Kiniksa Pharmaceuticals International, plc (KNSA) Earnings Call Transcript & Summary

[Audio Gap] Conference. My name is Geoff Meacham. I'm the senior biopharma analyst here and we're thrilled today to have the Kiniksa team with us. So speaking on behalf of Kiniksa, we have CEO, Sanj Patel. Head of Commercial, Ross Moat; and then John Paolini, Chief Medical Officer. Guys, thanks for coming.

Good to see you. Thanks for having us.

Yes. So I guess just for the folks that aren't as familiar with the story, just give us kind of the quick elevated picture we'll get to some questions, probably spend a little bit of time on ARCALYST?

Yes. Happy to do it. So obviously first of all, as usual, please note I will be making forward-looking statements today that are subject to risks and uncertainties. You can refer to those in the SEC filings. So happy to be here. Kiniksa is very much a growth-orientated well-capitalized company. Company was formed just around 8 years ago. And since that time, as Geoff knows well, we collated some very interesting and compelling assets. We are now a commercial company. And in fact, cash flow positive on an annual basis. The launch of ARCALYST is now 3 years since launch has gone incredibly well. In fact, we've just announced that in our first quarter, we had a quarter of $78.9 million for the quarter and in fact, increased our guidance for the year to $370 million to $390 million. And that, at the midpoint, represents roughly 63% year-over-year growth since last year. So obviously, I am quite pleased with the commercial execution with ARCALYST. We attempt to continue that growth and continue to nearly commercially. But on top of that, we're also looking at growth, obviously, from the rest of the pipeline, we have announced that we're moving our abiprubart molecule, which is a CD40-CD154 molecule into Phase II. We're going to be starting a Sjögren's study in the second half of this year. That's on the heels now of positive data in terms of proof of concept that we had in our array and obviously, very keen to see how that molecule moves forward. A lot of the external proof of concept for interrupting the CD40-CD154 mechanism. So exciting movements there. As Geoff knows, we are always keen to do business development, both for the in-licensing on the adolescent side. We've had some successful deals done with vixarelimab was a IL-31 and oncostatin M molecule that we out-licensed in Roche/Genentech and that was around $125 million plus royalties and milestones. And so obviously, we're looking forward to that. And we are looking to monetize our mavrilimumab molecule. This is an anti-GM-CSF molecule that we took through Phase II in a number of positive indication. So a lot going on at the company. Needless to say, execution both on the commercial front and on the clinical development front is top of mind.

Yes. So let's talk a little bit about ARCALYST and the sort of the recent commercial dynamics. Would you say Sanj, and maybe Ross too, looking forward, what's the -- been the primary driver? Is it persistent rates of patients that seems to be growing quite nicely. Is it the awareness and finding patients, I'm sure it's probably all of the above. But what would you just characterize kind of is the bigger driver of late.

Yes. Maybe I'll start, Ross, then feel free to jump in. I mean, I think, again, it's all about penetration. So we've often said that there's around 14,000 patients in the U.S. that suffer from 2 or more recurrences. And those have been the sort of target patient population that we've been focus on penetrating into. Last reported, we said we penetrated around 9% into that 14,000. On the one hand, it tells you, they've got a lot more work to do. It also tells you there's a lot more opportunity. So really, it's all of the things that you mentioned. I mean certainly, duration of therapy is very important. Last reported, we said that the duration is roughly around 23 months. When we first launched in April of 2021, we figured it maybe around 6 to 9 months, that increased to 9 to 12 months and then prior penultimately was around 18 months. So that duration certainly helped. But on top of that, it's things like educating the physicians, we've now got around 2,000 prescribers that we've recently announced. And that -- and 24% of those are repeat prescribers. So it really educating on, not the duration, but also the importance of compliance. We've got a very high approval rate within the payer network. And so we're working very hard. That's been around 90% quarter-on-quarter. So those all go towards that increasing growth and certainly, our expectations for the future. I'm sure Ross will cover the recently expanded sales force to around 85 sales reps, up from around 50. That's quite nascent. That happened at the end of last year. Hopefully, in the middle of this year, we'll see that really come to fruition. So Ross, anything to add?

No, I think that's all great and well summarized. I guess the only thing I would add is that we're just very focused on the awareness of recurrent pericarditis how to distinguish recurrent pericarditis from an initial acute pericarditis or the index episode of pericarditis. So patients get diagnosed accurately and quickly and treated early. So we focus on that very much with our field team execution and other kind of awareness activities that we have around ARCALYST around recurrent pericarditis. So that's key to us. And we're seeing the awareness grow substantially since the time of our launch year-on-year and quarter-on-quarter, the awareness, the knowledge around ARCALYST has growing significantly. As Sanj outlined, the number of prescribers has grown pretty rapidly. And in fact, in the last quarter, Q1 versus Q4, we had the biggest growth in prescriber base that we've had so far since launch. I think all that indicates that the awareness and knowledge is growing. And we are very focused on making sure that when physicians identify an appropriate patient and prescribe ARCALYST that they have a good prescribing experience. They know how to prescribe the drug, how to get it reimbursed, how to go through the approval process and to start their patients off and hopefully hear great feedback from their patients on how they feel once they're initiated on ARCALYST. And if we do all that well and help physicians and help patients, that will encourage them to identify and prescribe for more patients down the line.

I guess the question is, is there a way to leverage the experience even further to not just enhance kind of the risk benefit, but the cost benefit in another words. Can you follow patients and sort of present new data on longer-term follow-up and see the resulting kind of benefit on the cost side as well as the -- obviously, the clinical side?

Yes. I mean, John, maybe you can talk about the long-term extension of the data we've seen there. And obviously, what we're trying to obviously move forward in terms of publications as well. But there's an awful lot of education around the long term extension data, the resonance registry, which is I think is a very important part of the education piece.

Sure. Happy to cover that. Yes. So in the main RHAPSODY study, which is the pivotal study that supported registration, the median duration of treatment was 9 months. And so that showed a 96% reduction in risk of pericarditis recurrence. What we showed in the long-term extension is then following those patients for further. And so in fact, at 18 months of treatment, then there was a trial of suspension of therapy. And what it showed was that there was a 75% recurrence rate in those that suspended therapy versus those that continued therapy. So that was 98% relative risk reduction was consistent with the primary endpoint. What that showed is that the disease duration is long. And so therefore, if premature cessation of therapy, unmasks the underlying disease process and leads to recurrence of disease. But the good news there is that while you see that recurrence and it tells you the disease is present, you can reinitiate therapy, and that brings the disease back under control. And so that becomes a core of the educational piece, which is to treat to the duration of the disease, which as Ross has mentioned in the past, can be for those with multiple recurrent -- 2 or more recurrences be like 3 years. And so that's kind of the focus of the educational piece.

Got you. Yes. And then I guess last question on the payer dynamics. Sanj, you mentioned more and more wins and for the sort of a more accelerated time on patient sort of onboarding. Help us with kind of what are the gaps still to fill yet on the payer side and maybe how the step edits with sort of frontline therapies have sort of evolve over time.

Yes. I mean maybe I'll have some comments and Ross, feel free to join. We haven't seen that much pushback to balance not to say that in any ways we're complacent. I think half of the reason why we have such a high rate of compliance from the payer side or the reimbursement side is that we have proactively reached out. You have to remember, ARCALYST was an approved therapy prior to recurrent pericarditis albeit for CAPS and now for DIRA, incredibly rare syndromes. But I think that has sort of helped people understand but the data that John described, RHAPSODY has phenomenal data from the Phase III pivotal study, 92% reduction the p-values that were very strong. I think has helped us educate not just the physicians but also the payers in terms of the value that this therapy brings. And so we haven't had to date, again, not being complacent, a lot of pushback at all from the therapy. Ross, anything to add?

Absolutely right. We're very pleased with the payer approval rate. It's more than 90% in all completed cases. That's been the case. In fact, every single quarter since launch. So I think we've got a very strong value proposition and a robust value proposition that's understood well by payers. So we don't suffer from many payer edits, step edits and that type of thing. There are some very small plans that may have something like corticosteroid use prior to ARCALYST. But all of our education is really using ARCALYST as a steroid sparing agent before corticosteroid use. And I think payers are -- that's resonating very well with payers and is well understood. People understand they're using corticosteroids can prolong the disease and certainly, the toxicity effects of patients being on those therapies can be pretty substantial. And by the time patients are suffering from multiple recurrence is very clear that previous therapies have not work in addressing the root cause of the disease. And we know that the root cause is interleukin-1 alpha beta, so providing a targeted therapy to help those patients manage the disease is incredibly important. And I think we're seeing that live out in the pay world.

And you guys commercial success has mostly been U.S., maybe just give us at a high level kind of your thoughts as this opportunity could evolve outside of that.

Yes. I mean we are looking at it very carefully. We do have Orphan Drug designation in both the U.S. and Europe. And obviously, both Ross and I having European background or a British background, we're very keen to understand the opportunity ex U.S. without a doubt. So we're looking at it very carefully. At this point, we have not disclosed our plans. But needless to say, it's not lost on us that there is other potential outside of the U.S. and that would obviously include potentially Europe, given the orphan drug status.

Is that a pretty significant financial investment to raise awareness and build the brand? Or is there an opportunity maybe to use -- to partner with somebody?

Yes. I mean, I think we'll look at both. I mean we obviously Ross and I in particular, we've got a lot of experience working in Europe and launching drugs in Europe. You can always have a very targeted launch as well. We obviously thinking very carefully about how much investments you make upfront. So you're not going all out. But as you say, we're obviously open to partnerships as well. We do have an existing partnership agreement with Huadong Medicine, which is a very large Asian pharmaceutical company, and that's for the rights for ARCALYST and mavrilimumab actually across the Asia Pacific region, excluding Japan. So obviously, that's another way that we could potentially help monetize the asset in other regions. So we certainly are potentially looking at ex U.S. and certainly keeping the optionality for other regions.

Okay. Makes sense. And then I guess the last question is, as you think about the -- it's come up in a lot of other non-orphan indications, but manufacturing capacity and things of that nature, right? So there are any investments to be made there with respect to supply? Or are you guys pretty much free and clear from that hasn't been any issues thus far, but is that something that you think about down the road when you expand?

Yes. I mean we're always looking at the expansion and almost making sure that we have the supply in right now. Obviously, as you're aware, Regeneron manufacturing the drug. They've done that for years when they were supplying for CAPS. I mean that continues. We have publicly stated that there is a tech transfer in process and that will be in place with us. But again, it's something we're very much looking forward to whilst there has been a very strong partnership and there's been no issues to date, certainly, it's nice to be able to control your own destiny. And as we hopefully have significant continued growth ahead of us, we're going to hopefully look forward to controlling that.

Yes. Okay. Makes sense. Let's switch gears to 4 or 4. So maybe for those in the audience, just give us a little bit of a background for the CD40 antagonism and how that could really resonate right with the profile.