Conference Transcript - PROK 2026-06-04

Andrew Tsai, Analyst — Jeffries

We're going to get started with our next session. I'm Andrew Tsai, senior biotech analyst at Jeffries. Welcome to day two of our healthcare conference. And it's my pleasure to have the pro-kidney team with me. To my direct left, James Colston, CFO. Is that? Colston. Colston, CFO. Anthony Conway, head of R&D. And to his left, Ethan Holdaway, VP of IR. Welcome, all of you. Thank you, Andrew. There could be some people who are less familiar with the pro-kidney story. So could you take a couple minutes talking about what you're working on, what your strategy is, what you're trying to go after, and the milestones over the next six to 12 months would be very helpful.

Speaker 4

Yeah, sure. I'd like to start with thanking you, Andrew, for inviting us and Jeffries for inviting us to the conference and updating you and everybody on pro-kidney. ProKidney is developing an autologous cell therapy, real parent cell, for the treatment of chronic kidney disease, a disease that affects over 30 million people in the U.S. We're currently in phase three clinical development with real parent cell in advanced CKD patients, those patients that are at the highest risk of advancing to kidney failure and potentially leading to dialysis. We have 250 employees based in North Carolina and in Boston dedicated to manufacturing RealParentCell and delivering RealParentCell to our clinical patients, as well as completing our clinical study and working on BLA submission in early 2028. Our goal at ProKidney with RealParentCell is for these patients that are at the highest risk of advancing to kidney failure and ultimately, potentially, dialysis is to delay dialysis or in some cases actually prevent dialysis in these patients and give them more time, time, more time with their families, more time with a higher quality of life, and more time to potentially find a donor for transplantation. You asked about the next 6 to 12 months, and the next 6 to 12 months at ProKidney is pivotal. Later in 2026, we will complete enrollment in our Phase III clinical study. throughout 2026 and in early 2027 we'll share data on some ongoing studies that will further elucidate our mechanism of action story and ultimately in second quarter of 2027 we'll have phase three data for the surrogate endpoint of VGFR slope and accelerated approval and importantly we are funded to that data

Andrew Tsai, Analyst — Jeffries

read out. Perfect. And so 30 million patients here in the nine dialysis market end goal here is to delay time to dialysis for advanced stage 3 B4 patients. Is that correct? And so then in terms of the marketplace I guess there's ACEs, ARBs, SGLTTs. Where are those used specifically? Are any drugs, what drugs are being used in stage B4 right now. Yeah, I can take that.

Speaker 3

Thanks, Andrew. So today, for patients with CKD and diabetes, there are four pillars of care. ASARB, SGLT2, finarenone, which is a non-steroidal MRA, as well as GLP-1 with the recent flow study in the past few years. So those are the four pillars of care. In an ideal world, a patient would be on all four of those therapies to delay the progression of their CKD. I think one thing that's important to note is if you look at the clinical data generated across those four pillars, they were largely studied in more moderate CKD patients. I think baseline EGFR was in the mid-40s in several of those studies. And so while patients can stay on those agents as they continue to progress into later stage stages of kidney disease, there's certainly a need for more treatment options for patients who are further along in the more advanced stage 3b4, where the conversation with their nephrologist shifts from managing or preserving their kidney function to, hey, dialysis is a real possibility, or do you have a relative who could offer a kidney for transplant? And so, you know, our goal with RealParentCell, it's not a mutually exclusive therapy. It should be viewed more as an add-on therapy as these patients continue to progress. You know, can we do something here to help them preserve their kidney function, delay, or prevent that need for dialysis? And the last thing I'd mention with respect to the pillars of care, if I may, is that, you know, there are, in the real world, there are practical challenges that make it tough for patients to be on all four of these agents at the same time there's tolerability challenges there could be cost challenges there's you know pill pill fatigue there's um adherence or compliance challenges with this patient population so again our focus is really to to give those who have continued to progress more time right because you're

Andrew Tsai, Analyst — Jeffries

at its core you guys are two time self there to do two administrations and that's it kind of thing okay and so I think you mentioned 30 million non dialysis patients overall in the US and of those how many have stage 3b4 which is essentially with the population target and how of that how many have type 2 diabetes because I think that's also the sub population you're doing yep so

Speaker 3

there's about 3.2 million patients in the US with stage 3b or stage 4 CKD you can look that up on the US RDS data site and you know depending on the literature you're looking at around 35 to 40 percent of these patients have diabetes as well so the real parent cell TAM is over a million patients which is a really large market opportunity especially in the context of a cell

Andrew Tsai, Analyst — Jeffries

therapy. Yep. And so on one hand, when I think novel cell therapies, they cost hundreds of thousands, I guess, high hundreds of thousands. On the other hand, this is a million patient population, so it's a little bit different from when I think the cancer CAR-Ts, for instance. So what could the pricing bookend be in your guys' view, ultimately? Yeah, we haven't provided any

Speaker 3

formal guidance on pricing at this point, but you're correct in that the CAR-Ts on the oncology side are priced in the five to six hundred thousand dollar range so that's that's one way to think about it I guess the other way to think about it though is what is the potential value that we're delivering to these patients and the health care system overall you know to dialysis on the on the Medicare side is typically over a hundred thousand dollars a year it's even more expensive for Medicare Advantage and it's even more expensive for on the private side or the commercial insurance side where payers are often paying several hundred thousand dollars a year when patients initiate dialysis. So, you know, we think there's value to the system in delaying the need for dialysis and delaying kidney failure. And of course, you know, of utmost importance for patients and their families and their caregivers, improving their quality of life and giving them hope to stay away from dialysis for some time.

Andrew Tsai, Analyst — Jeffries

Right. So on paper, it doesn't take much in terms of market penetration at this kind of pricing level to get to a large sales number, should this be approved. And so maybe another question, just fundamentally, how does the drug work? And maybe it sounds like you're going to share more mechanistic work later this year or next year. So maybe talk about those dynamics, please.

Speaker 1

Right. Yeah, I can handle this. So the way the therapy works is we take a biopsy from a patient. This is an autologous kidney-derived cell therapy. We process those biopsies in our manufacturing site in Winston-Salem, North Carolina, and process those to around 50,000 to 200,000 cells. These cells phenotypically resemble cells that naturally exist within the adult kidney that are involved in repair of injured tubules. We expand those cells to over a billion cells, and then we inject the cells back into the patient's kidney, into the kidney cortex, and then three months later into the contralateral kidney cortex. This is all caveated. This is all through preclinical studies. But what we're observing is that in the context of co-culture with injured kidney cells, Rolparencel is able to essentially increase the overall health of those injured kidney And this is assessed through a variety of different metrics. It's lowering the oxidative stress, lowering innate inflammatory signaling, and increasing mitochondrial functionality. We're also evaluating this in preclinical rodent models of CKD and observing similar sorts of effects, as well as to increase angiogenesis in the vicinity of real parencele administration. We'll also actually be doing a study with a New York group here on evaluating a human decedent model of injecting autologous real parencele into this model and taking serial kidney bopsies and paired urine and blood collections to really interrogate what mechanistic effects our drug is having in a human autologous kidney context. But we'll be releasing our first new MOA data actually at the European Renal Association Annual Congress on Friday. So stay tuned for that. As well as just submitted several additional MOA abstracts to ASN Kidney Week for this So stay tuned.

Andrew Tsai, Analyst — Jeffries

Well stay tuned for that. And so now the phase three trial almost is nearing enrollment completion for the accelerator maybe speak to the design because it's efficiently designed it sounds like to support both an accelerated approval and eventually a full approval so what do you need to show on the endpoints to support both yeah yes so that's correct

Speaker 3

our phase three product one study was designed to support both accelerated and confirmatory approval of real parent cell we're expecting data on the accelerated approval endpoint which is EGFR slope in the second quarter of next year I think you asked about the assumptions behind that endpoint Andrew so we the study is adequately powered at 80% to detect a 1.5 ml difference between the sham arm and the treatment arm in that study and a little bit more around the the assumptions the sham arm we're expecting or modeling minus 3 ml per year decline and in the treatment group we're modeling a minus 1.5 ml decline i'd remind you that there there's we believe that we've reflected an element of conservatism in these assumptions because the effect size that we observed in our phase two study namely the region 007 study that that we reported on last year was much greater than that, but we wanted to make sure that we designed the study with an element of conservatism. We've made it this far at this point. And then the study would continue on after the accelerated readout, and we effectively are accumulating events throughout the study. And that's what would serve as the confirmatory endpoint. It's a composite time to event endpoint, very similar actually to the other recent landmark CKD studies, flow study in GLP-1 and the other SGLT-2 studies. It's a 40% decline in the EGFR is one of the event endpoints, renal or cardiovascular death or the initiation of dialysis or kidney failure. And that analysis, which is also powered at 80%, would be triggered after 122 events. and our guidance for the timing of that readout is the second half of 2029 okay

Andrew Tsai, Analyst — Jeffries

thank you and so maybe to dig a little bit deeper based on the prior phase two data that you've produced so you've powered it but with assumption of 1.5 minus 1.5 milliliters per minute for drug and so in phase two what did you see specifically on that on an absolute basis yeah so in the in the most recent

Speaker 3

phase two study which was the region 007 study we had two groups and the two groups had different dosing regimens group one is the group that we we mostly focus on because that dosing regimen whereby patients got two injections one in each kidney three months apart mirrors the dosing regimen in the phase three. That group had 24 patients. And what we did is we looked at this group of patients' kidney function in the two-year period prior to receiving real parent cell treatment. And then we looked at their kidney function for 18 months as the median follow-up after completing treatment with real parent cell. And what we saw is in the pre-treatment period in group one, patients lost 5.8 mL per year, 5.8 mL per year of kidney function. After treatment with real parent cell, these patients lost 1.3 mL per year of kidney function. So the difference that we observed in the phase two study in group one was 4.6 mL per year. We were certainly very pleased with that effect size and, you know, hence why we believe that there's an element of conservatism reflected in our phase three assumptions.

Andrew Tsai, Analyst — Jeffries

I always have to think about it, but the more positive value, the better. Is that correct?

Speaker 3

Yes. It's, you know, it's, I'm glad you bring it up because, like, we're looking at an improvement in the decline of kidney function. So, again, we saw in the pre-treatment period in these patients minus 5.8 ml per year. And then after treatment with real parent cell, they were only losing minus 1.3. So if you do the math, minus 5.8, minus negative 1.3, that's how you get the 4.6 treatment effect.

Andrew Tsai, Analyst — Jeffries

And then as for the sham in this phase three, well, phase two, there was unfortunately no sham. So how did you model or assume 3.0 for sham in the phase three?

Speaker 3

Yeah, we triangulated looking at prior clinical studies as well as our clinical data. One of the challenges with the other clinical studies that I mentioned before is that the four pillars of standard of care were largely studied in more moderate patients. But we did a very robust amount of work to come up with, you know, what we thought was a reasonable assumption for sham.

Andrew Tsai, Analyst — Jeffries

I see. And I guess through your work, you looked at the other SGLT inhibitors, what they showed in those studies. And specifically, there were very – I mean, there's a whole bunch of SGLT inhibitors approved. So did you look at multiple studies or just one drug to help you with your assumptions of minus three?

Speaker 3

Well, we looked at multiple studies as well as the clinical data that we've generated in the more high-risk patients to come up with the modeling assumptions for sham. And again, for the phase three, just a reminder, for the accelerated analysis, our assumptions minus three ml per year in the sham and minus 1.5 ml per year in the real parent cell. So that gets you to that 1.5 ml treatment effect difference that we assume.

Andrew Tsai, Analyst — Jeffries

Great. And on the safety side, what have you seen exactly on safety AEs, any SAEs? And what special AEs are you guys looking for?

Speaker 3

Yes. I mean, so far through the phase two data, the safety profile has been comparable to a routine kidney biopsy. and we didn't observe any SAEs related to the real parent cell product itself we did observe some AEs some some bleeding in the kidney hematoma that you know you might see with the biopsy but otherwise you know overall the message is that safety profile has been has been favorable

Andrew Tsai, Analyst — Jeffries

and comparable to a routine kidney biopsy okay got it and with to be crystal clear I should have asked earlier, but the phase two that you generated, despite being open-label, you were able to get an RMAT designation from the FDA on that data set, is that correct?

Speaker 4

So the RMAT designation came from an earlier phase two study, RMCL 002. We received the RMAT designation in late 2021 based on that 002 data. And what we saw in that data was that patients in RMCL-OO2 that were treated with real parent cell, the kidney function, the decline of their kidney function as compared to those patients that remained on standard of care was favorable. In addition to that, what we saw in that OO2 data was also a favorable safety profile.

Andrew Tsai, Analyst — Jeffries

Got it. As I think about it, as we talk things through, going back to the sham, just one question. Like, what do you think drives sham behavior? I know you've looked at other studies, but just fundamentally, how, you know, what drives a minus four versus a minus one, for instance, on the sham? What are these patients? Can these patients, like, exercise better or something like that? And, you know, operationally, are you doing anything to help ensure sham is closer to minus three than, let's just say, minus one, ultimately, kind of thing?

Speaker 3

I mean, I think, you know, these patients in general, when they get to this point, like, a lot of them are doing everything they can to preserve kidney function. So, you know, trying to eat right, exercising if they can. And it's hard to say, like, to get into kind of like these specific level of detail, Andrew, on the numbers of the sham beyond sharing, like, how we came up with our assumption and what our assumption is. I'd make one comment, though, with respect to standard of care. And we aligned with the FDA last year in a type B meeting on the accelerated approval pathway of real parent cell. And it's important that patients are on optimized standard of care. So we expect those in the sham arm to be on optimized standard of care, and we're stratifying for SGLT2 use in our study. And in fact, if a patient's not on SGLT2, on a stable dose of SGLT2, it needs to be documented as to why. So we're controlling what we can control, if you will, and that's how we're operating.

Andrew Tsai, Analyst — Jeffries

Okay. Very good. And so good luck on the EGFR data in Q2 of next year. Then the plan is to file a BLA by early 2020, is it? And so what is, can you explain the gap? What do you, what else do you need to accomplish before you file a BLA?

Speaker 4

yeah nothing specific to accomplish I think that that six month period will really be time for us to complete everything that needs to go into the BLA submission right so we'll complete the the clinical data package we'll complete all of the the manufacturing requirements and the CMC section in order to put the complete package together and that'll take us a few

Andrew Tsai, Analyst — Jeffries

months. Okay. And so as I think about the real-world uptake, should you be approved, you know, 1 million is a huge number, and so realistically are there bound to be patients who may not want to take two biopsy or prex or get two infusions basically in their kidneys maybe talk about your phase three enrollment maybe how many patients plan to get enrolled but ultimately backed out is that a good extrapolation of the

Speaker 3

real world for instance um yeah we haven't provided any specific numbers on like how many patients didn't weren't able to follow through with the injection in the phase three um but i i mean, you know, these are advanced CKD patients, and there are a lot of comorbidities and other health challenges associated with these patients. So it's not a surprise to us that a portion of patients were not able to follow through with the injection or the biopsy after randomization. Stuff happens in these patients. Now, I think in the real world, you know, assuming if the data are positive and the risk-reward profile of the product is compelling, like I think we would expect significant demand and given the size of the TAM, I think the opportunity's quite large. And also, you know, you have to remember in the phase three, like there is a 50% chance of patients randomized to sham. And so, you know, there's that, there's a couple months gap between, you know, consent and actually receiving the product, and that allows for time for people to kind of think long and hard about being in a clinical study. It's just one of the challenges of being in a study, but in terms of the market opportunity, post-data, we feel really good about what real parents could potentially do for these

Speaker 4

Andrew, I'll add there, too. I think that given the size of the patient population, I think that with the continued data if phase three looks anything like phase two I think there's a potential that the demand could actually outpace the capacity that we have so I think the way to think about it is really you know our manufacturing capacity we haven't given specific numbers but we have shared you know that that our current manufacturing facility which which we only own 180 180 thousand foot square foot facility of manufacturing space in North Carolina we're able to to manufacture all the product for our phase three study and also plan to launch from that facility. In addition to that, we have ongoing construction on an additional suite that will expand our manufacturing capacity further and then have additional space that we can continue to expand as we ramp our product. But ultimately, I think that million to a million and a half patients is, it would be very aggressive for cell therapy.

Andrew Tsai, Analyst — Jeffries

I see and then actually one more question back into the phase three so again you've assumed a 1.5 milliliter per minute benefit over sham can you give us a frame of reference what the other drugs SGLT's for instance ACE ARBS show it all while appreciating they're being used in the earlier lines but just a frame of reference could be helpful on a placebo address or sham

Speaker 3

adjusted basis? Sure so most of the recent studies showed approximately one ml per year difference. I think DAPA was 0.86 that's the one that's in our in our corporate deck right now but broad strokes around one ml per year and and that resulted in a clinically significant reduction and in events and

Andrew Tsai, Analyst — Jeffries

those patients. So minus 1.5 or a plus 1.5 milliliter per minute benefit for you guys would be inherently clinically meaningful, full stop. And it gives you the confidence about the confirmatory approval as well. Okay. And so then going back to commercialization, then COGS, cell therapies, when I think cell therapies, high margin, low margins to start, but maybe talk about the evolution of COGS, if you can.

Speaker 4

Mr. Sure. You know, we haven't shared lately any specifics around COGS. We don't have any immediate plans to share specifics around COGS. I think one way to think about it is our manufacturing process, which I believe is likely more straightforward than a lot of cell therapies, particularly CAR-T therapies. We don't require any type of viral vector in the process. And so I think because of the more straightforward process, our cogs are likely a little bit lower than maybe some of these other cell therapies and CAR T therapies. But I do think, you know, I'll go back to a point Ethan made, which is that, you know, I think with, you know, continued success in the clinic I think there'll be you know the demand for will parent cell and I think with that demand will parents that will be a

Andrew Tsai, Analyst — Jeffries

profitable product very good and then back to the conformatory so again accelerated approval data on EGFR is q2 of 2027 then the confirmatory data as you're launching it would be second half 2029 give or take based on events and And so you're 90 percent power to show what kind of hazard ratio, to be clear?

Speaker 3

So we have 80 percent power for both the accelerated and confirmatory analysis. The confirmatory analysis will be triggered after 122 events occur. And the hazard ratio assumption is 0.6. So a 40 percent reduction in the treatment arm in the events.

Andrew Tsai, Analyst — Jeffries

And then I think there's like three things you listed earlier that defines an event.

Speaker 3

Yep. There's a 40% decline in EGFR, renal or cardiovascular death, or sustained EGFR, less than 15, dialysis transplant.

Andrew Tsai, Analyst — Jeffries

And so should your cell therapy work in Q2? What's next for the product? Or do you expand to other indications?

Speaker 4

Yes, I'll start with saying that we're 100 percent focused now on completing enrollment in our Phase III clinical study in delivering Phase III data in second quarter of 2027 and BLA filing in early 2028. I think beyond that we'll be focused on commercial launch and then the confirmatory readout in 2029. You know, I think it is a large patient population, as we've talked about, so I think we'll have plenty of opportunity to continue to grow within this patient population. All that being said, I think depending on what our clinical data readout looks like and also our MOA activity looks like, or MOA data looks like, we may have the opportunity to expand into other indications as well.

Andrew Tsai, Analyst — Jeffries

Male Speaker 2 Okay.

Speaker 4

Was there anything else you'd like to point out before we wrap up? No, just thank you again for inviting us and maybe reiterate that we're really excited about the phase two data that we've shown so far and looking forward to sharing phase three data and second quarter 2027.

Andrew Tsai, Analyst — Jeffries

Thanks for the discussion and thanks everyone for listening.