Dianthus Therapeutics, Inc. (DNTH) Earnings Call Transcript & Summary

Good afternoon, everyone. I hope you're enjoying the first day of the conference and all the festivities. My name is Alex Buckley. I'm with the Healthcare Investment Banking Group, and it's my pleasure to introduce Dianthus Therapeutics, and Marino Garcia, CEO. We'll have some time at the end for Q&A. If you could just raise your hand, and there will be a mic that goes around. With that, Marino.

Thank you, Alex, and thank you to JPMorgan for the opportunity to present today an update on behalf of all the employees at Dianthus Therapeutics. Just a reminder, I will be making forward-looking statements, so I refer you please to our website and our SEC filings for all the appropriate investment risks. At Dianthus, we are developing two clinical-stage autoimmune therapeutics with best-in-class pipeline and product potential, both of which are targeting patient-friendly infrequent subcutaneous self-administration. The first of these programs is claseprubart. It's a highly potent long half-life, 8-week half-life classical pathway inhibitor that targets activated C1s. It is a validated pipeline and a product potential with positive Phase II in MG that we disclosed back in September and clinical proof of concept for classical pathway inhibition in CIDP and MMN. We have clinical and in vitro head-to-head data that support the potential for a more effective and convenient biologic with no box warning or REMS program. And again, here, we are targeting the convenience of a single, self-administered subcutaneous 300-milligram 2-milliliter auto-injector dosed every two or four weeks. Our second program, DNTH212, which has now started its Phase I clinical trial is a bifunctional BDCA2 and BAFF/APRIL inhibitor targeting two validated pathways, the innate and adaptive immune system. The BDCA2, we have in vitro data that very clearly shows superior pDC depletion versus litifilimab. And the BAFF/APRIL side, we have NHP data that shows deeper, longer IgG, IgA and IgM reductions versus povetacicept. And the idea here is to take these two best-in-class parts of this molecule, combine them into one to go after diseases where we know that type 1 interferon reduction as well as B-cell depletion could lead to superior efficacy over any one monotherapy approach. And again, here, we're targeting the convenience of a subcu self-administered dose every four weeks or less frequently. So just focusing first on claseprubart. We're very excited about how claseprubart is pursuing the -- what we call the power of consistent control with one click and the unique efficacy and safety benefits that come by being a potent upstream inhibitor, a classical pathway inhibitor that leaves a lectin and alternative pathways intact. That could provide not just the efficacy of being able to prevent the membrane attack complex, but also the formation of C3a and C3b. Two very toxic pro-inflammatory split products that are created between the classical pathway and where C5 intervene in the complement cascade, while leaving the lectin alternative pathways intact to be able to fight against the risk of encapsulated bacteria. And of course, the convenience with having a long half-life and being a potent antibody of being able to dose low volume, 300 milligram, 2 milliliters every two to four weeks. And the application that this has to a very large market in the neuromuscular space. In the United States alone, we're talking about 100,000 patients in the MG space that are AChR positive, north of 40,000 that are CIDP and north of 10,000 MMN. Together in the U.S. alone, we're talking about accessing over 150,000 patients with claseprubart. So just focusing first for a moment on the opportunity to be a best-in-class first-line biologic in myasthenia gravis. In September, we disclosed very impressive efficacy data with 300 milligram, 2 milliliters of claseprubart in MG. Across the 5 different efficacy measures, we saw very robust, very rapid, clinically meaningful and statistically significant efficacy with 300 milligrams every two weeks. And we also said that if we did not see a dose difference between 300 milligram, 2 milliliters, and 600 milligram in this trial, that very likely we would take 300 milligrams, 2 milliliters every two weeks forward into Phase III, but also test a once-a-month dose. Interestingly, to support this decision, at AANEM in October, subsequent to the release of the data, we presented this open-label extension data, where essentially we took patients who were on placebo for the first 13 weeks, where we saw robust response on placebo on the MG-ADL and QMG. And then we put patients into the open label on claseprubart. And we saw that without a loading dose after just two subcu shots at PK levels somewhere between 50 and 65 micrograms per ml, which essentially replicates the steady state of claseprubart if we were to dose it every four weeks. We saw that patients on top of the already robust response they had in the randomized placebo-controlled first 13 weeks, they had another significant drop of 2.5 points on the MG-ADL and 3.2 after just two doses on the QMG after just two doses. And again, at PK levels that are half of what we see when we dose at every two weeks. In other words, the exact same PK levels we would get if we dosed every 4 weeks. So this gives us even more confidence that we should see in our Phase III efficacy at four weeks that would be equivalent to every two weeks. I mentioned we had a very robust response on placebo in our randomized controlled portion of that trial. And as you can see on the left of this slide, the placebo responders were about 2.8 on the MG-ADL. That's closer to 3. And traditionally, we've seen with C5, as you can see on the right with zilucoplan that the placebo response was closer to a 2-point improvement on the MG-ADL. So we asked ourselves what could that be? And what we noticed is in the zilucoplan Phase III, they did have a QMG screening criteria, not just an MG-ADL screening criteria like we had in our Phase II. So we asked ourselves, what if we had a QMG screening criteria in our Phase II. And you can see in the middle there that with minimal loss of number of patients, our -- the placebo response would have been closer to a 2 just like with zilucoplan. And the difference for claseprubart, 300-milligram 2 milliliters every two weeks versus placebo would approach a 3.0. point difference versus placebo on the MG-ADL. That is a number not seen before with a complement inhibitor. So this gives us the confidence that if we just screen out for high placebo responders with a QMG screening criteria on top of MG-ADL, we could really see this antibody shine and show what it can do. And the reason we believe we could see better efficacy with claseprubart over C5s or terminal inhibitors is, as I mentioned earlier, it's very simple. An upstream inhibitor prevent C3a and C3b deposition, C5s act too late to prevent this. These are pro-inflammatory toxins that are being created as part of the complement cascade and deposited at the neuromuscular junction. So if you can imagine a patient who's on C5, they're preventing the formation of MAC, which is the primary driver of disease or dysfunction in MG. But they still have C3a and C3b causing inflammation at the neuromuscular junction. With an upstream inhibitor like claseprubart, we would be able to also prevent this on top of preventing the MAC. And for that reason, we believe we could potentially see superior efficacy or enhanced efficacy over C5s in MG. So, our Phase III trial, we're now in dialogue with the FDA, and soon, we will provide an update as soon as we have confirmation and in writing that we agree on what the Phase III will look like. We're looking at doing placebo versus claseprubart once every two weeks and claseprubart every four weeks. And as soon as we have that in writing, we'll announce the start of the trial and provide further guidance on it. But one point I'd like to finish on with MG is we have a new enhanced target product profile. In the past, we said we're looking for similar efficacy to C5s. We are now saying similar or better for superior efficacy. On safety, consistent with what we said before, no safety signals that would justify box warning or REMS program of any kind, again, creating that very strong differentiation versus other complement inhibitors. And finally, because of what we've seen in our Phase II and the open-label extension, we're looking at potentially not just having every two-week dosing, but possibly taking every four-week dosing to market with this product, which would really make it the most -- absolutely by far the most convenient and patient-friendly biologic in MG. Now moving on to the opportunity we have here to completely change the treatment paradigm in CIDP with claseprubart. CIDP is a market that offers substantial growth opportunity for claseprubart given the very high unmet need and the drawbacks or limitations of the current standard of care. IVIg works for quite a few patients, but it is very poorly tolerated and is very difficult and a big burden on dosing administration on patients. FcRns are now available, and that's great. It's a more patient-friendly version of IVIg, but it doesn't work as well as IVIg. It's less effective than IVIg. What this market needs is something that's equal or better on efficacy than IVIg, safer, better tolerated and certainly a lot easier to dose and administer for patients. What's exciting here is there's very strong proof of concept with riliprubart with their Phase II data, which they published a couple of years ago. And this was a bit of a game changer for Dianthus. What we saw is in their open-label Phase II data, they took all comers, patients who were refractory to IVIg. These are patients that FcRns will never study. They don't allow refractory patients into their trials, again, because FcRns are less effective than IVIg. But riliprubart allowed patients who are refractory to IVIg, stable on IVIg and treatment naive. And they switched them immediately to riliprubart, the active C1s inhibitor. And they saw really impressive efficacy signals. If you look at the first group, the standard of care treated patients, these are patients who are stable and doing fine in IVIg, switched and 52% did even better than how they were doing on IVIg. Again, this is switched within seven days. Patients who were refractory to IVIg. IVIg did not work for those patients, 50% when switched to active C1s inhibition got better. Again, somehow active C1 inhibition, classical pathway inhibition extracting better efficacy than what IVIg could deliver for a large number of patients with CIDP. I would remind you that the dose for riliprubart in this trial is 600 milligrams, 4 milliliters every week. That's also the dose we're taking into Phase III. So in other words, 4x more of a dose than we are. We're 300 milligrams, 2 milliliters every two weeks. So if there were an autoinjector, they would be two shots every week, we're one shot every two weeks. What gives us the confidence that, that lower dose can deliver at least similar efficacy to what riliprubart saw, if not better. And what we did is we conducted six head-to-head in vitro experiments versus riliprubart. And I let you choose which one you want to focus on. But across the board, it's clear we are orders of magnitude more potent than riliprubart. And that's what gives us the confidence that we should be at least equal efficacy, if not superior to riliprubart in CIDP. So we have our Phase III trial ongoing. And in the fall, we saw that riliprubart or Sanofi were delaying the top line results for their Phase III programs in the CIDP. But frankly, for us, it was the opposite. We actually accelerated. We had planned for our interim responder for our first 40 patients from Part A to read out in the second half of this year. But this fall, we saw that recruitment really accelerated, especially after we presented our MG, our MG Phase II results to our CIDP investigators. Anecdotally, they told us that the results were really impressive. The safety really reassured them. And we saw basically recruitment like a hockey stick, just really accelerate this fall. So we've now moved up our interim responder analysis from second half of this year to the second quarter this year, and I can confirm today that we are well on track to deliver our interim responder analysis early in the second quarter of this year. And one thing I would just make clear about what this trial -- how different it is from ADHERE because you'll notice for those of you who follow the space, it looks very similar. We have a Part A open label and then the randomized blinded portion Part B and only patients who respond in Part A are randomized into Part B. And that looks very much like ADHERE, but there's some very important differences that make any cross-trial comparisons challenging. The first one, in terms of patient group, we allow patients who are refractory to IVIg or standard of care into our trial. Again, no FcRns allow that. Why? Because FcRns don't work as well as IVIg. If IVIg did not work for CIDP patient, very unlikely an FcRn will work. We allow them into the trial because we saw really impressive data with riliprubart. Secondly, ADHERE took patients who are in IVIg, took -- remove the IVIg and then waited to see if they relapsed. And only those that relapsed were then allowed to go into Part A. We don't do that. We switch patients within 7 days. The next dose of IVIg is replaced with an active C1S inhibitor. It's replaced with claseprubart. So there's no making patients relapse. And I can tell you right now, moving forward, there are no CIDP trials are going to be doing that again. That's a relic of the past. Investigators hate it, and they will not recruit patients into trials if you are going to force them to have to relapse, make the patients relapse before they can go into a trial. And third, related to that second point, we are looking for somewhere around 40% to 50% response rates in Part A to tell us that we have the right dose with 300 milligrams, 2 milliliters in the open-label Part A. But that is not a number you can compare to the 67% response rates that efgartigimod saw in their Part A. Why? Because again, they took patients who were on standard of care stable, no refractory, took the IVIg off, made them relapse and only those that relapsed then were allowed to go into Part A. So that 67% is essentially saying that only 2/3 of patients that relapsed were able to get back to baseline. That means 1/3 of patients were not able to get back to how they were doing on IVIg before the IVIg was removed. In our trial, we take patients who are in IVIg standard -- doing well, stable or refractory. We switch them within seven days. So when we're talking about seeing 40% to 50% responder rates before we allow them to go into Part B, that's above and beyond what IVIg was delivering for those patients. So very different, a 67% from patients who had relapsed, only 2/3, meaning they got back to baseline versus us, we're looking for 40% to 50% responder rates above and beyond how IVIg was doing for those patients. So that's just on CIDP. We're very excited about getting to that announcement in the second quarter. And then the third indication, the opportunity for a best-in-class biologic in multifocal motor neuropathy. This in absolute numbers is the smallest of the three indications this indications, but I can tell you, it is a blockbuster opportunity because there's no competition. The FcRns don't work here. IVIg is used, but it's very ineffective. It doesn't work very well here. It certainly doesn't work as well as it does in CIDP. There's essentially only one other biologic being studied in MMN, and that's empasiprubart. So it's essentially us and the C2 inhibitor from Argenx. That's it. And what this market is looking for is an effective treatment that is considered safe and well tolerated and easy to use, preferably a self-administered auto-injector. And that's what we offer with claseprubart. With empasiprubart, they had really impressive Phase II data they published a few years ago, and they very clearly state the efficacy that they saw and they see is purely from the inhibition of the classical pathway that the fact that they block the lectin pathway provides no additional benefit for these patients. So they finally published potency data for empasiprubart. And what we saw is they used the Quidel MicroVue CH50. And they clearly show the CH50 numbers there for classical pathway inhibition as well as for lectin pathway inhibition. So, we said, fine, now let's use that exact same assay, replicate empasiprubart and do a head-to-head in vitro experiment and see how do we behave compared to empasiprubart. And we saw that at the CH50, we were able to get very similar numbers than they did in their experiment. Actually, it looks a little better in our hands. So we did them a bit of a favor there. But -- we are 6x more potent at the CH50. If you look at the IC90, we didn't publish this because they never published their IC90. But there, the difference becomes even more dramatic. It's more like 30x more potent than they are. So this should provide comfort that whatever efficacy empasiprubart has seen in MMN, we should see at least similar, if not better efficacy because we're a much more potent classical pathway inhibitor than empasiprubart. So, in summary, with MMN, we know it's an IgM-driven disease and it's classical pathway driven. We now have data that shows we are a much more potent classical pathway inhibitor. We know they block the lectin pathway. We don't touch the lectin pathway and the lectin pathway is important in order to fight against the risks of encapsulated bacteria, things like meningitis. So it's very likely they would get a box warning. We will not have a box warning, that precedent is already set with sutimlimab approved on the market today. And finally, it is an IV given every four weeks. We're aiming for a subcu auto-injector self-administered every two weeks. So that's it. That's the market competition. It doesn't take many patients if we're priced somewhere north of $400,000, $500,000 a year in MMN to have a blockbuster in our hands in this market because there's just no other competition except us and the C2 inhibitor from Argenx. And so we have our Phase II ongoing, testing our target dose of 300 milligrams every two weeks plus our high dose 600 milligrams, and we should have the top line results for this Phase II in the second half of this year. And now moving to our very exciting second clinical stage program, and this is DNTH212. Very excited about this one. It's a bispecific fusion protein that, on the one hand, inhibits BDCA2, so reduces type 1 interferon by depleting pDCs. And as I mentioned earlier, we have in vitro data in our presentation that shows very clearly that we have superior pDC depletion versus litifilimab, which is being studied right now with Biogen in SLE. And on the other hand, we have the BAFF/APRIL piece. And there, again, we've shown in nonhuman primates that we have a deeper, longer reduction on IgG, IgA and IgM levels compared to povetacicept. And the idea here is to take these two best-in-class. That's not me. So it's to take these two best-in-class pieces, put them into one antibody and go after diseases where we know the innate and adaptive immune system are driving the dysfunction. So, to be clear, despite the fact that we have a superior BAFF/APRIL potentially, we're not going after IgAN because there's no benefit to reducing type 1 interferon in IgAN. We're going to look at going after diseases, maybe SLE, maybe dermatomyositis, maybe Sjögren's. We have a list of indications on our presentation, and we'll provide an update on which ones we're prioritizing in the first half of this year. And what is our target product profile? What are we trying to do here? We are trying to bring about enhanced or superior efficacy in diseases where we know the innate and adaptive immune systems are at play than any one monoclonal monotherapy approach with no new safety signals from what we already know about litifilimab, for example, in the behavioral class. And finally, with the convenience of a subcu self-administered shot every four weeks or less frequently, potentially every eight weeks. So right now, as I mentioned, we're in Phase I. And in the near future, we'll announce our prioritized indications. And in the second half of this year, we should have results from our Phase I healthy volunteer data. And sometime next year, in Part B of our Phase I, we'll be having data in SLE patients. So with claseprubart, for 2026, we're looking to start the Phase III as soon as possible with three arms: placebo, one shot every two weeks, one shot every four weeks. CIDP, our interim responder analysis announcement coming in the second quarter of this year. and MMN, our top line results for our Phase II before the end of this year. And our latest update this morning, we have about $514 million of cash, which is -- takes us well into 2028 in terms of our runway. And with that, I think we can open up to questions now.

Super. Yes. Thank you, Marino. Obviously, a lot of progress this year and a very exciting set for 2026. So I'll open to questions from the room. Otherwise, there are some I have here.

Is this working? Yes. So Argenx is running a combo with efgartigimod and their anti-C2 antibody. Obviously, it's early with 212, but is that at least a thought about down the road combining the two mechanisms? Or is it still too early to think that far down the line?

Yes. I think it's too early. Sorry, can you hear me? I think it's too early to say. I mean that's an interesting experiment to run, but I'm not sure what the practical use of that is going to be. If you have an FcRn at about $400,000 a year, C2 that is targeting CIDP and MMN, which would probably take -- probably can probably charge higher than what you can in MG. I mean we could be looking at over $1 million of annual cost for two therapies in those patients. So interesting experiment, not sure you can do with that. A bispecific will be really interesting in the MG space for sure.

What are your plans in terms of moving manufacturing of claseprubart outside of China?

We have -- WuXi is our partner right now, and they're just fantastic. They're just really, really great partner. And I know many companies use them and would say the same. We are obviously looking that by the time we get to commercial that we should have a backup secondary supplier, one preferably based out of the United States, for example. So that's something we're very actively working on right now.

And is there anything that you find that investors miss about the story? Is there anything that -- or maybe don't fully appreciate?

One I would say is that this is a very different trial to ADHERE. They look the same. But as I mentioned, we are not making patients relapse. So when we say we're looking for 40%, 50% responder rates to replicate what riliprubart saw in their Phase II, that's when you switch patients immediately from IVIg or standard of care. So that 40% to 50% is above and beyond the responder rates IVIg was able to extract in CIDP versus the 67% that efgartigimod saw, that meant only 2/3 of patients that were forced to relapse were able to get back to where they were before when they were on IVIg, meaning 1/3 were never even able to get back to baseline. I mean, again, that's very different numbers. This is why I think there are two companies right now, Sanofi and Argenx, who believe complement inhibition could be superior to IVIg. They're doing head-to-head trials. You do not do a head-to-head trial versus a standard of care in any disease unless you think you're going to win. And what I would say, and I say this to investors often, don't listen to me, don't listen to what any other CEO tells you. Look at behavior, not words, look at actions. Argenx has two therapies in CIDP. One is on the market today and would love to be able to say it's equal or better than IVIg in order to really accelerate adoption and get those revenues really, really going. And the other one is a complement inhibitor in development. Only one of those two therapies is being taken forward into a head-to-head trial versus IVIg. And it's not the FcRn. No FcRn is going to study refractory patients. No FcRn is going to do a head-to-head versus IVIg because they won't win. Argenx and Sanofi are taking a very courageous move and doing a head-to-head trial versus IVIg. They're looking for non-inferiority at a minimum, which would be a win, but I think they're also expecting superiority. And if they show noninferiority, fantastic. You're as good as IVIg, but better tolerated and much easier to administer. But if you show superiority, it's game over for IVIg. And so I think that speaks volumes. And that is all based on the very impressive data riliprubart presented from their Phase II. So I think that's one thing. The other thing is MMN sometimes gets overshadowed by the larger MG and CIDP market opportunities. But let's look at that for just a very quick back of the envelope. If it's 10,000 to 15,000 patients in the U.S., let's say, half of those would be eligible for biologics. So 5,000 to 7,500. It's only us and empasiprubart. What share would you give us of that 5,000 to 7,000 patients, let's say, 20% 30%, give the rest to Argenx, that's fine. If you just get 20% to 30% of those patients, you're talking about easily at $500,000 a year, you're easily a $1 billion blockbuster in MMN alone. That's it. And it's purely driven from the fact that, yes, it's a smaller market, but it's one where you just get a much higher share. And really, the competition is us and a complement inhibitor that blocks lectin likely has a box warning and is an IV. And we're 6x more potent classical pathway inhibitor. So there's a potential we might have better efficacy in MMN. I don't know that. Until we do the experiment, we're not sure for equal or better efficacy. So MMN is one where I think once we get past the interim responder analysis in the second quarter, there are going to be two companies talking about MMN alone, us, but more importantly, Argenx. And I hope that together, we'll be able to really raise the profile for MMN and what a great opportunity that is for complement inhibition.

If there's nothing else from the room, then I'll Marino go. And thank you very much for attending.

Thank you.