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

Good afternoon. We'll continue with the next session. I'm Paul Choi, and I cover the SMid Cap Biotechnology sector here at the firm. And it's my pleasure to welcome BridgeBio for this session. From management joining us is Founder and CEO, Neil Kumar. What we'll do is Q&A. If any audience members along the way have any questions for Neil, please feel free to raise your hand, and we'll try and get a mic to you. But maybe before we start with Q&A, Neil, maybe if you want to provide some any high-level comments that you think are of interest. Otherwise, we can just go into Q&A.

Yes, sure. Happy to. First of all, thanks, everyone, for the time. I think our strategy a bit large over the next 18 months or so is informed by 2 inputs, really, number 1 is our continued belief in our late-stage pipeline of Phase II or Phase III assets in $1 billion-plus markets. And we can talk about those, but those are five specific assets, inclusive of our TTR cardiomyopathy program, all of which have catalysts in the next 18 months. And the second input is that we're at least planning for a very rough tape and a very rough market through the end of next year. And so what that leads you to is kind of a simple equation of trying to cut burn where you can so that we have a strong cash position. So we've reduced burn through layoffs, fixed cost reductions, et cetera. We've attempted to partner nonessential assets. Those two things together have led to increased runway about $850 million of cash on the balance sheet. And I think we have opportunities to further that. And then the final piece of the equation is to deliver solid data. And we've started that at the beginning of this year with one of our value driver assets with LGMD2i proof-of-concept that will be moving into a Phase III by the end of this year. And then last week, we announced positive proof-of-concept data for our ADH1 program, which also will move into a Phase III likely to read out by the end of next year. So that's kind of how we put it all together. And I feel happy to answer questions on any of the specific programs or strategy a little bit.

Okay. Great. Probably since your top line data last year and the ATTR top line data, and potential competitors data coming up in the not-too-distant future, the ATTR market obviously is up very high focus point for investors. So maybe as you've had more time to think about it, you and the Eidos team have looked at the Part A data. Is there anything that you would say now with digital hindsight of anything that has been determined with respect to the trial conduct, execution or anything like that or any of patient criteria from your perspective that baseline factors that stand out with a subsequent analysis or looking backwards?

Yes, great question. So I mean I think our primary focus to date has been on Part B and its fidelity. Just as a reminder, we have a nested trial design. Part A was a 12-month readout on 6-minute walk. And then Part B is a 30-month readout against mortality and CVH. And so what we really wanted to do in the first couple of months of this year was to look at blinded blended rate of mortality to ensure what occurred at Part A does not occur at Part B, meaning that we actually have a measurable deterioration against which we can show the drug's activity and we can walk through it. But I think the conduct and the fidelity of Part B looks good to us so far, meaning a blinded blended review of mortality at the end of February, suggested that death rates were in line with what we would expect from ATTR-ACT and certain of the latest natural history studies that have been published when one corrects for the 2:1 randomization, the moderately more healthy population in Class II and the hazard ratios that change from Class III to Class II to Class I. And then we had, as I think I mentioned at JPMorgan, low single-digit levels of TAF drop in and dropout rates consistent with the ATTR-ACT. So everything felt good in terms of the ongoing trials, Fidelity. Furthermore, as we look at Part A data, it seemed that 6-minute walk was discrepant everything else that we were seeing, as you and I have discussed, we hit on all the rest of what we could measure, inclusive of BNP, which seems to be as good as any univariate predictor mortality, serum TTR quality of life questionnaire and then we had a 27% reduction in AE driven death. So against everything else that we could see, it looked fine against 6-minute walk where it did decline like in the variant population, we also flatlined it against a minus 40 declination. But overall, at 6-minute walk, we just didn't see a declination against what a healthy volunteer would do. So then the question becomes why? And I'm afraid I don't have a clear answer to that. It's at least 1 of 4 hypotheses. The first could be context and training bias, which we could get into, the second is an evolving standard of care, which I think at least plays some role based on the recent publication, recent publication from the National Amyloidosis Center, suggesting also 11-meter decrement over 12 months, which was published after our trial started. But fewer [indiscernible] meds, greater and more aggressive use of diuretics. And then there could be some COVID-oriented changes, less ultimate diet, something that could affect drug volume. That's very speculative. And the fourth could be, obviously, the standard deviation of the endpoint is almost twice that of the mean and we could have just draw it on lucky card. So I think we'll learn more about it from, as you mentioned, the competitive landscape and especially APOLLO-B in the next coming couple of months.

Great. Maybe looking ahead to where is the Part B data readout. Under a scenario where the results is positive, how do you think about maybe next steps and your approach to market as theoretically the second entrant in terms of the stabilizer category? And what is your sense of the market outlook with a potential tafamidis generic coming in the later part of this decade?

Yes, great question. So I think that they're -- both from our market research as well as from analogs that one might look at in the cardiovascular space be it the statins or the ACE or ARB hypertensive categories, a 15% relative risk reduction or more would be considered, I think, as a superior product. And in that context, I think we have a pretty solid commercial plan and I think you'd take a majority of the market share there. Whether or not one would want to run in addition to a primary prevention study, some sort of head-to-head potentially in a variant population or something like that to continue to be used post the genericization of TAF, which in the U.S. could occur as early as '29, although my suspicion is it would be later, just given some of the IP that they filed around manufacturing and use. So I think we would look at that if we were superior. If we were a me-too product, obviously, those things change measurably. But this is -- obviously, the goal of the program here is to provide a relative advantage tafamidis in which case I don't think genericization, like genericization is the first statin didn't affect Lipitor all that much. And I think you see that in cardiovascular categories as long as you're demonstrably better.

Okay. And maybe just in terms of the market dynamic, what are you seeing with regard to the monotherapy utilization versus their combination drug for Vyndaqel versus Vyndamax? And how does that factor into your thinking about the market dynamics outside of the data results?

I mean they're moving everyone to the 61 Mig formulation. So I think it's only really in Europe where you would think that the 20 Mig approach might affect genericization in an earlier time frame, but they're basically moving everyone over there, too. So it would be yet to be seen kind of how they deal with that earlier generic window.

Great. And then just maybe just lastly on commercialization. How do you think about scaling up and access for acoramidis when it comes to the market?

Well, it's two very different scenes actually in Europe versus America. You saw that tafamidis was actually growing, I think, at a 10% clip in Europe and now has more revenue I think on an annual basis in Europe despite not even being available in the U.K. and Spain, I believe. And so that's because there is a certain price and obviously decreased mortality by 30%. In the U.S., you have the challenge of the [indiscernible] population and $13,500 or so, if not more, co-pay. That's not immediately addressable through foundations. And absent any [indiscernible] reform foundation is really the only way that you could pay for that. So some 14,000 scripts. I think a minority of them are being filled right now just given that gap. So I think you can do what you can on the co-pay commercial coverage side and then you'd want to just price responsibly so that you could capture more of the market on the [indiscernible] side apps and any sort of reform.

Okay. But obviously, a lot of moving pieces at Bridge and you have a very large portfolio. And I want to touch on something that you mentioned earlier, which is pipeline prioritization and just thinking about the cost base here. So can you maybe tell us what's the additional thinking about potentially partnering up other assets or out-licensing them all together or perhaps asset sales? And is there anything from your perspective that you should -- that as investors or analysts that we should think about that you'd want to like rationalize or perhaps deprioritize?

Yes. So I think as I mentioned, we sort of have this barbell approach. And when we look at what we can afford, the right-hand side of the barbell are the 5 large products that we have in Phase II or Phase III, so that's ATTR cardiomyopathy, achondroplasia, ADH1, LGMD2i and then our gene therapy for congenital adrenal hyperplasia. All of those will have just two of them have proof-of-concepts this year, [indiscernible] proof of concept coming late July, early August, CAH, proof-of-concept coming late this year, early next year and then a couple of Phase IIIs after that in the year to come. When we come out with our early-stage research franchise, which is pretty lean, we sort of pride ourselves on being able to do cheap valuable research. And that's really helped by our KRAS franchise which should have its first compound in the clinic next year and two development candidates this year. That's pretty much all we can afford to do. So everything else that's in between I think you can expect from us to seek partners. The six announced programs that we put out in our latest earnings report that we're seeking partners on, we immediately see spend on those. And we have for 5 of those 6 programs term sheets or long-form docs, so I expect we'll be able to find solid partners for them. And then there are some other programs that we haven't talked about partnering. But if we had NPV-positive term sheets on the table that we would take them, and I suspect we'll be able to find partners like that. So yes, I mean, all collectively, what does that do? It's not going to be a huge amount of upfront I think, $50 million to $100 million in aggregate additional onto the balance sheet of $850 million or so right now. but it alleviates close to 20% of the burn, which I think is going to be important. So just to go back to that first equation, it's really putting the entire picture together. We want to be able to play those five bets out. We want to continue to be able to do early stage research because we think we can do that and create real value. And then the in between, it's like get the burn down to $100 to a quarter. and really focus on getting that balance sheet at whatever, it was $650 at the quarter. We did the BMS deal and sold our PRV. So it's about $850 and continue to buttress it.

You talked about a barbell shape distribution, but I want to maybe ask about one asset that you didn't mention, which is in the middle there, which is your RDEB program. There are some relative to later stage or near commercial stage program assets in that particular indication that are just getting up and running here. And how do you think about that particular program, just given the data you've shown, which looked certainly promising on certain metrics?

Yes. Again, I mean I think it's in a different environment, we quite like that program and continue to think it has -- could have huge usefulness for patients. I mean, obviously, the decrease in pain, the systemic nature of it. I think it's a really nice backbone therapy in this space. I just think there's -- it's a pretty heavy competitive space, #1. And #2, more importantly, it's pretty high CMC cost. And so I think people should expect that we're going to find a partner there to move it forward. And they're just our programs like that. It's not like when we part with a program we think the science is somehow less strong than it was 1.5 years ago, it's just we're in a very different environment right now with a very high cost of capital and the water line is moving around and that could be better partners out there for us.

I think probably a question you get frequently is just thinking about your capital structure and your pending debt obligations. You've talked a little bit about pipeline prioritization and managing cash burn here. But what other factors or pushes or pulls could you speak to that would help you address your outstanding convert stat down the road? And how do you think about managing for that in the future?

Right. So just as a reminder, as part of the BMS deal and putting the $200 million on our balance sheet, we also kicked our debt out for a couple of years in return for relinquishing $200 million of the $300 million available that we could pull at a 9% cost of capital. So that was a little bit of a yin and a yang because 9% cost of capital sounds pretty good right now. But I think the added debt load is not something that our equity investors are keen for us to access in the near term. So what does the debt load looks like right now? It looks like 27% and 29% debt with 27% being the first of that [ 450 ] senior secured. Between now and 27%, we have 7 Phase IIIs reading out, including all of those core assets that I talked about, [indiscernible], LGMD2i, CAH TTR and ADH1. So on a risk-adjusted basis, we should be well able to service that debt handily unless we're bad at picking assets, in which case the company is not creating value commensurate with what it was supposed to do. So we feel pretty good about that and then a number of proof of concepts in the interim as well. So yes, that's kind of how we're thinking about the capital structure.

If there are any questions along the way, just remind the audience, please feel free to raise your hand, and we'll get a mic to you. Maybe continuing with the pipeline otherwise. Can you maybe help us think through the upcoming [indiscernible] data that you mentioned would be possibly in July or August? What, in your mind, from a mechanistic perspective gives you confidence in infigratinib's role here? And then, I guess, what would you consider, I guess, a good result in the context of the approved therapy that's out there from BioMarin?

Yes. Good questions. And just as a reminder, the disease is uniformly driven by gain-of-function mutations in FGFR3 and we're inhibiting FGFR3. So mechanistically, the theory of the case would be that we are targeting the disease at its source and in doing so, targeting both of the key effector pathways that are responsible for chondrocyte differentiation and proliferation, which are the map case signaling pathway and the JAK/STAT signaling pathway. So that should lead to an advantage. It did lead to an advantage in preclinical mouse models, a significant advantage, almost some 4x on the long bone growth and effects on things like spinal stenosis or things that are tied to that, that had not been seen with some of the other therapeutic interventions like BioMarins. In terms of the approvable endpoint, you're talking about average growth velocity in the bar there for BioMarin is 1.35 so -- and with a single daily injection. So in Cohort 4, as we read out here in the summertime, we'd like to be around BioMarin levels in terms of AGV with a safe once-daily oral, we think that's a very competitive profile. In addition, if it's safe, the hope is that the agency would allow us to dose up to the next Cohort 5. And if it's 5 safe, keep going because theory of the case is you only get one chance to find MTD in that Phase II. So continue to seek out more and more efficacy as we move up. But based on preclinical modeling, we should be right around the AUC of 200 nanomolar hours in Cohort 4, which would put us around BioMarin efficacy in 4 already.

Are there any learnings from the Voxzogo launch to date in terms of real-world utilization, patient feedback or parent feedback or physician feedback that's informed your clinical strategy for infigratinib even as you continue the dose finding and the dose escalation work?

I mean it seems to me that -- I mean it's early, the launch is still early, but I think they announced that they were trying to ward 110 which seems like a strong launch to me even at that elevated price point. That's consistent with the fact that most parents in this space are experiencing De novo mutations with their children and very keen to do what they can to help their children. So I guess my learning from that would be that there is a real appetite for medicines that could make a difference here. And secondly, as we have presented some recent data around hypochon at ENDO, which is a similarly sized market, honestly, to [indiscernible] different mutation in FGFR3 a slightly lower amount of elevated signaling to those two effector pathways. But there's a lot of attention within the skeletal dysplasia space to these medicines and an appetite for therapeutics as I think BioMarin is proving out.

So you touched on something interesting, which is you are focused on lead indications with your early as suppose your later-stage pipeline. But you and as a management team are clearly thinking about life cycle management as well as expansion indication here. Maybe -- can you maybe touch on that and just you mentioned one, for example, for infigratinib. What are other areas where you potentially see adjacent opportunities that investors may not be mindful of?

Yes. I mean I think they follow in kind of two categories. One is where the mechanism quite obviously is relevant to an adjacent disease. The other is if you're going after a homozygous recessive disease, for instance, the heterozygous loss of function population might be of interest. So maybe in the former, we talked about [indiscernible] and [ hypochon ]. We're also exploring uses of our ADH1 calcilytic agent in the context of hypopara which is somewhat obvious there as well. And in the second category, we have a primary hyperoxaluria type 1 program, a GO inhibitor that's uniform loss of function in AGXT but there's a frequent stone former trial that we're also setting up to run in heterozygous loss of function. AGXT patients are just high oxalate patients there as well. So room to expand on all those dimensions. And I would say, finally, our hope still on ATTR cardiomyopathy is that we are able to come back to polyneuropathy trial in a different era and in addition to interrogate that in a primary prevention setting. So lots to do.

Okay. Great. Maybe turning to another modality and as well as another disease CH and your gene therapy program efforts there. There are different approaches to the disease, including projects targeting CRF from Neurocrine and Spruce. But in that context of those two later-stage programs, how do you think about what is considered a good result for a gene therapy approach as you have data potentially, as you mentioned, later this year, what would you view for this particular population as a good clinical outcome for your initial data?

Yes. Great question. So I think with the Neurocrine and Spruce approaches, they're targeting the upstream part of the pathway, which shunts over to aldosterone and testosterone production. But what they're not doing is replacing what's missing in this case, which is 21-hydroxylase. And by virtue of that, they can affect I would say, half of what is driving this disease, which is the depletion of endogenous cortisol production. And so what they're showing obviously in their data is reductions in 17-OHP, which are marked and consistent from the adult to the pediatric setting and hopeful, it's not entirely clear, though, how those port over to reduction in steroid use. And I think that for us, obviously, the endpoint and the thing that we're really going to be focused on is production of endogenous cortisol. I mean that is the home run hit if we're showing analogous 17-OHP reduction and that alone, that would not be interesting as a gene therapy. And I think in that case, there's obviously a one-to-one correlation between obligated endogenous cortisol and not having to use exogenous steroid.

Okay. I guess as you look down the road and thinking about a potential pivotal trial design here, what does a Phase III trial look like for gene therapy in CAH? And then assuming positive data there, how is the market there for a gene therapy and this what is a relatively large orphan disease or rare disease population shape out to look like?

Yes. I think the Phase III is going to have the endpoint of steroid sparing or endogenous cortisol elevation, probably both. And so I think it will be relatively straightforward. And one thing I can say is I've come to realize that human function doesn't necessarily read the science textbooks. I sort of like these endpoints like we have in ADH1, serum and urine calculate agreed to with the FDA running a registration trial that reads out next year percent covariant. It's like -- you take the drug -- if the drug works, we should get a positive result there. Same thing with CAH. We don't know whether we have had a proof of concept, so we don't know whether the drug is working in that context yet. But if it does, I would say the translatability to Phase III will be pretty high. And I would expect that, that would be the endpoint. In terms of the commercial market, I think you could think about it in terms of being more and more important, the younger you go, certainly, children that are exposed to the vagaries of adrenal crisis. would be the initial and very interested market. But I think we've seen some demand all the way up through older patient population, which is in aggregate a 75,000 people or so. And I would say, it would skew towards female versus male as you go older, so we could talk specific numbers, and we tried to break it out by demand per decade. But I think that's generally a good set of rules.

Maybe more of a theoretical question. But since this question comes up with gene therapy approaches to hemophilia, sickle cell disease and beta thal is what would be I guess, in your mind, a good durability outcome on a gene therapy for CAH conceptually?

A couple of years or more. I think less than that, maybe it would be interesting for people who are immediately phasing adrenal crisis in their youth. But it will be disappointing if it's just a year per se.

I think maybe one of the most overlooked assets in your portfolio is in Limb-Girdle Type 2. And can you maybe just remind us what data you've seen so far -- shown us so far? And just how does that contextualize for that particular population of Limb-Girdle given I think that most people are probably familiar with the Sarepta program in a different area of Limb-Girdle?

Yes. So this is the most common of the Limb-Girdle as far as I know, Sarepta working on 2B, 2D and 2E. 2i which is the one that we're working on that's uniformly caused by loss of function mutations in FKRP, it is partially active still, not whole loss of function. It's about 7,000 patients between the U.S. and EU and quite a few already identified patients, like I think at one of the centers that we run VCU, there's some 110 patients already in a natural history study for a single center, and the trial enrolled very quickly. So it's a reasonably large patient population. And the disease happens to be caused by an absence of alpha-Dystroglycan glycosylation. And what you can see from the natural history studies as well as the mouse work and preclinical work that's been done is about a 10% increase in glycosylation should drive a therapeutic effect, and we ran a Phase II clinical trial recently a 6-month trial, and we showed that we were getting about 42% increases in alpha-Dystroglycan glycosylation by providing effectively more of the substrate of the enzyme that's not working quite as well as it normally does. So simple substrate replacement approach rectified the absence of glycosylation, also decreased creatinine kinase levels, 70-plus percent. And I think the nice thing in that data set was there was a nice correlation between an increase in glycosylation and a decrease in creatinine kinase and then you got to take this with a grain of salt because it was effectively an open-label study, but we followed these patients as they came in and then compare their baseline 10-meter walk times and modified North Star to what they had shown before, and they were all deteriorating before and on drug, they were slightly improving. So that's over 6 months, but still hardening. I mean, I think all of the data we're headed in the right direction, and it's set up a very productive discussion with the FDA, the first of many, I think, over the course of the next months that we'll have, and we continue to anticipate pursuing an accelerated approval in this space based on alpha-Dystroglycan glycosylation.

You've developed with ribitol, and I would characterize as an elegantly simple solution to a complex disease. But could you maybe speak to some of the other competition in this particular area of Limb-Girdle particularly with respect to other modalities or do you view the strategy that you're taking care with ribitol as sort of like setting an efficacy barrier that you view as challenging to overcome?

In efficacy and safety barrier, I think, efficacy, I don't know. There would be much more to be done in terms of glycosylation. But the competition in this space, which is just entering the clinic now is gene therapy. The issue is that you can have too much of FKRP and that can drive significant talks. So these types of goldilocks problems haven't been quite solved elegantly by gene therapy. So you've got that safety issue combined with the fact that if you have a relatively safe and efficacious substrate replacement therapy, I'm not sure why you go the gene therapy route. There's also other mutations that occur upstream that could also be treated with gene therapy and then downstream mutations that could be very interestingly solved with our substrate placement therapy, and there's a couple of diseases there that we would either include some patients like [ Fukuyama ] and some others in the registration trial or look to follow up with Phase IV trial post our first LGMD2i trial.

Maybe at a high level, those adjacent populations, how does that theoretically expand the TAM in your mind for ribitol?

Probably by about 1,200 patients, 1,200 to another 2,000. The chunk of it is still in LGMD2i.

Okay. Great. we're coming up on time, but I wanted to spend a few minutes on encaleret here. You just provided an update. Maybe you could provide a recap for your -- for the data that you recently presented here at ENDO and then just how that has figured into your regulatory discussions for your planned Phase III?

Yes. So really exciting data. This is one of the more exciting programs I think that we're working on. ADH1 is a disease that's uniformly caused by hyper-activating mutations in the CaSR calcium-sensing receptor, and we're just basically have a negative allosteric modulator of that receptor. And what we had shown in an inpatient setting that we then expanded to the outpatient 6-month setting in this most recent bevy of data is that we can normalize both urine and serum calcium levels for these patients, what the standard of care doesn't normalize anyone. It's a 0% as we saw from a run-in that makes some sense because you're taking vitamin D and calcium supplement. So even if you're addressing serum calcium, you are actually exacerbating the urine calcium elevation in many ways. And so the mean of both urine and serum calcium were fully normalized, some 80-plus percent responder rate. And we took that data to the agency and had a good discussion with them about what a registration trial should look like, and we're pleased to come out with effectively endpoints that are serum and urine calcium randomized against a standard of care arm. So that's a fairly straightforward trial that we expect to start enrolling sometime this year and to read out late next year.

So I agree, it seems like you have a pretty good line of sight through what is largely a similar Phase III relative to your Phase II and then a line of sight to the regulatory stage. Can you maybe talk about how these patients are identified? What is the current market landscape or treatment landscape like in terms of patient identification and how you think about the build-out and promotion of encaleret here in the market?

Yes. So right now, there's about 3,500 patients that are identified, which is just a small minority or a fraction of -- there are some 12,000 patients that are thought to be prevalent within the United States alone, and we get to that through four different of the statistical genetic databases. So that's a fairly consistent number. Right now, they tend to be diagnosed based on acute symptomatology, typically due to the low serum calcium. So fainting, seizures, things of that nature. In a future state, the hope is that we can pick up many more of these patients because there are likely to be hiding within the hypopara population and there is a test that we're conducting alongside Invitae who is our partner here, where one can run a panel, and we published some recent results, not we -- sorry, another group had published some recent results suggesting 13% of a hypopara population within the health care system actually had ADH1 or hyper-activating mutations in the CaSR. So I think that would be the next one. I mean interestingly, while most of the patients that we pick up today and most of the patients writ large of those 12,000 are moderate to severe, even mild patients go on to have a lot of the symptomatology associated with the high urine calcium levels of nephrolithiasis and CKD toward the middle and end stages of their life. So I think there's a role for this medicine along the patients if we can find them.

We're almost out of time here. But Neil, maybe just to touch briefly on the earlier-stage pipeline. If you had to call out a single asset that you would suggest investors follow closely, over the next 12 to 24 months, who would you pick as sort of your favorite trial from the early-stage program?

I think that we're really focused right now on trying to simplify the story. And it's those big 5 value drivers that I mentioned, plus KRAS, I suppose I could qualify as the -- I think we have a very interesting GTP-bound G12C inhibitor that will head into the clinic sometime mid next year. And then we have a PI3K breaker program as well. That should head into the clinical a little bit after that. So those, I think, are interesting and we're going to publish more data on those in the next coming months. But outside of that, that's really where we want people to focus, and that's really where we want to focus as an organization to deliver some good clean wins for investors so that we can kind of start to build our way back.

Okay. Great. We're out of time. So thanks to Neil and BridgeBio and we'll end the session on that note. Thanks, Neil.

Thank you.