Everest Medicines Limited (6HN.F) Earnings Call Transcript & Summary

Good morning or good evening. Welcome to Everest Medicines Business Update Call on Interim data from EVER001 Phase Ib/IIa clinical study in Primary Membranous Nephropathy. Please be advised that today's conference is being recorded. [Operator Instructions] And finally, I would like to hand the conference over to your speaker today, Ms. Leah Liu, VP, Investor Relations for Everest Medicines. Please go ahead.

Thank you, operator. Good morning or good evening, everyone, and welcome to our call. Joining us today are Mr. Rogers Luo, Chief Executive Officer of Everest Medicine. Mr. Ian Woo, President and Chief Financial Officer; Dr. Jason Brown, Chief Business Officer; Dr. Jennifer Yang, Chief Scientific Officer; Sandra Zeng, Chief Medical Officer. Before we get started, I'd like to remind you that the speakers on this conference call today may make statements that constitute forward-looking statements, including descriptions regarding the intent, belief or current expectations of the company or its officers with respect to the business operations, financial conditions of the company, which can be identified by terminologies such as will, expect, anticipate, future, intends, plans, believes, estimates, confident and such similar statements. Such forward-looking statements are not guarantees of performance and involve risks and uncertainties, and actual results may differ from those in the forward-looking statements as a result of various factors and assumptions. The company or any of its affiliates, directors, officers, advisers or representatives have no obligation and does not undertake to revise forward-looking statements to reflect new information, future events or circumstances after the date of this conference call, except as required by law. And now I will turn over the call to Roger to provide you with more details on our EVER001 Phase Ib/IIa clinical results.

Thanks, Leah, and hello to everyone. Thank you all for joining us on this call. Today, we are very excited to announce [indiscernible] results in the interim analysis of Phase Ib/IIa clinical trial of EVER001, a novel BTK inhibitor for the treatment of Primary Membrane Nephropathy. Expanding our leadership position in renal disease is a core strategic focus at Everest Medicine, and we are committed to build a pipeline of innovative therapeutics against the most common glomerular disease. Our lead product in this therapeutic area is Nefecon, the first innovative medicine approved for the treatment of IgA nephropathy globally and the only one approved in Greater China, South Korea and Singapore. Nefecon has been launched in China and Singapore this year and will be launched in South Korea and Taiwan next year. Just last week, we announced that Nefecon has been successfully included in the National Reimbursement Drug List in China for 2025, which will make the medicine accessible to more patients and significantly expand our investment in the renal disease ecosystem in China. EVER001 is the next clinical asset in our renal pipeline, and we believe that it has broad potential across a range of autoimmune-driven glomerular diseases. The first indication we are exploring is primary membranous nephropathy or PMN. PMN is one of the larger orphan disease in the U.S. with about 80,000 to 100,000 patients, and there are also total about 120,000 patients in Europe and Japan. However, PMN is not rare in China. Where there are about 2 million patients beyond PMN. We believe EVER001 has potential in other autoimmune renal diseases, including IgAN, Lupus Nephritis, Minimal Change Disease and Focal Segmental Glomerulosclerosis. These are diseases with critical unmet needs and with a total addressable patient population of over 10 million in China and over 300,000 in the U.S. We own the global rights for the renal disease. Membranous nephropathy is one of the most common causes of nephrotic syndrome in adults without diabetes. PMN is an idiopathic disease and represents about 80% of the membranous nephropathy cases and the remaining 20% of patients have a secondary form that is associated with an underlying disorder such as autoimmune disorders like lupus, infections, drugs or cancers. PMN patients have building up of immune deposits on the glomerular basement membrane in the kidneys, leading to high proteinuria and low serum albumin. 80% of patients with PMN progress to nephrotic syndrome, which is a set of syndromes including swelling, high cholesterol and low blood protein levels. Thus, the onset of disease is very evident and heavily failed by patients. Half of patients using current treatment options continue to have nephrotic syndrome, while over 1/3 of patients will progress to end-stage renal disease. The mean age of diagnosis is between 40 and 60. Next slide. In addition to the severity of the disease discussed on the previous slide, there is also a significant number of PMN patients. Similar to IgAN, the disease prevalence is higher in each patient population. In China, we believe there are over 2 million patients. In the U.S., it is a rare condition, still prevalent in about 80,000 to 100,000 patients. In Europe, there is also a prevalence of around 80,000 patients and in Japan, about 40,000. We are also -- we have also observed a clearly rising trend of [indiscernible] in recent years. There is currently no approved treatment for PMN. Current treatments like cyclophosphamide, calcineurin inhibitors and rituximab are used off-label and are associated with substantial side effects. Still, more than 30% of patients do not respond to the current standard of care. And even though even among those who achieved remission, approximately 30% will relapse. So there is an urgent need for more potent and safer treatment. Next, I will now -- I will hand over to Jennifer to talk to you about EVER001, our unique BTK inhibitor.

Thank you, Roger. So EVER001 is a reversible covalent BTK inhibitor that we are developing for autoimmune renal indications. The first being Primary Membranous Nephropathy. EVER001 can selectively form a reversible covalent bound with cysteine 481 in the BTK kinase domain. It differentiates from other BTK inhibitors currently marketed for other indications. Those BTK inhibitors are either covalent irreversible inhibitors or non-covalent reversible inhibitors. The covalent binding mechanism of EVER001 ensures a strong BTK inhibition, while its reversibility presumably will lead to less off-target toxicity, thus reducing the risk of idiosyncratic toxicity caused by the permanent modification of those off-target proteins. We also believe that the relatively fast [indiscernible] and its high selectivity may further benefit the safety profile. If you look at the left table, you can see that compared to ibrutinib, EVER001 has similar potency against the BTK, but it has much better selectivity over those off-target kinases such as LTK, [indiscernible] and et cetera. For EGFR ITK and TEC family kinases that are thought to be associated with undesirable safety profile, EVER001 demonstrated a superior selectivity profile even compared to the more selective BTK inhibitors like zanubrutinib and acalabrutinib. We believe this excellent selectivity profile combined with its reversible covalent mode of action make EVER001 extremely attractive as a treatment option for PMN patients who likely would need long-term treatment. For a disease like PMN, the disease occurs when B cells produce pathogenic autoantibodies such as Anti-PLA2R antibodies. Those antibodies can then bind to podocytes and in situ immune complex formation can further activate downstream complement pathway, leading to podocyte damage and proteinuria. As you can see in this disease pathogenesis, B-cell plays important role. And BTK, which can modulate the B-cell receptor signaling is an important component of the BCR signaling pathway. BTK inhibitors can prevent maturation, proliferation and differentiation of B cells, therefore, reducing the pathogenic autoantibodies produced by these B cells. Unlike B-cell targeted therapy, for example, rituximab CD20 antibody or anti-CD38 antibody or BAFF APRIL antibody, which can only affect a subset of B-cell population. BTK inhibitors can have a much broader effect. Beyond B-cell, it can also modulate other immune cells in the system, therefore, has an immunomodulatory effect on the chemokine cytokine network. Compared to B-cell depleting antibody like CD20 antibody, the oral formulation of BTK inhibitors can also allow for more rapid recovery of B-cell function upon treatment withdrawal when it's necessary, therefore, further reduce the risk of severe infection of patients. Of course, this will need to be further tested in the clinical study. With that, I will hand over to Sandra to talk about the ongoing Phase Ib/IIa clinical study.

Thanks, Jennifer. Today, I would like to share with you our preliminary results from our ongoing Phase Ib/Phase IIa clinical trial of EVER001 in PMN patients. We included -- we enrolled the patients with -- Chinese patients with biopsy proven PMN, positive anti-phospholipase A2 receptor auto-antibody and 24-hour proteinuria of greater than 3.5 grams. So the study was conducted in 2 dose levels, the low dose level cohort 1 starting with 100-milligram QD for 4 weeks, followed by 100 BID for 32 weeks. There is off treatment follow-up up to 2 years. Then the Cohort 2 is a higher dose with 200-milligram BID for 36 weeks treatment and then off-treatment follow-up until 2 years. The primary endpoint is safety and tolerability. The second endpoint is the efficacy endpoint, including percentage change from baseline of 24-hour proteinuria, anti-PLA2R auto-antibody level, UPCR and eGFR. Also, we measure complete and partial remission of 24-hour proteinuria rate and also remission of anti-PLA2R autoantibody level. And then by now, we already enrolled 31 -- total 31 patients, including newly diagnosed patients and also including the patients relapsed from or refractory to prior immunosuppressive treatment. By the date cutoff, September 13, 2024, we have 11 subjects in Cohort 1 have completed 36 weeks of treatment. 7 subjects in Cohort 2 have completed 24 weeks of treatment. So let's look at the immune response. As we know, clinically, anti-phospholipase A2 receptor antibody is a very specific PMN diagnostic biomarker and with about 70% to 80% of patients -- patients have exhibited high level of anti-PLA2R antibody level. It also is an important prognostic biomarker. So look at our data. So by the cutoff EVER001 induced close to 100% anti-PLA2R auto-antibody reduction in both treatment arms. The blue -- the blue line chart represents the lower dose at 100 milligram and the red line chart represent the high dose level 400 milligram. So for the cohort 1 and over 90% of reduction in anti-PLA2R occurred as early as week 24. And then this result, I just want to point out this result were maintained to up to 52 weeks, which including off-treatment follow-up period, like about 16 weeks. So reduction in the Cohort 2, which is the red line chart, reduction in the Cohort 2 -- reduction of anti-phospholipase A2R was more rapid in Cohort 2 and over 90% reduction was seen as early as week 12. And another thing I wanted to point out is the time course of PLA2R antibody under treatment is tightly correlated with clinical outcome. A decrease of PLA2R antibody predicting clinical remission, especially the immunological complete remission, ICR. I'm going to share with you next slide. As literature showing patients with achieved ICR have a dramatical low risk of progressing to the end-stage renal disease, those making immunological complete remission, a very key objective for treating PMN patients. So in our study, we did observe as early as week 4 to 8, the ICR was induced by EVER001. In the table, the blue bars represent the results from Cohort 1, the lower dose and the red bar represents the high dose cohort 2. In Cohort 1, by week 16, more than 50% of subjects already experienced ICR and by week 36, as high as 90% of patients achieved the immunological complete remission. 67% of subjects experienced ICR and by week 24 and all subjects, 7 subjects achieved immunological complete remission. So as we know, clinical response follows immunological response. We usually, we always observe immune response then we followed by the immuno clinical response. In our study, we did observe remarkable proteinuria reduction during the treatment period for both cohorts. In Cohort 1, reduction in proteinuria from baseline was 78% at week 36 and with continued benefit of up to 52 weeks, including the off-treatment period of 16 weeks. In the cohort 2, more than 50% proteinuria reduction was seen as early as week 16 and by week 24, reduction in proteinuria from baseline was 74%. If we further analyzing the clinical response and look at the proteinuria remission and we noted for Cohort 1, 8 out of 11 patients experienced proteinuria remission at week 28 and with 1 subject achieving complete remission. And by week 36, and we already see 9 out of 11 patients actually experienced proteinuria remission with 2 subjects achieved complete remission. So the median time to protein remission, proteinuria remission was about 20 weeks. For Cohort 2, 6 out of 7 patients already experienced partial proteinuria remission by week 20 and by week 28, all 4 subjects achieved a partial proteinuria remission. So median time to proteinuria remission was 16 weeks. And besides the 24-hour proteinuria, we know serum albumin increasing with associated [indiscernible] are important clinical symptoms and signs. So with the corresponding reduction of 24-hour proteinuria, serum albumin level gradually increased. Cohort 1 by week 36, serum albumin levels already returned to normal or near normal. And then in cohort 2, actually by week 24 and serum albumin levels already returned to the near normal range. And in addition, by the cut-off date, eGFR was stable with a small fluctuation in both cohorts. I just want to summarize what we have been observed in the clinical efficacy. In conclusion, EVER001 induced early onset and high risk of immunological and clinical response. Let's talk about the immunological response in Cohort 1, as high as 90% of subjects achieved ICR at week 36 in Cohort 2 and then all subjects reached ICR at week 24. And of course, if we look at the percentage change, close to 100% reduction in both cohorts by the date cut-off. And then if we look at the clinical response, in Cohort 1 at week 36, 82% of subjects already experienced proteinuria remission and then for Cohort 2 by week 24, 86% of subjects already experienced proteinuria remission. In addition, the serum albumin levels returned to normal or near normal range in Cohort 1 by week 36 in Cohort 2 by week 24. Besides efficacy, we also want to talk about safety, which is very important for a new mechanism of drug in autoimmune disease. And then in general, for both cohort EVER001 treatment were well tolerated and safe. We did observe 48% of subjects experienced treatment-related AE, but most AEs were just mild to moderate, let's say, grade 1 or grade 2 and also these AEs were transient. No clinical meaningful adverse events typically associated with BTK inhibitors, such as serious neutropenia, hemorrhage and cardiac arrhythmias have been observed. So with that, actually, I want to [indiscernible] observed from this analysis. And we definitely this data shows EVER001 as a covalent reversal BTK inhibitor has very strong target binding, high selectivity and potential low toxicity. So we are extremely happy with the results and look forward to completing the trial and collecting the long-term follow-up data. So we anticipate presenting the final analysis of the study in the future scientific conference. And then the last one I want to just do a little bit data -- our data comparison versus the historical data of current standard of care, including rituximab, cyclosporine and also cyclophosphamide. So we list the 3 major randomized studies on the right side. And then we reviewed the major efficacy data at week 24, including the immunological complete response and also 24-hour proteinuria reduction. From numerical number, definitely our data looks favorable compared with the historical data. Obviously, there are some caveats because this is a cross-study comparison. Maybe they are slightly different in terms of population or maybe medical history, we have to be cautious. So I think finally, as we think ahead for the future development and then we plan to maximize the global needs and the opportunities in the PMN as well as other renal indications like Rogers pointed out, including MCD, FSGS, IgAN and MN, which we believe EVER001 may also have a potential to benefit patients with this indication.

Operator, can you announce the Q&A information?

[Operator Instructions] The first question comes from Goldman Sachs, please.

I think there are some tech issues. My name is Linhai from the Goldman Sachs Healthcare team. First, congratulations on the Phase Ib data and the preliminary data really looks inspiring. And I think I have 2 questions. The first question is about the clinical trials itself. I saw that we have 2 dose level designed, and it looks like there is clear dose dependencies in terms of clinical responses and no major safety issues as well. And going forward, can you share a little bit more on the next steps for the clinical trials and also which dose level should we move forward? That's the first question. And the second question is, I saw that for MN, the age of onset looks older compared to IgAN. And how should we think about the real-world treatment rate for MN compared to IgAN, especially I noticed that for IgAN, many of the patients have the disease onset during their golden age at their career. And how should we think that for MN, the later age of onset, for example, like older than 50 years old, would that have a discourage on their treatment willingness?

Sandra first, then Ying the second question.

Yes. I think I can start for the first question. I think that's a great question. That's actually one of the key things we have to do just during our development plan because which dose is the optimized dose for the next step for the later development. And as you pointed out, we definitely see the same thing. The high dose that bring us the early onset in terms of both immunological response and clinical remission, we see that the same thing. But we currently cannot -- it's in the evaluation we are collecting long-term data, including up to like 1.6 years and 1.5 years or also like 2 years data to see how the data will look like. But for sure, the higher dose give us early onset and also both dose levels didn't have like safety issues, but we just need a little bit longer follow-up to help us to make a decision. We will share with you guys in the future.

Yes. Thanks for the question, Linhai. I think for your second question, I think what we have seen is most of the patients with MN are actually diagnosed between 40 to 60. So I think many of the patients are still in the prime of their working age. And we believe the ability and the willingness to treat is very high. And then the other is that, I think as Rogers mentioned at the beginning, about 80% of the PMN patients actually have nephrotic syndrome. And they actually see the symptoms more and sometimes even more visibly than IgAN patients, right, because they have very high proteinuria. So I think they -- when they're seeing this level of proteinuria, it's -- there -- I think we believe that most of the people will seek treatment, especially if there are safe and efficacious options and convenient options available to them.

Yes. So adding to Ying's point, I think because there's still -- currently, there's no approved treatment and even with those available treatments, a lot of patients will progress to end-stage renal disease. That's still a very severe disease in the renal area. At failure rate, 30% of patients respond to the current treatment. And even that 30%, there are also relapsed. So still a very severe disease. And as Ying pointed out, is very symptomatic, it's even more evidence than IgAN. Back to you.

[Operator Instructions]