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

Thank you for standing by. Welcome, and thank you for joining us this morning for Equillium's announcement regarding top line data from the Phase III EQUATOR Study in patients with acute graft-versus-host disease in the first-line setting. Presenting on behalf of the company this morning is Mr. Bruce Steel, Chief Executive Officer; Dr. Stephen Connelly, Chief Scientific Officer; and Dr. Lisette Acevedo, Vice President of Clinical Development, will also be available during the Q&A portion of the call. Before we begin, I would like to remind you that any statements made during this call are not historical and may be considered to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these statements as a result of various factors. This includes those discussed in the Risk Factors section in the company's most recent Form 10-K filed this morning as well as other reports filed with the SEC. I'll remind you that this call is being recorded, and a replay of the webcast will be available on the company's website following the conclusion of the call. And with that, I'm pleased to turn the call over to Mr. Bruce Steel, Chief Executive Officer for Equillium. Go ahead, Mr. Steel.

Thank you very much. We appreciate everybody joining the call today for our update on our Phase III EQUATOR Study, evaluating itolizumab in patients with acute graft-versus-host disease. I'd like to, before launching into this, thank our team, who has worked tirelessly over the years and certainly very recently as we have been getting into this data from this study. I'd also like to thank our extended team, including many advisers, who have worked very hard on this program, as well as our consultants and our contractors, including Medpace. And then I'd say, last but certainly very importantly, the clinical sites and patients, who have participated in the study and for whom we've been doing this work. This is very much, I'd say, the most important set of data that we have and study that we've conducted. This was our foundational program. When we launched the company, taking itolizumab into acute GVHD, and we're pleased to present this data today. I would say that maybe perhaps quoting one of our KOLs on the data, we have some very compelling results, but not necessarily the ones that we thought we were going to be seeing upfront when we started the study. And I'd say that was informed by our EQUATE study, which was shorter in duration as well as some other precedent studies. But we did miss our primary kind of Day 29 outcomes, but have seen some very compelling and what we believe to be a very meaningful benefit for patients clinically in longer-term outcomes, and we'll take you through that data. We have also submitted a breakthrough therapy designation application, and we have a meeting confirmed with the FDA to review this data under the context of support for an accelerated approval pathway based on this data. We will be making forward-looking statements, so I refer you to our disclosures here. As a reminder, itolizumab is a very differentiated approach to treating immuno-inflammatory diseases that selectively targets effector T cells, spares regulatory T cells and is highly involved in the differentiation, proliferation and trafficking of T effector cells into key organs. I'd say this pathway is highly active in the GVHD setting as the new immune system that patients have been getting takes hold and starts to attack the patient's body, the host body. And really, from the beginning, we felt that this drug had a very favorable safety and tolerability profile, which was an important factor going into this patient population where these patients are severely ill with very high mortality rates and felt that this drug had the ability to attenuate the immune response. And as we go through this, I think that's what we're observing in the study. In terms of the commercial landscape and market opportunity, this is an area of very high unmet need. There are no drugs approved for the first-line treatment of acute GVHD. Ruxolitinib is a first drug that patients will encounter on their journey here. We now have some other approvals in the second-line steroid refractory setting with RYONCIL recently approved for pediatric use. In the chronic setting a number of drugs are approved. But overall, this is now approaching a $1 billion therapeutic area in terms of GVHD broadly. And we think the first-line treatment setting is an area of very, very high unmet medical need and an opportunity to get in front of the other therapies if we're successful with this program. Let me take you through the data. We'll start with an overview of the study design. So we recruited patients who are enriched for severe disease. So patients entering the study had to have either Grade III or IV acute GVHD or Grade II GVHD with the caveat that they had to have lower GI involvement. And it's -- the GI involvement drives a significant amount of the morbidity and mortality in this patient setting. Patients had to receive standard of care, which today remains high-dose corticosteroids within 3 days of that initial steroid administration, patients had to get dosed with itolizumab. We treated patients every other week for a period of roughly 3 months. Last dose was on day 85. We did have predefined primary and key secondary outcomes of CR at day 29. So that's complete response at day 29, which means effectively full disease resolution at that -- to achieve a complete response. We also are evaluating as key secondaries, overall response at day 29. So that includes very good partial responses and partial responses to get to the ORR criteria. And then the definition of durable CR from day 29 through day 99, to achieve that outcome, patients had to have a complete response at day 29, maintain and hold that complete response at every visit between day 29 through day 99 to achieve that outcome. And then very importantly, we tracked a number of additional longer-term outcomes, including complete response at day 99 duration of complete response, failure-free survival and overall survival among other additional outcomes. And we do believe that these additional outcomes are very important for patient welfare and survival, and we'll take you through the totality of the top line data following. In terms of baseline demographics, I'd say very much in line with our expectations based on the criteria for enrollment. We had -- 73% of our patients were either Grade III or IV, the remainder Grade II with lower GI involvement. And so you can see overall, roughly 92% of the patients recruited to the study had lower GI disease. Important to note, we had a significant percentage of our patients from North America, basically in the United States with just under 40% of our patients coming from U.S. clinical sites, which include 9 of the 10 top transplant centers. And between the EQUATE and the EQUATOR program, I think we had exposure to close to 40 of the clinical sites involved in these transplant procedures. In terms of summarizing the safety results, I'd say we are very pleased with the safety profile observed in the study. Itolizumab did not appear to increase the risk of clinical sequelae. Importantly, rates of infection and rates of sepsis, which are key drivers of mortality, were not increased. And in fact, as you look at the sepsis number, we were quite a bit lower in terms of sepsis events in the study. So overall, extremely, I'd say, pleased with the safety profile. And again, very important, we believe, if you're seeking to treat patients in the first-line setting, not to introduce an agent that compounds risk for these patients. So overall, we were effectively, I'd say, as good or better than placebo as it relates to the safety on almost all measures. In terms of steroid tapering, effectively no difference observed in steroid tapering across the study between the treatment arms, placebo and itolizumab arms. Both had, I'd say, steroid tapering in line with guidelines, and you can see here from this chart, about 50% reduction in steroid utilization by day 29 and about a 75% reduction at day 99, and then tapering further from there. So we would suggest the results we're going to take you through are not attributable to any imbalances in steroid utilization. Okay. In terms of day 29 outcomes, as shown on the left here are the CR rates and overall response rate, ORR, at day 29 between the 2 arms. You can see that numerically, CR rates were slightly lower for itolizumab at day 29. However, when you add back very good partial response, where we had 8 patients versus 1, we're slightly above. And then further above when we add in partial responses. So between the 2 arms, we had a 43% versus 48% CR rate. And then ORR, 62% versus 54% rate for itolizumab compared to placebo, respectively. What becomes, I'd say, quite interesting is as we start to look at the longer-term results. So the durable CR and, I should say, the day 29 outcomes were not statistically significant. So again, we would say no discernible difference really for day 29 outcomes in the study. The day 29 through day 99 results from a durable CR definition, we narrowly missed statistical significance on this outcome with 23 of the 34 patients that had a CR day 29, maintaining that at every visit through day 99, on itolizumab in 13 of the 38 patients maintaining that response on placebo. So you can see 29% versus 16% based on the overall study population. As a percentage, however, we were roughly 100% better percentage-wise of patients that met that definition that did achieve statistical significance. And I should add, we're going to show a mix of intent to treat versus modified intent to treat data. We recruited a total of 150 patients into the study, 3 patients did not receive any study treatment, so they were removed for the mITT analysis. So the data shown here is ITT. As we start to look at these longer-term responses, CR at day 99 as a stand-alone value, this achieved statistical significance favoring itolizumab with roughly 45% of our patients having a CR at day 99 versus placebo at 28%. What's very interesting is the biweekly visit data shown in the chart. You can start to see very nice separation taking hold in that sort of 1 month out to day 43 range. And then separation occurring as patients remain on drug, again, last dose was day 85. And we would suggest that the -- based on the half-life of the drug on the order of 20 to 22 days and the PD effect of the drug that is likely between 1 to 2 months, you start to see that gap close out to day 180 where patients have been effectively off drug for at least we would suggest a month or so with that last dose occurring on day 85. So we would -- we think this chart does a nice job of showing what we see as drug effect with a material difference in maintenance of CR and durability of CR during the dosing window. And again, this had a p-value 0.03. So achieved statistical significance on that measure. As we look at overall duration of complete response defined as from day 29 CR to death, administration of new therapy, increase of steroids back to baseline or increase of disease staging, we had a median duration of complete response of 336 days versus 72, a statistically significant outcome on that measure. Failure-free survival. Similarly, we had failure-free survival of 154 days versus 70 on the median. And again, p-value of 0.04, so achieved statistical significance on this outcome as well. And then last but not least is overall survival. While this was not -- study was not nearly powered for an OS outcome, we are seeing a favorable trend towards itolizumab in terms of OS. We've observed at this point in the study based on this data cut, 19 deaths, or 24% of patients have died versus 25 patients, 32% on placebo. So certainly, a trend looking like it's favoring the itolizumab arm. So we're quite pleased to have seen that. We provided a table summarizing all of the data. This was in our press release for those of you who might have seen the press release go out earlier this morning. So table format providing the data that we've just summarized. So where are we? As mentioned upfront, we have submitted breakthrough therapy designation as well as we have been granted now a meeting to review this data set under the context of an accelerated approval pathway. We would expect the results of these submissions and discussions with the FDA in the early May time frame. We do believe in our advisers' support, I think that this is a clinical benefit in these longer-term outcomes that has not been observed with other therapies, very meaningful for patients. I think one could argue that it's longer term outcomes that perhaps matter more than the very acute stage of the disease. But we recognize that we've got some work to do here, but we're looking forward to a very productive conversation with the FDA based on the data. As a reminder, again, no drugs are approved for first-line acute GVHD, an area we believe of high unmet medical need as a rare orphan disease where we do have orphan drug and fast track designations already previously granted. And with mortality rates very high, with overall survival as low as 40%, depending on patient severity, we do believe this is the type of indication and unmet medical need and type of data that we have observed in the study that could support this pathway. And then last, I'll finish. This is an indication that we believe we could launch on our own with very modest incremental investment. In part, we have a very tight relationship with our strategic partner, Biocon, who is our drug manufacturer. And based on the high concentration of clinical sites where these patients are being treated, many of the sites obviously have been exposed to our program already. We think this is a drug that we can launch on our own and get to a very meaningful commercial sort of revenue line and sustainability based on this indication alone. again, I'd like to thank everybody for joining the call, and we'd be happy to open this up for any questions you may have.

And we'll -- I think Tom Smith is in the queue. Tom, would you like to go ahead?

Mr. Smith, your line is open.

Great. First on the primary and the key secondary endpoints. It looks like the placebo arm outperformed what we would have expected from some of the other contemporary acute GVHD studies, particularly on complete response. Can you give a sense of what drove the higher-than-expected CR rates in the placebo arm? I guess were there any subpopulations that stood out from some of your early analysis on the data?

Yes, Tom, great question. So we've obviously been doing some additional analysis on the data, looking at subgroups. I'd say the primary thing that's standing out is differences in the U.S. population versus the ex U.S. population, and we will likely be presenting this data at a future conference. The U.S. population in terms of CR rates were almost identical between the arms, and I'd say quite a bit above historical CR rates that have been published. The ex U.S. rates, I'd say, were more in line, and that's where we saw a greater discrepancy between the [ EDO ] versus placebo arms on CR rates. But again, I'd say all within the general margin of error. And certainly, statistically did not show any significance in terms of either CR or ORR rates. But we did see, overall, I'd say, high CR rates in the U.S. population. And we don't really have a great explanation for that. I think part of it is there are very few studies that have been conducted in this indication, if you look historically, and the EQUATOR study, this is the second largest study ever conducted in acute GVHD. So I think as more data comes out, the overall assessment of CR rates will shift probably a bit, but it may have to do with evolving standard of care prophylaxis regimes and so forth. But yes, not totally sure. But I think as we think about that, to the extent that CR rates are improving potentially, what's going to then be a focus is, can you maintain that CR? Can you keep patients out of the hospital and prevent them from having recurrence and perhaps preventing chronic GVHD and obviously, ultimately, you want patients to survive. I think that will be the ultimate measure is how patients are feeling and if they're surviving. And I think we've observed that in the study, where we, for the first time, treated patients over an extended period of time in 3 months.

Got it. That makes sense. Okay. And then with respect to safety, top line data look good, particularly on infection risk. So wondering if you could comment on the AE related discontinuations and the treatment-related SAEs. Like what were the events you were observing here? And what drove the treatment discontinuation?

Yes. I'll be happy to let Lisette respond to that. But generally, no real fact pattern there. Lisette?

Yes. Thank you. So as you mentioned, there was no real pattern to the AEs leading to study drug discontinuation. I would say there were 2 subjects that had infusion-related reactions. So not surprised that they unfortunately did discontinue study drug. And everything else is very consistent in one-offs with the -- from the patient population itself and the AE profile for GVHD patients, in general.

Got it. That makes sense. And just one last question on -- just wondering if you could elaborate on where you are with the regulatory interactions. Maybe just comment on the data sets you submitted to FDA for this breakthrough therapy designation requests and how you think FDA might interpret some of the signals here based on the decision to stop the enrollment early. And just how you -- I guess, walk us through sort of like your scenarios going into this meeting with FDA and your likelihood that they're going to be receptive to an accelerated approval pathway?

Great questions, Tom. So they have -- we submitted a pretty comprehensive briefing package, which includes all of the data we presented here. The table summarizing the data, I'd say, is sort of our primary data summary along with all of the safety tables. The accelerated approval pathway, I think, is in place for these types of circumstances, right, where you've got diseases of high unmet need, high mortality rates. In our case, this is a rare orphan indication with no drugs approved and 1-year mortality on the order of 50%, give or take. So we think the longer-term data is very important, very compelling clinically. And from a patient standpoint, and if I were a GVHD patient or if my friends or family were, I would certainly -- if I can choose between having a day 29 CR versus a day 99 CR or longer or improved survival, I would certainly take it. So we think this drug has a real benefit for patients. There's nothing to prove in this first-line treatment setting. And also, we're taking a look at even the nonresponder analysis, patients on ruxolitinib and how they fared and there could be, I think, some very interesting data there. So we're going to have, hopefully, a productive discussion. Hopefully, they'll be open-minded. But I think that's what this pathway is for. And the FDA has a very good team in this division. And I think we'll see. We expect to have both of our key investigators from the Dana-Farber, which is, as you know, one of the world's premier institutions for treating patients in this setting. We're expecting to have them join us at the meeting and provide their input. So we'll see. But yes, we're optimistic about the potential opportunity here. And obviously, we'll have to hear what the FDA has to say.

Your next question comes from the line of Roger Song with Jefferies.

A couple of questions from us. The first one is regarding this day in 29 versus 99, as you said, Bruce, patients definitely looking for long-term benefit here. So how did you decide to use 99 -- 29 days as a primary endpoint and 99 as a secondary endpoint? And then what is the regulator thinking about those endpoints when you design the study?

Thanks, Roger. Great question. So a few things. The day 29 outcomes, there's precedent for that first and foremost. We modeled the EQUATOR study off of the GRAVITAS-301 study, which is the largest study ever conducted in acute GVHD first-line treatment followed by the EQUATOR study that we've just completed, and we very much looked at that as sort of a precedent study design. Also, clinically, day 29 outcomes are very important as these patients are presenting acutely ill, physicians are looking for rapid responses to get them out of the hospital setting. With that said, the day 99 outcome also correlates roughly to when patients are viewed as transitioning from acute GVHD through the chronic stage of disease, chronic GVHD. And we wanted to observe a longer-term dosing window on drug to try to better understand the range of our therapeutic -- potential therapeutic benefit. So we designed the study for a 3-month dosing window. I certainly think going forward, we would look to dose significantly beyond that window based on the data we've seen in totality. But for various reasons, that day 99 evaluation period coincided with sort of the general window within patients who are viewed to have acute GVHD versus chronic GVHD, coincided with our dosing window where we know we have full drug coverage out to that day 99 end point. And then the next evaluation period was 3 months later. So I hope that answers the question.

Yes, it does. And then given your -- FDA granted the meeting for the accelerated approval potential, let's assume if the drug is approved, how itolizumab will be used in the real-world setting, given maybe people are looking at the 29-day CR seems not different from the placebo, but a 99-day will be highly meaningful. Will you be able to keep the patient on treatment through a little bit longer term, say, that we will see the long-term benefit? How are you going to convince the investigator? Maybe any feedback from your investigator and then KOL will be helpful.

Thanks, Roger. Yes. So we're still working through that as we're going into this FDA meeting. I'd say a baseline case, I think we would be dosing the drug as we did in the study, perhaps extend beyond that. Under an accelerated approval pathway, the sponsor would generally be committing to some follow-on evaluations. We would certainly be interested in evaluating longer-term dosing of the drug for patients who are maintaining response as an example. But I'd say we have more internal work to do as we're going into this interaction with the agency. But I'd say initially upfront, we would expect to have basically the same dosing regime and treatment regime at a minimum and then kind of expand from there. Steve, you may want to add something? Go ahead, Steve.

Yes. Sure, Roger. One of the challenges clinicians face when giving you the steroids or then second-line therapy is the durability of those responses, the relapse rates, the flares of GVHD. So one could see this drug with a safety profile that it's exhibiting as a sort of adjunctive therapy, where you'd start with steroids and itolizumab. And then if you needed second-line therapy, you could stay on itolizumab, you could add Jakafi to this, and you can sort of help bolster the durability of both steroid responders and Jakafi responders, prevent flares that's demonstrated in the data that we've seen is that those patients on itolizumab that are holding durable responses have less flares in the disease. And then, of course, that trend to improved overall survival and certainly GVHD-free survival, which was statistically significant, really highlights the benefit that this drug could add on top of all of these other agents that are currently used in the GVHD armamentarium. But really, that safety profile enables its use because if this was a drug that you pay the penalty for with adverse events or more toxicities, then I think there's a greater barrier or inertia for clinicians to reach for this. But if you ask a clinician who their high risk or who their sort of more severe patients are, all of the GVHD patients essentially fall into that bucket, which you really just don't know how they're going to respond to steroids early, medium and late term in terms of their course of therapy across the year. So the goal here is to put therapy on patients that pays no more penalty from a toxicities or adverse event, but does improve long-term survival, does improve durability of those complete responses and essentially leads to better long-term outcomes overall.

Your next question comes from the line of from Ram Selvaraju with H.C. Wainwright.

Congratulations on this exciting data. Firstly, I was wondering if you could comment on the paradigm of prevention of chronic GVHD. And what specifically you expect might be required in order to make such a claim for a drug like this, given the evidence that you already have?

Thanks, Ram. Appreciate you joining the call. Steve, do you want to...

Yes. Sure, Ram. So acute and chronic GVHD are essentially 2 different diseases, but there is an area of overlap, what we call sort of late acute GVHD or early chronic new onset chronic, where there is some mechanistic overlap in terms of high levels of pathogenic Th17 cells moving into tissues. And so I think that's the really interesting element that nobody is really tackling in the chronic GVHD sphere. Most people have gone for sort of refractory second, third-line chronic. Those patients tend to be more fibrotic. They have a different sort of milieu of immune cells that are playing a role. And so there's a strong case to think about those patients who have acute GVHD, 50% of those go on. It's the largest portion of patients who go on to make up that chronic GVHD population. So if you have a therapy that's safe, well tolerated, can lower the rates of relapses of acute GVHD, then it's plausible to believe that, that could impact rates of chronic GVHD. Now the EQUATOR study was never really powered to look at the rates of chronic GVHD. And as we only dosed through that sort of first 100 days, and that's really the start of the transition to chronic GVHD, there's a strong argument here in sort of our ability to low the relapse rate, improve the durability of complete responses and that GVHD, that really important GVHD-free survival rate is that if you dosed longer and monitored that, there's an argument to be made that you could plausibly prevent chronic GVHD. So that's something we'd have to take a look at. And I think that's something that the clinicians have voiced strong sort of desires to see from a therapy is that you turn this into more of a kidney transplant or solid organ transplant paradigm where patients are on a sort of long-term immunosuppressant sparing regimen, right, avoid steroids or really harsh immunosuppressants here and sort of preserve organ/tissue immunology so that you can reduce the rates of follow-on inflammatory episodes, which in this context would be chronic GVHD. So I don't think we can make any claims from this study. There was no statistical significance in terms of the differences. I think that, at least, we didn't make it worse because there's certainly been drugs in the past that have been tested that may improve acute GVHD, but essentially raise the rates of chronic GVHD. So I think the first hurdle passed in that. The second part would be dosing patients longer and then monitoring chronic GVHD rates. And I think if one could show a reduction in chronic GVHD, that would be absolutely massive for this field.

It seems Mr. Selvaraju has dropped. Your next question comes from the line of Catherine Novack with JonesTrading.

Just wanted to ask a little bit about the rationale for filing for breakthrough therapy designation at this point versus an earlier time. What substantial improvement do you think you've demonstrated with these data that you didn't have before?

Catherine, thank you. Yes, I'd say we did explore BTD designation at the time we had the EQUATE data coming in. As you'll recall, that was an open-label study. So the guidance and direct feedback we got from the agency was come back when you have controlled data that shows a clinical benefit. So I'd say we have extensive control data showing what we believe is a clear clinical benefit and addressing unmet need in this patient population. So that was sort of the, I'd say, criteria we were lacking previously when we had this dialogue with the FDA. And so we do believe that this data should support or could support a BTD designation. And obviously, that would be a great outcome in terms of the commitment and resources the agency would apply following the BTD designation.

Got it. And I don't know if you've done this analysis, but do you see any trend in response based on the grade of GVHD at baseline?

So what I will say is we have looked at subgroup analysis based on grade of GVHD at baseline and from Grade II, Grade III and Grade IV, of course, not surprisingly, Grade II patients respond more, but the percentages between itolizumab and placebo were somewhat similar between Grade II, Grade III and Grade IV. That delta stayed relatively consistent regardless of subgroup analysis.

Yes. So no real difference in terms of the improvement between the arms across those grades. But yes, you'll see more responders from the lower-grade GVHD.

And that concludes the Q&A session. And since there are no further questions, I will now turn the call back over to Mr. Bruce Steel.

Thank you, operator. Again, thanks, everybody, for joining the call. If anybody would like any follow-up dialogue, feel free to reach out to us. We're happy to dig into more details. But again, thanks, everybody, and we appreciate your attention.