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. I'm very excited to have with us Nurix Therapeutics. From the company, we have Jason Kantor, Chief Business Officer. Jason, good to see you.

Good to see you, Derek. Thank you so much for having us.

Yes. I mean maybe just to start off, a lot of things going on at Nurix. You guys announced a big deal on Bexdeg and other things. So maybe give us kind of the state of the business first, and then we can kind of get into more specific questions.

Sure. Terrific. So for those who don't know Nurix well, we are a multiproduct, multi-therapeutic area, biopharma focused on targeted protein degradation. Our lead asset is a degrader of BTK, which is a central node in B-cell signaling as well as other immune cells. It's in pivotal studies for CLL and is moving into Phase II for chronic spontaneous urticaria, CSU, and also multiple sclerosis, MS. We've got partnerships with Roche, as you mentioned, for Bexdeg, but also discovery partnerships with Gilead, Sanofi and Pfizer. We've got -- our lead programs in those collaborations include a STAT6 degrader with Sanofi and an IRAK4 degrader with Gilead, and I'm very happy to be here. Thank you very much.

Yes. So maybe to start off, just on kind of Bexdeg and what kind of underpins the deal with Roche in terms of like the strength of the data in CLL and kind of the promise in some of these I&I indications?

Yes. It's a great question. What I'll say is last year, as we were thinking about our strategy around this product, one of the things that was really clear was in order to achieve the right kind of value inflection for the program, we wanted to, one, establish the efficacy; two, establish long-term durability. So on the efficacy side, we had 83% response rate in heavily refractory patients. We had 22.1 months median PFS. We wanted to be able to have an established dose to take into pivotal, and we did a randomized study for Project Optimus. So having the data package in place, and being on the cusp of Phase III, doing the deal at this point is ideal for us because not only does it derisk us financially in terms of our ability to execute, but it expands the indication space we can go into, which increases the total addressable market, and that includes not only the malignant heme, but also I&I and neuro. And Roche is the ideal partner for us in this respect.

So in terms of just kind of the CLL opportunity, so you guys had already started kind of the late-line trial. And then obviously, the Roche partnership opens up kind of early line. But how do you kind of think about the competitive dynamics with kind of the next-gen BTK inhibitors versus kind of a BTK degrader? And then within that kind of class, how do you guys feel like you're differentiated versus kind of the BeiGene or BeOne molecule?

Yes. Fantastic question. I mean the BTK inhibitor space obviously started with ibrutinib and then acalabrutinib, zanubrutinib and then the non-covalent like pirtobrutinib. And so with each of those, it's been the goal of getting better selectivity, better safety and then ultimately to increase the therapeutic footprint into I&I. Degraders bring an entirely new modality to a target that's proven. So in CLL, or the BTK space right now is $13 billion annually. It's growing at close to 15% and the indication space keeps growing. We are the only -- the BTK degraders are really the first to try to cross both oncology and I&I. So the inhibitors have -- tend to do one or the other. But the BTK degraders, such as bexobrutideg have the advantage of removing the protein, doing it catalytically and being able to address mutations as well as wild type. And so the data has been, I think, remarkable, and we're full steam ahead on all of that. In terms of differentiation versus our closest competitor, BeOne, it's hard to say. Right now, they're both showing fantastic efficacy in the 80% range, which is remarkable. And I think ultimately, probably where we'll see the differentiation is on the safety side. We think we have a safer molecule. We think we have a more selective molecule, and we'll just have to see that play out over time.

Got you. So I guess when you think about the Roche deal in terms of like the economics to you guys and ultimately kind of the development plans, too, in terms of the cost, can you just walk us through kind of step-wise, like how you kind of go from where we are today and then building out the overall kind of set of CLL opportunities?

Yes, sure. So we announced the deal back in early June, so it was not long ago. It was the largest single degrader deal to date in terms of upfront. So it was a $700 million upfront payment, $2.3 billion total milestone and upfront package. The cost sharing is 40-60 on the development cost, and it's a U.S. 50-50 profit share ex-U.S. royalty. Now it's -- people have asked, oh, is Roche taking over? And no, this is truly a collaboration. We have equal representation in all the joint governance, and we're working together on a very ambitious CDP. That CDP includes the randomized Phase III study that we talked about, which is head-to-head versus pirtobrutinib, which is the standard of care in this second-line setting. And we are about to kick off a Phase Ib/II study in combination with venetoclax in order to enable the potential for maybe fixed duration, shorter course therapies that could get to very deep and durable responses. You asked how we're thinking about covering the CLL landscape. Well, Roche is the perfect partner because they have all of the potential combination drugs, including venetoclax, CD20 antibodies and the CD19 bispecifics. We're also looking to expand into Waldenstrom and mantle cell, and that just covers the heme space.

Got you. So maybe we're going to get some updates, I think, later this year. What should we be paying attention to for the Bexdeg kind of additional CLL data and anything else kind of in the heme space?

Yes. So in terms of Bexdeg data, we are also in addition to running -- having the ongoing studies in heme, we are running a healthy volunteer SAD/MAD study with a new tablet formulation, which is designed to initially go into our studies for CSU and MS. And so we will have disclosures around that Phase I data set this year. We're also working towards an IND in CSU as well as MS. CSU would come first, MS to follow. And then in terms of the cadence of news flow on the clinical side in CLL and NHL, we typically present data at ASH and at EHA. So that's -- the American Society of Hematology is in December and the European Hematology Association is in June, and we'll have updates on our Phase Ib cohorts at that time.

Should we -- I mean, I think we're going to look at some earlier CLL patients in that data set. So I guess what are the benchmarks should we be looking there for those patients?

Yes. So at EHA, we showed data from patients who were BTK inhibitor naive, including people who were treatment naive. We also looked at a cohort of patients who were BCL-2 inhibitor naive. And the response rates were quite high. I think in one of the cohorts, the response rate got just above 90%. So what we'll look at going forward is do we see further deepening of responses? Do some of the stable disease convert to PR? Do any of the PRs convert to CRs over time? This is something we've seen in the later line patients. And then how does the durability overall look in those patients as well as the safety. I mean, every time we've looked at the data, it continues to look very positive. So my expectation is it's going to continue to look that way.

Got you. And then maybe just to shift gears to the I&I side of the coin. So we know BTK works in a variety of different indications. Remibrutinib is approved in CSU. There's been a variety of different MS trials. So I guess when you think about the best kind of differentiator there, is it more the efficacy play or more the safety play given that there's been kind of a check or pass even in these MS trials about safety. And to be fair, even remi's got some bleeding risk associated with it.

Yes. These are great questions. So the reason that people got very excited about looking at BTK outside of the heme/onc space is because BTK is a central signaling node for not only B cells, but mast cells, basophils, microglia in the case of MS. And so disrupting the signaling has the potential to really shut down a lot of these autoimmune diseases. What was unexpected when the BTK inhibitors went into these spaces was a lot of them suffered from liver tox. And it's never really been fully explained why many of these ran into liver tox signal. Some of the possible explanations are higher doses that were needed in order to get the proper exposure in the brain in the case of MS. Certainly some sort of off-target because it's not a BTK on-target signal as far as we can tell. In our experience, we have not seen a liver tox signal. And so -- and just in general, we think we are more selective than many of the BTK inhibitors. So we are very encouraged by that, and that's led us to feel good about moving into these indications.

Now in terms of like efficacy, do you think what we've seen in CLL and somewhat translates like full degradation of BTK will confer better efficacy in I&I? And again, is that part of the...

Yes. That was the other part of your question. So we have run a lot of preclinical studies looking at B-cell activation, mast cell, basophil activation. And the -- our BTK degrader is much more potent than all of the inhibitors. So there's a potency. Now potency could just relate to dose, too. So you get away with a smaller dose. But what we've also seen, especially in the B-cell assay, is a deeper suppression. And we think that, that is likely scaffolding driven so that you actually can get more out of the suppression of the target than you can by simply inhibiting it. So there's work to be done there to prove the sort of scaffolding function in the I&I setting. But biologically, it makes sense, and we think we can get to a deeper suppression. Specifically in CSU, I mean, remi kind of sets the bar. They have shown biologic-like activity, so activity similar to dupi or to Xolair. The activity is actually quicker. It's more rapid, but it's a twice-a-day drug, and there is some rebound of symptoms between doses even on a twice-a-day drug. We think with a degrader with Bexdeg, we can dose once a day. We think we can have coverage throughout the treatment window. And we think that we could potentially drive that efficacy better. About half the patients are well controlled on each one of those therapies. So that leaves half the patients who aren't. And we think we can probably push the BTK mechanism a little harder than remi does.

Is there any insights? So I know BeOne had a trial with theirs in China, their degrader in CSU. Any insight to like how that performed? And it does sound like they want to move that forward. So what do you think -- I guess, like what would your internal benchmark be to move something forward with kind of an incumbent BTK inhibitor? Like how much better would you need to be? And what differentiation would you want to see to move that forward into a global registration Phase III trial?

I think remi does set a bar, and I think we would look to at least meet that bar. I think there are advantages potentially just being once a day versus twice a day, but we think we can probably do better than that. But I think that bar is pretty well established now in terms of the composite endpoints on itching and hives and swelling that's associated with the disease.

Is there any specific part of the disease, whether it be, again, itching or hives or anything like that, that is more directly driven by the scaffolding function? Or is that just like too nuanced that we don't really know?

It's very nuanced, and we probably don't have all the right information, and I am probably not the right person to be able to answer that. What I can say is the place preclinically where we've seen or in vitro where we've seen the most differentiation is on the B-cell side. So the disease involves both the B-cells in terms of the autoantibodies that are involved, but then also the mast cells and basophils, which are releasing the compounds that are causing the itching and swelling. So BTK is impacting the disease in 3 different cell types. And we think that certainly at the B-cell side, at least from the data I've seen, we do have good evidence of a deeper suppression of the pathway than you do with remi.

Got you. And then just on the other side in terms of MS. So MS is quite a mature market and fairly crowded. But I guess where do you think BTK should play? Is it more relapse and remitting or progressive, given some of the data sets that we've seen with prior BTKs, where do you want to establish kind of the beachhead?

Yes. It's a crowded market, but it's a big market, and it's a market with still high unmet medical need and a market where new therapies are adopted, new oral therapies are needed. The place where the biggest unmet medical need remains is in -- for drugs that can slow disability progression. I think that's the hope for BTK-targeted therapy, particularly if you can get access to the microglia. So the microglia are immune cells that are resident in the brain that are believed to be involved in some of the demyelination that's critical for the progression of the disease. So I think mechanistically, a BTK degrader should work across all of the forms of the disease. But I think commercially and clinically, the place where we'd want to see the benefit would be in disability progression.

How do you think about generating proof of concept with Bexdeg there? Would you do kind of Phase II kind of MRI? Or do you want to go into kind of a longer trial? What's kind of the design that you guys would like to do? And now with the kind of the backing of Roche and the help there, you could fund kind of any trial that you'd actually like?

Yes. I mean one of the great advantages of working with Roche is having that collaborative team now that's working on finalizing the trial design for the Phase II. I mean there's no group out there that has more knowledge of, for example, biomarkers in the space, and they've just run a full program for fenebrutinib. And so they are fully aware of how best to run the study. I think you always, in early trials, want to look at MRI-type endpoints, things that are quantitative. But ultimately, you need to show data on relapse rates or disability progression, but your ability to measure that in smaller studies, you really have to look at both surrogates as well as clinical endpoints.

So we should think more of a standard proof-of-concept MRI imaging-based endpoint study first before kind of going all in on Phase III.

Our thought -- just our general thought, and I'm not going to speak specifically to the trial designs at this point, but our general thought both for CSU and for MS is to run registration enabling -- trials that will enable a registrational study. So something that will provide -- we're not looking for a quick proof of concept. We're looking for a full understanding of the right dose and the right patient population in order to enable a positive registration study to follow.