Biomea Fusion, Inc. (BMEA) Earnings Call Transcript & Summary

Thank you. Good morning. I'm Eric Joseph, senior biotech analyst with JPMorgan. Our next presenting company is Biomea Fusion. And presenting on behalf of the company is CEO Tom Butler. There's a Q&A session after the presentation. [Operator Instructions] With that, Tom, thanks for joining us.

Thank you very much, Eric, and good morning, everybody. Exciting to be here and kick off the 2024 year at the JPMorgan conference. I'll be making forward-looking statements during this presentation, so please note. Our mission, we aim to cure, is at the center of everything we do at the company. And we believe that our approach may lead to significant improvement and extension of life for our patients. And that's really the driving force behind our efforts. And we had a very successful 2023, really reading out the first clinical data in both oncology and diabetes for BMF-219 and really putting together and working hard to set the pieces for large data set readouts in 2024, and we believe to be a very successful year again. And the success is really coming from what is listed here. We have a very experienced management team. We have the novel FUSION System, our platform. We have a Phase II clinical-stage molecule, BMF-219, advancing. We also have a Phase I clinical stage compound, BMF-500, which is also advancing well. And we think the development of combination assets is really where we can reach paradigm shift. Our team has had success, but also a lot of experience working together. And I think it really goes hand-in-hand. The majority of the C-suite here has worked together for over 10 years. We believe, with covalent chemistry, validated targets and proprietary combination set the path for long-term patient benefit. And really, it starts with covalency. Biomea Fusion is a biopharmaceutical company focused on the discovery and development of novel covalent small molecules. And really, the power of covalency is illustrated here. Ramses and I actually made this chart while that Pharmacyclics. And what is highlighting here is the potential of the PD effect outlasting the PK effect and really delivering this incredible outcome. And what the green line represents is the ability to achieve occupancy of your target. And in this case, it's BTK and ibrutinib. And that occupancy is maintained despite only needing a few hours of exposure during a 24-hour period. So that difference between the green line and blue line is patient benefit. So the benefits here, on the right-hand side, is highlighting high selectivity, specificity to your target, deep target and activation through covalent bond formation, and a greater therapeutic window because the patient doesn't need to have a certain concentration during a 24-hour period. Our FUSION System, our platform, is what allows us to discover and develop these novel small molecules. And we create all of our programs in-house. It starts with a novel target selection process, crystal structure-based drug design, and proprietary scaffold construction. So we do not use compound library screening techniques. We do customs scaffold construction to the target of interest. What that does for you is provide incredibly strong intellectual property. And we spend the majority of our time not needing to optimize specificity or selectivity to the target but optimizing the ADME properties. What we do is look at human genome-wide covalent pocket analysis and kind of really understanding your target, like menin, can have multiple cysteines. Menin, as an example, has 6 cysteines, but you only want to target one of them. Only one of them is important. So you have to understand what is the location of the cysteine, what is the right distance to the cysteine that you need to achieve with your warhead that's on your small molecule to achieve covalent bond formation, and what is the right angle to make sure you ensure covalent bond formation. These are really key components of building this highly specific, targeted molecule. And our platform has produced this robust pipeline. And the pipeline is continuing to expand. And with BMF-219, because of the broad potential of menin as a target, we have 4 clinical trials. COVALENT-101 and 102 is focused on liquid tumor and solid tumor development. And COVALENT-111 and 112 is focused on type 2 diabetes and type 1 diabetes. BMF-500, our FLT3 covalent inhibitor, is focused on acute leukemia. And we have a third program that we expect to announce this year, in 2024. And some of the upcoming milestones I'm highlighting here. In type 2 diabetes, we'll be at ATTD in the first quarter. So starting in the second week of March, we'll be announcing the completion of our dose escalation. In 2024, we'll be announcing initial proof of concept in type 1. And with the solid and liquid tumors, we'll be completing the dose escalation and determining the recommended Phase II dose. For COVALENT-103, we'll also be completing the dose escalation and determining the recommended Phase II dose in 2024. At the end of August last year, we hired a new CMO, Dr. Juan Pablo Frias. And this was at the cusp of delivering the first clinical data set with BMF-219 in diabetes. And as we were building out the company and increasing our internal expertise in diabetes, Juan, we thought, was an incredible cornerstone for this effort. Juan has served as principal investigator on over 250 clinical trials with diabetes. Over half of these studies were Phase III. And he's been part of clinical development of more than 20 approved diabetic agents. Diabetes continues to be a significant unmet need. And it's the biggest epidemic of the 21st century. Two in five Americans will develop diabetes during their lifetime. And what's astounding is that in 2022, the U.S. spent over $400 billion to handle diabetes. Clearly, we have a lot of work to do. And even though the number of approved agents and the number of innovation that continues to be seen in diabetes, we continue to get newer SGLT2s, newer GLP-1s, what we're highlighting here is that the number of patients with diabetes relying on insulin continues to rise. And so starting from the top, you see that the patient number continues, those who are becoming diagnosed with diabetes, the number of patients depending on insulin continues to rise at a similar rate. And the percentage of patients who are controlled has not changed in the last 18 years. And really, it's because we're not addressing the root cause, which is the depleting pool of beta cells. And we think BMF-219, as a novel mechanism of action, can start to change the paradigm here. With 219, we have a unique value proposition of focusing on beta cell health. And it's a first-in-class potential with a differentiated profile, we think, having an oral small molecule that's complementary to an SGLT2, complementary to a GLP-1 and other treatment options. Non-chronic dosing, meaning we think this is a short-term treatment regimen for patients; and disease modifying so that patients are no longer living with diabetes, they're done with diabetes. And we think the addressable market may include all diabetic patients because both type 1 and type 2 patients suffer from beta cell loss. Beta cells do indeed proliferate. And then they've been shown to proliferate in obesity as well as pregnancy. And there are also several very strong literature support, decades ago, showing that menin controls beta cell proliferation and beta cell mass. This is a very important diagram to understand and really, beta cell compensation in physiological and pathophysiological states. And what we're highlighting here is both beta cell mass, beta cell replication, and beta cell size. And some of these parameters are very important to learn. And as you age from neonate, child, adolescent to adult, what you see in the normal condition is that you would really establish your beta cell pool by the adolescent stage. And it stays steady well into adulthood and with a slow decline as you age. During pregnancy and obesity, you see an increase in beta cell mass, in replication, and beta cell size. It's important to note that the majority of people who are obese do not develop diabetes, it's only the minority. The minority that developed diabetes are those that have a decrease in beta cell mass and beta cell replication. They're not able to keep up with the continued demand in insulin. With BMF-219 focusing on beta cell proliferation as the core mechanism of action, we believe, if we can selectively increase the beta cell mass, we can restore insulin secretion and overcome the insulin resistance and the beta cell workload that's been subjected for the patient. Some of the important work that we did from a translational perspective was focused on the human islet work and looking at how 219 elicits beta cell proliferation. What's important to note, and this is something that we highlighted at the World Congress in December last year, is that 219's proliferation is glucose-controlled, meaning under standard glucose or normal glucose conditions, there is no proliferation exhibited by BMF-219. It's only under stimulated glucose. And so it's important to note that the time and the concentration matters in the level of proliferation that's exhibited. And understanding the dynamics of dosing a patient for 4 weeks, 8 weeks and 12 weeks is also critical. And then what we didn't show at the World Congress but is also important is that we only see beta cell proliferation. We don't see proliferation of other cellular components within the islet. We've seen with our preclinical work, both in vitro, ex vivo, and in vivo, that BMF-219 shows preservation, reactivation and regeneration of beta cells. And what's important to note is that all of these components are important for a healthy islet. BMF-219 is a potential first-in-class diabetic agent addressing, again, the recast disease. On the left-hand side, what we're highlighting here is the different agents that are currently approved and how they're aimed at treating the symptoms of diabetes and really trying to go after hyperglycemia, whether you increase the kidney flow rate, whether you suppress your appetite as well as increased insulin secretion from the existing pool. What we're trying to do with 219 is get the pool back and kind of rewind the clock on the disease. Here's a little bit on the study design for COVALENT-111. And keep in mind, with COVALENT-111, we're enrolling type 2 patients that are currently failing their standard of care. And the standard of care that they can be on is any combination of metformin monotherapy. They can be on an SGLT2. They can be on a GLP-1, a DPP-4, and any combination up to 3 antidiabetic medications. The dose escalation, or Part 1, on the left-hand side features 4 weeks of dosing with 219, followed by 12 weeks of follow-up. In the healthy volunteers, we had 16 patients. We have 50 milligrams, 100 milligrams, with and without food. We have 200 milligrams QD as well as 200 milligrams for QD for 2 weeks, followed by 400 milligrams for 2 weeks. This allows us to really understand the dynamics. And we really created an all-comers dose escalation trial, so we can understand the 4 corners of how BMF-219 works. And the important thing to note is that 4 weeks is intended to help us in a dose selection. The important component becomes now the dose expansion phase, the Part 2, where we're treating patients up to 12 weeks. And we have 4 cohorts designed for the expansion phase. The first 3 are listed here, arm A, arm B, and arm C, where we're treating patients for 100 milligrams for 8 weeks, 100 milligrams for 12 weeks. And the third is 100 milligrams for 8 weeks, followed by 200 milligrams for 4 weeks. These are all QD dosing. And back to the islet data that I just showed, you can see that everyone has a different proliferation and background rate. So we want to understand how do we convert those who need just 4 weeks compared to 8 weeks and compared to 12 weeks. Some of the baseline characteristics and demographics are highlighted here. And you can see that with age 52 and the 100 milligrams without food, 51 and 100 milligrams with-food cohort. And the placebo was 46 years old. We're highlighting here the sex, the duration of diabetes, varied between the with and without food. Without food was 4 years on average with diabetes. With food was 8.7. And placebo had a similar 4.2. The baseline characteristics of A1c was fairly similar. And the majority of patients on the without-food cohort were on just metformin alone. And the glycemic results that we highlighted here at week 26, keep in mind, these are patients who took therapy for only 4 weeks. And now we're following 5 months off treatment to see how the durability in the response and the durability of this new pool has realized. And what you can see here, the mean change in A1c for those taking 100 milligrams without food was minus 0.5% and a placebo-adjusted mean of minus 0.8%. 20% patients in both cohorts had at least a 1% reduction maintained at week 26. So a great proof of concept here. And looking at the placebo, it's a positive 0.3%. I think it's important for folks to know that on the placebo arm is really what's happening in the real world, that despite the start of antidiabetic medication or despite being on standard of care, your A1c is going to increase over time because the pool continues to deplete. And the pool, again, continues to be at about 5% a year. Here's our exposure and PD effect. And the AUC is really what we use to guide our drug development and really is the key exposure for a covalent inhibitor. The 100 milligram without food had an AUC of about 224, the 100 milligram with food had about 1/3 of that. And what's nice to see is you see this nice dose response with the without food had a 0.5% reduction at week 26. The with food had a 0.1% increase on average. And the placebo had 0.3% increase. These are all at week 26. And also pointing out, you see the variability is high between each cohort. And again, the variability is high, as I mentioned before, as everyone has a different background proliferation rate. And since we're only treating for 4 weeks, we want to understand who are the patients, what are their baseline characteristics in driving long-term durability, which is 4 weeks of treatment, and then how do we catch the remainder of those patients when we dose for 8 and 12 weeks. Our patients who responded with just 100 milligrams had a tremendous increase in HOMA-beta and also had a tremendous increase in C-peptide AUC. What's important to note is that we're looking at a baseline characteristic of a HOMA-beta below 200. 200 really represents the upper limit of normal. So we're focusing on patients who are "beta cell-deficient" and who would have a chance to actually have an increase in their pool and respond because of it. On the right-hand side, the change in C-peptide AUC, as a reminder, this is during the conduct of an OGTT experiment. So this is a controlled experiment where every patient has the same amount of glucose that they take. And now we're seeing how their new pool responds to this glucose over time. And this is the week 26 time point. I want to highlight a case study. This was a 29-year old man with a 4-year history of type 2 diabetes. This patient was on metformin and an SGLT2. They had been on this therapy for several years. And they came onto our trial with a hemoglobin A1c of 9.5. And really, again, this is normal course of business for diabetes. Again, it doesn't matter if you're on an SGLT2 or metformin or GLP-1. Your A1c, again, is going to continue to rise. And this patient was at 9.5 coming into our study. And if you look at their CGM, they had a time-in-range of about 30%, when guidelines and ADA treatment guidelines are suggesting you need to be 70% plus. When you look at the change in A1c within the first 4 weeks, it's a very robust change of about 0.6% reduction, but you can see the reduction continues while off treatment. And what we're looking for when we're studying these patients is how long does the pool take to mature? Everyone has a different maturation process. We know that maturation can take up to 12-plus months. And so it will be interesting to see, in our expansion phase, how patients now followed up to week 52 perform over time. An important component is that you cannot proliferate and produce insulin at the same time for a beta cell. So once they're finished proliferating, they have to go through a maturation state in order to produce insulin again. And what you can see is just within 12 weeks of the study, this patient went from about 30% time-in-range to almost 80% and now is, at week 21, which was the last time point for this patient, in 90-plus percent time-in-range. And you can see their HOMA-beta increase dramatically, 190% increase from baseline to week 26. And their C-peptide production during the OGT experiment increased 71%. So our accomplishments in 2023 were quite broad. And just highlighting here what we achieved with COVALENT-111, these are patients, again, failing standard of care on a number of agents. 84% of patients responded to 219 while on treatment, which gives you a really good understanding of the importance of menin inhibition in diabetes. 74% of patients continued to respond while off treatment at week 12. 20% of patients achieved at least a 1% reduction with 100 milligrams, 5 months off treatment. And 36% of patients had at least a 1% reduction of 5 months off treatment when they took 200 milligrams. The expansion phase had initiated towards the end of last year and currently enrolling and exploring the 8 and 12 weeks of dosing. COVALENT-112, type 1 diabetes. Because of what we're showing with beta cell proliferation, increasing the capacity and the function of the pool, we think 219 can be a great agent for type 1 diabetes. We had the IND and CTA cleared from FDA and Health Canada. And then in oncology, with COVALENT-101 relapsed/refractory acute leukemia, we had initial Phase I top line data with first complete responses and including MRD negativity. With COVALENT-103, which is also in relapsed/refractory acute leukemia, we had the IND for BMF-500 accepted. And our first patient enrolled in the study. And then with the FUSION System, we built out an expansion to our lab facilities to expand our in-house capabilities and then also continued development of the FUSION platform technology. For 2024, a ton of excitement coming for our anticipated milestones. For COVALENT-111, it's to complete the dose escalation, transition to the expansion cohorts and fully enroll them, as well as open up 112, which we announced on Monday, for FPI, and get the open-label cohorts, which is an N of 40, fully enrolled this year, and establish an initial proof of concept in this indication for type 1 diabetes. For oncology, for liquid tumors, dose escalation completed and recommended Phase II dose established is our goal. For COVALENT-102, it's the same. And also, for BMF-500, we think we can complete the dose escalation and also determine the recommended Phase II dose established. And again, really, for us, internally, we're really excited about the 219 and BMF-500 combination for acute leukemia. And then lastly, we expect to announce our third pipeline asset from the FUSION platform technology this year. Our development plan, the next 4 years for BMF-219 in diabetes. And of course, this is success-based and predicated on the success of our expansion. But based on recent FDA feedback we received, we think that we're in the driver's seat for accelerated path for 219 in type 2 diabetes. We expect the expansion phase to complete in 2024 with proof-of-concept established again in type 1 diabetes. We expect to initiate 2 pivotal studies in 2025 for type 1 diabetes and for type 2 diabetes. That puts us on path for our first NDA filing in 2026 and for type 2 diabetes in 2027. Here's a snapshot of our financials as of Q3. We ended Q3 with $200 million on our balance sheet with a burn of $25 million. We'd expect that burn to stay pretty consistent and really be great stewards of our cash spend and really understand, out of all the indications that we're pursuing with 219, where do we see that breakthrough-type data and then focus on those indications that are generating the breakthrough-type data. Thank you very much. I'll open it now to questions.

I'll ask the first question that's submitted via the portal here. And it really is one around the mechanism of action and distinguishing how 219 is promoting beta cell function, truly trying to decipher between replication or just stimulated function. Can you talk a little bit more about sort of how you are interrogating that preclinically and the evidence supporting perhaps real repopulation or replication of cells within beta islets?

Yes, it's a great question, Eric. And we really spent a lot of time and effort not only working in vivo in animals to understand that 219 resulted in an increase in not only the number of islets but also the size of the islets to drive responses in our preclinical studies. But I think the important component was in transitioning to human tissue and looking at the human islet work. And the human islet work is quite extensive and looks at not only the impact from a cellular component perspective, looking at how beta cells are replicating versus non-beta cells, but then what is the functional impact of that effect on insulin content. And I think in the clinical trial, you can't measure beta cell proliferation, but you don't need to. What you need to show, really the proof in the pudding, is that patients have an effect that's from a novel mechanism of action and that the effect is long-lasting.

Okay. Maybe just a couple of questions related to Part 2 of COVALENT-101. This is the multi-arm dose expansion phase of the trial. From Part 1, it seems like there was a food effect for some of the dose cohorts. In one case that may seem to have limited exposure with 219. On the other side, may have kind of contributed perhaps to tolerability or may have been confounded by tolerability issues. How are you managing or further interrogating the food effect property interaction with 111 in the expansion cohorts?

Yes, it's a great question. And the food effect that we saw preclinically and in our healthy volunteer study is that if you dose 219 with food, you get a positive effect. So you get an increase in exposure. And what surprised us was the 100 milligram, where you saw a reduction in exposure. And we think that is just a nuance of having a small N in the cohort and having a few patients who had very little exposure. We would anticipate, if you were to continue enrolling that cohort, that the 100 with food would actually end up with a higher exposure average. When we transitioned to 200 milligrams with and without food, the with food resulted in an increase in exposure, as predicted from our healthy volunteer study and from our preclinical work. And it's not a tremendous increase. It's an increase of 50-plus percent. And what we ran into from a tolerability perspective with the 200-milligram with food, we think we probably should have finished that cohort. And maybe the nuances that we saw was patient-specific. What we're doing as we continue our development with 219 is you don't need to take 219 with food to get the exposure you need for the efficacy we want. And what we want to do is basically tighten up the dosing instructions. So right now, we have it where you just take 219 2 hours after a meal. We'll try to tighten it up so it's 1 hour or even 30 minutes after a meal. And it's just a very clean dosing instruction.

You've offered some sort of broad eligibility criteria, the study being open to patients that are on compound treatment, standard of care. I guess, given the fact that you might see a fair amount of variation in that population coming into trial, well, really, can you just talk a little bit about the sort of ideal treatment background and also kind of severity of disease that you're hoping to enroll in the expansion cohort in the trial, appreciating that you probably want to get some consistency, right, across the patient population in different study arms?

Yes, that's right. And the escalation phase, just as a reminder, is really kind of an all-comer. So years since diagnosis is 0 to 15. We don't limit the number of antidiabetic medications up to 3. Beyond 3, we limit. And what I want to point you is on Slide 16. If you look at the graph in the center, the beta cell replication, as you age, especially for type 2 diabetic, your beta cell replication rate goes down, right? So age can very be an important prediction. And it's no surprise, when I showed the case study of the 29-year-old with 200 milligrams, this patient only needed 4 weeks to have such a dramatic effect, right? And it makes sense. They're 29. And so when we look at transitioning to 8 and 12 weeks in the expansion phase, what we're looking to do is capture those who have a little bit lower proliferation rate, that didn't have the strong response that this individual had in the escalation phase. And to your point, what we're doing in the expansion phase is limiting years since diagnosis to 7 years or less. And then 75% of patients will be on metformin alone. We still want to understand the other combination partners of SGLT2 and GLP-1. So we still want to understand the 100 milligram dose effect for longer periods of time in those patients. But we've really reserved the fourth cohort in the expansion phase to study patients who are on multiple agents, who are later in their disease course, more than 7 years.

I wonder whether sort of baseline C-peptide level might be an entry criteria to some extent. I mean you're kind of controlling for that or keeping it within a certain range by limiting time since diagnosis within 7 years. And obviously, background treatments sort of might also create some uniformity along that dimension. But specifically on C-peptide, is that sort of an entry criteria that you're monitoring for?

Yes, not for type 2. Certainly for type 1. And I think the type 1 experience will give us a lot of data for how we can guide for type 2. But going back to this chart that shows how many folks are on insulin with diabetes, the majority of these folks are type 2. And so we do want to understand what are those limits in C-peptide capacity in order to respond to 219. And for us, we don't have any guardrails in terms of HOMA-beta and C-peptide because we still don't know what those bands are. So as we complete the expansion phase, we hope to know a lot more. And we don't want to get caught up too much in what we see from a trend perspective with 4 weeks of dosing because it can be completely broadened when we transition to 12 weeks.

That's probably a good point to segue to type 1. I guess just kind of stepping back, just having generated data in type 2, I guess a broad question is the extent to which the data that you've generated to date at 4 weeks kind of derisks. How does that inform or provide confidence that you'll be able to see a similar effect on C-peptide and ultimately A1c? Well, really C-peptide in the type 1 population?