GUGGENHEIM 3RD ANNUAL HEALTHCARE INNOVATION CONFERENCE - PROKIDNEY CORP

Thanks, everyone, for joining us again this year for the Guggenheim Healthcare Innovation Conference. I'm Bob LeVon, one of the biopharm analysts here at Guggeheim. And joining us next in this room, we have the ProKidney team. Next to me, we Have Bruce Culleton, the CEO. Then we have Anthony Conway, head of R&D. And then we have Greg Madison on the CCO at the end of the group here. So thanks again for joining me. Thanks for joining with us. Maybe, Bruce, I'll turn to you first just for people who may be a little less familiar with the Prokidney story, just a little bit of an overview of the company and obviously exciting times, a lot of exciting stuff coming up in the next few months. Kind of set the stage and then we'll go deeper from there. Sure. Okay. Well, thanks, Vamo, for having us here again. So I'll just talk about our purpose, our progress, and a little bit about our people too. So we've got 250 employees. Most of them are in North Carolina. The majority of them are in South Carolina where we have our manufacturing operations We have a single purpose as a company, and that single purpose is to stabilize kidney function in patients with advanced chronic kidney disease and diabetes and give them hope to stay away from dialysis for as long as possible. We have the single asset. The asset's called roparinsel. It's an autologous cell therapy. The cells are harvested through a standard kidney biopsy, expanded ex vivo, and then re-injected back into the kidneys. And we've made substantial progress in our clinical development. We're a late-stage clinical development, very late stage. We've completed recruitment. We should finish enrollment in Q1 2027, and we expect an accelerated approval readout in Q2 2027. Great. Thanks for that overview. So maybe you can just remind us, I think, very interesting, exciting data you've shared to date from Paracel. Let me just overview on what you've share and then set the stage for the ongoing work. Sure. So this will be a really quick summary of what we've shared because we could spend the rest of the time just talking about the data. So I'll focus on our 007 trial that was published in May of this year in the Clinical Journal of the American Society of Nephrology. And in one group, one pre-specified group, the 24 patients who were in the group that most looks like how we treat patients in our phase 3 trial, so a very similar treatment profile, we saw in that a 4.5 ml per minute annualized difference, or a 78% improvement in patients' slope of kidney function decline before treatment with paracel versus after treatment. So again, that was a 78% improvement in decline in kidney function. That was from that study. The other phase 2 trial that I'll speak of just briefly was the RMCL002 study. And in that study, we saw the benefit associated with roparazole treatment really highlighted in the patients who are at highest risk of kidney failure. Those with a GFR less than 30. And so based upon that information, we did change our phase three protocol to be more focused on patients who've got that highest risk of kidney failure. Okay. And maybe you can talk about sort of the ongoing trial now. So, currently, you mentioned the accelerated endpoint readout, second quarter of next year. So, what are you hoping to see? How is the study designed for that? And then also for the final readout? Sure. So, we have a very rigorous phase three trial. It's for cell therapy. It's a randomized, sham-controlled, two-arm, blinded study. Eligible patients have a GFR between 20 and 35. They have to have diabetes, and they have to have a diagnosis of chronic kidney disease. And after randomization, patients are allocated to receive a roparinsel, which is once the product is made, there's an injection into the biopsied kidney, and then three months later an injection into the contralateral kidney and the sham group is the true sham group so in that in that arm of the study patients actually do have sham procedures and for all intents and purposes they believe that they're actually getting a biopsy and a repair and so treatment the endpoints there's two ways to think about this it's one trial there's an accelerated approval endpoint which is EGFR slope we're looking for the difference between the treatment and the control group and EGFR slope. That's the accelerated approval readout, which is again expected in Q2 of next year. The same patients, the same trial, will then be followed until we get to a confirmatory endpoint. Assuming we get accelerated approval, that confirmatory endpoint is a time to composite of events. And that composite event includes a 40% loss in EGFR, a sustained EGF-R less than 15, dialysis or transplant, or renal or cardiovascular death. So same study, different endpoints, accelerated approval, and confirmatory endpoint. And then so for the accelerated endpoint, you mentioned that the prior trial where you showed a 74% benefit in sort of pre-treatment, post-treamment here, you have the comparator arm. on that accelerated endpoint, what can you share about what you need to show from a statistical perspective, but also clinically will be meaningful to see between the two groups? Yeah. So great question. So we've assumed in the control group a decline in kidney function of three mLs per minute per year. That assumption was based upon our view of the entire data that's accessible to us in this population. But I'll remind you that in our phase two study that I just mentioned, the decline in the control group was closer to 6 mLs per minute per year. So we've actually taken a very conservative approach to what we expect in the in the control group for our phase three study. We expect the decline in the treated group to be 1.5 mL per minute, per year, a 50 percent difference. Now when we talk to KOLs, when we talked to nephrologists, that 1.5 ml per minute difference between the two groups is clinically meaningful, especially in this patient population. It's also a 50% difference between the two group. And that translates easily into how much time you can prevent someone from needing dialysis. So those numbers resonate well with providers, they resonate well patients, and we believe they'll also resonate well with payers. Okay, maybe you can talk then just about the unmet needs of the population you'll be targeting. I think you shared a little more of this in your updated corporate presentation today. How are you viewing this opportunity commercially? So, Greg, do you want to just talk to us about that commercially? I'll hand it over to Greg to take us through how we're thinking about this opportunity commercially. Yeah, yeah. And I think as Bruce started to allude to here, right, despite the advances recently in chronic kidney disease with a lot of new therapies coming online, the bottom line is being a nephrologist, that despite the best achievable care, patients are still progressing, right? So I think that's the need. We hear that over and over again, that they just reach a certain point where, you know, if you call it their optimized and standard of care for lack of better expression, if you will, these patients are still progressing, and nephrologists are kind of out of things to do at that point in time, other than just trying to do the absolute best. It becomes more of a when, not an if, they'll progress to dialysis. So I Think that gave us a lot of encouragement about the positioning, where we're studying the patients overall. you've heard us say before, there's a very large TAM. There's over 1.1 million patients that fit that criteria of stage 3B4 with type 2 diabetes. So as we listen to nephrologists, I don't think patient identification is necessarily going to be a challenge for us overall. We'll get to manufacturing a little bit here, but in terms of our thought process at launch, we want to have a very kind of focused and purposeful launch. This is the first time that somebody stood up within nephrology and making sure that the patient, as they get diagnosed from a nephrologist and get ultimately referred to an interventional radiologist for treatment, we want to make sure that that kind of pathway is well-established and really goes well for the patient and provider. That's our biggest goal right now is to, as we identify patients, ensure that the whole process is really smooth. So we'll start with a very focused and purposeful launch, probably eight to 10 centers located around the country, whereby we identify, you know, you refer to as a center of excellence. We're going to refer to it as more of a renal partnership network, if you will, of facilities that have certified, they're trained IRs. Then we can canvas and call on the community nephrologist in that geography, help identify patients and refer them into that appropriate treatment center. That'll be our initial focus. And then as manufacturing continues to scale up, we can kind of validate that model and replicate that model going forward as well. Okay. And maybe we could talk a little more on the manufacturing side. We get that question a lot, or where you stand right now, kind of your plans, and sort of scale up as you get closer to that. Yeah, I'm happy to grab that. So if you haven't seen it in our updated corporate deck, we have a beautiful slide which actually depicts this kind of walkway, but I'll try to visually walk you through it, if you will. But within the first three to four years, our goal is to build up our capacity where we'll be able to have at least manufacturing capacity for approximately 3,000 patients, right? So at launch, we'll start with launching in our, as Bruce alluded to, own our own manufacturing plant in Winston-Salem, North Carolina. So at launch, we'll have manufacturing capacity for about 350 patients. That's the same facility that is providing the clinical trial material for our phase three study. Within that facility, we also have the ability to do an expansion. This will come in two different phases. The first phase, which will take place in the second year through a tech transfer, will bring an additional capacity for 500 patients beyond that 350 in the first year, so additional 500 in that second year. A lot of that work has already been done during 2026, so it's ready to go outside of a typical tech transfer. Phase two in that same facility replicates kind of phase one, right? So that work will start in 2027. So by year three, we should be able to bring on capacity for an additional 500 patients. Then beyond that at the facility, we have a couple of different options. We could continue and do a further expansion of that facility. We could look at CDMOs, we could look at different geographical expansions as well, and that then gets us up into roughly about that 3,000 patients per year. So we've got a well thought through plan over the first, call it three to four years, of how to build up and scale our manufacturing capacity and provide ultimately the therapy for more patients. Okay. And Vamil, obviously with really good data, then this becomes a money issue how we scale. So with really good data, I think with the right resources, we think we can also scale through the different options that Greg outlined, even faster. So maybe shifting gears a little bit, so we saw some of you at ASN a couple of weeks ago. You guys had a number of posters there. A common question we get is just sort of the understanding of how repair and sell is working. And I'm looking at Anthony, if there's something you'll answer this question, sort of kind of the work you've done there, you're understanding at this point kind of how the product is working, would be great to hear. Yeah, absolutely. So we had seven non-clinical presentations at ASN, including one oral presentation. Four of those were mechanism of action presentations and three drug product characterizations. So high level, what we're seeing across all of our different CKD translational models is real parencyl inducing a cytoprotective effect to diseased and injured kidney cells. So, we're saying an improvement in oxidative damage, metabolic dysregulation, pro-inflammatory signaling to promote vascular integrity, and overall functional stabilization in both endothelial cells and epithelial cells in diseased and injured kidney cells. We're seeing real parent cell in grafts around kind of the subcapsular region of the injected kidney. We're also seeing new blood vessel formation in that region. We know real parent cell is secreting factors, and we're also seeing kind of a more systemic-wide improvement in kidney function. And so all of that data taken together, we're giving us relatively high confidence in explaining how real parent cell may be preserving kidney function in our clinical population. Okay. And this maybe builds on a couple of comments you made, but so in this population, obviously, there's not a lot of other options, both from the clinical side and then maybe also commercially. How are you thinking about this being used on top of the current agents like the SGLT2s, the GLP-1s that have sort of emerged over the last several years, both so it doesn't sort of, you know, lead to any surprising results clinically, but also how you think about it from a patient population perspective? So I'll just, I'll speak to the RMAT first, because we have an RMAT. And the way an RMAT works is that you need to demonstrate benefit above and beyond standard of care. So the standard of care from the discussions with the FDA, which we'd expect in our label too, to some degree, is that patients need to be on a RAS inhibitor, ACE or an ARB, need to be an SGLT2 as well. And so we've taken every, you know, all sort of operational means that we can, including putting that into our study protocol to ensure that patients are either on or have been on and failed RAS inhibition or SGLT2 inhibitor use. We also encourage a good standard of care in general, including GLP-1s. So we expect, and we are seeing, a very high use of standard of care in patients within our trial. We also expect that that's how it's going to be used in the real world, is that it's easier to put patients on small molecules, if you like, or weekly injections or bi-weekly injections at home. It's a lot easier to do that than to come into a clinic and get a biopsy and two injections. So we expect standard of care is going to rule the day. We're going to be there for those patients who continue to progress and are still at high risk of kidney failure. And is there anything in the trial, I guess, to just make sure it's balanced in terms of the use of the backup? So we suspect randomization will do most of the balancing. But just to be careful on the SGLT2 inhibitor side, we stratify randomization based upon baseline SGLt2 use or not. Okay, a couple other topics that come up frequently, I think we've seen cell therapies have a lot of promise scientifically and kind of getting to the mark, but then struggle commercially and maybe for various reasons, whether manufacturing or finding the right patients. How do you start thinking, what have you learned maybe from some of these prior approaches other companies have taken? How are you addressing those to kind of have hopefully a more positive outcome here? Maybe Greg will hand it over to you first. Yeah, I'm happy to grab that. But ironically, I think I'd start with manufacturing, since we're right on that topic. One of the nice things that we have in our manufacturing process is there's no viral vectors needed. There's no genetic modification required. What that translates to and why that's important is more from the patient perspective, right? So the patient's not required. There's not immunosuppression. There's like special preconditioning, which importantly allows us to do this in an outpatient procedure, right, that's very different than a lot of other cell therapies. So from a patient journey, the overall complexity, the manufacturing cost, if you will, it's a simpler, quote-unquote, process, despite the fact that we still need to do a biopsy and two injections. So I'd start there, just very different than a lot of our cell therapies, just be able to go directly to outpatient. The other piece I would point to is, unlike a lot other cell therapies are, our population is just really, really large, right? This 1.1 million patients, obviously, if we take that 1.0 million, you break that down not everybody might be eligible, but you're talking, you know, hundreds of thousands of patients, which is really unique here from a TAM perspective. And so, as I mentioned before, I think our ability to identify patients that are being treated but still progressing despite the best achievable care, we don't see that as a large issue right now. So, I think those two things speak to the fact that this can be very, very different than perhaps other cell therapies. A lot of other cell therapists that try to find that TAM and build that up, we have that existing. We just need to figure out how to identify them and get them into treatment. The other thing I'll add to that, if you don't mind, is we're on the right side of policy as well. So there was an executive order in 2019 advancing American kidney health. And last month, while we were at ASN, HSS built upon that executive order and rolled out their kidney care plan. And among three sort of pillars within that plan, one pillar was around addressing innovation to stabilize kidney function and prevent kidney failure. So it didn't call us out, but that's exactly what we're doing. And kidney disease has bipartisan support. So I think at the policy level, we're also in a very good position to have a successful business. I don't know how much you can share or how much you've shared before in terms of just how you're thinking about pricing for something like this, which obviously for a late stage where there's not a lot of options for these patients, but also a pretty big population of patients potentially. So what can, I don' know, Greg, if you want to maybe share what you can around that? Yeah, I mean, obviously it's a little early to share really specifics on pricing as well, but as we've done, I will say one thing I'm really encouraged on, just to build out the last question as well is the response from nephrologists so far, you know, with just even an idea of what Roparinacel could look like with a target product profile. They clearly see the need for their patients overall, and it's in the area that we're talking about. They're very intrigued by this novel cell therapy, right? There's nothing else like this within nephrology. So there are lots of questions on MOA and things like that, which Anthony, thankfully, is providing a lot of details for. But there's a lot if interest there as well. I think as we step back and look at it, a lot will be driven by the data, right, assuming I mean, the data is, you know, compelling as we expect it will be. You've got, you Know, a couple of different analogs that are out there. You've Got, You Know, cell therapy-like prices, right, which are pretty well established. You've had some recent advancements with other treatments in the kidney disease space as well. Some of the rare disease, you Now, products that are up there that are approaching cell therapy like prices. So as we start to step back and look at it, you Knew, I think we're zeroing in on, You Knew around that area. But again, we're early, requires a little bit more research and thought process behind it as well. Maybe the last couple of topics I want to touch on. One is around IP or sort of protecting your innovation here. Maybe you can share both from a sort of true patent perspective, but also maybe just a know-how perspective, how you see yourselves defending your product. Yes. So there's a few things to address there. So one, in the corporate deck that we just released today, we actually have, I think for the first time, disclosed what our IP positioning is. and we're in a really, really strong position. There's also this sort of just know-how piece of making our product. So some of that's not captured in IP, but there is definitely a know-ow that's protected in making our project, whether that's sort of the material that go into our product or actually how we make our product So we think we're In a very, very strong position from an IP perspective. And then put that aside, just to run a phase three trial like we have, get through a clinical development program, to run a trial like we have, that creates even a little bit more of a moat, if you like, for other potential entrants coming in directly as a competitor. And then just, I guess, looking forward now more from a big picture corporate level, so maybe you can talk about your cash position, and then obviously the key event is the second quarter data readout next year, but aside from that, what are some other events we should be looking forward to? Yeah, we have an earnings release, I think, later this week. But in our corporate deck this morning, we released our position that we had $142 million in cash at the end of September. That's sufficient cash to take us out to mid-2027 after a readout. Again, that readout is clearly the big thing for us in 2027. We also, as you know, stopped recruitment. That doesn't mean we've stopped enrollment. So some of those patients who were screened and are eligible for the study, the last patients that we anticipate will get enrolled in Q1. So that's, I guess, a softer milestone along the way to actually the big readout in Q2. One last question. Just in terms of the commercial layout here again, it feels very U.S.-centric. Maybe can you talk at all about your thoughts or plans on kind of going broader than in the U.S.? And also, I guess in the US, it feels like you can do something like this on your own, a targeted approach. But how are you thinking about the need for partners? Yes. So I'll just say from a U.s. perspective, our sole focus since I've been CEO is U. S. Now, that can be criticized, but because the population, the unmet need with the population here in the USA is so large, it's hard for us to distract our teams and start thinking about solutions outside the U.S. So that's why we're so focused on the U-S. Outside the U.-S., we will be open, clearly, for more strategic partnerships. We really haven't spent a lot of time on that just yet because our focus is getting to market in the U.'S. All right, great. I think with that, we'll leave it there. Thanks so much for joining us again. It was exciting times here. We'll keep track of the progress. Thanks, Tom. Yep, thanks.