Biogen Inc. (BIIB) Earnings Call Transcript & Summary

Okay, good morning, everyone. And as I keep saying this morning, happy Friday the 13th, but on a serious note, we're delighted to be hosting our Virtual Immunology Symposium. This is David Amsellem from the Piper Sandler Biopharma Research Team. And we're delighted to have Biogen with us for the next 25 minutes or so. So we have Dr. Diana Gallagher. She is the Head of Clinical Development for MS Immunology and Alzheimer's. So thanks so much, Diana, for taking the time to chat with us. Certainly, there's a great deal going on regarding Biogen's immunology pipeline and some late-stage readouts that are coming.

Maybe I'll start with your lupus programs. So you have dapirolizumab and litifilimab, both in late-stage development. But I wanted to ask a high-level question on the strategic rationale of prioritizing lupus, specifically SLE and other manifestations of the disease given that it's historically been such a challenging space in terms of drug development. So I guess with that in mind, why such a big priority to lupus? Obviously, it's a major unmet medical need. But just given the challenges, maybe talk about your thought process here.

Sure. So we've been working -- first of all, thanks for having me, David. We're really excited to be here. And you're right, lupus remains a very underserved, heterogeneous disease area, major unmet need, where patients need more treatment options. We have been working in lupus. It's not new for Biogen BDCA2 program or BIIB059, now called liti. We've had -- we did the IND now over a decade ago. So we've been in this space for a long time. We've had our collaboration with UCB, looking at CD40 biology for a long time, so -- two decades. And we've learned a lot as has the field over time. I think about the biologies that we're going after as well as sort of right target, right patients and excellence in execution. And I think we feel like now those three pieces are really lining up for us, and we have iteratively discharged risk along the way as we've gone from sort of research to early development to late-stage development in these -- with these specific assets.

Yes. Just a general question on dapirolizumab and litifilimab. How do you think each of these -- and we have more data late stage for dapirolizumab, I'll concede that, but how do you see each of these addressing the limitations of the existing biologic treatment options, specifically belimumab and anifrolumab.

Yes. It's a great question. I think we know that lupus is seriously undertreated. Even in the United States, we're only seeing anywhere from 20% to 30% patients get on biologic therapy. Of those, most of them don't reach what our American College of Rheumatology targets of lower limits of disease activity and steroid sparing because you can be diagnosed with lupus 15, 20, 25 years old, if you're heavily reliant on steroids that comorbidities you're going to develop over time are substantive. You really start to have a lot of side effect. So we think people are undertreated. We think that the drugs that are available are manipulating biology, but we may be able to bring even more compelling efficacy. And the patients say it best, my lupus is not your lupus. They say to each other. So I think people are going to have to often, you can't be diagnosed with something at 18, and it works for you until you're 88, right? You might have to cycle through different drugs. We know they have different organs manifesting at different times. They may be flaring and need a certain sort of efficacy profile and then they [indiscernible] because it's relapsing and remitting. So you're constantly wanting to titrate their medication and more options going to allow you to bring all the efficacy and limited side effects for a lifetime of treatment in lupus.

So maybe paraphrasing you, a great deal of disease heterogeneity ultimately lends itself to the need for a multitude of different advanced treatment options. I mean, is that a good way to think about it?

It's a great way to think about it. And it's very exciting, not only our work, but you see the field really moving. I think you're right, lots of times people thought it. 5, 10 years ago, it was very difficult to execute in this space. So I think we're starting to show the biology is breaking. Clinical trials are moving in the right direction in terms of execution, and hopefully, we'll bring a lot more options for these patients.

So diving into litifilimab. So this is a BDCA2 receptor directed therapy. Can you talk to the underlying mechanism here and its role in disease pathophysiology, not just in SLE, but also in cutaneous lupus. I know there's a trial of a more advanced trial in CLE. So maybe talk about mechanistically its applicability both in SLE and CLE.

Sure. It's a great question. So we, as I mentioned, have been working on this program for quite some time. It's manipulating this BDCA2, so that's something expressed on cells often a particular type of cell, but not exclusively called the plasmacytoid dendritic cells. We know that those cells are big producers of interferon, and we know that interferon drives a lot of sort of these interferonopathies or these complications that you start to get with inflammation, with bringing in other cells responding to inflammation, which is causing tissue damage. And so if we can break that cascade, so we bind, we break this idea of the BDCA2 will stop that biology. And it's not just interferons, we believe downstream of that. We have TLR 7 and 9. We're starting to affect interferons and other relevant cytokines to really break this cycle. And in terms of what does that mean, how does that manifest clinically, I think we've shown it in multiple different spaces, but I would think about it as overall disease control. So we hit overall disease control when we looked at SRI-4, which is a composite endpoint, but we also look very specifically at two critical manifestations, skin and joint. And so we showed in the joints, you have reduced number of joints impacted in terms of tender and swollen, which allows people to sort of function much better. And in terms of the skin, and we can get into it because we're super excited, we got breakthrough designation for CLE. You can see anywhere a significant clearing of the skin disease. And the skin impact in cutaneous lupus is profound. We're thinking about massive alopecia or hair loss, often big flaking, scaling and even scoring lesions often on the face, but throughout the body. So the ability to calm that down and allow the skin to heal has obviously physical improvements for them, but major mental health and quality of life improvements.

So I wanted to switch gears a bit and talk about the heterogeneity of trial endpoints and in SLE. So litifilimab, your endpoint, your primary is SRI-4. I think dapirolizumab, the primary was BICLA response. So I just want to better understand the rationale behind the different endpoints and the extent to which there's buy-in from the FDA here. I also know that these are accepted outcome measures, but would it be helpful to understand the differences between the two endpoints.

Sure. You're right. They're both well sort of characterized approvable endpoints that have a lot -- some differences and a lot of similarities. And so BICLA uses, it's like a BILAG-composite sort of end point. It requires partial improvement across all sort of affected organ systems without any worsening. Well, SRI-4 uses the SLEDAI-2K at its core, and it requires a four-point improvement. So it can be a little more sensitive to specific changes and specific organ systems. You don't sort of have to have across all sort of organ systems, you can also achieve efficacy by seeing specific organ systems. And so I will tell you that in both our trials, we measure both, both like BICLA is primary for DAPI, as you said, but we're also measuring SI-4 as a secondary and conversely in liti. SRI-4, we've chosen -- we had been examining that. Both of them were the POC sort of endpoints, and we kept them for the Phase III endpoints because we understood how to power and think about it, but we're measuring both in each case.

Okay. So it's really just a function of, I guess, the signal you saw in your proof-of-concept study, and you wanted to carry that forward in your pivotals. It's really nothing more than that.

That's right.

Okay, okay. That's helpful. So just moving on to -- so there's the TOPAZ Phase II program, which -- that's reading out, that's in SLE. But you also have AMETHYST in CLE for litifilimab. I guess one question I had here was, I think in Part B of the study, it's a 24-week endpoint. It's a shorter duration relative to the SLE study endpoints in TOPAZ. So -- and I realize that it's a CLE, not SLE, but wanted to better understand that difference in measurements in terms of duration.

Sure. It's a great question. I think we think about it in two ways. So in both the studies, we will go out to 52 weeks. So old booking ultimately over a year. In systemic lupus, of course, we want to see the patients improve as quickly as possible. We all want that for them. And we also want to see durability of effect. So that is something that particularly as we're entering that space, and where we're sort of differentiating on options, some of which you mentioned are approved and more coming. We want to see that onset and durability of effect in SLE. In CLE, we also want to see -- again, we just talked about your hair is falling out, your skin is massively inflamed, it's a more dermatologic based condition. Speed of onset and resolution of those symptoms is something that we heard from patients is critically important. So we will look at that 16- to 24-week endpoint, and then we will also look at durability of effect.

Okay. But to be clear, in Part B, the endpoint, the primary is at 24 weeks. Is that right?

Yes, that's right. Yes, as we went on that CLASI, yes.

Got it. Okay. So I wanted to move to DAPI. And regarding the successful Phase III, and I know you have the confirmatory study that's ongoing, but I wanted to just look backwards at the successful study. There was the BICLA response, but can you just talk about the steroid tapering profile that you saw for dapirolizumab?

Yes. And this, as you said, what are the lessons learned, many, many sort of challenging clinical development programs in lupus, one of them is managing steroid utilization, particularly in large multi-multicenter global trials, where clinical practice is different in different countries and even with different physicians. So you really have to be very clear about what the steroid taper expectation is, like how much steroids are you on, and let's have a protocolized, I'll call it, force, but per protocol steroid taper that they must attempt. And so we really -- we know that's important for overall wellness. We know the guidelines push it, but you have to put per protocol to get it ultimately to see if it's statistically relevant and also could be something we could get in our label. So we did do that, and you see that we're quite encouraged that up to like 1/5 of the patients were able to substantively reduce their steroids down to this 7.5- or 5-milligram dose, which is really where you're starting to get to, say, the long-term side effects are very differentiated. That's where we really want them to be. So we were able to see that, yes.

Okay. And then regarding safety, and you had a webinar last year where you discussed the lupus pipeline. And you talked to the potential for DAPI to be used safely in pregnant women, and you had preclinical data showing that it doesn't cross the placenta. I was wondering if you could talk to that data, and how you plan to leverage that in practice.

Sure. So it is as we sort of talked about at the top lupus effects women predominantly, but not exclusively, and particularly young women, who are often contemplating pregnancy or going through pregnancy. And most of the approved agents are not -- and all off-label things people use are not approved for -- often not allowed to be used in pregnancy. DAPI is differentiated because it is a heavily pegylated molecule, so it just doesn't cross that placental barrier, at least as we can see in primates. And so the other piece would be, does it not get into breast milk. So if you can create an option that allows for both utilization in pregnancy to not cross to the fetus as well as post birth to not get into breast milk and maintain high efficacy for these women, that's really differentiating. Of course, it's not an approved therapy. So we're working hard to sort of think about most people go for this in a post-approval setting. We're thinking right now in dialogue with agencies about what would it take to, right, start to examine some of these things in parallel? Or how should we be thinking about it? And ultimately, that's something we'll have to have an aligned sort of pathway for, but it's definitely top of mind for us because of how unmet the need is.

So looking at the R&D landscape for SLE, I mean we're going to see a number of readouts for orally available agents. There's INVOKE, there's SOTYKTU, there's the S1P modulator, Cenerimod, I mean all these Phase IIIs are going to be reading out in the next 12 months. And they're all mechanistically different, but wanted to get your thoughts on the potential for a more varied treatment landscape with if these oral agents or someone or more of them were to work, and what that could mean for DAPI and for litifilimab.

Yes. I think we don't see lupus, as we mentioned a few minutes ago, is a winner take all sort of market. We really see that with lifelong need -- with a relapsing and remitting condition and very heterogeneous condition, there is plenty of room for patients to have optimized therapy that treats the manifestations of the disease as aggressively as possible, but across the range. So there are patients that would say to us, "I want to be on as much medicine as I need and no more." And then "If I was come off it. I want to come off it." And so as you're working through that with them, you're going to have to have, I think, a range of options. And also the organ systems at different times and the flares are happening. I think we'll see -- yes, of course, it will be the idea they love and maybe science is just probably not going to be a one and done set it and forget a biology for them given the complexity. So that's how we're thinking about it. Of course, more options is -- we look forward to that, too. And we are -- don't just have DAPI and liti, we certainly have an early pipeline thinking about moving into orals ourselves so that we can bring a range as well.

Okay. So I wanted to talk about some earlier stage opportunities here. So you've got 122, the LRRK2-directed product. Maybe talk about that and its role in LRRK2 and its role in neuro inflammation. And what I kind of look at an asset like that is the extent to which you could have applicability in other neurodegenerative diseases beyond Parkinson's, maybe talk about that.

Yes. I think we've -- that is a really interesting asset. It's been something that we have a large controlled randomized trial trying to figure out what it can do in Parkinson's. We are not -- it's not our first Parkinson's trial, nor are we naive to the idea that these are very, very challenging spaces to work and profoundly manipulate biology. They're hard endpoints to move in Parkinson's. And so I think we sort of see it as something that we started pre-PoC, high conviction in that biology, but a sort of higher risk, high-reward component of can we hit PoC. And I think we've designed a nice trial that allows us to answer that question. In terms of applicability. You're right, that biology is interesting across. It's very -- I think the most risk forward sort of place to put it -- we sort of chose LRRK2 biology for Parkinson's. I think that the best biology is. You see it in a couple of other inflammatory conditions, but I don't think right now, that's where we would put it. We really want to take our shot here based on our conviction with the genetics and the preclinical data.

Okay. That's very helpful. And then switching gears to 091. So the BTK ambition is certainly, I guess, not new. But maybe talk about its utility in MS specifically, and how you're thinking about maybe the right way to ask the question is, just given how crowded MS has become, what do you need to see here to really, I think, capture your attention and say, okay, this is something we really should move forward and really invest precious R&D resources in.

Yes. Great question. I think it is, as you said, it's a really interesting biology in the sense that we know it manipulates findings in MS. We are certainly -- you see both the covalent molecules as well as these non-covalent molecules, all having different degrees of impact on biology in MS. So we have the ongoing Phase II study. That study is in relapsing MS. That study is -- has a comparator even in it, which is pretty unique, right? We have like at 2 doses and then VUMERITY in it to really see where we are. So that allows us to get a very good sense to your point. RMS is -- it's a crowded space. So our threshold to enter into that space will be appropriate to that crowding and needing to see what we need to believe that it's differentiated. And so we'll get that full data set later this year and be able to take, I think, a really informed decision on that molecule. We also have initiated a Phase I study of our BTK degrader. So we have -- that's in the clinic now, too. So we have sort of two -- that would be differentiated sort of greater biology that we'll have to sort of think about how we want to position that. So we still are very intrigued by BTK biology. It works in lots of things, not just MS, as you see, but it's really, to your point, about proving out the differentiation so we know where to put the resources behind it, and it's like you have the biggest impact.

Yes. And I'm curious, just a follow-up question about the degrader. I know we're in early stages here. And you mentioned MS, but just understanding the biology and mechanism here, how are you thinking about to the extent you can talk about it, other autoimmune disease settings here. And again, bearing in mind these are early days.

Definitely early days. And -- but I think we've spoken publicly on that idea that we are moving into this ideation of like these assets are not one -- sort of one drug, one disease, but are sort of products, which can create a whole portfolio. So multi-indication strategy is definitely on the table for assets like we call it 145, the BTK degrader as well as 142, the IRAK4 graded program.

Yes. Okay. Wanted to spend just a little bit of time on felzartamab, and I know that over the next couple of years, we're going to have some really important data milestones. But maybe a high-level question. I know we have about a minute or so left. But looking at CD38, obviously, there's a big focus on autoimmune diseases in the renal setting. But maybe talk more broadly about CD38 biology, and how you're thinking about broader development, not just the felzartamab, but I think you've started talking about the next-generation CD38 that came out of HI-Bio. I mean how are you thinking about that target more broadly?

Yes. So B-cell biology is a huge area of interest for us. You've probably heard Jane Grogan, our Head of Research; and Nick Wilson, our Head of Immunology Research, in particular, talk about it. So you're right, antibody-producing B cells that express the CD38 are implicated in multiple autoimmune diseases. So it was a very sort of intentional choice that our legacy HI-Bio colleagues made to go after immune-mediated kidney disease, but that does not preclude going after multiple other indications. So we definitely think that it's going to be involved in multiple other plays we could take. And that's why having, as you mentioned, sort of additional asset -- earlier asset, maybe that we can tune up and tune towards different diseases would be really great. So we're really looking forward to where we believe it can have an impact. And it may even be with believe, we can maybe do some more with believe, but with the backup or the sort of next-gen, I think we can sort of think about moving it into other inflammatory -- other autoimmune-based diseases. And it's -- there's a lot of biology and reasons to believe there too.

Well, definitely more to come there. I wish we had more time, but I'll leave it there. But thanks so much, Diana, for a really wide ranging and deep discussion, really appreciated and lots certainly going on and certainly an exciting year ahead in terms of data milestones. So really appreciate the time. Thanks, everyone, listening in, and we'll conclude. Have a great rest of your day.

Thank you, David. Have a great day.

Buh-bye.