Alumis Inc. (ALMS) Earnings Call Transcript & Summary

Great. Thanks for joining us, everybody. I'm Terence Flynn, Morgan Stanley's U.S. biopharma analyst. For important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley's sales representative. This morning, I'm very pleased to be hosting Alumis. Joining us from the company, we have Martin Babler, the company's CEO and Chairman of the Board; and Jorn Drappa, the company's Chief Medical Officer. Thanks so much both for being here. Really appreciate it, early on a Monday morning.

Maybe first, I figured we'd start with the company's key asset, which is envu. And 1 of the questions we get a lot is on the oral psoriasis space, there's a couple of other competitors out there. And so maybe just high level, walk us through kind of the profile of what you guys have seen in your Phase III psoriasis data versus Takeda and also J&J's ICOTYDE because those are the kind of key other competitors that I know everyone is focused here as the landscape continues to evolve.

Well, Terence, thanks for having us and happy to go a little bit into psoriasis. So envu is a TYK2 inhibitor. We believe that actually in TYK2 inhibition, one of the most critical things in psoriasis is that you maximally inhibit the target. And I think our data has been actually extremely consistent. I think that's actually the one piece that we feel we're very proud of. What we see with envu is that we consistently see basically PASI 100 rates in 40% or more at week 24. And we actually do believe that the predictability of the molecule and the consistency of the data is an important aspect. And the fact that actually, fundamentally, we put about 40% of patients into a state of clinical cure at week 24. And then in our ONWARD3 trial, where people were able to choose to go into, we see that rate actually going up in ONWARD3 section overall to about 54%. If you actually take a complete ITT analysis, from the very beginning of our ONWARD program all the way through the end that of week 48, you're actually getting, close to 50% as well of patients getting PASI 100. So almost half of the patients actually with this drug basically get particularly clinical cure. The other aspect that we feel is very important is actually when you ask patients what their most important symptom is that they want to take care of, they will actually tell you its itch. Physicians don't always agree with you -- with them because itch in psoriasis is actually a matter of disrupting the plaque. But for patients, that's a very important symptom. And we've shown consistently in our data set that for itch, we have a very, very strong onset. So it means it resolves very fast, a lot faster than the plaque, which is what -- where physicians thought the resolution of itch comes from. But not only does it resolve very fast, but we actually use NRS scale to measure it, which is what other people have used in itch trials for atopic dermatitis. And the FDA perceives a 4-point or more improvement as really clinically very meaningful and approvable. And we've actually seen the 4-point improvement in a very large number of patients, over 70%.

Great. What -- maybe just talk to us about the filing here? What's gating to getting this into the FDA? And what's the expectation in terms of kind of turnaround time?

So we guided to filing in the fourth quarter. We are on track to do that. One of the things that we can now publicly say also is that the FDA asks you to contribute safety from all ongoing trials. So 1 of the pieces that actually we -- we're looking to get was the safety from the LUMUS trial. And we could have done that as just a cutoff point. But we felt actually understanding the LUMUS safety data, including the placebo responses was helpful. And we've shared that 1 of the key outcomes for us, for LUMUS, which was a lupus trial, which is normally a sicker population, also on other concomitant meds basically showed us that it was again, very well tolerated. We saw no new safety signals. We have publicly disclosed. We saw no MACE, we saw no malignancies, no blood elevations that would -- chemistry elevations that would lead to a potential risk of monitoring or anything. So we actually do believe the LUMUS safety data makes the case for envudeucitinib even stronger. And that was the last piece that we needed to finalize the NDA.

Okay. And is it fair to assume standard review time lines? Is that how we should benchmark in terms of the turnaround time?

At this point, we should assume a standard review time.

Okay. One of the other questions we get is about the label. So I think you guys have made the case about more selective inhibition of TYK2 versus SOTYKTU. So maybe talk to us about likelihood that you'll have a differentiated label versus SOTYKTU because, again, I think that's another debate that we hear from a lot of investors.

Yes. Jorn, you want to start?

Yes. So I think SOTYKTU still had some carryover language from JAK inhibitors. So I think both of us and Takeda as well have consistently shown that with selective inhibition, you really do not have any JAK inhibition. So possible side effects of JAK inhibitors would be blood cell abnormalities. There would be lipid elevations, this type of thing. And consistently across both molecules, Takeda and ours, have not seen any evidence of that. And we have had extensive early clinical development, where we also have carefully tested whether there's any evidence of JAK inhibition, there is none. So it's fundamentally a different pathway. And so we obviously make the case that we should have a label that reflects our actual data, and there is no hint of anything related to JAK inhibition in our data set.

And the other 1 is the TB issue. And I think what we've now seen is 2 really interesting data points. First, neither us nor Takeda have shown any TB reactivation in any of our trials to date. The other one is [brepocitinib], which is a TYK JAK basically just got a labeling where it's very similar to ICOTYDE where the label actually is not a requirement for a TB testing, but rather just a recommendation. And so we believe that's actually a good surrogate for us to look at that we believe we have a good chance to also get that kind of labeling.

Great. When we -- I think Takeda is a little bit ahead of you guys in terms of filing time lines. So it seems like they'll probably get their label first. Should we assume whatever they get, you guys will get something very similar? Or is there enough differential to say like, okay, because Takeda got X, envu might get Y?

I would say that the label is based on the entirety of the clinical data, right? And so I can only talk about our clinical data since all I know about Takeda is what they have published. But based on our clinical data, we expect no requirement for lab monitoring because there are no systematic excursions in lab values. And Martin has talked about the TB and the overall safety and tolerability looks excellent. So I think so the label is going to be based on the data set.

Okay. Fair enough. Last one, just the psoriasis side, is any progress with the once-daily formulation. I know that's another thing going on in the background here. So maybe just level set us on where things stand there.

Yes. Our plan was originally to just share once we have selected the formulation, so we could give you an exact time line. But I think -- we decided last week that we actually have disclosed that we are taking multiple formulations into the clinic in the near term, and then we'll make a decision which one of those will be moving forward. We shared before that we actually made 1 formulation that we were very happy with from a PK perspective. Unfortunately, it had 1 other flaw that we just didn't like. We have since worked around that and basically are hoping to identify a formulation once we've done with the clinical testing and then we can give you exact time line at what point we will have a once-a-day formulation.

Would -- how long would initial PK/PD work take? Are we talking months here? Or is this quarters? Roughly...

This is probably quarters because we want to be very solid on that.

Okay. Got it. Okay. Maybe just moving to the kind of more recent news is you mentioned the LUMUS trial, Martin. So maybe just for everyone who hasn't gone through that data, walk us through kind of the key messages from the Phase II data set and the next steps because I know that's something else that you guys are focused on.

Sure. So this was a 48-week Phase IIb dose-ranging trial, pretty substantial in size, 4 arms, 100 patients each including 1 placebo arm and 3 active doses. Primary endpoint was the BICLA, which is a composite measure of disease activity in lupus at week 48. The headline result was that the trial did not meet its primary and key secondary end points in the overall all-comers trial population, but there was a strong signal in a predefined subgroup, which is the patients who have evidence of what we call the interferon signature. So that's a subpopulation that constitutes approximately quarter of moderately to active lupus patients overall in prospective studies. And so we have prespecified this, but we had not a priori excluded the biomarker negative, the interferon signature negative patients because we did not have a prior evidence that there would not be at least some evidence -- some benefit in those patients. So bottom line was that for the interferon signature negative patients, there was no benefit. In fact, in some -- in some -- for some endpoints, the placebo response was actually higher than the active doses, but there was a strong signal in the interferon signature positive subpopulation. And so there was a separation from placebo, both for the BILAG for the SRI-4, which is another composite endpoint in lupus for skin rashes for joint counts for remission. And so consistent evidence of response. So going forward, I think it's going to be important to hone in on this population that is likely to benefit from type 1 interferon-targeted treatments and focus the analysis on this subpopulation.

And then just remind us end of Phase II meeting, kind of any time lines around that because I think that's...

So the data is still new. We are still digging through, including some aspects that we need to understand further such as dose response, proposed Phase III doses, et cetera. We are aiming to put together a package for the agency towards the -- by the end of this year and then request a meeting. That's probably going to be early next year given the busy schedule for the agency typically in December. So that's the plan forward. And so we want to get an understanding of the agency's position on several questions. One question is for enriching this -- the biomarker positive population, what is the better strategy? Is it to basically focus the trial on this population in the first place? Or would the preference be to have still an all-comers Phase III trial with a cap, for example, on the signature negative patients than having the primary analysis for the biomarker-positive population and then the all-comers as a secondary analysis. So these are 2 possible approaches. We need to get buy-in on dose selection for Phase III and several other aspects. So those would be the key topics of discussion.

Do you have all the data you need to go higher in dose if you guys did want to do that? Like meaning from your prior dose escalation work, do you have more headroom to take a dose up if you decide to do that in Phase III?

Yes. So the data does not really suggest that there would be any benefit. In fact, one of the surprises of this trial was that the dose response was somewhat attenuated. We did have a bit of a dose response within the BICLA. But for other endpoints, there was a lot of variability and the overall effect size did not seem to be very different between the middle and the higher dose. So I think if anything, the question would be whether a lower dose would go forward and not a higher one in this disease at least.

Yes. And just to add a few other things because we had an original time line if the trial was positive just in the first place, and we didn't have to the prespecified subgroup. So from a time line and from a trial size perspective, actually, we do believe that there is really good evidence here that we could stay relatively close to what our original plan was. We originally had shared that as a base case, we would have to do 1 additional trial. We'll certainly see whether that's still an option. I think the other piece is important for people to understand is we do not expect a significantly larger trial than what we've already performed because for the LUMUS trial, we actually collected quite a lot of safety data across all 4 doses. But the long-term extension was actually all in the highest dose. And so we believe that we can actually size the trial for efficacy and don't necessarily have decided for safety given the way the LUMUS was structured.

And then anything else on the kind of placebo arms, so minimization of placebo response? I know that's historically been a big focus for lupus trials. So as you look through, I know it's still early days as you look through the LUMUS data, anything more you think you can do in terms of an implementation standpoint to kind of mitigate that placebo response further?

Yes. I think the key, again, is going to be the biomarker selection, right? So our placebo responses in this trial were high. But they were entirely driven by the signature-negative patients. So within the positive population, the placebo responses were like in the high 20s, which is within the realm of the expected in lupus trials. So I think again, sufficient disease activity ideally BILAG, at enrollment and interferon signature, both of which are highly correlated with 1 another, are the best ways to minimize placebo responses. We already did undertake very significant efforts to try and do this through enrollment adjudication and real time data review and other things. But it does turn out that this population that lacks the interferon signature does have very high placebo responses, and that corroborates prior experiences from anifrolumab where the same thing was shown in that trial as well.

And as you think about, I guess, the interferon signature, is that just a blood test, so it's very easy. Do most lupus patients have that done during the course of their regular diagnostic work? Or is that something that would be like an extra step that doctors would have to do as we think about commercial implications for looking for that?

At the moment, that is still very much a clinical trial blood test, but it is a commercially available blood test that is offered by the large central labs, such as PPD and Covance and others. So it's nothing that we invented. We just utilize that commercially available test. I think going forward, as more and more evidence is generated especially type 1 interferon targeted therapies just do not work in the negative population that this is going to become more common as part of clinical work in the future.

Okay. Great.

You can actually already see a little bit of a precursor of that because if you type in lupus and if you go do your search on the web, it turns out there's already pop-ups happening for interferon testing if you're a patient that has been diagnosed with lupus. So it looks like at least it's a directional effort going on to assess interferon high or low status already today.

Okay. We were talking about this earlier. So Bristol-Myers has some data for their first gen TYK2, so TYK2 in SLE expected later this year from 2 Phase III trials. So as you think about that data, maybe just frame for us the range of outcomes and what it would mean for your Phase III strategy and anything you'd be focused on?

Yes. So if you look at their Phase II PAISLEY trial, there was quite a bit of variability in between the dose arms. So the delta in response between active and placebo ranged from, I think it was 26% at the lowest dose, and then it was single digits. And as they doubled the dose and then again went up to 15% when they tested the 12 milligrams. So that's quite a wide range of outcomes, and it will be interesting to see in Phase III on what end of this large spectrum, the results are going to come out. If it turns out to be on the lower end, I think there is a clear path forward if. It's at the very high end, that is -- I think that makes it more challenging because they're going to be several years ahead. And so then that will need to factor into our decision-making of where and how to move forward with the type 1 interferon mediated group of diseases.

Okay. And any -- are they looking -- I guess it's not your trial, so kind of an unfair question, but are they cutting it by interferon signature as well? Or do you guys have any insights there?