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

Welcome, everyone. This is Biren Amin, biotech analyst here at Jefferies. I'd like to welcome everyone to the Jefferies Virtual Healthcare Conference. We have our next company, AnaptysBio, presenting and their CEO, Hamza Suria. So Hamza, please take it away.

Thanks, Biren. Appreciate the intro, and thank you to the Jefferies team for giving us an opportunity to provide an update on AnaptysBio. As Biren mentioned, my name is Hamza Suria. I'm the President and CEO of AnaptysBio. I will be making forward-looking statements today. We encourage you to review our SEC filings for relevant disclosures and risks. AnaptysBio is an antibody R&D engine focused on first-in-class immunology opportunities. We have a deep, wholly owned clinical pipeline with multiple catalysts up over the upcoming quarters, including an end-of-Phase II meeting, including Phase II data, Phase I data and the new IND filing across our wholly owned pipeline. All of these assets were generated internally within the company through our somatic hypermutation technology platform. And over the last few years, we've advanced 7 internally generated antibodies to the clinic. And we continue to use this capability and this platform to generate additional immunology-focused assets, both anti-inflammatory opportunities for treating inflammation but also upregulating immune system in the context of immuno-oncology. And we generally target advancing one new program to IND each year from our internal platform and development capabilities. In addition to our wholly owned pipeline, we have partnerships with GSK and BMS. And we've earned approximately $160 million already from those relationships. And we anticipate another $75 million in milestones coming in, in the next 18 months. Plus starting 2021, we anticipate royalties from 2 programs, dostarlimab and Zejula, adding to our future revenues. We're a very capital-efficient company. Not only do we have approximately $375 million in cash as of the end of Q3, but in 2020, based on the deal-making that we've done and the milestones that we've received, we anticipate breakeven net burn. And we anticipate that without future financing, we will extend our runway into 2023. In terms of our wholly owned pipeline, you see the blue chart here and the blue lines indicate our 4 wholly owned programs that are publicly disclosed at this point. We also have a number of preclinical programs that have not been disclosed, and we'll be rolling those out in the future. But as far as the currently disclosed pipeline, our primary focus is our anti-IL-36 receptor antibody called imsidolimab, which is in development for 4 indications currently that we'll talk about in more detail. And we anticipate expanding into additional indications in 2021. We're also in the clinic with an anti-IL-33 antibody called etokimab, particularly in chronic rhinosinusitis with nasal polyps. We are in the clinic in a Phase I with our PD-1 agonist antibody called ANB030. And we look forward to an IND filing in this quarter, in Q4, for our anti-BTLA modulator antibody called ANB032. On Slide 5, you'll see our partner pipeline in orange bars. Of particular highlight here is our GSK relationship in the advancement of dostarlimab to U.S. BLA filing and European MAA filing. And we anticipate approval of dostarlimab in endometrial cancer later this year. And we anticipate additional regulatory filings next year for subsequent indications, particularly mismatch repair deficient pan tumor in the first half of 2021. All these programs were generated internally within the company, and 7 of them have been advanced into the clinic since 2016. Our key upcoming clinical catalysts from our wholly owned pipeline are shown on Slide 6. The key program for us at this point is imsidolimab, our anti-IL-36 receptor antibody. After disclosing top line data from our GPP Phase II trial called GALLOP, we anticipate and are on track for an end-of-Phase II meeting with the FDA later this quarter in Q4 2020. And we anticipate providing guidance subsequent to that as far as the Phase III registration plan for imsidolimab in GPP. We're also fully enrolled and on track for top line data in Q1 of 2021 for our PPP Phase II trial called POPLAR. And we look forward to initiating shortly to additional Phase II trials, one in EGFR-mediated skin toxicity and another one in the disease called ichthyosis in Q4 of this year. With respect to etokimab, we already had week 8 top line data earlier this year, and we anticipate week 16 top line data from our ECLIPSE trial in chronic rhinosinusitis with nasal polyps. And we look forward to Phase I data in mid-2021 from ANB030 and anticipate an IND filing shortly with respect to ANB032. Let's spend a few minutes talking in detail regarding our imsidolimab program, which, as I mentioned, is in development for 4 indications currently with additional indications anticipated to be initiated next year. The reason that we're involved in the IL-36 receptor pathway is because of a very seminal biology that was published regarding genetic mutations in this pathway and an overactive signaling of the IL-36 pathway leading to multiple diseases. For us, as normal, healthy individuals, we have triple inflammatory IL-36 cytokines: alpha, beta and gamma. And those cytokines are balanced by a receptor antagonist that dampens down signaling through the IL-36 receptor. However, if this balance is disturbed either because of genetic mutation of the receptor antagonist or upregulation of cytokine expression due to environmental factors, you get multiple different dermatological conditions being manifested in patients. And we'll talk in detail about the conditions that we're currently pursuing, but there's actually a wide variety beyond GPP and PPP that could be treated with an anti-IL-36 receptor antibody. which is what our program is focused on developing, which is the antibody that we call imsidolimab. On Slide 9, you'll see unfortunate pictures of what generalized pustular psoriasis or GPP looks like. This is a disease that's associated with mutations of the IL-36 receptor antagonist. This is a systemic life-threatening condition that has systemic inflammation afflicted on patients. You can see it on the skin. But it's also actually also affecting their internal organs and leading to cardiopulmonary issues, gastrointestinal issues, and this is a life-threatening condition that can lead to death of these patients. There's at least 3,000 patients in the U.S. that have been documented to have GPP. Our recent estimates and analysis indicate that, that may be an underestimate and there may be up to 10,000 patients in the U.S. that have GPP and are being treated in some shape or form with the off-label therapies that are used in GPP. However, there's nothing approved for these patients. And earlier this year, we were granted orphan drug designation for the treatment of GPP with imsidolimab. So for this condition, we are currently conducting a Phase II trial called GALLOP, where we're giving patients with moderate-to-severe GPP monotherapy imsidolimab after washout of all prior therapy. And the primary assessment that we're looking for is at week 29 and week -- and day 1 -- day 29 and day 113 as far as improvement in the skin, improvement in the mJDA and improvement in the CGI with respect to these patients. We recently showed top line data after having all 8 patients complete the day 29 endpoint in this trial. 6 out of 8 patients achieved improvement in their CGI by day 29. We saw a very rapid reduction in pustules not just by the first week or day 8, we actually saw clearance of all pustules in general by day 29, which is a really remarkable result, as you can see from the patient pictures on the Slide 11. The antibody was very well tolerated. And interestingly, none of these 8 patients had a genotype that would indicate that they were genetically driven GPP patients. But in fact, they were environmentally driven individuals. And that actually is pretty interesting, de-risking for potential additional indications that are associated with IL-36 overactive signaling, including PPP, which we will talk about in a minute. So for GPP, with this data, we are on track for an end-of-Phase II meeting with the FDA in the near term. And we anticipate that, that will be in the context of the orphan drug designation and would enable a rather discrete Phase III registration plan for us in GPP. In order to support future enrollment and also to understand in greater detail the patient journey associated with GPP, we're also initiating a worldwide registry called RADIANCE that we'll be populating over the upcoming years and sharing data as far as the patient journey that occurs for GPP and PPP. On Slide 12, you'll see pictures of what palmoplantar pustulosis or PPP looks like. This is a disease associated with overactive signaling through elevated expression of IL-36 cytokines. These patients are very, very worse off because they are unable to walk or stand or do normal things without pain on their hands and feet. There's no approved therapy for these individuals. And although it's not a life-threatening situation, there are some very severe morbidities associated with the disease that make this a high unmet medical need for the approximately 150,000 patients in the U.S. that have moderate-to-severe PPP. We're currently conducting a Phase II trial called POPLAR, which is fully enrolled and it's actually overenrolled. And we're on track for top line data as far as week 16 for all the patients enrolled in the trial to be unblinded in Q1 2021, and that's when we anticipate sharing that data with The Street. The primary assessment here is a scale called PPP PASI, which is the percentage of the hands and feet that are covered with pustules relative to baseline in imsidolimab versus placebo-treated patients. Another indication that we are pursuing with imsidolimab, which is very interesting, which is oncology-supportive care specifically in terms of dermatological side effects of patients that are receiving EGFR/MEK inhibitors for their solid tumor treatment. Virtually all these patients undergo a papular or pustular rash that looks and mechanistically is very similar to what occurs and what we talked about in GPP. The rash is induced by overactive IL-36 signaling. We've seen that from translational data, including data that has been published at IL-36 upregulation, which leads to IL-8 secretion, which leads to neutrophil and infiltration into skin and neutrophilia. And that's a very similar mechanism to what we've already shown as active for imsidolimab treatment of GPP. So there are 60,000 patients in the U.S. that are treated with EGFR/MEK inhibitors on a regular basis. There's an awful lot of these patients that cannot continue dosing with their EGFR/MEK due to this rash. And we anticipate that imsidolimab may be a very useful oncology-supportive care treatment for these patients. And we anticipate initiating a Phase II trial in Q4 of 2020, basically shortly. And we look forward to sharing data from that trial with you in the future. The other Phase II trial that we're about to get going is an indication called ichthyosis. This is a rare orphan disease characterized by thickening of the skin due to inflammation that is driven by high IL-36 cytokine expression levels with conductive translational studies with collaborators in this indication and demonstrated that IL-36 is likely to be the driver here. It's an orphan disease affecting 6,000 patients in the U.S. And we look forward to starting our Phase II trial in this indication in the near term. We also, as I mentioned earlier, anticipate additional indications to be initiated in terms of additional Phase II studies for imsidolimab in 2021. Let's spend a brief few minutes talking about our etokimab program, which is our anti-IL-33 antibody. IL-33 is genetically associated with asthma and various other respiratory conditions. We conducted a Phase I trial with etokimab. And we're currently conducting a Phase II trial in a disease called chronic rhinosinusitis with nasal polyps, which affects about 400,000 adults in the U.S. And that trial is called ECLIPSE, where we are treating patients with 2 different dosing strategies of etokimab versus placebo. We already disclosed week 8 interim analysis data from this ECLIPSE trial, and we anticipate week 16 data later this year. And the primary outcomes here are scores called the nasal polyp score, or NPS, and a patient-reported outcome called SNOT-22. We already announced the week 8 data from this trial. And while etokimab did show efficacy relative to placebo. Unfortunately, that did not reach statistical significance at week 8. Secondary analysis were actually quite supportive in not just asthmatic patients that had chronic rhinosinusitis with nasal polyps but also non-asthma patients. And the blood eosinophil reduction was consistently occurring here as it has in other indications. So we are planning to reassess the etokimab program at week 16 when we have that data later this year. And it's quite likely that we may not spend any further AnaptysBio development dollars on further pursuit of etokimab subsequent to that week 16 data point. I'd like to spend a few minutes talking about our 2 wholly owned pipeline assets with respect to anti-inflammatory approaches against checkpoint receptors. This is a rather unique concept and a pioneering strategy that we and others have been recently leading in the industry. With respect to checkpoint receptors such as PD-1 or BTLA, you may have heard of antagonist antibodies particularly in the treatment of oncology situations, which is called immuno-oncology type treatment, where inhibition of those receptors leads to upregulating immune function. And that has been very effective in the treatment of oncological situations. Here, what we're talking about is doing the opposite, having antibodies that actually increase, for example, signaling to the PD-1 receptor. And that actually dampens down T cells. It does the opposite of what you're used to seeing in immuno-oncology. And approaching it that way, we believe, would be a very interesting treatment for specific dampening down of immune functions and autoimmune diseases. These are difficult antibodies to come by, and our technology platform has a unique capability in being able to generate and identify checkpoint modulators that are anti-inflammatory versus what you're used to hearing about, which is the opposite case, which is the immuno-oncology situation. So specifically, our PD-1 agonist antibody is called ANB030, which is in the clinic. It's in a Phase I healthy volunteer dose escalation, single and multiple ascending dose trial right now. The reason this is relevant is because there are genetic mutations associated with the PD-1 pathway that lead to a whole variety of inflammatory conditions that are extensively published. So it's known that if you have blocks that mutate or otherwise render your PD-1 signaling pathway to be dysfunctional or nonexistent, you get inflammatory disease. And our hypothesis is that is because there is insufficient presence of PD-L1 or low expression of PD-L1. And the absence of that binding is leading to that inflammatory condition. So we aim to change that paradigm and change that balance by dosing patients with ANB030, which is an exogenous substitute for PD-L1. It would do similar things to PD-L1 but in the case of a very specific antibody that is only applicable to activated T cells. We've shown extensive preclinical data, particularly translational data, for this antibody in alopecia areata, which was published earlier this year in March of 2020. And we anticipate that after completing our Phase I trial, we will be expanding the program into multiple Phase II conditions, specifically T cell-driven inflammatory conditions. And we believe one of those may actually be alopecia areata, as shown by our preclinical translational data. The other program in this vein for us is ANB032, which has a similar strategy except against the BTLA receptor. The BTLA receptor is very different than PD-1. PD-1 is only expressed on activated T cells. BTLA is expressed across a much broader variety of lymphoid and myeloid cells. And here again, there's genetic evidence that if you have mutations in the BTLA pathway, you get inflammatory disease. Those perturbations of your BTLA signaling pathway lead to uncontrolled inflammatory response. And what we have shown in, in vitro and in, in vivo efficacy models that our ANB032 antibody, which modulates BTLA signaling by favoring BTLA to bind HVEM and taking HVEM away from the pro-inflammatory signaling associated with binding between HVEM and LIGHT is leading to an anti-inflammatory effect not just on T cells but also on B cells and other myeloid cells that are associated with inflammatory response. So we're quite excited about the opportunity with respect to this antibody and the efficacy that we've already shown in animal models of GVHD. We are on track for an IND filing later this quarter. And we look forward to advancing this program into a healthy volunteer Phase I trial next year subsequent to FDA clearance of the IND. I'd like to spend a few minutes talking about our GSK immuno-oncology collaboration, where there are 3 antibodies in the clinic: one is an anti-PD-1 antagonist, it's called dostarlimab; a TIM-3 antagonist called cobolimab; and a LAG-3 antagonist called TSR-033. With respect to dostarlimab, particularly as the most advanced molecule, as I mentioned earlier, GSK has already filed BLA and MAAs for dostarlimab in the first indication, which is endometrial cancer. And those -- the BLA and MAA have been accepted, and we anticipate approval in the U.S. of the BLA in the remainder of 2020 and Q4 2020. And we also anticipate that GSK will be making regulatory filings for the second indication to be pursued to approval with dostarlimab, which is mismatch repair on a pan-tumor basis. And those regulatory filings are anticipated in the first half of 2021. In addition to that, GSK is advancing dostarlimab across a whole host of other solid tumor indications, as shown on Slide 25. In terms of financial metrics for AnaptysBio, this is a partnership with an aggregate of $1.1 billion in milestones. And we recently amended our collaboration with GSK that increased our royalties on dostarlimab to 8% to 25%. And we publicly disclosed that all sales above $1 billion on an annual basis would be paid 12% or higher. So that's a very meaningful royalty rate to us. In addition to that, as part of that amendment, GSK gave us a 1% royalty on their sales of Zejula as well as a $60 million upfront payment. So in addition to all of that, we anticipate $75 million in regulatory milestones that are upcoming in the next 18 months for the first 2 indications of dostarlimab, as shown on the right slide of Slide 25. In our remaining time, I'd like to spend a few minutes talking about the technology platform that underpins all of the antibodies that have been generated by AnaptysBio, which responsible for the 7 antibodies that have already reached the clinic and multiple more that are in preclinical development that we hope to advance into the clinic in the future. Somatic hypermutation is a very critical biological process that goes on within your B cells and my B cells. The reason it's important is because we inherit very limited diversity with respect to our genomes, just a few hundred antibodies. But in order for us to survive in the environment, we need billions of antibody specificities. And that giant mathematical disconnect is made possible by this highly conserved endogenous process called somatic hypermutation. AnaptysBio is the only company with the IP and the technical skill and the know-how to leverage in vitro somatic hypermutation for drug development. And that's what we've been doing to develop the antibodies in our pipeline. The key advantages of our technology platform is that we sample unprecedented levels of antibody diversity and are able to access biology and targets that are difficult for other technologies. We focus on high-potency and highly functional antibodies such that small doses convey large effects in the clinic, as you've seen from my clinical data. We de-risked manufacturability early enough. And we operate with speed. We go from concept to IND in approximately 2.5 years, which allows us to remain at the forefront of emerging immunology with respect to new opportunities that we're currently pursuing in our preclinical pipeline that have not yet been publicly disclosed. So in summary, our wholly owned pipeline catalysts are shown again on Slide 30. The key ones coming up are our GPP end-of-Phase II meeting with the FDA later this quarter/our PPP POPLAR Phase II trial is fully enrolled and on track for data unblinding in Q1. And we look forward to expanding the imsidolimab program across multiple indications, not just the 2 that we're disclosing here but also additional indications that will be disclosed next year. To wrap up. AnaptysBio is a novel antibody R&D engine focused on first-in-class inflammation, deep wholly-owned pipeline, validated platform that continues to advance new antibodies to the clinic, extensive revenues through our partnerships and a very capital-efficient business model leading to a net burn approximately breakeven for 2020. I'll stop there, Biren, and let you ask questions.

Yes. Thanks, Hamza, for update. Maybe let me just start with imsidolimab and the GPP indication. I think a few months ago, you had presented data where 6 of 8 patients at day 29 saw improvement on the CGI endpoint. How much of that day 29 data can you read through to week 16? I guess the reason why I asked is because you're going to FDA with the end-of-Phase II meeting relatively soon. Do you need a week 16 data to discuss with FDA in order to have a trial design? So I guess let me just stop there. There's a lot of questions in there.

Yes. So that's a good question. As far as week 16 seen in the first 2 patients that we showed data from last year, there was no relapse or loss of efficacy between day 29 and week 16. And we anticipate that in the subsequent 6 patients that we've done, the same would be the case. And we don't anticipate any reduction by week 16. We'll -- by the time we have the FDA meeting, we will have week 16 data on additional patients, maybe not all of them, but we will have week 16 data to support our proposals to the FDA. And to date, in the additional patients that have carried on beyond day 29, we've not seen any loss of efficacy or any safety issues or anything else that we anticipate would be an outstanding question for the FDA. We believe the data that we've already shown and the additional data that we have on hand would be sufficient in order to enable the FDA to make a decision on Phase III design.

And what would Phase III design look like, a single arm I'm going to assume? And how many patients would that entail? Or would it be like 40 or 30 patients?

So I want to respect the FDA process here and not get ahead of them in terms of what may be in the art of the possible here. Overall, as we all know, this is a very severe, life-threatening situation and urgently in need of medicine. As we've seen from our data, efficacy does not take very long to occur in these GPP patients, and efficacy is durable. There isn't a safety issue. So we don't think it will be a large number of patients that we would need for registration, and we don't think the endpoints will be forever the law. But at the same time, I want to just refrain from giving guidance at this point until the FDA has completed their review and given us formal feedback on that level.