Nurix Therapeutics, Inc. (NRIX) Earnings Call Transcript & Summary

All right, everyone. I think we'll get started here with our next fireside discussion. My name is Derek Archila. I'm one of the senior biotech analysts here at Wells. Very excited to have Nurix Therapeutics with us. From the company, we have Arthur Sands, President and CEO. Arthur, great to see you, as always.

Thank you, Derek. Great to be here.

Awesome. Well, you guys had some news this morning talking about your Phase III trial design. So I'll let you run through some slides real quick, and then we can move over to the Q&A afterwards.

Great. Yes. I'd like to introduce some of the new information via some of our slides. These are our disclaimers. But before I dive into our Phase III program for bexobrutideg, I do want to just take a step back and let everyone know how we see degraders in the larger context of the evolution of new therapies as pictured on this slide. So all the way back to original small molecule inhibitors, antibodies and, of course, DNA-based therapeutics. They've been designed to knock out or knock down targets. Now with targeted protein degraders pictured on the right side of this slide, we think this is a whole new class of drugs. Bexobrutideg, our lead program is the first deg with that stem, degrader for representing this new MOA, and we think it's going to be, of course, a major class of therapeutics. At Nurix, we're able to take our degraders and address major target categories that have blockbuster potential. We'll be talking, of course, about BTK on the left, which is a target that's well known, clinically validated. However, BTK inhibitors in the space of CLL and B-cell malignancies have been developing resistance mutations and our degrader can address those mutations, and we think this may be a property of degraders in general, being able to address current resistance mutations to known inhibitors to clinically validated targets. And then off to the right, we are very interested in our autoimmune portfolio, both with our IRAK4 degrader, which is being developed with Gilead as well as the latest one to go into development with Sanofi, the STAT6 degrader off to the right. The STAT6 represents a whole category of undruggable targets that we can address with degraders. And so this is how we distribute our target pipeline from clinically validated targets to targets that really would be better off with the degrader such as IRAK4 to then the undruggable, the STAT6 of the world, which have real breakthrough potential. On this slide, it's just that our BTK degrader, bexobrutideg, as I said, the first deg in this category of drugs, really checks all the boxes in terms of addressing the inhibitor resistance mutations, bringing to bear new efficacy function via the scaffolding function of BTK, which is the structural function of that kinase and many kinases have the scaffolding function. We take that out with our degrader. Degraders act in a catalytic fashion that is they pack the punch or the potency of biologics, although they are small molecules and are orally bioavailable and have the attributes of a small molecule PK and, of course, are eminently manufacturable. Bexobrutideg crosses the blood-brain barrier as well. We have activity in CNS disease, and I'll highlight a couple of patients with that. And then also, we see potential in autoimmune disease with Bexdeg, as we call it for short. This is, I think, some important foundational data before we get into the Phase III design. To the right on this heat map, what you're looking at is comparing NX-5948 or -- which is Bexdeg at the top across all the known resistance mutations that we're seeing in the clinic in our trials. And then as you see, the potency drops off for the inhibitors. We've listed both the covalent inhibitors as well as the non-covalent inhibitors. And as the boxes turn blue or red, that represents a loss in cell killing potency of 1,000-fold in blue and red is 5,000-fold loss in potency, and that's why those drugs don't work. And you can see that all the BTK inhibitors, although now representing upwards of $9 billion to $10 billion in sales, very successful drugs, but they all have their liabilities. And this is where we think Bexdeg and the degrader really will have a big advantage. And then off to the left, you're looking actually at degradation of BTK from our patients. That graph, the way that is conducted in the trial, day 0, we take our first blood draw. We measure BTK protein levels in our patients. And then you can see by day 8, all of the BTK is degraded regardless of the resistance mutations that these patients harbor. And these, again, are from our patients in our current trial. So we get complete degradation basically at all doses tested. And then this is an important highlight. This is our waterfall plot showing the decrease in lymph node size. Each bar there is a patient in the trial. You can see the overwhelming majority of patients are showing decrease in their lymph node size, which is one of the key components measuring response. And across the bottom is the mutational burden of each patient. And regardless of what the mutational burden of these patients is going into the trial, they all have the opportunity to respond. And we have not seen any type of resistance mutation pattern that would prevent a patient from responding so far to our drug. And then I should have mentioned that the light blue are patients with CNS disease where we're also seeing these responses translates to an overall objective response rate of 80% across the board. You can see the breakdown here. I don't have the safety tables here, but overall, very well-tolerated drug. We had no dose-limiting toxicities, no new atrial fibrillation or ventricular arrhythmias, which have been associated with some of the BTK inhibitors. And so a very safe profile, well tolerated overall. This is getting to our new disclosure today. We did 8-K these files. And really, the new disclosure is about item #2 here, which is our Phase III plan. And so I'll go into this in a little bit more detail on a subsequent slide, I think why don't I just dive forward to that. So here is the overall schematic for the Phase III trial. This would be -- is a randomized controlled trial, randomized 1:1 between bexobrutideg and an investigator choice control arm. Here, for the first time, we're defining our plan for the control arm, which includes 3 options for investigators. Pirtobrutinib, which, of course, is a noncovalent BTK inhibitor that has accelerated approval already in the U.S. and Europe and is anticipated to gain full approval. And then also IR or idelalisib-rituximab combination as a choice as well. And then bendamustine-rituximab or BR as another choice. What this does is in a single trial, it enables us to be clinically relevant across geographies. So we're offering standard of care of clinical relevance in multiple different countries. We anticipate being in 20 to 30 countries in the Phase III trial, which will be between 400 to 500 patients. It maximizes our opportunity for enrollment across these geographies. And also, we believe will address the current standards of care. So those are -- that's the major sort of update in terms of our trial design. We -- in addition to this, we are planning our single-arm Phase II trial. We see that as an accelerated approval opportunity potential that would be approximately 100 patients. And then the trial you're looking at here, this randomized control would be the confirmatory trial required for full approval. We have designs also to start a Phase Ib/II in combination with venetoclax and other combination agents that will be a dose exploration trial in combination. So that's the third step in our overall development. And then just to put this in context of which markets we're addressing with these trials, I think the most important one is, of course, in the middle there, that second-line position for bexobrutideg, which is currently approximately a $2 billion a year market forecast to grow to $5 billion a year. In the third line, which is where our data -- our results have been to date, the data I showed, 80% response rate is in the third line plus, actually patients that have received over 4 lines on average of 4 lines of therapy. Still a significant market of $1 billion to $2.5 billion in that third-line setting, where we've generated all our data to date. But our Phase III program will be addressing the second line in the middle, that marketplace. That's the Phase III randomized controlled trial I just outlined. And then we do have potential ambitions for the first line, which would likely be in combination. So that's my introductory remarks, and we can go to questions.

Yes. No, that's great. I mean, I guess in terms of what you just outlined for the confirmatory design, like I guess, how should we first think about the breakdown in terms of geography and the relevant investigator kind of choice for the standard of care? Like is that going to differ between U.S. and some of the ex-U.S. geos in the trial?

Yes, it definitely will vary. And that's why we wanted to offer sort of a real-world set of choices. We anticipate in the U.S. and Europe, it would primarily be pirtobrutinib that would be selected. However, in Europe, IR is also frequently prescribed in the second-line setting, especially for high-risk patients, as well as BR. And in outside of Europe and U.S., that can be up to 40 -- well, between 40% and 60% of patients actually prescribe BR even in the front line. So practices -- practice across geographies really does vary. We wanted to engineer a single trial that could really address all the options.

Got you. And I guess the other question is like how do you think about -- I don't know if you discussed the powering at all in terms of how the trial is powered and what you would expect from that investigator choice arm in the trial?

Yes. So we've analyzed different scenarios in terms of powering it. And I won't go into details of our stat plan at this time. But needless to say, we powered it, and we're citing between 400 and 500 patients. There's quite a range there. We'll likely refine that as time goes on. But we do think this will be a very well-powered trial to show Bexdeg's superiority to the control arm.

Got you. And then as you think about this strategy relative to what we've seen with some of the competitors, other larger trials, I mean, this seems more compact, maybe more financial friendly in terms of cost. But I guess what drove you again for this type of design relative to maybe some of the other designs that we've seen for some of the BTK degraders?

Yes. It is capital efficient. I think that's important in today's reality. I do think that you could engineer -- I mean, some of the larger pharma have done 6 trials as they develop -- fully develop their drugs. And that's certainly potential. We may expand on this portfolio of trials as we go forward. This is a core set for approval, for first approval, and we likely will expand, especially in the combination areas. And so yes, there are different approaches here. We think this is a very efficient way to get the first approval and to get the full approval.

Yes. Got you. Okay. In terms of like your expectations on how that trial or actually both, obviously, the accelerated approval, but also the confirmatory trial, how they'll enroll. Can you maybe give us some sense of kind of the timing and your expectations there, particularly with the confirmatory, which is more of a global trial?

Yes. So starting with the Phase II, the 100-patient trial, what we've seen with some prior drugs is roughly about a year of enrollment, it would -- we have not forecast that yet. We need to start enrolling before we can make our own forecast. But that's what others have seen. I believe pirtobrutinib in its accelerated approval was approximately a year during of enrollment time. There's a lot of enthusiasm for Bexdeg and for this trial. The results we've seen to date goes a long way to spur enrollment and investigator enthusiasm for the drug. So we do think that we'll be able to enroll that trial quickly. With regard to the randomized controlled trial, the large Phase III, we really haven't forecast that yet. That obviously will take much longer, but stay tuned until we can get there.

Got you. I mean I know this program is quite expansive and also particularly as you go into the first line, it becomes a much larger component and probably trial to run. So I guess, have you thought about in terms of bringing in a partner to help with allay and ultimately defray development costs? Or what do you think -- where do you think Bexdeg ends up? Is it basically through a partnership? Or is there some other sort of things that you're looking at from a strategy standpoint to get this moving through both kind of the second line and the frontline trials?

So what we've outlined, Nurix can do ourselves. So we're pushing forward ourselves. That gives us control and speed, and we're intent on doing that. Ultimately, we could see partnership as being part of the future for Bexdeg. It is a very large opportunity, multiple trials, especially if you go to the frontline, would be required and we do think it could end up being the way to maximize value. However, the second-line opportunity is quite significant. And I think if you look at return on investment in terms of the amount of money to go into these trials versus the potential return, the second line is really very attractive. The first line, we think will continue to be dominated by the covalent inhibitors. These are very strong drugs. They're very successful drugs. However, all patients basically progress at a certain point. So the patient population is quite large in the second line. And we think that's probably the best return on investment for us at this time.

Got you. Okay. And then as you think about the trial design between the competitors and your -- one that you unveiled today, I guess, is there going to be like a good shot at really understanding the differentiation between these molecules based on the different trial designs? And obviously, there's nothing that you can ever do to say that it's apples-to-apples, but will we come away from these data sets being there's a clear winner here?

I think ultimately, yes. I think most drugs and their competitors ultimately are defined based on their safety profile. I think many of the drugs have a similar efficacy profile if they're well designed for their on-target attributes. What's harder to anticipate is what's off-target and what shows up over time. And I think that is -- that's what has defined the frontline with zanubrutinib taking market share from ibrutinib because of safety, basically selectivity based -- the safety based on superior selectivity or a [ CalA ]. And I think we'll see the same thing with the degraders ultimately. I think you'll see definition of off-target differentiation over time.

Got you. All right. And then in terms of just like beyond CLL, can you just kind of walk us through kind of the strategy for Bexdeg and like Waldenstrom's and maybe in non-Hodgkin's as well?

Yes. So in Waldenstrom's, our ORR is 85% or 84.2% to be precise so far, which is very high. Again, this is in a relapsed/refractory setting. So we do think there's an opportunity there that is the NHL category that is most like CLL. So the monotherapy opportunity there is significant. If you then look into the other NHL categories, and we have now actually over 100 patients in the other categories, we have not reported on yet. We look forward to reporting on those. And we do think there'll be opportunity for Bexdeg in those categories likely in combination, although I can tell you, we've seen responses in every category of NHL. So we do think there's a broader opportunity there. Today, again, we're focused on the monotherapy in CLL right now.

Got it. Okay. And then maybe just in terms of how you think about BTK degraders and Bexdeg in autoimmune. So I mean you have kind of this cohort in wAIHA that you're exploring. What should we expect from that? And what's the strategy given kind of the main focus on CLL?

Yes. So the -- we think the same advantage that we're seeing in oncology will exist in autoimmune disease. And we believe that's driven by taking out the total protein and addressing the scaffolding function of the signaling pathway of BTK as well as the kinase function. So we think that's going to pay dividends in autoimmune disease, just like we're seeing in oncology. And so that means there is a broad opportunity. We started with wAIHA, specifically the autoimmune hemolytic anemia that overlays some CLL patients. That turns out to be a fairly small population. We pursue that as a proof of concept. We do believe that we can broaden that and get outside of oncology settings in I&I. And in the fall, we'll be describing a broader strategy there.

Got you. I mean should we think about this as moving Bexdeg forward in I&I, or should it be another molecule just in terms of like how IRA falls and what you want to actually do kind of longer term?

I think the first one would be Bexdeg. And there's plenty of reason to believe that Bexdeg would have that opportunity. It's got the safety profile we think already. However, it is such a huge market opportunity. We do have other molecules coming. And -- but they'd be several years behind. But we do think that there are attributes to BTK degradation that could even be further optimized even beyond Bexdeg.

Okay. Got you. So I mean, do you think like wAIHA in general or ITP or like how do you think about the opportunity ahead of BTK? I mean we also saw like rilzabrutinib just got approved in ITP. So like they're starting to pave the way a little bit more in autoimmune. So like there's a lot of different spaces, I guess, you could play, but is there any particular ones that you want to stay close to, maybe heme, but maybe others?

So I think we're looking very closely at MS, multiple sclerosis. We have CNS activity in -- already established in CLL and in NHL patients with severe brain disease, we're seeing clinical activity. So that's a very strong vote for pursuing an MS category. We really are also looking at dermatology and hidradenitis suppurativa is an interesting opportunity. Obviously, more accessible, more rapid trials than MS. So there's some drug development potential advantages. In the heme malignant -- in the nonmalignant heme indications, yes, ITP, that approval is encouraging. They tend to be smaller indications and more challenging to enroll. And I think with something like Bexdeg, I'm thinking -- we're thinking kind of go big is probably the smarter strategy.