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

All right. Well, good afternoon. Thanks so much for joining our 45th Annual Healthcare Conference. I'm Stacy Ku, one of the biotech analysts. I'm here with my colleague, Vish Shah, and we're very happy to be hosting Ben Palko, CEO of KalVista Pharmaceuticals to our fireside chat. So before we get started with some Q&A, just for some quick background, we picked up coverage in January. Our KOL feedback during HAE checks have been increasingly positive on sebetralstat's opportunity in the on-demand HAE space. So part of the reason why we picked up coverage and honestly, a little uniquely de-risked as clearly oral entrants in HAE have surpassed many expectations. At this current valuation, we think the launch is underappreciated and good surprise. So Ben, maybe quickly discuss sebetralstat's made value proposition. And obviously, we had some Phase III and open-label extension efficacy outcomes. Can you talk about what's most important to patients and clinicians as you're kind of getting ready to launch?

Yes. Yes. Well, first of all, let me say thank you, Stacy, for inviting us here today, and thank you to Cowen for sponsoring the conference and giving us a great venue here for another high-quality set of interactions. So super happy to be here. So sebetralstat is currently on file with the FDA and actually 6 other regulatory authorities, seeking marketing approval as the first oral on-demand therapy for hereditary angioedema. The fundamental premise of the drug is that HAE is a very serious genetic disorder, and it's treated by people who either through an on-demand only usage to treat attacks when they initially develop or some people treat using combination of prophylaxis plus on-demand therapy for breakthrough attacks. And what we have developed here is an option here for people that we think will offer the efficacy comparable to the current therapies available, which are all injectable, but with -- and with a pristine safety profile, I should point out. But in a way through an oral mechanism that really makes it much easier for people to treat attacks that offers a much more opportunity to take better control of their disease than they have nowadays in a less burdensome fashion. And so the market we'll enter into currently has 3 other major competitors in the space for on-demand. Again, the leader of the space is FIRAZYR, generic name is icatibant, which is the market leader in terms of the volume of usage, probably 70% or 80% of people overall use icatibant to treat as an on-demand therapy. And then there's a couple of other actually therapies that are both even more complicated, they're IV and icatibant is subcu.

Okay. So obviously, I'm just trying to hop on a comment that you just made, which is FIRAZYR is the market leader for the on-demand space, so the Takeda's FIRAZYR. A lot of caveats as we try to look at the efficacy, which is why we try to just ask KOLs their views on sebetralstat versus FIRAZYR, they largely view it as similar, a subcu product versus an oral product. In addition, they talk about kind of laryngeal attacks and efficacy. And you guys have shown a ton of different pieces of data, but it looks like there's really compelling activity regardless of severity or background prophylaxis therapy. So that's kind of the feedback we've heard so far. But as we've done our surveys and we've talked to clinicians, and it's [indiscernible], how do you think this is going to translate to the actual launch? And obviously, I believe the PDUFA date is June 17.

Yes. Yes. The PDUFA date is June 17. How it translates into the launch? We had the benefit actually of having been at AAAAI this weekend, which is the biggest scientific conference for us of the year, certainly in the United States. And so we -- all of us, the whole team that was down there, spent a lot of time talking to a lot of these physicians in groups and individually. And certainly, the feedback kind of mimics what you said about the surveys. It's very positive. I mean what we're hearing from physicians is that their enthusiasm is driven by the clinical data, largely that they've seen to date, which, to your point, does really show that this is a valuable therapy to people effectively regardless of whatever is going on. We're actually the only company that has really shown efficacy in all attack types, abdominal, peripheral. We had some really good laryngeal data this weekend that really supported that, and I can talk more about that if you want. All attack severities between mild to very severe, we've shown efficacy in all those subsets. And again, nobody else has actually ever shown efficacy previously in mild attacks, which can actually be some of the hardest ones to treat because they can still be debilitating, but it's very hard to show improvement clinically, and we've done that. We've shown efficacy in ages 12 and up. Adolescents, 12 to 18 have a very high unmet need because of the fact that their HAE attacks generally tend to really take off in puberty. But as of now, really, their only options are primarily IV. KALBITOR is approved for under 18, but really nobody uses KALBITOR. So their unmet need is very high. And all the data shows they wait even longer to treat attacks. They treat even fewer attacks. It's very hard to be an adolescent. And so my point is the physicians really are supportive because of the fact the data set is so strong, and we've shown data on top of all long-term prophylaxis as well, I forgot to mention. And so what they really talk about is the fact that this has really shown itself through data to be a therapy that actually can apply for everyone regardless of what their situation is with their other treatments or what kind of attacks they suffer. And so your direct question was what do we expect about the launch? And I think based upon that feedback and just based upon the KOL interactions, we feel like there's going to be a fair amount of interest on their part and that, that will proactively, in many cases, actually lead them to bring patients in to talk about this as opposed to just waiting for that. And of course, we have no idea how it's going to go on the patient side. Clearly, you can't promote to patients until you've been approved. So there's really nothing to talk about there. But again, the unmet need is underappreciated. And I think the latent desire to have access to this therapy is quite high than maybe commonly assumed.

You mentioned the data you've shown for those that are on long-term prophylaxis as background therapy. Who are going to be the early adopters in your view for an agent like sebetralstat?

Yes. Perhaps somewhat counterintuitively, the probably highest user population of on-demand therapy is actually a subset of prophylaxis users who despite being on prophylaxis aren't very well controlled, and that might be for a variety of reasons. And as a result, they can actually use very large amounts of on-demand therapy. And in fact, when we did a survey, we found that because of the attack rates that some of those people endure that on average, the attack rates in this poorly controlled prophylaxis population, the attack rates are actually higher than it is in the on-demand only population. And so we do think that because this is having much more of an impact, a negative impact on their routine life, that, that will be a group that we really see -- we expect to have high desire from in the very early stages. And then after that, of course, it moves into the on-demand-only users who we think will also have clearly a high desire for it. But like I said, their attack rates, believe it or not, tend to be somewhat lower than this prophylaxis population.

Understood. And again, the classic view on HAE patients is that they're notoriously sticky. So do you expect there to be a bolus of patients? Obviously, you were just at AAAAI. So you're hearing from clinicians in real time their views. So that's first one. Or do you expect the second scenario, which is patients come back for maybe their annual checkups, they start asking about the product. It's more of a steady gradual adoption curve. How are you thinking about that?

I think based on AAAAI, it's probably leaning somewhat more toward the former, which is because I do think we'll have physician outreach that maybe you don't always see in these kind of indications to let to inform people about this. And I do think -- and we think about this a lot, there will be significant efforts made to ensure patient awareness is high following approval as well. So -- and we do -- again, ORLADEYO, the BioCryst drug is actually instructive here in the sense that they had a very large amount of incoming patient requests following their approval. So those 2 groups, we think are going to be activated to probably an unusual degree. And so this doesn't just -- isn't just a kind of latent 6- or 12-month checkup kind of growth curve. So it's -- we think it's going to be better than that.

Okay. So fair to assume maybe initial launch patients are going to be maybe those coming from open-label extension trial and then maybe some patients that -- a little bolus of patient demand.

Yes, OLE should convert over. And then, yes, some -- so a healthy amount of patient incoming, I would expect.

Okay. I'm sure it's all heads down on commercial preparedness. Where are you and the team investing most time? Is it the clinician education? Is it the infrastructure kind of making sure when the drug is launched, being able to get drug to the patient? Are you kind of already starting to talk to clinicians about how to start the switching study? I can follow up.

Yes. It's all of the above. I mean the entire team is extraordinarily busy. The medical team has been in the field for the past couple of years now and really meeting with generally the top tier, the top 200 docs in the space who write about half the scripts. And so those people are very well versed. Obviously, the most significant of the thought leaders are on steering committees and advisory boards, and we have very routine interactions with them. But what we have had is, as you've seen, a very steady stream of really interesting and supportive data sets that have been developed by the team that the MSLs can now go out and talk about consistently. So I said just in the last month, we had the long-term prophylaxis data at Western Allergy in February. And then just this weekend, we had this laryngeal data, which again was very favorable at AAAAI, and then we also had some more data on adolescents. So there's been a steady stream of messaging to get out there and talk to physicians about in an analytical way that really shows how the drug can work. In terms of the commercial team, I mean, Nicole and her group are just going gangbusters right now. We actually onboarded the sales team, the field team in February. They've already made -- as of the last week, they've called, I don't know, 7 -- I think it was something like 700 physicians already. So their interaction level is very, very high. We're building out the patient services hub, which is actually a crucial element of this, really a kind of a table stakes requirements. So that group has been spending a lot of energy. And then you hit on this, and it gets overlooked a lot is just the logistics of how do you get it manufactured, packaged, getting the supply chain. All that's been really set into place now, and we're putting the final touches on the [ SP ] network and things like that. So that -- at the end of the day, you're exactly right, getting the drug to patients efficiently is a key element here that takes a lot of energy.

Understood. As we think about the unique aspects of an oral agent, branded oral agent launching in a largely genericized IV subcutaneous market, what are your plans at launch? I know it's still a little early in terms of kind of payer discussions, but how that have been they kind of been progressing?

Yes. We expect to have around 60 payers that we engage with significantly here. We've been having pre-approval information exchange meetings the last several months. In general, they have gone very well with payers. You're right that the generic in the space is something that people think about. But what we have discovered is that really that has no impact at all we expect on our -- on anything with regard to our pricing or access. We don't really see that becoming -- people ask all the time about steps, right? Well, you have to step through generic icatibant. And nowadays, what we see is people do have to step through to get to branded FIRAZYR, which still actually sells a fairly remarkable amount 5 years after genericization. But we don't really see steps as a significant issue in the space otherwise for branded products, and we don't expect it to be one for us either.

So do you expect like prior authorizations, walk through the timing of good reimbursement. There's just kind of a normal cadence of expectations, what should be expect here?

Yes. Prior auths are just norm in this space. Everybody generally has to work through a prior authorization. So we won't be anything unusual there. It's also not a super complicated process to work through. Basically, it requires a confirmed diagnosis of HAE is really what you're going to need to get a prior authorization. So that won't be a terrible burden for us. The -- when you get approval, because, of course, it just takes time to work through the formulary process with insurers commonly in the industry nowadays and not just for us, most people are dealing with these on a medical exception basis to get the prescriptions done initially. So what we'll end up doing is we'll have a program where we'll be able to -- when people get a prescription, to start them with an initial start -- once their insurance is confirmed to start with an initial start or box, let's just call it, of sebetralstat while we work through the approval process. And then we've actually got an entire team of people who work in the market access group, these payer access managers, who are the intermediaries between the physician and the payer and the patient to work through this whole commercial coverage question. And we happen to have hired -- our head of patient services actually did this at a very large company in the space, I'll say it that way. So she has a lot of experience there. And we've actually hired an equally experienced team of people to be part of this group. So I think we're very comfortable that we can get through this medical exception process and get people on commercial pay certainly as fast as anybody else could, moving them across.

And it sounds like you're taking notes from maybe some of your other HAE companies. Obviously, BioCryst, they have an excellent quick start program. They essentially offered free drug until they're covered, right? So...

Yes. We've learned.

That's doable within the HAE space. Okay. Again, genericized market, how are you thinking about pricing, especially as you continue your payer discussions?

Yes. The generics really don't represent any challenge to pricing in the space. Again, there's a lot of branded products out there despite the fact that icatibant is generic. And so we don't really expect it to have any impact on pricing at all. The pricing nowadays ranges in the space. On a per dose basis, if you will, FIRAZYR is actually probably the cheapest therapy. It's right around $11,000 WAC. And the other products, despite the fact that their WAC price per vial is lower, they tend to be multiple vials per attack. So their actual use on an attack basis is actually meaningfully higher than that. We expect our pricing to be somewhere at a premium to FIRAZYR. But again, we don't have to reach for the stars here in terms of pricing. We can do something, I think, that is reasonable in the context of payers and supports the kind of access we want to have for this product, right, because the key here is to have this be able to get out to people and be used while being reasonable from our perspective as well.

Is it reasonable to assume FIRAZYR is around $10,000 per dose?

I think nowadays, it's right around $11,000, like -- but yes, so ballpark. Yes.

Okay. Okay. Understood. One more question on FIRAZYR. As you think about those previous launches and maybe the labeling and usage, what are you trying to see for sebetralstat? As you -- some patients have had the opportunity to treat multiple attacks or to treat their attacks with multiple oral options.

Yes. FIRAZYR label is not a bad one to look at. It's a pretty straightforward in all respects. The label indicates up to 3 doses in 24 hours is how they write it. Our label will probably be something in the vicinity of that. Again, the safety profile is pristine. We're not at the dosing levels. We're talking about -- we're not anywhere close to any kind of safety margin or anything that might get in the way. So I think we expect it to be a relatively straightforward label that does have some level of maximum dosing in probably a daily period. Yes.

Understood. So we spend the most time for KalVista with investors walking through our analysis of the on-demand market. We triangulate around a range anywhere between 90,000 to around over 100,000 prescriptions, obviously, based on understated IQVIA prescriptions, survey results and a little bit of kind of the branded drug sales. Others, investors want to use the size of the market on FIRAZYR, which peaked at nearly $700 million in U.S. sales. However, one key thing that has changed is in that the size of the overall HAE market, which has grown in the total number of patients that are treated and diagnosed. So obviously, your team has done a lot of work around the on-demand market. You all are looking at maybe not prescriptions, you're looking at doses. There's a lot of different nuances in how you analyze it. So just to walk through kind of our view -- your view on our estimates and kind of the work that you've done.

Obviously, I think the numbers you come up with are pretty reasonable. I mean if we -- and you're right, there's a lot of back and forth between units and doses and attacks and all that. I mean there's -- our rough triangulation is there's something in the vicinity of high 80s, 85, plus or minus a few thousand attacks treated per year by which I mean with the dose of the drug, right? So that accounts for unit differentials in some of the vial-based products. And so that -- all those numbers, though, however, if you take any of those and you apply the branded pricing and the adjustments to kind of get you to the same place, which is if you put the market on a branded basis, the on-demand space only, it would be comfortably north of $1 billion in sales nowadays compared to what it really is, which is sort of the mid-600 space, which really counts to the fact that icatibants -- generic icatibant so much cheaper priced. What that does and take into account is the fact that there's a great opportunity to grow the market with a better option as we think we'll bring because one of the key aspects of HAE nowadays and is well known is that people don't treat nearly as many attacks as they probably should. Attack rates, everybody's estimates hover right around 2/3 of attacks being treated. And it's not like the other 1/3 shouldn't be treated. I mean it's not like -- it's really the fact that people with HAE are always going through this kind of mental matrix where they're trying to decide if the attack is serious enough to use a therapy, largely because of the limitations on therapy. Typically, they don't have it with them. We've shown that consistently. They don't carry it nearly enough. And so when they have attacks, which don't always conveniently occur at home, they have to go deal with that. And then second of all, FIRAZYR is a really tough drug to take. I mean it's an injection, so obviously, that hurts. But it's painful as it disseminates. It has almost 100% injection site reaction rate that was shown in the Phase III studies, and that can be very treatment limiting just in itself. And so you take that attack treatment rate and what you presume is that it would be meaningfully higher in the presence of sebetralstat. And just one quick data point on that is in our open-label extension study, which is an exactly real world, but it's pretty close, we have people treating right around 85% of their attacks. And so you don't have to get heroic and assume that everyone is going to treat every attack nor should they probably. But you could easily see how people treat 20%, 25%, maybe 30% more attacks with sebetralstat because they'll have it with them. It's just a much less complicated dosing. And because of all those things, they'll take it earlier, which means they'll feel better, which means they'll get more benefit from these attacks and that just inherently is going to increase treatment rates.

Okay. Understood. Again, you kind of alluded to it, but you run a ton of investigator-led collaborative work that I think has been really helpful for KOLs to really view the value proposition of sebetralstat. So maybe walk through your findings there, number of attacks on average. Obviously, a huge range of patients that are just on on-demand treatment only. And then also those that are on prophylaxis, what kind of breakthrough attack rates are you seeing?

Well, most recently at Western Allergy, we had a really nice poster that Paul and his team put together, which showed the open-label data of sebetralstat used in conjunction with prophylaxis. And so -- and in particular, the most commonly used prophylaxis therapies are obviously TAKHZYRO and then ORLADEYO. And what we showed was that those people, first of all, have breakthrough attacks at much higher rates than they're commonly seen. And so we showed in our study that people on LTP are having attacks roughly right around 1.8 attacks a month despite being prophylaxis. And those are meaningfully higher numbers than you typically see the prophylaxis players when they talk about it. And so I think it goes to the point I think you were sort of talking about, which is really what's the need here in terms of actual impact on people's lives of prophylaxis. And then the data further showed that when you take sebetralstat on top of those therapies, the efficacy is just as you would expect. I mean we showed it's right around 1.3 hours initial symptom relief on top of prophylaxis, which also ties to laryngeal data I also talked about. And so what we're showing is that regardless of what you're doing, again, attack type, severity, location, whatever, sebetralstat is highly effective and really giving the benefit that people would expect to see from using something like this in a way -- and again, to a degree that they just simply don't get nowadays.

As we think about maybe the long-term on-demand market HAE, there are obviously other oral options coming to the market. But the KOLs really consistently to us highlight the first-mover advantage. So just how do you make sure you execute on that? What are your views on the oral versus injectable on-demand space? Do you expect orals to encompass the majority of kind of usage? What are your views there? And how do we think about competition as well?

Yes. I mean to your point, again, just the benefit of having a lot of conversations this weekend. Physicians very much like the data for sebetralstat. Again, we've shown in a very robust fashion the breadth of capacity of this drug to actually give patients better outcomes than they have nowadays. But also to your point, it's really never been done in sort of an apples-to-apples way. But if you were to really compare these therapies across the board, all the data would look more or less similar. I mean there is no magical pathway here that's going to dramatically change efficacy for people. And so the key here to sebetralstat is it offers a great combination of efficacy and very clean safety and ease of use in a way that they really don't have nowadays. And so what that really boils down to is the fact that you're right, we are coming to market. We'll be the first, by a long shot, no matter what if -- even if anybody else ever does get there. And what we're going to be able to offer, physicians and patients both is, again, this very robust data set that shows in effectively everybody we could think of that this is efficacious and safe. And no one else has that data set, no one else is going to have that data set that we have. This will remain the most robust data of that sort that's out there. And so I think at the end of the day, that, regardless of what else is in the space is going to be powerful because at the end of the day, it all boils down to me as a patient, what works for me. And whether I'm a prophylaxis user or not or whether I have laryngeal attacks or not or whatever my unique circumstances are in a way that no one else can or will be able to do, we'll be able to say them, yes, we've actually looked at that, and we've shown that actually were good for you.

In the last few moments, I did want to comment on peak sales potential. I believe consensus is around $500 million were a touch higher. So just help us understand as we think about maybe the U.S. market, what are the different factors that are key for the launch to sebetralstat?

At this point, we're really down to making sure that we can get this therapy out to people appropriately. And so it is very much of an execution campaign right now. And as I said, Nicole and the entire commercial team are out in the field, and they're having a lot of conversations, and they're extending those conversations beyond the top 200 docs who we've talked to many times into the next 800 or 900 docs who write the other 40% of the scripts in the space. So we're going very deep and broad to make sure that everybody is aware of this is coming to marketplace. So the -- we've already got tremendous amounts of patient interest in this just through the unbranded activities that go on right now. We have a website. We've had over 1,600 patients already opt in to learning more about sebetralstat when it comes to market. We really -- this is not directed toward patients, but we recently launched a coming soon campaign that has the brand name attached to it and such. And so the awareness is getting high. And in fact, just even the one brand -- the unbranded activities, we've got something like 200 patients a month signing up to learn more about sebetralstat. So we're making sure the word gets far and wide. And then we're certainly working to make sure that, again, as those people come once we're approved, we'll be able to get the drug out to them efficiently, let them start working to make their lives better quickly and then move on our side through the whole commercial process to support the launch. So honestly, there's -- that's the name of the game for us for the near term is just head down and make sure we get it from beginning to the end.

Wonderful. Well, thank you so much for the time today. Really insightful, and we're looking forward to following the launch.

Thanks again for inviting us.