Apogee Therapeutics, Inc. (APGE) Earnings Call Transcript & Summary

Great. Thanks for joining us again, everyone. It's my pleasure to introduce the Apogee Therapeutics team. We have CEO, Michael Henderson; CMO, Carl Dambkowski; and newly appointed COO, Jeff Hartness, joining us today. So quite the lineup. And maybe I'll kick it over to Michael to give a brief company overview, and then we'll jump right into the Q&A.

Thanks. Appreciate it, Alex. And I'll just do a quick moment. Jeff joined us CCO, Chief Commercial Officer last week. Very excited to have him on board. So Apogee, we are developing potentially best-in-class antibodies going after the largest markets in inflammation immunology, specifically best-in-class monotherapies for atopic derm. We're currently in Phase II with that critical data coming next year, what we think could be a best-in-class treatment for frontline patients overall. Then that's our IL-13 inhibitor, a broad pipeline behind that, including IL-4 receptor alpha OX40 ligand and TSLP as well, which help us to come with first-in-class combination approaches across the rest of type 2 inflammation. So really excited about the pipeline that we have. I think we have the potential to become a leading, if not the leader in biotech in these conditions and excited to kind of dive into it today.

Yes. So let's kick things off with 777. And I wanted to ask this question in upfront just sort of setting the stage for what is 777? And why is it not just lebrikizumab plus a YTE [indiscernible] onto it? How did you design the molecule? How is it unique? And how does that contribute to unique IP?

Yes. Great question. One that we've gotten kind of over the years. I think that it's important to remember, we've been at this for a number of years now. The company was themselves for quite some time, we've raised close to $1 billion to not just create a good antibody, but the fully optimized antibody that we can against IL-13. So many years ago, and our IP to start to publish, people are now seeing this. We started by adding YTE and the lebri. When you do that, you get an okay antibody. It's just not -- you still call the baggage of a 20-year old IgG-4, hard to formulate, high viscosity antibody. What we did on this, we tried out different backbones. We tried out different half-life extension mutations. We tried out different formulations. The end result is something that is a very stable much higher formulation concentration, right, 180 mg per ml versus 125 mg per ml antibody that also has 3x the half life of lebri. So 50% greater concentration, 3x the half-life. That's how we're going from leverage every 2- to 4-week dosing out to every 3- to 6-month dosing. That also enables us to explore higher exposures while still decreasing injection burden. And I'm sure we'll get into that, but we believe that could lead to improved efficacy as well.

Yes. No, definitely. Helpful overview. And I did want to start then with highlights from your Phase I data back in March. It seems like a long time ago now, but just back in March, maybe sort of the key highlights as it relates to achieving that product profile that you hope to.

Yes, happy to. Midyear readout that we're really happy to bring in March of last year or this year. Carl, do you want to kind of speak to the highlights of that data readout?

Yes. No, happy to. And it does -- it -- a lot happened since March for us too, and I know we'll get into the other programs, but have also entered 2 other programs into the clinic since that time and launched our Phase II trial. But on APG777 and probably many on this call familiar with the data. But just as a reminder, we released interim Phase I data from our healthy volunteer, healthy participant study, really looking at safety, PK and pharmacodynamics. Highlights really are well-tolerated safety profile in line with the class, right, what we would expect for an IL-13 targeted therapy, which has really shown to be incredibly safe and we're showing that in our Phase I trial. Second is the optimized PK profile, really building on the engineering that the team did and Michael discussed, but a 75-day half-life for APG777, that's 3x the half-life of lebrikizumab and 3x the half-life of kind of your typical monoclonal antibody. It also showed dose proportionality. So look really good on those parameters and low variability overall, too. That's really nice because that helps us be able to better predict exposures patient to patient. So can -- could help with the ability to predict responses of patient to patient as well. And then I think a really exciting piece from the healthy volunteer data too and not something that you're always able to show from healthy volunteer data too was really important and meaningful impacts on pharmacodynamic markers and specifically kind of the 2 key biomarkers for IL-13 targeted therapies as well as atopic dermatitis. The first one being PSTAT6. That's kind of the first downstream marker after the key event for atopic dermatitis, which is the heterodimerization of IL-13 receptor alpha 1 and IL-4 receptor alpha with IL-13 as the glue in between. So when that comes together, that complex come together, that's the key signaling event that leads to the cascade of inflammation that is positive for atopic dermatitis. And the first thing that happens after that complex comes together, as phosphorylation of STAT6. What we've shown is near complete and prolonged inhibition of PSAT6 for -- up to and including 3 months after a single dose of APG777. And at the time of that data cut, that was just the longest follow-up we have. So we're continuing to follow that up and excited second half of this year to show additional follow-up data on that. So really exciting, right, the near complete and prolonged inhibition. And then the second piece that we showed in terms of pharmacodynamic markers, which I think is really exciting, too, is TARC. And if there's a biomarker for AD, it is TARC. It's correlated with severity. It shows changes after effective treatment, et cetera. From what we showed there in a non-head-to-head comparison is similar maximal inhibition compared to DUPIXENT, who also looked at TARC in a Phase I healthy volunteer study. but again, prolonged inhibition compared to DUPIXENT. So that kind of show a rebound after around 4 weeks in TARC in healthy volunteers, and we showed sustained inhibition up to and including 12 weeks. Again, just the longest available follow-up we had at that time. So really exciting for us is we're taking validated biology into the clinic, but optimizing the profile of APG777. I really should think this data release showed both of those points. One, the validation of the biology, both through PSAT 6 and TARC as well as the really optimized profile and the potential to enable every 3- to 6-month dosing with that 75-day half-life.

Yes. And to that point, you're now in Phase I. And Carl, you've talked about sort of the rationale behind the design of your Phase II combining a protocol for the IIa and the IIb. Maybe can you talk about the design of the trial, the reason to include both those in the same overall protocol and then any similarities or differences versus other contemporary studies, at least for the induction trial.

Yes. So great question. And yes, the Phase II trial currently ongoing, we announced our first patient in for that in May of this year. So now ongoing for 4 months also seems like a short and long time ago, although at the same time. But A couple of key aspects to the trial is, one is, as you said, Alex, we're combining kind of proof-of-concept portions of the study with dose optimization portions of the study. So your traditional Phase IIa and your IIb component, and we're putting that into 1 protocol. And what that really does for us is it accelerates time lines towards BLA. If you think of kind of the "typical path", you finished your Phase Ib, your Phase IIa study, you look at the data, you think about the next protocol, you restart up sites, et cetera. That lag between the 2 studies can be months, but is often a year or more in between them. So by including these and all the same sites in both parts of this we really maximize operational efficiency and can save months or years in our path towards approval. A second key piece of it is the Phase IIa or the Part A portion of it, which are a proof-of-concept portion of it, which will read out second half of next year. And this is about 110 patients randomized 2:1 to APG777 or placebo. Now that end is really important to us because a lot of data we've seen from early-stage biotechs in AD or any other indication of very small sets, but that 110 patients actually gives us greater than 90% power for the primary endpoint. So this is a real and meaningful readout and we're reading out the key atopic dermatitis endpoints at 16 weeks, which is what DUPI has shown, what lebri has shown, right? And so we'll really be able to take that second half of 2025 data and compare it to what others have done, both in terms of size of kind of Phase IIb type studies usually as well as timing of the endpoint overall. And we've seen that historically, Phase II data for atopic dermatitis is correlated remarkably well with Phase III data. Like the correlation is much, much, much greater than 0.9 in terms of R squared, which having worked in other disease areas before is not that common overall too. So a lot of things going into the thought behind that design and getting real and meaningful data second half of next year, but also optimizing our path towards BLA long term.

Yes. Yes. The other piece I would just plug on the study is we have maintenance coming after that. So the first Phase IIa atopic derm to our acknowledge that does include maintenance as part of the trial design, which is not only very friendly for patients and -- right, in a world where you are competing for enrollment, right? A very, I think, compelling value proposition to be able to put forward to sites and patients. But also we'll then have an initial maintenance data on both the 3 and 6 month prior to starting our Phase IIIs. So it won't be a question of what we have in every 3 and 6 months, it will be what are the doses that optimize having both for launch. Sorry, Alex. Go ahead.

I was just going to say, Michael, you mentioned obviously part of the design element of 777 is the concentrate ability in the formulation. And you're also retesting this higher concentration and higher exposure in your Phase II, I guess like how strong is the evidence in your opinion that there is a clear exposure response for lebrikizumab and that you could potentially drive superior outcomes in your Phase II at induction?

Yes. I think there are 2 reasons of evidence. I'll let Carl kind of speak to it in greater depth, but there was a Phase IIb, which was remarkable, I think, dose dependency. So a very nice dose efficacy relationship. That top dose tested, which was what could be fit into a 2-milliliter injection dosed every 2 weeks. So actually what can match DUPIXENT's dosing regimen that's a higher at the highest dose that was ever tested for lebri. That was then the only dose taken forward in the Phase III and the EMA data that came out end of last year, just ahead of Christmas showed that there was within those 1,000 patients tested, a very nice exposure response when you look at the different weight groups. Carl, do you want to speak to kind of what we saw there?

Yes. So as Michael said, the EPA, the EMA review documents from the lebrikizumab approval now, we're waiting on the FDA one, lebrikizumab was just approved last week in the U.S. And they showed 2 pieces kind of within that, that I think are really important. One is this weight efficacy relationship. And why that's important for exposure is as you increase weight, this is true of just about any monoclonal antibody, you decrease exposure. And what they showed is as weight went down efficacy went up. And it's not kind of a little hint here or there. It's a very strong relationship across weight groups, across every key endpoint, including the most stringent endpoints of EASI-90 and IgA-01. So really strong evidence there, I think, pointing to the fact that there's something there. We also had within there, they talk about the exposure response model. And it's pretty brief, but essentially exposure is predicted response. So I think kind of Michael said 2, I'll split that into the kind of 3 data points, the Phase IIb, the weight efficacy relationship as well as the exposure response model. So 3 points of evidence saying we need to test the hypothesis of whether greater exposures are going to lead to greater efficacy. Now I say that, but I also want to like caveat that in every discussion we have with KOLs, one-on-one, blinded, whatever it is or market research, they all say every 12 weeks is there every 3 months to 6 months. is transformative even with equal efficacy to lebri and DUPI, which are every 2 weeks for DUPI and 2 to 4 weeks for lebrikizumab too. So still transformative even with equal efficacy data. So this is really kind of icing on the cake for us and we've designed our Part A regimen. I talked about the Part A, that 110 patients that will read out induction -- the 16-week induction data next year. We've designed that to tap into it. So it has 30% to 40% greater exposures compared to lebrikizumab, which is kind of similar exposures. We design that because that low weight group, that 60-kilo group that did the best in terms of efficacy endpoints had 30% to 40% greater exposure. So that's why we designed it to tap into that number. So based on that data. But we do that with about half of the injections of lebrikizumab. So we get the exposure benefit because of that optimized PK profile without having to take a hit in terms of injection burden for patients, we have a benefit in terms of injection burden. So really excited to read out that data, I think, a win for us is equal data, equal induction data to lebri and DUPI in the induction setting with that less frequent dosing, but also happy and excited to be testing this hypothesis of whether additional exposures can give us additional benefits for patients. And that can be in a lot of things, not only top line numbers, but decrease in flares and decrease in itch, other things that it could be beneficial for as well.

Yes. Great. Great. And you anticipate a lot of my follow-up questions. So I do want to ask 1 more 777 question on the commercial front before we move on to the rest of the pipeline, there's a lot going on. I guess you alluded to this, Carl, too, lebrikizumab finally approved in the U.S. Yes, maybe, Jeff, like, what are your thoughts on the launch and the potential read through to Apogee and just in general, how the field is evolving.

Sure. Yes. Thanks, Alex. I think, first and foremost, we expect because this market is so underserved and unsatisfied that Lilly will have a good launch here. I think if you look at ex U.S., that kind of guides us toward that as well. For example, Germany and the NBRxs that we see early on. I think secondly is when you look at this market as a whole, the penetration is so soft looking at biologics. And this is a huge market, right, Alex, we're talking about 3x the size of plaque psoriasis. So I fully expect that Lilly will have a solid launch here. I fully expect that it will continue to drive more patients from topical corticosteroids over into the biologics space. But there is a long way to go as this is so unsatisfied. And that is exactly why some of these changes that are being made, if you look at the dosing alone, the patients, physicians everyone is -- has a desire, a need and a want for a better solution.

Yes. Yes. And there's obviously so much more we could talk about, but also some much more to cover. And so I want to transition to 808 and specifically, why this is an exciting molecule versus dupilumab? And I guess maybe your rationale for going after respiratory and COPD here. Maybe I don't know you want to start, Michael?

Would love to. So why is it an exciting molecule versus dupilumab? Dupilumab, it's a great antibody. But again, right, it's dosed every 2 weeks and it has a lot of liabilities. So what we did here is we actually have a femptomolar antibody. So right DUPI is great. It's picomalar is a higher affinity binder. And you can see that across our assays and it does translate to improvements across a number of preclinical assays. And at least preclinically, we have over 2x the half-life of DUPIXENT. So we're looking here because we are starting from a shorter half-life, a lower base of DUPI's 15 days in the clinic to get to 40 days or above. That would get us into the -- from an every 2-week paradigm with DUPIXENT, to every 6 to 8-week paradigm. And when we looked at where it positioned us, we've kind of found ourselves with a just almost an embarrassment of riches, right, to be frank, with having an every 3- to 6-month drug with 777 for atopic derm, and we thought where could every 6 to 8 weeks still be quite meaningful. And COPD was a clear answer, right? There, you have an every 2-week drug that soon to be approved, hopefully in the U.S. for COPD. And that's all with TSLP, of course, coming years from now on the horizon, and we also added a TSLP ahead of that assuming that could happen. So the unmet need in COPD was kind of the clear rationale.

Yes. I guess to that expansion point, what does the COPD launch going to look like for DUPI? And what are you looking for, hopefully, later this year for that launch to get started?

Yes. I think it will be -- when we talk to different pulmonologists and folks that are waiting for that approval in the U.S.A., right, there's just nothing to these patients. And this is a disease which can kill you and lead to hospitalization and there's been a clear sign of signal repeatedly in their trial. So Jeff, welcome to add anything, but I think we're optimistic that Sanofi and Regeneron's bullish statements are merited.

One thing I would add is that likely they'll have line extensions from their AD indication that will allow them to get a quick uptick in the market.

And so the path forward for this, you're going to have Phase I data later this year. And then can you lay out kind of the next 12 months or so for this molecule?

Yes. So on Phase I data end of the year, we're then launching a Phase Ib in asthmatic patients as well. And we're doing that because we do want to show some activity on FeNO, which we think is a strong surrogate biomarker and it's not been linked to both FEV1 and exacerbation endpoints and later trials. That will help us to refine and validate the dose that we could then take into COPD next year. I think -- and we talked about this briefly, we did add TSLP earlier in the year around the data announcement. And we did that not knowing how the TEZSPIRE data would read out, but also thinking that when we look at respiratory indications, we actually don't see the exposure response evidence that we see in atopic derm in many of these respiratory indications. So for us, always want to have a best-in-class drug in terms of efficacy and dosing. We added TSLP so that we could also pursue combination approaches, either with 808 plus TSLP or IL-13 plus TSLP. And we just see more data, both ourselves and externally to help know what will be the optimal TPP to take forward.

Yes. And with your combination platform, you also have your OX40 ligand target. Can you talk about why that makes sense as sort of another foundation for combination as you think about expanding beyond TH2 targeting?

Yes. I'll start and then, Carl, please add on. When we look at just what has worked in atopic derm historically, there are only 2 mechanisms that are have ever worked in Phase II trials for atopic derm that is IL-13/IL-4 and OX40 ligand. Outside of that, everything else has tried, but not kind of passed the bar in a Phase IIb trial. And when we look at what OX40 ligand does, it hits 3 types of inflammation, right? Type 2, of course, just like IL-13 but also Type 1 and 3. So it's the ideal optimal orthogonal target to combined with IL-13 to hit all the drivers that exist, including the heterogeneous drivers, which sometimes leads some patients to not respond. Carl, to speak to -- add on there.

Yes. Just to kind of add on to those points, right? Just mostly said it maybe a little different way, right, which is we know that IL-13 is the key or main driver in all of atopic dermatitis, right? So if you look at IL-13 levels, whether it be in the skin or peripheral blood, right? It's somewhere between 10x and 30x greater in patients with atopic dermatitis compared to healthy or non atopic dermatitis patients, right? And so -- that is the thing driving that. And I think the depth of response you see with lebri, especially in DUPI as well, right, shows that, that is the key piece in driving atopic dermatitis. That said, we know that it's a very heterogeneous disease, type 1 inflammation like interferon gamma, et cetera, type 3 inflammation like IL-22, et cetera, also are contributors here, especially in some populations, whether they be ethnicity-based or age-based or chronicity based meaning chronic patients have a little different cytokine makeup as well, too. And something that is missing when you're only targeting that single thing, right, is grabbing up the rest of that cytokine milieu, something that JAKs have done really well, right? They hit all of those types of inflammation. They probably hit them too hard, which has led to the safety liabilities associated with them. So what we're trying to do is increase the efficacy bar with what we know has worked well, IL-13 and then secondarily, OX40, OX40L and get to a better depth of response, that similar depth of response for IL-13, but some of the breadth of response without going too broad like JAKs, right? And we think that balance is really by doing IL-13, OX40L together, orthogonally validated mechanisms that have shown really great data and really will combine that both that depth and breadth of response with the right balance in it that we need to move forward and really provide transformative care for patients with AD.

Yes. Obviously, a lot going on here. And I know you're also going to have an R&D day later this year. So maybe what can you say about what we should expect coming out of the R&D Day around some of the next steps across your pretty wide and deep pipeline at this point?

Yes. So you can expect that we'll provide updates across each program at that R&D Day, I think it's important for us to highlight the company's totality and right, the number of kind of blockbuster drugs that we have in our arsenal, the data underlying our conviction, not only from the monotherapies, but for these combinations, right? We can tell you why we think that they're optimal combos. We'll put out data showing how they compare to monotherapy benchmarks, including right to dupilumab, et cetera. So you can see what's getting us so excited about them. And we'll also share some more around the trial designs or the combinations. I think people do not realize that our IL-13X ligand combination will start next year. That we will have the first-in-class combo in AV kicking off very soon, and we'll share more on what that trial is going to look like and when people can expect that data as well.

Great. Well, always a great conversation. We probably could spend another 2 hours chatting. So cut off there. But I always appreciate you guys. Thanks for joining us.

Yes. Thank you, Alex.

Thanks, Alex.

Bye everyone.