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

Welcome, everybody, to the 39th Annual JPMorgan Healthcare Conference. 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. Presenting on behalf of the company, we have CEO, Hamza Suria. [Operator Instructions] With that, I'll turn it over to Hamza, Hamza?

Thank you so much, Anupam. Good morning, everyone, and thank you to the JPMorgan team for this opportunity to provide an overview of what 2021 involves for AnaptysBio. I will be making forward-looking statements during the course of the presentation. We refer you to our SEC filings for relevant risks and disclosures. On Slide 3 is a summary regarding the company. AnaptysBio is a clinical stage antibody R&D engine focused on first-in-class immunology opportunities. Our strategy is to innovate novel therapeutic antibodies against emerging control mechanisms of the immune system, which may be applicable to inflammation and immuno-oncology and we drive those novel internally generated antibodies into the clinic and in the future, we also intend to pursue U.S. commercialization of our wholly owned programs. 6 key aspects of the company are shown on Slide 3. First of all, we have a deep, wholly owned clinical pipeline with multiple programs in the clinic, and we look forward to advancement of imsidolimab into Phase III registration trial this year in GPP. In addition to that, we are pursuing a broad set of dermatology clinical indications, and we have a total of 8 immunodermatology indications under Phase II or III development this year. We have a deep preclinical pipeline as well and anticipate advancement of 1 new program to IND each year, involving first-in-class inflammation and immuno-oncology mechanisms. All of these antibodies were internally generated within the company, through our technology platform. And over the last few years, we've advanced 7 antibodies into the clinic, about to be 8, which is a highly validated approach and team and platform approach to antibody development. In addition to our wholly owned pipeline, we have partnerships that have generated significant nondilutive monies for us. And we anticipate another $75 million in milestones in the next 18 months, and royalty starting 2021 on 2 royalty-bearing products of dostarlimab and Zejula. We have approximately $410 million in cash at the end of 2020, and our projected burn for 2021 is less than $100 million, which gives us a long runway all the way through 2023 on a conservative basis. On Slide 4, you can see an outline of our wholly owned pipeline. We have 8 immunodermatology indications under development during 2021. The headline of our development pipeline is in imsidolimab, our anti-IL-36 receptor antibody, which is being pursued in 6 different indications. And we anticipate advancement into Phase III this year. We're also pursuing our anti-PD-1 agonist antibody ANB030, which we anticipate advancing into multiple Phase II studies. And we'll be advancing our anti-BTLA modulator ANB032 into Phase I this year as well. On Slide 5, you can see our partnered pipeline and the most advanced program there is an anti-PD-1 antagonist called dostarlimab under our GSK relationship. We anticipate first approval of dostarlimab in the first half of 2021 and acceptance of a second BLA to a second indication of for dostarlimab in the first half of this year as well. And as mentioned earlier, we anticipate royalties from dostarlimab and Zejula starting for AnaptysBio in 2021. The specific time line of clinical catalysts from our wholly owned pipeline is shown on Slide 6. With respect to imsidolimab, our anti-IL-36 receptor program, we would like to move forward with a Phase III trial, and we'll talk about that in a little bit more detail in GPP. We're also anticipating a top line data readout from our POPLAR trial in PPP in this quarter in Q1 2021, and we also anticipate an interim data readout from our EMERGE trial for the treatment of EGFR/MEK skin tox at the end of 2021. We look forward to Phase I data from our ANB030 program in mid-2021, an advancement of that program into alopecia areata and vitiligo in the second half of the year. And we anticipate filing an IND equivalent for ANB032 this quarter in Q1 and anticipate advancing that program into Phase I during the remainder of this year. I'd like to spend some time talking about imsidolimab, our anti-IL-36 receptor antibody, which is being advanced in 6 different indications at the moment. On Slide 8, you'll see the biology of the IL-36 receptor, and this is a pathway that has been genetically associated with dermatological inflammatory diseases, particularly GPP. For us as healthy individuals, we have 3 pro-inflammatory anti-IL-36 cytokines, alpha, beta and gamma that are balanced and inhibited by an endogenous receptor antagonist, and that's how we have a balanced inflammatory response in our skin when our skin is consulted with chemical, mechanical or other infectious disease damage. However, in disease patients, you get uncontrolled signaling through the IL-36 receptor, either because of genetic mutations in this pathway or because of overwhelming cytokine expression. In both of those situations, we anticipate our ANB019 or imsidolimab antibody that blocks the receptor to dampen inflammatory response across these patient indications. On Slide 9, you'll see unfortunate pictures of the first indication that we're pursuing with imsidolimab, which is called generalized pustular psoriasis or GPP. GPP is a systemic disease with a life-threatening nature with pustules all over the body and damage to the internal organs. Patients can die from the cardiopulmonary failure and infections associated with GPP. This is an orphan disease in the U.S., officially 3,000 patients. However, recent claims analysis indicates that this is a lot in larger condition than originally anticipated. We already have orphan drug designation from the FDA for the treatment of GPP, and we've initiated a worldwide registry to understand the patient journey and help support future enrollment of clinical trials. On Slide 10 is a diagram of our GALLOP Phase II trial in GPP. We've already reported day 29 interim data from this trial, and we anticipate presenting 16-week data from this trial at a scientific meeting or a medical meeting later this year in 2021. On Slide 11, you'll see the data that we reported in October of 2020. In treatment of GPP patients, we observed a very rapid efficacy. And by day 29, patients achieved clearance of pustules and remarkable efficacy with respect to the treatment of not just the dermatological but also the systemic aspects of GPP. This was also observed without any safety issues or safety stops for treatment of imsidolimab. And we also observed that these patients did not require -- have any GPP mutations in their genotype in order to observe efficacy. We've shared this data with the FDA, and we had a meeting with the FDA in Q4 of 2020. We received support from them for advancement of an orphan registration plan for GPP with imsidolimab, and we anticipate starting a Phase III trial in the middle of 2021 after completion of protocol alignment with the FDA. The second indication that we're pursuing with imsidolimab, as shown on Slide 12. This is a very similar disease to GPP, except it occurs on the hands and feet, and hence is called palmoplantar pustulosis. There's no approved therapies for this indication. Very significant morbidity in terms of pain and inability to do normal functions. This is a relatively large orphan market, approximately 150,000 patients in the United States. On Slide 13, you'll see the clinical trial that we're currently advancing for the treatment of PPP. This is a trial called POPLAR, where with an n of 59 patients, we're assessing the efficacy and safety of imsidolimab in drug versus placebo, and we anticipate unblinding 16-week data from this trial in Q1 and of 2021. And we'll be looking at efficacy of imsidolimab as measured by the PPP PASI score improvement relative to baseline at week 16 for drug versus placebo. The third indication that we're pursuing with imsidolimab is an oncology supportive care opportunity shown on Slide 14. EGFR and MEK treatment of solid tumors is ubiquitously known to cause a pustular rash for the patients that are going through cancer treatment, and has recently been elucidated that this rash occurs through the IL-36 pathway and also includes IL-8 signaling and neutrophilia neutral infiltration, which is very similar to what we know to be the case in GPP. Hence, our hypothesis is that by treating these patients with imsidolimab we will be able to address and reduce the amount of rash that is associated with EGFR/MEK treatment which would significantly improve the care and tolerability of that cancer medication in the 60,000 patients that are treated with EGFR/MEK inhibitors each year in the U.S. On Slide 15 is a diagram of our EMERGE Phase II trial, which is ongoing in this indication, where we are assessing efficacy of imsidolimab versus placebo in 45 patients currently on treatment with EGFR or MEK inhibitors, and we anticipate week-8 interim analysis from this trial at the end of 2021. The fourth indication that we are pursuing with imsidolimab is called ichthyosis. This is a very severe orphan disease associated with thickening of the skin due to inflammation and dry scaly skin that leads to painful symptoms and cracking of the [indiscernible]. There's been recent data that we have generated that indicates that IL-36 signaling is highly upregulated in this disease, and we anticipate that we would potentially be advancing in imsidolimab for the 6,000 patients in the U.S. that are moderate to severe ichthyosis patients. We currently have a Phase II trial called INSPIRE, as shown on Slide 17, ongoing, and we anticipate data from this trial in 2022, where we would assess the efficacy of imsidolimab versus placebo for this patient population. There's a fifth indication that we're pursuing with imsidolimab, which was recently announced earlier this week is hidradenitis suppurativa. This is a really painful debilitating condition associated with nodules in overlapping regions of the skin. Current treatment methods for this disease have limited efficacy and often, these patients do not respond to therapy and progress to surgery. There's been published data indicating that this disease is mediated through the neutrophilia and neutrophil infiltration associated with IL-36 signaling. Translational data from these nodules shows highly elevated IL-36 expression, and we anticipate that imsidolimab would be a new and potentially better treatment opportunity for patients suffering with hidradenitis suppurativa, and we anticipate starting a Phase II trial in this indication in the next quarter in Q2 2021. Similarly, in moderate-to-severe acne, which is a very large patient population in the U.S. It is well understood that this is a response to a bacterial insult. And recent data has indicated that IL-36 cytokine activity is the driver of that immunological response and the neutrophil infiltration associated with acne could potentially be inhibited by treatment with imsidolimab. Existing standard of care, while it has some efficacy, has very significant side effects. And with the clean safety profile that has been observed to date with imsidolimab, we anticipate that our drug would have a potential advantage in the treatment of this very large patient population, and we anticipate starting a Phase II trial in this indication shortly as well. I'd like to spend the next few minutes talking about the 2 additional programs in our wholly owned pipeline, which are checkpoint receptor modulators. And as shown on Slide 21, these modulators are the flip side of what you may be used to seeing in immuno-oncology. Instead of inhibiting and blocking checkpoint receptors in order to upregulate the immune system, we're doing the opposite here. We're leveraging the natural biology of these checkpoints to turn off immune cells and our antibodies are specifically positively signaling through these checkpoints in order to enable that. On Slide 22, you'll see a diagram of ANB030, our PD-1 agonist antibody. The PD-1 pathway has been well studied and well understood. And it is also quite clear from genetics that perturbation of this pathway or lack of PD-1 signaling is actually associated with a whole bunch of inflammatory and autoimmune disorders. And our hypothesis is that the balance associated with immune regulation and inflammation is upset in inflammatory disease patients by the lack of PD-1 signaling, which could potentially be due to lack of PD-L1 expression or various other features. The purpose of ANB030 is to supplant for that missing PD-L1 interaction of PD-1 and that missing PD-1 signaling. We've demonstrated that our antibody has activity ex vivo. We shared and published translational data in alopecia areata. And this antibody is currently in a healthy volunteer Phase I, where we anticipate top line data in the middle of 2021, and we anticipate moving into Phase II trials later this year in the second half of this year in alopecia areata and vitiligo, which are both highly T cell-driven inflammatory conditions. The other program that we have in this category is shown on Slide 23, which is ANB032, our BTLA modulator antibody. BTLA is an emerging inhibitory checkpoint. That plays a key role in regulation of immune function on not just T cells, but also B cells and certain myeloid cells, including dendritic. BTLA is also genetically associated with inflammatory diseases, and we have demonstrated preclinical efficacy with our antibody, very robust in animal models, and we recently presented that data at a scientific meeting in 2020 called FOCIS. We look forward to advancing this antibody into the clinic, and we'll be filing an IND equivalent shortly for the advancement of a [indiscernible] tier Phase I in the remainder of 2021. I'd like to spend a few minutes closing the story on etokimab, which is our anti-IL-33 antibody. We've recently completed our ECLIPSE Phase II trial in chronic rhinosinusitis from nasal polyps as diagrammed on Slide 25. And as shown on Slide 26, after completing the week-16 dosing interval in this trial, while there was some efficacy and signal associated with etokimab in the treatment of chronic rhinosinusitis at the level of NPS, particularly as an endpoint. Unfortunately, we did not reach statistical significance and are no longer pursuing development of etokimab in this indication or other indications going forward. As shown on Slide 28, we have a very robust partnership with GSK across a number of immuno-oncology programs. And GSK has currently been doing clinical development across all the indications that are shown on Slide 28. We anticipate first approval of dostarlimab, our PD-1 antagonist antibody that has been licensed to GSK in the first half of 2021. And a second BLA has already been filed, and we anticipate acceptance of that BLA in the first half of 2021 as well. We recently revised our licensing terms with GSK, which was announced in October of 2020. Our royalties payable under that relationship on dostarlimab, were increased to 8% to 25%. We also gained a royalty on GSK's PARP inhibitor, which is called Zejula or niraparib, which will be starting in January 2021. We received a $60 million cash payment as part of that renegotiation, and we anticipate another $75 million in regulatory milestones in the next 18 months as approval of the dostarlimab goes underway in U.S. and Europe for the first 2 indications. I'd like to mentioned a few things about the proprietary technology platform that has been the underpinning of all of the programs that have been generated at an AnaptysBio. As shown on Slide 30, the key technology platform associated with the company is based on somatic hypermutation, which is a highly important, highly conserved biological pathway within our B cells that occurs throughout mammalian biology. And the reason this pathway is important is because we inherit just a few hundred antibody sequences from our parents in our genome. But in order for us to survive out there in the environment, we need billions, if not trillions, of antibody specificities to fight all the infectious diseases and various other things that we encounter. That mathematical disconnect is made possible by somatic hypermutation, which creates diversity in vivo, in situ, that allows us to generate the antibodies that we need for protection. AnaptysBio is the only company with the know-how and the IP and the expertise to leverage somatic hypermutation in vitro for drug development. And this is the platform that has allowed us to generate antibodies against difficult targets and generate functional diversity against all the programs that we discussed earlier. So the key advantages of our platform is that we are able to access unprecedented antibody diversity. We're able to generate antibodies with high potency and functional activity. We view risk manufacturability early and often. And we're doing all this with speed in approximately 2.5 years as we go from concept to IND, which allows us to stay at the emerging forefront of immunology. We've already put 7 antibodies into the clinic. That were generated through this platform internally within the company, and that's about to be 8 with the advancement of ANB032 into the clinic shortly later this year. So in summary, as shown on Slide 33, we have a lot of clinical catalysts coming up in 2021 with respect to imsidolimab program. We anticipate sharing additional detail from our GALLOP Phase II trial at a medical conference during 2021, and advancement of a Phase III trial or initiation of a Phase III trial in GPP in mid-2021. We also look forward to unblinding and reading out top line data from our POPLAR trial, which is a Phase II study in PPP, which we anticipate will be in this quarter of 2021. We also look forward to advancing and top line interim data from our EMERGE trial for the treatment of EGFR and MEK skin tox, which is a really interesting and important indication going forward. And we look forward to advancing the program in ichthyosis, hidradenitis suppurativa and acne as additional opportunities in the immunodermatology space. With respect to ANB030, we look forward to top line data from our healthy volunteer Phase I in mid-2021, and we anticipate advancement of that program into 2 Phase II trials later this year, alopecia areata and vitiligo. With respect to ANB030, we look forward to filing an IND equivalent shortly for that program and the advancement of our BTLA modulator into a Phase I trial this year. In summary, AnaptysBio is a clinical stage novel antibody engine focused on first-in-class inflammation opportunities. Our strategy is to develop antibodies against emerging inflammatory opportunities and immuno-oncology opportunities. We are advancing development in 8 dermatology applications currently, and we look forward to a number of clinical catalysts later this year. That's it for my presentation. I'll hand it back to you, Anupam.

Yes. Hamza, if you want to introduce the broader team on the line, we can get started.

Sure. I have 3 colleagues with me here today. Eric Loumeau is our Chief Operating Officer. We also have Dennis Mulroy, our Chief Financial Officer. And we also have Paul Lizzul our Chief Medical Officer, who is also a dermatologist as well.

Great. We've got a couple of questions in the e-mail portal. The first is, can you elaborate on GPP trial enrollment completion and when in the quarter, we should expect the data. I guess I would add on to it any color on last patient type of granularity?

Yes. Enrollment was completed last year, and we're in good shape for that data to be unblinded in Q1. We haven't given specifics on when exactly in Q1. So we'll just leave it at that for now.

Got it. I think there's some confusion on the street. What the primary endpoint of POPLAR is in terms of is it change from baseline in PPP PASI? Or is it a portion of patients achieving PPP PASI 50? I guess -- so to be therapeutic.

It's the former, but it changed from baseline in PPP PASI at week 16. Well, of course, be looking at different derivatives of that, both in terms of percent change, and also, we'll be looking at responder analyses such as PPP PASI 25 or PPP PASI 50 as well. But our overall metric here and what we would like to see in order for advancement of the program is a change from baseline of 25% to 50% in the drug arm relative to placebo in order to see enough efficacy for us to move forward. And PPP is a highly neglected condition. There's no drugs available, very brittle condition that is difficult to treat. So 25% to 50% improvement from baseline would be quite meaningful according to the KOLs in this indication.

So baseline relative to placebo.

Baseline relative to placebo.

And just to round this up, what is your assumption on how placebo performs in this?

We obviously don't know until we unwind the data. Our anticipation, given that this is a very durable disease, and it doesn't spontaneously disappear, given the nature of the inflammation and the indication. We anticipate that placebo will be very dramatic, and there won't be much impact there from placebo, but ultimately, we don't know until we unblind the data.

Got it. We've got another question in the e-mail portal here, which is, you said you expect your net burn this year to be less than $100 million. What does that assume in terms of milestone payments from GSK? Can you remind us of your royalty rate on LAG-3, TIM-3 and the bispecific?

Sure. So yes, our net burn anticipation for 2021 is less than $100 million. We have modest assumptions as far as some of the filing acceptance and approval milestones associated with dostarlimab in the first 2 indications. But they're relatively modest. And we aren't really assuming a whole lot in terms of royalties this year on that net burn. As far as our royalties on the other programs, those royalties stay at 4% to 8% as they were previously. The recent renegotiation was applicable to dostarlimab, that changed dostarlimab royalty from 8% to 25%. But the TIM-3 and LAG-3 programs, including the bispecific, would be paid at 4% to 8% as was originally the case.

Okay. Let me turn it over to Matt, from the team for a couple of questions.

Yes, a couple of questions on GPP. I think Hamza, you mentioned that the current epidemiology estimates for GPP may be understating based on some claims you've seen. So maybe you can expand on that a bit. And then second question is related to initiating the Phase III trial. It's conditioned on trial protocol alignment with the FDA. So does that imply that you need to have some sort of type B meeting before then and then kick things off?

So in terms of the prevalence of GPP, there's a range of epidemiology in the literature and the most conservative of that wouldn't indicate 3,000 patients in the U.S. However, as is typically the case with orphan diseases, they're underdiagnosed, are often mischaracterized because there's -- at this point, there's no drug available for GPP. So as we've looked at claims analysis, and there's actually an ICD-10 code for GPP and overlap that with other aspects of the disease. We found that actual claims by unique patients on an annual basis are much, much higher than 3,000, and we'll be sharing some additional information from that later this year as we complete that analysis. But there's reason to believe that GPP is a bigger disease than 3,000 as a result of under diagnosis. And as has been previously the case in other orphan diseases, you find a whole lot of additional population once there's a drug available to use for patients.

And then on the Phase III initiation?

On the Phase III initiation, yes. So we look forward to that in middle of 2021. The FDA was quite supportive of an orphan disease plan as presented based on our data and the high unmet medical need and the life-threatening nature of GPP. So we did align with the FDA on key design elements in terms of the size and the follow-up and the endpoints associated with that Phase III, and we're quite pleased with the interaction. We will be meeting with them again as part of the protocol design, and we will also be sharing with them final data from the week-16 GPP Phase II trial, which is the GALLOP trial. Before we initiate the Phase III in the middle of 2021.

Hamza, what are the read-throughs from the GPP Phase II data that we know to the potential PPP data like -- yes.

Yes. So we do believe there's some derisking between the 2 indications. They're both quite similar in terms of the disease presentation of pustules and inflammation and erythema. And they're both known to be occurring through the IL-36 pathway as up-regulation of cytokines drive both of those diseases. In particular, because our GPP population was not a mutated population. It is environmentally driven GPP. That has risen 1 cross-talk to PPP because PPP is also not a genetically driven condition and is environmentally driven up-regulation of IL-36 cytokines. So we see those 2 being quite related and read-through from 5 to the other. However, just to be fair and balanced, PPP is a different indication, different endpoints, different trial, different time line, different dosing. So there are some unknowns with the PPP trial that we will address once we have the data.

As we think about kind of the model here, what are pricing considerations for the drug, given the significant differences in GPP versus PPP populations? And where are the push-pull levers here to consider as we think about building out the model?

Yes. So on the one hand, given the orphan nature of GPP and the high unmet medical need in the life-threatening nature, the pharmacoeconomics of GPP could potentially support an orphan disease pricing type of dynamic. If it was a drug only for GPP, that would certainly be the case. However, what we would ultimately look to do is balance penetration into the other opportunities, the 5 other indications that we're pursuing, and particularly indications such as PPP, which are much larger, hidradenitis suppurativa, EGFR/MEK, skin tox. And depending on how the clinical data rolls out over the next couple of years, it may make sense for us to pursue a more normal psoriasis vulgaris like pricing in order to gain penetration in order to be -- to have imsidolimab be applicable to help those other patient populations as well. So we haven't made any hard decisions about pricing. We'll let the clinical data drive that discussion over the next couple of years. And we look forward to making imsidolimab available to as broad of a population as the clinical data supports, and the pricing will resonate with that strategy.

Okay. A couple more e-mail questions here, which is, in PPP do these patients have systemic elevation of IL-36? Or is it local? And is POPLAR powered to hit a p-value of less than 0.05?

So we have powered the trial for statistical significance, and we look forward to assessing stat sig when we look at the data. In terms of IL-36 cytokine elevation. In general, with PPP, most of the activity of the IL-36 cytokines going through the receptor occurs at the level of skin. So you see dramatic elevations of IL-36 signaling and cytokine expression in biopsies from the skin. However, it's less of a systemic condition, unlike GPP, which is all over the body. PPP tends to be more resident and particularly active in the dermis, in the skin and particularly in areas of inflammation of the skin. So the hypothesis would be that if you took biopsy samples from unaffected areas where -- outside of the hands and feet, IL-36 levels seem to be lower even in other contralateral parts of the body, and it's in the hands and feet that IL-36 levels are the highest and extremely up-regulated in the PPP situation.

And then another e-mail question here is, are you planning to study the same dose you previously studied in your Phase II GPP study in Phase III? Can you provide a little bit more detail on how you chose your anticipated doses for the program? It looks like you've been kind of steadily increasing your dose that you plan to study.

Yes. So fortunately, with imsidolimab, we don't have a safety signal and have not observed any dose limitation at this point. So we have freedom to pursue a variety of different doses. In the case of GPP, we specifically chose to use a 10 milligrams per kg or 750 mg IV-loading dose because of the severity of that medical condition and because of the need to observe efficacy as soon as possible given the life-threatening nature of that disease. So that's the reason why the dosing is different in GPP. The way that we chose the dosing overall was to look for pharmacodynamic effect, particularly in our Phase I that we conducted with imsidolimab, which is reported, and that data is published and on our website. And there, we observed pharmacodynamic activity in the single ascending dose cohorts of that Phase I and understood from that pharmacodynamic activity, what dose levels were required and what frequency of dosing would be applicable for us to move forward with. So that's how we came up with the doses initially, and we'll continue expanding that profile. In the Phase III itself, we haven't commented on what specific dose level we will be using. But we'll provide granularity into that as we start the trial in the middle of 2021.

Got it. Okay. I don't see any more questions in the e-mail portal. So Hamza and team, I want to thank you guys so much for your super productive session this morning.

Thank you so much. Appreciate it. Thanks, Anupam and Matt.

Thanks.

Thanks, everyone.