Suppurativa in controlled trials that are informative to really help us guide some of those answers, I’ll take some guesses. Certainly, we have, for lack of a better term, an endpoint, which is a strong tool, but not a very sharp tool. It’s not a precise tool. The element of variability and subjectivity makes it a little bit difficult to always try to compare apples-to-apples, particularly when there have only been one or two apples in the bin before. So let me say this: as a general rule, anything that gets me to a clear answer about a next step, to me, is a success. So, if we see clear separation between the groups, and if some of the secondaries look also supportive, and we say to ourselves, 'Well, it’s clear that we’re having a clinical effect and need a clinical benefit.' That’s a good answer. Hopefully, we won’t get the other kind of clear answer, which is, there’s nothing here, but we’ve done our best. But again, even a good clean answer on that side of the equation allows us to focus on other areas that we can put our time, effort, and treasure. So getting back to, we always like – people always like to say, 'Well, what would an interesting difference be?' For me, any statistical separation that’s significant? I will say, let’s look very carefully at that. With this kind of instrument careful as we already use it as carefully as we can, that probably is meaningful. We would, at the minimum, like to see a statistical separation, obviously, with the HiSCR. The only precedent we have about what’s good for registration, what’s strong enough for registration, is what we’ve seen before, and the one drug that’s been registered. Somewhere a delta of between 20% and 30%, 25% to 30% with, of course, the bigger number going to be the new agents. In that case, it was adalimumab over the background therapy. That’s the one regulatory precedent we have for registration. So I think it could be argued that something approaching that is pretty strong data since that’s all we have so far. And we’ll just have to see how the agency thinks about these things. It’s pretty clear they want to stay with HiSCR. They’ve been very clear to the community about that. So that’s what we’re using. We will report essentially – and you’ll recall in this trial, we’ve committed to talking about the 12-week primary endpoint data. We also have some additional open – it’s open label, but blinded to dose of a continued dosing for 24 weeks. We’ve got some special challenges here in trying to preserve the integrity of this dataset while presenting top-line data, which will essentially be aggregate data between the groups that will tell us whether there is a difference between any of the dose groups in the placebo. We will definitely have that information, and that will be valuable and, in fact, will tell us whether we achieve the primary endpoint of a statistical separation between drug-taking folks and placebo-taking folks. The powering on that was established quite early on, and I think we’ve talked a little bit about it. Originally, we were powered to see about a 90% level to detect the historical standard of a 20% difference. Again, I don’t think, even with all of the challenges of COVID, we probably have something pretty good, still very good power in that way. I’m not worried about a material depowering of the study in any way. So I think, again, we’ll get a clean answer. But the whole point is, if we get a nice strong resolve on the primary endpoint, we want to have a dataset of preserved integrity. So that when we take the follow-up phase, we can use the entirety of the data with a discussion with the FDA, and again, ask how could this support registration or inform a registration? So that’s what we’ll be talking about sometime in Q4 when we bring the data forward.

Okay. Thank you so much, Tom.

And our next question comes from the line of Ted Tenthoff with Piper Sandler. Your line is now open.

Thank you for all the updates. Tom, congrats on the success. It’s been really an exciting year. I’m trying to understand how the data, hoping that it’s positive from HS and/or C3G, could impact AAV approval. So it would be supplemental filings, but would you need to wait for the AAV approval to file for the other indications? I’m just trying to sort of understand the sequence of that with respect to regulatory filings? Thanks so much.

Well, Ted, thank you. I hesitate to apply on regulatory details, since my regulatory expert is not on the phone today. We have an excellent team at ChemoCentryx that does this work. But my understanding is that probably while each filing and, of course, the background materials in each filing, such as the manufacturing and chemistry controls, obviously, the cumulative databases in other ways, safety, et cetera, those support any individual filing; probably each indication would be taken in its own turn. The ANCA vasculitis filing will be moving along on the calendar already in its own way, at its own pace. We’ll probably have that process well underway by the time the other filings got put in. And again, without being entirely familiar with the details, because each of these indications is also at separate divisions within the FDA. I presume that those divisions, while obviously cooperating extensively on the materials, would, of course, have their own process. I think they’re kind of quasi-independent but, of course, supported by the core technical information.

Well, again, it’s a high-quality problem, hopefully, so.

Thank you.

And our next question comes from the line of Yanan Zhu with Wells Fargo Securities. Your line is now open.

Sorry, I was on mute. Thanks for taking the questions. Regarding the HS study design, there is a 10 mg BID or kind of a mid-dose arm. Just curious, what – why was – because other – the other studies didn’t include any those arms lower than 30 mg BID. So what’s the reason for including that arm and what we might learn from that arm in the HS study? And also, if you could – yes, yes, I’ll take that. I have a follow-up after that as well.

Sure, of course. In point of fact, in one of our Phase II development programs, we did include a 10 mg and a 30 mg dose against know avacopan, all of which was on the background therapy of standard of care. So it was kind of every group got high-dose glucocorticoids in daily settings in addition to the combination of either cyclophosphamide or rituximab. The classical glucocorticoid plus x protocol, where x is either cyclophosphamide or rituximab. Every individual in that Phase II study got that. We layered on either a 10 mg dose or the 30 mg dose. While that study was mostly a safety study to see if there would be any additional safety burdens that avacopan might impose on people, should the drug be used, we were able to look at 10 and 30 mg. Again, the power – the study was not powered for efficacy. There were hints that what we saw with the active effective 30 mg dose in the other trials was present and apparent, even in that setting, where everyone else was getting standard of care. Thankfully, there was no safety burden that avacopan brought to that. We were able to look at 10 and 30 mg. The power of the study was not powered for efficacy. But there were hints that what we saw with the active, effective 30 mg dose in the other trials was present and apparent, even in that setting, where, of course, they were getting standard of care. So we provide that data as a guide to the regulators. That’s why we put it in the trial as we did.

Got it. That’s very helpful. Thank you. And then the remaining question is regarding any safety implications from the HS study? More specifically, for the ANCA vasculitis study, the avacopan is used on top of cyclophosphamide or rituximab. So it’s a little hard to see clearly a safety profile because of the background therapy here. I think there is a very good opportunity to demonstrate safety, and it’s a large data set. So could you share your thoughts on what – in addition to efficacy, what kind of safety leverage will this provide to the entire avacopan pipeline? Thanks.

Yes, very perceptive question, and you’re quite right. In the ANCA patient population, they’re on background therapy for their disease. They’re also taking many concomitant medications to control other complications. The burden of these medications is considerable. One hopes that, going back to avacopan and ANCA vasculitis by removing the need for these broadly immunosuppressive therapies, we also get rid of some of these nasty concomitant medications that give them so many AEs and SAEs. But even there in ANCA, we could show 40% fewer severe AEs in the avacopan group versus the prednisone standard of care group. It seems to be, at many levels, very good safety advantages to using avacopan. But we’ll let regulators and others sift through the data sets; I won’t say any more about that since it’s under a finding right now. But it is pretty clear to us that this HS population is by and large, notwithstanding the fact that they have this really debilitating illness, and that causes them a lot of discomfort and pain in many areas of life physically and emotionally. They are not under the burden of quite so many concomitant medications. The safety database still blinded, suggests we have far fewer across the board safety events in this patient population. Nothing seems out of the ordinary for this patient population. I think when the data come out, it will certainly add to and fundamentally enhance the picture of safety around avacopan, which we believe, based on evidence today — both preclinical and off-clinical data from several species — that we believe will support a very positive safety data package. We hope it will just further enhance that package.

Got it. Thank you, Tom. Very helpful.

And our next question comes from the line of Joseph Schwartz with SVB Leerink. Your line is now open.

Thanks very much. Congrats on the progress as well. I was wondering if you could categorize or characterize your payer interactions for us in terms of how well you’re finding that they appreciate the various sources of value that avacopan could deliver in terms of the total cost of patient management, maybe including a lot of the safety liabilities that you were just alluding to in the range of efficacy benefits? Are you finding that anything resonates more or less, and how are you thinking about incorporating the feedback you’ve obtained from payers to date in your ultimate pricing decision?

It’s a great question. We – again, without going into too many details, and my commercial team will be presenting a lot of information at Health Economics Conferences as we get closer to launch. Those will be very interesting to watch. I’m going to say that these interactions to date have been – we’ve been very pleased with how much payers actually understand this particular orphan indication. They get it — maybe totally is a bit too strong. Let’s just say that we’ve been impressed by their understanding of the true cost of this kind of disease. You can go out and do the big ticket stuff like dialysis. The kidney data was something that was, again, very pleasantly a factor in some of those conversations so far. End-stage renal disease will bankrupt our Medicare system if we don’t do something about it, as it’s about 9% of the total Medicare budget, far more than the entirety of the NIH budget for all medical – basic medical research. Payers also understand that glucocorticoids are cheap in the bottle, but super expensive to use. They understand the complications, safety consequences, and the diminishment of quality of life and the pharmacoeconomics of having people out of work or out of the healthcare system. So I would say this, going into those conversations, you always worry about the unknown. But so far, hats off to the payers; they’ve been a lot more knowledgeable and much more on message and very receptive to the data we’re presenting. I think that’s been an encouraging part of the journey so far, and we’ll have more to say about those details later in the process.

That’s very helpful. Thanks for the insight, Tom.

And our next question comes from the line of Tessa Romero of JPMorgan. Your line is now open.

Hi, Tom and Susan, this is Tessa on for Anupam. Thank you for taking our question. So on C3G, there is some competitive activity in the space. What are your thoughts around differentiation here for avacopan C5 inhibition from a mechanistic perspective? And then what is the latest thinking about epidemiology for C3G, where I think the literature can be somewhat variable? Thanks so much.

Yes, indeed, the literature is really variable. We have a lot of discussions even within the enterprise about what is the most reliable idea of both incidence and prevalence, just in the U.S., let alone anywhere else in the world. It’s a rare disease, that much is true. I don’t know if it’s quite as ultra-rare as some of the literature suggests, but my own inclination is maybe not. I think that the treatable patient population in the United States is certainly accessible, likely in the low number of thousands, and that’s kind of what we’re looking at. It’s hard to know. Having said that, since there is nothing available for these people, and since they go through this really dismal progression of being young people having end-stage renal disease, going into dialysis, possibly getting a transplant, usually from mom or dad, but typically mom, and having that transplant fail within a few short years from the same underlying condition, going back into dialysis. I mean, this is a really bad grim cycle and very expensive for the patients, their families, and, of course, for the healthcare system. It’s definitely worthwhile approaching this problem and approaching it from a couple of different angles. I hope that we can all find even in a rare disease like this. I think any approach that wins or any couple of approaches that win is real progress and will help everybody because frankly, C3 glomerulopathy, again, one of its mysteries, since it’s so rare, is it really one disorder or how many disorders is it? I mean, we keep collapsing different features of kidney disease with complement dysregulation under new titles, and C3G is the latest one. I just think of it, generally speaking, as a complement-regulated — I’m sorry — complement dysregulated glomerulopathy. There are other approaches, yes, in the complement intervention space. I think that our orally active drug validated, at the level of another difficult and complicated disease involving ANCA vasculitis and validated robustly, has to de-risk our approach somewhat. The question is: are all C3G cases the same kind of disorder, or are there going to be subsets that will be more amenable to treatment with one modality versus another? And that will play out over this next year. But make no mistake, some of these other approaches have been frustrated, and it’s challenging to understand what’s happening in this disorder. It’s one of the reasons that when we set out, we intentionally decided to do something different. We said, 'Look, C3G is difficult; you can have presumptive C3G, and then we do have a lot of biopsy work in this area. Let’s take biopsies. Let’s confirm that you have C3G at the level of biopsy at least and then let’s look again at six months.' That’s a real investment on the part of patients and clinicians, but it’s worthwhile. By bringing all these features together, we think we’ll be able, for the first time in the history of this disorder, to marry all these features together from a really good blinded dataset, collected, blinded, evaluated in the case of histology by a central laboratory, this should be very powerful. I think we’re going to have a lot to offer in terms of just knowledge, and I hope to be very sanguine and optimistic about the therapeutic benefit for some of these people with avacopan.

Great. Thanks, Tom, for taking our question.

And our next question comes from the line of Ed White with H.C. Wainwright. Your line is now open.

Thank you. Hi, Tom. Hi, Susan.

Hello, Ed.

So just a couple of questions. First on ACCOLADE. You’re expecting the top-line data by the end of the year. Is that only Stratum 1, or will you be seeing some Stratum 2 data as well?

That’s a very insightful question. Ed, thank you for bringing that up. It’s notable when we talk about the ACCOLADE trial design. I think we alluded to that on one of the slides. There was good literature that suggested that if you had bona fide C3 glomerulopathy, active lesions and destruction in your kidney glomeruli, you were probably also likely to have a biomarker of high levels of C5b-9 or soluble MAC complex in your periphery. This biomarker is stable, easy to measure. So it would kind of make good sense, right? You’ve got a complement dysregulated kidney disease, and there’s a nice biomarker in the blood. So maybe that’s helpful for diagnosis and knowing whether we’re having a therapeutic benefit. To that end, we had originally designed the trial for those people that had a fairly high level of C5b-9 in the periphery. As we got the trial design launched and consulted with the FDA, there were some other papers that came out that had a kind of opposite point of view. They said, 'Actually, all the actions in the kidney, don’t worry about what’s happening in the blood, because you could have C3G and have fairly low levels of complement activation markers in the blood, including C5b-9.' So what we decided to do is actually get that second Stratum, which is low soluble MAC complex in the trial, so that we could definitively answer the question. If we had the Stratum 1 trial and got a great result, the next question would be, 'Will we do another trial in people with low soluble MAC complex and see if you get the same result?' We thought we’d do it all in one. Now why do I tell you all this? When you have presumptive C3G, we look for presumptive C3G, screen people, we take measurements on soluble MAC complex either low or high. The last step is to biopsy prove, since that’s the most invasive step. At least by the standards of this trial design, which was designed with consultation with the leading nephrologists in this area, it seems that the original hypothesis is more correct. If you have biopsy-proven C3 glomerulopathy, you are likely to present clinically with this marker of high soluble MAC complex. If you have low soluble MAC complex, even if you clinically well presume C3G, you convert at the level of biopsy at a much smaller rate. By the end of the trial, near all of those patients could fall under Stratum 1 for the most part. Stratum 2 will have less data only because far fewer people actually have C3G when they have low soluble MAC complex. We will have virtually all of the target of the original Stratum 1. We will put out all the data we have in the world, which is probably the bulk of the data that we have that was collected from clinical trials on C3G. We’ve already answered, I think, or at least provided new information on a fundamental clinical question, which was the controversy between soluble MAC high or low — does that equate to C3G in the kidney? That’s a level of biopsy. The high soluble MAC complex is more commonly correlated with C3G.

Great. Thank you.

Thank you, Ed.

And now I’m showing no further questions. I would like to turn the call back over to Thomas Schall for closing remarks.

Well, thank you, operator. Again, I wish to thank everyone who has been on the call today. Again, it’s been a very exciting, although challenging year for many of us in the industry. But we’re making good progress. I very much look forward to updating you as we execute further on these 2020 plans. Again, thank you all for your time and attention today. You may now disconnect. Bye-bye.