Celldex Therapeutics, Inc. (CLDX) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the Celldex Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I'd now like to hand the conference over to Sarah Cavanaugh. Please go ahead.

Thank you. Good afternoon, and thank you for joining us to discuss the top line results from our Phase II barzolvolimab program in eosinophilic esophagitis or EoE. Joining me on the call today are Anthony Marucci, Co-Founder, President and CEO; Dr. Tibor Keler, Co-Founder, EVP and Chief Scientific Officer; Dr. Diane Young, Senior Vice President and Chief Medical Officer; Dr. Margo Heath-Chiozzi, Senior Vice President of Regulatory Affairs; and Dr. Diego Alvarado, Vice President of Research. Please note the slides for today's call are available on the Investor Relations section of our website. Before we begin our discussion, I would like to direct your attention to Slide 2 with respect to important information regarding the forward-looking statements that today's speakers will be making. Please be advised that a question-and-answer period will be held later in this call. I'd now like to turn the call over to Anthony.

Thank you, Sarah, and good afternoon, everyone. Today, we are reporting top line results from our Phase II study of barzol in EoE. As many on this call know, identifying the key drivers of this difficult-to-treat disease has challenged the field over the years and patients continue to need more effective treatment options. Depletion of the eosinophils has not consistently resulted in improved clinical outcomes for patients and research in the field has suggested that other cell types, including mast cells, could play an important role in the disease pathogenesis. As we explore barzolvolimab's full potential as a mast cell depleting agent, we are leading important contributions to the emerging science that defines which diseases are ultimately mast cell driven. In studies conducted in CSU, cold urticaria, symptomatic dermographism and prurigo nodularis, we demonstrated barzolvolimab's ability to profoundly deplete skin mast cells and impact disease symptoms, which supported continued development in these indications and atopic dermatitis, which like PN, is an itch-driven skin condition. We designed the Phase II study in EoE to determine if barzolvolimab could deplete mucosal mast cells in the GI tract and in turn, improve clinical outcomes in this disease. Results from this well-run study were clear and confirmed that barzolvolimab profoundly depletes mucosal mast cells, but depletion of mast cells did not result in improvements in EoE symptoms. We are disappointed in this outcome, especially for patients who need more treatment options. We have repeatedly said that we needed to not only see profound impact of cell depletion, but we also a reduction of dysphagia scores that would be clinically meaningful and compare favorably to the current standard of care. These results did not meet our internal hurdle rate, and we will not advance development in this indication. Diane will walk you through the data tonight, and we will answer as many questions as we can. That said, there is a significant body of data associated with the study, and our team is currently working through the top line analysis, which we just received in additional data still to come. The Celldex team is committed to advancing mast cell science and its impact on important diseases, and we plan to publish these results in the future as we feel it is important for the field for both mast cell science and EoE. Before I turn the call over to Diane, I would like to thank all the clinical trial investigators, site staff and patients involved in this trial. Diane?

Thank you, Anthony. Good afternoon, everyone. Let me start by reminding you of the study design outlined on Slide 3. This study is a randomized, double-blind, placebo-controlled parallel group trial. 65 patients with active EoE were randomly assigned on a 1:1 ratio to receive subcutaneous injections of barzolvolimab at 300 milligrams every 4 weeks or placebo during a 16-week placebo-controlled treatment phase. Following completion of the placebo-controlled treatment phase, all patients entered a 12-week active treatment phase and received barzolvolimab 300 milligrams every 4 weeks. Patients then entered a follow-up phase for an additional 16 weeks. Endoscopies were conducted at baseline, weeks 12 and 28. The primary endpoint of the study is the reduction of esophageal intraepithelial or mucosal infiltration of mast cells as assessed by peak mast cell count at 12 weeks. Secondary endpoints include the reduction of dysphagia, reduction of eosinophils in the esophagus and safety. A key exploratory endpoint for the study was the endoscopic scoring of EoE-related inflammation and fibrosis or the ERES scale as it is more commonly called. Dosing is complete in the study and patients are being followed as per protocol. As you can see on Slide 4, demographics and baseline disease characteristics were generally well balanced across treatment groups. Patients on the study were highly symptomatic and had moderate to severe EoE as indicated by high baseline peak mast cell and eosinophil counts and dysphagia symptom questionnaire or DSQ scores. Slide 5 outlines the primary endpoint, which the study clearly met, the absolute change in peak intraepithelial mast cell counts from baseline to week 12. Peak mast cell counts as measured by CD117 or KIT positive cells per high-power field at baseline were 50.3 in the placebo arm and 55.4 in the barzolvolimab 300-milligram Q4-week arm. At week 12, the absolute change from baseline was a decrease of 2.7 cells per high-power field or placebo compared to a 36 cell per high-power field change for barzolvolimab. The result was highly statistically significant with a p-value less than 0.0001. We also analyzed the change in intraepithelial mast cells using tryptase staining, which may be more specific for mast cells in the esophagus. In barzolvolimab-treated patients, there was a 75% depletion at week 12. Based on available data, this depletion continued to deepen to approximately 90% at week 28. This finding is important because it confirms that barzolvolimab profoundly depletes both cutaneous and mucosal mast cells. Identifying the key drivers of EoE has been a challenge for the field. A growing body of evidence suggested that mast cells might play an important role in the disease. We demonstrated barzolvolimab's ability to profoundly deplete mucosal mast cells, but we now know that this did not result in improvement in clinical outcomes, providing direct evidence that mast cells are not a primary driver in EoE, as you can see in the secondary and exploratory endpoints outlined on Slide 6. The first box shows the change from baseline in the dysphagia symptom questionnaire at week 12, where there was no improvement observed compared with placebo. This was echoed in the change from baseline endoscopic evaluations as measured by ERES outlined in the second figure on this page, where there was also no improvement over placebo noted. We were also surprised based on the close interaction between mast cells and eosinophils by the lack of eosinophil depletion depicted in the chart on the right. In order to determine whether a longer duration of barzolvolimab treatment would have improved outcomes, we conducted an unblinded review of all available data through the full 28-week treatment period and the full 44-week study, and the results for these endpoints are consistent with the results at 12 weeks despite deepening profound mast cell reduction. While this is not the outcome we wanted, our work here answers a key question about the involvement of mast cells in this disease, and we are hopeful these findings will support the advancement of EoE research and the drive for more effective therapies for patients. Another important finding was the continued confirmation of barzolvolimab's favorable safety profile outlined on Slide 7. This is our first study evaluating this more frequent every 4-week dosing regimen of barzolvolimab 300 milligrams, and the safety profile is consistent with prior studies with less frequent dosing. The most common adverse events observed in 10% or greater of barzolvolimab-treated patients were hair color changes, nasopharyngitis or the common cold and fatigue. The hair color changes were grade 1 events with a single grade 2 and mostly occurred in the beard, which is fast cycling hair, especially in men who shave regularly. These changes have either resolved or are resolving with follow-up. Four patients discontinued related to adverse events on the placebo arm and 1 patient discontinued on barzolvolimab, reporting hair and taste changes. There were no treatment-related SAEs on the barzolvolimab arm. Again, these safety findings are highly supportive of barzolvolimab's overall safety profile, and we were pleased to see this consistency with the more frequent dosing regimen of 300 milligrams given monthly. In summary, on Slide 8, there were a number of key learnings in this study. We have now demonstrated that barzolvolimab depletes mucosal mast cells as well as cutaneous mast cells as demonstrated in prior studies, which supports broad future development of KIT or stem cell factor targeted therapies, including in other GI conditions where mucosal mast cells are believed to play an important role. Broad mast cell depletion did not result in improved clinical outcomes in EoE, providing direct evidence that mast cells are not a primary driver in this setting, furthering the scientific understanding in EoE. We will complete the Phase II study, but we will not pursue further development in EoE. Lastly, we were pleased to confirm barzol's favorable safety profile at 300 milligrams in a more frequent dosing regimen. With that, I will turn the call over to Anthony to close. Anthony?

Thank you, Diane, and thank you all for joining us. While we are disappointed in the clinical outcome in EoE, we are proud of our progress and continued execution. We remain committed to leading the science and the exploration of mast cell biology to deliver life-changing therapies to patients in need. Barzolvolimab has significant potential to become a transformational medicine for patients, and we continue to work to determine which disease settings offer the best opportunities for future success. As you can see on Slide 9, barzolvolimab is currently being studied in 5 indications, including 2 Phase III studies in chronic spontaneous urticaria and 2 Phase II studies and Phase II studies in cold urticaria, symptomatic dermographism, atopic dermatitis and prurigo nodularis. We are also preparing to initiate a Phase III program in cold urticaria and symptomatic dermographism. We look forward to continuing to update you on our progress as we advance these programs and additional candidates from our KIT and stem cell factor pipeline. We appreciate your support in this endeavor and look forward to answering your questions today. Operator?

[Operator Instructions] Our first question comes from Thomas Smith with Leerink Partners.

Just first question on safety. I think it looks really clean here through that 16-week treatment period. Can you just comment on what you saw out beyond that time point? I think you mentioned kind of an unblinded review of the data that we have beyond the 16 weeks. So could you just comment on that time point? And were there any other patients who discontinued treatment with longer dosing?

Well, the data is not complete, but we do have data on the majority of patients. So I can just generally say that the safety profile further out is very consistent with what we're seeing, and there's really no additional signals there.

Okay. Got it. That's helpful. And just a follow-up on the dosing, if I could. Obviously, the mast cell depletion here looks really strong. Can you just talk about the kinetics that you saw here with the 300 mg Q4 week dosing and then talk about your level of confidence in the 2 dose levels that you're using in the Phase III CSU program?

So as far as kinetics for the immunohistochemistry, those are from the 12-week and week 28 analysis. So we don't have fine-tuned kinetics based on when we took the biopsies. But our expectation is that we have very profound depletion, as we said, it occurs quickly and further gives us confidence overall for our Phase III programs.

Got it. That's helpful. If I could just sneak in one last follow-up. Just on the neutrophil counts, if you could just comment on any grade 3 neutropenia that you observed or I guess, the consistency of the experience here relative to the existing barzo experience, that would be super helpful.

Yes. So we had just one adverse event of neutropenia, which was a Grade 2 and resolved while on study. The curve for the neutrophil count looks very consistent with what we've seen with all of our other programs.

Our next question comes from Yaron Werber with TD Cowen.

The prurigo nodularis Phase II that's ongoing based on that positive Phase I data, it looks like it's a 24-week study, 120 patients, right, 1:1:1. And it seems like it's still enrolling, but the primary completion on clinicaltrials.gov looks like it's early next year. So it looks like we're potentially on track for data in the first half of next year. Can you -- I know you haven't given guidance, but can you -- does that make sense? And then secondly, just on safety, can you just -- are there any hypersensitivity or any anaphylaxis or any sort of rare AEs that popped up in the study?

Yaron, why don't we have Diane take the second question first, and then I can give you timing on the data.

So there, we did not see anaphylaxis in the study, really nothing as far as hypersensitivity, and there were no related serious adverse events in barzol-treated patients.

And Yaron, what it says on clinicaltrials.gov is how we're tracking. I think it will be data sometime in '26. But as we get closer, we can certainly fine-tune as to when we'll have that data, but it will be sometime in '26.

Our next question comes from Kristen Kluska with Cantor Fitzgerald.

Clearly, not the results you wanted, but importantly, it did have a good mechanistic rationale here for depleting the intraepithelial mast cells. So curious, as you think about future innovation and indications for Celldex, how do these data help kind of fine-tune where you may consider looking next and what that rationale may be?

So, do you want to take it from a biologic standpoint and can always answer anything else?

Kristen, well, I think what we learned about here was mostly related to EoE with regards to the potential lack of a driving role for mast cells. I don't think there's a lot of read-through to many other indications. This is a really unique and difficult-to-treat disease. So clearly, we have to do our homework. What I do think is that we appreciate that mast cells have a real important role, but may not always be drivers in a number of indications, and that's really what led us to develop our bispecific antibody approach. We're targeting mast cells along with other pathways may really be what's needed in certain indications. And so our future is really working through also understanding what other pathways work in conjunction with mast cells, and you'll see that as we roll out some of our bispecific programs.

Our next question comes from Judah Frommer with Morgan Stanley.

Just maybe sticking with EoE and I guess, potential additional analyses. I think it's become better understood in the last few years that there are varying potential endotypes for EoE. Just curious how you're thinking about maybe further investigating the data you have? Is there an opportunity to do sort of subcohort analyses based on endotypes or any other defining factors between groups or if that's just not worth your while?

We certainly have a lot of data to go through, and we're anxious to get as much out of this study as possible based on all the biopsy and opportunities. The challenge with a lot of subgroup analysis is the size of this study will be difficult to give really significant evaluation with regards to the numbers that fall into a particular endotype or have specific disease characteristics. But we do plan to do the work and certainly we'll be presenting on that.

Yes. Judah, we want to be helpful here. Even though it didn't work out for us in EoE, we think there's enough data that we could be helpful in giving out some information based on any kind of analysis we'll do. So we'll definitely do that.

Our next question comes from Sam Slutsky with LifeSci Capital.

I guess since you won't be progressing in EoE anymore, is there room to add an additional indication to the pipeline over the next year? And then can you just discuss how you're thinking of new indication selection between barzolvolimab versus 622?

Yes. So we intend on adding additional indications going forward, Sam. But as we always said, too, we'd like to get data from our studies to give us additional insights. We know what we want to go after, but we want to see if some of the studies that we have correspond that we can get some cohorts or patients with comorbidities that would fit what we want to go after. As far as looking at 622 versus barzol, we're going through that process now. Obviously, there are different types of diseases we can go after with 622 that we wouldn't necessarily be top of mind with barzol, but we'll get more clarity around that as the year ends, and we'll be happy to discuss that with you.

Okay. And then I guess just real quick on that potential indication expansion. Is that something we might get insights on next year? Or is that kind of '27? How are you thinking on that?

It's probably next year. I mean we'll -- as these data sets come out, we'll get more information. I think we have our list. We're just looking for more clinical data to have a check a box for. So it will be sometime in '26.

Our next question comes from Yatin Suneja with Guggenheim.

This is Iris on for Yatin. Thanks for the update. It's a really important piece of the scientific puzzle. So my question is about the safety. Would you be able to provide a little bit more color on how soon do you see the hair color change based on discontinuation and also the blinded data? And would you expect to disclose the full safety data at some point?

Dan?

So the pattern of hair color changes is similar to what we've seen so far. We haven't done a complete analysis of that yet. We're still looking at top line data, as Anthony indicated. And we will plan to publish these results at some point, reasonable time.

If I may have a follow-up question. Are there any other GI indications you think this MOA would be applicable?

Barzol?

Yes.

So we do think that there are certainly other GI indications that have a different biology than what we see in EoE, where we do know that mast cells play a role, and we will investigate them. Again, it may be something that's better tackled with our bispecific approach than barzol specifically, but we are looking into additional GI indications.

Our next question comes from Richard Law with Goldman Sachs.

This is [ Paxon ] on for Richard. Maybe just a quick question on the DSQ scores. I mean, do you think that there's any possibility that it could have just taken more time for symptomatic changes to play out if you were to extend this study? And then maybe is there anything specifically about your patient baseline characteristics that you think could have contributed to the negative result. Some of the things we noted just looking at this study versus [ Dupi ] was patients had higher eosinophils and I think greater history of esophageal dilation. So things like that.

So we are definitely going to do more analysis to try to understand that. We see the same things that you're describing in the demographics. And I think that is something we should look at. The data that we have looked at in the study really does not suggest that longer treatment is going to have an improvement in symptoms. There really is not an improvement in symptoms, although the mast cells have a deepening of response. So we don't believe that longer treatment that we would get a greater.

And remember, we were very clear. We wanted to see the impact on the mast cells, which we did see, but we also wanted to see the stage scores similar to what's currently standard of care. And once we didn't meet those, it was -- we put it...

Our next question comes from Alex Thompson with Stifel.

I guess shifting gears to your ongoing Phase III CSU study. I wonder if you could comment on the progress there, expectations around time lines and what portion of patients have been dosed with multiple doses at this point? And if you're seeing any blinded signals around anaphylaxis, hypersensitivity or other severe adverse events? And then maybe as a follow-up, too, can you talk about your confidence in the underlying mechanism here in prurigo nodularis and atopic derm just given the results today?

As far as the Phase III goes, Alex, we said that we guided to 2 years [indiscernible] and that we're happy where we are. As far as talking about efficacy or safety of an ongoing study, we won't do that. We'll wait for the study to be completed. And as far as the read-through of this to atopic dermatitis, there's absolutely no read-through. We think that the better read-through is PN and PN, we saw some good data in our Phase Ib and some other evidence from other studies. So we absolutely see no correlation between this and atopic dermatitis. PN is the indication you'd want to look at.

I guess as a quick follow-up, would you say no news is good news on the Phase III as it relates to severe safety signals?

No news is good news. Right.

That concludes today's question-and-answer session. I'd like to turn the call back to Anthony Marucci for closing remarks.

Thank you, operator. As I said earlier, there is a significant body of data associated with the study, and our team is currently working through the analysis. We will use what we learned to continue to drive innovation in mast cell science and deliver life-changing therapies for patients. Thank you all for joining us this evening, and have a good night.

This concludes today's conference call. Thank you for participating. You may now disconnect.