Brii Biosciences Limited (2137) Earnings Call Transcript & Summary

[Foreign Language] Good morning, and good evening, everyone. Thank you for your interest in Brii Bio, and welcome to participate in our business update call. I would like to remind you that remarks made on today's call may include forward-looking statements. The company does not undertake any obligation to update any forward-looking statements, whether as a result of new information, further events or otherwise. This is Chris, Company IR Director. I'm joined today by Dr. Zhi Hong, our Founder and CEO; Dr. Ankang Li, our Chief Strategy and Financial Officer; Dr. David Margolis, Chief Medical Officer; Dr. Susannah Cantrell, Chief Business Officer; Dr. Qing Zhu, Head of China R&D; Dr. Ellee de Groot, Chief Technology Officer; and Mr. Rico Liang, Greater China General Manager. A few hours ago, we just announced the VBI transaction. So join me today, our senior management team would like to share more details regarding on the deal. After our presentation, we will open the call for Q&A. [Foreign Language] Welcome your questions conducted in Mandarin as well. So I would like to turn the call over to our Chairman -- sorry, to our CFO, Dr. Ankang Li. Li, please go ahead.

Thank you, Chris. Hi, everyone. Thank you for listening and participating in our call. We are very glad that we just announced that we are broadening our leadership in the HBV field with a portfolio covering prevention to cure. We have expanded our collaboration with our partner, VBI Vaccines. So in this latest deal, we have obtained worldwide rights to BRII-179, which is a therapeutic vaccine for hepatitis B. Our exclusive license for BRII-179, which is VBI-2601 called by VBI, now is a worldwide market. So we are going to establish our leadership position not only in the HBV functional cure, but also we are extending to the prevention of the hepatitis B. In this deal, we also obtained APAC ex-Japan rights to PreHevbri, which is an approved product in the United States and in a few other countries. We will have this exclusive right to develop and commercialize PreHevbri in this APAC region. This is a best-in-class any doubt HBV prophylactic vaccine and the region include both APAC and Greater China. So we are paying an upfront payment of $15 million, which include a few components such as $5 million ring-fenced manufacturing supply as well as $3 million equity investment into the VBI. And VBI also announced its financing -- its ongoing financing which would be part of that $3 million investment. So we will also pay VBI additional milestones and royalties based on future regulatory and commercial milestone events. But those payments are really backloaded. The transaction is subject to certain closing conditions, which you can log into VBI's website to look at VBI's announcement. Right. This is the highlights of the transaction. I think with this transaction, we now cover the HBV from prevention to cure further expanding our leadership in this field. Thank you. Now, I will turn to Dr. David Margolis so that he can give you more highlights about 2 programs as well as our plan to develop and commercialize them. Thank you.

Thank you, Ankang. So our decision to invest further in BRII-179 is a data-driven decision based on our own data as well as evolving data in a hep B care space. Now, BRII-179 is a 3-antigen HBV vaccine, which has been specifically formulated for use in chronic hep B patients as a therapeutic vaccine. We've conducted now 2 studies and the interim data from both of these studies has been presented and is shared again here, which gives evidence that BRII-179 is able to induce both a specific hep B antibody and T cell response. The top study shows us that after 4 doses and NRTI backbone patients, BRII-179 is able to generate in a large minority of patients, a substantial T cell and B cell specific response. In the lower portion of the data, we can see that when combined with 835 and dosed for a longer duration of time, a more prominent response in more individuals was seen in both the antibody and the T cell space. In fact, the majority of individuals were able to generate a hep B specific antibody response and in the majority of those individuals, the response was greater than 100 mIU/mL. Next slide. So why do we think that this antibody response is important and may be important contribution to combination curative therapy? There have now been a number of studies, including this important study, which Vir recently presented at EASL, which have shown a correlation between the presence of antibody and the durability of seroclearance. In this study, individuals who were treated for up to 48 weeks with the siRNA BRII-835 plus pegylated interferon generated the highest rates of seroclearance, 25% at the end of treatment. 16% which were able to maintain seroclearance following the discontinuation of treatment. The important correlation that was noted in these individuals is that all 4 individuals with anti-HBS levels greater than 500 mIU/mL were able to sustain cure seroclearance while all individuals with antibody levels less than 100 rebounded. Individuals with levels between 100 and 500 have a variable response. This suggests a very tight correlation between the presence or the ability to generate antibodies and the ability to maintain a durable seroclearance. Next slide. So with this in mind, we believe now and with the assumption of global rights of 179, we have all of the tools that we need to evaluate the primary strategy of functional cure, which is the potent reduction of surface antigen while at the same time, promoting an immune response, which can help to maintain that seroclearance over time. With the use of the siRNA, which has demonstrated reduction in surface antigen levels in combination with possibly the monoclonal antibody, which is currently under study by Vir and is about to start a Phase I study in China along with the potent immunodosing BRII-179, we believe this dual combination of surface antigen loss plus promotion of antibody production may help to maintain cure levels in the highest percentage of patients. We acknowledge that the patient population of hep B is quite variable. So a great interest to us is to help -- is to better understand these individual patient populations and identify those which are most likely to respond to these combinations. We plan to start multiple combination studies evaluating this premise over the next years with the first study is to begin the second half of this year. Next slide. The care for hep B is likely to be an iterative process. The field has learned considerable amount of information over the last several years. And we acknowledge this approach, but also want to take advantage of it through our evaluation and the use of combinations to generate approvals in waves. Our first and primary approach is to take advantage of the data generated with 835 plus pegylated interferon showing sustainable cure in up to 16% of individuals and optimizing that combination with or without 179 to promote higher durable cure rates. Over time and in parallel, we expect to conduct combination studies, which will help us evaluate a broader set of patients and identify a subset of patients, which can promote an even higher response rate, targeting cure rates in these subgroups between 30% and 60%. And ultimately, we believe the field needs to get to a point where all patients with chronic hep B will have treatment options and the data should help answer questions as to how to get there over time. Next slide. Now moving on to PreHevbri. PreHevbri is a 3-antigen prophylactic HBV vaccine, forms the basis of BRII-179, but is formulated differently as a prophylactic vaccine. This is a well-differentiated prophylactic vaccine showing best-in-class seroprotection rates, antibody titers as well as durability of these antibody titers over time. Recent data showing here on the bottom with antibody titers up to 3.5 years. Next slide. We believe there is considerable opportunity to continue to evolve the prophylactic space. Obviously, hep B strategy -- prevention strategies have been in place for many years with national emphasis on increasing rates of immunization. In spite of this, low coverage of vaccination of at-risk individuals remains with even young individuals with highest rates of vaccination superseded by falling rates over time in older individuals. There's also groups of nonresponders to current vaccines, which could be targeted as well as waning vaccine immunity over time, all of which can be approved upon by a best-in-class vaccination strategy. Next slide. The unmet medical need is significant in the regions, which we have now accessed rights from VBI for PreHevbri. This is an area of high endemic HBV infection. There are over 150 million individuals we estimate with hep B in the regions where we will be marketing PreHevbri. This presents an even higher number of patients that are potentially at risk in these high endemic areas estimated to be up to 500 million. People, of course, living in these higher prevalence areas are at increased risk of infection. And as mentioned on the previous slide, we believe there is considerable room for improvement in the vaccination rates and the penetration of vaccines in this market. Our access to PreHevbri will jump start our commercialization efforts as a company using this safe and highly efficacious vaccine. Next slide. Again, this process will come in waves with the commercialization happening in different countries at different speeds, largely based on the regulatory requirements for approval. The large global data set supporting PreHevbri will be taken advantage of in submissions to initially to the APAC countries, which will be the first targets for commercialization based on the lack of need for additional clinical data followed by a parallel effort to generate clinical data in China for access to the China market over time. Eventually, our hope is to increase overall market penetration and vaccine usage across the regions of interest including institutionalization international reimbursement. The primary focus will be in self-pay markets. And I believe this will take us to our Q&A. So I'll turn the floor over to Zhi Hong, our Founder and CEO.

Great. Thank you, David. Thank you, Ankang, for the summary of this transaction. So now I think we should open up for questions. And after Q&A, I will make concluding remarks. So as Chris mentioned, you can ask questions in both Chinese or English. And then feel free to do whatever you preferred. Thank you. Can we move to the next slide in the Q&A?

Yes. Thank you, Zhi. I think we have opened the line for the question and the first question is coming from Morgan Stanley, Jack. Operator, unmute Jack. Thank you.

So I have 2 quick questions. So it seems like, one, the next step what the company will be evaluating would be the combination of 179 plus 835 -- sorry, 835 plus interferon gamma with or without 179. So I'm curious in terms of, one, what the implication -- what the commercial implication or I guess, clinical would be in terms of adoption for a 3-drug regimen versus, I think, maybe previously we were kind of aiming for a 2-drug regimen kind of how the dynamic would shift depends on the affordability, depends on the administrative method, these consideration? And second one is, I see that kind of we're targeting a 15% to 30% functional cure rate. I mean that's a broader range, I think. And how does that compare to kind of what previous regulatory discussion has indicated? What was the threshold bar that say, CDE or NMPA would have considered to be an approvable threshold versus kind of what we're seeing based on the clinical updates from Vir, from us and other companies in the past 6 to 12 months? Just these 2 questions.

Well, thank you, Jack. I think these are excellent questions regarding the next step. As David alluded to that we now have significant knowledge and insight in terms both in terms of sRNA and neutralizing the antibody as well as the therapeutic vaccine 179. So those insights are very critical in terms of how we're going to combine them and further optimize this. I think we'll have a starting point, although the sample size is small at 16%, but we thought that's a good starting point for us to further optimize this including how we're going to select patients more carefully and then making sure that we always keep eye on not only losing the surface antigen as well as enhance the antibody response. And so that, I think, is very important as shown by Vir's data as well as by many other people. I think with regard to affordability, it shows clearly that we're -- if we have a way to use 2 drug combination not 3, then we don't have to do 3. And obviously, when you don't have optimum response and then you need 3, then you use 3. I think pricing will not be the barrier for access. I think having a better cure rate to me, is the most important driver for adoption of any HBV curative therapy. So I think those discussions probably will be for another day when we talk about commercial strategies and more kind of in-depth discussing. But as you know, that we're still away from that. And so I don't think we should talk about affordability, pricing strategy at this points. But your point are very well taken. And I think in China, we have always have to keep an eye on the affordability. And then especially, as I mentioned before, the cost of good consideration as you know, that we're trying to make our regimen as efficient as we can to lower the cost of good in order to be more competitive in this space. So this is absolutely something that we'll consider. With regard the FDA or EMA or regulatory or CDE and NMPA's current consideration of how to have the -- how to define this cure rate and the percentage, the end point, I want to point to you some very helpful discussion as well as -- in the recent EASL study as well as last year, there are working group that are looking at how to define the kind of a functional cure rate. And then the talk about in a more strict definition of sustained loss of surface antigen and there is also lose kind of understanding of maintain a very, very low surface antigen level post-curative treatment over extended period of time. So I think there are -- there will be some publication. I think it's coming up very soon. I do not want to foreshadow a lot of that discussion. But I would ask you to pay attention to -- in the near future regarding some of the publication on the consensus among EMA and FDA. And then clearly, those consents will be important for China to consider as well. So obviously, the bottom line is that you have to start with a very good cure rate compared to the current standard of care, which is very low from 3% to 7%.

Okay. And then the next question is coming from SVB, Roanna.

Great. So I had a question on PreHevbri. So I'm curious, what are the immediate next steps in China? And can you use the PROTECT and CONSTANT studies to support regulatory submission there? Or will you perhaps need to run additional trials for it in China?

Yes. I think those are good questions. I mean we're obviously -- with this deal, we're going to start talking to CDE and NMPA right away. And I know, we know who to talk to, and we have already have some early regulatory assessment. But I feel probably this is too early for me to comment on. But there is a range of -- as we can see from the past experience, there's a range of potential time lines in terms of regulatory requirement. And I think there is something from the best-case scenario of what we're seeing in the HBV vaccine from Merck and improving 9 days to some very long studies in the country. So I think this is something that we'll find out pretty soon. But there's clearly significant need as our GM potentially could answer some of the questions if you have more interest in this. And clearly, the country recognize this unmet need. There's a large proportion of that population has not been vaccinated. So there's the high-risk group has been identified. I think the current situation in China, this is a very open market with a lot of very generic vaccines, and then they all kind of similar to each other. And so the promotion is more from the vantage point of pricing. I think with a PreHevbri, which clearly have been demonstrated clinically without a doubt, it's a much better vaccine, much longer duration of protection and then strong antibody response and safe. And I think this will help us to really promote this vaccine based on the information that we have, and we think based on the need, based on the large population not being vaccinated and susceptible population, high-risk group, we think this is going to be a pretty important market. And I think the other thing that I would say in the country, in the APAC region, this is a high endemic population, high population density, high infection rate. I think vaccine as a business model is quite fit for those areas where the volume is big and the pricing is more affordable. So we do believe this could offer a significant advantage to addressing the HBV burdens in the various country of regions and with a very reasonable business model in this case. So I don't want to say too much about this other than to say we're still working in this area, and then we're going to work with partners, with regulators and to figure out how we do this. I think this is probably what I want to say.

Yes. Understood. That makes sense. And one more for me. Circling back to your HBV combination regimen for functional cure with 835 and peg interferon with or without 179. I was curious, let's say, your first test of this combination regimen, let's say, everything works out well. Do you have any sort of sequence or prioritization of how you're thinking about launches in different countries? Or how are you thinking about that?

Yes. So that's a good question. I think that's a good question. Obviously, our priority, our team is situated in China, and then that's where the action will be. I think our goal is to rapidly expand this various combination, testing them very quickly. As David mentioned that we have a number of studies planned and then with the earliest one to start before the end of this year and to test the various combination. So I think those are very important. With regard to the global rights, as you know, that we do have a partnership with Vir and then which has the option on the U.S. rights. And then obviously, we need -- we will communicate with Vir regarding this opportunity and working together. I do think it's important for us to have the global right because this will enable us to work more closely with Vir. I think as with before that where we had to talk 3 parties in order to build a consensus agreement and to do it. I think now it's more streamlined. I think we also appreciate that VBI understand that as well and allowing us to form a much closer relationship with Vir and at the same time, freedom to focus on the commercialization and manufacturing and supply of the PreHevbri.

Thank you, Zhi and Roanna. And then the next question is coming from UBS, David.

So I just want to follow up with -- if there's any further data that we could -- that you could share with us about the combo therapy of 179 and 835 given that in February, we received the data about the seroclearance. And also post this deal, do we immediately take over any of the ongoing clinical trials of 179? And are there going to be any R&D expense impacts going forward to us, please?

Okay. David, thank you for the question. I think with regard to the data on 179, and I want to point to our corporate update that there are 2 events that we're going to share top line data for the 2 combination. One is in combination with sRNA 835, the other one is with the peg interferon. I think the data release you mentioned in February was just at the end of the treatment with the first 50 patients. And then we have more data to come with all the patients and that including some of the follow-up, the long-term follow-up of the first 50 patients. So that information will come before the end of the year. And we're also in the process of completing the study for 179 in combination with peg interferon and then we're going to have to look at the data and unblind the data. I think those will take some time. And also, I think this is going to be before the end of the year, we'll share some of the top line data. With regard to the clinical trial, obviously, we're taking over the global development of 179 that will -- as I mentioned, that will free VBI to focus on commercialization of their prophylactic vaccine. But with regard to our relationship with Vir, we hope this is going to provide even more closer partnership between us and then undertaking multiple combination as we have done in the past and then perhaps in a greater geographic territory to test this combination. So we're looking forward to have that conversation with Vir in the coming weeks and months. And hopefully, we can have some to share in the next 6 months or so and to say in terms of what else that we can do together. So clearly, this is a very important, very exciting news for us to expand our partnership with Vir.

Thank you, David and Zhi. And I received a written question regarding, can we recap the second half data readout regarding on the HBV pipeline, Zhi?

What do you mean to recap the second half?

Is there any catalyst for the HBV portfolio next to half of the year? Yes.

Okay. Thank you. I think we do. I think Vir have updated everybody on the EASL study and clearly, there's the March study where they're testing the triple combination, the sRNA and the neutralizing antibody with or without peg interferon. I think the early study, the short treatment duration of the 2 combinations have clearly shown that there is a very universal reduction of the surface antigen even in a very short period of time and dropping everybody, almost everybody, 90% of patients to below 10 international unit per mL. And so that's a pretty important information that they have shared with you. And they also set that before the end of the year, and there will be more sharing of data on that combination with or without peg interferon for longer duration at the higher dose. And remember, the Part A was at a suboptimum dose, is only 75-milligram of the neutralizing antibody. So that dose will go up. I do want to mention that we're -- the antibody, why we're excited about this is that this is the only antibody we have seen so far a 6-milligram had caused significant surface antigen reduction more than a lot. So I think people may have forgot more than a year ago. And then when data -- when Vir showed the data, it was a really exciting moment for people to think about neutralizing antibody. I know there's a lot of others trying to develop neutralizing antibody. I really want to point out to the fact that this is an antibody that is so potent that we can offer to patients in a treatment cycle without pushing the dose really high beyond affordability. I think somebody mentioned early on about affordability. This is where we have to consider in terms of how we're going to position, not only each combination of different assets and also making sure that we have the right dose chosen that is actually -- that's going to make things more affordable to the broader patient population for the countries in China, APAC region. So -- and thank you for giving you a long-winded answer to this. I hope I answer your questions.

Yes. Thank you, Zhi. As a reminder, analyst and investors, if you have any questions, please just raise hand. Thank you. [Foreign Language] We also received a question regarding on the VBI transaction, noticing that we also -- supply chain investment plus the financing. So can you give more color on that part?

So I'm going to actually ask Ankang to comment on that, and this is a pretty comprehensive deal. I think there's different strategic intent with the different chunk of investment. I would ask Ankang to speak to that. Ankang? I guess Ankang is probably not -- let me try to answer your question regarding this. Yes, we have indeed made sure that we are making this investment to ensure that we have the supply and manufacturing activity dedicated to supporting 179 as well as the early launch of PreHevbri. I think this is very important. As you know, many people probably have those commercial experience when you launch the product, oftentimes, you probably have seen other company, you have invested, there's no supply available. So this agreement is very important that we reinvest that amount to ensure that once we launch the product in the region, there will be supply available and dedicated to us so that we can sell. So I think that's what that is for the $5 million for the manufacturing supply efforts. And then the equity investment, I think the company, obviously, right now is at the -- given the market condition is obviously at a very -- I would say the stock price is low, so we're taking advantage of doing this and making sure that we're supporting them through our investment, at the same time achieving return on investment. As you have noticed that from our previous investment at Qpex, we have achieved $24 million of return on investment. I think as well as our other investments, we have always considered equity investment because I believe this is something that if we make the right decision, we could win twice. I think this is always -- has always been an approach that we're undertaking with all the partnership and then we become a closer relationship with our partners, not only as their partners as well as their investors. I think that helps us to enhance our relationship in that regard. So I'm sure -- I'm not sure whether I have answered your question, but that's basically what that is.

Yes. Thank you, Zhi. Maybe coming another outlier question because there's a celebrity in Hong Kong just get suicide over the night due to the depression. So the investor is also curious about our CNS progress in the U.S. and especially for the major depression disorder. Can you give a little bit color on that pipeline?

Yes. I'm glad you raised that question, and I think we're so shocked and sad at the loss of Coco Lee. And I think someone who are in the region who will learn how to love, and this does obviously illustrate a problem in our society that where we know so little about it, and then we don't really have a good effective therapy to deal with it. I think I've mentioned this before multiple times with the COVID coming through with a silent pandemic of mental health issues. Clearly, this is one area that we are making major investment in this space. We believe this is going to be the next wave of innovation. And then from a public health perspective, it's going to be a hugely important area that require all of us to care about it. I think this is the kind of stuff where the news goes away and then people just forgot about it. But for most of us who are working tirelessly in this area, we recognize how many people are suffering from this and including many of our own colleagues and then this is not an uncommon disease. So I think we -- I can speak to that on behalf of a lot of people. So I'm glad that you're paying attention to our mental health investment. I think this is a very important area for us to continue to invest and to address the significant unmet public health need. Thank you for the questions.

Yes. Thank you, Zhi. And the next question is regarding for the 179. Actually, the question is asked in Mandarin. So they want to get to know what is the competition landscape in China, especially in Greater China about the prevention vaccine. So how are we going to deal with that competition?

That's a good question. [Foreign Language]

Okay. And then the next question, we noticed Laurence Wang. Please go ahead.

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language] Don't hold that against me. So I will follow up, have Chris follow up with you on that specific question. So but I think it's a broader baseline of [indiscernible].

[Foreign Language]

[Foreign Language] We have all the insight from all the data that are coming out of the neutralizing antibody and coming out of the 179 therapeutic vaccine. And if I may remind you that as our data continue to mature, we are actually expanding the safety population, the number of patients and subjects being exposed to the various modality. And I think with those data further mature and we're gaining more and more confident about the safety profile. And then we know that we have the most potent neutralizing antibody by a long mile, and we're most advanced in that. And we have more than 200 subjects already exposed. We know we have the most advanced sRNA and then coming from -- the only innovator actually have commercialized sRNA as a therapy that's [ annoy them ]. So we absolutely have the best platform in this space. I think not with J&J and retaining the right to Arrowhead, I think the sRNA that we're working on is the most advanced sRNA at this stage. We also have the most potent vaccine of any kind to generate very strong antibody response. I think you have seen other vaccines generating some T cell response. Obviously, our vaccine also can generate that T cell response. But when it comes to the antibody response, nobody even close to the ability of the viral-like particle within the prophylactic vaccine and 179, the ability to generate such a high level of antibody response. I think we have the best of all the modality. We have the most comprehensive modality and then that allows us to really progressively, systematically test different combinations, and we're very confident that we have a lot more information to share with you. With regard to the prevention, obviously, this is a new area, a new horizon for us that we tap in. And many of you have known Brii in the last 2, 3 years that -- our effort to develop the antibody for COVID. And this is the team that you have -- you're looking at a team that has done it before, from discovery to commercialization. Even though the COVID situation has evolved, but we have the manufacturing and commercial capability and understanding in terms of how we do this. So to that, I'm very happy that this PreHevbri is coming in and fill that gap and then for us to start prep our engagement of the society KOL and commercial partners. So those are very, very important for the company. It shapes our strategy and then further strengthen our commitment to addressing the HBV disease burden in a very broad approach. So I want to thank you all for attending this. I know this is a short notice, you probably still have a lot of questions, and then please do send it to our IR and Chris, and then we'll try to address this in a timely manner. We're probably also going to a later time of this year and then to share additional information with you regarding our overall strategy of HBV. So stay tuned for that. So thank you very much. I'd like to close this meeting by thanking you and also thanking our partners at VBI for really allowing us to really create such a very comprehensive partnership and strengthen our partnership in this space. Thank you.

The CSO remarks, [Foreign Language]. You may now disconnect it. Thank you.