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

All right. Great. Good morning. Thanks for joining us, everybody. I'm Terence Flynn, Morgan Stanley's U.S. biopharma analyst. Very pleased to be kicking off the third day of our conference this morning, hosting Nurix, and we have Arthur Sands, the company's President and CEO. Thanks so much, Arthur. Before we get started, just 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. Thanks so much, Arthur. Really great to connect this morning. I thought maybe just I'll turn it over to you for some high-level comments on kind of where the company stands, what your strategic priorities are before we go into questions.

Well, thanks, Terence. Thanks for having us at the conference. We got a busy schedule today. So yes, we're about to enter pivotal studies in chronic lymphocytic leukemia as our primary program, lead program. It is our BTK degrader program, highly selective BTK degrader, NX-5948 now with the name bexobrutideg or Bexdeg as we call it. So we're actively planning the Phase II and III program. These will be pivotal studies, and I'm sure we'll talk more about the design. We did recently disclose our design considerations for the Phase III study. So that takes obviously a lot of our efforts now. But we have a whole pipeline, as you know, that include other degraders of BTK and IKZF1 and 3, that's NX-2127 in aggressive lymphomas. And then we have NX-1607, which is an inhibitor of protein degradation through CBL-B, which is an immuno-oncology target and stimulates T cell development. And we're in Phase I with both of those programs, testing NX-1607 in solid tumors. We then have a whole immunology inflammation pipeline as well. There, I think most attention has been focused on STAT6 recently, degrader there, again, very specific, very selective that we've discovered and developed with Sanofi, our partner, for the STAT6 degrader. They have now brought that into IND-enabling studies. And then also IRAK4 degrader with Gilead, our other major partner. And so we have a growing interest in I&I. And each of those deals that we have -- I should also mention our Pfizer deal, but they're all structured with cost profit share options for Nurix so we can opt in after we see human data from these programs. So that gives you a bit of a broad pipeline overview and have to talk about the platform and technology, any direction we'd like to go.

Yes. Great. Maybe just before we go to the pipeline, just the platform. I know there have been a number of different iterations of the degrader approach. So maybe you could just give us kind of what your view is on kind of the key features of your platform maybe relative to some of the others out there and what's allowed you to develop it both on oncology and also on the inflammation side because I think that is somewhat unique as well in terms of your approach, whereas it feels like some companies are either oncology or inflammation, you guys are obviously able to do both approaches.

Yes. So I think it has to do with the historical underpinnings of our science. So we were founded based on science out of Berkeley and UCSF all around E3 ligases, which are the enzyme system of the ubiquitin proteasome system that controls degradation. So we're very ligase-centric -- basic science-centric on ligases in the early days of the company. This translated to being able to work across a broad set of ligases. There's over 600 in the human genome. And we've been able to ligand a large number of those, so find binders to them, which has been rate limiting. So I think what distinguishes our platform is our really significant investment in DNA encoded libraries of small molecules to find ligands. We've now recently augmented that with AI modeling of ligand finding. And I think that's been, again, a distinguishing feature. We call it our DEL-AI platform now that has allowed us to ligand other targets and ligases that other people can't. So we can very rapidly spread not only into true oncology targets, but also into other areas like immunology and inflammation. We've even further leveraged this platform to develop what's called DACs or degrader antibody conjugates, which is using the degrader molecule as a payload on an ADC sort of platform. But they're distinguished and we'd like to name DACs that -- DACs, degrader antibody conjugates. And that's our deal with Pfizer, originally Seagen. So our platform is very broad and it's very enabling in many different therapeutic areas, actually.

Yes. On the Pfizer Seagen, is there anything getting close to the clinic there that you can provide an update on or not yet?

We can't really describe those programs yet. They all were drug discovery programs literally from protein level scratch sort of beginning point. So it does take some time. But they progressed very rapidly. And I think it's a great partnership given their prowess in ADC development, which is obvious. It's become, I think, a high priority for Pfizer to, again, find new payloads. It's been one of the rate-limiting steps for ADCs.

Okay. Great. One other focal area right now for the whole industry really is just some of the changes at the FDA. And so I would just welcome your perspective. Obviously, you're getting ready, as you said, for your pivotal program here for Bexdeg. You interact with the agency, is it business as usual? Are there any changes in terms of personnel, anything you'd flag? Or you feel pretty comfortable with your ability to kind of interact with the FDA and advance all the priorities of the company?

We feel comfortable. I think our particular project team really hasn't changed much. And I do think that they continue to be responsive. I think there's a high level of interest and degraders with the FDA as a new category of drugs. So I think it's been not an issue for us. Now at the higher levels, et cetera, I mean, I think if we were on the verge of getting our drug approved, I might be a little more concerned. But in terms of launching into Phase III, I think, it's more straightforward.

Okay. Maybe before we talk about the Phase III design, you could just give us a highlight of kind of where you've come from, the profile of Bexdeg that you've developed here and through the Phase I/II trials and really what stood out most there and gave you the confidence to advance into this Phase III?

So turning to the fundamental engineering of Bexdeg, we really designed the most selective and most potent molecule we could. And we think that NX-5948 or Bexdeg will have the superior profile of being exquisitely selective and the most potent. So that translates design goals like that, generally translate into better efficacy and better safety of a molecule as compared to competing agents. And so I think we've been in targeted protein degradation and ligase science for over a decade, and we've really learned all the tools of the trade in terms of achieving this optimization. We use the most sophisticated proteomics to see what we're targeting and see any off targets. And this has really been a great optimization tool. And in terms of using proteomics and ligase science, I think it's easier to have than done. And we've, I think, perfected it. And we've done this with our partners, too. So I think we've benefited in terms of our partnership ability as well.

And maybe just on the safety profile. I know AFib has been a focal point of the differentiation among the different BTKs. Maybe just talk through the safety profile that you guys have seen thus far in the early studies.

So we've seen no AFib above background levels, which, of course, do occur in the elderly population, but there's no -- does not appear to be any drug-related AFib that you could attribute to the drug above background levels in this population. Of course, we have patients coming in with some AFib. We have patients coming in with some hypertension. So the cardiovascular profile looks quite good for Bexdeg. And I think that's extremely important. Other BTK inhibitors do tend to have some off-target kinases that do affect the heart, and that's been well established. So that's been an AE of special interest that we've been watching. We also see a very clean profile across liver enzymes and pancreatic enzymes. And that's also been associated with some off-target effects. So again, I think this exquisitely engineered, clean, highly specific BTK molecule translates to better safety.

Okay. And then maybe just on the pivotal program that you're starting later this year, maybe just give us the latest in terms of that design and how you're approaching it? And then maybe any -- you can dig into some of the subsequent trials that you might be planning after that.

So we have an accelerated approval strategy for potential accelerated approval, which is a single-arm study in third-line plus population, which means in patients that have received a BTK inhibitor and progressed -- the disease progressed on that as well as having had a BCL-2 inhibitor, most commonly venetoclax, of course. So that category of patients is identified -- has been identified by the FDA as an area of high unmet medical need. There's no approved therapies in that space currently. And so that would be -- that is our one pivotal trial attempt for accelerated approval. And then, of course, you have to have the confirmatory trial, which is a randomized controlled trial, which then we are also launching. That will be 400 to 500 patients. The single-arm trial, I just mentioned, would be about 100 patients. And so in the randomized controlled trial, our control arm, we selected what we consider to be a globally relevant control arm. So it's a global trial. And so in the different geographies, we have different standards of care to address with the control. So we're including pirtobrutinib, which is a noncovalent inhibitor, an emerging new agent. We think has relevance -- high relevance in the United States and Europe. We're including BR or bendamustine-rituximab as an option, which is the standard of care in many countries across the Europe and the globe. And then idelalisib-rituximab or IR. So it's a blended control arm, investigator's choice. So it becomes a very kind of real-world type of trial.

Yes. Okay. Great. Maybe just on the single-arm study there. Is this -- I'm assuming it's a response rate endpoint and you need some durability of follow-up? Or what is the -- what's the FDA agreed upon for? What you need for approval for the accelerated basis unit setting?

So of course, with accelerated approval, you never really have agreement with the FDA. Again, it's a review issue at the time of submission always. But in general, ORR and progression-free survival are key endpoints, and I think most attention on progression-free survival. Our ORR that we've already seen in this population, actually even more advanced population than this, has been about 80%. So we're in an ORR that's very high. And especially, again, this is fourth line plus patients in terms of our current Phase I. In the accelerated approval, we're going to be going up a line to third line. And then in our randomized controlled trial, we're going to second line, right? I should have been clear about that. So we're advancing in lines of therapy, reaching larger patient populations and people that really should even have a better response rate, but we're already seeing 80%. Our PFS is not calculable yet because patients stay on the drug, and they're seeing a long duration of therapy. And so not having a PFS calculated yet is actually a good thing.

Yes. So what do patients right now in that third-line setting receive? Is there a chemotherapy regimen? Is it palliative care? What's the typical therapy right now if we think about other trying to get at some benchmark on duration PFS as we look historically. I know you say FDA is never going to sign off anything, but what do these patients get now?

It's a mixed bag. But a lot of -- bendamustine and rituximab, a lot of they are still given third line plus chemo-immunotherapy. And we've had patients get CAR-T. We've had patients on bispecifics, experimental therapies that are still in drug development. A lot of patients have received a number of these therapies. Other toxic chemo regimens are tried. And yet -- as we receive these patients, again, we're achieving this 80% response rate. I should mention also, we do take patients with CNS disease. And we've seen some dramatic CNS responses and that substantiates the fact that Bexdeg crosses the blood-brain barrier and has a brain activity.

Okay. And what's that patient population represent in terms of numbers right now in the U.S. roughly, like if you look at framing out the market opportunity in the third line plus?

So it depends on your source, but you could say between 8,000 to 10,000 patients probably in this category and unfortunately, growing numbers of patients. If we get to second line, then you're looking at about 16,000 patients. So even with third line and second line, you're looking at multibillion-dollar market opportunities. And all of these patients -- fortunately, there are effective first-line BTK inhibitor therapy. So they are on therapy for a long time, but then progression does occur. And so those populations are significant in the second and third line.

And then maybe just pivoting over to the Phase III confirmatory trial that you mentioned. So this -- I'm assuming a 1:1 randomization, so about half and half, half on Bexdeg and half on physician's choice?

Yes, 1: 1.

Okay. And then the superiority endpoint is that PFS?

Yes. Yes.

Okay. And then -- so the -- can you give us any benchmark for the control arm? Like I know it's a lot of different therapies, but what's the -- where you expect that to shake out ultimately, given it's a mix of different regimens?

Yes. So with the BR, IR, you're probably looking at anywhere from 10 to 12 months of PFS. It can be higher depending on the patient, status of the patient. And then with pirto, we've seen numbers like 14 months in their latest studies, but that could also be higher depending on the line of patients that you're getting. So there are some unknowns there, but we do think the study has a high probability of technical success.

Okay. And is it fair to think like 20% is usually -- I mean, that's usually the bar in oncology. Is that a good benchmark roughly that we should think about for...

20%...

20% improvement, sorry, comparison study in oncology?

Well, I'm not ready to sort of be locked into a number that they have to hit, but you do want to have a substantial improvement.

Okay. Okay. Fair enough. And then again, I think this is a global study. So is there anything about geographic differences here versus maybe what was enrolled in your Phase I/II trial that we need to consider just as we think about translating that Phase I/II data to the randomized Phase III. I know line of therapy is obviously different, but is there anything about geography that would matter or not really?

I don't think so. I mean I think we're primarily going to be enrolling in Europe and U.S. We will include other countries, other geographies to make sure we do cover a broader section of the globe. But I don't think that will make a substantial difference from what we've seen already.

And then maybe as we look out further into the future, obviously, this is the later line setting. Do you guys have aspirations to move even earlier? I know Lilly, for example, just read out some data in the frontline setting for pirtobrutinib. As you think about the forward, is that in the game plan? Or is that dependent on a partnership? How do you think about like addressing that first-line opportunity? Because you mentioned you've got great selectivity, great potency, clean safety profile. So how do you think about potentially moving into the earlier -- even earlier lines?

So we think in terms of combination agent -- with combination agents in the earlier lines, and although monotherapy, the first 2 trials I've been talking about are monotherapy to be clear. But in the front line, there's a lot of interest in limited duration therapies that all are combination based. So we've actually also outlined a Phase Ib/II study to start looking in combination Bexdeg, in combination with venetoclax and also anti-CD20 antibodies so Rituxan potentially. Obinutuzumab is in the frontline as anti-CD20. So that would give us some frontline optionality there as well. With regard to monotherapy in the front line, those are very long and expensive studies. And I think one has to ask if that investment really makes sense, given where the direction of the field is going, I mean, upwards of half of prescriptions in the future may be in combination regimens rather than monotherapy in the frontline.

Okay. And what's the latest on going solo versus seeking a partner down the road? It feels like you guys can do that later line setting probably independently. But again, if you do want to move to combos, is that something where you would seek a partner? Or you feel pretty good doing that alone as well?

Well, the initial combination study, we can do alone. I mean that's a dose exploration study. And I do think that -- and we have the financings to initiate all the studies I've been discussing, so we can go it alone, go fast and really be directed on that core program of studies. Now one could do many more studies and build out the profile of the drug even further. And their partnership would probably be useful even it's only clinical trial partnerships where drugs are supplied by others, that may be interesting in combination. So it's something that we always do consider, but we're really going forward on our own here in Phase III.

Okay. And any sense of -- have you given any time lines for when we could see initial data from these 2 pivotal studies roughly?

We haven't given guidance yet on timing. I think the guidance we have given is to start the study -- on the initiation of the Phase II study, the single arm in the second half here that we're in 2025.

Okay. Okay. Great. And I know you guys are planning to file an IND for autoimmune cytopenias for this asset as well later this year. So is that -- maybe just talk to us about the rationale there and how to think about that opportunity.

So what we have done, just to be clear, is we've initiated a cohort of CLL patients that have autoimmune cytopenia overlay in their disease. This is a subset of the CLL patients. And we have several very interesting subsets, by the way, in the Phase Ib trial, which include patients with high genetic risk factors, patients that are -- have been in only second-line therapy and first-line therapy and patients with certain BTK resistance mutations and this cytopenia cohort. We actually have not specified an IND for this year in the non-oncology setting. It is definitely under consideration, and it's something we hope to shed more light on in the future.

Okay. Got it. You obviously have a couple of other assets you mentioned, 2127, 1607 here. Maybe just take those in order, kind of what should we expect here over the next 12 months for these assets, as we look at important clinical catalysts.

Yes. So we did recently disclose that we will have a publication at ESMO for 1607, which is focused on our Phase I results. It will be our first disclosures on the Phase I trial, which has been quite a significant effort in 1607, the CBL inhibitor. So I think that will be interesting.

And that's all comers, all types of tumors?

Yes. It's 11 different solid basket trial, 11 different solid tumor indications and really all about dose exploration. So we take all comers there. I do believe we have a publication also at SITC coming up so that will be early November. We have a very busy schedule. I should mention on some of the other elements of the pipeline. Gilead will be presenting a poster -- I believe it's a poster on the IRAK4 degrader, GS-6791 with their Gilead number now. So that, I think, is coming up this month, I think at a Paris meeting. And then, of course, ASH, we have...

That's preclinical like structure paper or something like that?

I don't have the structures in it, but it's all in the preclinical modeling, in all the animal models and why the IRAK4 degrader, we think, is such a superior entity. And so then ASH will be at Bexdeg, will be featured there as usual. So we have a very busy medical meeting conference plus industry meetings, the targeted protein degrader conference in Boston at the end of October. We always are big participants there as well.

Yes. And then 2127, anything we should be focused on there this year into next year?

It'd probably be into next year in terms of medical conferences with that. That's in the dose escalation phase of the Phase I program.

Okay. And maybe just circling back on ESMO, 11 different tumor types that sounds like it's going to be a decent number of patients. So we should have a pretty good handle on safety. Maybe just talk to us about what some of the preclinical data showed here, like where were the strongest signals by tumor type? Or what do you think is a likely future next step here in terms of tumor type or pathway?

So we saw very strong monotherapy activity in preclinical models across tumor types, including colorectal models, breast cancer models, models we ran in combination with PD-1. So what we saw was monotherapy activity from this very potent agent, very selective CBL-B inhibitor. So I think in this -- in the Phase I study, we'd like to see some signal of monotherapy activity. And I think that's critical in order to be convinced that you have an immuno-oncology agent that can pack enough of a punch to actually have impact. I think some of the earlier IO agents really didn't have much in terms of monotherapy activity, and then we didn't see them progress successfully in combination. Ultimately, this drug will be given in combination, although we -- again, we do want to see some signal. Even though, again, with 11 tumor types, it's hard. They're heterogeneous patient population, but you're looking for some types of signals that give you confidence that you are having effects on immune system.

And is there going to be any -- I think it was supposed to have taxol in combination. Is any of that data coming or that's a separate like...

Definitely going to be a separate process. We really focused on monotherapy dose exploration to really get the dose right and the dosing regimen right. So this is a very strong agent that stimulates the immune system. And so you can imagine, we went very gradually and very cautiously in terms of dose escalation.

Yes. Okay. And then anything from the animal models on safety, tolerability that was a kind of signal or something that as we think about like the AE profile here in the clinic that we should keep our eyes out for?

Well, with an immuno-oncology agent that works, you should see at some point a fairly fulminant autoimmune response in an animal tox study, which we have seen. So I think that -- obviously, we don't want to dose that high in humans, but you try to establish your upper limits in tox studies. But so we've seen on target, if you will, tox associated with immune function.

In preclinical setting?

In preclinical, yes. Now in clinical as well with IO agents that work, one does see autoimmune AEs occur at a certain frequency. You just want that to be a tolerable frequency.

Yes. Yes. Well, yes, I know the checkpoint inhibitors. You see those are the checkpoints, right?

It's associated with activity.

Yes. Yes. Okay. All right. Great. And I'm guessing on the -- maybe we pivot over to immunology. You mentioned Gilead has a poster coming up here, IRAK4. So we'll stay tuned for that. On the STAT6 program with Sanofi, anything you can share there in terms of just high-level thoughts about why is there a lot of excitement about this target? I've heard it compared to kind of like an oral DUPIXENT. So maybe just give us a little bit more flavor about the target itself. And then anything more you can share on that front? I'm guessing there's not a lot with Sanofi's program, but maybe just anything...

Yes. We can't -- we don't have a lot of data yet that we can share. However, we are working on that for the fall. But the -- to describe it, so we've been working on this program with Sanofi for 6 years now. It was part of the original Sanofi drug discovery collaboration, which I think I signed in 2019. So this is a program that has been highly selected and well developed, carefully curated with Sanofi every step of the way on the joint scientific steering committee around this program. STAT6, for those of who may not be familiar with it, it is a transcription factor on the JAK-STAT family of pathways, if you will. But it's very specific. If you knock out STAT6, you have mice that are healthy otherwise, then lacking an IL-4, IL-13 response, type 2 inflammatory response. That's the only thing they lack. So it's a clean target. It's exquisitely potent target biologically. And so we endeavor to make a degrader that was that clean and that potent. And in fact, what we did have in the press release with them when we announced that they have brought this in now to Sanofi into IND-enabling studies. This is NX-3911, is that we achieved knockout like levels with our degrader. And that has been tested in several animal models. In fact, we always run the knockouts with our drug as a control. So it's a beautiful drug discovery program, honestly, and it's been put through a lot of phases with Sanofi to qualify as a drug development candidate.

Okay. And so going into IND now and so again, maybe next year, there'll be some initial Phase I healthy volunteer data?

Yes. I mean I would hope, of course, that's up to Sanofi's timetable. But if they progress on a reasonable timetable, we should be in healthy volunteers. And by in 2026 [indiscernible], we are in healthy volunteers now, and that was a similar time frame. That was licensed by Gilead about a year, 1.5 years before.

Yes. And then STAT6, just remind me, can you measure that in healthy volunteers? Is there like a way to measure that directly so you can see that knockdown levels in healthy...

Yes, you can. And in fact, Kymera has done that with their program, so -- which was quite convincing. So you can see the degradation of STAT6. This is one of the advantages of the targeted protein degradation actually. You have built in the best biomarker that you can imagine in terms of on-target removal of the protein, especially with bloodstream-based targets. So that I'm sure we will look for also in healthy volunteers. Of course, we've seen it in animal models, in every species we've been in. So yes, that is a good surrogate marker -- PD marker.

And then dose levels preclinically, like how does your data or Sanofi and your stack up relative to Kymera on a preclinical basis. Is that something you can do cross-trial comparisons on? Or is it difficult?

Well, not yet. So once everyone's molecule is published and we know what exactly is the development candidate, people will profile these molecules preclinically. And that's already coming with the BTK degrader, for example, for us in BeiGene and AbbVie, people are making these molecules around the world. And so I imagine we will see it. But I can speak to what our design goals were with Sanofi would be, again, exquisitely selective and highly, highly potent and be very clean against all the off targets that you could think of. And even those you can't think of proteomics and so we think we've achieved that. So we really are shooting for best-in-class STAT6 degrader.

Okay. And then last question is on the cash position. You referred to this earlier in some of the Bexdeg and ability to fund the current studies. So maybe just remind us what you said on cash runway.

Cash runway into the first half of 2027 and we -- I think we finished the last quarter with $485 million approximately in cash. So we're in a good cash position and again, able to launch this Phase III program.

And that excludes any future milestones from either Gilead or Sanofi or Pfizer, the cash runway guidance? Or do you guys include...

So we have an operating history with them now where we do put in a discounted value to make sure that we are kind of keeping up with what we have historically. So we do include some milestone.

Okay. Well, thanks so much, Arthur. Really appreciate you having here today.

Thank you.

Absolutely.

All right.

Thank you.