Bristol-Myers Squibb Company (BMY) Earnings Call Transcript & Summary

Good day, everyone. Welcome to the Bristol-Myers Squibb event at UEGW. Today's call is being recorded. At this time, I'd like to turn the conference over to Mr. Tim Power, Vice President, Investor Relations. Please go ahead, sir.

Great. Thanks, Alan, and good morning, everyone. Joining me for today's presentation are Samit Hirawat, our Chief Medical Officer and Head of Global Drug Development; and Chris Boerner, our Chief Commercialization Officer. And also on today's call is Giovanni Caforio, our Board Chair and Chief Executive, who will be joining Samit and Chris for the Q&A. As a reminder, slides for today's presentations are available on the Investor Relations section of bms.com. And I'll refer you to Slide 2 of today's presentation for our legal disclosures. And with that, I'll hand over the call to Samit, starting on Slide 3.

Thank you, Tim. It is a pleasure to speak to you today about the important data we presented for ZEPOSIA in ulcerative colitis from our pivotal Phase III study True North. I'm very excited about the potential of this new medicine and the value it can bring to patients. So on Slide 4, I'd like to start with stating the significant unmet need that exists with this disease as patients receiving currently available treatments receive an inadequate response or do not respond at all. The treatments like biologics and JAK inhibitors can bring with them concerns pertaining to inconvenience and safety. At UEGW, we've shown that there is a potential new option which can be used to treat these patients. ZEPOSIA works by selectively targeting S1P receptors 1 and 5, preventing certain types of pro-inflammatory lymphocytes from exiting the lymph nodes and reducing their circulation to intestinal tissue. We were very pleased with the Phase III data presented, both with respect to highly statistically significant and clinically meaningful results in the primary endpoint as well as with respect to the consistency of benefits across multiple endpoints. Over the next several slides, I would like to highlight for you what's most important about this trial and these data. Turning to Slide 5. Here, you can see the trial design for our Phase III study called True North, which measured endpoints at both the induction phase at 10 weeks of treatment and maintenance phase at 52 weeks of treatment. The study included patients with moderate to severe ulcerative colitis who were on oral 5-ASA treatment, prednisone or budesonide. These patients were randomized 1:1 to either ozanimod 1 milligram dose or placebo, which they received for 10 weeks during the induction phase. After 10 weeks, patients who responded on ozanimod were randomized again to either ozanimod or placebo in order to robustly test the effect of continued treatment with active drug for the maintenance phase of the study. Note that an open-label cohort was added, where patients received open-label ozanimod to ensure adequate power in the maintenance stage. Also, an open-label extension was available to nonresponders, patients with relapsed disease or those who completed maintenance treatment at 52 weeks. Turning to Slide 6. Let me take a moment to address the endpoints measured in this trial. This is important because when physicians and patients are faced with making a treatment decision in ulcerative colitis, they're focused on multiple components of efficacy. They need to know whether the patient is likely to respond, how well they will respond and for how long they will respond. In this study, we included multiple endpoints to help answer those questions for ZEPOSIA. The primary endpoint for both induction and maintenance was clinical response as defined as a 3-point Mayo score comprised of rectal bleeding, stool frequency and mucosal endoscopic subscore. You can also see the many secondary endpoints included in the study. These are basically measuring how many patients are getting close to full relief of their symptoms and seeing healing of the mucosa, the lining of the gut. Keep in mind that the mucosal bleeding and corticosteroid-free remission definitions were more stringent in this trial than what we've observed in historical clinical trials. Specifically for mucosal healing, the True North study required no neutrophil to be present to consider a patient a responder for this endpoint. For corticosteroid-free remission, the definition in the True North study required a minimum of 3 months off of steroids while most competitors did not include that requirement. On Slide 7 is a view of efficacy measured after 10-week induction phase, which you have likely seen from our medical presentation. The primary endpoint was clinical remission, for which the results were highly statistically significant and clinically meaningful. Apart from a significant benefit versus placebo, close to 1/5 of the patients achieved clinical remission, similar to what we've seen with biologics. Results were also positive across each of these additional important secondary endpoints such as clinical response, endoscopic improvements and mucosal healing. Note that almost half of patients derived a clinical response. This is telling us that within the first 10 weeks, nearly half of the patients are responding to treatment, with underlying disease control supported with endoscopy as well as a reported improvement in symptoms. As I mentioned, physicians also focus on how well the patients have maintained their response. And so as you see on Slide 8, we showed a similar view of efficacy after maintenance treatment. What's impressive is how well patients are maintaining their response and remission after 52 weeks of ZEPOSIA. Furthermore, when you look at all the secondary endpoints at 1 year of treatment, you see that over half the patients who had a remission at week 10 demonstrated continued remission after 1 year, with many able to remain steroid-free. Importantly, again, in the maintenance phase, the objective endoscopy endpoints suggest continued improvement in the health of the gut throughout that time. Furthermore, similar to what we saw at induction, the benefits are observed in patients who are both TNF experienced and TNF treatment naive. Turning to Slide 9. As you've seen on the past 2 slides, the clinical benefit of ZEPOSIA was demonstrated across the study's primary and secondary endpoints for both the induction and maintenance phase and with both TNF-naive and TNF-experienced patients. Taken together, we see the consistency shown across these multiple measures as one of the most important aspects of the True North clinical trial data. In other words, the medicine is inducing a remission in a significant number of patients and is being maintained well, which speaks to the compelling overall efficacy profile of this medicine. Turning to Slide 10. Overall, we believe the favorable safety profile of ZEPOSIA is already well understood as reflected in the multiple sclerosis label. In the True North study, the most common treatment-emergent adverse events during the induction phase were anemia, nasopharyngitis and headache. The serious treatment-emergent adverse events included vestibular neuritis in 1 ZEPOSIA-treated patient and exacerbated ulcerative colitis in 2 patients in the placebo group. Overall, after 52 weeks of treatment, you can see that the rates of treatment-emergent adverse events for ZEPOSIA were generally similar to that of placebo. And that -- what's most important to take away from this slide is that we are seeing the favorable safety profile of ZEPOSIA as known in MS reflected now in the ulcerative colitis indication as well. Of course, our Phase III data aren't the only data we've seen for ZEPOSIA in ulcerative colitis. This week, we also shared long-term follow-up results from our Phase II TOUCHSTONE study, which by now has reported 4 years of follow-up. Here's what I believe is important about these data. First, you can see the high rate of continued participation in the study as nearly half of the patients completed the 4-year extension. Also, annual discontinuation rates were only 15% at year 2 and increased only modestly to 18% by year 4. These data demonstrate the durable efficacy of this medicine in patients with moderate to severe ulcerative colitis and suggest a favorable overall benefit/risk profile for long-term use of ZEPOSIA. And our plans to develop ZEPOSIA in IBD don't end with True North. As you can see on Slide 12, we've highlighted our ongoing ZEPOSIA study in Crohn's disease. Having demonstrated a benefit in ulcerative colitis, we are now even more encouraged about the potential for ZEPOSIA in Crohn's disease and believe that ZEPOSIA has a potential to play an important role in the treatment of this disease, where there also exists a high unmet medical need. You can see that our Phase II STEPSTONE data demonstrated encouraging endoscopy responses in both biologic-naive and experienced patients. Considering similar trials in this patient population, the results for endoscopic response of 23% are greater than what we would be expecting with patients treated with placebo at around 11% to 14%. The main reduction for Crohn's disease activity index or CDAI of 130 points is also greater than what we would expect for placebo at about 50 points. Our ongoing Phase III YELLOWSTONE program is studying patients with moderate to severe active Crohn's disease over a 12- week induction period and 52-week maintenance period. The study is currently enrolling, with data expected in due course. On Slide 13, to summarize, we believe that ZEPOSIA in ulcerative colitis offers patients a safe oral option with efficacy comparable to biologics. Both our Phase III data and long-term Phase II follow-up data have demonstrated a differentiated potential medicine for patients in need. And finally, we look forward to continuing the ZEPOSIA program in Crohn's disease with our YELLOWSTONE trial. Now I'll pass over to Chris to share with you our commercial perspective. Chris?

Thanks, Samit. First, I want to start off by sharing how ZEPOSIA in UC is an important step in further expanding our immunology business and building our GI franchise. We're excited about the potential of ZEPOSIA as well as additional promising pipeline opportunities such as our TYK2 inhibitor and cendakimab whose ongoing programs across a range of autoimmune diseases are highlighted on Slide 15. For context, let me remind you of the strong foundation we already have established in immunology today. Our multibillion-dollar global Orencia business is across 3 indications, the largest being rheumatoid arthritis, where we've been successful despite a very competitive marketplace. We also recently launched ZEPOSIA in MS, and while it takes time to establish a brand in MS, we are encouraged by our early execution so far. As we look across our late-stage pipeline, we are further excited about the opportunity to broaden and strengthen our immunology franchise across rheumatology, gastroenterology and dermatology. Turning to Slide 16. Let's talk about now -- let's now talk about IBD. Inflammatory bowel disease is a large opportunity with significant unmet patient need. While biologics and JAK play an important role today, they carry with them considerable logistical and safety considerations. As a result, only about 40% of patients with moderate to severe disease are treated with available biologics or novel oral therapies. We believe there's an important opportunity with ZEPOSIA to address these needs in IBD and that the data supports use in both the pre- and post-biologic space. We believe the True North data positions ZEPOSIA as a first-in-class S1P receptor modulator for UC patients while our ongoing research in Crohn's disease can further expand ZEPOSIA in IBD. Turning to Slide 17. With that being the case, I'd like to remind you what we know about patients who are living with UC. These patients are typically diagnosed at a young age and often are subject to a lifetime of treatment. They face significant challenges as the severity and long-term impact of this disease greatly affects the quality of their life, including their ability to work. Flare-ups are frequent and painful and have a significant impact on daily function. Patients are subject to 12 or more bowel movements a day. Finally, given the low remission rates and loss of response with some patients -- with some treatments, patients often recycle through multiple therapies, ultimately ending, for some, in surgical bowel resection. Beyond the physical attributes, this disease comes with substantial related sociopsychological impacts. There is a clear need for something new in this space, a drug that not only works but is also considered safe and manageable for chronic use. Turning to Slide 18. With these patients in mind, what we hear from physicians is that they are looking for new treatment options. They are looking for safe, efficacious medicine and the ability to offer oral options in line with their patients' preferences. In short, our customers see tremendous value for a safe, effective and convenient oral agent. As we turn to Slide 19, you'll see that ZEPOSIA has the potential to be a comprehensive treatment solution for patients with UC as this medicine offers physicians all 3 of these important aspects. As we've said, ZEPOSIA shows consistent efficacy across multiple endpoints, was approved in MS without a black box warning label and is administered via a convenient once-daily pill. The totality of this profile is a package that we believe addresses physicians' and patients' needs. And Slide 20 further illustrates why I believe we have a differentiated option with ZEPOSIA. In comparing ZEPOSIA's profile to other agents in this space, we can see how ZEPOSIA has a selective S1P and novel MOA, the only agent with a comprehensive solution which sits on all 3 of these important aspects, specifically strong efficacy, a differentiated safety profile and an oral formulation. On Slide 21, I'd like to provide some color on 2 important aspects of this launch which our teams will be focused on: leveraging our quality access and reimbursement capabilities as well as educating customers on how to adopt and leverage a new MOA. As for the access environment, we will leverage our experienced value and access team, which spans multiple disciplines and functions and has a strong track record of success. Don't forget that our foundational product in immunology is Orencia in the rheumatology space. With this asset, we were able to secure favorable access for what is now a multibillion-dollar medicine. That leads me to introducing a new MOA. It is important that physicians understand how ZEPOSIA works and is differentiated as well as how to use the medicine. We know that all of these components are important in order to ultimately change prescribing behavior, and we've demonstrated this successfully in the past. A recent example of this is with Eliquis where we were able to build a significant brand by establishing it as the best-in-class factor Xa inhibitor in a market formerly dominated by generic [ Lumigan ] within an entrenched anti-coagulation ecosystem. We plan to leverage these robust experiences and capabilities as we look forward to our expected launch in UC. Turning to Slide 22. But our journey in GI doesn't end with True North. We see ZEPOSIA in UC as the first in a series of opportunities we have to build a differentiated GI franchise and immunology. We continue to enroll our Phase III program in Crohn's disease where the unmet need is very similar to what I described in UC. The newest addition to our immunology franchise, cendakimab, gives us an opportunity in eosinophilic esophagitis, an immune-mediated digestive disorder with significant unmet need, as well as in broader immunologic diseases. Additionally, TYK2, which have proof-of-concept studies underway in both UC and Crohn's, could complement our presence in ZEPOSIA in these diseases. Overall, we see these 3 assets as very different from existing treatments, further differentiating within the GI space and meaningfully adding to our presence in immunology. On Slide 23, in summary, we are very excited about the potential of ZEPOSIA in UC. There is a significant unmet need with this disease, and we believe these data show that ZEPOSIA offers efficacy comparable to biologics in a convenient dose form. We believe the totality of these data across safety, efficacy and convenience makes ZEPOSIA a comprehensive treatment solution, which addresses patient need and appeals to customers. We look forward to our potential launch with a set of proven capabilities and further expanding our immunology franchise with other exciting assets to come such as cendakimab and TYK2. Thanks again for joining us today. I'll now turn it back to Tim for the Q&A session.

Thanks very much, Chris. Alan, could we go to our first question, please?

We'll take our first question from Terence Flynn with Goldman Sachs.

Congrats on the data. Maybe just 2 for me. The first, I was just wondering if you could give us an update on the timing of the actual filing. And with respect to the potential launch, any more detail you can share on your sales force build and sizing both in the U.S. and ex-U.S.? And then a question for Samit is just how do these data inform your outlook for Crohn's disease? And then any more specifics on how enrollment is going in that trial?

So maybe I can start off. Thanks for the questions, Terence. And look, we've got the Phase III data, and we are in conversations with the health authorities. And in due course, we will be able to inform when we have filed, and the file is expected, as we normally would do, in Phase III trial readouts. So more to come on that as a follow-up. From a Crohn's disease perspective and then, of course, from a commercial perspective, I'll ask Chris to comment on it as well. From an outlook perspective for Crohn's disease, from a biologic perspective, if you think about the basic pathophysiology that exists in these diseases, there is a high amount of confidence and rationale that makes sense to use ZEPOSIA and how it targets the overall mechanism of inflammation that occurs in this disease. So targeting that inflammation in the gut and then seeing the data from the YELLOWSTONE trial, so from biology and mechanistic point of view, it makes sense. And we, as I said earlier, are very confident in how the data could read out when it reads out. Now from an enrollment perspective, the trial right now is enrolling. We anticipate somewhere in the time frame of late 2022, '23 from a readout perspective and certainly looking forward to that. Chris?

Terence, just quickly on the build-out. The medical teams are largely in place. On the commercial side, we have begun the process of building out our marketing teams. We anticipate that both the sales and marketing teams will be fully hired and in place by late Q1 of next year. And then, of course, all of the platform capabilities that we'll be leveraging for this launch that are being utilized in our existing portfolio are already in place.

Thanks, Chris.

We'll next go to Geoff Meacham with Bank of America.

Congrats on the results. So 2 questions. The first one is what do you guys make of the data from both the clinical and also from a market perspective in TNF-experienced versus naive patients? It looks like you have a much more dramatic benefit in the latter. And then, Samit, for maintenance, I'm assuming that patients in the study will be followed up for an extended period. But how long would you expect real-world use to be in the maintenance setting?

So from the data readout perspective, how we look at it, we certainly -- as Chris and I both mentioned during our presentation, we are very encouraged and excited about the data. And as we also heard from the previous question, that when we look at its placement versus what we've observed from other treatments such as JAK inhibitors and biologics, the efficacy that we see is similar to some of the biologics. We also see efficacy both in the treatment -- biologic treatment-naive and treatment-experienced patients. So overall, we are excited about the data and therefore, definitely looking forward to bringing it to the patients as much as we can in the shortest amount of time. We obviously look at the maintenance phase. You see the high amount of retention. You've seen the Phase II data where we have patients staying on treatment at 4-year follow-up now. So these are the things that we have to continue to evolve on and continue to build the data on and bring forward. We certainly have the 52-week data in hand, but now with the trial continuing in the open-label extension, we continue to collect that data as we go forward. I can't really today say what is the maintenance treatment period going to look like because, as we've seen, many of these patients will continue on treatment. We've seen the very high retention rate in the Phase II study as well. Chris, from the market perspective, how do you see the data?

Sure. Let me just comment on a few things. First, thanks for the question, Geoff. I think the starting point for us is -- I think it's helpful to remind ourselves that there's still considerable unmet need in this space. And specifically, obviously, since we've had the True North data, we've been talking to customers extensively. And what they highlight for us is that there is a continued need for oral agents that are safe but deliver significant efficacy. And I think a clear reminder of that is the fact that about 2/3 of patients discontinued therapy within a year. And then second, given the chronic nature of IBD, patients cycling through multiple MOAs, there's a need for novel treatment, both in the pre- and post-biologic space, that contribute a new approach to treating these patients. And I think it's in that regard that we have to look at the True North data. And there, I think relative to existing agents, we're very happy with what we see. Certainly, relative to TNF inhibitors and biologics, we think ZEPOSIA is demonstrating efficacy that's competitive with biologic therapies but with certainly an improved safety relative to the TNF inhibitors. We don't, for example, see black box warnings here. We see relatively low discontinuation rates versus a product like Entyvio. And then as we compare it to JAK inhibitors, I think the True North data demonstrates, again, efficacy that's competitive with JAK's but with an improved safety profile. And so if you combine that efficacy profile with a convenient route of administration and as I noted previously, a novel approach to treating these patients, we think we've got compelling data that's going to be an important contributor to patients in this space.

Okay. Thanks, Chris.

We'll next go to Steve Scala with Cowen.

I have 2 questions. First, severe AEs at 10 weeks did not favor ZEPOSIA. Can you elaborate on what was driving the severe AEs at 10 weeks while they were similar at 52 weeks? And then secondly, maybe for Chris, patients seemed fine with injectable meds in serious diseases such as MS and RA, particularly when the injectables seem to continually raise the bar. Orencia is an example. Why is GI different in your view?

Samit, do you want to start?

Sure. So when we look at the adverse events overall, I think what we've talked about over here in the profile, that deltas between the adverse events in terms of the placebo group and the ZEPOSIA-treated group are not that far apart. Yes, we can certainly look into the specificities of how patients behaved in the first 10 weeks versus the 52-week period, but they're really not something that are concerns where patients have to discontinue treatment. And especially when we talk about the nasopharyngitis or headaches and stuff, they were not consistent with the expectations for the population. So we don't believe that these are defining from a treatment perspective for the patients, and patients do continue on with the treatment, for these adverse events that you've seen. And as you yourself pointed out, during the maintenance phase, we don't obviously see the continuation of these either. So from an overall safety profile perspective, we are quite happy to see what we have seen thus far.

Sure. And just on the injectable meds question, I think you're right that injectable medications are replete within immunology and certainly in this space. The things that I think are important in UC to consider are, first, we know just from prior treatment approaches that GI tends to favor, certainly in earlier course of therapy, those products that are more convenient and more accessible to patients. These are patients that largely are younger patients. Over half of these patients are 45 years or younger. So factors like convenience play an important role in these patients being able to go about their daily lives. Needle phobia is a considerable issue in the space, and so route of administration has historically been very important. We also know, when you look at UC in totality, up to 65% of patients discontinue treatments with biologics, and adherence has been historically an issue in this space. So you take all of those factors together, we think that route of administration, specifically an oral and convenient once-daily formulation is going to be very important for both patients and HCPs. And then if you combine that with a very compelling efficacy data that we've seen in True North, along with an advantageous and favorable safety profile versus existing therapies, we think it's going to play an important role here. So I think some of those are the factors that are uniquely at play in the UC space relative to some of the other markets you mentioned.

Thanks, Chris.

Next, we'll go to Chris Schott with JPMorgan.

Just 2 for me. The first, you talked about 40% biologic penetration in this setting. Just give us a sense of where you think that can go over time. Is it possible we could see like 60% or 70% penetration with some of -- between your drug and some other products coming to market? And maybe just some color about what the hurdle has been for the 60% of patients not currently on a biologic. And the second one was just quickly on the reimbursement landscape in UC. Is this as challenging a market as you've seen in something like psoriasis, where rebating some of the larger products is a significant hurdle for newer agents? Or is this a more open category given still the pretty significant unmet need out there?

Sure. Maybe I'll take that one, Chris. First, with respect to penetration in the space, I think the way that we've seen some of the challenges to patients getting to these biologic therapies is multifaceted. First, a number of these patients are continually cycling through products that are used early in the treatment algorithm. Many of these patients simply favor oral treatments that are available. Many of them ultimately progress on disease but are unable to tolerate biologic therapies when they're provided. And then as we mentioned previously, a number of these patients are younger patients, patients who have active lifestyle, and many of them are still working. And so the issues of coming in frequently for injectable meds in this space is something that's been a big hurdle to patients proceeding on the biologic therapies. And remember, many of these biologic therapies, as we've noted in both Samit's presentation and my discussion, carry with them significant toxicities. And so patients have been leery of moving on to these biologic therapies. And so I think that in many respects, that speaks to the unmet need in this space. There is considerable need amongst patients and as we've heard from physicians who have seen the True North data for products that deliver efficacy that is comparable to that which you see with biologics but is easier to administer and importantly, comes with a safety profile that's more favorable. And we think that's what we've got with True North. As for reimbursement and access considerations, unquestionably, access is going to be very important for us to deliver at launch. And as you point out, this is a space where payers have been actively managing novel therapies. And we certainly recognize that there are established players in this space who have very broad portfolios. That said, I think there are a number of things that give us confidence that we'll able to step up and deliver in this space. First, we have very strong market access capabilities internally to BMS. We've demonstrated that with the quick access that we've secured in MS with ZEPOSIA with covering more than 70% of commercial lives. As I noted previously, in RA, Orencia has a very favorable access position. And that's facing some of the same TNF and JAK competitors that we're going to see here. And while breadth of portfolio that you see with the existing players is an important consideration from an access standpoint, it's not the only consideration. Based on the True North data, we think we're going to have a very strong value story to tell to payers. We clearly have a drug that's efficacious. It's one that delivers not only clinical remissions and durable remissions, but quality of life improvements, which again is important for a younger patient population. The safety is favorable relative to existing therapies. And of course, we know that payers have a preference for oral therapies in many cases. And so we think all of those give us an ability to tell a very good story from an access standpoint.

Next question comes from Seamus Fernandez with Guggenheim.

So just a few questions here. So first off, just on the pricing dynamic. Just hoping to better understand the potential gap in pricing between MS and the UC market products that are available on market today versus your current pricing of ZEPOSIA. Is that just sort of a discounting mechanism in the United States? So just wanted to get a better understanding of that. Second, just wanted to see how you guys are thinking about the rollout in international markets and the opportunity in global markets versus the United States. It seems like the kind of hindrances or limitations that can exist in the United States may not exist overseas for a comparable oral therapy. So just wondering how you're thinking about the potential rollout in international markets. And then the last question. In terms of the patient population that -- in the MS label has a -- or is contraindicated for treatment, just wondering if that carve-out population is anticipated in the UC space as well or if that has not been incorporated.

Thanks, Seamus. Maybe I'll start, and then I can turn it over to Samit to address your last question. With respect to pricing, so we priced ZEPOSIA, I think, responsibly, consistent with the value that the product delivers as well as the patient access dynamics in the MS market when we launched. Obviously, we have recognized, since we certainly saw the True North data, that there are differences in pricing between the MS markets and IBD, and we've spent considerable time thinking through how we'll be addressing that. It's too early to discuss specific pricing strategies for UC specifically, but it's something that we've been working on consistently for some time. With respect to the rollout ex U.S., this is a very large opportunity outside of the U.S. We estimate that there's about 1.6 million patients with UC across the U.S. and largest EU markets. We estimate, specifically in the top 5 markets in the EU, about 700,000 patients, so this is a sizable population. As you know, we do think that some of the challenges that exist to the adoption of newer therapies in the U.S. may not be present there. We have very experienced teams in all of these markets from their experience on Orencia, specifically in immunology. But then more generally, obviously, access generally speaking is going to be very important as we get into the European markets, and we have very experienced teams there really across the portfolio. So we think that this plays potentially an important opportunity in Europe. We're certainly ramping up to prepare to launch and very much look forward to having the opportunity to do so. And with that, maybe I'll turn it over to the Samit.

Yes, sure. Thank you. So look, the restrictions that were applied for the cardiovascular risk, for example, in the MS program were already applied in terms of the patient selection for the clinical trial perspective. At the current time, we do see that continuous education. Because it's a new mechanism of action, so the interactions with the prescribers and physicians will continue. And certainly, that will lead to that discussion of what patients should get and how the dosage should be done and how patients should be managed and maintained. We don't see that as a humongous hurdle, considering dosage start is also built into some of the biologics, et cetera. So physicians are used to initiation of treatment and then, of course, maintenance for these therapies. Chris has already talked about how the outreach will be. We've talked about education, et cetera. So we don't see that as a barrier from an overall access for patients and how physicians will be able to prescribe these medicines.

Thank you so much.

We'll go now to Tim Anderson with Wolfe Research.

A commercial question. Can you put the commercial opportunity with ozanimod in ulcerative colitis in relation to what you think the opportunity will be for TYK2 in psoriasis, assuming that the Phase III data comes out as planned? The 2 medicines share similarities, both are oral, safety looks comparatively good, efficacy is comparable to biologics. But when I look at this weekend's data on ozanimod, every company seems to use different ways of measuring efficacy. So it's, to me, a little bit harder to see differentiation on side-by-side comparison. And I'm just wondering if you might agree that the opportunity set here in ulcerative colitis and possibly Crohn's is less than what is likely to be with TYK2 in psoriasis. We've also seen Pfizer be slow to gain traction with XELJANZ in the setting. And then second question on safety. At least yesterday in the maintenance slide, there was a bump in LFTs, 5% for your drug versus 1 -- less than 1% for placebo. I know there were no [ high block ] cases, but can you give us the grading on those elevations, such as what percent were grade 3, 4?

Sure. Maybe I'll start, Tim, and then I'll turn it over to Samit. First of all, I think with respect to the opportunity for ozanimod versus TYK2, we actually think that both are going to play an important role potentially, obviously data dependent with respect to TYK2. Given the size of this opportunity in terms of the number of patients who are diagnosed with ulcerative colitis, given the significant unmet need that exists for these patients and in particular, the large percentage of patients who sit between those who have failed 5-ASAs, immunomodulators and steroids in that early segment of the disease and have moved on to advanced disease but yet, never ultimately get into the biologic space, we think there's a broad swath of patients here. The other thing to remember is that all of these UC patients are going to be treated chronically, and we know from current treatment that they're oftentimes cycling through multiple mechanisms of action. So if you add all of that up, we think that there's, A, ample opportunity in terms of the breadth of the opportunity for 2 additional products to play in this space. Second, we think that we will benefit from having 2 distinct mechanisms of actions for these patients, particularly given the data that we've seen with True North, and we'll obviously have to wait and see what the data looks like with TYK2. But data dependent, we think both can play an important role just given the unmet need, the opportunity here and the need for new novel MOAs to treat these patients. And I would say that's true both in the pre-biologic space as well as post-biologic space. Samit?

So thank you. So we did see a little bit of a bump, as we said, in the ozanimod-treated patients in the alanine aminotransferase. You also said that there are no [ high block ] cases that we observed in this particular study. So -- and these are reversible. In the overall profile of these patients, there are not serious adverse events. These are obviously lab abnormalities with no clinical consequences as we've seen in the trial. And so we keep an eye on that. These patients can be managed. So we'll be able to manage these from a lab perspective, and physicians can easily manage them. So we don't see them as restrictive from a patient perspective for dosing and continuation of treatment in the landscape. These are not clinically significant. So they are not grade 3, 4, 5 that we are talking about. These are very low-grade adverse events.

Thanks so much.

We'll next go to Dane Leone with Raymond James.

Can you hear me? Apologies, having a lot of connectivity issues this morning.

We can.

Great. So in a similar vein to the questions you've been getting, going into this full presentation of the ozanimod's ulcerative colitis data. A lot of IBD KOLs have been quite optimistic about having an oral solution upfront for their patients. And some of them have actually done a cross-relation on how this could be similar to how apremilast has been put into the psoriasis market. So the question though is a lot of these docs have also been interested in your team running a study in more mild to moderate ulcerative colitis cases. What do you think would be the strategy there to maybe offer a solution where, right now, you obviously would not use a biologic agent and it would be a really direct carve-out to, I think, something that these IBD docs would like to see but also would like some data behind that as well?

Thank you for the question. So obviously, the current study has been conducted in patients with moderate to severe ulcerative colitis. And the data are what they are, they speak for themselves from an efficacy, safety perspective, competitive perspective, and we've talked a lot about that. And we are looking forward to discussions with regulatory authorities and bringing it to the patients as soon as is possible and with a long-term follow-up that we will be looking to proceed with. In terms of moving these medicines to an earlier setting -- or rather, the mild to moderate setting, we are defining the life cycle management program now, and we'll certainly be sharing it as soon as we have put our pencils down and are able to communicate that. But certainly it's something that we will need to continue to follow. As you know, our over -- and Chris described it, we have overall GI franchise which is evolving very nicely, not only with ZEPOSIA but we have TYK2 program also ongoing in the ulcerative colitis and Crohn's disease space. And then, of course, there's cendakimab in the other GI diseases. So overall, our focus is definitely there, our interest is there in the GI space, so we will certainly look forward to expanding our overall presence in that disease setting as well.

Thanks so much.

Next question is from Navin Jacob with UBS.

This is Sriker Nadipuram on for Navin. I just have just a couple of questions. Could you tell us the average duration of effect in responders post induction? And then did you see any differences in efficacy between patients that were taking background steroids versus patients taking 5-ASA? And then just one for Chris. I guess echoing on some of the other questions. Just in terms of positioning, do you expect GI docs to go to this prior to biologic therapy based on this data? And are there any plans for head-to-head trial versus other biologics?

Maybe I'll start with...

Sorry. Yes, go ahead, Chris.

Maybe I'll start with your question on where we plan on positioning this. We think there's opportunity both in the pre- and the post-biologic space. As we talked about previously, there's certainly a need for those patients who either can't make it all the way to biologics or with the specific profile of biologics with respect to efficacy, safety and dose of administration or route of administration is not something that is appropriate for that patient. And so in that regard, we think there's ample opportunity potentially in the pre-biologic space. But we also know that many of the patients who are treated with biologics either move on from those therapies because of a lack of response and they'd develop specific toxicities or immunogenicity. And so we think there's actually an opportunity in the post-biologic space as well. Obviously, this is going to be something that physicians will need to decide with respect to the individual patient setting in front of them, but we think there's opportunity potentially both pre and post biologics. Samit?

Thank you, Chris. And so in general, when you look at the secondary endpoints in the maintenance phase of the study, you see that the patients who do achieve a response in the induction phase, most of them are then continuing into the maintenance phase. So there is the very nice disposition that patients who achieve a response will then continue to remain in remission and get a response for the longer duration, and these data will be followed on in the open-label phase. And then in terms of differentiation of activity in patients who are pre ASA treated or pre corticosteroid treated, those data are subpopulations that are continuing to be analyzed. And we'll certainly share those once those analyses are completed.

Thanks.

It's David Risinger with Morgan Stanley.

Yes. Could you just stress the ZEPOSIA efficacy seen to date in Crohn's and the long-term opportunity as you see it? And I ask specifically because Crohn's is obviously more difficult to treat and it's less crowded.

Sure. So in terms of the Crohn's disease, as we spoke on Slide 12 of the presentation, that's the data that we have from the STEPSTONE trial. And as I spoke earlier, we do see the endoscopic response of about 23%. So when we think about comparing that to what one would observe in the placebo arm, that would be around 11% to 14%, is what the reported data are. Also, from the Crohn's disease activity index, we see a very nice response over there. Now from the biologic perspective, certainly, over here, we are talking about the gut being involved from one end to the other so -- and as you very well said, that this is a little bit more complicated disease, more difficult-to-treat disease. So ultimately, we have to wait for the data to read out in a couple of years, but we certainly now are more encouraged based on the data we've seen in the ulcerative colitis and the mechanism behind it of inflammation treatment because of the S1P modulation effect that we have with ZEPOSIA. We spoke about it earlier. We have another study ongoing with TYK2 inhibitor as well, and that data will also add to our understanding of the biology. And the biomarkers that could come into play as we look to expand our life cycle management program for both of these medicines in the future.

David, the only thing that I would add to what Samit just mentioned is that I think one point that you made is important, which is this is an area where the unmet need looks very similar to what we've been describing with ulcerative colitis. There is, however, an additional opportunity, we think, in the pre-biologic space here just given the fact that 5-ASAs are not really well established in Crohn's disease. And so given the fact that you don't have a well-established first-line treatment, the unmet need for patients pre biologic is particularly acute in Crohn's disease. So look forward to seeing how data continue to mature. But we would agree with you that there's significant unmet need here both pre and post biologics.

Thanks.

We'll take that question from Luisa Hector with Berenberg.

So I just wanted to check that you're confident with this one study that you should be able to access a broad label from the FDA, covering both the pre- and post-biologic patients. And then apologies if I missed this because I know you've touched on the cardiovascular safety, but did any patients need an ECG on entry into True North? And can you share what percentage of recruited patients were ultimately randomized onto -- into the treatment arms, please?

Yes. I'll start off. I think your first question was is one study going to be enough. Look, we are, as I said, not going to comment on specificity of the regulatory dialogue, but certainly, these are discussions we will continue to have. We believe very -- we are very encouraged with the results, and we believe very strongly that one study should lead to a good dialogue and the label will be -- what the label will be when we see it. But we do believe very strongly that one study with the results that we've seen in this trial does adequately address many of the endpoints. And so we're looking forward to that dialogue with the regulatory agencies from a safety database perspective as well. This is a large study and, of course, supplemented by the data from the MS trials as well, from the overall safety perspective. There is the precedent, even in the past, that if the evidence is strong, that can lead to approvals, of course. To your second question, perspective in terms of ECG requirements, when patients were screened, of course, like in many, many, many studies in general, even when there is no liability from a cardiovascular perspective, patients do undergo screening with an ECG. So ECG is a requirement from a screening perspective. That doesn't mean that it speaks to an issue with the drug. But in general, patients who are enrolled in the study, you need to rule out certain cardiovascular risks that the patient may be carrying into this study. So baseline ECG is required for many studies. So that's why we had a cardiovascular assessment built into the study in the screening phase.

The only thing I would add is that, obviously, we will have to wait and see the final label in UC. But we know from our experience on the MS side that while the MS label calls for ECGs, there is no requirement for first-dose observation in that setting -- in that space. So obviously, we'll have to wait and see how the final label looks based on the regulatory review of the True North data.

Thanks, Chris, and thanks, everybody, for your time this morning. Obviously, if you've got follow-ups, you know where to find us. I think we'll end the call here, Alan.

Thank you, sir. And that does conclude today's conference. We thank everyone again for their participation.