AnaptysBio, Inc. (ANAB) Earnings Call Transcript & Summary

Okay. We'll get started here. Welcome to the afternoon session of the 2020 J.P. Morgan Healthcare Conference Wednesday afternoon session. My name is Anupam Rama, I'm one of the senior biotech analysts here at JPMorgan. I'm joined by Matt Bannon and Tessa Romero from the team. Our next presenting company is AnaptysBio. And presenting on behalf of the company, we have CEO Hamza Suria. Hamza?

Thank you, Anupam, and appreciate JPMorgan providing us an opportunity to present an update regarding AnaptysBio here. I will be making forward-looking statements regarding the company. We encourage you to review our SEC filings for relevant disclosures. AnaptysBio is a clinical-stage novel antibody R&D engine. Our focus and our business model is to innovate first-in-class antibodies against emerging biology in immunology and drive those therapeutics from scratch generated internally to clinical development into patients. Our business plan for 2020 is shown on Slide 3 and is summarized in 5 key points that I'll go through just now. Firstly, we have multiple clinical catalysts coming up in 2020. We've had a setback in our pipeline with respect to our atopic dermatitis trial that read out in November of last year, and we've decided to discontinue further development in atopic dermatitis for etokimab. However, we have 3 Phase II readouts coming in the remainder of 2020. We're advancing a new program into the clinic in 2020, and we'll be filing a new IND on a fourth wholly owned program during the remainder of 2020. All of these assets and everything that you see in our pipeline was generated internally within the company using our validated technology platform in internal antibody development expertise. That expertise and productivity has been responsible for advancing 7 antibodies to clinical development over the last 4 years, which has been very productive. And the focus of our platform and our R&D engine is first-in-class immunology opportunities, whether that's in the direction of anti-inflammatory opportunities for inflammatory disorders or pro-inflammatory mechanisms in the case of immuno-oncology opportunities. Our track record has been to roughly advance one new program to IND each year, and that's what we intend to continue doing in 2020 and beyond. In addition to our wholly owned pipeline, we have key partnerships with TESARO, now GSK, and Celgene. And across those partnerships, we've received approximately $100 million in revenues. And those revenues are about to accelerate meaningfully as the most advanced of those partner programs was just confirmed yesterday to have been filed for BLA by GSK, which is an antibody called dostarlimab, and we anticipate approximately $30 million in milestones from the BLA review process of dostarlimab and royalties to kick in potentially in the upcoming near term. That's great validation of our internal expertise and nice to see one of our internally generated assets make it all the way to BLA. We do all this with a very capital-efficient business model. We have $444 million in cash as of the end of Q3 2019, and we're projecting a net burn in 2020 of approximately $60 million, which anticipates runway all the way out into 2023. We manage cash very smartly. We did a reorganization after our atopic dermatitis data in late last year, and we'll continue to be fiscally responsible with the capital that we have to extend our runway and generate additional assets and additional clinical catalysts over the upcoming years. On Slide 4, you can see our entire pipeline. As I mentioned earlier, all of these assets were generated internally within the company, and 7 of them have gone to clinic in the last 4 years. The blue bars show our wholly owned assets that we retain rights to, and the orange bars indicate partnered assets that are being advanced in the context of our GSK partnership and our BMS partnership. With respect to our wholly owned pipeline, we have an anti-IL-33 antibody called etokimab, which is currently being advanced in chronic rhinositis (sic) [ rhinosinusitis ] with nasal polyps. And we -- as I mentioned earlier, we've decided to discontinue development in atopic dermatitis. And our next eosinophilic asthma trail, which would have been a Phase IIb trial, is on hold for pending the results of our chronic rhinositis trial. Our second wholly owned program is an anti-IL-36 receptor antibody called ANB019, which is focused on 2 orphan inflammatory conditions. One is called generalized pustular psoriasis, and the other one is called palmoplantar pustulosis. And we also have 2 checkpoint modulator antibodies that we have internally developed, one of which called the ANB030 is advancing into the clinic this year. And we are announcing today a new fourth wholly owned program, that's also a checkpoint receptor modulator against BTLA, where we anticipate an IND later this year. On the partnered side, the most advanced of our partnered assets is in anti-PD-1 antagonist antibody called dostarlimab, which as I mentioned was confirmed to have undertaken BLA submission yesterday by GSK and is also in development across a number of additional indications, which we'll talk about in a minute. We also have a TIM-3 and LAG-3 antibody under that partnership with TESARO, now GSK. And we also have a partnership with what was then Celgene, now BMS, where one asset is advancing into the clinic. Key time lines of clinical catalysts from our wholly owned pipeline are shown on Slide 5. With respect to etokimab, we anticipate interim top line data from our chronic rhinositis Phase II trial, which is called the ECLIPSE trial, in the first half of 2020. And initiation of our Phase IIb trial in the eosinophilic asthma is on hold pending that dataset. With respect to ANB019, we have already shown an interim analysis from our GALLOP GPP Phase II trial, and we anticipate additional clinical data and the regulatory update during 2020. And we have an ongoing Phase II trial in palmoplantar pustulosis, where we anticipate top line data in the second half of 2020. Our wholly owned PD-1 agonist antibody, ANB030, has completed IND filing last year as projected. And we anticipate Phase I initiation in the first half of 2020. And in the second half of 2020, we anticipate IND filing for our fourth wholly owned asset, which is the BTLA modulator antibody called ANB032. So I'd like to spend a few minutes talking about our most advanced program, which is our anti-IL-33 antibody called etokimab, which is focused on development in respiratory indications. And this is an antibody called -- the focus on IL-33 inhibition and has gone through many clinical studies, and IL-33 is particularly interesting because it is genetically associated with asthma. People that have lost the function of IL-33 are protected from asthma. People that have gained the function of IL-33 have increased incidences of asthma. And IL-33 has been known to be an upstream cytokine that potentiates the release and expression of IL-4, 5 and 13. We have conducted a large Phase I healthy volunteer trial without seeing any DLTs with etokimab. And currently, we're focused on advancing this program into chronic rhinositis with nasal polyps, which affects about 400,000 adults in the U.S. And in the future, we may anticipate moving forward into additional development in asthma, which affects 1.1 million adults in the United States. Before we get into the respiratory indications and respiratory data, I'd like to just recap the results of our ATLAS Phase IIb atopic dermatitis trial, which we top lined in November 2019. This is a trial with an n of 300 where we assess different dose levels and different dosing frequencies of etokimab against placebo. And the key endpoint here, the primary endpoint here, was the easy score change relative to baseline at week 16. Unfortunately, as you already know from our disclosure in November, this trial did not demonstrate improvement against placebo with respect to etokimab. Although etokimab was safe and well-tolerated and there were no pharmacokinetic issues associated with dosing or any other irregularities with this trial, we did not see the efficacy that we anticipated. And hence, as a result, we have discontinued further development of etokimab in this particular indication. However, previously, at the EAACI conference last year, we disclosed detailed data from a trial of etokimab in eosinophilic asthma, which is a Phase IIa trial where we gave severe eosinophilic asthma patients a single dose of etokimab versus placebo on top of standard of care, which is ICS and LABA. And we asked ourselves the question, in that single dose, do we see an improvement in FEV1, which is a clinical marker of asthma lung function? And do we see improvement in the patient-reported outcome called ACQ-5? Following a single dose of etokimab versus placebo, we saw those 2 lines, blue for etokimab and the dotted orange for placebo, separate right away. And a single dose of etokimab persisted FEV1 improvement for at least 60 days or so following that initial dose. And we believe that this is an interesting signal that validates the previously known genetics and associated biological activity that etokimab may have in eosinophilic asthma. In addition to FEV1, we also saw patient-reported outcome change at the level of ACQ-5, where patients dosed with etokimab right away reached the MCID; with respect to ACQ-5 with patients dosed with placebo, did not achieve the MCID. However, we would like to take a pause on further development in eosinophilic asthma until we have a readout from this trial, shown on Slide 13, which is an n of 100 study in patients with chronic rhinositis with nasal polyps. In this study, we're testing 2 different dosing frequencies of etokimab against placebo on top of standard of care, which is mometasone spray. And the key endpoints that we're looking for here is nasal polyps score and a patient-reported outcome called SNOT-22. And we anticipate that we will have this data in the first half of 2020, which will be a critical decision point for us in terms of the future of etokimab. So having completed the discussion on etokimab, I'd like to spend some time on ANB019, our anti-IL-36 receptor antibody. The reason that we're interested in this biological pathway is because of clear genetic association of dysregulation of this pathway with 2 orphan inflammatory conditions. For us as normal individuals, our IL-36 pathway is stimulated by 3 pro-inflammatory cytokines, alpha, beta and gamma, and an endogenous receptor antagonist that keeps the system in check. If you have mutations in this pathway or if you have increased levels of cytokines, you can get 1 of 2 diseases, which I'll show you in a minute. One is called generalized pustular psoriasis. And the other one is called palmoplantar pustulosis. And each of these conditions, we believe our ANB-019 antibody would restore balance and dampen inflammation by blocking the IL-36 receptor. On Slide 16, you can see unfortunate pictures of what GPP looks like. This is a systemic, life-threatening illness that can be associated with mutations in the IL-36 receptor pathway. These are patients that are chronically ill. They chronically have pustules all over their body. They chronically have inflammation of their internal organs. They usually have various other issues, including cardiopulmonary problems, infections and various other things that often lead to mortality for these patients as a result of GPP. This is an ultra-orphan condition in the U.S., where approximately 3,000 patients are diagnosed and suffering from this disease. Our GALLOP trial, which is a monthly dosing of ANB-019 has been ongoing to initiate -- to assess the effect of ANB-019 in this rather difficult condition. And after monthly dosing with our antibody, the key assessment that we would like to make is what happens to the body surface area of pustules? What happens to the C-reactive protein levels, which indicate inflammation? And what happens to the composite score, which is the modified Japanese Dermatology Association index of -- mJDA. Last year, we reported interim analysis from the first 2 patients to complete the GALLOP trial and completed all the way out to day 113. Following an initial dose of ANB-019, we saw that in as rapidly as 1 week, all the pustules were cleared from these patients. Their CRP levels return to normal, and their mJDA scores were reduced by 58%. We did not observe any antidrug antibodies, which is particularly important in this context. And neither these patients had a mutation signature, which further is helpful in terms of derisking additional indications such as PPP. So we're highly encouraged by this interim analysis data from the first 2 patients to complete the trial. And what we need to do is continue enrolling and accelerate enrollment of this trial, which we have conducted by making a couple of changes. One is that we have removed the washout period that was a significant drag on our ability to enroll these patients. And the other aspect is, for the purposes of this trial and future registration study trials, we have increased the footprint of the study to additional clinical sites and additional countries across Eastern Europe and Asia, and we look forward to additional data from this trial in the remainder of 2020 and also a regulatory update that perhaps sheds light on how we advance the program into a registration trial going forward. In addition to the GALLOP study, we are studying PPP or palmoplantar pustulosis. This is a very similar condition to GPP and physiologically looks very similar as well, except is localized in the hands and feet. There are no approved therapies for this indication. These patients suffer through a lot of pain. They cannot do normal things like walk and work and have a normal life. And this is a larger orphan inflammatory disease, approximately 150,000 patients. In this case, because it's not a life-threatening condition, we're able to conduct a Phase II trial called POPLAR in a placebo-randomized fashion where we are administering monthly doses of ANB-019, and we are assessing the impact of ANB-019 as a monotherapy on the palmoplantar severity of disease, the surface area of their hands and feet that are affected with pustules relative to placebo, and we anticipate this data to be available in the second half of 2020. And again, here, we've enhanced enrollment and accelerated the advancement of this trial by expanding into additional sites and geographies to help this trial in future registration studies that perhaps would follow-on from this. So those are the 2 key studies that are currently ongoing with respect to our ANB-019 program, and we look forward to those 2 readouts in the remainder of 2020. I'd like to spend a few more minutes talking about the newest entrants to our wholly owned pipeline, which are 2 checkpoint modulatory antibodies for inflammatory disease. And I just want to start with Slide 23, which is intended to explain to you that although you may have heard of checkpoint antibodies in the immuno-oncology context, this is doing the opposite. This is using checkpoint receptors such as PD-1 and BTLA to turn off immune cells. And by doing so, we're able to specifically focus on the immune cells that are culprits in various different diseases and do the opposite of what you may have seen in immuno-oncology. The validation for this approach is actually coming from genetics. People that have dysregulated PD-1 pathways, low expression of PD-L1 and various other abnormalities tend to have higher autoimmune disease rates, and also treatment with a checkpoint antagonist antibody in the case of immuno-oncology also results in inflammatory disease. However, these antibodies are rather difficult to develop. They have some particular unique epitopes and binding profiles that our technology platform and our internal capability makes us uniquely able to access. And we've developed a portfolio of these antibodies that I'll talk about in the next 2 slides. On Slide 24 is ANB030, our PD-1 agonist antibody. Here, the biology is associated with lack of signaling through PD-1, which results in incidence of inflammatory diseases. Not only has that been seen on a genetic level, but we've also done translational studies in certain undisclosed indications where the absence of PD-L1 or low expression of PD-L1 is associated with runaway inflammatory responses that are causing disease. And those situations we anticipate that augmenting PD-1 signaling by treatment with ANB030 would be able to successfully treat these human inflammatory conditions. We have completed an IND filing for ANB030 in Q4 of 2019, as originally planned, and we anticipate initiation of a Phase I trial of ANB030 in the first half of 2020 and moving forward or beyond that into efficacy studies that we will talk about in the future. PD-1 is specifically expressed on activated T-cells and is very specifically associated with T-cell-driven conditions. In contrast, the new program that we announced today, ANB032, has a little bit of a different profile, which is focused on BTLA. And here, BTLA is not specifically just activated on one cell type or another but is broadly expressed across lymphoid cells and myeloid cells. So we believe ANB032 has a much broader profile in its applicability to several really severe conditions that have a broad immune cell representation such as GVHD, where we have in vivo efficacy. We anticipate filing an IND for ANB032 in the second half of 2020 and that being the fourth wholly owned program that we advance as part of our pipeline. In addition to our wholly owned pipeline, I want to spend a couple of minutes talking about specifically the partnership that we have with GSK, which was originally TESARO, which is focused on 3 immuno-oncology programs that are moving into further development in very solid tumor phenotypes. On Slide 27, you'll see that there is robust development being conducted of the 3 antibodies under that partnership across thousands of patients across various different solid tumors. And for the first time today, we're revealing some detailed financial information with respect to this partnership. First of all, for each of the programs under this partnership, AnaptysBio is due a royalty of 4% to 8% based on global sales tiers, which has not previously been disclosed. And in addition to that, as dostarlimab goes through the BLA review process, which has already been started by the BLA submission that GSK talked about yesterday, we anticipate a $10 million milestone payment upon acceptance of that BLA and a $20 million milestone payment upon first U.S. regulatory approval of dostarlimab. There are several other milestones associated with other programs and additional milestones associated with dostarlimab that we haven't publicly talked about, but these are the ones that we anticipate in the near term and look forward to in terms of leveraging for -- to balance our cash spend and our cash burn. All of these programs were generated internally using our somatic hypermutation technology platform. For those of you that don't already know, somatic hypermutation is a critical biological process that goes on within your B cells and my B cells. The reason it's important is because we are inherent from our parents -- very little antibody diversity, just a few hundred antibodies. But for -- in order for us to survive in the external environment, you need billions, if not trillions, of antibody specificities to defend this against all the infectious disease and neoplasms and various other things that we encounter. So that extreme mathematical disconnect is made possible by this endogenously encoded, hardwired process within our B cells called somatic hpyermutation. And AnaptysBio is the only company with the know-how and the IP to be able to leverage that for drug development and leverage that in vitro to generate antibodies. And that allows us to access biology and diversity that has not been possible before, also allows us to focus on high potency and functional antibodies that we can drive into the clinic, allows us to derisk manufacturability. And we do so with speed. We go from concept to IND or foreign equivalent of an IND in approximately 2.5 years, which allows us to remain at the emerging forefront of immunology. As soon as new biology comes about, we have internal expertise to understand and position that biology. And roughly 2.5 years after that, we file an IND for that program, as we've recently done in the case of ANB 030. So using this technology platform, using this expertise and using this speed, we have advanced 7 antibodies to the clinic in the last 4 years, so which is quite productive. So I'd like to wrap up in the remaining time that I have by reminding you of the key clinical catalysts that we talked about already. With respect to etokimab, we anticipate interim top line data from our chronic rhinositis with nasal polyps Phase II trial called ECLIPSE in the first half of 2020. And our eosinophilic asthma Phase IIb trial is on pause until we see that data. With respect to ANB019, we anticipate additional clinical data and a regulatory strategy update in the remainder of 2020 for GPP. And we anticipate top line data from our Phase II PPP trial called POPLAR in the second half of 2020. We have filed an IND for ANB030, and we anticipate a Phase I start in the first half of this year, and we anticipate advancing our latest program, ANB032, into an IND filing in the second half of this year. To remind you at a high level about AnaptysBio, in summary, we're a clinical-stage novel antibody R&D engine. Our focus is emerging biology in immunology that we can generate antibodies against de novo from scratch using our internal expertise and drive that for the benefit of patients. We have 3 Phase II readouts coming later this year as well as a new program moving into the clinic and a new IND filing. All of these assets were generated internally. And 7 of these have been advanced to the clinic in the last 4 years. We focus on first-in-class inflammation and immuno-oncology opportunities and driving IND -- to file an IND each year. Our partnerships have been very meaningful to us in terms of generating revenue. We've received approximately $100 million already, which will accelerate as BLA filing undergoes for dostarlimab, and approval is anticipated in the remainder of 2020. We had $444 million in cash at the end of the third quarter of 2019. And we're projecting a burn of $60 million in 2020, which gives us runway at least into 2023, and we intend to be very prudent with our cash flow management going forward. Thank you very much. I believe there's a breakout session in Sussex.