Biogen Inc. (BIIB) Earnings Call Transcript & Summary

Good morning, everyone. Welcome to day 2 at the 37th Annual Piper Sandler Healthcare Conference. This is David Amsellem from the Piper biopharma research team. We're delighted to have Biogen with us. So we have Dr. Uptal Patel, who's the Head of Biogen's West Coast Hub, and we're going to have what I think is a really timely discussion focused on Biogen's immunology pipeline. There's a lot in advanced development. There's some big data readouts over the next few years. So I think this will be a really interesting and certainly timely discussion. So thank you, Dr. Patel for joining us.

And I wanted to dive right into felzartamab, your CD38 directed treatment here. So I know you hosted -- you and the team hosted a webinar earlier this year, highlighting the clinical program. You talked not just about autoimmune diseases impacting renal function, but also other autoimmune disease settings with this molecule in mind. So given that backdrop, can you talk more broadly about the CD38 target and why you see it as particularly interesting?

Yes. First, thanks for having us, and thanks for having an opportunity to share some of our experience with felzartamab. I think the story for CD38 really begins with recognizing that antibody-producing B cells that express CD38, have been implicated in a number of autoimmune diseases, particularly those with pathogenic antibodies driving the diseases. And so that context is important in recognizing for a number of different antibody-driven diseases. Available therapies just have not been effective. And so having a more plasma cell plasmablast targeted therapy, which are the antibody producing cells that drive these diseases, was something that was very appealing from a therapeutic perspective, allowing more targeted therapies, allowing those earlier B-cell populations to remain intact, while you then address these important pathogenic antibody producing cells.

Sure. So more specifically, looking into the role of CD38 in a range of autoimmune diseases impacting renal function. Why is renal diseases your top clinical priority?

Yes. Well, prior to Biogen, felzartamab came to Hi-Bio via a company called MorphoSys that developed felzartamab and they were acquired by Novartis since then, but had a history of producing very good antibodies. And what they saw was this opportunity to target CD38 for autoimmune diseases versus the currently marketed anti-CD38 that have been used for multiple myeloma. So out of desperation clinicians around the world have used available anti-CD38s off-label to treat their more difficult to control patients and have published these experiences over the past 2 decades. And what you see is a breadcrumb trail of spaces where essentially targeted CD38 therapy could be effective in these autoimmune diseases. And so kidney diseases are in that group. And what's nice about them, I think, is that there's been an evolution in the endpoints that allow essentially trials that could be done on a sort of more feasible time frame in a number of different rare indications where available therapies haven't been effective. As an example, for IgA, anti-CD20 therapy does not work. Yet it's an autoantibody-driven disease. And so that, I think, provided the foundation for a number of different rare kidney disease opportunities for them to start in that we've been fortunate to pick up.

Yes. So I think your most advanced program is in late antibody-mediated rejection in renal transplantation patients. So before we go into the existing body of data, I wanted to level set the underlying unmet medical need here, the size of the population and essentially what is the target population here.

Yes. Maybe I'll start with a couple of high-level thoughts. Target population is roughly about 11,000 people. And that's a subset of the 300,000 or 400,000 people who are alive with the kidney transplant. And this subset is those with late antibody-mediated rejection, which is the first area we're starting in. But there's a lot of other adjacent opportunities in this population. And so if you think about the context here, patients who've received the kidney transplant essentially have been given this opportunity to have the preferred treatment for kidney failure versus dialysis. And this is the #1 cause of late graft loss that there are no effective therapies for that is devastating for patients. And so having something that could reverse that course and preserve these precious societal resources of kidney transplant for longer is a really important problem to address.

So let's talk about your Phase II data here, and that's published and it was highlighted in the webinar. But I think it would be good to review the body data in late antibody-mediated rejection.

Yes. So this was a small Phase II study, 22 participants, randomized 1:1, felzartamab to placebo. The felzartamab dose regimen was 9 doses over 5 months. And this population was exclusively DSA positive late antibody-mediated rejection so people well past 6 months after transplant, generally, though, about 8 years into their transplant course. And what we saw was inclusion biopsies were required for entry, and then the primary endpoint was safety, but what we had was 2 efficacy time points at 6 months and 12 months. So the 6-month time point was shortly after the course of felzartamab was provided or placebo. And then the 12-month endpoint was off therapy for the last 6 months. And what we saw was remarkable. So the primary pathologic components that defines antibody-mediated rejection is a score looking at the inflammation of the microvasculature in the kidney. So the microvascular inflammation score is generally what drives this -- the histologic classification. And the medians were moderate AMR, moderate to severe AMR, matched in placebo and felzartamab. And 2/3 of the people in the felzartamab arm achieved MVI scores of 0 to 6 months. And this is unprecedented. None of the other therapies that have been tried in Phase II, multiple different Phase IIs targeting a brief different mechanisms have ever achieved that. And essentially, we had about 80% reversal of microvascular inflammation at that 6-month time point. So the scores got low enough such that you could be classified as not having active AMR. By 12 months of therapy, we saw a reversal of some of that, suggesting that perhaps ongoing dosing would be required, and that's what we've taken into the Phase III study.

And regarding the Phase III, can you just walk through the design and primary outcome measures?

Yes. So it's designed very similarly. It's a 1-year study. And we'll have essentially people randomized to felzartamab or placebo. And then 6 months, because of the overwhelming efficacy that we saw, we didn't think that it would be reasonable to keep people on placebo and essentially all the placebo participants will cross over to active treatment. And those originally assigned to felzartamab will continue on some version of maintenance therapy. So we'll have assessments in 6 months, just like we did in Phase II as well as 12 months. The difference will be the 12 months will include a felzartamab arm that has received maintenance therapy.

Okay. And what will be the top line data, the initial top line data look like? Or in other words, what will we get in that top line readout? I believe that's a '26 event if I'm not mistaken.

2027.

'27, sorry. But what will the top line contain, I guess.

Yes. So fair. This is an important space for which there are no prior comparators. Just for context, the last Phase III in this space was an IL-6 antibody that was looking at a 5-year overall graft survival primary endpoint with a 2-year accelerated endpoint looking at kidney function. So what we've designed is very different because of the compelling Phase II study results we saw. And so we'll be looking at reversal of AMR by histology. So what defines the disease once it's reversed, essentially the lack of disease is the primary endpoint. There's a number of important supportive data that will support that. The first is when -- in our Phase II, we also saw that a biomarker that reflects graft injury, so donor-derived cell-free DNA, which is specific to graft injury also drops very aggressively with treatment starting within the first few weeks, stayed down with treatment. And then as disease activity picked up, that also picked up so that's a very early marker of disease control that we'll have data on in the Phase III. And then we'll also have exploratory data of looking at molecular markers that also corroborate sort of this resolution of AMR. And then the overall function with kidney function will have larger numbers in the Phase III to also look at that. And that's something that we saw again, in the small Phase II suggestive evidence of not only preservation but perhaps some improvement in kidney function, and that will be better powered in the Phase III.

Okay. So just to be clear, just to clarify, in '27, the first pulling back of the curtain, so to speak, will be that 12 months data. The top, okay. Got it. In terms of IgA nephropathy just moving on to that program. So as I understand it, bigger market but a lot of drug development here. So the April target, you have that target, I mean so these are -- there's a lot of excitement here, but a lot of competition. So with all that in mind, where do you see the fit for felzartamab, just putting the body of clinical data aside and just knowing what we know, how do you see the fit mechanistically with all these other agents that are targeting that have other targets?

Yes. So in IgA, lots of progress every month. There's new announcements, which is great for patients, and we're excited to see all of that. I think where felzartamab really has an opportunity to sort of standout is that we think it will be the only option that will allow durable disease control of treatment. And so why do we believe that? Harkening back to this mechanism, again, CD20s don't work. So depleting earlier B-cell population isn't effective in controlling disease. And we know that the plasma cells and plasma blasts that drive the disease are what needs to be addressed. And so by directly depleting them, we essentially remove the disease-causing cells and in our Phase II study, that's probably what accounted for the really impressive durable effects that we saw. So after a 9 dose regimen, 5 months of dosing out to 2 years, we saw ongoing reduction of proteinuria as well as total IgA that suggests that it's really got this important disease-modifying mechanism. So how will that fit into the other therapy. So I think what's evolving is that there will be some foundational therapies, building on ACE inhibitors and SGLT2s, the new ERAs will certainly provide a potentially non-disease-modifying foundational CKD prevention -- progression prevention set of therapies. The next class that will be important to some patients are those that address really inflammatory manifestations of IgA? Like, for example, the complement inhibitors will have a role for some patients. And then the APRIL/BAFF are a really important advance for patients. What we see there is that these agents modulate B cell maturation and viability of plasma cells, plasma blasts. But in all of these studies, when they include the off drug components at the end of their study, you see that within 3 or 4 months, proteinuria returns back to the high levels at the beginning and eGFR progression continues. So they work, but they require ongoing dosing so what we also don't know is the long-term effects of requiring the B-cell modulation on other important safety perimeters.

So I guess 1 point of differentiation is the potentially the absence of the need for ongoing dosing. Is that a fair way to think...

Absolutely. Yes. So in our assessment with patients, providers, that's a really compelling opportunity. So we think all of these options will be important for patients, but also choice for something that could be -- could provide more durable long-term treatment-free efficacy.

One question I had about the pivotal study here is that how do we think about pace of enrollment here? I mean you're competing for patients, and there's a lot going on in the space. So how do you think about that?

Yes. First, I think what's important is that these therapies have helped increase the awareness of IgA nephropathy. So more patients are being tested, which is a good thing and more patients are being identified. We're somewhat fortunate in that many of these Phase IIIs have been fully enrolled. And so it's also a good time to come online with the new program. Many of these therapies that are getting accelerated or full approval still aren't available in a variety of places and uptake has been low. So it still provides, I think, an opportunity for clinical trials to provide a new therapy -- therapeutic option for patients while we evaluate the efficacy and safety.

So I wanted to, in the interest of time, toggle over to the PMN program. So as I understand it, lots of rituximab usage here. So I guess with that in mind, can you talk to the different subgroups of PMN patients where you envision a fit for felzartamab.

Absolutely. So PMN also some growing interest in the therapeutic development space, which is fantastic for patients. Clearly, a long history of anti-CD20 use, again, off label, there's no approved therapies for PMN. What the literature suggests is that for high-risk patients who start off with, for example, in the PLAR2 positive patients. If they start off with very high autoantibody levels, they tend to not be as responsive to anti-CD20 therapy. So we think that's a direct opportunity for targeted plasma cell plasma blast depletion, where we've seen very rapid reductions in PLA2R in high-risk patients. The other is that unlike IgA nephropathy, there is a sizable proportion of patients who respond to CD20. There is also a sizable portion of people who either don't respond initially because they got these plasma cells, plasma blast and niches that can't be reached. And these cells don't express CD20. And so you see lack of response initially or relapse because essentially, the CD20 therapy is not depleting these cells that are causing -- that are producing these pathogenic autoantibodies. So I think there's 2 big populations. The first is upfront in high risk patients and as well as perhaps second line in patients who don't respond or relapse after CD20.

Okay. What's the size of the population that don't respond or relapse after CD20.

Yes. So that's anywhere from 30% to 50% of patients. It depends on how long you follow up. But it's a sizable proportion of patients. Now with the better CD20s, that could be some slightly smaller but even with the more potent CD20, the biology isn't going to be different. Those cells still don't express the plasma cell, plasma blasts don't expect CD20, and they do express CD38, who'll provide opportunity for targeted therapy even after CD20 therapy.

And 1 more question about felzartamab just briefly. Just talk about your potential clinical development plans for the drug beyond late AMR and IgAN and PMN. What other trials could come next? I think you talked about lupus nephritis, if I'm not mistaken. But I know there's others. So just help us give us a road map of what comes next.

The short-term road map, we do have an active Phase Ib signal-seeking study in lupus nephritis. This is an open-label study with up to 20 participants, and we look forward to sharing some data on that in the coming year. The second study that we're just about to kick off is a related subset of that AMR population I described being quite large. So currently, the current Phase III is in DSA positive antibody major rejection. There's also from the work we've done, a recognition that DSA negative AMR is an important population. And so in the past year, what's become clear is that the epidemiology of that population has become more clear. It's about half the size of the DSA positive AMR population and their outcomes are almost as bad. So essentially, a very important complication that can lead to kidney failure almost as much as DSA positive population. So we're kicking off a Phase II study any day now that will allow us to examine the efficacy of felzartamab in this isolated microvascular inflammation population. So the nomenclature here gets -- is an evolution because previously, the dogma was that these DSAs, donor-specific antibodies drove the disease, but some of our work is identified, but there's also DSA independent mechanisms that drive this microvascular inflammation particularly driven by NK cells that also express CD38 that we also deplete with felzartamab. No, no, sorry. And then the last set of indications is really kind of alludes back to that idea that there are a number of autoantibody-driven diseases that essentially have been implicated, the plasma cells, plasma blasts have been implicated in. And we see those as tremendous opportunities, and we'll be starting a few new proof-of-concept studies in the coming year as well.

Okay. So I wanted to spend the rest of our time talking about lupus, which is obviously a very important part of the immunology R&D portfolio. So I guess why prioritize SLE and other manifestations of lupus and particularly given that it's been historically so challenging in terms of drug development.

So lupus is very heterogeneous. So I think this was summarized nicely by a patient in one of our recent focused seminars that patients with lupus will say my lupus isn't your lupus. And that heterogeneity has probably also been part of the challenge in identifying effective therapy. So far, there's only 2 approved therapies. We think the penetration is really only up to about 20% of the population that could benefit from therapies. And so this has been an active efforts for Biogen for many years. We've got, I think, some really exciting data across 2 different mechanisms. And so with litifilimab, essentially targeting BDCA2, you're able to deplete type 1 interferon signal through plasmacytoid dendritic cells that drives the disease and with very compelling data from 2 Phase IIs that suggest a pretty strong clinical effect. We're excited and looking forward to the readouts from those Phase IIIs in the coming year. And then the CD40L therapy with dapi again, already 1 positive Phase III, and that's really only the third mechanism that's been proven in a large Phase III to be effective. And so we're running a second Phase III and look forward to read out some following the others.

So I wanted to take a step back. So there's disease heterogeneity, there's also heterogeneity on trial endpoints. So litifilimab, your endpoint here is the SLE Responder Index-4. Dapirolizumab, I think it's BICLA response. So just help us understand the rationale behind the different endpoints here. And I know that these are validated endpoints, but I wanted to just get your thoughts on why different primary outcome measures for these different studies? And do you have buy-in from the FDA?

Yes. So the teams that have worked on that built off of the proof of concept studies that we've got. And this is a space that's an evolution. And I think what we've found is that targeting the right endpoint with the right subpopulation is important. And we've been very, very grateful for a strong partnership with FDA to find alignment across all of our programs.

Okay. So litifilimab is also in development in CLE. And my understanding is there's nothing approved in CLE. So can you talk to the AMETHYST study in CLE for litifilimab? I mean why a 24-week endpoint in Part B of that study. It's a shorter duration relative to the SLE study endpoints. But I just want to understand what the rationale is there.

So I think 1 of the challenges for lupus for those who have been in this space, there's a number of different multiple composite sort of endpoints that capture different aspects of the manifestations of lupus. And what's nice about CLE is that we've got more objective data with these skin findings, right, and so what that allows is, I think, in some ways, a cleaner assessment can happen more quickly if your therapy is working quickly. And so I think that's sort of that design reflects that opportunity in this subpopulation of lupus patients.

Sure. And then I think I have time for 1 more question which I'll fit in. So also a CLE study question. Just remind us, to the extent that the AMETHYST study is successful. Can you file on it given the absence of approved therapies in CLE. I mean is it designed as a registration quality study, I should say.

Yes. So I think if it were in isolation, that might be challenging, but it's not because we've got the broader lupus program. So I think that sort of the opportunity here is that will -- that's sort of helpful on multiple fronts, the efficacy assessment more broadly across lupus, but also then a more robust safety database.

All right. Terrific. Well, we're out of time. Thanks, Dr. Patel. Thanks to everyone in the audience.

Great. Thank you.