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

Good morning, everyone. Thank you for joining our next session. Brian Skorney. I'm one of Baird's senior biotech analysts. Very happy to have with us presenting Nurix, it's a company that I cover. And I'm very excited about the work in the protein degradation space. They have a lead asset hitting BTK degradation and a number of partner programs behind that. So thank you so much for joining us today, Art. Maybe to start, you can give us a bit of a brief intro into yourself, Nurix, the company's history and the core competencies as you see it.

Well, thank you for having us. Happy to give you an introduction. These are our disclaimers. So yes, targeted protein degradation is a new field still, although we've been at it for over 10 years. We're based in San Francisco and the Bay Area based on science out of UCSF and Berkeley. And what's pictured on the slide is this evolution of new therapeutic modalities. So we are in targeted protein degradation, which focuses on the removal of proteins that are disease-causing proteins from the cell. So we put it in context of a number of major breakthroughs that have taken place in drug development back -- as far back as antibodies and also nucleic acid-based therapies, but targeted protein degraders are small molecules taken orally that can remove proteins from cells. And so one of the goals of all therapeutics has been to target particular disease-causing proteins. And what we can do now with targeted protein degradation is to harness the machinery of the cell to remove particular proteins that are causing disease. So at the top of our pipeline list is bexobrutideg, which is a degrader of BTK, which is a driver of B-cell malignancies, specifically CLL and other major -- the most common leukemia in adults is CLL. So that's where we're focused to start with. But we have a whole pipeline coming in addition to bexobrutideg that are all modulating protein levels within the cell. So oncology is our primary focus, but inflammation immunology is our next emerging pipeline area. STAT6 is a very interesting transcription factor, which we embarked on with Sanofi. That's a type 2 inflammation, the greater that we're focused on for atopic dermatitis. This is a transcription factor that we can remove selectively from the cell. IRAK4 is also with a partner, Gilead. And each of these, we have 50-50 in the United States in terms of ultimate co-commercialization. So let me focus on bexobrutideg, which is the first degrader in the area of B-cell malignancies. We removed BTK selectively from the cell we can address not only wild-type BTK, which is a normal BTK protein but also areas of BTK that have been mutated or selected for by BTK inhibitors, which is a significant current market. So we removed those proteins that stops the lymphocytes from developing and growing. In the case of CLL, this is, of course, the major target. Not only do we address the resistance mutations of BTK, but also the scaffolding function of BTK, which is another signaling [ modality ] through which BTK signals growth within the cell. So there's some early data on the right-hand side, I'm showing you the areas of resistance mutations that we see in the clinic, and those are labeled by virtue of their mutation within the BTK protein. NX-5948 or bexobrutideg can degrade and remove all of those mutations. That's the green, the most potent cell killing. And then here, we're comparing ourselves to the current inhibitors of BTK, the covalent inhibitors and the noncovalent inhibitors. And what you're looking at in the different colors, blue indicates a loss of potency of 1,000-fold, red, 5,000-fold loss in potency. And this emerges this resistance to these inhibitors emerges with treatment of the BTK -- current BTK inhibitors. So a significant marketplace is over $10 billion currently. And the degraders, our degrader can address all of those. On the left-hand portion of the slide, you're looking at the actual removal of BTK from the blood circulation from our patients. And by day 2, we see significant degradation of BTK and all the way through the first 30 days, we get to essentially complete elimination of the BTK protein. This translates to a significant clinical benefit. What you're looking at here on the slide is the reduction in lymph node size in patients with CLL. And you can see the overwhelming response is positive in terms of reduction of lymph node size. Each bar represents a patient. The light blue bars include patients that have seen us involvements of CNS lymphoma and leukemia. At the bottom across the slide, we're sharing the different mutations that exist in each of these patients. And regardless of the mutational spectrum, we have a very significant clinical effect in each of these patients. So we're very encouraged by this data, and it shows us that BTK degradation can really address a wide spectrum of genetic burden in these patients. It translates to an overall response rate of 80% across the patient population, which includes fourth-line-plus patients. So these are patients that have seen chemo immunotherapy. They've seen BTK inhibitors. They've seen, in some cases, CAR-T therapy. And when they come to us in this trial, we are able to achieve a response rate that is actually quite remarkable at 80% with a very well-tolerated safety profile. Here on this slide, I'm outlining our Phase III plans, our registrational plans which include an opportunity for accelerated approval. That's number one, which is a Phase II trial of approximately 100 patients, which we're currently initiating. And then number two, to be followed by a randomized controlled trial with a global standard of care control arm, including pirtobrutinib, Eli Lilly drug, which is a noncovalent BTK inhibitor and then chemo immunotherapy agents as well. So this will be about 400 to 500 patients. The third trial we're initiating as well is a combination trial with venetoclax, a BCL-2 inhibitor. This offers the opportunity, not only in the second line but also first-line opportunity. Just a little more detail on the trial design for the Phase III trial. We are addressing rather large markets, starting on the left, which is the third line plus opportunity within CLL $1 billion to $2.5 billion forecast growth. In the second line, which is our Phase III trial, we'll address is another major market, 16,000 patients or greater. And then ultimately, the first line, we see bexobrutideg being able to address that population and combination. I won't go through the trial design in detail, but in blue is the CLL trial. We're also exploring non-Hodgkin's lymphoma and yellow on the bottom and marginal zone lymphoma as well as Waldenstroms and via other categories of NHL. I'm just going to highlight the objective response rate in Waldenstroms at 84%, very significant, again, response rate in a heavily pretreated patient population. We're at a number of scientific and medical conferences coming up. So we have a tremendous, I think, news flow in the second half of this year and happy to talk about any of this in detail.

No, great. That's a comprehensive intro. I guess maybe to just go back high level and just think about the sort of the theoretical advantages and you had some empirical slides kind of highlighting what those potential advantages are of targeted protein degradation versus sort of the more classical mode of inhibiting covalently or noncovalently tyrosine kinases or other proteins.

So the central advantage is removal of the bad actor protein in the cell and to do that efficiently. So the only way you could do that really before targeted protein degradation was by CRISPR or genetic removal, so actually knocking out the gene. In this case, we harness the E3 ligase machinery of the cell, which is the natural enzyme system within the cell to remove proteins and we can do that in a very targeted fashion. So when you remove the protein that is actually causing growth in the case of cancer, you get a more comprehensive shutdown of that pathway, that signaling pathway. And that's the fundamental advantage to this technology. And of course, being a small molecule being orally bioavailable, makes it therapeutic that can be widely available. And so this is -- anyway, this is the major advantage of target protein degradation.

And when you think about BTK degradation, it's funny, I remember, God, it must be 15 years ago, talking about the J&J BD team ultimately, a couple of years later, licensed ibrutinib for ex U.S. But sort of covalent inhibitor, there's a lot of questions whether actually permanently inhibiting the protein was safe, and there were concerns. And now obviously, we've seen a lot more utilization of covalent. But as you kind of look at target identification for degradation, how do you kind of consider the puts and takes of completely eliminating the protein? Are you generally looking at something where complete knockout models are safe? How do you determine what's?

So the guide that we use is genetics. So if you look at human genetics and miles genetics and looking at loss or removal of a gene, and when you see a desirable outcome from blocking that gene or removing it, that opens the window to removing the protein via a chemical means like targeted protein degradation. So covalent inhibition was, I'd say, the next best thing to this, where a compound would bind permanently or covalently to a target and basically take it out of action. The problem with covalent inhibition is that there are many binding sites that have a cysteine, which you have to bind to, to cause this permanent binding, many binding sites and other proteins. So off-target was the big concern. Now if you could make a drug that was specific enough, then you'd have a success story, and ibrutinib was the poster child for that in CLL. It's a multibillion dollar drug still today. But with targeted protein degradation, we can really avoid the need to bind to a cysteine, which is a common binding site and engineer a specific binding site that then can trigger this degradation machinery. And so that allows us to target any protein basically. We don't need the cysteine binding site of a covalent binder and we have targeted not only enzymes such as BTK but also transcription factors and STAT6 being, I think, the best example of that in terms of regulating immunology. So we can be very specific, very targeted and again, orally bioavailable.

Great. So when we talk about BTK degradation, obviously, we've had great success with covalent BTK inhibitors and now some noncovalent BTK inhibitors. And obviously, there's sort of the resistance profiling, maybe selectivity, better options. But how do you think about developing bexobrutideg to kind of specifically show the advantages over covalent and noncovalent? And what liabilities do you think you can overcome?

So we've started in the third-line plus population, patient population. So these are patients that have become resistant to the current therapies. And when you have success there, you can translate that forward into earlier lines of therapy, specifically with regard to the resistance mutations that have occurred in these patients. So that's how we first proven that targeted protein degradation has an advantage. If you can really overcome resistance to current therapeutics is pretty black and white. Then we expanded to show that not only these resistant mutations are vulnerable to our drug, we can tackle those. But also even the normal protein, we take out the entire protein that we get an efficacy advantage. So 40% of our patients have the resistance mutations, but 60% have the normal protein. And this 60% of patients have also not -- they progress in their disease on the current inhibitors. So when we can treat both the wild type or normal protein and the resistance mutation proteins, we're showing that targeted protein degradation has a real advantage therapeutically in the broader population. So our clinical development strategy is to move up in lines of therapy from treating the worst cases, if you will, to then treating the earlier onset disease patients and that becomes a very important opportunity for us.

And then just in terms of the safety profile, I mean maybe you guys are in a better position than anyone else to understand what is specifically BTK-mediated versus some of the other targets that may be ibrutinib or the other BTK inhibitors are hitting. So what are you seeing clinically? And what can you kind of say is definitively a BTK-mediated?

So the beauty of targeted protein degradation is that you really are, from a safety standpoint, seeing only on-target safety issues, which is the target you're trying to hit anyway. So in the blood system, BTK is responsible for the acceleration of proliferation of lymphocytes. So we obviously reduce lymphocyte numbers primarily, which is the key factor in a B-cell malignancy. BTK inhibitors have also been associated with other blood system side effects, including bleeding and bruising. So we do see bruising. We don't see any frank bleeding. So we do not have that severity on the clotting system. We also do not see cytopenias. In fact, we see improvement in the white blood cell counts when you treat the fundamental disease states. So neutropenia and hemoglobin levels come up, we see improvement of the cytopenias. And then with regard to -- there have been cardiac side effects of the inhibitors, we basically do not have that. So we are -- from a cardiovascular standpoint, we think a safer profile overall compared to the inhibitors.

Okay. Great. And then just in terms of the resistance profile, I know you sort of stated that for anything, over time, you'll see resistance to it. But I guess, mechanistically, how could you even envision what would BTK degrader resistance look like? Can you select for it in preclinical assays? Have you -- has it been seen clinically? Is there any sort of genetic underpinning that would render BTK resistance?

So preclinically, people have modeled essentially resistance to a degradation machinery, and it usually involves loss of function of the E3 ligase machinery of the cell which is extremely rare and has not been seen clinically. So you can actually engineer it in the laboratory, but it does not appear to be a clinically relevant event. So we think that targeted protein degradation will be somewhat inherently harder to become resistant to. There will still be mechanisms of resistance that evolve to any cancer therapy. But what you want is something that will be more difficult to get around. And that appears to be what targeted protein degradation represents.

In terms of the modeling, if you sort of break the E3 ligase system, does it do anything to those cells in terms of their survivability? I mean it would seem like it's such a big break in a system that those cells couldn't plausibly survive.

So actually, it is very hard to lose that machinery. So that's part of the advantage that we have. There are over 600 E3 ligases encoded by the human genome. So there is some redundancy in the system as well. And it seems to be a system that is very robust and it must be in order for the cell to survive. So by taking advantage of it and harnessing it, we see this therapeutic window being quite large actually. Theoretically, you can lose any one of the ligases and still survive. In the case of bexobrutideg, we are harnessing cereblon, which is a particular ligase very active in the hematopoietic system and has been used by other drug categories, Revlimid being the most significant one. So it is a robust system that can be harnessed and can be used to a therapeutic advantage really without too much worry about losing that capability.

Got it. So maybe looking ahead to the pivotal programs that you're planning on starting here, starting with the single-arm study, are there specific characteristics beyond sort of post-BTKi and post-BCL-2 inhibition that are part of the enrollment criteria? Like are you specifically looking at resistance filing for inclusion and exclusion criteria? Is it important that you have a substantial number of patients with C41S (sic) [ C418S ] or other BTK resistant mutations? Are you looking at underlying genetics to enrich like 17p? Does that matter anymore in post-BCL-2 BTK world?

Yes, it's a great question. So in the early days, we are very intent on getting these particular genetic profiles. But when we've seen bexobrutideg work across the spectrum, so we have loosened the enrollment criteria. So we don't have any of those enrollment criteria that selects for a particular genetic mutation. We take all comers. And these are patients that have been in general 3 to 4 lines of therapy. Now technically, for the Phase II, it will be third line plus patients but many of them have been on at least 8 lines of prior therapy, and we're still seeing this 80% response rate. So we just take all comers into the Phase II trial, third line plus. The Phase III will be second line. So all we require there is that they have already been treated with a BTK inhibitor. So we want to prove that we can rescue these patients who have been on a BTK inhibitor, but their disease has progressed.

Got it. And just in terms of the rate-limiting steps, I think you said that the last step sort of agreement with the FDA on the dosing for the study. And I know in the Phase I you've looked at cohorts across 50 to 600 mg QD expansion cohorts at 2 and 6. I guess one of the questions I have looking at the data is how can you teleport any efficacy signal -- I mean, it almost looks that response and safety is pretty consistent across doses. So I guess you obviously have much more data than I do. What informs dose selection to go forward?

It's a big question. And the FDA under Project Optimus is trying to determine this in the era of targeted protein therapy, how do you pick the best dose when even low doses work? I mean we've had responses at 50 milligrams. We've tested 10x that. And we see a very similar safety profile across 10x of dosing. That's really encouraging from a therapeutic perspective, obviously, because the window -- the therapeutic window is very large. It makes picking a dose difficult, right, because all the doses look pretty good, and they look fairly similar. So we're in the midst of discussing with the FDA and the EMA and the MHRA in the United Kingdom. So it ends up being a medical judgment call about how to pick the best dose of a drug that really is so highly effective across all doses. So we'll keep you posted on that.

Okay. Great. So the second line Phase III study you're planning is physician's choice with sort of either pirtobrutinib based regimen or an idelalisib-based regimen. I guess, first, I was kind of surprised to see that idela even is used anymore. Do people still use that drug? And how do you kind of think of what to expect the PFS to be in the second line? Would sort of the underlying assumption be that it would be around 19.5 months, which I think was the PFS for both pirto and idela? Are there other considerations to think about in the trial design around that expectation?

So there are many considerations to launch a single globally relevant Phase III. So you have to have a control arm that is used across the globe and treatment variation is significant. In the United States, idela plus rituximab is not used very much, but pirtobrutinib is coming up. So we've included pirtobrutinib the most I'd say, relevant noncovalent BTK inhibitor as a control, and we think we will beat that. We think degradation is going to be superior to noncovalent inhibition. So -- but idela or IR is used in Europe actually quite a bit. And then BR, bendamustine plus rituximab is still given to 50% to 60% of patients globally. So it is a very common therapy, both in the first line and the second line and even the third line. So we've chosen a globally relevant control arm that will really give meaning to our results really in whatever country we're in, and we'll probably be in 20 to 30 countries with this trial.

Got it. And then how do you kind of think about the commercial step-ups going from sort of late-stage setting to second line and then ultimately aspirations for frontline?

Yes. So I think on one of the slides I did have that step up. So if you start on the left, that's third line plus about 10,000 patients. It's still a blockbuster opportunity even there which is where we've seen this 80% response rate. So we know -- essentially, we believe we will be successful there, certainly. Moving to the second line, what you generally see if you move up in lines of therapy, even higher response rate to an effective therapy. And so we're looking forward to initiating the Phase III, which will be in that second-line setting that addresses about 16,000 patients in the U.S. alone. I'm showing U.S. numbers here. So this is a very significant market. Currently, about $10 billion in sales of BTK inhibitor drugs. And we think the degrader can capture a very significant fraction of that in order to be really a significant enterprise.

Great. And in the last couple of minutes, I just wanted to touch on your partner programs and understand there's a limitation as to what you can say on STAT6 and IRAK4. But just kind of high-level thoughts on those programs. Obviously, there's a lot of enthusiasm around STAT6 now. IRAK4 seems to come and go in terms of enthusiasm.

It's going to come back, IRAK4. These are new targets in autoimmune disease. And so the goal is to be more targeted to be safer and to be highly effective. So STAT6, which we've been working on with Sanofi for about 5 years now is entering IND-enabling studies. It's a highly specific degrader of this transcription factor STAT6. If you genetically knock out STAT6, you have an animal that is healthy, but basically does not have an autoimmune capability does not have autoimmune disease. So it's a very clean target. It's really quite remarkable target. It has not been druggable until targeted protein degradation. And so we're very excited to move that forward with Sanofi. Of course, they having DUPIXENT that is a major franchise for them in type 2 inflammation, atopic dermatitis and many other autoimmune diseases. IRAK4 is similar in terms of hitting the immune system in a very specific way. And it has not been successfully drugged before. So we started working with Gilead on that about 5 years ago as well. They had IRAK4 inhibitors that were not getting the kind of efficacy required. And with the degrader, we can overcome the limitations of the inhibitors. They actually have in Phase II at the time. So we think both of those opportunities are very significant in all the immune disease addressing, again, multibillion-dollar markets.

Great. And then just the last 2 minutes here, is there anything we didn't discuss today, I didn't ask that you think is particularly important for investors Nurix to know?

Well, I think if you look at our upcoming events, I do want to just highlight ESMO in Berlin. We will be presenting NX-1607, which is an inhibitor of an E3 ligase. So we're blocking degradation in this case. And this stimulates T cell development and immunity in terms of cancer. So it's an immuno-oncology target NX-1607 as the first inhibitor of CBL-B. CBL-B is the ligase that we block. So we'll be presenting that for the first time is our Phase I results in Berlin. We'll follow that up with SITC in Maryland, another international conference. So 1607 is kind of a sleeper agent to keep an eye on. Most people have been focused on bexobrutideg. We are presenting that also at a number of settings in Europe. And then ASH is a big event for us coming up in December, as usual, which, again, will present an update on bexobrutideg.

Great. All right, thanks so much for the time today. Thank you in the audience for being here.

Thank you. Appreciate it.