Biogen Inc. (BIIB) Earnings Call Transcript & Summary

Good morning. My name is Shelly, and I will be your conference operator today. At this time, I would like to welcome everyone to the Biogen Thematic Pipeline Seminar, Rare Kidney Disease. [Operator Instructions] Today's conference is being recorded. Thank you. And I would now like to turn the conference over to Mr. Tim Power, Head of Investor Relations. Mr. Power, you may begin your conference.

Thanks, Shelly, and good morning, everyone. Welcome to Biogen's Thematic Pipeline Seminar, where today, we'll focus on felzartamab and rare kidney disease. During this call, we make forward-looking statements, which involve risks and uncertainties that may cause actual results to differ materially from statements. We provide a comprehensive list of risk factors in our SEC filings, which I encourage you to review. We've also posted the slides to our website that we'll be using during the call. On today's call, I'll be joined by our President and Chief Executive Officer, Chris Viehbacher, Dr. Priya Singhal, Head of Development; Dr. Travis Murdoch, Head of Biogen's West Coast Hub and Dr. Uptal Patel, Head of Development for Biogen's West Coast Hub. Our discussion today will focus on felzartamab opportunities across multiple nephrology indications, and each section of our presentation will be followed by a pause for some Q&A with time for additional Q&A at the end. To allow us to get through as many questions as possible, we kindly ask you limit yourself to 1 question. And I'll now turn the call over to Chris.

Thank you, Tim. Welcome, everyone, to our first investor seminar. As you know, we have been focused on generating sustainably growing revenue, building a new Biogen. So over the past 2 years, we have restructured our business through our Fit for Growth program, and that's brought a lot of focus and generated significant resources. We've launched 4 first-in-class indeed first-ever disease-modifying treatments in the past 2 years, and they now represent a significant and increasing share of our total revenue. We also critically reviewed our portfolio of development assets. And we now have a pipeline that I think is more diversified and in 1 in which we have growing excitement and confidence. Now Biogen is where breakthroughs happen. We are proud that we tackle some of the hardest problems in medicine. But this brings challenges even when we succeed scientifically. Breakthroughs mean a market has to be developed. Since often, there has been no treatment in the past. That is also difficult for investors to assess since there are often no analogs. The rare nature of the diseases and lack of analogs means that we have to work harder to educate physicians and patients, our own teams, but also you, our investors. Today is an opportunity to do a deeper and more focused dive into a very promising part of our pipeline. We've expanded our therapeutic horizon of interest to include immunology. Our acquisition of HI-Bio last year accelerated this expansion. We're currently in the process of initiating 3 Phase III studies in rare nephrology indications with felzartamab. In fact, we have already enrolled the first patient in 2 of the 3 studies, and we expect to have the first patient enrolled very shortly in the third study. Now although the indications are in nephrology, the path to treatment goes through the immune system. I think you're going to hear that the CD38 is not only an ideal approach in these 3 indications, but there are many other potential indications. Dr. Travis Murdoch and Dr. Uptal Patel will take you through the 3 initial indications for felzartamab. And Dr. Priya Patel will -- Dr. Priya Singhal, sorry, will conclude the presentation. Before we do that, I would just like to point out in addition to innovating in immunology, we're also innovating a business model. I'm really pleased and proud to say that the HI-Bio team has elected the part of Biogen and the team is now the foundation of a new West Coast hub. We recently recruited a new head of immunology research, Dr. Nick Wilson, who is building on a research team alongside our HI-Bio colleagues. We hope to leverage the passion, the entrepreneurial spirit and the knowledge of this team and wrap around the benefits of a larger company in terms of procurement, CMC, global clinical trial recruitment as just some examples. Now this is not easy to deal organizationally, and I'm grateful for the collaborative leadership of Priya, Travis and Uptal. So I'm now going to turn the presentation over to my colleagues. And if I could have the next slide, please. Our 2 colleagues are Dr. Travis Murdoch. He is a Road Scholar where he studied immunology, trained as a physician first. He was a consultant, then became -- had a period as an investor at Third Rock and SoftBank for founding HI-Bio. And Uptal is in at nephrologist by training. He spent 20 years at Duke University. He's also the Chair of the Board of Directors of the Kidney Health Initiative. He was Head of Clinical Renal and Executive Group Director, Early CVRM research at AstraZeneca before becoming the Chief Medical Officer at HI-Bio. So I think you'll find these are 2 extremely well-qualified people to really present the strengths of our immunology and nephrology pipeline. So Travis, I'll turn it over to you.

Thanks for the introduction, Chris. So let's start by talking about how we brought real depth of expertise in nephrology to Biogen. As some of you know, HI-Bio was established to address severe immune-mediated diseases by developing targeted therapies. We built a team with many years of expertise in immune-mediated diseases with a focus on nephrology given the high unmet need, but also compelling proof-of-concept data for our lead program, felzartamab. Following the acquisition by Biogen, the vast majority of the team has remained part of our West Coast hub and grown over the last year with an intense focus on advancing our immunology and rare disease efforts, including advancing felza into 3 pivotal studies with further expansion opportunities underway. Today, we'll be speaking the felza and why we think this is such an exciting opportunity for patients and for the company. But let's start on CD38, which we believe is a very interesting target in immune-mediated diseases. As you can see on this slide, there are multiple diseases caused by autoantibodies that attack the body's tissues. While the end organs affected vary, the mechanisms that underwrite these diseases are shared. Most autoantibodies are generated by 2 types of cells, plasma blasts, shown on the left and long-lived plasma cells shown on the right. Both these cell types, which are the professional antibody factories have high expression of CD38, which makes it a very interesting target for treating antibody-mediated diseases. Now there's additional history here in that there's strong validation of CD38 in multiple myeloma, which is a cancer of plasma cells. So the mechanism by which CD38 works is by directly depleting the cells that produce autoantibodies. We believe this has the potential to treat antibody-mediated diseases in a more durable and targeted way, which are clinical data that we'll share have borne out. At the same time and critically, we avoid earlier B-cell lineages, and this has the potential to provide a differentiated safety profile, given that CD38 does not target B cells. What we've shown, for instance, is that patients can maintain vaccine responses while they're receiving felzartamab. This is a different approach than those targeting CD20 or CD19 that deplete precursors to those cells or APRIL-BAFF, which really act by inhibiting those cells. So hopefully, you can see why we believe that CD38 and targeting CD38 via a monoclonal antibody is a differentiated approach to treating these diseases. But let's turn specifically to felzartamab, and why we believe this is the right anti-CD38. First, felza inhibits -- binds to CD38 in a unique way, which has some important consequences. It was engineered to not have complement-dependent cytotoxicity. As a result, infusion rates can be as fast as 30 minutes, and we've seen a lower rate of infusion-related reactions. Additionally, felza binds CD38 in a way that doesn't inhibit the ectoenzyme, which we believe could have safety benefits. Secondly, and uniquely, we have a complete chronic tox package for felza, including reproductive tox package in marmoset monkeys. Now the marketed CD38 programs, which are used in oncology, do not have chronic or repro tox packages that are important to support the chronic use in immune-mediated diseases. And that's because they don't cross react to relevant nonhuman primate species. So our current focus is on nephrology indications of high unmet need, including AMR, IgAN and PMN. As we'll share, these indications have compelling proof-of-concept data. We additionally have an ongoing lupus nephritis signal-seeking study. Now we've seen some compelling data off-label in lupus and in lupus nephritis with daratumumab. And that appears in some ways similar to data generated off-label CAR-T therapy, including durable remissions off therapy. But as you can see with this indication landscape, what's unique about the anti-CD38 approach is that there are a number of other indications shown here with off-label case series using other anti-CD38. And this really provides us a road map for future potential indications where there's already some existing clinical validation. So now I'd like to hand it over to Uptal to walk us through the felza opportunity in the AMR.

Thanks, Travis. Let's start with an overview of AMR in kidney transplant recipients on the next slide. So antibody mediate rejection, or AMR, is a disease with a very high unmet medical need. And that's because it's one of the leading causes of kidney transplant failure. As you can imagine, patients are thrilled and rejuvenated when they receive the gift of life from a kidney transplant, but absolutely devastated when they lose their new kidney to rejection. This disease is driven by alloantibodies to antigens on the donor cells as well as by damage from natural killer cells that caused microvascular inflammation in the kidney. This process can occur either shortly after a kidney transplant, referred to as early AMR or in the case of late AMR, more than 6 months following the transplant. What's important is that despite the potentially devastating impact of AMR for these patients, today, they have no approved options and experimental treatment so far have had limited success. So let's take a deeper look at why this is such an important opportunity for patients as well as for Biogen. First, patients who need kidney transplants tend to be younger, meaning there is a productivity impact to having this disease, and there are costs associated to the health care system for managing their disease over time. Now unfortunately, while transplant is the answer for these patients and a preferred treatment for kidney failure, kidney transplants are hard to come by. Only around 1/3 of patients on the wait list will actually receive a kidney transplant, and the cost of the procedure itself is almost $0.5 million here in the U.S. This further drives the importance of protecting a transplanted kidney once patients have actually received them. Take a minute to look at the numbers in late AMR more closely. As you can see on the right, approximately 4% of transplants develop at AMR and are, therefore, at significant risk of losing the kidney transplant. Furthermore, it can cost somewhere around $160,000 to treat and manage AMR per year. And knowing there are no effective treatments today, I hope you can appreciate why we view AMR as an important opportunity. So let's take a moment to look at what characterizes AMR. While identification of AMR begins with routine post surveillance, the diagnosis is defined by a kidney biopsy, exhibiting features of active microvascular inflammation or MVI. More specifically, MVIs are characterized by infiltration and accumulation of immune cells within the kidney microvasculature, made up of glomerular and peritubular capillaries. Traditionally, AMR has been viewed as the result of high affinity donor-specific antibodies or DSAs that bond to alloantigens, primarily HLA antigens on the endothelial service of these capillaries. This triggers a cascade of factor mechanisms, particularly natural killer or NK cells, leading to inflammation and injury of the microcirculation. Resolution of AMR is achieved when the active features of MVI and other histopathological features resolve. As I mentioned, the options available today have had limited efficacy, but let's take a closer look at that on the next slide. With no approved therapies for AMR, the existing standard of care relies upon the use of therapies that remove DSAs or reduce their production, such as plasmapheresis or intravenous immunoglobulin, both of which have lacked efficacy in late AMR. Unfortunately, Phase II data from multiple investigational agents have also thought to meet the bar for what transplant physicians want for their patients. In our research, we have heard from these physicians that they need a drug with much higher biopsy resolution. Anything greater than 45% would be clinically meaningful, but they actually told us that a drug that would deliver more than 75% would not only be good, but transformational. With that in mind, the Phase II study was conducted to look at what felza might do in AMR. Let's look at that next. So because felza has a distinct capability of selectively targeting not just the CD38 expressing plasma cells, but also the CD38 positive natural killer cells, this Phase II study had the potential to demonstrate greater efficacy than prior therapies. It included 22 patients randomized to either felzartamab or placebo dosed over 24 weeks. The primary endpoint of the study was safety, but key secondary endpoints included resolution of AMR features on biopsy, including MVI. Let's take a look at that on the next slide. In the felzartamab arm, over 80% of patients demonstrated AMR resolution by biopsy at 6 months versus placebo, where we observed only 20% resolution. This was accompanied by an improvement in kidney function as measured by the estimated glomerular filtration rate, or eGFR in the felzartamab arm out to 1 year. And remember, as a reminder, expert transplant nephrologist told us that anything over 75% would be transformational. So these results were very encouraging. Underscoring the significance of these results, the Phase II study was published in the New England Journal of Medicine last year. And on the next slide, you'll see that this is also a well-tolerated medicine. The majority of treatment-emergent adverse events were mild to moderate in severity. The most frequent adverse events observed in the felza arm were infusion-related reactions with the majority occurring after the first dose, and there were no treatment-related discontinuations. So this is why we're excited about the potential for felzartamab in AMR, where no treatments exist today and why we started a Phase III trial earlier this year. Let's talk a bit more about that on the next slide. The TRANSCEND Phase III study will enroll approximately 120 kidney transplant recipients with late AMR. The primary endpoint of TRANSCEND is the percentage of participants who achieved resolution of AMR at 6 months as assessed by biopsy. Key secondary endpoints include changes in the MVI score in the percentage of patients achieving an MVI score of 0. You'll notice that unlike the Phase II, we're including the potential for chronic treatment here because we believe this will reduce the risk of relapse in the future. Remember, in this disease, the constant presence of a transplanted organ drives persistent stimulus for alloimmune responses. The study is expected to read out in 2027, and we look forward to sharing updates as this progresses. So in summary for late AMR, it remains the leading cause of kidney transplant loss, posing a significant unmet need in transplant care. And despite extensive efforts, no approved treatments currently exists and previous agents in development have consistently failed to demonstrate sufficient efficacy to gain confidence among transplant nephrologists. However, felza has shown promise as a potential breakthrough therapy, and the Phase II data showed a transformational over 80% resolution of AMR, offering new hope for improving long-term outcomes in kidney transplant recipients with the potential to address the critical gap in treatment options. I'll pass it over to Tim for Q&A on felza in AMR.

Thanks, Travis. And as Uptal alluded to, we're going to take some questions on AMR now, and then we'll come back and we'll pause for questions after IgAN, PMN at the end of the call as well. Operator, can we just go to the first question for AMR, please?

[Operator Instructions] Your first question will be coming from Eric Schmidt with Cantor.

Congrats on a very lucid presentation around felza in this indication. I guess my question is on the schedule and dose in AMR and maybe in particular, whether felza is going to be formulatable as a subcu. I assume that's going to be important when we talk about the IgAN opportunity in particular.

I'll take that one [indiscernible], Uptal.

Sure. Thank you for the question. So in the Phase III AMR trial, in Part A, we're going to have participants randomized to receive 9 intravenous infusions of felza or placebo over 5 months, like we've done in our other studies. And then the efficacy and safety will be evaluated compared to placebo at 24 weeks. In Part B, all participants will receive felza during this open-label period from 6 months to 52 weeks. And at this time, I'll maybe hand it over to Travis to share how we're thinking about subcu.

Sure. Thanks, Uptal, and nice to hear from Eric. So we'll share this later in the presentation, but we certainly are -- we're currently pursuing subcu. That said, and as we'll share and certainly the case in AMR, these patients have no options. And so an infusion initially weekly and monthly and then every 8 weeks, which is the schedule, we believe is highly tolerable in this patient population and one that given the potential for transformative efficacy would really result in IV form potentially becoming an important part of the standard of care.

Next question will be coming from David Amsellem with Piper Sandler.

So I might be putting the cart before the horse here asking a commercialization question. But on Slide 14, you have the patient funnel down to 11,000 patients with late AMR. Of course, IgAN is quite a larger market. So I guess with that in mind, you've got these different addressable markets of different -- of various sizes. So how does that play into your thinking about pricing, the extent to which you'll price it in sort of deep orphan territory versus something more geared to a larger population? It might be early to ask the question, but it's something that I'm thinking about as you're going through these slides.

Do you want to take that one, Travis?

Sure. Thanks for the question and certainly something that we've been thinking about, albeit, as you mentioned, it's early. So what's unique about AMR, certainly, it's a smaller patient population today than IgAN. But what's unique in the data that we've seen is that patients clearly have evidence of relapsing off therapy. We see that both through biomarkers such as cell-free DNA, but also recurrence of MVI at 12 months because in the Phase II study, patients didn't have therapy between 6 and 12 months. So we think that in this disease, actually, the dosing schedule will be more intense and there will be chronic dosing. In contrast, in IgAN, as we'll share in the next section, after a 9-dose 5-month course, patients had durable disease control out to 2 years. And so we think that from a relative dosing point of view, there is an opportunity to commercialize this product across multiple indications of different sizes.

Yes. If I could just add -- I was just going to add on, David. One of the things that as we look across, we -- just because of what Travis said, I think we're looking at an annual cost basis. And actually, just because of these different dosing regimens, and it is early and it all needs to be validated in clinical trial. But we actually think that, that will actually help us even though there are different populations when you look at it on an annual cost basis, this works out.

Thanks, Chris. Let's go to maybe one more question on AMR.

Your next question comes from the line of Jay Olson with Oppenheimer.

This is Cheng on the line for Jay. I'm just curious about the diagnosis of AMR. It seems like you need to have biopsy. So just wondering, do you think like a biopsy will be required on the label for felzartamab? And also maybe I can just ask about the following strategy, whether you need to wait for the Part A and Part B or you can follow based on the Part A results?

Uptal?

Thanks for the question. So the biopsy-based diagnosis is pretty critical and defines the disease. This microvascular inflammation, there's really no other way of diagnosing that without a biopsy. Fortunately, in kidney transplantation, biopsies are routine, particularly for complications and assessing the efficacy of treating rejection. So there's precedents for this. As far as filing strategy, our intent is to file on the 6-month data, and we'll -- we've got breakthrough and orphan drug designation to allow some ability to sort of add to those packages as we move forward with the program.

Terrific. Thanks, Uptal.

Let's move on, if you don't mind, to our next section on IgAN. Go ahead, Uptal whenever you're ready.

Turning to IgAN. IgA nephropathy or IgAN is the most common type of primary glomerulonephritis worldwide, and it's a serious disease and a leading cause of kidney failure. And what's clear is that today, patients need new options that deliver durable disease remission. IgAN is mediated by immune complexes composed of galactose-deficient IgA1 and its IgG autoantibody, both of which are believed to be produced by CD38 positive plasma cells. These immune complexes deposit in the kidney, resulting in tissue damage and nephron loss, the subsequent progressive kidney failure. And most patients who get this disease are typically diagnosed in their 20s to 40s. So their lifetime risk of developing kidney failure or death from kidney disease is really high. Now while some countries perform regular screening for IgAN, most patients are typically diagnosed through incidental findings such as increased proteinuria or hematuria and then the diagnosis is confirmed by a kidney biopsy. Current treatments are evolving, but generally involve nonspecific therapies to reduce proteinuria with or without chronic generic or branded steroids. So we all know that this landscape is increasingly competitive, and there are many new assets being tested in late-stage development. To better understand this landscape of desired therapy in IgAN, we spoke to nephrologists and patients about what they would want to see, and we learned some interesting things. As expected, there's a focus on the need for more effective options that have an acceptable tolerability profile. But what we thought was interesting was that physicians and patients are also telling us there's a real need for a novel therapy that provides durable disease remission without chronic administration. And on this slide, you see on the top right, this is nicely captured by a comment from a patient, really highlighting the psychological impact of chronic treatment for this disease. Knowing that felza would deplete the long-lived plasma cells that produce the antibodies causing IgAN, we ran a Phase II study to see how felza might work in this disease. Take a look at that next. So here's an overview of the Phase II study we ran to assess the depth and durability of felzartamab's effect on proteinuria out to 2 years. This study schema looks a little complex, but it's basically a placebo-controlled trial evaluating different durations of treatment from 1 month out to 5 months. And as I mentioned, we wanted to see how durable the benefit from felza would be. Take a look at that, next. So first, we looked at what was happening to antibodies of interest, and these are pretty interesting. What you see is that felzartamab treatment resulted in robust and sustained reductions in IgA more than 18 months after the last dose. Now this is important because this is the primary antibody that's implicated in the disease. And what's also important is that levels of IgG and IgM antibodies vital for fighting infections quickly rebounded after treatment. So we believe that we may have a differentiated profile here that might have the ability to manage the disease with a durable effect while maintaining the ability to fight infections. Take a look at what happened to kidney function next. So looking at kidney function on this slide, what we found was in line with the reductions observed in IgA. We observed robust and sustained reductions in proteinuria as shown in the chart on the left. In the 9-dose arm administered over a 5-month period, we observed ongoing reduction in proteinuria with a roughly 50% reduction at 24 months. Again, it's important to remember that this is now 18 months off treatment. This level of proteinuria reduction is both clinically meaningful and may translate generally to kidney preservation based off epidemiologic data. To confirm this and consistent with it, we also observed sustained placebo-adjusted stabilization of kidney function as measured by eGFR after 2 years as well. So overall, these data were really encouraging and seem different from what is seen with other approaches. At that point, when we look at the emerging IgAN landscape, the sustained response observed with felza is different from many other investigational programs in IgAN, such as the APRIL or BAFF agents. For those agents, the data so far shows that when therapies are stopped, you begin to see an increase in proteinuria and loss of eGFR within just a few months. What we're seeing with felza is different. We're clearly seeing efficacy in the same neighborhood as the other effective approaches but without the need for continuous treatment. And so you can see why we're excited to launch the Phase III study in IgAN. Here's the design of our Phase III study, PREVAIL. It's a placebo-controlled trial examining the 9-dose regimen over 5 months versus placebo. The primary endpoint is change in proteinuria from baseline to month to 9 with a key secondary endpoint being change in eGFR from baseline to 2 years. PREVAIL is now underway, and we expect data to be out in 2029. So in summary, for IgAN, many patients progress to kidney failure over their lifetimes, highlighting the urgent need for treatments that deliver durable disease remission. This represents a significant unmet need for patients with IgAN. And felza has emerged as a promising therapeutic candidate with Phase II data demonstrating sustained clinical benefits following just 5 months of treatment with effects persisting for up to 18 months of therapy. Again, these results underscore felza's potential to transform the treatment landscape for IgAN and deliver a differentiated treatment option for patients. Let me pass it back over to Tim for Q&A on felza and IgAN.

Great. Thanks, All. So yes, let's go take a couple of questions on IgAN and Shelly could we go to the next question, please.

Your next question comes from the line of Mohit Bansal with Wells Fargo.

This is Sadia Rahman on for Mohit. So in this Phase II data, there seems to be some rebound in IgA antibodies after the 6-month dosing period. There's also -- there looks to be a decline in eGFR similar to the slope you're seeing in the placebo arm after 9 months. So just curious how you think this felzartamab could look in Phase III with this drug holiday compared with competitor B-cell agents that are dosed chronically?

Sure. Let me take that. So thanks for the question. I think one of the things to -- you picked up on an observation sort of after the 6-month point, a little rebound in the proteinuria. That may be in part related to noise. This is a small study. And I think what we see overall is consistent with pretty consistent reduction, and that's shown in the Japanese subcohort that we only have 1-year data. So again, small numbers in each of these cohorts, which is different than some of the other studies out there that for larger Phase IIs. And as far as progression goes, this was a high-risk population. And what we saw was progression that was quite rapid in the placebo group, but stabilization across the different doses, in particular, for the 9-dose arm in felza.

Next question is coming from the line of Laura Chico with Wedbush Securities.

I'm not sure if this should be directed towards Travis or Uptal, but maybe if you could talk a little bit about the registrational study. So the Phase III study is enlisting the primary endpoint of a percent change from baseline in proteinuria at week 36, which is consistent with what we've seen from other players. At the week 104 secondary analysis, what are you looking at in terms of, I guess, magnitude of effect to remain competitive? Would it be ideally seeing kind of that stabilization persist on GFR? Or are there other measures that you're kind of looking to see?

Yes. Thanks, Laura. So the 2-year endpoint, I think what everyone is interested in patients, companies, treating physicians and the regulatory authorities is stabilization of kidney function. So preservation of kidney function is the goal. And when you look at proteinuria as a surrogate of that. So that allows sort of a faster pathway to approval and having the drug be available to patients sooner with the 9-month data. But the ultimate goal is really reducing the loss of kidney function. And so we're very interested in the amount of preservation we'll be able to achieve in 2 years with felza.

Thanks, Uptal. Shelly, let's go to one more question on IgAN, and then we'll move on to PMN.

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

This is Kevin on for Brian. So maybe just to follow up a little bit. How are you thinking about sort of Phase II to Phase III translatability for -- in IgAN felza on biomarker and kidney function? And then can you maybe talk a little bit about that specific eGFR 20 to 30 cohort that you have built in, in the Phase III program? What are you hoping to learn from that data set?

Uptal, do you want to take that one?

Sure. So thank you. So in terms of translatability, look, we had a relatively small Phase II study, but the totality of the data we have that we're sharing today on felza suggests that reducing the antibody production driving these diseases leads to durable disease-modifying effects. And so although there is some noise from our small study, we're very pleased to see the reduction in proteinuria and that translates to stability of kidney function. And that needs to be validated in this larger Phase III study that's now underway. As for the additional cohort, there's interest in understanding what happens to people who've already lost a fair amount of kidney function. The goal is still to help stop and preserve the remaining kidney function those patients have. So rather than have that confound the primary assessment, we've created a separate cohort to look at the effect in people with GFRs between 20 to 30. And hopefully, that will also translate there. But the disease mechanisms are a little different there because there's activation of sort of chronic pathways that lead to progressive kidney disease, but we're hoping to also find stabilization of kidney function there.

Thanks very much, Uptal. If you are ready, let's move on and talk about PMN.

Great. Thanks, Tim. So PMN, primary membranous nephropathy, it's a severe antibody-mediated disease of the kidney that's the leading cause of nephrotic syndrome and carries a significant risk of kidney failure. Patients with PMN and nephrotic syndrome often present with very severe swelling and fatigue related to the high-grade proteinuria, which also causes them to be at increased risk for infection. This disease is characterized by autoantibodies that are produced by CD30 expressed in plasma cells. And it's estimated that up to 80% of PMN patients have autoantibodies specifically against PLA2R, and those with high titers are at increased risk of poor outcomes. There are no approved treatments for PMN currently and the standard of care includes everything from immunosuppressants to chemotherapy. And still, up to 40% of patients do not achieve remission and 30% of patients progress to kidney failure within 10 years. Take a closer look at how it's managed today. On this slide, we have a simplified view of the treatment algorithm and the outcomes for different treatment options. Here, the treatment decisions are based upon risk evaluation, which is largely determined by assessing the degree of kidney dysfunction using eGFR and proteinuria. Looking at high-risk patients, you can see that their options include cycling through a series of medications, including the use of steroids as well as chemotherapy. Each option has anywhere from a 20% to 50% relapse rate with other safety and tolerability considerations over the long term. Knowing that felza could potentially be a better option, we ran a Phase I/II study. Take a look at the design of that. So this study utilized our 9-dose regimen in 2 cohorts of patients, both of whom had anti-PLA2R autoantibodies and were in need of immunosuppressive therapy. Cohort 1 consisted of newly diagnosed or relapsed patients with high PLA2R autoantibodies, while Cohort 2 consisted of refractory patients who showed no immunologic remission to prior immunosuppressive therapy. While the primary endpoint was safety, we were very interested in the secondary clinical endpoint. Take a look at those data next. So on this slide, we see the impact on changes in the autoantibody involved PLA2R. Looking at anti-PLA2R titer response across both cohorts, the graph on the left shows depth of response at the 6-month time point. Felza led to a robust reduction of PLA2R autoantibodies in newly diagnosed, relapsed and refractory patients 1 month after the last dose of felza. The graph on the right shows a sustained response without additional therapy. Most patients actually had a response that was maintained at the 12-month mark. What's interesting is the response in Cohort 2, which included highly refractory patients, including some of whom were refractory to multiple rounds of prior anti-CD20 therapy and cyclophosphamide. Now let's turn to what the impact was on relevant clinical assessment. Felza led to improvement across various parameters in most patients in both Cohorts 1 and 2. This includes the recovery of serum albumin levels, decreased proteinuria and stable eGFR through the end of 1 year. While there's some heterogeneity in these individual patient populations, we believe the robust and sustained immunologic response and improvements in kidney function suggest evidence of the potential efficacy of felza in PMN. Now you can see why we're also encouraged by the opportunity to advance the Phase III study in PMN as well. Based on these findings, we're initiating PROMINENT, a Phase III study to confirm the efficacy of felzartamab in moderate to high-risk patients with PMN, inclusive of newly diagnosed and relapsed patients, similar to Cohort 1 in the prior study. The study will include 2 courses of felzartamab separated by a drug holiday so that we can fully elucidate the clinical profile of felza in patients with PMN over 2 years. PROMINENT is now currently underway with a readout expected in 2029. So in sum, PMN is a symptomatic and progressive condition with approximately 30% of patients advancing to kidney failure within a decade. Current treatment options are often limited by insufficient primary efficacy, relapses to therapy or severe side effects such as those associated with chemotherapy. At the same time, felza has shown promise in addressing these challenges with Phase II data showing robust and sustained reductions in anti-PLA2R antibodies and sustained clinical improvements across newly diagnosed, relapsed and refractory patients. Together, we believe these findings highlight felza's potential to redefine the treatment paradigm and improve outcomes for patients with PMN. Let me pass it back over to Tim for Q&A on felza and PMN.

Thanks, Uptal. Shelly, can we just go to a couple of questions on PMN? Maybe go to the first one on this one, please.

[Operator Instructions] your next question comes from the line of Paul Matteis with Stifel.

This is Julian on for Paul. Just for the Phase III, can you talk about in PMN, what are the proportion of newly diagnosed or relapsed patients? And then I guess just across these 3 indications, would you be able to just opine on what you believe is the level of potential for chronic dosing? Any information on that would be really helpful.

Uptal?

Yes. No, thanks for that question. So this study is just getting started. And so we don't have any targets for the newly diagnosed versus relapsed populations. But based on what we see clinically, there's some variation of this around the world, and we expect that these will be balanced across the 2 arms. Maybe for the second part, I can hand it over to Travis.

Sure. So I would say what we're seeing in IgAN certainly is patients are having durable responses out to 2 years. Given the underlying pathogenesis of this disease and of PMN, we do expect that there will be recurrence in some patients. And so our thinking is that we'll pursue a long-term extension study to really understand in both these diseases to understand retreatment. But we do expect that a portion of these patients will require retreatment just given the underlying pathogenesis of the disease.

Next question is coming from the line of Evan Seigerman with BMO Capital Markets.

This is [ Connor ] on for Evan. Maybe just one follow-up to the previous question there. Can you maybe discuss a little bit about the importance and differentiation of the durability of the responses you're seeing here in PMN and maybe discuss a little bit your sort of decision to redose at week 52 and kind of the profile of a patient who may require chronic dosing.

Travis, do you want to take that one?

Sure. So one thing that's really important to note in the [indiscernible] study, which was the signal-seeking study is that these patients had some of the highest anti-PLA2R, so the autoantibody titers. And in this disease, what we see typically is that patients who are higher titer tend to not respond as well to CD20-based approach. We believe that, that's because these patients are more plasma cell driven, and they end up getting, unfortunately, cyclophosphamide, which is really toxic. Now these are also the patients who tend to be at highest risk for relapse. And so given that -- obviously, we only have 1-year data, but given the fact that we were seeing deep responses immunologically in many patients, but not all, we decided to redose patients at 52 weeks, as you point out. And I think it's going to be really the long-term extension study and really understanding those patient segments based on risk, which helps us understand how many of those patients ultimately will relapse and require retreatment after a 2-year period.

Thanks, Travis. Let's go to one last one on PMN, please, Shelly.

Your next question is coming from Phil Nadeau with TD Cowen.

Question was on the PMN Phase III trial. The primary endpoint is complete remission. How is that defined in the context of the trial? And what percent of patients would you expect to receive -- to achieve remission under tacrolimus?

Maybe Uptal for that one.

So the complete remission definition is something that is pretty standard with thresholds of proteinuria that are achieved, whether that's 0.3, 0.5 with stable GFR. And then for the proportion of patients who then relapse, that's -- sorry, I'm blanking on the second part there.

Yes, I think the question was on TAC, the TAC arm, what we expect in terms of...

TAC arm, sorry, so the responses there. Yes. So the tacrolimus arm, that's -- by 2 years, we expect that there'll be a smaller proportion of those patients who achieve complete remission without the need for rescue therapy. So if they've got worsening proteinuria progression of their kidney function, they would be eligible to receive rescue similar to many other trial designs. And so that will be a relatively small proportion.

Thanks. Maybe I can hand back to Travis to take us to the next section and conclude with Travis.

Thanks, Tim. So to summarize, we believe that the selective and unique targeting of the CD38 positive immune cells may provide felza with a differentiated profile across important nephrology indications. And this really includes potentially becoming the first approved treatment in AMR with transformative efficacy as was demonstrated in the Phase II, a highly differentiated option in IgAN with a durable treatment-free remission and the first B-cell sparing and preferred agent for high-risk patients in PMN. This provides us with 3 Phase III studies, 2 of which are already dosing patients with our first data expected in 2027. And to be more specific, although these 3 indications have different estimated patient numbers, we view all 3 of them as commercially attractive. Starting with AMR, even though the population is smaller, this is an indication with the potential for chronic dosing with no approved therapies and where the value to patients and the health care system can be very meaningful with the potential of protecting the transplanted kidney. In IgAN, we understand this is an increasingly competitive market and potentially more fragmented. But we believe the potential to bring a differentiated therapy to market with a non-chronic option and shorter dosing will be one that patients and physicians appreciate. And finally, with PMN, this market is slightly larger than AMR. And even though we expect there to be continued use of the anti-CD20s, we have an opportunity to be the first B-cell sparing agent in high-risk newly diagnosed and relapsed patients, and we believe we can address a significant fraction of the market. So in sum, we believe for each of these opportunities, we have a significant commercial potential for the company. Now importantly, given the rare nature of these diseases, there's a finite commercial footprint that we believe will be required to be successful. AMR is a disease that's managed and closely monitored in transplant centers. Therefore, there is a concentrated footprint of physicians. IgAN and PMN, as you expect, are treated in the broader nephrologist community, but nearly half of nephrologists are treating the majority of patients. So for these indications, there's still quite a focused commercial footprint that we believe will be required to succeed. But we're not satisfied with just these 3 diseases. Remember, we told you how broad the applicability of anti-CD38 could be. So let me take a moment to tell you how we're thinking about that. Starting with lupus nephritis. We also believe there's an opportunity to deliver a differentiated treatment option in LN without the type of side effects associated with other investigational agents that deplete cells, such as CAR-T or T cell engagers. The existing data demonstrate that an anti-CD38 approach is active in this disease. So we're executing a Phase I study with data expected in 2026 that's intended to inform next steps, including the potential to move forward with a registrational study. But beyond lupus nephritis, we're looking at other opportunities that will allow us to build our CD38 franchise, and I'd like to share 2 objectives. So we have a unique opportunity given the knowledge base and development expertise to further expand and strengthen our anti-CD38 franchise. Cells have already shown promise as a non-chronic treatment in diseases like IgAN and PMN, and we are actively advancing a subcutaneous formulation that could further enhance patient convenience and accessibility. And additionally, we're developing a next-generation anti-CD38 designed to provide greater commercial flexibility and continue to unlock potential for CD38 targeting across multiple indications. We believe the existing data and in particular, PMN, which is very much a prototypical IgG autoantibody disease, suggests that we could have deeper and more durable antibody and clinical responses without globally impacting IgG to the same degree as other classes, importantly, the anti-FcRns. So together, these advancements position us to maximize the potential for CD38-based therapies and deliver innovative solutions to patients in need. So in summary, we believe the data generated to date highlight the potential for drug development a best-in-class treatment options across multiple serious immune-mediated renal diseases with significant unmet need. We're expecting a regular cadence of data readouts over the next few years, and we'll gain increased clarity into the clinical profile of felza and the potential holds for patients. Now the 3 Phase III studies we have today, we believe, are just the beginning of what we can do with C38. So I'd like to hand it now off to Priya to provide some concluding remarks.

Good day, everybody, and excellent. Thank you so much, Uptal and Travis, for that in-depth look at felzartamab. I hope that our audience shares our enthusiasm for felzartamab's potential to be an important medicine for patients and further bolster Biogen's high conviction late-stage pipeline. Now turning to our overall late-stage pipeline. As you can see from this slide, felzartamab is an important asset in a broader set of several compelling opportunities across this late-stage high scientific conviction program. What I hope is also evident is that there's depth in the pipeline across key franchises. This includes our anti-tau ASO in Alzheimer's as well as Salanersen or BIIB115, our next-generation ASO in SMA, which has the potential for a once-yearly administration. And from this slide, I hope it's clear that our pipeline momentum is increasing. In fact, since our earnings call last month, we have now dosed the first patient in the PREVAIL Phase III study of felza in IgAN and started screening for the prominent Phase III study of felza in PMN. I believe this progress demonstrates our focus on execution as we continue to employ a highly disciplined scientific approach to R&D. And with several important milestones expected over the next 18 months, we have the potential to continue to further strengthen the profile of our pipeline and deliver new meaningful therapies and options to our patients. I hope you'll see why our confidence in, therefore, delivering the new Biogen is growing. We believe that our pipeline will continue to play a key role in this journey, and we remain focused on advancing and expanding our pipeline to deliver the sustainable growth. We also look forward to continuing to share updates with you as we progress in the future. Now I'm going to hand it back to Tim for our final Q&A session. Over to you, Tim?

Thanks very much, Priya. Shelly, can we go for our next question, please?

Your next question comes from the line of Marc Goodman with Leerink Partners.

This is Basma on the line for Marc. We had a question on IgAN, please. And we'd like to hear your opinion and commentary on the other competing assets at early stage that aim to be even more selective by targeting the pathogenic autoantibodies. How much does it really matter this additional level of selectivity and does it really impact the differentiation from felza asset class?

Travis, do you want to take that one?

Sure. So just to clarify, either, you're speaking to some of the IgA degrader approaches?

I think that's right.

Yes. So I think the important piece here is the mechanism, which is that we are directly depleting cells. So we're depleting, we believe, and our data suggests both the IgA-producing cells, which are largely in the mucosal associated lymphoid tissues as well as antibody-producing cells in the bone marrow. Whereas these other approaches really are, in a way, taking those antibodies out of the system, but not dealing with the root cause. And so while I think there'll be multiple tools in the toolbox for physicians, we believe that many physicians and patients would prefer to have an option where you're directly depleting the pathogenic cell rather than really only dealing with the downstream mechanisms.

Your next question is coming from Geoffrey Meacham with Citi.

It's Ross on for Geoff. I guess really curious about indications moving forward. Obviously, this can have some broad applications. So I guess how is the company thinking about going into certain indications over others and specifically if the company was considering prioritizing going into rare disease indications over others?

Do you want to start with that, Travis? And then maybe, Priya, you want to add on prioritization?

Sure. So we're actively looking at prioritizing new indications. Certainly, lupus nephritis is an indication where HI-Bio had already initiated a signal-seeking study, but one that has a ton of industrial logic given the building lupus franchise here at Biogen. Beyond that, I think the -- we're looking for indications that are large but rare markets, but ones that certainly, we think could be highly derisked already given data for off-label use of daratumumab and other anti-CD38s, but also, frankly, some of the plasma cell-targeted CAR-T therapies. And so you can imagine that there's a broad swath of antibody-mediated diseases, but we can quickly narrow down to those where we think we could have a commercial differentiation and where we already are heavily derisked by virtue of those other data.

Thanks, Travis. I agree completely with what you said. And actually, I just offer that this is very similar to our approach across any indication mapping. So we're always looking for the scientific conviction, biomarker data, external and internal and looking at the value proposition and the unmet need. So we're really putting all of that together and prioritizing. So that's the disciplined approach we're taking.

Yes. And I would just add, we're certainly prioritizing a next-generation CD38 as well because while we are certainly looking at rare indications, they're all going to have some differences and potential pricing differences and having 2 separate molecules would enhance the optionality around this. We are in the space of immunology and I think we prefer to follow the pathways here, and that leads to whatever indications that they lead to. As Travis said, the commercial investment is manageable. They're not huge investments in commercial to go after any one of these indications. And so in our view, any one that -- where we can gain conviction and we think there's an unmet need between the 2 molecules, the subcutaneous formulation, we do think we can build out a portfolio. And that might be relatively diverse in terms of indications. But I'd say we're betting more on the science and let the commercial chips fall within it, essentially.

Your next question comes from the line of Myles Minter with William Blair.

I had one on Slide 28. It's on IgAN again. I think the RADAR study that John Barrett's on seems to suggest that an eGFR decline of 2 points over a year is pretty increased rate of ending up with renal failure. I had a question on your eGFR data that doesn't seem to line up with the proteinuria data in the trial in the IgAN trial. Can you just explain how you're getting a 50% proteinuria reduction with your 9-dose arm, but it seems that eGFR is still declining. I'm just wondering whether that's just a small amount of patients and variable eGFR or whether that's something that you're actually seeing and how you kind of reconcile that to long-term benefit in this patient population?

Sounds like one for Uptal.

Yes. Thanks for the question, Myles. So the -- you're highlighting the disconnect between sort of our data and maybe some other Phase II data with larger study populations. And I think that's what we are seeing is noise and more progression than we would want, but the greater progression is true in both arms, not only the placebo arm, but also the treatment arm. But the relative reduction is important. And what we're hoping is with the adequately powered Phase III trial, what we know to be true about the disease is essentially that reducing the drivers of disease then manifests with a reduction in proteinuria that generates -- that essentially indicates then that you've got a decrease in the disease drivers that then also lead to decline in kidney function and that, that would be evident in our Phase III study. So we're very comfortable launching this and expect that we'll have -- we'll be able to demonstrate clinically meaningful benefits.

Your next question comes from the line of Umer Raffat with Evercore.

I have a set of 3 questions, if that's appropriate, I'll go ahead. Otherwise, I'll limit it to one. Tim, what do you say? Okay. I just -- look, I was just looking to clarify how the Phase III is structured. First, is the dosing through week 24 and then beyond as well? And I asked because in Phase II, we saw 3 out of 9 patients that were responding started being nonresponders when you went past week 24 when they were no longer dosing. So that's number one. What's the dosing profile? And if you could speak to the durability of response. Secondly, is the actual dose still about 1 gram per infusion and 4 infusions in the first month. So if you could just speak to how the dosing is being done, the volume and whether it's subcu or not. And then finally, the primary endpoint that's being used in Phase III, which is the histologic resolution, was that ever reported for Phase II? This may be my lack of understanding here in AMR.

It sounds like a good question for you, Uptal.

Sure. So thanks. So as far as dosing and continuing that. You're exactly right that what we observed was some of -- a few of the patients who had responded by 6 months, then had evidence of AMR activity by 12 months. And so that is why we're going to continue dosing in the Phase III Part B. So during that second part of the year, we'll have ongoing dosing for those initially randomized to felzartamab. Those initially randomized to placebo will receive the standard 9-dose regimen over 5 months. And we're using the same dosing regimen that we've seen in all 3 diseases that we just showed data on, PMN, IgAN and AMR. That is essentially 5 weekly doses followed by 4 monthly doses. So a total of 9 doses over about 5 months. Currently, all of the dosing will be administered IV, like Travis and Chris described, we're working up subcu, but that will take some time. And then in terms of the primary histology -- sorry, primary endpoint, it was actually demonstrated and reported in the New England Journal paper. So we demonstrated resolution of AMR. The subtlety is that -- and it doesn't really change if you use a different classification, but the way AMR is graded is with an international classification system called the Banff Classification. And we used the 2018 version for this trial, which was started several years ago. It's been revised. There's a 2022 classification that's going to be used for the Phase III study.

I think one thing to add here is that when you look at the New England Journal paper and you look at microvascular inflammation, we have many patients to achieve an MVI of 0 at 6 months. This is all on biopsy. So this is all histologic resolution. That's never been demonstrated in any AMR study. And to Uptal's point, we do see that start to come back at 12 months off therapy. But in both, the Banff classifications, MVI reduction is sort of the main driver of resolution. And so we feel very confident in the translation into a Phase III.

Your next question comes from the line of Michael Yee with Jefferies.

A couple of questions. For these indications, are you planning to file each of these on one study on accelerated approval endpoints for AMR, IgAN, et cetera? And specifically for IgAN, it says that it's a 2-year readout, although it's a 36-week input endpoint and that's to 2029. I was just trying to get my time lines there. Is that actually a 36-week endpoint? Is that the endpoint in 2029, which seems quite far for just 36 weeks. So 2 questions there.

Travis?

So in the case of AMR, given we have BTD, we're expecting to file on 6-month data. And the last 6 months of the study is open label. So that's where we expect data in '27. The -- I think we've -- we intend to, if possible, use the accelerated approval pathway in IgAN, but we're -- what we're providing is really a full approval in 2 years. But the study is designed to enable that 36-week endpoint...

Your next question comes from the line of Sumant Kulkarni with Canaccord.

I have a 2-parter on AMR. Beginning July 1, 2025, our understanding is that Medicare will be starting up a program called IOTA or Increasing Organ Transplant Access model, which means hospitals could receive upside risk payments in year 1 or be eligible for downside risk payments beginning in year 2 based on performance. So given this dynamic, could felzartamab in AMR help position hospitals for success and incentivize its use? That's the first question. The second is on AMR, is it fair to assume that the 45% to 70% clinically meaningful to transformational thresholds on biopsies translate very well to actual functional improvements for patients? Or are there any nuances we should be aware of there?

Travis?

Sure. Thanks for those questions. So I think the 2 questions are in a way related, right? Unfortunately, in AMR, we've never seen a study that showed resolution on biopsy. And so what we expect, given that patients that have microvascular inflammation, and there was an England Journal Paper in October of last year that really shows this is highly associated with loss of graft even with or without evidence of antibodies. And so what we understand about this disease is that if you have AMR and MVI on your biopsy, you're likely to lose your graft. And so the community feels very strongly that if you were able to reverse that, given that the disease is defined by those features of biopsy and that ongoing inflammation, which is what we showed in our Phase II study that you'll be able to reverse that course to renal decline. So for hospitals and treaters who are being judged by outcomes, we do expect that this will be a helpful driver. But frankly, for patients who see this sort of a result in a Phase II, what we're already hearing from sites that are active is a ton of enthusiasm and excitement about enrolling into our Phase III study. And that is certainly because there's been nothing for these patients, but also because we're seeing very significant clinical impact in the Phase II.

And I'll just add, the median time from transplant in our Phase II study population was about 8 years. So that's sort of past the period of the year 1, 2 where IOTA is going to have the biggest impact. That said, late AMR is defined as after the first 6 months. And so some -- there will be some people who have AMR within a year or 2 of transplant that could be impacted by this. And to Travis' point, there is no effective therapy that exists right now. And these could have a really big impact for patients.

Your next question comes from the line of George Farmer with Scotiabank.

On Slide 27 of your deck, the selective and sustained reduction of IgA is quite striking relative to IgG and IgM -- in the IgM study. How relevant is that across the other 2 disease indications as well as other indications that you're thinking about?

Take that one, Uptal.

Sure. So it was striking, and we're pretty fascinated by that. It may be related to the fact that IgA is produced, like Travis mentioned, primarily by cells in the mucosal associated lymphoid tissue, which may be more accessible and so they're depleted. For IgA nephropathy, it's really important. Like we said, it's a deficient IgA that's driving the disease. These are likely produced the same compartment. And so reductions in these antibodies that are producing some of the reaction is critically important. What's also important is that the improvement in IgG and IgM. So across all of our diseases, we do see this pattern. In terms of the impact of the sustained reduction in IgA for the other diseases, it's not clear there's any benefit there nor downside. But what we do see is also the return of IgG and IgM, which is important for those diseases that are essentially treated with greater levels of immunosuppression in the background.

Maybe one thing to add here, not related to IgAN, but related to PMN is that you saw this in the data we showed, but also in the data we've published, we see sustained and deep reduction in the IgG autoantibody, while at the same time, you see normalization of IgG and of other protective immunoglobulins like anti-agonist. So when you think about PMN as a prototypical IgG disease, and as I mentioned earlier, the anti-FcRns have gone after these diseases, but have not been able to show a sustained reduction in autoantibody. We do believe that there's an opportunity to potentially have a differentiated approach in other IgG autoantibody diseases.

Your next question comes from the line of David Amsellem with Piper Sandler.

So just wanted to clarify how you're thinking about expansion opportunities for felzartamab. I know you talked about different indications. But I guess -- and maybe it didn't come through quite as clearly in the slide, but what beyond the 3 that you've articulated, are you most excited about? And how are you thinking about further advancement in the additional -- these additional indications that you are most excited about? I just wanted to clarify how to think about the setup in terms of additional studies and what you're prioritizing.

Travis?

Sure. Thanks for the question. So I think it relates to the last question as well, which is where are there IgG autoantibody diseases that we believe we could show a clinical impact and also one that has the sort of durability and depth of response that we're seeing. And so naturally, that leads us, frankly, into a number of indications where the anti-FcRns have been active, but clearly, where they show, let's say, a 50%, 60% reduction in autoantibody. But in the PMN study, we show an 80% with normal IgG after a year. And so you can imagine some of those indications being spanning both neuroimmunology, hematology and dermatology. And we're actively prioritizing those, which we'll expect to be coming back and saying more to in the coming months, but believe that there's a role really for felza and potentially for a next-generation CD38 across those indications.

I think we've got time for maybe 2 last questions. Can we go to the next one, please, Shelly?

Your next question comes from the line of Laura Chico with Wedbush Securities.

This is more of a strategic question kind of along the lines of the last one. And I understand the goal is to really continue to build out the immunology franchise. But I'm curious if there are other assets that would perhaps complement or be beneficial to bring into the portfolio that could kind of boost the footing in the nephrology space with felza. Anything else from a mechanism or target perspective that would be something that would be sought after?

Yes. I mean I'll take that one. I think there's always 2 axes to these things. One is you've got a commercial presence and you're building up relationships, and we certainly will be doing that with nephrologists. So on the one hand, it will make sense to say, all right, are there other assets through business development that could come in and enhance that nephrology space. But the other is, and this is what we've really started to appreciate since the acquisition of HI-Bio, and that is just the significance of CD38 as a mechanism. And I'm not a scientist, I think I'm allowed to say this. But to me, this feels like precision immunology. The immune system is very important. We don't want to modulate it any more than we have to. And that's why I think CD38 seems to be such an elegant solution here. And I think we're mapping out and Travis and his team are really doing that. We, in fact, had a first conversation about some new indications yesterday. And it is going to be a function of -- there's a period of biologics exclusivity for the current molecule. We've got a follow-on molecule. We're going to be looking across at where do we think this mechanism really would fit. And that's where you sort of divorce the commercial aspect to this. And you really look at where does this mechanism really potentially offer the biggest benefit. And then we'll tool the commercial side to fit that. But -- so I think it will be both. I think we're going to be going horizontally in nephrology. But I think going back to the mechanism looking across in that direction and other indications, but Travis you're much more expert on that and I invite you to complement anything here.

Yes. I mean there is a lot of different upstream, downstream mechanisms that one could think about. I think what we like about the direct targeting, especially as it pertains to these sort of rare diseases of high unmet need is that you are really -- you're depleting the pathogenic cell. And so you have the potential to really be disease-modifying in a way that some of the downstream mechanisms, be it the anti-FcRns as an example or other degrading approaches don't have. But I think we also recognize that as we continue to generate clinical data across these indications, we'll see where there's pockets. For instance, some of these diseases are mixed B-cell plasma cell diseases where others seem to be more pure plasma cell. And so you can imagine how we may want to start thinking about other mechanisms that are complementary in the diseases that we have of interest.

Your next question is coming from Jay Olson with Oppenheimer.

This is Cheng on the line for Jay. Maybe 2 questions from us. First on IgAN, given that you are thinking maybe felzartamab may enable a non-chronic dosing. Are you planning to maybe run some type of a solution study to transition patients from other agents to felzartamab eventually? And the second question is on the next-generation CD38 antibody. Is that like a monoclonal antibody or it's like a multi-specific antibody?

Travis?

Sure. So I think naturally, in our IgAN study, and I invite Uptal if he's got additional comments, we do allow patients who've been on other therapies but have washed out. I think if the profile holds up, I think commercially, one thing to consider here, as you see what we believe, which is plasma cell targeted agents are likely to become a backbone of therapy, I think there's a real question as to if patients could in first line, take a therapy and know within the first 6 to 12 months if they've had a response and then be able to be off therapy. I think for many patients, that could be a very compelling opportunity. And so while naturally, I think there's going to be a switch pool and will be -- we believe that as a different class of plasma cell targeted agents, we could potentially be an important switch agent for patients who are on APRIL-BAFFs. I do believe there's a reason to believe that physicians and patients would rather have a durable option upfront. So that's maybe the first question. Maybe I'll -- could you repeat the second question again?

What type of...

Sorry, I didn't hear that.

For the next-gen CD38 is an antibody.

So we have not disclosed publicly exactly what that molecule looks like. But I think there are a ton of learnings from the felza experience. And what we learned at HI-Bio is that not every 38 is built the same. And I think we'll continue to build on that expertise with our next-generation molecule.

Sorry, go ahead, Uptal.

I was just going to add a little bit about the IgAN. So I think one of the clear mandates in the kidney community is now in this golden era of multiple therapies is that the goal will likely be to try to start with disease-modifying therapy. So from that perspective, like Travis mentioned, you could try felza, see if that works. And the other goal will be depth of response, right? I don't think the current thresholds are going to be satisfactory. I think what we want to do is stopping progression for patients, and that might require sequential therapy. So to your question about are we going to be studying that, like Travis said, there's ways people can get on to our Phase III with the appropriate washout. And we'll continue to study the effects of felza in our long-term extension where some of those options could be explored.

That's great. Thanks very much, Uptal. Look, that's -- we're out of time. I just want to thank you all for your time and taking part in our webinar today. Hopefully, it was informative. The IR team is around if you have any follow-up questions, and we'll leave it there. Thank you.

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