aTyr Pharma, Inc. (ATYR) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to aTyr Pharma conference call to review the top line results for the Phase III EFZO-FIT study of efzofitimod in pulmonary sarcoidosis. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. It is now my pleasure to hand the conference call over to Ashlee Dunston, aTyr's Senior Director of Investor Relations and Public Affairs. Ms. Dunston, you may begin.

Thank you, and good morning, everyone. Thank you for joining us today to discuss the top line results from our Phase III EFZO-FIT study of efzofitimod in pulmonary sarcoidosis. Before we begin, I would like to remind everyone that except for statements of historical facts, the statements made by management and aTyr [indiscernible] are in response to questions on this conference call are forward-looking statements under the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that can cause actual results to differ materially from those in such forward-looking statements. Please see the forward-looking statement disclaimer in the company's press release issued this morning as well as the risk factors in the company's SEC filings and included in our most recent annual report on Form 10-K and quarterly reports on Form 10-Q. Undue reliance should not be placed on forward-looking statements, which speak as only of the date they are made, as facts and circumstances underlying these forward-looking statements may change. Except as required by law, aTyr Pharma disclaims any obligation to update these forward-looking statements to reflect future information, events or circumstances. We are joined today by Dr. Sanjay Shukla, our President and CEO; Jill Broadfoot, our CFO; and Dr. Robert Bachman, Emeritus Professor of Medicine at the University of Cincinnati. On the call, Sanjay will provide an overview of the results of the study. Dr. Bachman will provide some additional commentary around the results before we open up the call for any questions, which can be addressed by Sanjay, Jill or Dr. Bachman. I will now turn the call over to Sanjay.

Thank you, Ashlee. Good morning, everyone, and thank you for joining us for our conference call. We're here today to discuss the top line results from our Phase III EFZO-FIT study of our lead therapeutic candidate, efzofitimod, in patients with pulmonary sarcoidosis, a major form of interstitial lung disease. Earlier this morning, we issued a press release summarizing the top line results for this trial. We reported that treatment with 5 milligrams per kilogram of efzofitimod positively impacts quality of life and maintains lung function while reducing or withdrawing steroids. The study, however, did not meet the primary endpoint of change from baseline in mean daily oral corticosteroid or OCS dose at week 48. Some additional key findings include 52.6% of patients treated with 5 milligrams per kilogram of efzofitimod, achieved complete steroid withdrawal at week 48 versus 40.2% on placebo. A clinical improvement in the King's Sarcoidosis Questionnaire or KSQ lung score changed from baseline at week 48 was observed for 5 milligrams per kilogram of efzofitimod compared to placebo. And a greater proportion of patients achieved both complete steroid withdrawal at week 48, with KSQ lung score improvement in the 5 milligram per kilogram efzofitimod arm compared to placebo. The lung function as measured by Forced Vital Capacity or FVC at week 48 was maintained. And finally, efzofitimod was well tolerated at both the 3 and 5 milligram per kilogram doses with a safety profile consistent with that what we've observed in all trials conducted to date. This study demonstrates that patients with chronic symptomatic sarcoidosis can be managed with substantially lower steroid doses than previously thought without the fear of worsening disease. In spite of a higher-than-anticipated placebo response, we found that treatment with efzofitimod was associated with a greater amount of steroid reduction, including steroid withdrawal, a clinical improvement and the quality of life for these patients and the maintenance of lung function. This is the first Phase III trial and largest ever interventional study conducted in pulmonary sarcoidosis and the data generated from this study is likely to inform treatment practices for all sarcoidosis patients moving forward. Based on these consistent findings, which we believe indicate drug activity for efzofitimod across multiple clinically relevant efficacy endpoints, we plan to engage with the FDA to determine the path forward for efzofitimod in pulmonary sarcoidosis. As a reminder, EFZO-FIT was a global Phase III 52-week randomized, double-blind, placebo-controlled, multicenter study in 268 patients with pulmonary sarcoidosis. It consisted of 3 parallel cohorts, randomized equally to either 3 or 5 milligrams per kilogram of efzofitimod or placebo, dosed intravenously once a month for a total of 12 doses. The primary endpoint of the study was steroid reduction at week 48. Additionally, clinical and efficacy assessments included the KSQ lung score or FVC, complete steroid withdrawal all at week 48. In terms of the trial design, the study included a protocol guided steroid taper in the first 12 weeks of the study, followed by continued taper or rescue until week 48. Steroid taper and titration were guided by the Patient Global Assessment, or PGA, which was administered every 2 weeks. If there was any clinical worsening the principal investigator of PI was required, to rescue based on this PGA. And if there was improvement, the PI was required to taper. Before we present the results, it's important to note that key demographic and baseline characteristics were generally balanced across all treatment groups for demographics, including age, sex, weight race and for disease characteristics including FVC, duration of disease and dyspnea. We'll start with the primary endpoint of steroid reduction. When we looked at baseline steroid use, treatment groups were mostly balanced with a mean daily steroid dose of 10.51 to about 10.7 across treatment groups. The primary endpoint was calculated as the change from baseline in mean daily steroid dose at week 48. With the week 48 point calculated as an average between weeks 44 to 48. For 5 milligram per kilogram of efzofitimod, we saw patients reduce from a baseline of 10.7 milligrams of steroids down to 2.79 milligrams for 3 milligrams per kilogram of efzofitimod, there was a reduction from a baseline of about 10.5 down to 3.5. And placebo reduced from a baseline of 10.7 down to about 3.5%. If you look at the amount of steroids reduced from baseline as an overall percentage, patients were able to reduce their steroid dose at the end of the study by 73.6% for 5 milligrams per kilogram of efzofitimod compared to approximately 68% for 3 milligrams per kilogram of efzo and finally, 63% for placebo. In our modeling, we assumed that patients on efzofitimod would taper from baseline to an average daily prednisone dose between 1 to 4 milligrams, with placebo expected to taper to between 4 to 7. So the drug performed accordingly to what we projected. However, we did not achieve statistical significance as the placebo tapering outperformed even our most aggressive modeling. Another important assessment of steroid reduction in the study was patients that achieved complete steroid withdrawal at week 48. We saw 52.6% of patients in the 5 milligram per kilogram efzofitimod treatment group, tapered to 0 milligrams of steroids at week 48 and 51% of patients in the 3-milligram per kilogram efzo arm also ended the study steroid free. We believe that this is very good performance by the drug. However, we did not anticipate the 40.2% of patients on placebo, but also in the study steroid-free. We modeled for 30% of placebo patients to taper to 0 which was well above the 10% that most experts that they would expect to see in this 12-month study, while forcing patients down to 0 milligrams on their prednisone. So 40% of the placebo patients tapering off steroids majorly impacted both the ability to hit stat sig on the primary end point of steroid reduction change from baseline and also the steroid-free response. We believe the high placebo response was driven by several factors, but most notably the implementation of our rigorous protocol we're administering the Patient Global Assessment every 2 weeks to guide steroid titration. While this has now been proven highly effective at managing steroid doses in sarcoidosis patients. Now let's turn to findings to the KSQ lung score, which is the main patient-reported outcome or PRO we used in the study as it is viewed as the most sensitive quality of life assessment for sarcoidosis patients. The KSQ lung measures disease-related symptoms such as cough and shortness of breath, this score is a leading indicator as to how patients felt while undergoing treatment. Patients completed these symptom assessments at baseline monthly during the study and at the end of the study at week 48. We're very pleased with the findings for the PRO in this study. And there are a few ways that we looked at the KSQ lung score, which were all prespecified. First, we compared the change from baseline at week 48 across treatment groups. Patients on 5 milligrams per kilogram efzofitimod had a clinical improvement of 10.36 points and those on the 3 milligram efzofitimod had an improvement of 7.33 points, compared to placebo, which improved by 6.19 points. Next, as a KSQ lung as a disease-specific measure of pulmonary sarcoidosis symptoms, we wanted to evaluate if complete with steroid withdrawal i.e., removing all prednisone would impact the KSQ lungs score. So we use a responder analysis to assess patients that were steroid-free at week 48 and improved 8 points or more on the KSQ lung. So I'll point out here that while the KSQ lung has been validated academically, it's currently undergoing validation for regulatory purposes. And preliminarily, we've established during this validation that the threshold for meaningful clinical change in the KSQ lung score is 8 points. And this is consistent with the consensus among sarcoidosis experts that an 8-point improvement in the KSQ lung is a very meaningful change. So in this responder analysis, we saw that a greater proportion of patients were both steroid-free and achieved KSQ lung score of 8 or greater, which is improvement with 29.5% in the 5-milligram per kilogram of efzo arm compared to 14.4% in placebo patients. This means that you have about 2.5x better odds of being steroid-free and have improved quality of life if you take 5 milligrams per kilogram of efzofitimod. I'll note that we also saw an improved result in the analysis -- responder analysis for the 3-milligram per kilogram efzofitimod treatment group with nearly 28% of patients responding. These improvements in steroid withdrawal and KSQ lung over placebo observed in both doses of efzofitimod, give us confidence that the drug is providing meaningful benefit to patients. We believe these are very important findings as steroids are known to have side effects that can greatly impact patient's quality of life as much or even more so than the disease itself, and quality of life compared to current treatment options is of high priority to patients with sarcoidosis. So this combination we are observing with efzofitimod is a very important and outstanding finding from this study. Now let's take a look at FVC, which is one of the main lung function assessments used in the study. FVC is highly variable in sarcoidosis. And there's limited natural history data to provide a predictable rate of decline. We were looking to assess the change from baseline to week 48 for the absolute percent predicted FVC. And for context, remember, steroids are used in these patients to help control inflammation and stabilize lung function. By decreasing steroid use, it's expected that FVC would potentially decline. And by rescuing patients with steroids, it's expected that FVC would actually improve. FVC percent predicted was largely maintained across all treatment groups with a decrease of 1.8% for the 5-milligram arm, 2.7% for the 3-milligram efzo arm and 2.1% for placebo. Though we see a slight decline. We see it across all treatment groups, and this decrease is well within the normal range of variability. And these results for FVC are in line with what we expected considering the steroid taper and rescue protocol. And the stability of lung function while removing steroids in this patient population is a notable finding. Finally, let's review the safety findings, which are a key part of efzofitimod's value proposition, considering that current treatment options for pulmonary sarcoidosis typically have serious side effects and toxicity. Overall, monthly dosing of efzofitimod was determined to be well tolerated at both the 3 and 5-milligram per kilogram doses. And the safety profile was consistent with all trials conducted to date. Adverse events or AEs were mostly mild or moderate in severity, generally assessed as unrelated to the study drug. And serious adverse events or SAEs were very limited and balanced between treatment groups. The proportion of patients with treatment-related SAEs and events leading to discontinuation and the proportion of patients who develop antidrug antibodies was small and also balanced between treatment groups. These findings are consistent with previous studies and reinforce efzofitimod's favorable safety profile, making it a desirable option for patients. Before I summarize the key findings from the study today, I wanted to take a minute to thank the patients, investigators, patient advocacy organizations, our partner, Kyorin Pharmaceutical, our team at aTyr, who all contributed to this landmark study. We're incredibly grateful for your participation and the data generated is a major contribution to sarcoidosis research and sarcoidosis care. Although we didn't meet the primary endpoint of the study, we do see drug activity and clinical benefit for efzofitimod. This is evidenced by the benefit observed in substantial steroid reduction, meaningful clinical improvements for KSQ lung and preservation of lung function. Additionally, this study reinforces efzofitimod's favorable safety and tolerability profile, suggesting that efzofitimod has the potential to be a safe and effective treatment option compared to current standard of care for patients. Particularly for those that require chronic therapy. We believe the totality of this data warrants engagement with the FDA to determine the path forward for efzofitimod and pulmonary sarcoidosis as there are -- there are and remains an urgent need for a safe and effective treatment to address the unmet needs of this underserved patient population. We plan to review the full results of the study to obtain additional insights, and we're scheduled to present at the upcoming European Respiratory Society Congress in Amsterdam at the end of the month. I'd now like to turn the call over to Dr. Robert Bachman, Emeritus Professor of Medicine at the University of Cincinnati and Chair of the trial steering committee for the EFZO-FIT study. Dr. Bachman will provide some of his thoughts around the data and key takeaways for the study.

Thank you, Sanjay. I'm happy to provide some of my thoughts around the study results, and there are a few key takeaways from my perspective that I would like to highlight. First, I believe that efzofitimod has drug activity in sarcoidosis. The best evidence for that is the steroid reduction seen beyond the reduction seen with placebo, which comes to a significant benefits such as improvement in quality of life as measured by the KSQ lung. I'm particularly enthusiastic about the improvement of the KSQ lung in patients that received efzofitimod and we're able to get completely off of steroids. Quality of life is so important to sarcoidosis patients and steroids typically have a negative impact on quality of life. I know my patients would be thrilled to take a drug to get them off of prednisone and make them feel better. Second, I'm quite surprised by the high placebo response with regards to steroid withdrawal. I have treated over 2,500 sarcoidosis patients in my time and been involved with many of its past sarcoidosis trials. I would have expected less than 10% of placebo patients would have been able to become steroid free. I would have also expected more relapses when the steroids were withdrawn. Because this was not seen, it confirms that we have become increasingly aware of, patients that we treat have been receiving excess prednisone. However, the amount of excess observed in this trial is historically notable. I think it reflects the rigor of the trial and a shift in clinical practice. I also view the high placebo response is likely a function of the study design and the protocol, which, in my opinion, was excellent. Like many clinical trials, it was more rigorous in clinical practice as we typically do not assess the patients every 2 weeks as they did in this trial. However, the ability to get more patients off of prednisone on using this rigorous protocol will be useful as we develop future clinical guidelines for the treatment of sarcoidosis. Third, I'll remind you that drug is safer than what is currently used. Most commonly used drugs for sarcoidosis are prednisone, methotrexate and REMICADE. All of these have significantly more toxicity than efzofitimod had in this study. If available, this drug would be a very helpful treatment option in my clinical practice. So in many ways, considering the clinical benefit observed in this trial as well as robust safety profile compared to current standard of care. I think that there's a strong rationale to seek approval for efzofitimod. And finally, I would like to say how remarkable it is that aTyr was able to conduct and complete this large global randomized controlled trial that had a rigorous steroid withdrawal protocol. This is something that we really haven't been done before in sarcoidosis to this extent. And so far, even just the top line results have given us significant new information that will advance the field. Overall, a great job on this study and look forward to seeing more of the data when it's available. Thank you.

Thank you, Dr. Bachman. Now at this time, myself, along with Dr. Bachman; and Jill, we're available to take your questions.

[Operator Instructions] Our first question comes from the line of Derek Archila with Wells Fargo.

First one just for Sanjay. I guess based on your conversations with the agency, I guess, how much flexibility do you think they're willing to extend here just in pulmonary sarcoidosis, not a lot of good treatment options. And can you just confirm for us that all the endpoints that you presented today are prespecified?

Yes, Derek, thanks for that question. And that last point is really important. These were prespecified. These are not post hoc. We haven't even started really the post-hoc look at the data. The fact that they are prespecified is really another level here why I think we're really prepared to engage the FDA. The FDA has been great to work with thus far with this program. frequent interactions as we talk about our trial, talk about the design, look to validate King's Sarcoidosis, so we're encouraged by all those interactions. You point out that there is really no really good available therapies, no approved therapies in sarcoidosis. So I do think that they are going to be a collaborative partner, and we're looking forward to engaging them. These results on their own really merit a really good discussion with regards to what our next steps here for this program.

Great. And then just a follow-up. I guess any specific measures that you can call out within the KSQ lung kind of questionnaire that were really driving the improvements on the score?

Another thing that we're also looking more specifically in the KSQ lung is an amalgam of cough and shortness of breadth endpoints, teasing out exactly which of those six questions. For example, the drug was most sensitive on that is something that we will look at more closely. But the overall KSQ improvement, I think, is outstanding. I also think that the responder analysis where we look at KSQ of greater than 8, better than we would expect to see that kind of response in the steroid-free patients. That's a much more rigorous, even higher bar composite, and we show the greatest amount of statistical difference in that analysis. So both really, really positive findings with regards To the PRO.

Great. And then last one for me, just in terms of getting a Type C meeting on the books with the FDA, is this something that you suspect you can complete and get minutes by before the end of this year or early '26. How are you thinking about the timing there?

We're going to move to engage the FDA as quickly as possible, but I also want to make sure that our briefing book we have a really good look at all of our data. The totality of the data, as I pointed out, gives us a high degree of conviction for efzofitimod. But I want to make sure that we have the best bridging both possible I want to take some time, look at some things from a post-hoc perspective and then look to engage the FDA shortly after that.

Our next question comes from the line of Yasmeen Rahimi with Piper Sandler.

Yes, thank you so much for the presentation and obviously, the strong data with the fat part of the primary endpoint being missed due to high placebo. Thank you Sanjay, for clarifying that these were prespecified analyses and trying to kind of following up on Derek's question is as you're engaging with the agency, what are some of the important analyses that you hope to complete before you engage that you like to present to the FDA. So if you could just maybe talk about the work that's going to start imminently this post this top line data that you like to complete before you meet them. And then the second question is for our KOL, I know you're not the FDA, but given this product profile and drug activity with quality of life improvements, what would you say -- why wouldn't this warrant the to say this is sufficient for a filing package? And what would that probability be? I know this is your opinion, but given the depth of this data and the high unmet need, if you could just -- maybe help us understand what the probability of FDA allowing the company go forward and this could be an improved drug would be really helpful for us.

Yes, yes. I'll answer quickly the first part before turning it over to Dr. Bachman. We have a large and, I would say, a healthy number of prespecified tables here that are going to give us a really good ability to have good discussions with the FDA. Many times, sponsors, I think, come to the FDA with a lot of post hoc analyses. That's a lot softer in my opinion, and probably not the right way to go. We prespecified a number of these endpoints. So that's going to really help us. There are some other things that we were finalizing here, other quality of life, fatigue assessment score, for example, things of that nature will help to present more of that at European Respiratory Society, also cracking open some of the biomarkers, that's going to take some time. So those are the other types of assessments that we want to make sure we really have a good look at before we approach the FDA. Regarding your question directly to Dr. Bachman, and I'll turn it over to you, Bob, now to discuss your opinion on this drug and the FDA.

Yes. Thanks for the question. I think that nobody knows what the FDA is thinking about things in general. And certainly, this is a problematic area for the FDA. I've been with them for a couple of different drugs besides this one. You've got to remember that the only drugs approved for sarcoidosis are 1950s, prednisone being the prominent one there. So at this point, we're moving away from in clinical practice and in clinical trial design for horsepower capacity because, frankly, there isn't that much difference even with the best of drug in totally treatment-naive patients, which is not what we see in clinical practice. So we're looking at quality of life and how to best measure it and getting rid of the prednisone in patients who are on it. So the clinical trials that are out there that have been recently completed, they are ongoing, are all designed to look at getting people off of prednisone and to improving like this study or at least keeping the quality of life stable. We have just generated a couple of different consensus statements among sarcoidosis leaders. And we're hoping that, that's going to convince the FDA that a drug like this or other drugs that are able to show you can get people off prednisone and keep their own quality of life better, should be approved but that's still the FDA's call.

And if I may ask one question from Jill. Jill, if you could just maybe remind us what the cash runway is and now with the sort of timing of engaging with the FDA, getting the minutes back would be helpful.

Yes. Thank you, Yas. The last time we provided a corporate update, we had a total of $113 million in cash. So I feel confident that we're sitting in a very good position, but we will be updating that when we report -- updating our guidance, I should say, when we report our Q3 corporate update.

Our next question comes from the line of Faisal Khurshid with Leerink Partners.

Maybe one for both Sanjay and for Dr. Bachman. Could you just speak to your hypothesis on how the placebo outperformed this way? Like were these not the right patients? And I guess like I thought these patients are like supposed to be steroid-dependent like how is 40% able to come off of prednisone?

Sure. Thanks, Faisal for the question. As I mentioned, our view is this is largely driven by that -- by the protocol, the rigor of the protocol, the ability to manage these patients to be able to effectively every 2 weeks, which is a bit of an artificial construct. This has reaped tremendous dividends for all patients in this study. When we look at the relative disease characteristics, these patients are sick. They are steroid-dependent and at least in this 1-year trial, this is the data that we produced. Again, it outperformed any of our models, even my most aggressive model. Prior to the trial starting, if I could have told you that efzofitimod knocks your steroids down more than 75%, 50% more than that are getting off steroids, and we're greatly improving your quality of life. That's exactly the patient profile, the TPP would want in a label. So we're digging in more into the reasons. There could be some things we're looking at, at background immunosuppressants. I do not think this confounds the signal and changes anything. But there's a notion that background immunosuppressants may have helped the placebo population, but that's yet to be determined. I really want to dig into that a little bit more. But as you pointed out, these are steroid-dependent patients that were enrolled in our trial. And we've shown a remarkable ability through the combination of our protocol and using efzo to get a significant number of patients off. Bob, I'll turn it to you, you can talk a little bit more about that placebo response.

Yes. I think this is important to realize that there's a shift. I mean since 2000, there's been 9 clinical trials that have been published, that looked at steroid tapering and looking at how much they can get off. And when I did the -- with Janssen, the infliximab trial, or REMICADE trial in 2006, we had -- we didn't steroid taper in that trial, but we had a lot of people on prednisone and very few on immunosuppresses other than prednisone. And they were on a lot more prednisone. So what's happened over the last 20 years as people have been going down on prednisone. Even though the investigators were reluctant to think that would happen, it did indeed happen, they were able to get off easily. And on top of that, they were now using more immunosuppressants like methotrexate. So in this study, more than half the patients were on methotrexate. So I think that, that's part of the reason why placebo patients did better. I can't overemphasize the importance of asking the patients every 2 weeks how they're doing and tracking therapy. We simply didn't do that in our clinical practice, certainly, 10, 15 years ago, we would have patients come in every 3 months and only reduce the prednisone then. We start moving that up in the first 6 months to having them come in every 6 weeks. Buy nobody was really making the decision over 2 weeks until we're just recently. And this trial, I think, is going to push people to start having things like phone apps and stuff like that, to ask patients, how are they doing and thinking about going down the dose over 2 weeks.

Got it. That's helpful. And then one follow-up on quality of life. Sanjay, can you talk to us about how you think investors should think about the quality of life outcomes on an absolute versus placebo adjusted basis? And then for Dr. Bachman as well, I think you had published a paper actually said MCID for KSQ lung is 4 points. So I'm curious how you interpret the results. And then for Sanjay as well, do you have a responder analysis for percent of patients able to achieve that 4-point reduction for drug versus placebo.

Right. So let me just point out from the MCID you pointed out that's from some work from Dr. Bearing at King's College while academically validated, I think we are getting more sophisticated. And what we're learning is when you look at group changes, this is really wonky with the PRO, but about 2, 2.1 points looks like is what you'd want to see among group changes. But individual patient responder, it has to be much higher. And what we're learning is it should be closer to 8. So when you think about the group changes that we observed in this trial, yes, we saw a more than 4 points as leaning in the old MCID among the groups. That's great. But it looks like the threshold between groups the MCID is probably going to suss out at about 2, 2.1. Bob can talk a little bit more about that, that's work that's ongoing. The 8-point is what you want to see if it's true response. So the FDA likes to have a responder threshold. We've been working with them hand in hand. And this also matches what more or less the consensus of the world experts, the [ WASAU ] statement which I'm not sure is out yet, Bob. So think about it two ways that from a group perspective, the drug is really moving things in a significant fashion. And then from a responder threshold, which has to be higher, yes, no, we're also successful with that KSQ 8 threshold. Bob, do you have additional comments?

Yes. I think it's important that you correctly point out the KSQ MCID was a paper that I gave with Dr. Bearing who developed the KSQ and 4 points was the minimal important difference. However in clinical practice, we don't use King's. But when we look at trial results, people realize that there's enough variability that 4 point was maybe a little too low. And we just recently published the Delphi where we looked at 100 stakeholders, 30 experts and came up at 8 points and 12 points would be better cutoffs if we're going to really say this is truly an important effect rather than just seeing in the variability of the patients responding. So that's why I think in the [ WASU ] statement that's working its way through, we just presented the results of our -- of this task force that looked at as a recommendation is to look at 8 points not as 4 points. It's a minimal important difference in clinical care.

Got it. And Sanjay, just to clarify, you're saying the responder analysis was successful.

Using the cutoff of 8 and also the steroid free. Yes, that is, I think, one of our most strongest and outstanding findings. And that I think that's really what patients and providers want. They want to be able to get off steroids and they want to make sure that their quality of life is significantly improved. We've demonstrated that through this composite. And I think Dr. Bachman will probably also agree that, that finding is exactly what we'd want to see. Bob, I don't know...

I think that at the lower bar would be getting them off prednisone just keeping their quality of life stable. And as a bonus here, you're showing that people are actually improving the quality of life over 30%, almost 30% of the time or over 30%.

Our next question comes from the line of Joe Pantginis with H.C. Wainwright.

So two questions first. I don't want to harp on this, but regard to the placebo effect. So the every 2 weeks concept. So is that just talking to the variability of how patients feel? I know that's somewhat rhetorical. And do you feel that going forward that might be able to change patient guidelines and how you're looking at the frequency of steroid papers?

Yes, Joe. Certainly, this is a construct that's in the protocol. And look, we've proven that if you can assay these patients, if you can talk to them every 2 weeks and assess them you can do a much better job. Is that reflective of clinical practice and how things will move going forward. It will be tough or Dr. Bachman can answer some of that. But I do think that this is a smoldering disease by having frequent touch points like that, perhaps you can really have your finger on the pulse with prednisone. We're also taking a snapshot of about a year. So certainly looking at things in a longer trial, you may see some of that smoldering light of fire. But again, that 40% was much higher than we had modeled for. If the modeling had hit even our prior 30% dose, 30% placebo response we'd be fine right now with regards to the primary. I think moving forward with regard to treatment guidelines, I do think personally that this is the highest degree of evidence produced in a long time, and it's going to have to be incorporated in the treatment guidelines. So Dr. Bachman, you can answer more questions around what you think this data will do to treatment guidelines.

Yes, I've been actually treating patients with sarcoid for more than 40 years, and I developed a treatment guidelines from 1999, and it shared the recent ones that we published in 2023. And what happened is that we used to tell patients come back in 3 months and then we'll talk about changing your dose of prednisone because we used to think it was a relatively slow process when you went down on prednisone. This study and others have shown that we can make that decision faster. And so things like the PULSE trial, which led this one came out before this one, it is clear that we can make the decision every 2 weeks, maybe even sooner than that, but I think 2 weeks is a reasonable amount of time. And I think -- so I think this is really going to drive the way we practice rather than necessarily trying to reflect with current -- what practice was 10 years ago.

I appreciate that. And then my next question, and obviously, Sanjay, this can change 100 times between now and your FDA meeting. But if you were in front of the FDA today, what would be your potential wish list of what you might want to accomplish with regard to next steps or study design and changes you would make?

Well, I mean, I think the first point of view is to take this data, which I think is the best data set produced in a long time for sarcoidosis with no therapies available. and have a discussion around how do we seek approval here, whether that's immediate or stepwise, that's what we have to determine. That's what we have to really strategize around. But the fact is we have a lot of good data here gives us a lot of conviction around the drug. Yes, the primary did not hit. So we have to own up to that and address that. But what are the reasons behind that? And as Dr. Bachman has pointed out, this 2-week protocol assessment it is not right now part of clinical care and practice. It may need to be incorporated in that direction. I'll remind everyone, too, that this is a drug that could be administered once a month through a 1-hour IV infusion thus far, tracking to really good safety and tolerability. I view it as a maintenance therapy that could fit really well into current standard of care. So all things that right now, we have to sit down with the agency and see what they think about the short-term ability here for us to get efzo over the finish line. But it is going to require a really engaged conversation where we need to look at the totality of the data we produced and put it up against what's available out there right now in particular, from a safety perspective. Dr. Bachman can comment a little bit around his experiences with drugs like infliximab and from a safety perspective, how our drug stacks up. Bob, I don't know if you want to say something there about that.

Yes. I mean, really, influximab REMICADE is the drug that we first described in 2000 in the last 10 years, it has been the best drug for patients that are steroid-refractory who aren't getting better with just methotrex. So that represents a significant proportion of patients with sarcoidosis chronic disease. And that is a much more toxic drug. You're probably aware of it in things like rheumatoid arthritis and Crohn's disease. And this drug infliximab is better than HUMIRA, some of the other anti-TNF drugs. So having a drug that has a much better safety profile like this one is good. And then the infliximab trial didn't look that better -- much better than this one. In fact, it didn't improve quality of life in the infliximab trial that we did here -- like we did here.

Our next question comes from the line of Prakhar Agrawal with Cantor Fitzgerald.

Maybe a couple on pulmonary sarcoidosis. How did the ability to taper even beyond the 12-week tapering protocol impact the results in the placebo performance? And second question is, have you been able to tease out efficacy by patients who were on a higher quartile of baseline steroid across placebo and treatment compared to the average of 10.5 milligram? And I had a quick follow-up.

Yes. For that second point, Prakhar, we did look -- we've looked at 10 and above and below 10 as that was a prespecified stratification. We're not seeing differences there in the conclusions. The drug does not work any better or any less regardless of those cutoffs. Now looking more specifically into smaller 2.5-milligram or quartile elements. This is something we are going to unpack and look a little bit more closely at. To the other question you had was, if I understood it correctly, your view was the ability to taper. I think that's what you're getting at. The placebo patients maybe need to take a little longer than 12 weeks. Was that what you were getting at?

Yes. Yes.

Yes. So another thing we're really looking at closely is the ability to taper. What we're observing is our protocol has been able to rigorously get folks down, the rate and speed in which placebo compared to our drug is something that we're really looking closely at. And also then looking at ability to maintain 0 for, say, a 6-month duration. We're seeing differences emerge there that efzofitimod does a better job. So we'll look at things like steroid-free days, ability to taper time to clinical worsening these are also things that we're looking at very, very closely here. So stay tuned, yes.

And can you talk about the timing of the SSc-ILD readout now and read-throughs to that indication from these data sets?

No timing just yet. I think we'll come back to that probably later this year. As I've said previously, once we have better line of sight to complete enrollment in that trial, we'll have an idea on when it reads out. That's a 6-month trial. So stay tuned once we look to finish enrollment in that trial, the SOC data will be approximately 6 or 7 months after that.

Our next question comes from the line of Roger Song with Jefferies.

The first one I have is the variability in the kinetics since you're already taking to a lot of additional detail on the time course. Just curious, one is how the standard deviation look like? Is that higher than your modeling? The other thing is that any time point you see the strategical difference between the efzo and the placebo during the course of the 1 year? And then I have a follow-up.

Right. So your first point, I think, is more about -- you said about the drug kinetics.

Yes, drug kinetics and then standard deviation yes.

Right, right. So the PK, we are doing some for sampling, and we are going to be looking more closely at that. So absolutely, looking at the exposure of the patients. That is something that we're going to look very closely. This is a standardized weight base, but could we also tease out some differences in an exposure response this is something, Roger, that will be important for us to look at for sure. That's not obviously a top line analysis, but the PK characteristics and the ability to potentially see an exposure response is something that we want to have done here as well. I just don't have that right now, but that will be something that will be very important. Your second question is, I think I think what you're getting at is durability. And when I think about this drug, I can see some data that will probably be presented at ERS in my mind. Quality of life, for example, was just remarkably consistent. efzofitimod immediately started to make patients feel good. And when you look at all the time points our statistical difference observed is not just an anomaly of week 48. Really across the trial, we're seeing the quality of life for the patients on efzofitimod significantly better regardless of which time point you look at. So that's the data that we hope to present in Amsterdam, follow-on visualizations, looking at point-to-point variability. I think the drug is demonstrating a very, very durable response and that's certainly a very durable quality of life trend. And Dr. Bachman, you've seen some of that as well. I think you'd concur with me with regard to that assessment?

Yes, I think the fact is that you're seeing a response that looks pretty apparent in the first 12 weeks, but it doesn't go away with time. You don't see a decay in that. And I actually like the fact that all the endpoints are going together it's not an end point that's sitting out there that's going in the opposite direction.

Got it. And then in terms of the KSQL, the endpoint. It is prespecified. Do you have any alignment on the powering and then when you design the trial? And then last question also related to regulatory. Any potential subpopulation you will dig deep into to show the statistical significance even in the primary endpoint?

Yes. So the KSQ is prespecified and all of the analyses that I presented today were prespecified and well powered. So the fact that we showed the statistical differences in overall KSQ and also in the responder, this is a well-powered signal based on the size of our trial and at thresholds that are meaningful. And as I said, preliminarily validated at this point. We're working on validating in parallel from this trial. So very much in line with the numbers that we want to hit as we validate the KSQ and then from a powering point of view, very robust signals in both of those 2 endpoints. Your second question, Roger, can you just repeat that again?

Yes, sure. So any subpopulation -- meet the primary end point?

Yes. So I think what we're going to be looking really closely at. We've looked at things like duration of disease, say, more than 2 years, less than 2 years, we've looked at -- we'll be looking at subpopulations of different PFT phenotypes. We've started by looking at mixed and restricted patients compared to not mixed and restrictive. So those subpopulation, that analysis is starting and ongoing. As I said, this is some of the post-hoc work that now we'll dig in to determine if there are some populations where we have a different signal. So that is part of the post-hoc analysis that's emerging. As I mentioned, background immunosuppressant use with methotrexate. It's something I'm looking really closely at because there's a notion, as I said, that placebo may have benefited from that. This sets us up to also have a real discussion around can efzofitimod also potentially replace methotrexate because methotrexate does not seem to be at least looking at this data to be a drug that has a lot of primary efficacy. Which I think I suspected -- but these are the elements that we look to unpack as the drug efzofitimod is certainly safer than methotrexate, which comes with its own liver side effects. So these are the things that we're going to be looking really closely at Roger, in the post-hoc data cuts.

Our next question comes from the line of Brian Abrahams with RBC Capital Markets.

Sorry, the results didn't work out as you'd hoped, but I appreciate you hosting this call and providing this really helpful context. Just kind of curious, as we think about framing next steps. Can you characterize your willingness to run another study in this indication? And if you were to -- can you talk about maybe some of the changes you might consider to endpoints might the design include perhaps less rigorous, more real-world check-in protocol versus every 2 weeks. Could you consider dosing higher? Did you see any patterns of AEs that would preclude you from dosing up in the subsequent study? And then I have a follow-up.

Thanks, Brian. Yes. So just to be clear, we're looking in the FDA about the potential for efzofitimod immediately being available for patients. So we'll be looking at any and all opportunities for that in the event that we would be asked to run the trial, whether confirmatory, whatever nature of that trial looks like you point out several things that we need to really dig into. I don't necessarily think about passing the patients less, loosening that criteria certainly I think would yield greater deltas. But I do like the way the protocol is run. I think what we really want to focus on is the placebo population, are there things with the IE criteria that could be tightened up to squeeze some of that signal. I think that would be something that we would look at really closely. How do we even further fine-tune the patient population to enhance that delta One could say that just the delta we've established the more than 12% difference, you can model off that. I mean, this is probably the best natural history data ever in sarcoidosis. So now you can model off of this and model and then that you can hit that difference, provided it a meaningful important difference. But I also -- I look at signals in KSQ that has to play a bigger role I think we've already gone beyond steroid reduction. So now I think we're in a world where our drug and other drugs will -- I think patients will demand steroid withdrawal. With regard to dosing, we don't -- we have a good safety profile. I think you bring up a good point could the drug be administered more frequently, could we go to every 3 weeks infusion, we'd have to weigh that against how the patients would feel and the centers. All really good points here. if we are asked to do something another trial. But our viewpoint is we want to take this data set and see what can immediately be done for patients who are really in desperate need of better therapy.

Understood. No, that makes a lot of sense. And then maybe just one more question. Did you notice any correlations between the improvements on KSQ lung with steroid reductions or withdrawal. I guess I'm sort of wondering whether the quality of life improvements that you're seeing are driven primarily by greater steroid reductions or perhaps a secondary drug effect, especially considering you mentioned that these were seen like quite early on.

I think it's fair to say that if you remove steroids, you are going to feel better. But I think what really is something that we have focused on is the degree of quality of life improvement is quite substantially different between those placebo patients that remove steroids compared to those that remove steroids on efzofitimod. And that's apparent when you look at the KSQ differences and especially the responder analysis. So I think it's fair to say that any and all of us, if we took less steroids, we're going to feel better. The question is, are you substantially or statistically better than your placebo counterparts, and we've demonstrated that in this trial. So I think it's a combination, but I also think that this is why I view it as the protocol effect, the rigor of our protocol reduces steroids, but to really feel better epsofitimobs the thing that is making the patient's quality of life better here with that difference that we observe.

Our next question comes from the line of Yale Jen with Laidlaw & Company.

Just two here. The first one is essentially we already have the Phase III data in retrospectively, as you go back to look at the Phase II readout, do you have any comment and thoughts on that -- then I have a follow-up.

Thanks, Yale. Yes, I mean Phase II obviously had a different design, taking folks down to 5. And obviously, we didn't have the rigor of the every 2 weeks with the PGA. But when you look at that data, look at quality of life, again, a very consistent signal that we observed in that trial. It's safe, similar to that trial. We consistently in that trial showed a dose response. I think it's at least on my preliminary view, we're seeing something similar in this trial. 5 certainly is always outperforming a placebo in all the assessments we're looking at. So a lot of consistency from that trial. That was a smaller trial. I think that was one of the things that we were heavily criticized. Now we have a signal in 270 -- nearly 270 patients. So consistency in a much larger population that is now really well powered. I think this is why we like some of the results in this trial.

Okay. Great. That's very helpful. And 1 more question here, which is that the endpoint has been adjusted toward an average of 4 weeks versus the, I guess, the last weeks of the study. Do you see that have any impact on the readout?

Well, I think you have to look at -- we have patient diary data for every single day. So the average dose is also best is the way the FDA wanted us to look at it, point estimates, point-to-point variability. I think that could be worrisome if we just take a point estimate. . But I think the main point here is when you look at month-to-month assessments, as Dr. Bachman pointed out, we have a lot of durability here. The signal is not bouncing around at the visits of quality of life, in particular, immediately patients start to feel better, and they continue to feel substantially better compared to their placebo counterparts all throughout the year, while maintaining 0 steroids, so -- 0 to low steroids.

Our next question comes from the line of Soumit Roy with Jones Trading.

When you look at the curve for between the placebo arm on the 5 milligram, was there any difference between 12 to 24 weeks versus 24 to 48 as this is the longest trial ever in this indication or was that pretty much overlapping the whole time.

I'll be looking, Soumit, at the different cutoffs. We looked at the whole trial. We've also looked at 12 to 48. So stay tuned. I think what you're getting at is, is there -- are there windows? Does the drug start to work better towards the end? Right now, we just look at overall and we're also looking at 12 to 48, I need to look at some other windows. And this goes back to an earlier question that can the drug seem to allow patients to taper faster and cleaner. That's something that I think is going to be really important. And the other component is, did it take placebo patients longer to get to 0. So this is some of that time to event, the number of steroid-free days. Those are things that I will be looking at and hope to get that to you in the future.

And one last question. Trying to reconcile the quality of life endpoint versus the primary endpoint. Clearly, do you think the drug is clearly disease modifying and if there is any objective biomarker or something that you can use to show that this drug is effective in certain subpopulation as you dig through the data?

Well, I definitely think it's treatment modifying. Disease-modifying gets into looking at other elements, other functional elements, maybe radiographic. That's something we didn't assess in this trial. So I think it's yet to be determined. But certainly, yes, I mean, we are, in many ways, modifying disease by substantially reducing steroids, still maintaining inflammatory control, not worsening lung function. And I think patients would certainly say that it's modifying their life. And I think that's a significant concern and consideration for these patients. They've been on toxic prednisone for decades. And I think this is the first drug that, I think, really gives hope. It is going to change, I think, treatment practices and experts are going to look at this data and have to think differently. But I also think that efzofitimod has demonstrated some things quite unique.

Our last question comes from the line of Dev Prasad with Lucid Capital Markets.

I have a couple of questions, one for our KOL and one for Sanjay. For KOL how do you view the relative importance of KSQ versus FVC in pulmonary sarcoidosis patients in terms of capturing meaningful clinical benefit. And for Sanjay, KSQ case you demonstrated clear benefit in the trial. But how do you think FDA will balance those quality of life gains against FVC benefit?

Dr. Bob and why don't you go first and then I'll finish.

Yes. All right. So yes, I'm a pulmonologist. So we like numbers and we look at FVC. But if you have the patient and we did a few years ago, we published a study of 1,800 sarcoidosis patients. The #1 priority to them as far as treatment was quality of life; and #2 was functionality. Number 8 on the list was the lowest one was pulmonary function tests. They really are less enthusiastic. And I think -- as I said, if you look at the trials that we've completed, the improvement in force bottle capacity has been minimal. That was the biggest result with infliximab despite the fact that over the next 15 years, we've shown that, that drug is an important part of therapy. So I think the FVC has been overblown up. The FDA is, I think, recognized that that's probably not the primary endpoint and the recommendations we're making now, you should be looking at quality of life and steroid withdrawal.

Yes, Dr. Bachman, you exactly said what I would say, FVC from a regulatory perspective is falling much lower in its priority we got wind of that years ago when we started after our Phase II data. It's clear that quality of life and steroid replacement reduction. This is the way at least I read the FDA is interested in the KSQ lung is a field endpoint. They look for things and field function and survives. Right now, I think the drug of the disease is searching for even better functional measures. But in my view, the field end point here that the FDA is focusing on and has guided us to focus on is King's Sarcoidosis Questionnaire. So I do think that this portends well for us, that's where we saw a signal.

Thank you. I would now like to turn the call back over to Sanjay Shukla for closing remarks.

I just want to thank everyone's interest, a lot of great questions today. obviously, not exactly what we wanted, not what the company wanted, not what investors wanted. I do want to just highlight here, though, that for patients, specifically those patients who are listening, those that were in our trial you contributed to something here, landmark, the medical evidence that we're producing here is going to make you feel better. Practice patterns are going to have to acknowledge this excellent evidentiary data set that we've created. I think it's going to positively benefit your care. Efzofitimod is still in the mix here. As I said, we plan to really fight for you, fight for patients and work closely with the agencies around the world, but I did want to tip my hat to the patients out there and really thank them for their interest and those that participate in our trial you really moved the field forward. So I'll end there, and thanks, everybody, for dialing in.

This concludes today's conference call. Thank you for your participation. You may now disconnect.