Annexon, Inc. (ANNX) Earnings Call Transcript & Summary

All right. Let's go ahead and get started. Welcome, everyone, to the JPMorgan Healthcare Conference. My name is Anupam Rama. I'm one of the senior biotech analysts here at JPMorgan. I'm joined by my squad, Priyanka Grover, Malcolm Kuno, Rati Pinge. Our next presenting company is Annexon. And presenting on behalf of the company, we have CEO, Doug Love. Doug?

Excellent. Thank you, Anupam and JPMorgan. We're delighted to be here today to give an update on Annexon Biosciences and our path towards a breakthrough 2025. I'll be making forward-looking statements, which you can review our materials on file. Founded 10 years ago, Annexon started with the premise that we are going to completely transform the complement landscape and drive immense value by translating our pioneering complement science into effective therapies for millions of patients suffering from complement-mediated diseases. Grounded in our scientific platform, it has now been clinically validated in an array of indications and has broad applicability for multiple therapeutic areas. Leading the charge is our most advanced program, Guillain-Barré syndrome, which is poised to replace the standard of care with a recent Phase III positive program, which is differentiated from the products that have been used for 40 years in this space. This is a blockbuster space, which we're quite excited about and I'll talk more to. Following Guillain-Barré syndrome is our Phase III program in geographic atrophy, which also has produced differentiated data from the marketplace as it is the only vision-sparing -- significant vision-sparing product in development, having produced statistically significant data there, and is poised to disrupt a multibillion-dollar blockbuster market. And last but not least is our first-in-kind oral classical complement inhibitor, which is designed to disrupt the space by providing robust efficacy, coupled with convenience in the form of appeal in diseases that are currently treated by frequent IV infusions and subcutaneous injections. In total, we have multiple ways to win with this platform, each one of the programs having the potential to be best-in-class. And so we're excited for the outlook for 2025 and beyond. Turning to our science. It is where we are founded and grounded. We are taking a pioneering scientific approach to stop complement-mediated, -driven neuroinflammation where it starts on disease tissue in autoimmune, neurodegenerative and ophthalmic diseases. Based on discoveries of our scientific co-founder, the late Dr. Ben Barres, former Chair of Neurobiology, we are targeting C1q, the initiator of the classical pathway, to shut down both upstream and downstream complement so as to halt neuroinflammation in diseases of the body, the brain and the eye. With that founding discovery, we've spent 20 years studying this approach and the role of neuroinflammation in a host of neurodegenerative diseases and have produced more than 30 novel assays around this pathway to best understand the role where complement is playing a key driving role in the disease process versus a supportive role. That, of course, increases our overall PTS. We've taken those learnings into what we call a strategic drug development approach. It's a bit old school in that in each of our programs, we have started with a signal-finding study to further elucidate the role of complement in a diverse array of diseases with strong execution across those. The net result is we've been able to produce really what is game-changing data across our flagship programs, which we will talk more about. Now on the basis of this data, we've been able to develop the leading complement-focused pipeline with multiple ways to win. Led by our flagship programs, each has a diverse drug candidate that's leading the charge there. And as I've said before, we've produced very unique data. And as a result, we have the potential to treat millions of patients suffering from complement-mediated diseases. Our flagship programs have also informed and derisked our next wave of programs, which gives us the opportunity to continue to generate value for many years to come. Turning to 2025, really centered upon 3 key catalysts to drive really breakthrough value. The first is in ANX005 in Guillain-Barré syndrome. There, we're poised to submit our first BLA submission in the first half of this year, while we continue to advance our discussions with EMA towards MAA over the course of the year. Secondly, with ANX007, our Phase III pivotal program, a large program that is global in nature, we anticipate completing enrollment of that study in the second half of the year and reading out the data in the second half of 2026. And then finally, with regard to our oral ANX1502 program, first-in-kind oral program in the classical complement space, we will produce clinical proof-of-concept data in the first quarter of this year in cold agglutinin disease. And from there, we will also update on future indications in which we look to take this program forward. We're really excited by a host of indications to move forward into that have been clinically validated, and so more to come on that. Finally, as it relates to the overall health of the company, we have cash runway into the second half of 2026 to achieve all of the milestones you see here on this slide. And so we're really well positioned to really break through this year and transform the company and taking it to the next stage of its life. Now to double-click into Guillain-Barré syndrome. This is a first-in-kind targeted therapy for GBS. There have been no advancements in this space in over 40 years. This represents our third study here, and we're excited by the differentiated data that's been produced out of this program and really has set it up to replace the standard of care. A few headlines from our recent Phase III program where GBS -- ANX005 and GBS showed neurological success in this late-stage study, really promising agent, improving disability in this disease across all measures related to GBS, and I'll show you some of that data. First, however, just kind of to paint the picture, this is a devastating disease, really an acute neuromuscular disease that causes paralysis overnight and really robs patients of their -- people their ability to live their best lives. Notwithstanding standard of care, IVIg, folks are really quite -- still quite suffering from this disease. In fact, almost 50% of patients treated with IVIg are admitted to ICU immediately upon coming into the emergency room. 1 in 4 require mechanical ventilation. 1 in 5 can't walk after a 1-year period of time. You can just only imagine that one day, you were healthy. You got an infection and the next day, you can no longer move and function independently, really quite devastating. And it's not a cheap disease to treat either. It costs the health care system more than $2 billion a year to treat this disease, really associated with patients in ICU on ventilation, skilled nursing facility and the like. And unfortunately, there are no FDA therapies for this disease. As Hugh Willison noted, this is a neurological emergency, and we really do need therapies who are available to provide immediate and aggressive stopping of the disease process and a fast recovery to get patients back to their normal lives. And we're encouraged by -- that's what we've seen in our Phase III program. Here's just a snapshot of some of the data. Importantly, what we saw in our Phase III program, which is, again, a large, 240-patient, placebo-controlled study, we saw a very rapid benefit in this study where we improved muscle strength by week 1 in the patients treated with ANX005. It's a really important time period. That's the time when you're making decisions on whether to move patients into ICU or provide additional alternative therapies, which really are not quite effective. The impact on muscle strength at week 1 translated into very durable results. You can see by week 26 or 6 months, 2.5x more patients treated with ANX005 were able to recover to full strength at that time point, so a really whopping effect early, which translated to full recovery 6 months thereafter. We also did a real-world evidence study, which is really quite important for us to evidence the impact of ANX005 against standard of care or IVIg. There, very similar to what we saw in our placebo-controlled study, we saw a more complete recovery and fast recovery. So very much what -- like what I showed on the prior slide, ANX005 versus IVIg showed a 10-point improvement in muscle strength by week 1. And you can see that IVIg, those patients are still declining at that time point. And then looking out to 6 months, you can see with treatment with ANX005 on the right, we saw almost 2x as many patients return to full recovery versus the standard of care at 6 months. So a marked improvement on what the therapies are currently available to treat this devastating disease. We also went further to look at the impact of ANX005 on key measurements of disease burden. And there, too, you see a robust effect with ANX005 versus standard of care, particularly IVIg. We had half as many patients treated with ANX005 actually go on to ventilation versus IVIg. And for those patients who did move on to ventilation or ICU, we got them off the ventilator and got them off -- out of ICU almost 2 weeks sooner than IVIg or plasma exchange. You can imagine every day that you're in the ICU, every day that you're on a ventilation is a game-changing event for the patients, the hospitals, their families, et cetera. So we're really pleased by the outcomes here. All of that positions ANX005 to really own what is a blockbuster market. GBS occurs in 150,000 patients worldwide, importantly, 22,000 patients annually in Europe and the U.S. And as I said before, the current standard of care is suboptimal to treat this population. There's been no placebo-controlled studies ever conducted with IVIg. So we don't really know its true treatment effect. Notwithstanding that, 90% of patients are treated with IVIg off-label due to the severity of the disease. You really have to do something for this patient population that was otherwise normal and now can no longer function. Although contraindicated on the treatment guidelines, unfortunately, half of the patients treated with IVIg are getting a second course of treatment. It's now been clinically established that IVIg in the second course of treatment results in worse clinical outcomes and more importantly, higher safety events. Physicians are still putting patients in a second course of treatment because they just have no other options. And it really speaks to the need and the debilitating aspect of this disease. Last thing I'll note is that IVIg carries a black box warning, and so that's not trivial. At a time that you're fighting a disease like GBS, you're taking therapies that could really have an impact on your overall health as well. By contrast, as I showed in the prior slides, ANX005 has really differentiated outcomes. We got patients better and more -- faster and more completely on function, extremely well tolerated. We avoided ICU and ventilation, and we reduced ventilation time. All of that leads to what we think is a robust commercial opportunity. One of the things to note about GBS is everyone gets treated. As I said before, 90% of patients take some form of therapy because you just have to, given the debilitating nature, but it's a very concentrated circumstance. This is an incidence-based disease. And what we've determined with extensive research is that 440 hospitals account for 80% of the GBS population on an annualized basis in the U.S., and 3,000 physicians are responsible for writing scripts and treating these patients. What that means is it's a very tractable commercial opportunity where we can have a very focused commercial footprint to target these physicians and these patients and help them get better. We're well underway in building out our commercial operations. We have a very strong med affairs group that's out in the field now calling on these hospitals and educating the physicians, managed care folks and the like. So we're really encouraged by the outlook to day 1, really get after this disease and drive immense value for patients and our shareholders. On the go forward, we've checked the 2 most important boxes heretofore. One, obviously, winning on a large placebo Phase III study and also demonstrating that -- in a real-world evidence that ANX005 is superior to IVIg and plasma exchange in that analysis. In terms of next steps, we're actively engaged in discussions with the U.S. and EU regulatory bodies. We plan to submit our BLA submission in the first half of this year, and we are, of course, ramping our education and commercial opportunities in this disease. This offers the opportunity to be Annexon's first commercially available drug. We're really encouraged and excited to be bringing this forward as it is a game changer in this space. Second, I'll turn to geographic atrophy, the first program in geographic atrophy to provide significant visual preservation in this really devastating patient disease. Some headlines from our Phase II proof-of-concept study were our neuroprotective approach, by blocking C1q, showed significant preservation against vision loss with the opportunity to preserve sight in an elderly population. The average age of the patients in our study coming into the study were 80 years old and above. So it's a population that you really want to get after. You also note headlines here were this is the only program, first and only program, that has received PRIME designation from Europe, in effect, breakthrough, really evidencing the import of our functional data to preserve vision in this population. Very much like GBS, the unmet need here is quite high. GA is a severe disease that limits an elderly patient population's independence. Looking at vision loss here, 3 lines on the standard endpoint, BCVA 15 letter means you've lost 50% of your vision. You have to turn in your driver's license. You can no longer operate independently. Many of these folks are moved into skilled nursing facilities where they have to have family members come move in with them. So it's a really devastating disease. It's the leading cause of blindness, impacts 8 million patients worldwide. There are no FDA-approved treatments impacting vision in this population. Unfortunately, and indeed, there are no treatments at all approved in Europe or in Asia. In the words of Dr. Nora Lad, Vice Chair of Clinical Research at Duke Eye Center, she says, unfortunately, currently, treatments have not translated to protection of clinically meaningful vision for patients. And our mission is to do exactly that. And so we've embarked on a really robust program, starting with a proof-of-concept study that we conducted last year or we read out last year. This is a 270-patient study that was run here in the U.S. And what we like about it is the comprehensive nature of the data. Shown in the top panel on the left, we've shown that we were able to preserve significantly vision in a normal light conditions. You can see there that 6% of the patients in every month, shown in red, lost vision versus 21% of the patients in the sham arm. Moving to the right, in a setting of low light conditions, we also significantly protected vision there. 7.6% of the patients in the every month group, shown in red, lost vision versus 20% in the right or in the sham group. And importantly, in those patients who have earlier-onset geographic atrophy, none of our patients in the every month group lost vision. That's 0 out of 56 versus 17% in the sham arm. That's a really significant finding. It means treating earlier with ANX007 is going to result in bigger and better outcomes and probably expands the pool. And that's what you would expect to see in all neurodegenerative diseases. If you have an effective therapy, it should work better earlier, and that's what we see in our data. And then last but not least, it's really important to call out our functional benefits. Targeting photoreceptors in the eye, these are neurons in the eye, which are responsible for visual acuity and the only structure in the eye that directly correlates with visual preservation. There, you can see in the central fovea of the eye, where you have vision loss, we preserved almost 60% loss of photoreceptors versus sham in that group. So what we've done here is shown that we have protected vision and the structures that are associated with vision in our dataset, which is a really comprehensive package that has been well received by KOLs, patients and importantly, the regulators who we've talked to around the globe. In terms of next steps, we've checked the box on a really robust proof-of-concept study. We've got an EMA PRIME designation and robust alignment with the FDA. And our next steps are to complete the Phase III study, which is really designed to replicate what we did in our proof-of-concept study. So we have not deviated much from that and really just going deep on that. This is a large study, 630 patients globally, enrolled predominantly in the U.S. and Europe, and we're really excited by the outlook on this with it reading out in the second half of 2026. Finally, turning to the first and only oral classical complement inhibitor in the space. We're really excited with this potential to completely disrupt the biologics-treated marketplace for antibody-mediated autoimmune conditions. As you all well know, these conditions, many of them neuromuscular [ in like ], like myasthenia gravis, CIDP, MMN, are treated by frequent IV infusions, whether that's weekly, every other week and occasionally once a month. That's how this market is being managed. These are severe diseases of anemia. Patients have ability -- inability to get out of bed at times and to manage their daily living. So our aim is to give them an oral tablet where they can get better from home, regain their freedom and have flexibility in the way they go about treating their disease. And this is a large opportunity. What I like about it is the indications that are chiefly in our mind are those indications that have already -- already have been clinically validated from a clinical perspective, so the PTS is relatively high. And we're bringing forward a drug that really meets the patients' needs in these disease spaces. Our drug, ANX1502, is targeting the activated form of C1s. That will be familiar to many of you who have studied the antibody-mediated autoimmune space. And in our healthy volunteer studies, it's been generally well tolerated in a tablet formulation, twice a day dosing, which is really quite convenient. And it's shown robust inhibition of the classical pathway, comparable to autoantibody or antibodies that have been used in this space previously like ANX005 or sutimlimab, which has been approved for use here. You see a bit of that data here on the right where our drug levels achieved greater than 100 nanomolar, which is the target trough level that you would want to see in diseases for which we are pursuing. So in terms of next steps, we're in a healthy -- we've completed our healthy volunteer work there. We've had initial in vivo pharmacodynamic signals in those studies as well, which is really quite important. And we're now looking to really confirm the dosing profile for our drug in a patient population. We're using cold agglutinin disease to do so, a very objective disease -- autoantibody disease. And there, the endpoints are objective, impact on reduction of hemolysis as measured by bilirubin as well as showing the ability to shut down the entire classical complement pathway. We anticipate data in the first quarter of this year. And with that data, we will announce the next set of indications we will go into. We think this is a game changer, candidly, and has an opportunity to really disrupt the marketplace. So we're excited by that. So in close, I will just quickly say we've got multiple ways to win in 2025 and beyond. It's been a 10-year journey to disrupt the complement space. We're excited with what we've done in terms of validating this clinical platform. We've got 3 flagship programs, each designed to be best-in-class in their respective space, multiple winning datasets across those diseases. They each have a differentiated profile and are positioned to completely transform the space in which they're playing, really, really prove important. I love our team. They've been able to execute exceedingly well. I mean think about the diversity of programs that we have. GBS and acute neuromuscular disease that's been run in Southeast Asia, GA, a chronic ophthalmic disease that's been run in Europe and in the U.S. And so we love that we've been on time, on budget, and we will continue to fight to do so. Love the team's fight from a cultural perspective. Warrior spirit is one of our key mantras as well as all for one. You guys have all been in drug development for a while. You know it's all about how do you solve it. We've been able to do that. And then our catalysts in 2025 and 2026 really are game changing. So we think we're well positioned for breakthrough. There's more to do, and we're excited to do that. So thank you for your time, and happy to answer any questions you have.

Thanks, Doug. I just want to remind folks that there's 3 ways to ask a question. The first is you can raise your hand and I'll call on you. The second is you can put a question in the portal and I'll ask it on your behalf or you can e-mail me. But I will kick off the questions here. Maybe on 005 in GBS, so now that you have the real-world evidence in hand, what are the final sort of gating steps of the NDA submission in the first half?

Yes. Great question. So we're next set to meet with the FDA for our pre-BLA meeting, importantly, to get a label in this disease, given that it was run outside of the U.S. And just maybe a little backdrop on that, we ran the program outside of the U.S. because it was deemed unethical to withhold standard of care in the U.S., IVIg, given the debilitating nature of the disease. So from the FDA, we need 2 things to get a label: one, win on your Phase III program, we've checked that box; and two, demonstrate that the patients in our study are comparable to patients in the Western world. In other words, is the data that we saw in our Phase III study generalizable to the U.S. It's why we conducted the large real-world evidence data that we released in December. And we're really pleased that we were able to match the patients one for one in our study with patients in a large registry of Western world patients. So we feel like we've checked that box as well, but we will go down and have that discussion with the regulator shortly and then look to file a BLA shortly thereafter.

And are there plans to publish or present some of the real-world data to the, say, broader physician community?

Yes, absolutely. So really pleased that IGOS, the registry that has done the analysis in the real-world evidence fashion will have submitted, and that will be published at the upcoming AAN conference, and we'll be at every conference thereafter with both the real-world evidence data as well as the data from our Phase III study. I think it's really important to continue to publish our data.

Questions from the audience? Yes?

For the -- you're mentioning continuing education for the physicians on GBS -- you're mentioning continuing education for GBS within the physician community. Would you be focusing predominantly in the 440 hospitals that were -- that you had mentioned within the presentation?

It's a good question. So it is a prioritized approach to education. But the first thing I will say is we want to treat all GBS patients. I mean this is such a debilitating disease. We can't emphasize that enough. Normal one day, the next day, you can't get out of bed. The 440 hospitals I alluded to do represent 80% of the patients in the U.S. And so we certainly have started to go in very deeply there with our med affairs group and others to ensure that they're educated both in person as well as digital media, et cetera. We will continue to do that. But we are pushing out further than that. It's just important to try and treat as many patients as possible with this, what we think is a very unique approach to this disease. So thank you.

What are the key precommercial activities that you're going to be doing kind of in 2025 to prep the market?

Yes. Really good question there. So it's multifaceted, as you alluded to. So we, of course, are engaged in heavy medical education. I mean the thing to note about GBS is there's been literally no advancements in 40 years. And so physicians just typically treat it in the emergency room. The physicians have had no reps or MSLs calling on them. So we're making sure that people really understand the disease, how to diagnose the disease, the course of the disease and how important it is to treat quickly. I mean what you hear in this space is time is nerve. So the more quickly you can treat, the better. So we started off with a really robust medical education campaign, both in person, digitally and print. From there, we are very active on the managed care front, meeting with hospitals and payers to ensure that we can get this therapy on formulary. One of the things that we did in this study, which was really intentional, is we looked at measurements of disease burden. What are the impacts to patients and physicians that they care about from this disease as well as from payers? And so when you look at things like days on ventilation, days in the hospital, days in the ICU, these are the things they really care about. These are the discussions we're having with the payers and the hospitals now, which will allow us to get reimbursement for this drug, we think, rapidly and at rates that are really beneficial to us and the patient population. So really active on the managed care front and then really a robust commercial plan to launch this drug initially in the 440 -- excuse me, I got a little frog today, in the 440 hospitals. Distribution is the last thing I'll just talk about on that. It's really important. Obviously, this is a neurological emergency. You have to have drug there. You don't necessarily know which hospitals it will be at immediately. We do know in the 440, they're going to see repeat cases of GBS. And so there, we'll be providing drug, buy and bill. It will be on site there. We also can provide our drug to these folks on consignment, so they can have it and they'll pay for it when they use it. And last but not least, it's just kind of a standard offering for some of the specialty distributors. We can do it drop shipment in a matter of hours. What's important about ANX005, it's really very stable. The shelf life is 4 years with just standard hospitalization. So the drug can pretty much always be on site or we can get it to you in a matter of hours. And again, our aim is to just treat patients. We're starting with that 440, but we want you wherever you are in the U.S. and Europe. Malcolm?

So it's pretty clear, GBS data in terms of days in the hospital. Do you have any data cuts or even anecdotal evidence about -- when it comes to readmission?

Readmission.

Yes.

Yes. Very low readmission rate. Once we get you through -- so it's a disease of muscular damage then ultimately, full-body functional damage. You gain muscle first and then you start getting -- being able to move functionally. So you're able to use a remote or whatever with your hands then ultimately, you're able to get out of bed. Once you do that, assuming you're getting the right kind of physical therapy, et cetera, you're just on your road to recovery. Hopefully, you're getting to full recovery. We've been really pleased with what we've seen. I will say this is the first study to look out to 6 months. Typically, what you see, if you go back and look at IVIg, plasma exchange studies, you're seeing 4-week data points. Occasionally, you'll see an 8-week data point. We carried this all the way out to 6 months, so that we can demonstrate the durability of our treatment effect. And that's what we like about some of this data here on the right, where you're seeing patients get to full recovery on the GBS disability scale. That means they're able to walk, run without assistance. So they're able to be back to their full selves. And you can imagine if you're an employee and you want to get back to work, that's what you're looking to get to.

Additional questions from the audience? Yes, go ahead.

Because I had the mic. As a follow-up to that, in your 6-month duration, have you picked up any side effects because you're completely floating C1q?

Yes. We've been really, really pleased with the safety profile for this drug. So this is a single infusion. So you're stopping this autoantibody attack, which typically lasts anywhere from a week to 2 weeks right at the start. So you're shutting it down completely, your drug does its thing, and then you allow complement to come back. So once you've had that initial infusion, if you really haven't seen a safety event related to the drug at that point, it's unlikely you're going to see it thereafter. And so the safety profile has been really quite nice. We've seen a bit of tolerability upon the initial infusion in the form of a skin rash that's transient and goes away. But outside of that, we've been really encouraged by the safety profile of this drug.

Another question?