Lakefront Biotherapeutics NV (GLPG) Earnings Call Transcript & Summary

Thank you. I think so. We're just getting started. Yes, we're going all night. Perfect. Yes, exactly. Mic check, mic check. There it is. All right. Good afternoon, everyone. Welcome to the final fireside of day two at Morgan Stanley's Global Healthcare Conference. I'm Judah Frommer, one of the SMID biotech analysts here. Very excited to have Henry, Erin, and Eric representing Lakefront. Let me just get through a quick disclosure before we get started. For important disclosures, please see the Morgan Stanley Research Disclosure website: www.morganstanley.com/researchdisclosures. All right, with that, the team's been leading Lakefront through quite a transformation. So before we dive in, maybe give the audience an intro to the company and your focus since taking the helm last summer.

Sure. Great. Well, we're delighted to be here, and thanks for hosting us. So we are a clinical stage biopharmaceutical company now with a very exciting portfolio of T-cell engagers with a lead program that is going to start registration studies next year in four programs in total, and it was quite a journey to get here. So we started about 18 months ago. The company at that time named Galapagos had a portfolio that was built in ex vivo CAR T. We spent a couple months analyzing that portfolio and went through a thorough process analyzing strategic alternatives and ultimately determined that those programs were not commercially viable. We then negotiated with and unions in Europe to get clearance to unwind that portfolio, which we did. So we had over 650 employees and about $300 million annual spend. We began winding all that down this January, which was obviously quite a complex process, which is now almost complete. And in parallel to that, we pursued business development. So we had about EUR 3 billion in capital and we looked at a very long list of opportunities, without necessarily honing in on just oncology or just autoimmune programs. But when we saw the initial data from Oro, just about a year ago actually, sort of September, October last year, we were just blown away with what we saw on the lead program and started doing some serious diligence. The more work we did, the more we were convinced that this was a very unique opportunity and one that we were a very good party for. Ultimately renegotiated our historical deal with Gilead to where they contributed to that deal and ended up paying half the deal consideration. And we ultimately prevailed in a competitive process to secure that asset in March. And for the last six months, we've been, you know, heads down executing on that program. It's going quite well, are enrolling well and progressing nicely, and we're quite excited to unveil some data toward the end of this year and then start registration studies next year.

Okay, great. And we'll spend most of our time on Gamgertamig and that acquisition. But maybe just further set the stage on that Gilead relationship. There's obviously, like you said, a history of collaboration between the two companies even before the acquisition. So maybe just a little more context around the relationship, how it stands today.

Yes, so we inherited a relationship with Gilead who entered into this broad strategic alliance with then Galapagos in 2019. It was a 10-year agreement, so we've got another three years running on that agreement. And as part of that agreement, they put about $5 billion into the company, and so that is where a good chunk of the cash comes from. And that agreement allowed them to opt into any program we have at the company at POC stage. And to opt in for, you know, a pretty small amount, $150 million for commercial rights ex-Europe. So of course when we got involved, and frankly following some discussions even before we took our roles, it was very clear that Gilead was highly motivated to, through us, find a way to deploy that capital very effectively, but to also reimagine that historical deal. And so as part of the negotiation with Oro, we also in parallel negotiated with our partners at Gilead to where ultimately, again, they put up half the money to do this transaction and were splitting operational responsibility. They will ultimately commercialize the lead program and we will, you know, we will take a royalty and I think it shows that on a combined basis, you know, we can, uh, you know, very effectively pursue, you know, business development. So we're very pleased with the engagement. We're operating at a very senior level at Gilead. They talked about it in their fireside chat today. So this is a program that gets a lot of attention. And, you know, we're pleased with how the two companies are collaborating to really broaden this program and accelerate the program and hopefully bring it to patients in the not-too-distant future. Okay. Cool.

Great. And maybe just a bit of background on how that Oro transaction came together. I know you and Gilead had a focus on certain therapeutic areas, but broader than just Galapagos was focusing on. So maybe a bit about the funnel of opportunities you considered. What interested you specifically about Oro and Gamgertamig, and then the terms of the deal?

Yes, so again, we didn't specifically target autoimmune diseases or opportunities. We didn't specifically target one therapeutic area. We really looked very broadly across the biotech landscape, but we specifically wanted opportunities that had very clear clinical proof of concept. So ultimately with Oro, we saw more than 60 patients' worth of efficacy and safety data that was, as I said, quite compelling. We wanted to be in a place where we are the rightful owner for an asset, so I didn't want to be somewhere where I knew every pharma company was focused today and likely reviewing every asset. This is a set of orphan diseases which we think are quite significant, multi-billion dollar each in terms of commercial potential, but where I think many folks at pharma don't have that on their list of strategic priorities at this point because some of these diseases aren't well commercially understood at this point. There haven't been effective medicines, and we have a chance to be first in class in many of these indications. So it was important to find something where we have a real angle in terms of us being first and us having a good competitive position. And so again, at the end of the day, this aligned well with where we were interested strategically and where Gilead was willing to, you know, put up half the money to participate. And so it's a sort of a win-win situation across all of that. And again, ultimately, being first in class in a new exciting area was really, really compelling component of this. And then we can talk of course about the specific clinical profile and all of that good stuff and where the high level, let's sort of reframe it.

OK, great. So maybe let's get a little bit deeper into the data package we have for Gamgertamig at this point. So what indications has it been studied in? How many patients do we have data for in autoimmune indications?

Specifically? Yes. So the focus of the program to date has been in a few diseases that are mediated by autoantibodies. The most mature data in terms of studies that have been done both in China and outside of China, Australia, U.S., would be the autoimmune cytopenias, so ITP and hemolytic anemia. There was also an initial focus in the clinical trials in China on Pemphigus vulgaris, which is an autoimmune skin disease. So those are the three indications where the most data exists. There's another ongoing trial outside of China investigating some other autoimmune diseases, Sjogren's disease, of homeostasis, confirmatory experience in Pemphigus that's ongoing. And I think ultimately the list of diseases that are amenable to this type of therapy is actually quite large, and part of our plan over the next year is to expand the number of proof of concept studies to start addressing that larger for the seven diseases.

Okay, great. And I think you meant investigate again, Gamgertamig in multiple myeloma. So obviously the focus for you guys is on autoimmune. But any data in that indication that was helpful in framing the profile here?

No. Yeah, I think, you know, in terms of the myeloma data, you know, I think, you know, a lot of people know, you know, this is a class BCMA-directed T-cell engagers and CAR T therapies, you know, established target in myeloma. There are marketed drugs being used. The experience with Gamgertamig in myeloma, which is our partner, Qimed, who has rights to the drug in China, is developing in myeloma. Hmm. I think one of the things that was interesting about that experience is that they were able to show in their myeloma data that the rate of cytokine release syndrome, which is one of the key safety considerations here, seemed appreciably lower than what was observed with teclistamab. And we think that that's due to the fact that this antibody has been engineered so it has a lower affinity for CD3, so it's less prone to cause T-cell overactivation. And I think that was one sort of aspect of the myeloma data that interested us, in addition to the fact that it's been studied in well over a hundred patients with myeloma. So just the breadth of the experience was important for us to see as well.

Okay. Great. And maybe just on the competitive landscape across BCMA. So not long after you guys announced your acquisition, Candid was acquired by UCB, I believe. You have Cullinan out there. So maybe talk about some of the properties of Gamgertamig and how do you think Gamgertamig is differentiated versus those other programs? Presumably you did due diligence across many BCMA T-cell engagers.

Yes, I mean, once we, you know, once we found Oro, as I said, about a year ago, we, of course, did a pretty thorough assessment of other, not just BCMA-directed T-cell engagers, but we looked at some CD19 programs as well. So we have a pretty good sense of how everybody stacks up. And what we liked about Oro, well of course the data sort of spoke for itself. It was an indication, as I said, that Oro had very smartly picked where to develop this program. And so we now have a 2-plus-year advantage over, you know, the next competitor. And so that is quite helpful, of course. Secondly, the data we saw was already in a sub-Q format and at a dosing regimen that is one that we think makes sense to use for registration studies, and so again, a lot of this space is really working through finding that optimal dose where you have, you know, a benign safety profile and efficacy and that's what is not trivial. And so, Oro had already achieved that, which was very, very attractive. So all of that gives us a really nice, um, timing advantage and a really nice platform to go into other diseases. And so, um, yes, it's a competitive space. I mean, as I said, we're fully focused on maintaining and hopefully even accelerating our timeline advantage. Yes. But these are large enough markets that at the end of the day, somebody else comes in the market and it's still a very large opportunity. So it's not necessarily a winner-take-all type market. But as I keep saying, it's important. It's nice to be first, and we intend to keep that advantage.

And I guess I would add to what Henry said, um, you know, there are two main targets in this space, CD19-BCMA. BCMA was previously thought to be largely restricted to plasma cells and plasma blasts. We think those cell populations are important. Those are the ones that are producing the autoantibodies, but we also recognize it's important to address the B-cell compartment as well. And I think what is being observed now through Gamgertamig studies, through studies that Candid's doing, through studies of teclistamab in the diseases is you actually get a much broader range of cellular depletion than what you would have originally thought. So BCMA is expressed in sufficient amounts even in naive B cells and so to us, you get the sort of depletion pattern you would expect with CD19, which is restricted to B cells, but you also address the plasma cell component. We believe in some of these or many of these autoantibody-driven diseases, that's going to be an important thing to address.

Great, that makes sense. And you touched on a bit earlier specific to the CRS. But I guess what have we seen clinically that suggests Gamgertamig can induce that immune reset with better safety?

Yes, what I would say, you know, we haven't commented specifically on the, you know, the incidence or severity of CRS that we're seeing in the studies, what I would say, you know, Henry mentioned this is a subcutaneously administered drug. In all the trials to date, it's been administered as outpatient therapy. Obviously, if you were seeing something of concern with CRS, you might rethink whether that would be the right way to administer the drug. We've seen nothing in the study so far that would make us think that this is not going to be an outpatient administered drug in a self-form. So we're comfortable with what we're seeing as far as the CRS profile.

Okay, great. And then just touching on kind of the initial indications that you'll be going into, you know, clearly you've prioritized, you know, registration and development in some rare autoimmune indications. Maybe tell us a bit about those indications, the rationale behind pursuing those first, and if you could, give us an idea for how big those opportunities could be.

Yes, I can start, Henry, you can add in. But, you know, one of the appealing aspects of starting with diseases like ITP, hemolytic anemia, pemphigus, is that the proof of concept is very clear, right? If your platelet counts go up, your platelet counts go up. If your hemoglobin goes up, it goes up. If your skin lesions go away, they go away. So there were three diseases where it was very easy to interpret proof of concept and the effect size was very clear. So I think, you know, as a way to establish proof of concept in this set of diseases, they picked the right three diseases. You know, Henry also mentioned the aspects of, you know, the fact that these are diseases with well-established regulatory precedents.

So we think there's a very clear path from proof of concept stage right into phase three. Yes, and from a commercial perspective, I mean, you know, while these are orphan and we've obtained orphan designation from FDA for all three of them, you know, they're pretty sizable populations and there really isn't anything effective out there today. These patients are really very sick, it can be deadly. They are basically sidelined, they're in these chronic therapies, heavily on steroids and other immunosuppressants. We think, as I said earlier, these are all multi-billion dollar commercial opportunities easily, and I think they would be really elevating the existing standard of care very significantly, and so that's what gets us excited.

Got it. And you've talked about more data, program development being shared later this year. Maybe give us a sense of what might come with that update, which indications could it include, you know, how many patients, length of follow-up, anything you can share on.

Yes, the key focus is the cytopenia set of studies that we've talked about. So we're talking ITP and AIHA. And as I said, we had about 60 patients when we entered into the deal in March. So since then, these studies have been enrolling in the U.S. and Australia very attractively. So we have many more patients now. So we know response rates, we know how many of these patients saw their B cells being depleted. We of course are seeing safety since that generally happens right around dosing, so we know that. So that's all very good. What we want to demonstrate, though, is whether we're truly achieving immunity and then reset, so that means the B cells get depleted, and then after some period of time, they come back and they come back healthy and patients stay without disease for some meaningful period of time. And so essentially that's just a question of time. We saw a few patients when we did the original deal back on the earlier data set that had already achieved that. But we want to get it to a meaningful number where we believe it would be, you know, interesting to share that with the market and kind of demonstrate that this is an immune reset therapy. So that's that's the goal and we think by around year end we'll have enough patients that have been on therapy long enough to sort of adequately decide.

To describe that drug profile. Okay, great. And maybe just a bit more on dosing, you know, what doses have been explored thus far? Do you think we'll have go-forward dose with this update? You know, how should we be thinking about, you know, dose selection?

Yeah, so we haven't disclosed the exact dose and dose regimen, but what we have said is that even the data we saw back in March, you know, a good chunk of those 60 patients were at doses or close to doses that we think would be what the registration studies would be. So now we, of course, have much more of that. What we've also said is that what's very commercially attractive is, and frankly very important when you think about what this means for patients and quality of life and so forth, that this is a very short initial course of dosing, and then that's it. Got it. So these patients ideally go through that pretty quickly. Yes. get monitored for a very short period of time, and then essentially go back to normal life. That's the ambition. And that's the profile we're seeing. And again, it would be an exciting step forward for patients in these diseases. And that's what we hope to demonstrate when we roll out the data by the end of the year.

I would maybe add to that another aspect of the Oro program that was attractive to us at the time that we were doing diligence is that the very first experiences with the drug and autoimmune disease in China, um, were conducted at doses that were much higher and longer in duration than what we're using in the clinic now. And even at those doses, you achieve the reset profile and the safety profile was acceptable, probably not optimized, but acceptable. The most challenging work for us was dose de-escalation to the point where we have this sort of efficacy safety profile that we think will be attractive to go forward. And that's a much easier proposition than starting from zero and building on that. So that was an appealing part of the program.