Immunovant, Inc. (IMVT) Earnings Call Transcript & Summary

Hi, everybody. Good morning. I'm Ekaterina Knyazkova from the pharma team here at JPMorgan. Pleased to be introducing Immunovant. And from the Immunovant, we have the company's CEO, Pete Salzmann. We'll have a Q&A session after the presentation. So if anybody has a question, feel free to submit a question via the Ask a Question button, and I'll try to weave that into the Q&A. And with that, I'll turn it over to Pete.

Thanks, Ekaterina. Good morning, everyone, and thank you for joining me. I'll be making some forward-looking statements, and so I direct investors to the second slide in the presentation to carefully review this material. Transitioning to Slide 3. At Immunovant, our vision is to make a big, big difference for patients. We're developing solutions with the potential to improve substantially on the standard of care. That's what our vision guides us towards. On Slide 4, I'd like to spend a couple of minutes on the anti-FcRn market. This is a busy week and everyone on this call is following updates across a range of disease areas and across a range of therapeutic mechanisms. I really believe that the anti-FcRn mechanism is worth getting to know well as it has very broad potential across a range of autoantibody-driven conditions with high unmet need. If you are new to the space, the definitions for the disease acronyms can be found at the bottom of the slide. Now sometimes a list like this primarily represents indications that might be studied. In the case of the anti-FcRn class, specific studies in more than 15 indications have already been initiated or announced. The announced indications across several assets include multiple classic auto antibody-driven diseases like myasthenia gravis. Most of these indications already have positive clinical data from at least 1 anti-FcRn. Recently, a range of studies in exciting immune complex-driven conditions have also been initiated. Janssen began these class-expanding studies which are very interesting since immune complex-driven diseases generally begin with an autoantibody. We believe we have a potentially best-in-class anti-FcRn and that positions us well to compete in this entire category. And we're, therefore, enthusiastic about the broad set of indications being pursued across the class, and we look forward to a flow of data from a variety of studies. On Slide 5, you can see all of this boiled down quite simply. Our asset, batoclimab, is a fully human monoclonal antibody targeting FcRn. And by targeting and blocking the Fc receptor, we lower free floating IgG. Now within the anti-FcRn class, batoclimab has key product attributes that provide unique potential benefits to patients. Batoclimab delivers levels of IgG suppression that are among the deepest reported across the class. We've achieved these IgG reductions with a simple subcutaneous injection, whereas most of the competitor data is from intravenous formulations. The simple subcutaneous format enables dose tailoring to match patients' needs. So for example, we can pursue a flexible induction and maintenance approach. Such an approach targets maximal efficacy at the beginning of treatment in the induction phase at a time when symptoms are generally most severe. Then during the maintenance phase after disease control has been achieved, batoclimab's dose can be adjusted downward with the potential for consistent symptom relief and a lower effective dose in the chronic setting. To summarize, our asset has the potential for class-leading efficacy with tailored dosing to meet patient needs and delivering via a simple subcutaneous route of administration. We believe this profile is ideally suited to treat many autoantibody-driven diseases. For those of you who are newer to the anti-FcRn space, Slides 6 and 7 describe the mechanism of action. As you know, the immune system is made up of both cellular components and immunoglobulins. The IgG immunoglobulin is a protein with a very long half life. And that's because IgG is recycled, which I'll show in a moment via the Fc receptor. Importantly, in many autoimmune diseases, IgG antibodies develop, and these recognize and bind to normal tissues. These auto antibodies then cause a range of clinical symptoms. Why does IgG have a uniquely long half life among all proteins and among immunoglobulins? It's shown on Slide 6. You see the green FcRn binds to the pink IgG antibody, preventing the IgG from going to the lysosome where it would otherwise be enzymatically degraded along with other proteins in the blood. That's the normal process. There is a pH dependency for normal IgG. So at the cell surface where the pH is higher, the IgG antibody dissociates from the Fc receptor and is returned to the bloodstream. That's the recycling. Inside the endosome where the pH is lower, the IgG binds tightly to the Fc receptor and is protected from degradation. On Slide 7, our antibody batoclimab, shown in purple, binds the Fc receptor. You can see that schematically as the green FcRn binding to the purple batoclimab molecule. This binding prevents the endogenous IgG, shown in pink, from binding to the Fc receptor. When that happens, the endogenous IgG is shuttled to the lysosomes where it's degraded. So that's the fundamental biology, which by the way, is really straightforward. Slide 8 allows me to expand a bit on batoclimab's profile. Again, for those who are newer to the mechanism, here, I'm showing some early data from our Phase I study. Our 680-milligram subcutaneous dose delivered some of the deepest IgG reductions in the anti-FcRn class, nearly 80% in this study after just 4 weekly doses. Note that pathogenic IgG reduction is a biomarker that correlates well with clinical symptoms across the autoantibody conditions. I should also point out that the 340-milligram dose demonstrated strong lgG suppression in this and other studies, too. So these 2 doses are both very viable induction doses. The 340-milligram weekly dose also has great potential as a maintenance dose. Turning to Slide 9, you can see Immunovant's current development plans. Given the broad opportunity for anti-FcRn to make a meaningful impact on patients' lives, plus recent FDA alignment, we plan to initiate a pivotal Phase III trial in myasthenia gravis or MG. We'll do this in the first half of 2022. In addition to MG, we have existing programs in thyroid eye disease and warm autoimmune hemolytic anemia. We plan to announce 2 new indications by the summer of 2022, so we'll have 5 indications in total. In addition to our pivotal trial in MG, we plan to start 2 more pivotal trials in 2022. So 3 out of the 5 indications will be in registration stage. Beginning on Slide 11, I'd like to take a deeper dive in MG, our lead indication. MG is a serious autoimmune condition with a prevalence of about 66,000 patients in the United States alone. As I mentioned, we recently announced that we'll be initiating a Phase III trial in the first half of calendar year 2022. Now MG is a prototypical autoantibody-mediated condition, and the autoantibodies are targeted against the neuromuscular junction. MG is characterized by weakness of voluntary muscles and is associated with risk of disease exacerbation or crisis. 15% to 20% of MG patients will experience at least 1 myasthenic crisis over their lifetimes, which is a potentially life-threatening acute complication. And despite available treatments, patients still report substantial lifestyle modifications in dealing with MG. Nearly 80% of people we surveyed with MG reported moderate or major lifestyle modifications. And that's what we see in this figure to the right. In fact, a large majority of respondents in our research stated that they must make moderate or major lifestyle modifications because of their condition in spite of current treatments. Note that some of the respondents in our survey were taking a C5 inhibitor but none were taking an anti-FcRn. People living with MG do appreciate the benefits of a partial response that corresponds to a few points of improvement in the MG-ADL or myasthenia gravis activities of daily living score. But what they really hope for is a deep response that would correspond to a many point improvement in MG-ADL or another scale. Of course, they don't express their needs in terms of MG-ADL, but rather they shared with us that they really desire to live without making lifestyle modifications. Living without lifestyle modifications would translate to a very low score on the MG-ADL or one of the other assessment scales. A variety of anti-FcRn trials have shown that the anti-FcRn class has the potential to be a much better solution for people with MG. For different assets, these trials have generally shown a rapid onset of action, an impressive breadth of response and a favorable safety profile. These results align with our research and support why neurologists are quite enthusiastic about the long-term potential of the anti-FcRn class in MG. So now diving into how we approached our pivotal trial in MG on Slide 12. Every Phase III program has 2 important goals: to ensure product approval and to differentiate versus the competition. Whereas the path to product approval is generally specified by regulatory agencies, the path to product differentiation is rooted in a deep understanding of the market. To that end, we've conducted market research with both physicians and with patients. And we're confident that we have identified meaningful opportunities not only to improve on older standard of care options, but also to further improve on newer therapies, including other anti-FcRns. People with MG recognize many limitations with older standard of care options. Efficacy onset of some of these treatments is very slow. Other steroids -- other, excuse me, therapies like steroids and IVIg, they work quickly but have limitations preventing chronic administration. Specifically, moderate or high-dose steroids when given chronically have many well-documented side effects, and IVIg has a route of administration that many people find burdensome. When an ineffective therapy like steroids or IVIg has stopped due to side effects or due to logistical challenges, patients with MG may experience recurrence of their symptoms, including disease flares. Off medication, these flares can be very significant and represent a source of anxiety for people living with MG. The lack of reliable treatment options that provide robust efficacy and long-term tolerability translates to a lot of unmet need among people living with MG and this bodes well for the anti-FcRn class. Finally, there's one particular need shown on Slide 13 that is expressed strongly by people living with MG. Specifically in our survey, the vast majority of people with MG indicated a desire for continuous chronic treatment versus an intermittent on-and-off approach to therapy. People with MG associate intermittent dosing with flares off-treatment, and these flares in the case of MG can be very severe. Occasionally, they result in hospitalization. Consequently, the vast majority of people with MG that we surveyed prefer the peace of mind of continuous therapy. For continuous therapy, we believe that a medication delivered via a simple at-home subcutaneous route clearly has the upper hand to medications delivered via intravenous or subcutaneous infusion and requiring administration by a health care professional. So what does all this mean for our approach to a Phase III trial in MG? Slide 14 shows how our team focused on leveraging batoclimab's unique product attributes, in particular, its capability to deliver tailored dosing via a simple subcutaneous route of administration to address the specific and important unmet needs we've identified. Thinking about a person with moderate to severe MG who is a candidate for a new medication or for a clinical trial, they want a few things. First and foremost, they want to get better. These individuals are quite impacted with high disease activities course and so they want to achieve a big improvement quickly. We designed the induction period of our trial to maximize speed and depth of batoclimab's efficacy, which we believe has the potential to be best-in-class. Patients will receive 12 weeks of continuous dosing during the induction period. Efgartigimod separated nicely from placebo with 4 weeks of initial dosing, but we believe continuous dosing can do even better, particularly when it comes to the percentage of subjects experiencing a deep clinical response. Once people with MG have improved on treatment, they want to stay better and avoid flares off treatment. At the same time, many people would appreciate the option to lower their treatment dose a bit during the chronic phase to minimize potential side effects associated with immunosuppression. This is true for a wide range of medications used to treat MG. Physicians also shared with us that maintaining disease control over time can be easier than getting the disease under control initially. Taking all this together leads to a common approach for many immune-modulating therapies, namely an induction and maintenance approach where higher induction doses are used to maximize the initial clinical control while lower maintenance doses are then used to optimize benefit risk during the chronic phase of therapy. In the case of batoclimab, we also expect lower maintenance doses to reduce the impact on albumin and LDL when these changes matter most, in other words, during the chronic phase of therapy. Finally, after a period of study disease control, often at a lower dose, many patients and their physicians would appreciate being able to apply a data-driven approach to flexible dosing over time. Flexible dosing over time is needed by many people with MG because the symptoms of MG tend to wax and wane. Even on a stable medication dose, some patients may experience a deterioration of their clinical symptoms requiring rescue therapy. Many patients told us that the ideal rescue therapy is a higher dose of an existing medication used for a short period of time, and that this is a simpler approach than adding a totally new medication for rescue. I should point out that just as a simple at-home subcutaneous route of administration enables chronic dosing, it's also ideally suited for fine tuning the dose over time. In order for these dose adjustments, including rescue dosing to be data-driven, they need to be studied in the clinical trial, which is exactly what we plan to do during the long-term extension period of our trial. Slide 15 summarizes our overall program approach. We're pursuing, as I've mentioned, an induction maintenance design that includes a long-term extension. This is a well-established approach for newer therapies and other autoimmune diseases, and it is a common clinical approach, as I've mentioned, from many older medications used in MG. At the same time, it's actually a first among recent trials in MG. This approach provides the potential for maximum initial efficacy. Having then achieved initial efficacy, we believe the lower doses can maintain efficacy. These lower doses will also reduce the impact on LDL. And finally, during the long-term extension phase of the trial, flexible dosing will be studied to optimize treatment over time as the disease waxes and wanes. Moving now from the conceptual to the specific on Slide 16. This slide provides more detail on our design. Approximately 200 subjects will enter the trial and be randomized to 1 of 3 blinded arms: 680 milligrams of batoclimab delivered weekly, 340 milligrams of batoclimab delivered weekly or placebo delivered weekly. Period 1 will last for 12 weeks, and the primary efficacy endpoint will be measured as the mean change in MG-ADL through those 12 weeks. As is common with induction and maintenance trials, subjects will then be rerandomized at the end of period 1. This rerandomization occurs into 3 new arms: 340 milligrams of batoclimab delivered weekly, 340 milligrams of batoclimab delivered every other week and placebo. Periods 1 and 2 are fully blinded with all subjects in each period receiving the same number of weekly injections. Whereas period 1 tests the ability of 2 doses of batoclimab to deliver higher efficacy than placebo, period 2 tests the ability of 2 doses of batoclimab to maintain efficacy. The primary endpoint for period 1 and the key secondary endpoint for period 2 will be restricted to the AChR antibody-positive patients with additional analyses run for the entire population and for AChR negative patients. As I mentioned, this design takes advantage of batoclimab's specific attributes, namely the ability to provide tailored dosing and a simple subcutaneous injection. This trial was designed around 340 milligrams as the anchor dose but also tests a higher dose in the induction period and a lower dose in the maintenance period. As mentioned previously, the long-term extension will allow for protocolized or standardized dosing flexibility up and down. Ultimately, we believe this will deliver a very rich data package. And if approved, batoclimab will have a unique and differentiating data for clinicians to use to optimize the treatment of their patients with MG. On Slide 17, I'll reiterate a few points in terms of how the approach we've taken with batoclimab differs from other therapeutics in clinical trials for MG. As I mentioned, our team listened to individuals living with MG, and we believe we've designed our trial to uniquely meet their needs. As you know, argenx gained FDA approval for efgartigimod last month based on the results of their single Phase III trial in MG. Their protocol followed an intermittent paradigm of treating for 4 weeks and then having responding patients wait until their disease relapsed prior to receiving another 4-week cycle. Intermittent treatment for many patients is not a return to normal so a better solution is still needed. Also, the efgartigimod Phase III trial was conducted with an IV route of infusion. Moving on, Janssen announced the design of their Phase III trial for nipocalimab in MG. The design, unlike the argenx program, does offer continuous dosing but at a single fixed dose through to their 24-week primary endpoint. They do offer a step down in dose but only during the open-label, long-term extension. Like efgartigimod, nipocalimab is administered intravenously. Our clinical trial seeks to optimize all 3 dimensions shown here. Dosing will be continuous and flexible, tailored to the stage of the disease, higher in the induction, lower in the maintenance period and tailored to the individual patient's clinical response during the long-term extension. To this last point, both down-titration and rescue therapy will be studied as a long-term extension to [Audio Gap] course of MG. Finally, as you know, the route of administration is via a simple subcutaneous injection. The bottom line is that our design is intended to demonstrate potentially best-in-class efficacy of a treatment that is continuous and easily administered. The goal is to provide patients with a flexible chronic therapy that can be fine-tuned to meet the variable symptoms associated with MG rather than delivering intermittent therapy or delivering a one-size-fits-all dosing solution. Based on expert feedback, our team is confident that this design will provide a robust data package that has the potential to differentiate batoclimab as a best-in-class offering for people living with MG. The other 2 announced indications we're pursuing with batoclimab are thyroid eye disease and warm autoimmune hemolytic anemia. While I won't go into the -- go into detail on these 2 indications today, I will mention that we have preliminary proof-of-concept data in both indications along with MG. And briefly on thyroid eye disease, this is a tremendous opportunity to address a patient population that is significantly impacted by their disease. Horizon's very successful launch of teprotumumab with full year net sales guidance exceeding $1.5 billion is an initial indicator of where thyroid eye disease is going as a market. With that, I'll point investors to the other slides included in the deck on thyroid in disease and warm autoimmune hemolytic anemia for further consideration and move to Slide 25 for wrap up. We believe the potential of the anti-FcRn mechanism and the potential for batoclimab specifically are both very large. Today, I focused on MG, but we'll be covering TED and WAIHA in more detail at an upcoming R&D day later this quarter. Given the opportunity to make a meaningful impact on patients' lives across a range of indications, we're pursuing a broad development program for batoclimab. In parallel to MG, TED and WAIHA, we're planning to announce trials in 2 other indications, bringing the total number of indications under study to 5. Of these 5 indications, 3 will be studied in pivotal trials starting in 2022. This aggressive development plan reflects the confidence our team has in batoclimab. With that, I think we can transition to Q&A.

Great. Perfect. So I guess just to start, I guess, on the anti-FcRn mechanism. I think you've mentioned -- am I flipped on the video or am I okay?

You are, but we can turn off the -- there you are.

Okay. Perfect. Sorry about that. All right. But on the anti-FcRn mechanism, I think you've mentioned the double-digit kind of $1 billion potential for this class. What gives you confidence in that?

Yes. Well, I think there's 2 things that give me confidence and they're 2 very, very unique features of the anti-FcRn class that make it so exciting. One is that the sheer number of diseases where autoantibodies play a role, if not the defining role, then a really important role. And for a variety of reasons, the vast majority of those autoantibody conditions don't have targeted therapy today. They're treated with older, broad spectrum immunosuppression. So the unmet need is high across a wide range of indications. Then -- so that gives us a lot of opportunity. Usually, when you have that much opportunity, there's a lot of technical risk, meaning that you're targeting some very foundational mechanism that has a variety of risks either on the efficacy or safety side. In the case of the anti-FcRn mechanism, as I sort of walked through quickly on Slide 6 and 7, the mechanism is really straightforward. You have a very well-defined biomarker that's been shown to be correlated with clinical symptom improvement across a range of conditions. So you combine sort of a very straightforward mechanism, very straightforward biology with a very wide range of indications. And that gives you just a tremendous opportunity.

Perfect. Perfect. And I guess on your lead indication with MG, it's obviously a crowded competitive landscape. Just talk about what gives you confidence that the asset will play a role and what kind of role it will play in the market.

Yes, yes. Well, there certainly are a lot of medications that are used in myasthenia gravis. And there are a variety of trials ongoing today for myasthenia gravis, and efgartigimod was recently approved. But with all that said, if you remember the slide I showed regarding how patients today feel about their myasthenia gravis, there's still a lot of unmet need. Most of them are making major or at least moderate lifestyle modifications in spite of a whole variety of existing therapies. So there are a lot of therapies, but I think there's also just a tremendous amount of opportunity. The anti-FcRn class, this is a particular indication which has several different assets have reported out data. And as I sort of summarized in the presentation, it all looks good kind of across the board. I think the anti-FcRn class is poised to really redefine expectations for patients with MG. So that's at the class level. Then at the level of competition within the class, as I outlined, I think we have 2 really important and specific product attributes, our broad therapeutic window, the broad range of IgG suppression that we can achieve and then the simple subcutaneous dosage format. That allows us to design a really unique trial around achieving initial efficacy and maintaining efficacy. So competing on the efficacy dimension is important to being a leading brand in any indication. We absolutely think we can achieve that in MG. So that's what gives me confidence that we can compete strongly in MG.

Perfect. Perfect. And then on the subcu route of administration, which is obviously quite unique. I believe that argenx, I think, is developing something similar for their asset. Can you just kind of compare what you're doing versus what they're doing? Any kind of differences that you think are important?

Right, right. So they have a relationship with Halozyme and they're developing a Halozyme-enabled co-formulation. That's a little bit different. It's a system that's been used in, I think, primarily some oncology indications. The formulation that we're developing is sort of a standard run of the mill, simple subcutaneous injection that's been used by many, many, many biologics and been used by individual patients for decades. So it's a really proven delivery mechanism. Why do we have that device available, that formulation available right from the very beginning? Well, I'd like to say batoclimab was born subcu. And what that means is that the inventors of batoclimab actually selected specifically for an antibody that was easy to concentrate in the high concentrations required to deliver a biologic via a subcutaneous -- simple subcutaneous injection. So we've had that sort of engineered in right at the beginning. It wasn't just good luck, it was a strategic decision. And that gives us a unique place in among the anti-FcRns, which is that our development program is fully based on our subcutaneous injection.

Perfect. Perfect. And I guess, let's switch gears to kind of the thyroid eye disease, TED, market. So I guess, Tepezza has obviously had a very successful launch in that space. Just how do you see yourself positioning in that market? Do you think that you will need, I guess, additional like superiority to Tepezza? Or do you think there's a role, even if it's like similar data, just basically, how do you see that, I guess, playing out here?

Right. So I think the really, really successful uptake of teprotumumab has clearly validated the high unmet need that's led us to initially pursue thyroid eye disease as one of the indications, that, along with the fact that it's sort of another classic autoantibody-driven condition. Is there still opportunity after the launch of teprotumumab? I think absolutely for a couple of reasons. First of all, there's -- it's very, very uncommon for a single brand to satiate all the need in any immunology market. Typically, there's a variety -- patients have different needs, they respond differently in the therapy, they respond differently over time. So there's almost always a good opportunity for 1 or 2 or 3 really good different mechanisms for almost every immunology disease. Beyond that, thyroid eye disease has a very unique feature, which is that the labeling is for fixed duration dosing. This is a paradigm that the ophthalmology division of the U.S. FDA follows for many medications. And so teprotumumab's label specifies essentially fixed duration of 6 months of therapy. And that means that different mechanisms have a really good opportunity to be complementary. I think many patients will need more than 6 months of therapy. There are patients who finish teprotumumab and still have residual symptoms. There are patients that finished their 6-month course and then later have a relapse. And then at the front end, there are people that have a disease pathophysiology that may lend themselves better to an anti-FcRn initially. So I think the 2 mechanisms can really be very, very complementary and essentially be a great thing for patients to have both mechanisms available and both brands can thrive in the market.

And I think the last question I kind of had, I think, if I recall correctly, there was some cholesterol signal, I think, in the Phase II study, and there was a clinical hold on all of that. I guess can you remind us do you have -- at this point in time, do you have a good understanding of like what part of the mechanism, I guess, was driving that? And how are you, I guess, mitigating that as you think about both the TED program, and also if that's potentially something that you're considering like in the MG study as well?

Yes, great question. So the LDL signal to which you're referring resulted in a voluntary pause. So we voluntarily halted our studies. There wasn't an FDA clinical hold. And over the course of last year, particularly in the second half last -- second half of last year, we worked with the FDA to get the green light to restart our trials. We achieved that by, first, convincing ourselves that we really understood what was causing the changes in LDL. And to make the story short, there's an on-target reduction in albumin that leads to an increase in LDL that's very predictable. It's dose-dependent, resolves with resolution of dosing and it's lower at lower doses. So that real good understanding of the pharmacokinetics and pharmacodynamics of the interplay between batoclimab and LDL allowed us to design the study that I outlined today. I didn't go into great detail on that because we were able to achieve a really straightforward safety and monitoring plan with the FDA. But you can imagine that in the induction period, the higher doses of batoclimab will yield larger changes in LDL. But that's during a 12-week period, and for the vast majority of patients that won't be a safety concern. During the clinical period, so during the long-term extension after the first 2 periods, during those periods many patients will have titrated down their batoclimab. And at the lower doses of batoclimab, the changes we observed were much less significant. So that sort of approach allows us to optimize not only the efficacy and the level of immunosuppression to tailor that correctly, but also allows us to deal with the LDL for the vast majority of patients. We estimate there might be 5% or 10% of patients who have a very high baseline LDL where there might be a -- there may have been an issue. But for the vast majority of patients, we don't see this as being an issue.

Perfect. Perfect. Great. And I don't think I'm seeing any questions showing up online. So I think, Pete, if you want to have some closing remarks. Otherwise, we can wrap it up here.

Yes. Thanks for that, Ekaterina. So we're very, very excited about this program. The class, as I mentioned, is really, really unique and exciting with immunology. And batoclimab, I think, is very unique and exciting within the class. So you put those 2 things together with a strong balance sheet that was in our slides, I don't think I called it out specifically, but you put those 3 things together, and we have a lot of enthusiasm for the broad development program that we're initiating here in 2022.

Great.