InflaRx N.V. (IFRX) Earnings Call Transcript & Summary

Okay. We'll go ahead and get started. So welcome to the Thursday session of the 2020 JPMorgan Healthcare Conference. My name is Anupam Rama. I'm one of the senior biotech analysts here at JPMorgan. I'm joined by Tessa Romero and Matt Bannon from the team. Our next presenting company is InflaRx, and presenting on behalf of the company is CEO, Niels Riedemann. Niels?

Yes. Thanks so much, Anupam, for inviting us here. Good morning, everyone. I would also like to welcome those listening in on the webcast. Before I start, I have to advise you that I will be making forward-looking statements and you know that there's disclaimers that come with that. Now InflaRx is about C5a-inhibiting technology. We've dedicated about 20 years of research towards this goal, and we are the leading company in the anti-C5a space. We have drugs, 2 drugs, in development that are capable of completely and selectively blocking the activity of C5a in humans. And we have a strong patent coverage which will last until end of 2030 but, with extension, the common extension that we, you can usually get in U.S. and sometimes in Europe, until end of 2035. We have several clinical developments. We have recently completed a Phase II study in an interesting disease which is called hidradenitis suppurativa, and we have seen that our drug can statistically significantly reduce all lesions and has a very durable long-term effect, which is something that is so far missing in this disease, despite the fact that we did not meet the primary end point at week 16 on the score that was developed before. We have a very favorable safety profile so far and very excellent tolerability in over 300 patients treated. We have multiple ongoing other programs. In ANCA-associated vasculitis, we have 2 studies: 1 in the U.S. and Canada and 1 in Europe. We have another study, an open-label study, in another neutrophil-driven skin disease, pyoderma gangrenosum. And we have in the development pipeline a follow-on molecule, IFX-2, which has different features but performance-wise just performs on C5a inhibition just as IFX-1. We also are looking at extending our pipeline, and we will update you on this in the near future. So this is the pipeline as of today. We have completed hidradenitis suppurativa Phase IIb study, and we are about to discuss with the authorities a program for Phase III development. We have ANCA-associated vasculitis ongoing, as mentioned, and also pyoderma gangrenosum, and we are also about to start a trial this year in the oncology field which is so far undisclosed when it comes to the indication. And I mentioned IFX-2, where we made great progress in the last year. One of the goals was to alter the features of this antibody to make it more suitable for long-term use. So I just want to remind you on the terminal complement space as this is a very interesting space. You know that Soliris and ULTOMIRIS are 2 approved drugs from Alexion that inhibit C5. This is how the complement space got more and more of interest. And our target has been and will be, for the time being, really that pathway that you see here on the right side that is C5a-driven information. C5a works mainly through 2 receptors. The main receptor, clearly, is C5aR, and then there's another receptor, C5L2, which has different signaling capabilities and that is because there's different ligands that can bind to it, but they don't bind to the same pocket. So they do cause different signaling and different effects, but the C5a part of the signaling has been shown to introduce PKC signaling and HMGB1 inflammasome. So clearly, a pro-inflammatory effect of C5a. And we are here with our technology inhibiting the ligand, and we can get full control over it. So we are very happy that we can say that we can really control this pathway. We leave MAC formation intact, and I'm going to show you the features in a minute. Just to remind you, our drug binds the free C5a at an epitope that we -- a conformation epitope that InflaRx has identified and well patented globally. We leave membrane attack complex formation intact. Our antibodies can block the biological function of C5a to 100% in human and human blood, and we bind with a very high affinity to this new epitope. Here's one example. This is actually from studies that we've done with patient -- plasma samples from hidradenitis suppurativa patients. This is a CD11b assay that looks at neutrophil activation. So the higher the scores, the more neutrophils get activated, and you see the white bar is just recombinant C5a. So these neutrophils in fresh blood get activated. You can also activate them with plasma from patients that are suffering from hidradenitis, as you see, the 2 blue bars here, and already low amounts of our antibody can completely inhibit the signaling. That also tells us that C5a is crucially important for the induction of neutrophil activation in this disease. To the selectively here without going into great details. On the left-hand side, that's -- it's an assay that's been used for 34 years in our field. It's a hemolysis assay. So as long as you see those wonderful sigma-shaped curves, you know that your lysis is working. So your MAC formation is functionally happening because it can lyse those cells. These are erythrocytes from sheeps, and you can detect the hemoglobin that gets out of them. So if you had an inhibition, you would see the dotted line here with heat-inactivated plasma, but in the presence of our antibody, we see no inhibition. And this on the right-hand side is actually data from a clinical trial that we ran in septic shock patients here over 28 days. You see that in placebo and all dose groups, there's no inhibition of the MAC formation. So we are very happy about the selectivity. So let's talk a little bit about hidradenitis suppurativa, here on Page 10. This is a truly devastating skin disease that is a very chronic skin disease. And the typical features of this disease is that patients develop deep-seated, very painful nodules that can sometimes develop into abscesses, break open and release odorous fluids. And as the disease progresses through the stages here, you will call them Hurley stages, stage 1 is not necessarily chronic, but stage 2, surely, is chronic disease. When you reach stage 3, you typically have fistulas that basically drain pus, sometimes over years, and that pose a very big burden for these patients. So nodules, abscesses and fistulas are the hallmark. And that comes with pain but also with a lot of fluid discharge, which is extremely impacting on the patient's quality of life. And also, as you can imagine, the malodor is a different impact as well. So there's currently only one treatment option for these patients approved, a biologic TNF-alpha inhibitor, Humira, from AbbVie. And in the AbbVie approval trials, this inhibitor could show that about 50% reached a response. Taking both trials here together, one trial clearly performed well. The other trial did not perform the same way. But taken together, about 50% responded. But then, again, approximately 50% lost the response in the next 3 to 6 months already again. So there's a huge unmet medical need. As you can imagine from this that, at best, maybe 25% will stay on this drug that start the drug. And therefore, there's a lot of patients [ that ] need for a new therapy. Our original thoughts of going into this was because we found out, and we actually really discovered this as first company and scientists here, that C5a is extremely up-regulated and generated in this disease. And we also found that neutrophil activation occurs in these patients driven practically to 100% by C5a. So -- and I have shown you earlier here in the presentation an example of that already. So C5a seem to play a crucial role. And when I say dramatically up-regulated, I mean it mean approximately twice as high as we found in septic shock patients. So this is a very inflammatory disease and complement seems to play a clear role. And that's why we went on and looked at the first studies, but before I go there, I want to just give you just a brief explanation of the score that AbbVie used for approval of the drug. That is the score that we failed on at week 16. It's called HiSCR, hidradenitis suppurativa clinical response score. And as I explained, those 3 lesions, this score really looks at reduction only of abscess and nodules, called AN count. But apparently, the FDA, in the documents, mentioned also that you need to look at all lesions for these patients. So there were 2 additional things introduced. And in order to also cover the draining fistulas, one criteria for response that was in use is that you cannot increase your draining fistula count from baseline and not the abscess count either. So 3 criteria have to be fulfilled in order to be called a responder: a 50% reduction of AN count. This is very tricky, and I may go into that in the Q&A session. And then these 2 additional requirements I mentioned. Now we ran the first study in 12 patients in single-center, open-label study, very, very sick patients in this case. And we saw -- we dosed the patients 800-milligram weekly IV, which, for our, drug is a lot, until day 50. So 2-month dosing. And then we left the patients for observation for another 3 months until day 134. And we reported a very good response on this HiSCR as you can see here. And even after we stopped the drug, we had maintained response and even an additional responder, so we came out with 83% response rate. So we took this to a Phase IIb study, and I want to briefly explain that was the SHINE study recently completed. 177 patients were actually on drug in this study, and we had 1 placebo group and 4 dose groups which we called minimal, low, medium and high dose. And minimal dose was really 400 milligram every 4 weeks. And you see then 800 milligram every other week -- sorry, for every 4 weeks and then 800 milligram every other week and 1,200 milligram every other week. So our primary end point here was week 16, 4 months end point, and we wanted to see whether we can establish a statistically significant effect on -- so a dose response effect on the HiSCR. There are statistical means to look at that. We use this MCP-Mod model. So what that does is you fit a fitting curve through the doses and the statisticians and the model can then show you whether that is statistic significant. Now these are about 35 patients per group, and we did not know about the variability of the AN count, and I'm going to come to that in a second. But when you were a responder at week 16, you would then transition in an open-label extension period for an additional 5 month. And the responders really went to the low dose, 800 milligram every 4 weeks. And the non-responders would then transition in the medium dose group, 800 milligram every other week. So the main goals, establish a dose response on the HiSCR and also establish whether we can introduce a maintenance therapy to maintain response over time. And of course, we also looked at safety and long-term safety here in this study. So this was what we got at week 16, and we were quite startled because we could not explain this at that day we got the data. You see the HiSCR response of these 5 groups. It's always placebo, minimal, low, medium and high dose, and you can see that they are practically jumping around the same 40%, 45%, 47%. And at the same time the AN count mean looked like that on the right side. How did that make sense? So at that time, we could not fully explain that. I think, by now, we can. And when we looked at other lesions, like the draining fistulas, it looked quite impressive. Our drug had an even enormous effect on reduction of draining fistulas, especially if you went to the highest dose, and there are reasons for that, that we understand well now. And then we looked at scores and also, this is not on this picture, at just counting all lesions together, and we saw a nice dose response and a significant effect. And when we fitted our statistical model, for example, through this score, IHS-4 score, which looks at all lesion reductions, we would have had a positive trial. Now you can say this is post hoc, but we didn't really do invent something new. We just looked at the lesions that you're recording to then compute the HiSCR. And those lesions, we significantly reduced, but on the HiSCR, we failed. So again, I said that there are some reasons for it, and I would love to go into that in further detail. But let's look at this score because this was not invented by us. It was developed by the HS Foundation through multiple [indiscernible] procedures. And what that does, it just looks at all the 3 lesions and it scores the lesions. So for nodule reduction, you get 1 point. For an abscess, you get 2 points, and for a draining fistula, you get 4 points. Now why was this done? Simply because they found out when they weigh the most fluctuating lesions, the nodules, less strong, the score becomes much more stable and more useful to look at efficacy in smaller patient numbers. So what about the HiSCR long-term response? And this is something that we recently reported in the outcome of the open-label extension phase and that we feel very strong and very happy about. So this is a 9 months dosing, and you see that at week 40 here, we have -- when we just take all patients together, which is approximately 70% of patients that started the trial -- so we had a lot of patients that stayed in the trial over a 9 months week IV dosing. We saw 56.3% HiSCRs. And you see that the responders that we put to 100% at week 16 maintained about 70% response. Now that was -- considering this low dose, that was not the effective dose here, but that was very surprising because that same picture with the AbbVie data would have shown you that it went down below 50%. And at the same time, the non-responders started still or continued to respond up to over 40%. So we said there must be more to it, so let's look at the other lesions. And then when we really started looking at the lesions long term, we really felt even stronger about the effect we saw. So this is, again, all finishers at week 40. Whether they were responders or not doesn't matter for this picture. They're altogether which we call the open-label extension finishers, so to speak. And we compare the scores to their baselines. And here, you see the relative reduction of the AN count of 66.9%; draining fistulas, 46%; the IHS-4 score that I just introduced to you, 54%. But even if you just counted just the lesions, which we here call ANF, abscess, nodule, fistula, count, there was a strong reduction. The median is even approximately 10 points higher for all these graphs. And then we said -- we went to the KOLs and we went to the physicians and said, "Can that be by chance or carried forward? Can it be anything else but a drug effect?" And they clearly told us, "No". And we said, "How can we illustrate it?" Because we don't have a placebo-controlled group in the long-term extension study so, but we had this very well-performing placebo group in the first 16 weeks. So this is it. These are -- the right-hand side shows the first 16-week placebo group with the same scores here. And you see that there is a clear difference. We didn't put statistic on here because to the highest likelihood they're positive, but it's not accurate to compare these 2 groups. But it just gives you a -- I would say, a good impression of how much more effect we got through drugging the patients. So -- and this is just following the IHS-4 score here on Page 21. The HiSCR non-responders are the blue -- responders are the blue dotted line, and this is the IHS-4 score. So that means when you responded at week 16 on the HiSCR, there is a correlation with IHS-4. So these patients stayed very stable over a long term. The non-responders, however, they still had a benefit, and we asked ourselves, "Where does this benefit come from in the non-responder group?" Because at week 16, you have a selection already of those that react to drug or not in this disease. So instead, where does it come from? And the next picture tells you that these are all the non-responders on the HiSCR. But these are -- yes, IHS-4 score. So we're looking at all lesions here. And interestingly, these non-responders at week 16, they had even a worsening of 20% in the IHS-4 score, the placebo group. Now keep in mind the patients were not retrospectively unblinded. They didn't know that they were in the placebo group. And you see what happened. Especially, the placebo and the minimal dose group started responding, not knowing that they were on the placebo group. So we feel this is another evidence that the drug has an effect in these patients. So what we learned from that is that the HiSCR is burdened by a very high variability driven by the AN count, mostly by the nodules, and it doesn't capture draining fistula reduction which was known before. There's an evidence for a very high C5a turnover and that really requires our drug to be dosed higher, not too surprising because AbbVie's Humira is also approved at the double dose and doesn't have much of an effect at single dose. So there is something to this disease that needs more drug maybe because it's such a large inflammation. And IFX-1 leads to a marked reduction in all inflammatory lesions, and that is durable over a long-term effect here, 9 month. We did not have a single drug-related serious adverse event in the open-label extension phase recorded and the drug was very well tolerated. So we will next discuss here with the FDA an end-of-Phase II meeting. We will submit for that soon in Q1, and we will discuss with the FDA path forward towards a pivotal program for Phase III and approval of this drug. So I, we believe that by mid -- by second half 2020, we will definitely voice to you the path forward and the plan for the further development in this interesting disease. Now briefly. We have running other trials. I just want to talk very briefly about ANCA-associated vasculitis. You know this is a life-threatening rheumatological disease, where anti-neutrophilic cytoplasmic antibodies play a crucial role and where C5a has been shown to be the key initiator of the flare phase of the disease. So it's a very rare disease. You see the prevalence numbers here displayed. And the current treatment options are that patients in the flare phase are usually treated either with rituximab or cyclophosphamide in combination with high-dose long-term glucocorticoid steroids. And these come with a big burden, with a lot of side effects. And therefore, there is a medical need for developing a drug that can probably more effectively address the underlying mechanism. And that is C5a, and that is why we went into this development a long time ago. Now C5a needs to be there to degranulate the neutrophils. If they don't degranulate, if they don't release the enzymes and the oxidative radicals, the vessels will not get inflamed. And also both receptors have been shown to be part in this degranulation with ANCA neutrophils. So the -- what we believe what could be a potential advantage -- and I have to mention that also, that a small chemical inhibitor of the C5a receptor has just recently read out positive in a Phase III study. So there is validation of the pathway, and that helps us here also to move this forward with great enthusiasm because we believe our drug will deliver a very rapid onset. When you give this drug IV at the end of the infusion, you have control over C5a. And that's something that we believe may be meaningful because every day counts for these patients when they go into organ dysfunction. And there may be some differences that you could probably move them faster into a full remission, and that's something, a signal we're looking for. We're running 2 trials, 1 in the U.S., just 2 doses on top of standard of care. That is a trial that was wished for by the FDA upon our discussions with them. It's clearly mostly safety-oriented trial, where we test those 2 doses just on top of standard of care. But in the EU, there's a larger trial ongoing, where we have 2 parts. One is basically looking at reducing corticosteroids and introducing our drug. And when that is safe, and that is something we're reading out right now, then we move forward in the second part, where we have, again, a standard-of-care arm that controls for it but then also an arm where we completely avoid corticosteroids and just dose with our drug. So this will give us a proof-of-concept signal, and this is what the main outcome of this trial is. And we -- our primary objective clearly is here to show this, that we can completely get rid of corticosteroids in this flare phase. And of course, we also look for safety, and this is a very safety-oriented trial as well. So before I come to the conclusion, just a few words here. Pyoderma gangrenosum is also a neutrophil-driven systemic autoinflammatory skin disease. This is really a nightmare disease as there's no treatment options available. Some patients do respond to corticosteroids. They tend to have a high relapse rate. And some patients do not respond to anything. So this is an ongoing trial. We have recently announced that we are enlarging it. This is a truly rare disease. Again, it's an interesting disease, and we are here looking forward to sharing some open-label data in the near future. It will be 18 patients. The study objective is, of course, looking for an efficacy signal while having safety always in the foreground. I'm not going to go into deeper PG rationale. Again, neutrophil-driven disease. C5a is the strongest neutrophil activator. So we feel there's a good rationale to go into the study. And again, I mentioned it's open-label. It's running in the U.S. and in Canada and 18 patients shall be minimum enrolled. So our strategic long-term goals, to finish up my presentation. We want to advance our lead program, IFX-1. We are dedicated to move that forward in HS, in hidradenitis suppurativa, towards a Phase III approval program. We will share with you regulatory guidance outcome in the second half of this year, and we will also explore IFX-1 in the other ongoing studies that I shared with you, and we are very excited about the oncology program which will also start this year. We will extend the pipeline also beyond IFX-1. Of course, we want to also expand with IFX-1, but we're looking for IFX-2. There's great advancement in the features of this molecule, and we are also broadening the pipeline beyond that. So with that, I would like to thank everyone for your attention, and I'm happy to move over then soon to Q&A. Right, Anupam?

Yes.

Thank you very much. Have a great day.