Kodiak Sciences Inc. (KOD) Earnings Call Transcript & Summary

Okay. We'll go ahead and get started. I've been told from the audience that my introduction for this hasn't changed in 10 years. But I want to welcome everybody to the Tuesday morning of the 2020, JP Morgan Health Care conference. My name is Anupam Rama. I'm one of the senior biotech analysts here at JP Morgan. Matt Bannon and Tessa Romero from the team are joining me. Our first presenting company of the day is Kodiak, and presenting on behalf of the company is CEO, Victor Perlroth. Victor?

Thank you, Anupam. I'm Victor Perlroth, the CEO of Kodiak Sciences. It's my pleasure to be here. Just a quick note on our forward-looking statements before we dive in. Our goal at Kodiak is to develop the best next-generation therapeutics for high-prevalence retinal diseases using our antibody biopolymer conjugate, or ABC Platform. And KSI-301 is our lead molecule. It's our anti-VEGF ABC and the data that we're generating suggests a best-in-class profile for the key diseases of wet AMD, DME; DR, diabetic retinopathy; and retinal vein occlusion. We're generating very promising clinical data showing efficacy, durability and safety for the molecule. And we'll be presenting further quarterly updates on data with KSI-301 throughout 2020 from our Phase Ib, which is really a Phase II equivalent study, with up to 18 months follow-up per patient. And the next data progression that we expect will be at the Angiogenesis Scientific Meeting on February 8. We're currently engaged in our DAZZLE wet AMD pivotal study, and we're on track and looking forward to initiating 4 additional pivotal studies with KSI-301, and that execution is planned for the summer to start those pivotals. So we're on track with our 2022 vision to file BLAs for KSI-301 in the RVO, wet AMD, DME and hopefully also the earlier diabetic retinopathy indications, all in 2022, so actually quite right around the corner. And we've completed recently a recent royalty and equity financings at the fourth quarter of last year that give the company, together with existing cash at that time, close to $600 million of capital to put to work to ensure that our clinical trials, our manufacturing and pre-commercialization activities can be happening at rapid clip. Kodiak, we see ourselves as an ophthalmology medicines company with very strong science, uncompromising and, hopefully, elegant in our design, focused on developing what we call go-to medicines or first-line medicines that can challenge the status quo medicines in the core indications in retina. And our focus, 24/7, is on developing medicines for retina. We approach our drug development in retina with our -- the science of our antibody biopolymer conjugate platform, or ABC Platform. It's a new scientific approach, a new design platform for intravitreal injected medicines into the eye. And we've designed our ophthalmic antibody biopolymer conjugates for long-interval dosing or increased durability, and very strong efficacy. So we do a very -- a cutting-edge antibody engineering. We also invented our biopolymer platform. The biopolymers are built off of phosphorylcholine, which is a special moiety in the body. It's what's on the cell surface of all of our cells, and it binds in structures water in a very interesting way. And our biopolymers, another way to think about them is as a form of macromolecular water. And we conjugate those in a stable linkage using standard ADC-type chemistries, that are commercialized and marketed and scalable to form our conjugates that have a stable linkage of 1 biopolymer to 1 antibody. And what's special about our conjugates and our medicines for retina and ophthalmology, really, is that from the standpoint of the ophthalmologists. They don't have to understand that it's really a different medicine in a way than current LUCENTIS or EYLEA or Avastin, right? It's a soluble biologic in a liquid. It's aqueous, injected really in the same way and diffuses slowly in the eye through the different tissues to give it the durability, but has no fundamental new risks, let's say, versus the existing biologics. So really, we think of them as the same where it matters, yet they have that science under the hood in terms of designed in ocular durability; designed in rapid systemic clearance, which is what you would want; high bioavailability to the retina and the choroid, the tissues of action in the eye; very high safety and biocompatibility; and of course, what's special for ophthalmology as well, improved and very high stability. So if you close your eyes a little bit and take a step back and think in retina and ophthalmology, over the last, say, 10 or maybe even 20 years, if we think about a next-generation platform for medicines development in ophthalmology, what is it that you would want to come up with? And fundamentally, frankly, you want to come up with something that looks very much like this. And in the end, you want that platform to kind of disappear, and you want the medicines themselves to speak for themselves and have that special performance in the patients. And that's really what we've designed in our core program, the KSI-301 program. But we're also able to apply our platform for bispecific conjugates for retina to bring 2 biologies to bear. And also now, we've begun working on our triplet therapies, which also use our antibody biopolymer conjugate platform to be able to bring 3 modalities or 3 mechanisms of actions to bear for retina and looking in our pipeline to be applying that technology towards diseases such as dry AMD and glaucoma from the standpoint of the retina where you have a multifactorial diseases going on, and where we, I think, uniquely can bring our special platform to bear to bring multiple biologies. So KSI-301 is our monospecific, a fantastic molecule, right, for ophthalmology, targeting the demographics of aging and diabetes as an anti VEGF, our bispecific, which is moving up quickly and accelerating, and now our new triplets as well. So Kodiak, as an ophthalmology company, focused in retina, with an acceleration over the past year with our lead program and deepening our pipeline. So a little bit of a deeper dive into KSI-301. So in theory, intravitreal anti-VEGF agents can improve and maintain vision when dose per label, looking at LUCENTIS 12 monthly injections or aflibercept, EYLEA, with 8 monthly injections. So you can get increased vision in the early phase, and you can sustain that over actually many years if you're dosed per label. But in practice, minimal visual acuity gains are actually achieved. So without continuous high-intensity treatment, vision loss begins after only 3 months at anti-VEGF therapy as physicians and patients stretch beyond the natural capability of the medicines. So this pattern is seen globally, really, in with all current therapies. An early boost in vision and then a deterioration that begins very quickly. We are not achieving the promise of anti-VEGF therapy of anti-VEGF biologics dosed into the eye. Why is that? And the reason is that the current agents, LUCENTIS, EYLEA, Avastin, even the new Novartis' Beovu medicine, they're really all traveling in the same pack. They do not control the disease long enough between doses. Patients cannot come in often enough, and physicians really can't schedule the visits often enough. And so very quickly, physicians and patients begin to spread the doses out so the patients are off mechanism for holiday or drug holidays in between injections. And in each one of those holidays, there's incremental photoreceptor death, which is permanent, which, over time, leads to decrease in vision. KSI-301, our lead agent, our anti-VEGF ABC, we see, and I think now the industry, both the key opinion leaders in retina as well as, I think, payers and perhaps drug developers as well, are recognizing the special position or the special place of KSI-301 in Kodiak's ABC Platform, really as the definitive single-generation 2.0 anti-VEGF for the market. So we have a very high molecular weight of our molecule, a large size, in this case, 950,000 molecular weight as opposed to, say, EYLEA, at 115,000; or LUCENTIS, ranibizumab, at 48,000 or Novartis' brolucizumab at 26,000. Larger medicines in the eye will stay there longer. We also have a very high formulation strength of our medicine at 50 mg per ml formulation, dosed at 100 microliters, providing 5 milligrams of anti-VEGF. So a molar excess of 3.5 versus EYLEA or 7x versus LUCENTIS in a much larger size, a much longer ocular half-life, which translates, over time, to much higher concentrations in the eye, which translates into improved durability for patients. So our molecule has the potential for extended durability and a more flexible retreatment window due to its large size, right, 20x larger than LUCENTIS and 8x larger than EYLEA. And that size translates into better half-life, which translates into increased concentration advantage over time. Importantly, our ABCs are medicines and KSI-301, they're more than the sum of their parts because of that special biophysics of that phosphorylcholine biopolymer. So we're seeing and saw initially preclinically a deeper potency of our medicine as a conjugate versus its starting protein and also this deeper potency versus other agents such as Avastin, EYLEA and LUCENTIS. We've also found that we have better tissue bioavailability to the retina and the choroid than smaller molecules, and interestingly, even better tissue bioavailability than, say, EYLEA, even though we're 8x larger. So we also have designed in that rapid systemic clearance of our molecules, which is important because you want to treat the disease in the eye, but you actually don't want to be treating the body. And we have shown a tremendous safety record, and we'll see a little bit more on that in a few minutes. Our goal with the molecule, KSI-301, is to have it to demonstrate meaningful differentiation, okay, as a first-line therapy in each of the key retinal vascular diseases, okay? And the way to think about it is each one of these key stakeholders, right? We want to be thinking about as we develop KSI-301, that we're generating the right profile and the right data so that each one of these stakeholders will want to grab or choose KSI-301 once it's approved as a first-line agent, whether that's the patient, their family, whether it's the retina specialist, the practice owner, the payer or the health system. That's our objective. So one of the important ways to think about achieving that, in terms of having a meaningful differentiation in each profile, it's important to think of each 1 of these 4 core verticals or these core markets or these 4 diseases a little bit differently. For example, with wet AMD, right, the current best care would be EYLEA after its 3 monthly loading doses, then every 2 months; or brolucizumab after 3 monthly loading doses once every 2 to 3 months. So in this case, in wet AMD, we're designing our pivotal study to be able to bring 100% of patients to every 3 months, but also, hopefully, a majority of patients to every 4 and 5 months. That study, the DAZZLE study, as a pivotal is recruiting now and enrolling well. In DME, the current best therapy would be EYLEA once every 2 months, after 5 monthly loading doses. Our objective here would be to run a pivotal with 3 monthly loading doses and then looking at every 3, 4, 5 or 6 months. So a very differentiated durability profile with fewer loading doses, a best-in-class profile, we hope, in retinal vein occlusion, the best is EYLEA once a month, and our objective here would be to run pivotals to show that we can do once every 2 months or longer after 2 loading doses. And in the non-proliferative diabetic retinopathy, very interesting area, where LUCENTIS and EYLEA are approved, but actually not used that much, the best is EYLEA 5 monthly loading doses used every other month, and our objective here would be to try to remove all loading doses and to have a therapy that could be used 2 to 3 times a year. And we believe, based on the data, that we're generating, in our Phase Ib, our sort of Phase II equivalent study, that each of these pivotal designs is educated from the Phase Ib data that we're generating. And we believe we have a very high probability of achieving the primary endpoints in each 4 of these indications, together with very differentiated durability. If we can achieve that, which we think the data suggests that we can, we will have the definitive generation 2.0 anti-VEGF agent. And we believe that profile will be first-in-class as a molecule. And that dropping into the market in the context of 2022 BLA filings for all 4 of these indications can be quite special, and we're accelerating into this, this year. So that's our 2022 vision, essentially to run pivotal studies. The DAZZLE pivotal study is ongoing and recruiting. We plan to initiate the DME pivotal, the RVO pivotals and the diabetic retinopathy pivotals this year. Towards 2022 BLA filings for all 4 of those indications is our objective. DR is a potential. The others we're accelerating towards achieving that. And KSI-501 is our bispecific ABC, the anti-VEGF, anti-IL-6 dual inhibitor, which is also quite a special molecule, and that's also moving towards an IND in 2021. That's our 2022 vision. Now, we have the financial resources to accomplish this and are focused on execution this year. On Slide 17, looking at the accelerated development strategy following the FDA end of Phase II meeting and the finances -- the financings that we finished in the fourth quarter of last year. Looking at the ongoing Phase Ib study, 120 patients. We'll continue to report data on a quarterly basis with the next major data dump happening on February 8. Initiation of the 2 RVO studies in the summer, towards approval. Looking at the DAZZLE study, as I mentioned, in wet AMD, which is recruiting. And then looking at the initiation of the DME and the diabetic retinopathy studies in the summer, looking towards BLA filings in 2022. As I mentioned, on December 2, we announced the sale of a capped royalty right on KSI-301, and then on December -- for $225 million. And on December 6, we announced the closing of a $317 million public offering of common stock. Those financings, together with cash on hand, provide the resources for Kodiak to accelerate into our accelerated development program. Let's talk a little bit about some of the clinical data for KSI-301. So as I mentioned, the Phase Ib study, which we dosed the first patient almost 1 year ago in the Ib, and we continue to progress the study and extended it from a 9-month duration to 18-month so that we can continue to see the progress of our fantastic durability in the study. We gave 3 loading doses once a month every 4 weeks to all patients. It's treatment-naive patients. And we looked at a basket of wet AMD, DME and RVO patients. We -- on Slide 20, after the loading phase, we do durability assessments on a monthly basis to evaluate whether the patient should be retreated. On Slide 21, across the 3 diseases, we have slightly different retreatment criteria. Importantly, investigators, as they see the patients on a monthly basis, could decide to retreat the patient at any time if they felt that the disease was worsening and maybe they didn't quite meet the retreatment criteria. Baseline characteristics of the patients on Slide 22, the patients actually had fairly good vision to start and that's an important thing to note. So in wet AMD, what did we see? So on Slide 24, we like to look at the durability, looking at it from a swim lane's point of view. That is here -- as of the cutoff date here of November 8, and as I mentioned, we'll be showing a really a bolus of additional data within the next 30 days at the Angiogenesis Meeting on the 8th of February. What's -- the nice way to look at the data here is we can see every patient through November 8 that had reached 12 weeks, in other words, who had had the 3 loading doses plus 4 weeks. And each of these little diamonds represents a retreatment. Importantly, what we're seeing in wet AMD is that over 80% of patients can go longer than 3 months after the last loading phase, okay? So if you think about, well, what do existing therapies do? For example, what does EYLEA do, okay? At a high level, one way to think about EYLEA, if you look at this chart, is about 1/3 of the patients would have been retreated at 12 weeks, okay, 4 weeks into the loading -- after the loading phase. Another 1/3 might have been treated around 16 weeks here. And the other 1/3, maybe around 20 weeks. So a distribution of patients with the existing therapies that would treat all the patients essentially within 4, 8 or 12 weeks. And what we're doing is we're bringing the vast majority of patients to 4 months or longer. That's very special. There's really no other agent that is providing that kind of durability data. And at the same time, on Slide 25, 26 and 27 and 28, really, what we see is, in the context of this durability, we're also showing very appropriate efficacy in terms of gain in vision and retention of vision, the BCVA, the best corrected visual acuity; and also showing very appropriate reduction in OCT, and in fact, bringing the OCTs down, essentially, really very close to a normal OCT of around 300 microns in these treatment-naive patients. And we'll be showing more data as the data progresses, as we dose more patients and as they move through the study, as I mentioned, on a quarterly basis this year. And the maturation of that data, I think, will be nice for everybody in the community to see. We're quite excited about what we're seeing. So moving into DME, diabetic macular edema and diabetic retinopathy on Slide 30. Similarly, we give 3 loading doses to the patients, and then we follow the patients looking for retreatments. I think we're very pleased and really seeing data beyond our own expectations in DME. We're giving very few retreatments to the patients. Again, more than 80% of patients are going longer than 3 months. And we're seeing many patients go 6 months or longer. On Slide 31, again, seeing very appropriate gains in terms of efficacy, in terms of vision and OCT, improvements in the patients that had DME, and -- on Slide 31 and 32. On Slide 33, looking at diabetic retinopathy, which you can also see in these diabetic patients. So we're seeing very appropriate, interestingly, signs of disease modification in these patients. On Slide 33, 2-step improvement is an approvable endpoint in diabetic retinopathy. And on Slide 34, it's fun to look at some of the photos very quickly. So if you think about this patient, who had diabetic retinopathy, in fact, they had a proliferative diabetic retinopathy, you see these red kind of shotgun lesions or hemorrhages on the day the patient came in and these hemorrhages down below. At week 12, we see rapid conversion from proliferative to non-proliferative diabetic retinopathy, and the patient here through week 22 with no additional doses really has a resolution of this disease in the photos. And actually, this patient, as of this cutoff date, was week 22, but actually, this patient has still not received a retreatment. So that brings their disease beyond 6 months from the loading phase not requiring retreatment. It's quite special, and the opportunity in early diabetic retinopathy is quite special for our medicine. In RVO, retinal vein occlusion, quickly on Slide 36, we're also seeing very appropriate. This is a very VEGF -- very high VEGF-driven disease. We're seeing more than 50% of patients going 3 months or longer. And again, it's important to remember that EYLEA and LUCENTIS really are labeled monthly for retinal vein occlusion. So we're seeing very nice durability. And on Slide 37, we're seeing powerful gains in vision and powerful improvements in OCT and RVO patients with our medicine. Importantly, in terms of safety, on Slide 40, we're very, very pleased. We've given over 400 injections now to patients, and 103 of those patients have received 3 or more injections. Still, we found 0 cases of intraocular inflammation in any of the patients. So clearly, we have a very special, very clean baseline profile for inflammation that, I think, is very special and should give all of us a lot of comfort that the biopolymer platform itself, KSI-301 as well, has a very nice baseline safety profile. So some conclusions. KSI-301 is demonstrating very promising safety, very appropriate efficacy and disruptive durability. ABC is our new design platform for long durability intravitreal medicines. We're really in a class of our own, and we've achieved very important development milestones with excellent safety, strong efficacy across the 3 major retinal diseases. And we are seeing really a remarkable biological durability, which, from the Ib study, gives us a very strong comfort and confidence that we can meet the primary endpoint with very strong durability across the major retinal diseases, right? A 3- to 5-month durability in wet AMD, 3- to 6-month, let's say, durability in DME, 2- to 3-plus month durability in RVO and potentially every 4- or 6-month dosing in diabetic retinopathy. Again, just flipping in the last minute or 2 to our -- a reminder of our 2022 vision. I think now we have the resources, financial, to really accelerate on our execution and to deliver on the continuation of the DAZZLE pivotal study in wet AMD, to initiate 2 pivotals in RVO, to initiate our DME pivotal and a non-proliferative diabetic retinopathy pivotal this year, to be accelerating with recruitment in those studies and proper execution and the underlying manufacturing towards BLA and being a pre-commercial company, towards BLA submissions in 2022. So we're -- looking backwards, about a year ago, our stock was at $8. So we had a tremendous year in the last 12 months. I think we're very excited based on the resources that we have, the data that we're generating, the incremental maturation of the Phase Ib that we look to be presenting on a quarterly basis as well as our execution in our pivotal studies in our manufacturing. We're very excited over the next 6, 12, 18 and 24 months to be part of the biotech universe and to be continuing to communicate with all of you. Thank you.