Generate Biomedicines, Inc. (GENB) Earnings Call Transcript & Summary

Yes. So I think if you think about the anti-TSLP space, and you mentioned the teze data that was in the EOS greater than 300 cohort, right? So they showed a blended rate across all comers of 56% 70 in the high EOS cohort, 40 in the low EOS cohort I think that's kind of the sense the benchmark as the incumbent, right? And so I think somewhere in the 50% reduction across all comers and then pushing up, I think you've seen with the IL-5s and with products like Dupixent in the high EOS cohort, somewhere in that 50%, 60%, 70% range as well. And so I think that's kind of the market that you're going to have to hit to be competitive. And so I think obviously, doing that with also a great safety profile will be key to the success of the medicine.

And given the FDA feedback for our trial and the reason the size of our trial is 786 subjects in 2 different studies is to be powered to capture the below 300 EOS endpoint. And so we're 94% powered to capture the less than 300 EOS endpoint in terms of reduction, and that means we're basically 99% powered across all comers. Sure. And can you remind us or tell us what the evidence you have around pharmacodynamic evidence that the T-slip suppression is maintained through the 26 weeks.

Yes. I mean the data we just showed at the European Respiratory Society actually shows that we're sustaining those biomarker reductions out now up to about a year. And so again, Jason mentioned earlier, the 98-day half-life, you're seeing 50% reductions across a number of the key biomarkers like ESOS IL-5, IL-13. You're seeing substantial reductions in FeNO as well. And what's really been encouraging is at that 300-milligram dose, you're not seeing kind of a waning effect toward the end of the period. And so we feel very, very confident that the medicine is very active for beyond 6 months actually.

Great. I guess, COPD is the largest swing factor in our valuation. And the market will read the ERS poster as a proxy for the multibillion dollar opportunity up by Macron PK data alone. Is that a fair basis? Or does the real answer need a Phase IIb.

No, I think -- listen, I think as we've seen GSK just took a very aggressive approach going straight to Phase III with no COPD that we're aware of, right? So I think Teze showed a really interesting signal in their Phase II study. If you think about the currently approved biologics for COPD, you have Dupixent in Nucala they are only approved in the greater than 300 EOS cohort in COPD, which is about 28% of the market. The data that teze showed would take that down to about the 150 EOS cohort where you would add another about 40%, 45% of the market. And so obviously, the landscape in COPD is changing with the recent AstraZeneca data for the IL-33 where they were the first medicine to show a benefit in the less than 150 EOS cohort. And so -- but we think we still think there's a huge opportunity. The COPD market is only 2% to 3% penetrated from a biologics perspective. As you know, in these sort of immunology conditions, you usually see when they're mature markets, you have a 40% to 60% biologics penetration, there's a lot of room to run. COPD is depending upon which statistic you look, 1 of the top 5 burdens of disease globally. So the cost of the health system is extraordinary. The cost of patients' lives is extraordinary. And we think if you had somewhere -- the teze data in the greater than 150 was about a 37% exacerbation reduction that's a really meaningful medicine for patients. And so we think the opportunity, as you rightly point out, is profound, and we think GB-0895 is very well situated in that. And the last thing I'd just say is the 6 monthly dosing may actually be more valuable in COPD, given the frailty of the COPD population. COPD patients oftentimes are carrying multiple comorbidities and having a long-acting therapy that almost provides background protection for that population. We get a lot of feedback from doctors and patients that would be very, very meaningful for the lives.

I normally ask these questions towards the end. And I want to give some time to some pretty exciting oncology programs, the MMA with 1 in particular, but given SOLAIRIA-1, SOLAIRIA-2 the data you've shown that DRS in COPD, I think you had $457 million of cash on balance sheet end of Q2, how do you think about the balance sheet and funding from this point forward?

Sure. So we are funded through the first part of 2028 and that will carry us through the Phase I trials in oncology. It will carry us through the enrollment in the asthma trial as well as a lot of the initiatives that we're doing from the platform side and the next generation of molecules that we're moving toward the clinic. There's a number of different paths that we're, I'd say, simultaneously pursuing from a capital perspective. We doing partnerships like our Amgen and Novartis partnerships. It will be -- is part of our core strategy. So we will continue to do partnerships like those. We've been very successful in terms of getting toward the end of resolution on most, if not all, of those targets and certainly will be over the next several months. That opens up a lot of capacity for us to do more partnerships. And so those types of partnerships as well as achieving milestones on the Amgen and Novartis partnerships will bring in non-equity dilutive capital. We'll certainly explore equity capital markets. as well as product-specific financing, potential commercial partnerships around some of our products over time. And therefore, we believe over the next 12 to 18 months or so, a lot of these pieces will carry us through not just asthma data but beyond.

Thank you. Moving on to GB-4362 MMAE neutralizing program. Maybe just give investors a snapshot of what that is because I don't think it might be broadly appreciated, particularly for people new to the story, and what clinical evidence do you need to show toxicity can be decoupled from efficacy?

Yes. It's a great question, and thanks, Sean. Because 4362 is a program that is very unique, right? I mean -- we talk a lot about medicines, and you started the conversation with China. We're not aware of anyone else pursuing a concept like this. And so the beautiful thing about 4362 is the dose-limiting toxicity for MMAE-based ADCs has been peripheral neuropathy. And this has kind of been seen in pretty extraordinary rates, in the clinical trial setting. So enfortumab vedotin pads have Pfizer's extraordinary molecule for urothelial cancer, shows about 2/3 rate of peripheral neuropathy in that trial, which leads to about 20% of patients discontinuing, leads to down dosing and at least the dose holidays. Ultimately, what we're trying to do with this molecule is selectively buying the cleaved payload without interrupting the intact ADC. And we have a molecule that can distinguish the cleaved payload from the Intact ADC because it binds the cleavage site and that cleavage site is only exposed once the payload is circulating systemically. And so we think this has a huge opportunity to not only address this kind of core dose-limiting toxicity, but also extend the utility of all MMAE-based ADCs. And so if you -- Pfizer had some really interesting data at ASCO in June, which showed a direct correlation towards survival on drug and overall survival. So if you're able to keep people on these ADCs, you're seeing extraordinary survival rates. And that's ultimately what we hope to be able to show is that by reducing the neuropathy, you're reducing that dose limiting toxicity. We think the endpoint that the FDA will look for is a reduction in neuropathy and what you'll try and show is a noninferiority from a survival perspective, because you rightly point out like what you don't want to do is interrupt the bistandard of fact and so we're partially through the design of the molecule, partially through the work we've done in terms of dosing in a line to the second dose of MMA, we think there's a way to actually thread that needle nicely.

Sure. And what we've done in sort of preclinically, what we've shown is we can reduce free MMAE by up to 80% in nonhuman primates and mice without impacting tumor killing, but with getting substantial reduction in skin toxicities and neutropenia, which are other toxicities that occur in additional peripheral neuropathy. Our Phase I trial is designed to find the dose of our antibody that reduces free MMA by 50%. The feedback from the FDA, which this has gotten Fast Track designation and is in first-line therapy has been go up -- you can go up to 80%, but we think 50% reduction is the right. It gives us enough room to not impact the bystander effect, but to reduce the peripheral neuropathy and other toxicities, meaningfully enough that patients can benefit from continuing on the drug longer?

Sure. Thank you, Jason. And what milestones should investors look for in terms of data release around that program. So where we've completed dosing the first cohort of subjects in the dose escalation portion of the Phase I. We believe -- and again, the dose escalation portion is to find the dose that reduces free MMAE by 50%. And so we believe we'll have that dose toward the beginning of 2027. Once we have that, we're going to do a dose expansion study or cohort expansion where we'll take somewhere between 40 and 60 subjects, let's say, who already have Grade 1 peripheral neuropathy on PADCEV and KEYTRUDA that are urothelial cancer patients. They'll receive our drug, MMAE neutralizer commensurate with the cycles of getting PADCEV and KEYTRUDA to see if we could reduce the progression of Grade 1 peripheral neuropathy going to grade 2. Because once you hit grade 2 peripheral neuropathy, it's irreversible for the patients. And so that over the course of 2027, we believe we'll have the data, which is the safety and efficacy data we're looking for to be able to potentially move directly to registrational trials. As Mike mentioned, where safety would be the endpoint. Sure. Sure. And what relationship might you have with PADCEV and how do you fill out or fill further MMAE containing partners?

Yes. So there is no formal relationship. The beautiful thing is in the U.S. standard of care for first-line new or the patients is KEYTRUDA plus PADCEV, right? And so this is just simply layered on top of that [indiscernible] care. As we look forward, though, I think there's 2 different pieces, Sean. You point out like ultimately, the way you will develop this. We've done it with PADCEV because that is the leading MMAE-based ADC. You'll do a basket trial likely with all MMAE-based ADCs to kind of show that this works across the whole continuum. And then I think in the future, there's an opportunity to potentially co-formulate, which would be, I think, really interesting as well, where you can co-formulate 4362 with the MMAE based ADCs.

Sure. Is there anything specific about PADCEV that might mean that your compared to other MMAE containing ADCs that might make it more robust in combination with about just soaking up the free MMAE or do you think it's broadly applicable to your confidence level around that?

In the preclinic, it's very clear that it's probably applicable so as we think that -- again, it's partially tied to the linker and the payload. So a lot of the early Seattle Genetics, ADCs all kind of use the same sort of core technology there.

Sure. And philosophically, at the beginning of the conversation, we're talking about platform pipeline on platform that I think many people might generate think it's a respiratory company and not really in a company and that the molecule could have come from the wet lab, could it come from AI. We don't care as long as it works and you get a payback. But the way I'm thinking about this is potentially a step in the validation of the platform to investors. So maybe put some meat around the bones on that.

Yes. I mean I think 1 of the things that we spent a lot of time thinking about, Sean, is actually I think it's easy sitting here today to think Oh, well, where is the AI. The real question we had to answer with GB0895 was would computationally generated molecules immunogenic right? That was the unanswered question that nobody had ever tested because there had never been a truly computationally generated protein that entered the clinic. What we've seen now across the 5 programs that have entered the clinic is that these are very well-behaved molecules. The ADA rates have been very, very low. And so in some ways, for us, from a platform perspective, 895 derisk that question across all of our programs. Now as you rightly point out, where we're going is to these more complex biological tasks, like distinguishing this intact ADC from the circulating MMAE and you'll see that, I think, across the next generation of programs, they're taking on more and more complex domains of biology that I think traditional tools have not allowed us to drug.

Sure, sure. Maybe an opportunity just got limited time here. I just sort of wanted to touch on Novartis and Amgen partnerships and maybe give investors a flavor on those partnerships? And what could we expect in milestones et cetera, or announcements on candidates?

Yes. So the way these are structured, each of Novartis and Amgen, Amgen back at the end of 2021, Novartis late in 2024. So almost a couple of years ago. We agreed on a select number of targets we generate molecules that ultimately we get to either lead candidate criteria or DC nomination based on some prespecified criteria. And then once we get them to that level, they take time to verify it. And once they verify, they pay milestones and then ultimately, they have the choice to move them forward into the clinic, and they would pay milestones over time and potentially royalties. Milestones are in the mid- to upper $300 million on each program and the royalties are some mid-single digits up to low double digits on each of those programs. We've been extraordinarily successful in prosecuting across all of the targets or a total of 9 targets between the 2 of them at this point. Some of them we will get to the criteria, but they will not be moved forward because, frankly, biology that they could not test for decade, let's say, or more, we finally were able to get them a molecule to test the biology and the volume has work. I think we were very successful in getting there. But ultimately, if the biology doesn't work the back them forward. We have received the first milestone on the first program from Amgen already. We believe we'll hit multiple more programs on theirs. And on Novartis, we've been extraordinarily successful even much faster just given we've signed that deal a few years after Amgen, so had many more people at the company a lot more capabilities. And so we believe we'll also hit multiple milestones. The time line on verification is kind of the biggest kind of impediment to receiving those milestones. But now we believe over the next 12 to 18 months or so, we see multiple milestones in both of them.

So 1 of the really cool things, though, but the partnerships is Amgen and Novartis are probably 2 of the best protein engineering companies on the planet, right, certainly in the top 10, right? And so when they hand you tasks that they can't solve, this goes again to this question of China. If the best in the world can't solve these sort of things, you're basically finding complex biology questions that if you solve them for them, we then have the right to apply that across other domains. So 1 of the tasks that both of them had given us was can you stabilize the native hormone and drive a thousand-fold improvement in selectivity? Neither of them had solved that for almost a decade. And we gave Novartis, 40 molecules that had over 10,000 fold improvement in selectivity in 4 months well. And so the power of these technologies, once you get them up and running is really, really profound.

Well, gentlemen, we're right at time. Is there anything I didn't ask that I should have or any message you would like to leave investors with before we call a close.

I think we've covered a lot of ground here today, Sean. I think the most important thing is, I think the point you made at the outset, generated a company that were with our first manifestations, we're showing clinical proof of concept for these AI design molecules, but we're really only scratching the surface. And I think as we continue to push the frontiers what we're going to find is that there are a whole series of undruggable domains that we have never had the tools to prosecute that will unlock biology in really meaningful ways, and we're excited to be part of that journey for the industry.

Well, thank you, Mike. Thank you, Jason. I appreciate your time.