Equillium, Inc. (EQ) Earnings Call Transcript & Summary

All right. Good morning, everyone, and thanks for joining us here at the SVB Leerink Global Healthcare Conference. My name is Tom Smith. I'm the senior biotech analyst here at SVB Leerink. And really happy to welcome our next company here to the virtual stage, if you will, Equillium. And representing Equillium today, we have Bruce Steel, the CEO; and Chief Medical Officer, Dolca Thomas. Thank you both for joining us. Really looking forward to the discussion. And maybe just before I pass it over to Bruce, just a quick kind of housekeeping note here. If you have any questions for Equillium, please feel free to put them in the webcast portal or you can e-mail questions over to me directly. And with the housekeeping out of the way, Bruce, I'll pass it over to you. I think you have a couple of slides that you'd like to walk through. Maybe just a quick overview for those who may be less familiar with the company, and then we'll jump right into Q&A.

Great. Thanks, Tom. It's a pleasure to be here. Dolca and I both appreciate the opportunity to give you the update on Equillium today. We'll go through these slides pretty quickly just to sort of center everybody on the Equillium story. We are developing programs to treat severe immuno-inflammatory disorders really with the goal of treating patients who today remain severely ill and largely not well treated by existing therapies. We are leaders in CD6 biology. We're developing itolizumab, which is a first-in-class antibody therapeutic targeting CD6 in the CD6-ALCAM pathway. We believe this is a highly differentiated mechanism of action with the ability in a single drug to inhibit both the activity as well as the trafficking of T effector cells. And itolizumab is a well-validated therapeutic having been developed by our partner, Biocon, in India for the treatment of psoriasis. The drug is approved there for the treatment of psoriasis. It also has emergency use authorization to treat COVID-19 patients with ARDS in the hospitalized setting. We're developing the program in 3 distinct indications currently. We have ongoing programs in the first-line treatment of acute GVHD. We have a program in lupus and lupus nephritis, and we're studying itolizumab as well in uncontrolled asthma. This is an overview of our pipeline. It's worth noting that we have the ability to deliver itolizumab both intravenously as well as subcutaneously, and we're using both of those delivery approaches across our studies in the acute indication for the first-line treatment of acute GVHD, we are using itolizumab IV. This is a program where we are currently in the later stages of our Phase Ib open-label study. We do expect to have a regulatory interaction sometime around the middle of the year to get concurrence on our path forward. We do have fast track and orphan drug designations for this program, and we do expect to have some additional data from this program later this half of the year. In our lupus and LN program as well as in our uncontrolled asthma study, we're using our subcutaneous delivery. We do have Fast Track Designation in the LN program. We've already provided some interim data on the lupus portion of this study. We do expect additional data later this quarter. And we are now launching our lupus nephritis portion of the study with data expected during the second half of the year. In uncontrolled asthma, we also expect data in the second half of the year. Very quick snapshot on the mechanism. So we have drugs in the field of autoimmunity and inflammation that inhibit trafficking. We have drugs that inhibit activity of specifically downstream cytokines. But in itolizumab, we have 1 drug that does both really with a focus on effector T cells lineages, Th1, Th2 and Th17. So this is really what drives our indication strategy focusing on diseases where T cells are heavily implicated in disease pathogenesis. And ultimately, we believe this drug may be disease-modifying in the ability to sort of restore that imbalance between regulatory T cells and effector T cells and hopefully have a longer-term durability and outcomes for patients through our therapeutic approach. Quick overview of the data we've released so far in our acute GVHD study. This is looking at the first 3 dose cohorts. This is a 3x3 dose escalation study design started out at 0.4 mgs per kg escalated to 0.8 and 1.6 mgs per kg. And these are in very ill, high-risk patients grades 3 and 4 acute GVHD patients upon first presentation dosed on top of steroids. So first-line treatment setting. And what we've seen is some very we believe encouraging results, not only in terms of overall response rate, but really complete response rates. And as you look through our dose escalation, we saw 50% CR rate in the lower dose cohort and a 100% CR or VGPR as we dose escalated to the 0.8 and 1.6 mg per kg dose levels, we did have 1 very good partial response in that last cohort. So we're very, I'd say, encouraged by the depth of these responses. They've been pretty rapid responses. And so far, we've seen very good durability as well with patients maintain those responses out past day 57. The adverse event profile for the drug in this patient setting so far, we would characterize as being consistent with our understanding of itolizumab from prior data sets as well as consistent with what these patients who are severely ill commonly experienced as they're presenting with acute GVHD. As we think about how we evaluate the data that we're generating versus prior data sets there are 2 very relevant data sets that help us sort of view and assess our program. One is data that was published back in 2015 by Margaret McMillan at ALL, looking at a very large data set of acute GVHD patients in their response rates to steroids, which today remains standard of care. There are no drugs currently approved for the first-line treatment setting. And then more recently, Incyte second-generation JAK inhibitor, itacitinib, which missed primary endpoints in a Phase III study the GRAVITAS-301 study, but Incyte did provide some breakout in terms of their high-risk patient population. And what you see here is quite striking, which is overall response rates are modest, complete response rates are even harder to achieve. And we do know that the complete response rates are very important for longer-term patient outcomes. And so you see complete response rates from the McMillan paper of just under 30%. On the GRAVITAS-301 steroids alone was a little bit better than the prior experience in the McMillan paper of around 35%. And you see with the addition of itacitinib, they bumped that up to 42%. So over 60% -- around 60% of these patients are not achieving a complete response under these 2 publications. In our study, we're seeing about 80% ORR and almost all of these have been CRs or VGPRs so far. So this is really what's, I think, giving us conviction in this program going forward as well as sort of momentum in the study with investigators. A quick summary on a few financial metrics. We reported $90 million of cash at the end of Q3. Very important to note that we did complete a $30 million financing a few weeks ago. That was a single investment by Decheng Capital. We're very pleased to have them as a new investor supporting the company going forward. Katherine Xu has also joined the Board, who is with the Decheng team. Our cash burn has been relatively modest. We obviously are scaling up the company as we advance the program very modest debt outstanding. So that's a quick snapshot of our financials. At this point, we feel very well capitalized to achieve these key milestones with cash into the 2023-time frame. So that's a summary on Equillium, and I would be pleased to answer any questions and take it away, Tom.

Thanks, Bruce. Really nice overview of the asset, the mechanism and the acute GVHD data. I appreciate those comments. Maybe if you could help frame up for folks. I mean a question I get a lot related to itolizumab. I mean it is potentially first-in-class anti-CD6. Why do you think -- I guess, others haven't pursued this pathway more aggressively?

Yes. Well, without going into the long history, obviously, this is a receptor that was identified quite some time ago as you can tell by the CD number. There was some very early interest in this program a couple of decades ago. As it turns out, we believe this is a target that previously has been pretty difficult to drug. The program was developed really off the radar by our partner Biocon in India. And it wasn't really until they published their psoriasis pivotal study. That was a 225-patient study with really good outcomes that showed that the drug was highly active as an immune modulating agents, also demonstrated a good safety and tolerability profile. That paper sparked a significant sort of resurgence in interest in the CD6 and the CD6-ALCAM pathway at the academic level. And so if you look at the literature on CD6 and the CD6-ALCAM pathway, you'll find that there's actually been quite a bit of publications almost all of which have been quite recent in the last 2 to 3 years. So I think there is a strong sort of resurgence of interest now in this target. Clearly, as we're generating data, this is starting to get much more attention. And our belief is that intervening at the CD6-ALCAM pathway is sort of a central node in the overall autoimmune inflammatory cascade and mechanistically is highly differentiated from other drugs that are either approved or in development. And as we continue to sort of prove out our thesis in individual indications, I think that will allow us and others to gain more conviction that this pathway is highly relevant and very important from a therapeutic standpoint.

Right, right. Okay. I appreciate that. And you mentioned the -- obviously, the partnership with Biocon. Before we dive into kind of the data and GVHD, maybe you could just give us a little bit of background on that relationship and who's handling manufacturing, how the economics are structured?

Sure. So we're very pleased to have this strategic partnership with Biocon. For those of you who aren't familiar with Biocon. It's really, I think, one of India's largest if not the largest fully integrated biopharma company with the core business in biologics and biosimilars and manufacturing protein therapeutics. So in addition to the clinical derisking the Biocon completed around itolizumab. They've also derisked the program significantly from a CMC and manufacturing standpoint. So Biocon manufacturers, itolizumab, at commercial scale in their FDA-regulated core biologics manufacturing facility. And we have a very unique drug sourcing relationship. They're our exclusive drug supplier. We have a favorable sort of arrangement with them. That's, I'd say, mutually favorable in terms of how we source the product, we get drug at their cost of goods for clinical development. And in addition to that, we get free drug supply for up to 3 orphan indications during clinical development until first U.S. approval. Biocon is a significant stakeholder in Equillium. We also owe the milestones and royalties downstream, none of which began until our first U.S. approval. So the whole partnership with Biocon was really designed to support Equillium and itolizumab and generate value in the program in bringing this drug to patients.

Okay. Yes, that's helpful background. Then I guess maybe the other thing, when you think about anti-CD6 you think about pipeline or products type potential, like what drives your indication selection decision making? And I guess, specific to the GVHD, what was the kind of the jumping off point there? What drove this as the lead indication?

Sure. So I'll start the answer to that question, I'll hand it off to Dolca who has tremendous experience in co-stimulatory pathways to her prior experience and maybe Dolca can even highlight a little bit of that. But in short summary, as we think about how itolizumab works mechanistically, it's really the ability to modulate the activity and trafficking of effector T cells with a heavy emphasis on Th17 and diseases where Th17 is a key driver in addition to Th1 and Th2 that we also know we have significant inhibitory effects on. And if you look at acute GVHD, it's known that -- at first presentation as that new transplanted immune system is taking hold and patients present with GVHD where that new immune system is attacking the body that is a heavily Th17-driven process. As patients become sort of more refractory and develop chronic GVHD. It's a little bit more heterogenous. But on initial onset, this is a heavily Th17-driven process. In addition, our colleagues at Dana-Farber, which is our lead investigational site, had done prior work looking at targeting CD6 T cells ex vivo back in the '90s with very, very good results in terms of addressing GVHD. They didn't really have a scalable process or therapeutic at the time, but that was sort of an early proof of concept, if you will, around the pathway. So that's kind of the answer there. But maybe Dolca can jump in, provide a little bit of her background in this area and thoughts on the indications we're currently studying, but also where we can take the drug as we continue to build the company.

Yes. So just to add on what Bruce said, part of it is really also the infiltration of these T effector cells into the tissue itself as well that contributes to the pathophysiology and the damage that occurs at the localized level. And Bruce gave a really nice outline as it relates to graft versus host disease, but it's also quite relevant for asthma as well as lupus and lupus nephritis in particular, where there's preclinical as well as clinical data showing the -- that there are T effectors, CD6 positive cells infiltrating. There's biomarkers that show a relationship between urinary expression of ALCAM and its role potentially in active lupus nephritis and similar data as well in asthma. So the evidence as it relates to preclinical and clinical strongly suggests that T cells are very important in the localized pathophysiology of the disease as well.

Got it. Okay. Yes, that's helpful color. Maybe just diving into the clinical data a little bit within GVHD. We did strong initial results from the early cohorts here. How do you guys think about dosing going forward? I know you talked about expanding the 1.6 mg per kg dose cohort. Do you think -- and I think you're also going to look at higher dose -- dosing levels as well. How do you think about what the right dose could be for itolizumab in GVHD?

Yes. So the data so far clinically does suggest that the 0.4 is a subtherapeutic dose. And so when we're talking about dosing now, we have the 0.8 in the 1.6 data, which shows very high efficacy as it relates to the CR rates. And so when we determine the final dose, it will be probably multifactorial in terms of how we maximize the efficacy bar with the current dosing regimen. The second thing is looking at the PK and the PD data where we have the ability actually to measure the amount of CD6 present of the surface of the cells. And that really will also help drive and inform in terms of how we sufficiently induced CD6 shedding which would be correlated with our ability and what we would translate to be the hypothesis as, hey, we're having an impact and an effect on these T effector cells. So the combination of that data in addition to safety will really allow us to determine what the final dosing regimen. Right now, both the 0.8 and the 1.6 when we look at the efficacy threshold, they seem to be very similar. And so depending on what we see from the other components that I mentioned, we will determine whether there's a need to even further dose escalate because we do have a cohort that we should dose escalate. But the totality of the data will inform whether that's even necessary.

Okay. Yes, that's really helpful. How many patients are you targeting into the dose expansion cohorts?

So our current goal is to really have 3 additional patients in each cohort to further inform this decision, as I mentioned in terms of defining -- is it -- are we optimally targeted already? Or do we need to dose escalate? And then, if we don't dose escalate, which 1 of these 2 doses and of course, the safety is also going to be a critical driver in terms of the dose selection as well.

Right, right. No, that all makes sense. Okay. And then you've guided to engaging in some FDA dialogue later this year, kind of mid part of 2021. Can you talk about, I guess, what your expectations are going into this dialogue? And what you think a potential accelerated path could look like for itolizumab in GVHD?

Yes. So I think the fact that we have fast track and orphan drug designation is fantastic in terms of opening the dialogue. And it just highlights and acknowledges that the FDA understands that this is a high unmet medical need where there are no approved therapies and not having good outcomes here is associated with high morbidity and mortality for this patient population. In addition to what we've observed as it relates to the complete response rate, the other significant thing that we've observed is also the ability to taper steroids concomitant with this high efficacy bar. And because of these 2 components and the safety that we've observed to date, which is quite tolerable and consistent with graft-versus-host disease, we believe that we have a good opportunity to propose a single pivotal trial, and that will evaluate really the response rates as well as durability, the ability to reduce and taper steroids and morbidity and mortality. And so because of all of these things, we believe that there's a very good possibility that a single pivotal study would be allowable for this type of indication. But of course, it's a matter of discussion with the health authorities at the end of the day.

Right. Great. That makes sense. Okay. And then in terms of -- I think this is actually a great slide to have up here because I do remember the GRAVITAS-301 study results, and I think that certainly took some folks off guard the response rate in the control arm here. I guess I'm curious kind of what lessons you've learned from some of the recent data sets in acute GVHD, how you've incorporated that into the program here and how you would intend to incorporate it into the Phase III trial design? How do you ensure that you're getting and you're targeting, I guess, the right patient population?

Yes. So I mean I think part of our strategy and focus has been to really target initially these very severe patients, the grade 3s and 4s where high doses of corticosteroids do not have as much as an impact. In the itacitinib trial, they did include lower risk patients, the standard risk versus the high-risk patients and they -- that may have impacted what they observed. But one of the things that we are feeling very good about as we look even at the itacitinib trial is independent of what the placebo arm was, right? The ORR may have been higher than the historical controls. But the CR rates didn't really budge, right? And that threshold of CR remains at less than 40%, whereas our data, we're seeing CR rates in the 70% threshold. And so one of the areas that we -- in particular, one of focus is really using CR as a threshold of success which is the gold standard for patient care anyway, right? So a CR is a better than a partial response and outcomes for patients that achieved complete responses are better than patients that reachieve partial responses. And so part of where we want to focus our clinical trial outcomes is really on the CR. We will look at overall response rate, but CR is really the bar that needs to be met.

Tom, it's worth noting, if you look at the inside information that they put out on GRAVITAS-301, they did hit statistical significance on the CR measurement. So they showed about a 12% improvement on CR basis versus placebo, statistically significant across all the patients that we studied. So while they missed on the overall, they I think they'd see a potential signal there. And again, we feel pretty good about the sort of magnitude of response that we're seeing on the CR basis.

Right, right. And do you feel like there is potential to have CR as your primary endpoint? Obviously, this is all subject to conversations with FDA, I'm sure, but what's the likelihood or the possibility of that?

Yes. I mean I can't say what the [Technical Difficulty] percentage possibility is, but if you think about what the objective and the goal of the FDA is really to ensure that new therapeutic advances that are relevant and significant for the patient population and protecting the safety. And so the CR is the bar. That's the highest efficacy that could be achieved. That means complete resolution of all symptoms. And so that, I think it is a matter of negotiation with the FDA, but it is a much higher bar than ORR when you think about efficacy threshold.

Right, right. Okay. Staying in line with GVHD but switching gears a little bit to the chronic setting. We did recently see data from a 4-patient cohort out of India that was presented at TCT. I think some pretty intriguing data. I know you guys have talked historically about potentially pursuing the chronic opportunity. Just curious on your latest thinking for chronic GVHD and I guess, how you think about the potential to develop itolizumab in this patient population?

Yes. I mean I think the data, as you mentioned in that poster does suggest that there is a potential value and already clinically as it's being observed in that 4-patient study. Mechanistically, it makes a lot of sense also to evaluate the chronic graft-versus-host disease. And right now, while our focus is on the acute GVHD, this is something that we're really thinking about carefully in terms of how do we further maximize the ability of itolizumab to be beneficial in acute graft-versus-host and chronic graft-versus-host disease as well is quite relevant.

Right. Right. Okay. I know we only have 5 minutes left. So I want to make sure that we hit on some of the other programs. You do have the EQUALISE trial that's currently ongoing in lupus, and you've guided to some data from Cohort A in that study in Q1 in 2021. Can you just talk about the patient population that you're evaluating here? And then, I guess, your expectations into that Cohort A data?

Yes. So this is primarily a safety study, and we initiated this study on overall lupus patients, not focused primarily on lupus nephritis, and we dose them with 2 doses of itolizumab. So really, it will not provide insight as it relates to efficacy because we would expect longer-term duration of treatment to be able to evaluate that. But the thing that we will learn from this study are the following: One, it's a study where we're using the subcu administration, and it will provide confidence as it relates to the type of exposure and the ability to deliver subcu dosing. We will get PD data markers as it relates to the ability to remove CD6 expression on the surface in this patient population. And again, the third would be really the safety piece, which is also very important to understand in this patient population.

Right, right. And then you're expecting a readout in the lupus nephritis population later this year, measuring some clinical endpoints there. I guess, what's your sense for expectations into that data set?

Yes. So in the lupus nephritis, which is an open-label study cohort, we will be looking at not only safety, but again, here, we'll be dosing longer term. So it will be dosed every 2 weeks for a total of 12 doses, so 6 months delivery of the drug, and we will be looking at proteinuria, which is one of the markers that now has been validated by the regulatory agencies at a surrogate in terms of prevention of long-term morbidity and mortality as it relates to lupus nephritis. And so we will be looking at that in addition to other SLE biomarkers such as complement levels and other things that will really help inform the ability for itolizumab to provide a benefit in lupus nephritis. And again, the bar there is very low, as it relates to what has been achieved thus far, even with new therapies in terms of the complete response rate or complete remission in the patient population. Right now, we're looking at 40% complete response at 1-year. So there's a lots of work that still needs to be done here for these patients.

Right, right. Okay. Yes, that substantial unmet medical need and certainly a need for new therapies. Just quickly on the asthma program, the Phase Ib EQUIP study. You're actively enrolling this year. You've guided to potential data, I think, by year-end 2021. Can you just talk a little bit about the trial design and the patient population and what you're hoping to learn from this initial data cohort?

Yes. So this is a study where we're giving 5 doses of itolizumab every 2 weeks, and it has been quite challenging as a result of the pandemic to recruit patients. Because, of course, a lot of the centers and sites have been closed, and this is a population that is high risk in terms of COVID as well. And so we have been motivating and trying to really accelerate the recruitment efforts. The other component here, as it relates to asthma is that the disease manifestation and exacerbations are not occurring as much as they used to pre-COVID. And so that's also going to be impacting the ability to evaluate efficacy endpoints moving forward in asthma. The patients are not having asthma exacerbations. So our goal is really to complete enrollment of the study, get the safety information data that we have and start planning for the next pivotal trial in terms of how do we best evaluate asthma efficacy moving forward in this post-COVID world.

Right, right. Okay. That's great. And maybe in the 30 seconds that we have remaining, Bruce, you did mention the closing of the $30 million private placement. If you could just talk a little bit about prioritizing corporate strategy, also how far the cash runway gets you into funding operations here.

Yes. So we've obviously got a significant amount of effort and focus on advancing itolizumab in the acute GVHD program into later-stage development as Dolca elaborated on earlier, getting through the existing studies we have underway. We do believe that therapeutically, itolizumab has a lot of breadth in terms of potential and other disease areas that we would like to try and evaluate. We continue to have an ongoing business development effort around looking at programs that could complement itolizumab in the pipeline. So quite a bit going on, on the corporate development front. Currently, we feel like with our cash as reported and the funding recently completed that were funded well into the 2023-time frame. I'd say as our general kind of guidance post this financing. Obviously, that will really depend upon a lot of potential future events, including the ultimate size and cost of the next phase of development for acute GVHD and other initiatives we may undertake. So obviously, that's subject to change but based on kind of our current runway and an overall budget, that's sort of our best thinking today.

Right, right. Okay. All right, guys. Well, unfortunately, we've run up against time, but I really appreciate Bruce and Dolca, your time and your insights and very promising data set so far in the acute GVHD, a number of catalysts coming over the next -- really over the next 12 months, but specifically within the next kind of 3- to 9-month time frame. And we'll stay tuned. Really appreciate you guys joining us, and thanks to everyone on the webcast as well, and I hope everyone has a great day.

Thanks, Tom.