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

Welcome, everyone, to the 40th Annual JPMorgan Healthcare Conference. My name is Anupam Rama. I'm one of the senior analysts here at JPMorgan. I'm joined by Caleb Smith, Sumanth Kotha, [ Malcolm Kuno ], and Priyanka Grover from the team. Our next presenting company is InflaRx, and presenting on behalf of the company, we have CEO Niels Riedemann. I want to remind the attendees that there is an app -- ask a question feature in the portal. And if anybody wants me to ask a question on their behalf, please put it in there. With that, Niels, take it away.

Thanks so much, Anupam. First of all, thanks so much for inviting us. We're honored to be part of this again, and looking forward to this presentation. So I'll start right away. I just want to direct your attention to the forward-looking statements we're going to make. So please take note of the disclaimer. Going forward to Page 3. So InflaRx is about complement. We have now several assets under development. Our lead product candidate called Vilobelimab is a first in class anti-C5a antibody. And we are in multiple clinical programs, which I will be talking to you about today. Two of them are in immunoderm, and these are exciting areas where we made great progress recently. We have a severe COVID-19 study in patients intubated with ARDS reading out in this quarter. We're excited about that as well. We have just completed 2 trials in ANCA-associated vasculitis last year, which were both positive, and we have an ongoing exploratory study in cutaneous squamous cell carcinoma. And we have an ongoing exploratory study in cutaneous squamous cell carcinoma. We just announced a new program, 904 -- INF904, an oral C5a receptor inhibitor, which may have best-in-class potential. And we have worked 5 years on this very hard. This goes to the core of our expertise, 20 years of research on the receptor, and we are very happy to speak about that as well. I would like to advance to the pipeline slide. So I've been talking about the areas, just to give you a few more hints here upfront. Vilobelimab is in these different spaces of development. Immuno-dermatological is the space -- the space has become our key focus. Hidradenitis suppurativa, we just announced the initiation of work into a Phase III -- first Phase III pivotal program. We have worked quite a lot with the FDA dermatological section to get support for a new primary endpoint and we will be hosting on February 3 an event where we are going into details of this endpoint and showcase related data, correlation work and other important aspects of that. Pyoderma gangrenosum, we just released towards the last quarter of last year, the data in the last dose group. These were very positive data for our company. We had a dose-related efficacy reading and the high dose gave us a very high response rate in this extremely difficult rare disease -- difficult to treat and very cumbersome for the patient. As I mentioned already, severe COVID-19, this trial is reading out and 2 positive trials in ANCA vasculitis. Why do we put them together? These are both diseases that are life-threatening and both have a vasculitis component. As you may know, neutrophils drive ANCA-associated vasculitis, the vessel inflammation, quite a bit through complement activation. And we believe that a big portion of severe COVID -- the most severe forms, the ARDS, lung failure part is also driven by, at least, I would say, a microangiopathy with thrombosis, and we believe C5a plays a role in it. Oncology exploratory. I'm going to be speaking about that a little bit. We do have a follow-on molecule, which is fully humanized altered antibody to have different features for more chronic development, also binding to the same epitope, which is still in pre-clinical, which is called IFX-2. And we have just released first data and also the existence of this program, INF904, the C5a receptor antagonist. So let's jump briefly through the terminal pathway again, on Page 5. So this is C5, which gets cleaved into C5a and C5b, which is considered the terminal pathway. I just want to remind you that C5 can be cleaved by the complement pathways, but also by enzymes. And this latter way by enzymes may play a role in different diseases. For example, thrombin, which is very active in COVID, can cleave C5 directly outside the path basin. Why do I mention that? Because the known and marketed C5 blockers do not inhibit this cleavage. So if you want to work on C5a, you need to have a specific targeted approach like our monoclonal antibody Vilobelimab. And C5a works through 2 receptors, C5aR, which is our key receptor here for our INF904 component and a much less researched and also less present receptor, C5L2, but this has different ligands. I just want to remind you, the C5a engagement with this receptor leads to largely proinflammatory effects as well. So let's talk a bit about immuno-dermatology. Just want to advance to Page 7. We've talked a lot about hidradenitis suppurativa. Pretty chronic, very devastating skin disease which manifests through deep-seated nodules, which are painful that can writhe into abscesses, become very painful. And in the later stages, also draining tunnels that are deep-seated lesions with an opening to the outside, and they usually drain a lot of pus -- up to a liter a day per tunnel. And this makes life miserable for these patients. And typically, the armpits, groin areas, genitals are affected by the disease. Now I'm not going to go into the details here. There's one drug approved. There's a large unmet medical need despite the approval of Humira. A lot of patients are left without treatment option. And we have started a trial in the past, which had failed on the primary endpoint, the so-called HiSCR, which was used for approval of Humira. And if you advance to Page 8. This was the SHINE study results. The HiSCR did not show a positive signal. However, the HiSCR was a -- result in the placebo group was huge with almost close to 50% placebo response. So we learned that there are shortcomings and difficulties. And the HiSCR has a shortcoming. It doesn't even respect if your drug works on the draining tunnels, which are the most cumbersome lesions, which has been published quite extensively. And we did a lot of work on this. Pharmacodynamic studies suggest that we need a higher dosing. This is already agreed with both agencies in Europe and with the FDA. And we also saw a pretty substantial long-term effect with our drug keeping patients even with a nonoptimal dose, keeping patients that stayed on the drug are improving over time with the signal that has not been published otherwise so far. So we, in the end, like the results, but we suffered a lot from the miss of the primary endpoint. And we made certain conclusions. HiSCR was burdened by high variability. We needed increased dose. We need a new endpoint that respects reduction of all 3 inflammatory lesions. And we believe that our long-term data are -- could be an outstanding achievement that really differentiates this approach. So what have we done? We've had some discussions with the FDA. We completed in the last summer a Type A meeting. We got support for a new primary endpoint. We will discuss all details to this endpoint with the FDA -- suggests we name modified HiSCR. And we are very happy to announce that we have already submitted the protocol, worked in all the advice from the FDA. We cleared the 30-day review. So we start the trial now. And we will, on February 3, discuss this new modified HiSCR in greater detail. Coming to pyoderma gangrenosum. This is a nasty skin disease with large ulcers typically on the lower extremities. It's a rare disease. There are no approved current treatment options, neither in the U.S. nor in Europe. And so these patients get treatments off label, but there are not even guidelines in terms of -- yes, expert opinions exist, but not even established guidelines. So difficult situation for the patient's high unmet need. We conducted a study where we had 3 groups, 800 mg every other week. This is Page 11. Now 1,600 milligrams every other week and 2,400 milligrams every other week. Always with induction of the first 3 doses of 800 milligram. And then we allowed always the last 2 patients per group, if the safety was great, to advance to the next higher dosing group after a certain time spend on day 57 if they didn't improve. We used the PGA score on Page 12, you see some data. PGA score is an assessment which looks at improvement to baseline. If you stay at 5, that means there's no improvement. If you go to 6, that means your ulcer is worsening. However, a 4 could mean already up to 50% closure; a 3, up to 75% and so on. When you reach 1 or 0, your ulcer is more or less completely closed with maybe reminiscence of crust or skin discoloring. So in the first cohort, we reported earlier 2 remarkable cases that cleared not only the target also but the entire disease. But overall, the cohort, you see not everyone responded and patients were kind of zigzagging between visits. Now in the next hurdle, this was in the middle of the starting pandemic. We got a bit unlucky. 2 patients were not evaluable. One had skin rash and discontinued; the other just left the trial center. And then there were also others that were, I would say, in a very poor disease status. However, one patient sparked our interest, which is patient #10. This patient was dose escalated and showed a beautiful response from a very large ulcer that healed a bit and after updosing very rapidly completely. So we were looking forward to get results from the highest dose cohort. This is now Page 14. And as you can already visibly see here, 6 out of the 7 patients showed a remarkable consistent improvement over time. I do want to flag -- and they all closed their ulcer and the ulcers in the disease and stayed closed during the observation period for where we had already observational data. The trial is almost completed. There's a few more patients that have to finish observational study, but everyone finished treatment at that point in time when we reported the data. I want to flag one patient had an existing -- coexisting severe skin infection and was started on antibiotics together with Vilobelimab. This is a protocol violation. And he had a very complicated course. However, the target ulcers are still closed, and this is why we kept them on here. This is patient 19, I believe, yes. Good. So the nice part is these correlated with C5a levels, and I'll give you just a hint on Page 15, 16, 17. In Page 15 is a patient example. That was the one in the medium dose group that we escalated. A devastating ulcer that we really got to heal completely. This was a great success that patient had tried to be treated with high dose corticosteroids, ciclosporin and other treatments, and they all failed. The next patient on Page 16, this was a very tough to treat disease patient, multiple failed trials with different off-label products. And in the end, we were successful with this patient to close the wound. You see that these patients typically get oftentimes prednisolone, 10 mgs to handle the pain better. This is typically a side medication that we also allowed in the trial. On the next and last patient as an example is very interesting. This is a patient who had PG since 2020, but he had preexisting psoriasis since 2017, and he was on adalimumab since 2017, and he developed PG under adalimumab treatment. And he was the fastest responder in the trial. We did get a late report of a baseline, so pretreatment tuberculosis positive tests. This is why for safety reasons, we discontinue it from further treatment, but the wound stayed closed and he did not reactivate TB, and this may have been a false result, but this was for safety purposes. So in all conclusion, safety looked great. We had one infection in the skin, which is very common in these patients and the skin rash, which is due to our drug, which I already reported. The rest of the profile of the AEs was in line with underlying disease. And there was no dose relation in the AEs. Clinical response out of 17 evaluable patients, we had overall 9 patients that fully closed, so in remission; 1 patient that saw clinical response up to PGA score of 3. And the other 7 patients had at least a slight improvement. Now looking at the high dose group, we had an 85% remission rate, which was great. This was also correlated to C5a levels. We are very interested in this data. We will meet with the FDA next to discuss a potential fast path to a pivotal program. So this is the immunoderm space. Very briefly, we have talked about the COVID-19 on Page 20 here before. This was our hypothesis, which we derived from our Phase II study, an early study in 30 patients. And the great thing about this, we published this in the Lancet Rheumatology that by now, many of these hypotheses have been confirmed. Tissue factor release from neutrophils is -- has been shown only months later after this publication. In the meanwhile, even direct platelet aggregation through C5a has been confirmed. I should mention that these COVID patients that we're talking about, the severe COVID patients have some of the highest C5a levels in the blood that we've ever found in patients. So this can induce thrombosis, it can certainly induce neutrophil activation and tissue damage in the vasculature. So we believe C5a is key involved in microangiopathy and in thrombosis. By now, they call this immunothrombosis, which is an interesting aspect. So I'm not going to repeat the Phase II study results. I'm going to jump to Page 22 with you. And just to the status, we fully completed enrollment last year. We are awaiting the results of the 369 patients available for this trial, all intubated ARDS COVID patients still this quarter. So we are very excited about that. You can see the outline of the study here. Just want to mention the primary endpoint is the highest hurdle you can set, which is the 28-day all-cause mortality. And we are very eager to see results and see whether we can prove that Vilobelimab is a life-saving drug for these patients. Good. With that, I'm just going to very briefly just summarize ANCA-associated vasculitis on Page 23. We've had 2 trials. On the lower part of that graph, you see the U.S. trial which was a safety trial where we treated with Vilobelimab on top of standard of care. And we had no safety issues, and we also saw a slight trend here towards faster, full remission and also overall, the corresponding groups together had a bit more patients in full remission. However, the European trial was a larger -- a bit larger trial there, we also had a group where we exchanged high-dose corticosteroids completely to Vilobelimab. And all 3 groups showed very high full remission rates between 77% and 80%, which is great. This is actually above average for all trials. On top of it, we were able to show that the Vilobelimab-only arm had a very tight glucocorticoid control. And it mean pretty much 0 additional corticoid induced toxicity while we saw a clear toxicity induced in the standard of care arm. So this creates a future option for Phase III development. We want to have regulatory interactions to understand how a potential path could look like. However, we do now focus on immuno derm. So this is really a nice future option to have, and we will be evaluating how that could look like. So last but not least, Vilobelimab in oncology. We took quite a few years to prepare for this on Page 25. This is a very high-level summary. C5a, they're about -- in the meantime, roughly 100 papers on the role of C5a in different tumors. There is certainly a direct effect, immunosuppressive effect on the tumor microenvironment because C5a attracts the neutrophil skin lineage MDSCs, myeloid-derived suppressor cells, which partially initiate from -- originate, sorry, from neutrophils. And so C5a attracts them, activates them. Long story short, it basically brings the T cells down and lets the tumor grow. There's also a metastatic effect that's been described and also a direct tumor growth effect by now. We are assessing efficacy and, of course, also safety here in a mono arm and in a combo arm with pembrolizumab. We have a drug supply agreement with U.S. Merck. And you can see some disease details here on the right side. I just want to mention this is locally advanced and metastatic cutaneous squamous cell carcinoma. So this is a rare subpart of the relatively common squamous cell carcinoma of the skin. They respond well to checkpoint inhibitors, but second line -- pretty much all of them that respond fail over time and second line, there's nothing available for these patients who also have high unmet medical need. We are running the study. It's recruiting well. We expect first insights into the study during this year. We have not guided concretely. Key results will definitely not be available this year, but we are really eager to learn more about this in this exploratory study. So this brings us to 904. We are very excited about this pipeline program. Two slides only, then I'm done here. C5a receptor is a very interesting target. It's a 7-transmembrane G-protein-coupled-receptor and we have worked off from a structure that was known to inhibit tryptophan 213, which is in the membrane, a very important allosteric binding site that gives you full efficacy when we block there. However, it means you have to have a certain structure to get in there. We were able to already get a patent issued in the U.S. And on the next slide, I'm just going to show you on Page 28. A few highlights. We believe it has best-in-class potential. We have seen absolutely no tox findings even up to the highest dose tested in the IND-enabling tox studies. We show a very high in vitro potency with the desired IC50 here. We have shown in comparison to avacopan-like molecules clearly less CYP3A4 inhibition, which is an important cytochrome enzyme apparatus that builds down other drugs and corticoids for example. We have seen higher plasma exposure. This was our initial goal. And you see on the right side, lower side, an experiment in hamsters, we have at 24 hours, close to 4x higher plasma presence, which may lead us to think maybe we can dose once daily with this drug. And then also a better potency in an in vivo model. This is the upper right graph, where we induce neutropenia in these small animals by adding C5a. They start sticking the neutrophils to the cell wall and you can prevent this if you block the receptor on the neutrophils. And you can see that at the exact same doses of avacopan-like molecules and INF904, we have a better potency and better efficacy. That means at lower doses, we get a larger coverage of the receptor. This is exactly what we wanted in the development program. So we've developed a few efficacy models with renal disease, peritonitis, and we are very happy with this molecule. We have initiated first discussions, which we will help hold with the agencies, and we hope to start first-in-human trial in the second half. This was our pipeline. We are very excited about this. Then last but not least, we have here a wrap-up on strategy. And Jordan, would you want to cover the last strategy slide here for us? So I'm happy to hand over to you and then thank already everyone, for listening in, and happy then to answer the questions together with the team. Jordan?

Thank you, Niels. Yes. Thank you very much for a great presentation. As Niels has indicated, we're really excited about the focus that we have developed on this immunodermatology platform with initiating our Phase III program with Vilobelimab, including this novel new endpoint called the modified HiSCR, which we will have an R&D day very soon to showcase what this endpoint is and our Phase III study design. Based on the pyoderma gangrenosum data that we released last year, we look forward to progressing this toward Phase III based on regulatory guidance. And then our additional pipeline, severe COVID-19, we do have a big Phase III readout coming by the end of Q1. And if this is positive, we certainly will move this to help patients in the U.S., Europe and other countries. With AAV, we are very excited about the data we generated in our U.S. and European studies, and we look forward to discussing next steps with the regulatory authorities. In oncology, with our collaboration with Merck, we look forward to continuing to see -- showcase what this may do in combination with KEYTRUDA. And also, which we recently announced this week, really excited about showcasing INF904, our new C5aR receptor antagonist and advancing this into our first in human studies by the second half of this year. We also, given our financing we did last year, we do have a strong cash balance and look forward to progressing our programs as we move into the rest of this year. So thank you very much for hosting us, Anupam, and we look forward to discussing with all of you in the coming weeks.

Okay. Niels, if you want to introduce the broader team on the line beyond Jordan, we can get started. I think you're on mute.

The classic. I have with me here also next to Jordan, our Chief Strategy Officer, I have Thomas. Thomas Taapken is our very experienced, great addition to the team already over here with us, our CFO. I should mention though that Thomas is also a chemist by training, he's a scientist and a long years investor. So he has been in the industry for a while, and we feel privileged to have this great team here.

Maybe I'll start off. We'll start out with INF904, which you just talked -- disclosed earlier this week. C5aR, similar mechanism to avacopan, right? And you talked about some of the differences here. Why was it important to bring a C5aR forward for you guys as the next asset? And maybe not just with Vilobelimab but also avacopan, how do you think about the range of indications that you could move forward with this after kind of the first-in-human study?

Yes. Thanks so much. Great question, Anupam. And really it is already -- in the second part of your question is already kind of the answer because we have such a bandwidth of indications that this is possibly applicable for -- this mechanism of C5a/C5aR inhibition that while we feel Vilobelimab is a perfect molecule to have full control over the pathway, it is an IV drug. It is unlikely to be manufactured to be an injectable at this point in time. We may achieve that with our follow-ons, but not with Vilobelimab. However, an oral drug is clearly something that we've always been wishing for certain chronic indications. And this opens a very new space. I mean, you may be well aware that Alexion has been very creative, entered the neurological space, great, great move into this space. There are other spaces that are currently explored like kidney diseases with a receptor antagonist by ChemoCentryx. So there's a broad bandwidth of indications. And some of them, you can simply not well explore with an antibody. And just maybe one more thing to add. Since we have announced this, we've seen a strong interest by the industry in this because we know that many, many people have tried to develop an oral C5aR inhibitor, chemical inhibitor. And it's a long history, but only one has been successful so far. So we are excited about this molecule.

Maybe thinking about Vilo a little bit and HS, a lot of work to get the FDA to kind of sign off on the trial design. What ultimately led to FDA to move away from HiSCR as a traditional endpoint? And I guess one of the key questions for us is how do you control the heterogeneity that is seen in HS? Yes.

So I think 2 things that really help us here. First of all, I think key to this opening up was the agreement with the FDA, that reduction of draining tunnels to non-drained tunnels is a very meaningful event. Just by the wording, you still have a draining tunnel or non-draining tunnel. You still have a tunnel or a fistula as previously referred to. But the disease now the understanding has progressed. So that means the lesion inside the skin that drives the draining tunnel is completely different when you're reverting to non-draining. Now the opening may not close because it's epithelialized, that's a very different thing from the other fistulas. However, you can excise this if you are cosmetically disturbed by it. So the opening was really the agreement that changing a draining tunnel to a nondraining tunnel is extremely important for patients with draining tunnels. And that's the second part of the answer to your question. We are now focusing on active draining disease, so all moderate to severe patients that have active draining tunnels. You have to have at least one active training tunnel. So for these patients, it's clearly meaningful and obviously, it's not captured by the HiSCR. So when we listen what they don't want from an endpoint, I think we moved after we were able to convince them that the draining tunnel reduction is important.

And some of your peers are focusing maybe in a more severe population. You guys are focused on moderate and severe patients. Talk to us about that distinction and if heterogeneity is more of a risk in more moderate patients than in, say, severe patients.

Yes. So I would say part of the heterogeneity we capture by saying you have to have an active draining tunnel to be in the disease. This per definition makes you an early stage 2 or 3 patient. So the problem of the heterogeneity really comes in when you're using a score like the HiSCR, which rewards you primarily on reduction of abscessing nodules. Why do I say that? Because the majority of lesions for the patients are nodules, and they are fluctuating all the time. That means if you're focusing on abscessing nodules, not your count reduction as main endpoint, you get a large variability. And the more patients you have with low counts, the higher chance that you get a responder by chance, even in a placebo group. And so that problem we have now really more or less eliminated with the new endpoint that really asked for reduction of all 3 and emphasizing the requirement of reduction of draining tunnels. So I think we did both tricks. We resumed in patients that have the problem of a draining tunnel, which is typically a more severe type of population, even though they're still early stage 2. And then also, we created a new endpoint, which will not show you this huge variability anymore. And this is something we want to showcase on our February 3 date to say, "Hey, what does this endpoint do? When you look at, for example, our trial, HiSCR response rate, 47.1% in the placebo group, crazy. How would that exact same group would look like on the new endpoint?" And I can already give that upfront here. It will be substantially lower. And that's really showcasing what this endpoint does and how it takes off that risk.

And then I know you're waiting for some feedback on PG, the next steps, but any initial thoughts on size and scope of what that Phase III program might look like?

Yes. So I think the scope can only be guessed at this point in time, but there is precedence for one Phase III trial that has been pre-discussed with the FDA, and that was a company with an [ IL-1 beta ] inhibitor. They actually started at 58, if I recall correctly, patient trial and they unfortunately stopped it very early after, I don't know, very few patients for some futility reasons or some problems in the trial. However, this gets you a guess of what they planned. So it's a pretty rare disease. So we're not talking about 300 patients per trial -- that would be completely unfeasible. We have here 19 patients that took us a while because we only worked with centers in Canada and U.S. before and then later on, added a couple of centers in Europe. So of course, if we go to broader scale, I think these patients are there. We hear this. Interestingly, there's synergies because it's almost the same centers that have HS patients that treat also PG patients. So there are synergies. But I guess, in the range of maybe something between 50 to 100 patients would be a wild guess without having had any feedback. And we will, of course, update everyone on whether we can maybe tie this down a little bit. And thankfully, we have a lot of safety information from other trials already on the drug.

Maybe a final question for me, which is -- so the severe COVID-19 trial is reading out here in the near term, that's been a pretty tough population in the inpatient setting. Any thoughts on what a clinically meaningful change in all-cause mortality would be or maybe remind us what the trial is powered to show?

Yes, we haven't -- we have said that we have over 90% powering in the trial. So that means we have to have power for a large effect size. The first part of your question, we haven't released exactly the effect size, but the first part of your question is tricky. So your question is, what would be meaningful. And there are a few different ways to look at it. You can say, okay, every life is meaningful. We all would agree. However, an expensive drug, if you show a very minor effect, we know that from the [indiscernible] stories back then it just doesn't get picked up by intensivist. So if you ask me as being a former intensivist, I would tell you, if you show an impressive effect and impressive, I would start -- I would think, start somewhere between 30% and up relative, right? So that means a relative reduction of 30% up. That is something where my peers as intensivists would not think. They would just say, "If I can get that drug, I will give it, period." If you, on the other hand, come with something like 15%, I know that people will be suspicious. Let alone, you would need 2,000 patients, and that trial will probably not be recruitable in high-class centers. So to our knowledge, the 369 patients is the largest yet conducted trial in intubated COVID patients with a new asset in a 1-to-1 randomized fashion. So this is quite an endeavor for us and I would guess, in that frame, 30% up, there's no discussion in the frame 15% to 30%, there will be some discussion. Below 15%, I think, intensive has become very suspicious whether that is by chance in a single trial.

Okay. Okay. Niels and team, thanks so much for a super productive session. I hope you guys have a great rest of the day.

Thanks, Anupam. Thanks again for inviting us and all the best. Talk soon.

Thank you, Anupam. Bye.