BridgeBio Pharma, Inc. (BBIO) Earnings Call Transcript & Summary

Afternoon session of day 2 of the Bank of America Healthcare Conference. My name is Greg Harrison. I'm one of the biotech analysts here at BofA. It's my pleasure today to introduce Neil Kumar, CEO of BridgeBio. Neil, would you like to start off with some opening remarks, then we can get into Q&A?

Yes, sure. That would be great. And thank you so much for having us. It's been a wonderful last day here. Just as a reminder, BridgeBio Pharma is a clinical-stage biotechnology company that focuses on genetic diseases, both precision oncology, as well as Mendelian diseases with some 20-odd programs ranging from Phase III all the way back to preclinical discovery. And as I think most of you in the room know, we had a fairly significant setback at the beginning of this year with our ATTR cardiomyopathy program, Part A. And since then, basically, our strategic posture has been defined by a couple of things. Number one, after a couple of months of pretty hard core analysis on that ATTR-CM dataset, whether or not we continue to believe in Part B, the outcomes portion of our cardiomyopathy study. And I think the answer is yes, and we can get into why as we go forward. So we're still big believers in that program. We're still big believers in our late-stage value-driving programs, which are delivering proof-of-concept data over the next 12 months in at least 4 marketplaces that are $1 billion or more within the Mendelian disease space. So that's the second. And then the third thing that defines our strategic posture is, we believe that the macro environment and I'm not a macroeconomist, but we believe it could stay bad for a significantly long period of time. So at least till the end of next year. So when you put all that together, we think we have a lot of late-stage real products that are reading out, but we think access to capital or at least cost of capital could stay significantly challenged for some time. So the way we've been thinking about our near-term tactics are really to provide ourselves the balance sheet to mid- to end of 2024, so that we can read out a significant chunk of the BridgeBio experiment. And so what does that look like? I'd say, 3 legs to that stool, and you've just started hearing about some of this stuff. So number one is a meaningful decrease in operating costs, and that's coming from 2 things. Number one is decreasing the cost of things like headcount reduction. But number 2 is partnering programs. And those programs that we're partnering, some of which we announced in our Q most recently are going to alleviate something like 20% to 30% of our burn. And collectively bring something like $50 million to $100 million of upfronts in. It's not really about the upfronts, but that still is a reasonable capital for us. It's more about the ability to alleviate that burn on a go-forward and retain some of the back end of the economics there. In addition to that, we've been very focused on ensuring that our capital structure in terms of our debt is such that it's very long-dated, and we have cut a bit of leverage with our senior secured debtors right now. So my expectation is that, we'll be able to defer first principal payments against that debt out a couple of years. So we'll be looking at debt repayments in the '27 to '29 time frame effectively where we would have at least 4 Phase IIIs and 9 proof-of-concept to readout between now and then. So that's really leg of the stool #1, which is around runway. And leg of the stool #2 would be opportunistic business development deals because we have quite a bit of optionality within our portfolio, especially in areas of science that we think are exciting but where we probably aren't going to get any near-term credit from Wall Street on. And so I'd probably first focus on oncology there. We believe we have a best-in-class SHP2 asset, for instance, in a Phase Ib right now. And I think pharma appreciates that. I think that's probably less appreciated by Wall Street. Analogously, we have 1 of 2 programs that I think directly inhibits GTP-bound G12C RAS. And those are the types of programs that I think we could generate meaningful hundreds of millions of dollars of upfronts that a sale of our pediatric review voucher and potentially some opportunistic deals in and around ex U.S. value-driving assets would provide a reasonable amount of runway on the balance sheet. I think we're always going to be looking to make sure we try to do NPV-positive deals, accounting for the increased cost of capital. But there's a lot of optionality within the portfolio. So I think we'll be able to do that, and you should look for us to be pulling those levers over the course of the next coming months. And then the final thing is the provision of great data for patients. I think that really is the road forward. And it started this year with our proof-of-concept in LGMD2i. Hopefully, it continues in June with the final presentation of our proof-of-concept data in ADH1, as well as, hopefully, an announcement in and around our Phase III plans so that we could get that program registered if we're lucky, and it goes this way, by end of the 2023 time frame if we can get 6 months in urine calcium at the endpoints. And then finally, our achondroplasia data at the end of July, where we'll have proof-of-concept there, too. So I think 3 strong proof-of-concepts this year, if we can deliver on that, reduce the burn, restructure the debt, do some real good partnering, pulling a couple of hundred million dollars on the balance sheet so that we're good to mid- to late of 2024, and that starts to feel like we're on the path back. So maybe a bit I'll stop, like I always say, that's kind of how we're thinking about things.

Great. That's a great overview. Maybe let's jump into some of the specific programs. Maybe if you can give an overview of ADH1 and your encaleret program there? How you're thinking about that disease unmet need and how your approach could be best-in-class?

Yes. So ADH1 is a disease that's uniformly caused, for those of you that don't know, by hyper-activating mutations in the calcium-sensing receptor. And now, I guess, many of the programs we have in our pipeline, all we're doing is targeting the disease at its source. So we have a CaSR antagonist that we've been using to go after it. And all of the symptomatology of the disease is driven by low serum calcium levels, which can lead to things like seizures, muscle fatigue, et cetera, or high urine calcium, which can lead downstream to kidney failure, nephrolithiasis, et cetera. And so in the first 2 periods of data, so we basically have this antagonist that should work across. I think we've seen it work across 14 different mutations of -- including the most common in the context of a disease that has about 70 different hyper-activating mutations. And what we presented was inpatient data in periods 1 and 2 thus far that suggested that CaSR antagonism can actually lead to full normalization of serum and urine calcium levels, which is unachievable. There's basically a 0% response rate from standard of care, which is Vitamin D and calcium. And so we showed a 100% response rate. So what we're looking to do in the period 3 data upcoming is to extend that to the outpatient setting, where people could titrate the dose. They'll be managing their patients. And hopefully, that response rate stays in the 80-plus percent rate, and we continue to see normalization on that. We'll also look at PTH levels. And based on that data, obviously, the efficacy side of powering, if the data hangs in there is relatively straightforward, but then we'll need to think about what the safety data set is that the agency would need to see, again, if the data are positive. And by the time we announced the data at Endo, we should have a clear plan as to how that Phase III would progress.

Great. And how should we be thinking about the total addressable market opportunity in ADH1?

Yes, it's a great question. So if you do a carrier frequency analysis on any of the standard data sets, which our STAT GEN team has done, it looks like a carrier frequency of between 10,000 to 12,000 patients. There's 3,500 patients already identified in the U.S. alone. So this is a very meaningful market. And those patients have been identified because they have relatively severe symptomatology, moderate to severe symptomatology so they would be treatable with a drug like this. And I think it's very analogous to XLH to be honest. I mean, I think we look to grow from 3,500 closer to that 10,000 to 12,000 number and the way you grow it is you look within the hypopara population because that's really where a lot of these patients are. And if you can drive diagnostics in there, there was a recent paper suggesting that 20% of hypopara patients were actually testing positive for one of these hyperactivated mutations in the CaSR. And so this would be -- I think that will be the way to identify them. But even 3,500 as a starting point and you talk about a price point somewhere with the mid-300, somewhere in there, our payer review suggests that, that would be the right price point. I think you're talking about a reasonable marketplace here, yes.

Yes. What efforts are you making to help increase that diagnosis and maybe make it into that larger population in the end?

Right. So far, actually, we've concentrated on centers of excellence and working with some of the real leaders in the space of Collins at the NIH. I think going forward, you should expect us, especially if the data are positive here at Endo that we'd be striking some partnerships to try to drive diagnostics into the HP space so that people could at least pick up at the academic medical centers, the missing patients. Beyond that, it's going to be disease education like we've seen in TTR and elsewhere. Yes.

Got it. So when you present the full Phase II data at Endo, can you give us your thoughts on, first, what you will be presenting? And then what a successful scenario looks like to you?

Yes. So it will be the same bevy of data that period 1 and 2 showed. I think it will -- and most importantly, will be serum calcium and how well we normalize that was the effect of the drug on that versus baseline urine calcium, the same there and then PTH levels. And I think -- and we'll also remind people of what the standard of care response rates are, which is I just mentioned are effectively 0%. And I think if we're still at a responder rate of 80% to 100% and having a meaningful effect on both urine and serum calcium and all patients, yes, I think that would be a great outcome for patients.

What does a Phase III trial look like to you in this indication? What's your goal for pivotal?

The goal would be to track off of what's been done in the HP space, where the approvable endpoints could be, in this case, something like serum and urine calcium and where the time frame would be something like 6 months. So I think in a best case scenario, we would meet with the agency and be able to lock something like that down, which means that 6 months, call it, tens of patients is what it would be based on just kind of a rough up powering. And that trial could easily readout sometime late 2023. Yes.

Okay.

The worst case scenario would be there's some sort of functional outcome that's required beyond serum and urine calcium for approvability. I'd be surprised by that. But then that would be a couple of year trial. That will be a longer trial.

Okay. Maybe let's turn to the achondroplasia program. Can you talk about how your approach is differentiated from other pipeline compounds and also BioMarin's VOXZOGO?

Yes. So maybe I'll start with BioMarin and Ascendis, which is just a long-acting form of what they're doing. So the disease achondroplasia, as most of you know, is uniformly caused by a gain of function mutation in FGFR3 and that leads to elevated signaling through 2 effector pathways that are responsible for chondrocyte differentiation and proliferation. One is MAPK and the other is STAT1. And so what the CNP approach is looking to do is to tamp down MAPK signaling. And they obviously do it and therefore, provide an AGV advantage. What we're doing is, we're going directly to the source, again, targeting well-described disease at its source by inhibiting FGFR3 itself. And that should have 2 advantages, primarily that one is that, you should be able to fully normalize MAPK signaling in a way that we haven't seen from at least BioMarin's program in vitro work, certainly, at the doses that they're working with in humans. And then the second is that, you should be able to inhibit the STAT1 part of the pathway as well. And you can look at the mouse model out of Laurent's [indiscernible] lab, which I think is the same one that BioMarin used. If you're able to do that concomitantly normalize both of those signaling pathways and do it more potently, you should be able to see -- I think we showed a fourfold better long bone growth, but actually impact on some of the other things like proportionality, foramen magnum and things of that nature that could impact on things like spinal stenosis and the human condition. So yes, that's the overall.

Okay. What should we expect from this data update? And kind of the same question here, what is your view of success? I mean, do you need to beat BioMarin in this one, if you're in line, roughly, is that sufficient? Or as your route of administration may be enough of a benefit where you could get away with maybe even less growth...

Yes. I mean, first of all, I think route of administration is just to elaborate on that. They have a once-daily injection. We have a once-daily oral, it's a sachet. You can mix it in with your children's food. So I think that's huge. I think if we were at the same as BioMarin, that would still be a big victory for parents and for patients or for kiddos. And I think we've heard that pretty convincingly from the market, and there are several surveys out there that suggest the same. I think for the Cohort 4 data that we announced at the end of July, what we'd like to see, and I think the big concern with this program certainly has been from the get-go what the safety profile looks like. So I'd love to see a clean safety profile in that fourth cohort. And I'd love to see impact on average growth velocity in the realm of BioMarin. I don't think it needs to be at it or beat it necessarily for this to be an interesting product because if it's safe, I think we would approach the agency, and we will do all this work before the fourth cohort gets announced and see whether or not we can move to a fifth cohort, so to continue to move up in that dose response. I think the second is we're exactly at BioMarin, which is 1.35 centimeter for a year, in which case, that's, I think, a great outcome, obviously. And then we're somewhere above that, which based on the mouse model work and I think in Cohort 4, you start to get those exposure levels that are close to BioMarin like in terms of MAPK inhibition, I mean, if we're better than, then I think -- and that's even more home run hit, yes, that's big.

Okay. What are the next steps after this? You mentioned maybe dosing up another cohort. But if the data are positive, where does it go from here?

I think in almost any case, even if we were better than -- significantly better than BioMarin, we continue to interrogate the drug in its Phase II until we reach the top end of the dose response. The next dose of Cohort 5 brings us pretty close to NOAEL. So it would be an ongoing discussion with the agency as to whether or not we move on from there. But certainly, you only get one chance to meet the top of the dose response, which is your Phase II and you don't know what Ascendis or others are going to post. So I think it would be good for us to continue to interrogate the drug and then past that, I think you would expect to see a very similar Phase III campaign is what we're in.

Okay. And then how would you see the market unfolding, if you get to market, you have a competitor there where a lot of the kids may already be on that treatment? Is it a new patient dynamic? Is it -- would there be switching or maybe different patients on the different drugs? Or how would you see that market evolving?

Yes. I think that you would -- for newly diagnosed patients, if we continue to go down to a relatively young age 3 there, you'd expect to pick up a majority of the scripts, especially if you have better efficacy and you were more convenient. I suppose if some people are seeing nice effect with the daily injectable, they may want to stay on the daily injectable. But at least from what we've heard thus far, that can be quite a concern that once-daily injection. So if you had an oral that was easier to administer with potentially better efficacy, I think you'd want to switch over.

Yes. Makes sense. Okay. And then on the ATTR program, you're going to have the mortality data mid next year. Just given what happened with the interim analysis in December, what gives you confidence that you could still have a good result on the mortality?

Yes. I think basically 2 lines of thought there. One is, do we believe the drug is effective and can provide great mortality and 2 is, do we see the event rate within Part B such that if the drug is working, it can show itself, if you will. I think on the first, we continue to believe that what the drug showed at the end of Part A was effect on everything that could have shown an effect on based on anywhere things did deteriorate, it showed a signal. So obviously, with 6-minute walk, there was no deterioration. Everyone was continuing to stay healthy. The only part of the trial where you did see some deterioration on 6-minute walk was the variant population. They were minus 40 and our drug flatlined it. So you did see effect there. That's 10% of the trial, so I wouldn't overread that. But quality of life, KCCQ, if you look at BMP, which went up 25% in placebo, and we flatlined it, even if you look at AE-driven death, there's almost no place in which we didn't see effect. And importantly, biochemically, we saw a 40% rise in serum TTR, which suggests that our drug is doing precisely what we wanted to do in terms of stabilization, maybe even more than I would have suspected, given that there's 90% wild type in the trial. So we continue to believe that the drug is effective in doing what we wanted to do. In terms of is there enough mortality in Part B, that's where we would needed to take some time, both Part A. And so we looked at median 15-month and median 21-month blinded/blended data. And you got to correct for a track levels of mortality in 3 different ways. You got to think a little bit about -- we had a few more Class 2s in that class. So we basically shifted some of their Class 3 to Class 2 and the placebo arm is going to look different for different classes. The hazard ratios changed with class. And then we have more people on drug, so we're 2:1 randomized and they were 2 to 1 randomized. When you do those calculations, we were almost right on top of where you would expect to see the mortality rates at. So we feel comfortable that the trial is well powered against the endpoint of mortality and CVH for Part B. I'd say, secondly, you also want to look at whether or not there is some discrepancy between what normal mortality rates would look like in a mean 77-year-old patient population versus what we're seeing. And certainly, we are seeing very high mortality rates versus that 1.5% to 2% per annum rate. And then maybe finally, I'd make the comment that, although every single piece of data we had seen prior to Part A suggested that you would get a something like minus 40 to minus 60 decrease on placebo in 6-minute walk. There was a paper published from our leading enroller, the NACSite, Julian Gillmore and his group that suggested that they also saw a minus 11 deterioration over 12 months and 6-minute walk. And the punchline of that paper is that, the best univariate predictor within their cohort of future mortality over the first 12 months was change from baseline in BMP. And we saw a profound effect there in, obviously, the first 12 months of our trial. So everything that's coming out now continues to suggest that we should have impact on the things that matter in Part B, and that's why we're excited about the program.

Great. Do you have any updated thoughts on the placebo performance that you saw?

I mean, except for the fact that now these people have seen it. So there's really 2 -- there's 2 hypotheses, right? One is, if the true mean is minus 40, but the standard deviation is, I can't remember, like 75 in our trial and maybe a round that for Pfizer, too, that we just do an unlucky card, right? The second is that, standard of care has evolved so we're using fetal rhythm control meds and we're diuresing in a more effective way. And we're just managing these patients better. And maybe there's some context in training bias. If you put all that together, that means the mean has shifted now, right? So we're sort of in a new paradigm. Arguably for the second hypothesis is this recent paper out of Gilmartin Group suggesting now they're the second readout in the last, whatever, 12 months, 24 months, that shows a decline that is well less than what was historically observed. And if that's the case, I would chalk it up to some combination of the things I suggested, an evolving standard of care and perhaps in his paper that they were picking up patients earlier. Yes, I get -- I think we'll learn a lot more from APOLLO beyond that as well.

Yes, for sure. Can you give us an overview of the Phase II open-label extension data that you presented and how that impacts your thinking on the Part B readout?

Yes. I think the Phase II OLE and with all the caveats that an OLE deserves continue to, I would say, bolster our argument for the drug, at least in our minds, a 65% approval rate on -- improvement rate on BNP is about the best that I've seen in a very sick population. But this is a sicker population that even was enrolled at ATTRACT. And so that's better than what Alnylam has showed better than, I think, what [ TAC 80 ] has showed in the past as well. So again, to the extent that you believe BNP is a strong univariate predictor of mortality to the extent that, that cohort has been fairly long lived, given their baseline characteristics. Yes, we continue to feel like that's a really good another piece of data showing that our drug is doing what it should do, and that can translate to benefit.

Great. Now, how would you see the market evolving, say, Part B data are positive? And then you have a treatment landscape at some point in the future with a couple of orals, maybe silencers, gene editing, where does that parameters fit within that? And what are the advantages of still sticking with an oral when you have more potentially curative options there?

Well, I think that the whole commercial landscape will be dictated by who wins on mortality. First and foremost, I think that's been true in cardiovascular categories in the past, and I think it will stay true here. I think from that respect, when you look at the experiments that are being run, certainly, our experiment is advantaged given the amount of tafamidis drop-in and others, we can run a clean experiment. And I think if our hazard ratio superior to tafamidis, we'll win within the stabilizer context and that stabilizers will win within the overall context, unless the knockdowns are doing something that I don't know about and provide way better efficacy. My assumption has always been a 90% knockdown is tantamount to a 90% stabilizer and obviously, we're above 90% in terms of stabilization. And I think the knockdowns are around 84%, 85% being max knockdown. So I think there's always going to be -- it's a big market, so there will be room for a lot of different approaches. I also think from a safety standpoint, a safe small molecule that preserves this important protein, no one doesn't have TTR. No one has a half dose of TTR, everyone has it. So if you had the opportunity to just do less in terms of disruption to the body and provides the same efficacy, I think you'll find cardiologists use it now. Obviously, it could play very differently if we're not able to show that efficacy in our Part B and could also play differently if Alnylam, Ionis or Intellia show widely describing efficacy dollars like being better. I think efficacy will win the day, though, in this category, meaning mortality.

Sure. Okay. Maybe let's move to the earlier pipeline. Where else should investors be focusing, especially after you've reprioritized within the pipeline, what's next? Is it LGMD2i? Is there another program oncology, KRAS? What do you think should be the next focus beyond these lead programs we talked about?

Yes. Good question. I mean, I do -- we have done quite a bit of pipeline pruning. What that leaves are these large market opportunities in the Mendelian side that I think a small company like ours could launch. You've got TTR, you've got achondroplasia. I think that ADH1 fits that same bill. It's a rare Mendelian endo disease, again, analogous to what Ultragenyx has done with XLH. And then I think the remainder of those 2 in the bucket are LGMD2i where we should be in a Phase III by the end of this year and congenital adrenal hyperplasia, where we should have proof-of-concept data end of this year, beginning of next year, somewhere in that realm. So that would be one basket. And then the second basket, there was a middle basket that used to be the smaller Mendelian programs that were high. So yes, those are effectively gone. And then there's a third basket, which is oncology. And there -- we've got -- again, as I said, I think we've got a best-in-class SHP2 inhibitor. We'll be kicking off combo trials with both Amgen and BMS should investors spend their time there that I think remains to be seen how all of that plays out, but we're excited about that compound and on our RAS franchise, we'll be in the clinic next year. So I think that will be the right time for people to really dig in on that. But yes, no, I think the nice thing about oncology is pharma gets interested earlier in that stuff. And then I think for the nice thing about our late-stage pipeline, it's real products in big markets, and we've got the cash rated out and hopefully taking steps to further buttress that position, so yes.

As you move forward and maybe in the future, start adding to the pipeline again, how does patient population size impact that decision? Because you have a pretty wide variety of some ultra, ultra-rare. You have some big populations. How does that fit into your decision process?

Yes. I don't think we have that much ultra ultra-rare anymore in part because when BridgeBio was founded, it was very different, like you could have a patient population of 2,000 and hit really clean Phase I/II data, and that could effectively drive your stock and not everything is about driving your stock. But in today's day and age, one has to be very careful about access and cost of capital. And those programs, effectively, you have to take a contrary and pass here to all the way to revenue. So I think you're going to see us do less of that ultra-rare unless in these tremendous NPV, like on MoCD Type A, which is about the rarest drug. I think anyone has ever taken on in the history of drug development, maybe we spent $20 million on it to take it across the finish line, which was the right thing to do. Children that would have otherwise died are now alive because of that effort. But it was also NPV positive because we get a PRV out of it, which should be salable. So I think there could be opportunities like that, but we probably won't spend that much time on it. I think our patient cutoff or the market unmet need cutoff is going to be higher because I think the days of the market rewarding smaller population like things are certainly gone right now, and it could be permanently gone.

Great. Well, with that, our time is up here. So Neil, I'd like to thank you for joining us and for the great conversation and thank you to all in the audience for joining us as well.

Yes. Thank you. Appreciate it. Okay.