Kyverna Therapeutics, Inc. (KYTX) Earnings Call Transcript & Summary

Thank you. All right, good afternoon everyone and thanks for joining us at the Morgan Stanley Global Healthcare Conference. I'm Michael Ulz, one of the biotech analysts, and it's my pleasure to introduce Werner Schuler, CEO of Kyverna Therapeutics. And just as a quick reminder, the format for today is a fireside chat, so if anyone in the audience has a question, please raise your hand and we'll get it looped into our discussion here. But before we get started, I just need to read a quick disclosure. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. And with that, I'll turn it over to Werner. And if you want to make some introductory comments, and then we can hop into the Q&A.

Sure, Mike. Thanks very much, very much for hosting us. It's been a great day so far. And yes, I'd like to just start off by saying Kyverna is really excited about the tremendous progress we're making. We're leading the world in bringing cell therapy immune patients starting with our first indication with stiff person syndrome, but we're on track to finish filing our BLA as of Q4 of this year, which would put us on track to be the first approved therapy in this terrible condition that has no approved therapies. But more importantly, it puts us on track to be the first cell therapy company anywhere in the world with an approved therapy in autoimmune diseases. So really excited about that tremendous progress there. But this really opens up the aperture for the rest of our neuroimmunology strategy and portfolio that we're building here and looking at additional indications with myasthenia gravis and progressive MS and other things that will continue to build and grow our company as we continue to navigate this space, but more importantly, help these patients that desperately need something new in terms of a new therapy that can transform their lives.

Great, and thanks for that introduction. And I thought maybe we could start with a couple big picture questions here, just, you know, maybe why autologous CAR T-cell therapy, you know, and specifically, MIV-Cell has been so promising for autoimmune indications.

I think what's really important here is that MIV-Cell, unlike other CAR T therapies, has been specifically designed for autoimmune diseases. This construct was in-licensed from the NIH as a next-generation construct for potency in these conditions, but more importantly, significantly improved safety. We're the only CD19 with a CD28 co-stimulatory domain in the autoimmune space with a fully human design as well and other changes to the CAR construct that provide this improved safety profile. And we're now seeing that bear out in the over 100 patients that we've now treated. We're seeing these remarkable clinical results, but at the same time, no high-grade CRS, no high-grade ICANS, no incidences or reported cases of ICHS. All these things are really important when you're looking at developing a construct that's going to help patients more broadly across these across these conditions.

So you're seeing very promising results, not only on efficacy, but safety across a lot of different indications and quite a few number of patients there. Talk about the impact of the recent news from Novartis and BMS and kind of what that means for your program or doesn't mean.

Yes, first of all, I think it's really unfortunate that these cases were announced and the impact that it has on these patients and these programs. But I do think it really underscores what we're doing at Kyverna is very different, and very different on 2 important ways. First, the construct itself, and I touched on that a little bit in my opening, but MIV-Cell has been uniquely designed for use in autoimmune patients and it's been designed for significantly improved safety and like I said, this has been bearing itself out in the clinical profile that we've now seen in over 100 patients treated. So again, no high-grade CRS, no high-grade ICANS, no cases of the ICHS, which some of these other constructs have been associated with. And I think that's critically important to keep in mind that we're dealing with a construct like MIV-Cell that has this prominent safety profile, improving safety profile. In addition, what's also really important is the manufacturing. We're not using a rapid manufacturing process. In fact, we're using a traditional, well-established, tried-and-true manufacturing process that has been, again, well-validated and established in the over 100 patients we've now treated. 98 percent manufacturing success rate. And we believe this combination of the construct and the manufacturing is what's contributing to the overall promise of safety profile that we're now seeing.

Yes. And just on the manufacturing side, like what do you think is contributing to the sort of risk around that, particularly in autoimmune disease?

Well, it's difficult to speculate about other manufacturing programs and other companies. Some would say you're introducing more naive T-cells and that has a different clinical profile in patients and one that needs to be elucidated through their own development program. But again, coming back to Kyverna, what is really critically important here is we know what we've got and we've got a really well-established manufacturing process that's been well validated and this is bearing itself out in the safety profile that we're seeing across all these patients.

Yep, makes sense. And if we focus on stiff person syndrome, you mentioned this in your prepared remarks, it's your sort of first to market strategy here. Maybe discuss the unmet need there and give us a sense of the potential market opportunity, patient numbers, et cetera.

Sure. Well, stiff person syndrome is really a really underappreciated disease. It is a rare condition. It has no approved therapies up to this point, and nothing that these patients are actually using actually works for them. So if you look at the natural history of stiff person syndrome, over 80 percent of these patients will progress throughout the course of their disease to significant disability, where they'll either need a walker, a wheelchair, or be bed bound. Less than 20 percent of them will actually be employed 4 years after their initial diagnosis. So the impact on them on these patients and their families is is is is horrendous, which puts into context what we're seeing with MIV-Cell in the clinical pivotal program that we just announced earlier this year, um, so remarkable in what we're doing here, so remarkable. For the first time ever, not only seeing clinical improvements in these patients, but for the first time ever, actually seeing a reversal of disease and a reversal of disability. So patients that in the trial we had 12 patients in the trial that required walking and assisted devices. Over 2/3 of these patients actually didn't need those walking devices by the end of the trial. So, you're able to reverse the course of disability in these patients and do so with the one-time therapy that also allows these patients to come off background therapies that they've been chronically burden with. So high doses of steroids, high doses of IVIG, things that have their own safety impact on patients, these patients are able to come off of that and live this, you know, life drug-free, disease-free remission, which is actually quite remarkable.

Yeah, quite dramatic effect there. I guess maybe just talk a little bit about how you identify these patients or diagnose them and kind of what percentage are currently diagnosed.

Well, we know in the U.S. there's 6,000 diagnosed patients. And we know this through epidemiological studies as well as through additional work that we've done on claims analysis. And patients are diagnosed in 2 ways. They need the clinical symptomology. So there's a battery of tests that these patients take with stiffness scores and mobility scores and that plus a combination with this diagnostic testing. They are also tested for antibodies like GAD 65 being the predominant one. With patients who have both of those, that becomes a confirmed diagnosis for an SPS patient. As I said, there are 6,000 patients in the U.S. These are well-identified patients. In fact, we do know there's between 2 and 2 and a half thousand are also refractory to existing therapies, and these are highly concentrated in a number of key academic centers. So this makes this a very important disease, but also one that's easily identifiable in and we can tackle here at Kyverna in terms of addressing.

Yep, makes sense.

You talked a little bit about the data you've seen so far, and I think near term you're going to have another update with some longer term data out to 12 months, I believe, and later this quarter, so probably fairly soon here. I guess, how should we think about durability of the effect? Is it something that's kind of, you know, can it continue to improve, is it something that that you have a nice impact early and you kind of stabilize it at the same place, or just maybe talk about what to expect there or how to think about that.

Well, if you look at the pivotal data readout that we announced earlier this year, the primary endpoint being the timed 25 foot walk test, we saw a 46 percent improvement in patients and this is highly the data is highly statistically significant but also highly clinically relevant because 20 percent improvement is considered clinically important. So we are seeing that from the primary endpoint but we also saw high statistical significance across all the secondary and exploratory endpoints as well which is quite remarkable. What we are looking for in follow-up is can we see a majority of these patients continue to see a durability effect? Can we actually see a majority of these patients also remain off their background IVIG and background immunosuppressants that they've been chronically burdened with? Again, if you put this in perspective with the natural history of the disease, again, these are patients that progressively get worse over time. Patients never get better. At best, they'll stay constant, but most will progress. And if we can actually continue to show that a majority of these patients can have this significant clinical improvement, again, with the one-time therapy that allows them to come off all these other background chronic therapies that they've been burdened with, we are truly introducing a paradigm shift here that will have never been seen before.

Yep.

Can you talk about durability and what you've seen with the longest patient out there? I think it might be the MG patient, but just generally what you've seen over the longer term after treatment.

Well, prior to the initiation of our of our clinical studies here at Kyverna, we had done some work through it, a compassionate use in IIT programs, and some of our first patients treated with both stiff person syndrome and myasthenia gravis are now well past the 2-year mark, and free of disease but also off their background immunosuppressants and chronic therapy. So the early patients are really giving us an indication of what the longer term durability of the cell can be and that's why we're so excited to by the longer term follow-up of the stiff person syndrome, KYSA 8 trial, which we will provide in weeks, as well as a longer-term follow-up on our KYSA 6, which is our MG Phase 2 study. And again, if we can continue to demonstrate a durability effect in a majority of these patients, we are truly doing something transformative here.

Great. And, uh, you began your rolling submission for Stiff Person earlier this year. You expect to complete that, I think, by the end of this year. So maybe just talk about what's been submitted so far and what kind of remains to be submitted to sort of complete that process.

Well, through the RMAT designation that we have for stiff person syndrome, we've had some very positive dialogues with the FDA and started our rolling BLA submission earlier this year after our pre-BLA meeting. And we're on track, we've announced this earlier, but we're reiterating our guidance to finish this BLA submission in Q4 of this year. We have submitted all of the modules, except for the clinical module. So the CMC module we just announced in our Q2 earnings has been submitted and as I think everybody knows, this is a critical module for cell and gene therapies to have completed and gives us a lot of confidence that we're derisking the rest of the file. And in terms of the clinical package itself, we are finishing the completion of that documentation, including adding in the 1-year follow-up data, which we just mentioned a few minutes ago, as well as some additional analyses on the natural history study, which will provide some context as to what we're seeing in the KYSA-8 study. These things are coming together and we're well on track. So as I said, we're going to be on track to finish filing in Q4.

Yes, great.

Can you talk about interactions that you've had with the FDA? You know, is this sort of the same team you've been working with for a while for this stiff person syndrome? And there's been some, obviously, changes. Leadership, has that had any impact at all on your interactions?

No. At this point, no. We've had no major deviations at all from the conversations we've been having with the FDA. In fact, throughout the whole development process, and again, tapping into the RMAT designation that we do have with the FDA, we've had constant conversations with them, and they've been highly supportive of what we're doing here at Kyverna, and highly supportive of this program with the recognition that, again, there's no approved therapies and what we're doing here, um, is highly transformative with the clinical results that.

And just given the profile and the dramatic impact you've had in stiff person, is it fair to assume you'll request priority review for an accelerated timeline?

Definitely, the high unmet need here, the transformative results that we have, the RMAT designation, all these things will allow us to less a priority review. We think there's a high probability that the FDA will grant that.

And considering you're sort of a.

I think I've mentioned you're in the process of preparing for the launch and kind of being ready by the end of this year, maybe just talk a little bit about what you've done so far and what remains and maybe early thoughts on strategy.

Yeah, stiff person syndrome is an excellent first launch for us at Kyverna. It allows us to be really focused in terms of our strategy and generate some really valuable opportunity commercially. We've been working behind the scenes on a number of fronts to prepare for launch. First, in terms of manufacturing, we're working with our manufacturing suppliers. We're well on track and feel confident that we're doing the right things there. In addition, site activation becomes critically important. We're targeting 10 centers to start because of the concentrated nature of these patients and where they're actually seeking and accessing treatments up to this point. And we're working with these sensors now to prepare them for the next phase of the pandemic. Prepare them for commercialization, including getting the necessary contracts and processes in place to deliver MIV-Cell on time and consistently for them in a commercial setting. In addition, we're doing a lot of work with payers, spending time with them working through the value proposition. We've now got the data set from our Pivotal Redo. We'll have some longer-term and follow up here in a few weeks. We're sharing that with payers and we have a very, very strong value proposition. Supportive MIV-Cell in a strong payer position, which has been positively moving forward well. In addition, we're spending a lot of time working with patient advocacy groups. This is a very tight-knit community. These patients are well aware of their own personal diagnosis, but also by looking at their peers and their friends, they know what the prognosis of this disease will happen to them over time. And so there's a lot of, there's a lot of anxiousness hope in the community right now with what we're doing here at Kyverna and a lot of support for helping.

Us bring this to patients more broadly. Can you talk about maybe some of the market research you've done so far and, you know, kind of the level of enthusiasm among maybe the physicians and patients as well?

Well, physicians and patients are waiting. We've seen clearly from the market research that over 90 percent of physicians are strongly supportive of the TPP that we have and the value proposition that MIV-Cell can bring for patients. And we know that 85 percent of physicians would use MIV-Cell consistently in their moderate to severe patient population. So that's a very, We have a very strong initial market research read and we believe that will only improve as we get closer to launch if we can continue to show a durability of impact, if we continue to show that a majority of patients can remain drug-free, disease-free, post the MIV-Cell treatment, we believe the adoption rate and the willingness to try and use MIV-Cell will only go up over time.

Makes sense. I don't know how much you can say about this, but just in terms of your current thinking on pricing, I know you mentioned you're doing a lot of work with payers there to try and figure that out, but any thoughts on how we should think about pricing? Are there good sort of analogs out there or just, you know?

Any thoughts you can share? Well, we come back to the value proposition that MIV-Cell is bringing for these patients and looking specifically at these diseases. And the case of both stiff person syndrome and myasthenia gravis, which would be our second indication, there's a high cost to managing these patients. In stiff person syndrome alone, the cost of IVIG, and patients hundreds of thousands of dollars a year. And then you layer on top of that caregiver costs, lost time from work. There's a lot of emergency costs because these patients unfortunately have these stiffness attacks where they freeze up and fall and have significant injuries. There's a psychological burden as well with these diseases. Overall, it costs the system We plan the patients hundreds of thousands of dollars a year to manage. So we believe there's a strong value proposition from MIV-Cell if you can come and treat these patients once and not only have this transformative clinical impact but also get these patients off the background chronic therapies and chronic burden on the healthcare system that these patients have been enduring. We're actually targeting, if you take a look at the cost of CAR T therapies now, which is roughly $500,000 to $600,000 for a CAR T treatment, we're targeting a significant premium to that for MIV-Cell, and we believe it's justified, given the high value proposition that we're bringing for these patients in both of these initial indications.

Yep, makes sense.

So a lot to look forward in stiff person syndrome, but you also have myasthenia gravis studies ongoing, the KYSA-6, the phase 2 study maybe highlight some of the key takeaways from that data that you've shared so far.