Ascentage Pharma Group International (6855) Earnings Call Transcript & Summary

Here at the Guggenheim Conference. Here at the Guggenheim Conference. My name is Brad Canino. Happy to be sharing the stage for the next fireside with Ascentage. We've got Veet Misra here. Thank you so much for joining us, Veet.

Thank you for having me.

And maybe we can just kick off if you can give a brief overview of Ascentage and where you are today, core focus of the company, where you've got the footprint and what you see as really the key pillars of the strategy for the company.

Yes. Thank you for the question. So Ascentage is a public company, dual listed on both the NASDAQ and Hong Kong Stock Exchange. We're a global company, close to 800 employees at this point. We're a commercial stage in China with 2 novel products for oncology indications in hematology. And we're rapidly growing. We have a pipeline of 7 disclosed compounds, including the 2 products I mentioned, each of them novel, best-in-class potential, spanning essentially the big markets in hematology. And we have an internal discovery engine as well. In terms of the breakdown, the spread of employees, predominantly in China, but we have over 100 in the U.S. So China, it's discovery, innovation, clinical trial execution and sales. In the U.S., clinical trial execution, we have 4 U.S. registration studies ongoing. So the U.S. is going to be our global market hub, which we're going to be -- that's the next chapter of the company to -- in terms of its global expansion commercially.

Okay. So great overview of the company. You've got a decently large pipeline of products as well. Maybe introduce the marketed products and the late-stage pipeline.

Yes, certainly. So in terms of the marketed products, we have, firstly, a third-generation tyrosine kinase inhibitor called Olverembatinib, which is a third-generation TKI in a space that's gotten a lot of attention in recent months. Essentially, this is a disease category where there's been imatinib in the space brought out by Novartis in 2001. There's been the need, which increased survival significantly, but there's been the need for additional TKIs to be brought to meet patient needs due to resistance. There's the gatekeeper mutation, T315I, which is about 25%, sometimes 30%, depending on the representative population of CML. And then there is safety concerns that can arise in the near term or later term and intolerance issues. That has been the case of the second-generation TKIs. It's been a large pharma category. There is a worldwide unmet need for CML and also ALL, both in terms of the pediatric population. It's the #1 childhood cancer, including solid tumors and also spans adult and elderly population as well. So TKIs have to be especially potent to address ALL as well. We're running a U.S. registration and a part of a global registration study in ALL. So we're excited about that. And then also, we have a BCL-2 inhibitor approved in China called Lisaftoclax. It's the second ever BCL-2 inhibitor to get approved ever since Venetoclax got approved by AbbVie in 2016. So it's been a 9-year journey getting that on to the market. There's a competitor out there that has a BCL-2 inhibitor that got approved for MCL. And essentially, the characteristics of our compound are a daily dose run-up as opposed to weekly. And we also have not experienced with our compound DDI issues, which is a concern as it relates to the importance of combining with other agents, including namely BTK inhibitors. I'll jump to BTK. We have a BTK protein degrader that we just announced in early January, a U.S. IND clearance for. We subsequently last week announced China CDE clearance. We have an exciting preclinical package of this BTK protein degrader. We believe it's quite differentiating versus our competitors, which we'll talk about more over time. And that yields a combination approach with a BCL-2 inhibitor, which we have obviously in-house. So we feel like we have the -- the only company that has a third-generation TKI and a BCL-2 inhibitor, both of which we believe has strong best-in-class potential. And to answer your question about the rest of our pipeline, we have 3 multi-kinase inhibitors directed towards solid tumors, a range of solid tumors that we're carrying out. And we have a discovery engine, as I mentioned. So we also are bringing forward a PRC2 complex inhibitor, which we call APG-5918 for now, directed towards both multiple anemia indications, including SCD, beta-thal and oncology where we've seen some companies recently go after sickle cell and prostate cancer using the same type of approach and have yielded exciting results, but -- and Pfizer has an EZH2 inhibitor, part of the same complex. So there's really quite minimal number of players in this category as well. So this is kind of our banner approach in terms of commercialization, global clinical execution and bringing about additional novel compounds to bring forward in the pipeline.

Great. Maybe we'll drill into the BCR-ABL first a little bit more. I mean you mentioned in that intro, the mutation potency, the improved tolerability. Maybe give a bit more granular details around that differentiation compared to the marketed products and the clinical stage products that are competitors that are being developed.

Yes, certainly. So it's been interesting to see the attention onto the CML space, especially in the last year, maybe slightly more than a year. There's been a couple of companies. I guess I'd put ourselves in that category that are essentially addressing the unmet need. Some people can view it as disruptive, maybe in the sense that it's been, as I mentioned, a large pharma category. The issue with the patients is eventual intolerance and resistance to second-generation TKIs. There's a drug Ponatinib by Takeda that's addressed a lot of the concerns of second-generation TKIs. Unfortunately, it has issues as it relates to toxicity. We do have a relationship with Takeda as a lot of people probably know where they have an option agreement ex China as it relates to Olverembatinib. We believe that in itself is highly validating of our approach as a potential franchise extension strategy for Takeda. So I think one really needs to focus on potency, efficacy and long-term durability. Our compound got conditional approval and eventually full approval in the NRDL in China starting from 2021. So we have a number of years of history over our competitors that are disrupt trying to be disruptors. I think that really matters. I think people get caught the excitement of looking at data cuts, looking at the safety efficacy point in time versus the pharma company standard drug and essentially extrapolate from that. That's fine. There's nothing -- one has to, however, take into consideration in the landscape, who are the ones that are showing durability over time because that's what matters when dealing with CML, the name of the game is survival. So we have now the benefit, especially being a drug that is approved in China, where our KOL IST network and relationships have also done effectively post-marketing studies. So we've done -- so we have -- actually, there's published data now out there in conferences that have shown and very high reputable publications, Nature Journal of Clinical Oncology, et cetera. Long-term studies, 4-year, 6-year case studies of patients who have had multiple failures of TKIs. Often, they even rotate back to a drug that hasn't worked before. It's because there's limited options. And then you can see patients actually revert back to having MMRs when they have had declines due to resistance. And in addition, and this is important as well, patients have converted from advanced CML, AP or BP, acute phase or blast phase where the overall survival prognosis becomes more and more poor, back to CP, which is the majority of the CML cases are CP. They're diagnosed most often as CP. But to actually get a very difficult-to-treat population to revert back, that's quite meaningful. So our competitors aren't even close to that point yet. Also, we have -- since we have the benefit of having both the TKI and the BCL-2 inhibitor, we've actually in-house in one company. We've actually done studies and others have as well as investigators combining our drug with Venetoclax, which we can do with our combination with our proprietary compound and have shown patients can achieve deep MRD, so MRD-negative CR rates. And this is important because these patients can then be eligible for allo-HSCT, which means they can then go on to longer-term potential remission. So these are the types of studies that are being carried out right now with our drug. And this is what you want to see in terms of the kind of the long-term durability of the drug. DOT equates to sales. That's why I think this has also been a market that's caught the attention of investors again. And we've shown this type of effect in ALL, which is, as I mentioned, a difficult-to-treat disease, unmet need.

Great. Now maybe you can speak a little bit about the POLARIS-2 study for CML. Design for that study, what you're going up against and what you think the bar is for success to make that a drug that is competitive on the global stage?

Yes. I think the design is a nice rational approach to show the safety efficacy profile of our drug versus. In this case, there's 2 parts to it. One is a -- has a control arm, Part A against bosutinib, Pfizer's second-generation TKI. And then there's a Part B that's a single-arm only T315I mutants. So this study is a global study, including the U.S. and EMA. We are advancing enrollment this year. We look to have majority of the enrollment actually complete this year. So we'll give more guidance as to when the trial is going to be completed, but progressing well. I would say that one of the things is that we feel like there's a good probability of success given the trial design going against bosutinib. The endpoints are 24-week MMR and then a longer-term 96-week MMR. So it's designed to truly show the go -- the FDA approvable endpoint, and EMA approvable endpoint. And also will emphasize the potency, hopefully, in T315I. So not to -- given the experience in China and patients, post-marketing studies, as I articulated, there's papers out there, publications, 4-year, 6-year follow-up. We feel like this -- when looking at the totality, this design will get us a good outcome, hopefully. Yes.

Okay. Let's switch a little bit and talk about the BCL-2, Lisa. You have an approved indication in China for that. Maybe discuss that in detail. But then where do you see the vision for this product potentially globally?

Yes. So one thing I should mention though for the POLARIS-2, there's actually a crossover as well between bosutinib and our drug as well. That actually has helped to stimulate enrollment also. Yes. So to answer your question, so the -- I think one thing to note in terms of the population that was approved in the registration study in China, it was a very deep challenged patient background population. It was a pivotal Phase II study that yielded approval. These patients had complex karyotype, almost half had -- were classified as complex karyotype. 100% of them had BTK exposure. A majority of that group were actually truly intolerant, resistant to BTK inhibitors. In China, the characterization has to be precise. There is really no one wants to -- one needs to be very intellectually honest with the regulators there. So you can kind of take it at its word that these were truly pretreated resistant BTK inhibitor patients. And with that background, actually, we did get approval with, I think, a label that was better than the market anticipated. The specific language was patients who have received at least one prior systemic therapy, including BTK inhibitors. And essentially, that language doesn't have the word resistant or refractory in it. So it's -- that allows doctors to prescribe [indiscernible] as a 1.5 line therapy, not a second-line therapy. We've actually shown at ASH taken forward this patient population have demonstrated high ORRs and overall survival in this patient population, carried it forward. So again, we have the benefit of post-marketing in China that we can carry forward here. And we feel like that with a lot of the noise that was going on, it's still not fully resolved yet with China versus U.S., how much of that is valid. We've been hearing that from other companies. I think we're more rational about that now and just kind of looking at the data where it is and not discounting so much what's going on in discounting data from China. These are now very extremely well -- and these have been for a while, validated by very strong reputable publications, PIs. So we'll -- and obviously, we're conducting global studies as well with the proper balance representation of patients from each part of the world.

Yes. And you offer a different dosing schedule than Venetoclax as well in terms of the ramp-up and everything. What's been the experience like that? Maybe talk to the Chinese experience, but also this has been used with some global investigators in clinical trials. How do they see that different from Venetoclax? And what's the positive aspect of that? And how is your drug exclusively able to deliver that?

Yes. So the dosing matters. This is a community oncology physician setting compound. So consistency as it relates to -- we've seen some inconsistency from competition as it relates to what is the -- ultimately going to be the multi-week dosing schedule for their drug. For us, it's clear. We have a 6-day daily dose run-up. So that is important for safety when you think about CLL and SLL and then other indications as well, such as AML, which is obviously has a high mortality rate. And then obviously, we're going after an area, which is a big opportunity for us, high-risk MDS. There's no other company that's doing a Phase III registration study in this disease category. It's a multibillion market opportunity. And we are conducting a global study in HRMDS. In addition, the other aspect that's important is DDI, drug-drug interaction, because the combination with the BTK inhibitor or a protein degrader is definitely going to come into -- it's already in play with the inhibitor, but now the big push is for fixed duration therapy. So obviously, you want to have elimination of DDI issues, but we're the only ones who definitively have shown there's no DDI issues with our compound. So that's going to be interesting especially as the BTK protein degrader becomes more and more high profile. And then when you think about supportive care as well, like antifungals, that's where DDI also comes into play. And then, of course, the other area is bone marrow toxicity. So this has enabled us to really push forward in HRMDS. Venetoclax has shown years prior inability to treat multiple myeloma due to 2 Phase III studies showing bone marrow toxicity. And then subsequently, as the more details came out last year during SOHO in HRMDS. So -- and as far as we know, another competitor with a BCL-2 inhibitor is not going after HRMDS,'re going after MM. So this is ours, to be frank, with HRMDS, a great opportunity for us. And then one can only go after this type of category with all those characteristics intact.

Yes. So let's talk about MDS for a bit. You've got the GLORA-4 study. Venetoclax did have a study that was unfortunately not successful. What is the rationale for bringing your drug there given it's the same mechanism? Maybe how does the differentiation play into that? And what are the key elements of that trial design that we should be paying attention to?

Yes, it's a really good question. So that VERONA study you're referring to with Venetoclax and HRMDS, the design was VEN Plus, an HMA, Hypomethylating agents, in this case, AZA versus AZA. And it's been -- it was known for quite a while leading up to the actual full disclosure of the results that the trial failed. And we were embarking on the same design as well, as you mentioned, the GLORA-4 study. It was a little bit like we're on the edge of our seats, and we're getting a lot of questions about like what exactly went wrong in that VERONA study because you're going doing the same design. Well, then finally came out during SOHO that the design of that trial was a double-blind randomized placebo-controlled study. And what occurred was there was early in the study, a withdrawal of drug in the active arm, early in the study. And in this case, it was AZA because you -- the investigator could only pull back on the known drug. But it essentially confirmed our position all along that it was the toxicity of Venetoclax. The hazard ratio was 0.908. So it wasn't even the near miss. And unfortunately, the survival curves kind of both converged, both arms at 22 months. So it's, however, validated our approach, and we're really dedicating a lot of our resources to push enrollment. The other thing about GLORA-4 is we have a dual primary endpoint. So the longer endpoint, of course, of overall survival, but we also have complete response rate as an endpoint -- primary endpoint, which could be the basis for accelerated approval, we'll see depending on the results.

Okay. Great. Maybe in the last minute or so, if you could just talk about across the portfolio over the next 12, 18 months, what are the top catalysts and milestones that investors should be focused on with everything you've got going on?

Yes, exactly. No, for sure, like pushing forward on the registration studies, as I mentioned, POLARIS-2, POLARIS-1, GLORA, we didn't really talk about that, but that's a combination with BTK inhibitors and then GLORA-4, so pushing forward. This will -- is our foray towards commercialization in the U.S. And then also as it relates to the early-stage pipeline, a lot of attention now brought towards the PRC2 complex, EED inhibitor. So Phase I results in that as well as the BTK protein degrader, giving more in due course, the differentiation, specific differentiation of that versus our competitors. So we've seen for both those cases with comparables that early small -- really small patient sets, ultimately, you need to have the right number to show safety, efficacy long term to instill confidence. But you can see how even small number of patient sets can really move the needle in terms of value creation. So we're definitely allocating the appropriate resources for those as well to give the public more data. So that's been our push, and we're essentially well capitalized at this point, and I think have good optionality.

Okay. Great. Well, Veet, thank you so much for sharing the story. Thank you. Thanks, everyone, for listening in.

Thank you, Brad.