KalVista Pharmaceuticals, Inc. (KALV) Earnings Call Transcript & Summary

Welcome to the Global Healthcare Conference. I'm Pete Stavropoulos, biotech analyst with Cantor. With us, we have KalVista. It's a company that I cover. And now I'm pleased to introduce the CEO, Ben Palleiko.

Yes. So let's start off with an introduction of yourself, followed by a description of the company.

Thanks, Pete. Yes. Thanks for having us here. It's really nice to be back at this conference again for another year and get to talk to you all. So KalVista Pharmaceuticals is a precommercial company. We have a product called sebetralstat, which has -- we've now filed an NDA in the U.S. and also MAA in Europe to get marketing authorization to sell for treatment of HAE attacks. And for those who don't know, hereditary angioedema is HAE. It's a genetically derived disease. It's very rare. It's about 150,000 globally. And what happens is patients either lack a gene or have a low functioning gene that causes them to suffer these sporadic variable bouts of extreme swelling, and so for a bunch of reasons or effectively for no reason, what they will have as a cascade takes off. And it leads to typically localized swelling commonly in the abdomen, but also peripherally and, extreme cases, sometimes patients will actually have laryngeal swelling, and that has -- that can lead to asphyxiation actually, if untreated. So it's a fairly small population, obviously, but it is a lifelong disease. It's obviously familial. It has a great impact on people's lives. And so despite the fact that there's a number of treatments involve, and I'm quite sure we'll get in the competitive dynamic here, the fact is there's still a very high unmet need in this population because a lot of patients treat only on-demand way. And the only -- the therapies nowadays are available to them are all injectable or infused or they use prophylaxis, which -- there is one oral prophylaxis, but also most of those are injected or infused. But the problem is even patients on prophylaxis still have breakthrough attacks at a fairly significant rate. So it's a disease where there is still a severe need for a more efficacious and -- treatments that allow patients to actually live a more normalized life. And that's what we're looking to provide here in next year, assuming FDA approval.

All right. So you just mentioned that you have an NDA filing. It was supported by the Phase III KONFIDENT study. Presented data at AAIC -- I'm sorry, not AAIC, AAAAI, confusing Alzheimer's maybe, and you also published it in the New England Journal of Medicine. Just take us through the key highlights of that study, key takeaways.

Yes. So the Phase III study, which we called KONFIDENT, with a K, was a follow-on to our Phase II study, obviously, which is actually the same study design. And what we did in this study was a -- it's an on-demand treatment. So what we did is we brought patients in, they enrolled in the study. And I'll talk more about the criteria here because I think that's important in a minute. But function of what we did is we had 2 active doses of sebetralstat, 300 and 600 milligrams, and we also had a placebo. And so what patients would do was come in and treat up to 3 attacks, 1 each in a blinded manner, randomized with each of those therapies. And then what we did is we -- the data points we collected, the primary endpoint was what's called time to initial symptom relief using a scale called Patient Global Impression of Change, which is a 7-point categorical scale. We can talk more about that if you're interested. And then we had a number of secondaries as well. And so the point was what we ask patients to do is when they feel an attack coming on, to take their therapy and then recorded various time frames how they feel compared to the time at which they took their dose. And the first time point at which, twice in a row, they said they started to feel at least a little better was the primary that would be reached. The data was highly statistically significant. We showed them the 300-milligram arm patients started to have initial symptom relief for about 1.6 hours. It was much, much longer than that in the placebo arm. On the secondaries, we hit all those in a statistically significant manner as well. So the data was really -- was very positive. It completely tied together with the Phase II data, which showed very similar results. And actually, equally importantly, probably is the fact that the safety was just absolutely pristine. We've had -- we've always displayed really good tolerability with this drug in all the clinical studies. We actually published in the New England Journal, as you said, the Phase III results back in the spring. And a notable point, which I think our CMO is very proud of, is the fact that in the New England Journal, they actually know that the safety profile was no different than placebo, which is a pretty strong statement. I think the key thing about the study though, which is really what matters, is this is the most inclusive, broadest-ranging largest study ever conducted in HAE. We enrolled the most number of patients, and we enrolled effectively everybody with HAE. We allowed them to treat all attack locations. We allowed them to treat all attack severities, from mild all the way to severe. We treat laryngeal attacks. We now got the largest -- I think the largest database of laryngeal attacks treated in a clinical setting ever. We allowed patients on prophylaxis to use this as well. And so this population of study was really intended to look very much like the real world population of HAE in terms of all the way they treat and the attacks they treat, and I think that's what makes it particularly powerful. As we will now, again, assuming we get approval here, be able to go off and talk about the fact that no matter who you are, what kind of attack you have or what else you're doing to treat your disease, we've shown that we can actually -- you can benefit from this.

All right. When we initiated on KalVista back in 2018, I remember looking at the PK/PD curves, and what was striking was how fast you onboarded. You reached 2x IC50 in a very short period of time, I think, less than...

15 minutes.

Less than 15, and then you hit 100 times IC50, I think, in less than 30 minutes. Okay. And so it seems like that translated in the Phase III, but there was a little bit of a debate about requiring a second dose. And so can you tell us about...

No. That's a great question. So what Pete's referring to is the clinical trial protocol, you're right, and this is a point I didn't talk about. What the clinical protocol trial -- trial protocol said was that patients should take a dose at the first signs of an attack, as soon as they believe they're having an attack. And then the protocol said, and if desired -- not quite what it said, but basically, they were not allowed to take a second dose if they thought the symptoms warranted, if they want to take a second dose. And the reason we did that is because, in the real world, actually, patients fairly commonly take additional doses of their drug. The redose rates of FIRAZYR, depending where you look, range between maybe 20% on the really low side. But I've seen numbers as high as probably 50% redose rates. So we're -- again, we're trying to sort of enable patients to treat the disease in the way that they think is warranted, and so we put that in the protocol. Now at the end of the day, what happened is, and actually the poster that the KOL presented where they talked about this, he was asked this very question and his answer was why they take a second dose because they could, like because it was the protocol. And so we did -- as part of the data release, you were very well to point out, they -- we did point out the fact that patients took -- about 40% of patients took a second dose in study. We honestly didn't think that much of it. That was probably our fault. But it did raise this question of, is there an efficacy issue that you have to sort of solve for? And so we went back and relooked at the data, well, and we sort of talked later and we said, well, actually, pretty much everybody got to the primary endpoint at one dose. So it wasn't really an efficacy thing. What it really more was the fact that the protocol allowed it, and it was a patient behavior thing. Since then, we've generated this open-label data. We've now treated again. We've now treated more clinical attacks and -- more HAE attacks in a clinical setting than anybody ever has before. We've treated upwards of 1,600 attacks in the open label now. And what's been very interesting is we've looked at -- we've monitored things like that. And actually, the redose rate in the open label is down right around 25%, which is actually at the low end of those FIRAZYR numbers I talked about. The use of conventional therapy, which was, I don't know, maybe 10% in the Phase III trial was down around 5% in the open label, which is about what you see in the real world. So, a, I don't think it was that much of an issue to begin with, like maybe just -- I think we just didn't -- maybe we didn't present it as well as we could have; b, certainly, to the extent that it was something people were paying attention to, the open label has really shown that everything about sebetralstat is just trending to what you see in this space generally, which really goes more to patient behavior than the drug itself.

I can see it. I mean, throat's closing or you're starting to swell, you want to see it come down. I mean...

Or even you're going to work, right, and you think to yourself, I took it, I feel good, but I want to make sure I continue to feel good, I'll take a second. I mean, that's -- this is why when we ask people in the real world why they take a second dose, that's the kind of answer you get. I've got to go to store, I got to go to work, I know, whatever, I just want to confirm that I'm feeling better. And so it's a lot of times, it's that as opposed to the drug itself.

Yes. I think okay, I won't get into that one. But anyways, the treatment guidelines for HAE says attack -- not attack, treat as early and -- as early as possible. And so I guess you do see significant delays in treatment with standard of care. Can you just talk about that delay, the reasons behind it? And again, the Phase III data and the interim OLE data that you presented at EAACI, that's suggesting sebe can actually shift that behavior.

Yes. So again, everything in the on-demand space nowadays is either injected or infused. And the leading drug in the space is branded name FIRAZYR, went generic a few years ago, branded -- generic name is icatibant. It's probably, I don't know, what, 3/4 of the marketplace in total. Patients -- and there's been a number -- this isn't really our data. There's been a number of studies that have shown this. It's well known that when people are having attacks, they delay, in many cases, for several hours before they treat and despite the fact they know they're having an attack. And there's a lot of reasons for that. It's kind of a matrix thing. One issue is that FIRAZYR, icatibant, is actually very painful to inject. It's very aesthetic, and so -- it certainly -- they call it -- I mean, sometimes it's kind of morbidly called FIRe-AZYR because it hurts when it -- as it disseminates. It also causes, effectively at 100% rate, injection site reaction. It actually yields this mast cell inflammatory response. And so patients get a pretty substantive welt when they inject themselves, almost always, that can last for several hours and so it hurts. So -- and also abdominal attacks are quite common. And so it's also -- imagine you have an abdominal attack and you have to inject abdominally a -- this medication. So people pause because of that. People also pause because it's really awkward to carry. I mean, it's a prefilled syringe. It's pretty big. And even if it's disassembled, which it commonly comes as, it's still a pretty good size box. You kind of -- it's hard to carry in your pocket. You can't really leave it in your car. I mean, it's not supposed to be sort of sitting in high temperatures in the stuff for a long time. So it's an awkward thing to carry. And again, the injection process by itself is [ nontribulant ]. So people don't want to treat themselves whatever here in the office, at work, whatever, at a party. So commonly, they'll go home. The end result of all this is, and multiple surveys have shown, people unambiguously know they should treat early. But on average, they wait something like 3 hours or more, on average, to treat. In our study, in our open-label study, adolescents using -- and adolescents actually don't have access to FIRAZYR. Adolescents only have access to IV-infused therapies currently. And on average, adolescents are waiting closer to 8 hours before they treat. So these enormous treatment delays, despite the fact that early treatment really matters, that leads to unnecessary suffering, right, because attacks do generally escalate if they're untreated for a period of time. And so it's just -- and at the end of the day, a lot -- about maybe 1/3 to half of attacks aren't treated at all. I mean, you do see that treatment rates vary between about 50% and 65% in the world generally. So by comparison, sebetralstat just utterly changes all of that, and we've seen this state in the open label. In our open-label study, patients are treating, on average, within 9 minutes of attack onset. Adolescents are treating on average within 3 minutes of attack onset. So these people know they're having attacks. They can tell when they're coming because it's obviously a disease you have your whole life and you're familiar with it. So they unquestionably know when an attack is commencing. Now they're able to treat it as soon as they could. And also, they're able to treat at a much higher rate of attacks. So I told you, in the real world, maybe at the high end, maybe 65% of attacks are treated. Right now in our open-label study, they're treating north of 85% of attacks. And again, maybe that doesn't play through in the real, real world. Maybe it goes down to something less than that, but unquestionably, though, they're not treating enough attacks, and they will treat more in the presence of sebetralstat.

FIRAZYR, I've heard -- but bee sting is what the KOLs that I've spoken to.

I've heard more than that.

All right. So you did have a whole bunch of presentations at EAACI. Any of them that you want to highlight?

We have put out a phenomenal, I mean, and again -- and full credit to our medical department here for this. We put out a phenomenal amount of data cuts on this -- ,on the sebetralstat development program. I mean, we've -- in addition, to running the biggest and the broadest and most inclusive trial ever, we certainly run the most transparent trial ever. I mean, the Phase II results were published in The Lancet. The Phase III results were published in New England Journal. We did -- at EAACI, we had 6 posters. I think in AAAAI, we had something like 10 posters. We were just in Berlin a couple of weeks ago at a different conference, had another 6 poster. So the data is just at a tremendously high rate. I think -- and so I think it's really hard for me to pick out any single data set that I think would be important. But I -- but everything we do, I think, just continues to point to the -- again, I can touch on so many different levels: just the high unmet need; the fact that, again, not enough attacks are treated and they're treated till it continues to show. The quality of life that people endure as a result of this has really impacted substantially. There have been this commonly held myth in the space before we did our Phase III that patients on long-term prophylaxis actually had much milder attacks on average, and so they didn't require treatment generally. That was kind of in this common refrain. What we showed in our study is actually that they have attacks that look exactly like patients on on-demand. I mean, the severity distribution is about the same and also the impact in their quality of life is about the same. I mean, if you're a prophylaxis person and you're having one attack on an infrequent basis, you still have the sort of challenges that are associated with that in terms of just thinking about your disease and having it feel like it's something that's omnipresent in your life. We're -- the idea here is, obviously, now that can all recede because you'll have this tablet in your pocket, in your backpack whatever. And when you feel the attack coming on, you'll take it, you'll go about your day. And overall, the impact on your overall well-being is going to be much less. So we've highlighted those kind of topics. We've cut -- we've shown all this data with regard to long-term prophylaxis patients compared to on-demand users. We've shown adolescent data. We've shown European data. I mean, data set is -- I mean, to call it rich would be just underplay, I think, how much we've actually put out there.

Okay. All right. I'm going to pause here for a second with sebe and ask you about a competitor program. They recently had data at the Bradykinin Symposium.Just wanted your perspective on that.

Yes. Yes, there was these other folks that put out a -- I think it was a press release actually, right, a couple of weeks ago and a couple of posters they presented at this Berlin symposium I mentioned. I think I got some attention in some quarters. I think some of your competitors probably got a little enthusiastic. I think our summary is it's -- I think there's much less of it than it appears, I guess, would be the summary. The clinical development program that, that -- that those folks are drawing is sort of the old school clinical development program. It's kind of -- FIRAZYR was approved in 2011 or something, and their model is sort of what that model was, which was you basically don't treat all attacks and you don't treat them early. What you actually do is you treat a subset of attacks because you require them to wait until the attack reaches a certain level of severity. And so I think they've been very open about the fact that there's -- they're not doing what we do, which is what the guidelines say is they're not encouraging patients to treat all attacks and not encourage them to treat them immediately. They're -- and for the clinical trial purposes, they're sort of waiting till they get to this level because what that does is kind of maximize your parent treatment effect. And so I -- and there's probably a lot of other things. But I think to summarize it would be it's just a very different clinical trial program that is serving a different purpose than, I think, ours. And I just want to come back to what we are, which is, again, we've run the largest, the broadest, the most inclusive clinical trial ever in the space. We've treated every kind of attack. You can see, paradoxically sometimes, mild attacks are actually harder to show clinical benefit in than severe attacks, right? If you have a really severe attack, you know when you've kind of peaked. It can be harder for folks who are having a mild attack to do that. But the problem is mild attacks can really still be debilitating. I mean, if you're -- if your hand is a little swollen, you can't turn the doorknob, that's a problem actually. And so what we're really doing is our trial was designed to work -- to show it demonstrates that this drug works in everybody and also to demonstrate that we sort of can make patients' lives better in a very real way as opposed to just trying to show up effectively a clinical trial-based result.

Yes. And I believe that when they move forward, it's going to sort of be a mirror a little bit of your Phase III.

Well, no. I mean, they have to use a different -- they have to use the same endpoint we did in the Phase III because the FDA made them. But other than that, the Phase III trial is actually the same as their Phase II. This whole not treating every attack and having it reach some minimum severity threshold is actually how it works. And so at the end of the day, again, I don't like -- I like to focus on us more so. But at the end of the day, I would say that what they're going to show is that -- assuming it works, assuming they have positive data, they're going to show that they've had efficacy in essentially a kind of a subset of attacks, whereas we'll have shown that we have efficacy in every kind of attack.

Okay. Really quickly on these ones, so we can get to the market. Potential language in the label, how many doses?

I want to be a little -- I want to keep a few things in our pocket. But FIRAZYR label is -- which is probably instructive in terms of how we think this works is FIRAZYR is labeled as up to 3 doses in a 24-hour period. So I think the end of the day, what our label will look like is some number of doses in some time period, probably somewhat comparable to where they are.

Okay. Why not file for both doses, 300, 600?

We thought about it. I think at the end of the day, it just ends up that the curves essentially overlaid each other. It's -- and generally -- I think the question we actually had to ask ourselves is what's the incremental benefit of having a 600 as opposed to a 300, having both, and we couldn't really identify a need to have both doses. Patients in the study showed that effectively everybody can get to the primary endpoint with a single dose of 300. They'll always have the option to redose, again, as they do nowadays. And so we felt like that was a -- that's probably a better solution. Because again, a lot of this is you have to trust the patients know what their disease is and how to treat it. And so there may well be, at the end of the day, some attacks where patients need to take 2 doses, right? You have a really severe -- you feel a really severe abdominal attack coming on, so you want to be sure. You have a laryngeal attack maybe, I don't know, there could be that. But there's no reason to not let people who have lived this disease their whole lives decide that as opposed to us just kind of putting this dose on them.

Okay. So moving on, market research. What do you believe the market size is for the on-demand HAE?

If you look at the script data nowadays, there's -- and we put this out there, there's something over 120,000 scripts a year for -- in the -- for on-demand medications. There's always these assertions that the market has been shrinking, but the truth is that number has been essentially flat for the last 5 years at least. In fact, it's actually gone up a little bit in the last 5 years. And -- which is kind of counterintuitive because, again, everything here says that prophylaxis has taken over the world. But the truth is, the reason it's very stable is because you've got 2 segments in the market that are very stable in the demand for on-demand therapy. You've got people who are inherently satisfied with on-demand for whatever reason, and they're going to even be more satisfied in the presence of sebetralstat. And then you've got the other end of the spectrum, you've got folks who are on prophylaxis but who still have a very high rate of breakthrough attacks. And we've actually shown that there's a population that actually has so many attacks that the average number of on-demand tracks in the prophylaxis space is actually higher than the on-demand space. So those people, despite being on prophylaxis, still have a need for a lot of on-demand therapy. And what's interesting is despite the fact that there's now 4 therapies approved, there's 1 more coming soon and 6 more behind that by my account, the fact is none of those actually meaningfully move the efficacy up to any degree. Everybody is in sort of this -- in the clinical trial setting in this kind of 85%, maybe 90% number. And so these people who are on therapy but still have breakthrough attacks, I think they're essentially going to have breakthrough attacks no matter what therapy they're using. And so that's why the market is going -- has stayed where it is because these 2 populations are very stable, and nothing is going to disrupt those 2 populations. So the punchline there is -- and the dollar size, the market shrunk in the last 5 years. That's purely because icatibant went generic. If you put in icatibant price on that, all those scripts, it's a number meaningfully north of $1 billion in market size even now. And so our view is that the opportunity here is for us to capture a large share of that marketplace. I think patients will also treat more attacks, as they should, in an appropriate manner, and that grows. And I do believe that actually -- again, maybe counterintuitively, there's -- prophylaxis has been really easy, by and large, for people to get on in the last few years because it's kind of the least worst option. TAKHZYRO twice a month is generally dominant in terms of its combination of efficacy and treatment burden. We changed that whole concept fundamentally. sebetralstat can now become the foundational therapy in HAE space, where you go in and talk to your doctor about treating your HAE and actually conversation which now goes directly to TAKHZYRO on [indiscernible] prophylaxis can actually go to, "Why don't we try this on-demand therapy, use it when you have attacks, take it early and then see how you're doing?" And then -- and so the point is you can actually -- it's not clear to me that, that prophylaxis sort of discussion continues inexorably to sort of go in the same direction. I think you can really change, again, at a very fundamental level, how you have these doctor-patient discussions. And a number of these folks on prophylaxis, who went on because it offered the best option at the time, least worse probably option at the time, may now think this is actually even a better, less burdensome way to treat their disease.

Okay. You talked about the patient. You talked about the physician -- treating physician. How about payers? Has there been a shift in terms of how payers view prophylactic kind of treatments?

Yes. It's interesting. So we started to have some payer interactions and what's your -- kind of an early stage, where you start having this preapproval information exchanges. And so we've been -- but we've been having conversations for the last several years. The data is powerful. I mean, again, we've shown -- again, because of the breadth and the scope of the trial, as I said, you walk in with data, and it's really -- it's uniformly effective and beneficial for patients. So that's a pretty easy conversation to have. What's actually been most interesting thing so far is this is not an area that payers pay an enormous amount of attention to. I mean, the therapies are high priced, but the population is really small. And the total dollar share of their area of concern, it's really small. But what's been interesting so far is what really happens is we go in and meet with the payers and sit down to talk and, of course, as part of this, they pull out their cost for HAE therapy. And what really jumps out is they say, "Boy, we're paying a lot of money for prophylaxis right now." And on top of that, a lot of these folks are still using a lot of on-demand medication. So I think what's been interesting is, as opposed to having any challenges for us in terms of access or pricing, where we really highlight for them is there's a lot of spend in prophylaxis that they probably weren't as attentive to as in the past.

Okay. We've got 2 minutes left. In terms of commercial preparedness, what's the groundwork that you've been laying for the launch?

Yes. Yes. I mean, the plan for sebetralstat is this really deserves to be a global product. And so we're -- and a company of our size can actually do this and actually launch it globally. We intend to maintain strategic control of this product. We think it's the kind of thing that deserves our attention and focus on. So we're going to manage this ourselves. We have -- we're obviously going to launch it ourselves in the U.S. The sales call is really tight there. It's maybe low 30s sales folks, just to give you a sense of what you need to really cover the market well. So it's a very small number. We also plan to launch ourselves in Europe and Japan. We've built smaller teams in both those geographies. And then to global -- for the rest of the global reach, we'll do what everybody else does. Typically, that's a lot of distributor type arrangements and such. But we had an enormous amount of interest already. I mean, there's a couple dozen folks in different geographies that have reached out to us, looking to talk about launching and whatever, Gulf states to South America or Eastern Europe, whatever, a lot of places. We've got a really experienced team. I mean, just to hit on this, our -- each of our Chief Commercial Officer, U.S. Head of Sales and Marketing, Head of Europe and GM Japan have all launched multiple products in the HAE space before. So we've got a really deep bench here of skill set in the area. We know how to commercialize these assets properly and how to touch the right populations and payers and all those groups. So we're moving forward. It's absolutely achievable by a company our size. And I think within a few years after launch, we can have this in 10 or more countries.

All right. Last -- actually second last question. Cash flow positive, how are you going to accomplish that?

Again, the great thing about this product, from our perspective, beside the benefit to patients in the system generally, is that it's not a terribly expensive sales and marketing effort. I just told you. The numbers are really small in terms of the commercial infrastructure. We don't have a lot of other late-stage spend. We're -- that's coming through the system. We have the major clinical trials that have been related to sebe's trials, that are all winding down in terms of expense. So the point here is that the cash spend of the company is really focused on the launch. And as I said a minute ago, it's really not a terribly expensive launch in the scheme of things. So given the scale and scope of the market opportunity, we do think that we'd expect us to have a fairly positive reception. And so just -- as a result of just keeping our cost structure lean, which we've always been really attentive to, and generating revenues ideally globally in the short term, we think that's what drives cash flow positive.

All right. So last question. If we're sitting here 12 months from now, what would you like to say your key value-creating accomplishments have been?

In a year, I'd like to be able to tell you that we've launched in the U.S. and effectively immediately after approval, which remains the goal. I think we'll be very close to, if not, launching in Europe. I think we'll be making plans to make several other launches potentially late next year or in early 2026. So the truth is what I think what we're doing is saying a year ago, I sat here and told you how we had this, what we think is a terrific drug with a great efficacy and safety profile. And now we're actually achieving that by bringing this out and getting it to the patients around the world, who actually will meaningfully benefit from this.

Right. Ben, I thank you, KalVista for attending the Cantor Global Healthcare Conference. Great to see you. And so...

Always nice to be here. Thanks, again.

Awesome.