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

Welcome to our next fireside chat. I'm Robert Burns, Managing Director and senior biotech analyst at H.C. Wainwright. I'm joined today by the CEO of Nurix, Arthur Sands. Arthur, thank you for joining us today.

Well, thanks for having us. Very happy to be here.

Awesome. So maybe let's just start from a high level. For investors who may be newer to the Nurix story, can you provide a brief overview of the company, the platform and your pipeline today?

Yes. So we're focused on targeted protein degradation, which is a new small molecule approach to actually removing protein targets, disease targets from the cells via the ubiquitin proteasome system. So removal, targeted removal of the protein, which gets a more thorough hit on the target compared to inhibition. So our lead program is BTK, a BTK degrader called bexobrutideg, recently just signed a great deal with Roche, which I'm sure we'll talk about for CLL, chronic lymphocytic leukemia and non-Hodgkin's lymphomas, where, again, we're removing the BTK protein, and we get a more thorough and deeper efficacy response, can address resistance mutations to inhibitors. The inhibitor class is $10 billion a year class, but a lot of resistance mutations coming up. So degradation removes that with Bexdeg, as we call it for short. And then we have a whole inflammation program, partially with Bexdeg, again, with Roche, but also our STAT6 program with Sanofi, which is in Phase I and our IRAK4 degradation program with Gilead, which is completing Phase I. And then we have a host of other undisclosed targeted protein degrader projects. So we're about 12 years old. We're based in the San Francisco Bay Area -- and had a very successful entry into the clinic with Bexdeg now starting Phase III.

Yes. No, that's perfect. So I guess the major news, as you just alluded to, was that massive Roche collaboration for Bexdeg. So can you talk a little bit about what made Roche the right partner for this asset relative to all the other major pharmas out there, the economics of the deal and more broadly, how the partnership changes the opportunity for Nurix and its shareholders?

Sure. Well, so Roche was the right strategic choice to fully develop this drug across multiple indications in oncology, but also in autoimmune disease, where we've specified CSU or chronic spontaneous urticaria and MS with Roche, again, global experts. So they're the right strategic partner. And I might add, it was a competitive process to get this deal. Because Bexdeg really has such a best-in-class potential for any BTK drug, I'd say, inhibitors or degraders. But of course, the degrader aspect brings the superiority of efficacy because we remove not only the kinase function but also what's called the scaffolding function of the protein, which is another signaling function at any rate. So Roche, they've been great to work with from the beginning, and they followed this program for actually several years. We signed this deal in June. It was a landmark deal. As you point out, we're talking about it was $700 million upfront and then another up to $2.3 billion in milestones, development milestones and sales milestones. And that's a significant -- if you look at the economics of that. And then, of course, probably even more significant is that it's 50-50 in the United States. So we retain product rights in the United States. We get milestones and royalties ex-U.S., which are substantial. And of course, they've got the whole ex-U.S. infrastructure, which we don't have. So we get the strategic expansion just from an operational standpoint. And then they have the best portfolio of B-cell malignancy drugs. So CLL and NHL, they have the best antibody portfolio, the best combination portfolio for our drug to go with. So when you add it all up, I mean, it's really -- and then scientifically, we're so aligned. And it's just it was an intense deal process, but it really worked well. It worked the way a deal process should work through all the diligence and boy, are they diligent. I might add.

I believe.

So anyway, I wouldn't do it again. I'm glad that deal got done, and it's a great deal. So anyway, that strategically the best fit.

Yes. So one of the things that I noted when I was looking over that press release and the deck that you guys put out was the massive expansion in the development opportunities for Bexdeg, not just within hematological malignancies, but also within I&I, right? So you mentioned Roche's complementary portfolio. Obviously, they got fenebrutinib in MS. They have a bunch of other bispecifics in B-cell malignancies. So talk to me a little bit about how this expansion or go into detail a little bit more about the expansion opportunities from a clinical dev perspective for Bexdeg?

Yes. So that was really the second part of your first question, too, is like how -- what does this mean for Bexdeg as a drug and for shareholders. So really, it is an unprecedented sort of breadth of development that now we can do with Roche that we could not do. So this BTK mechanism really is analogous to the CD20 target. So a Rituxan-like molecule or -- so CD20 has so many uses with the right molecule. So Bexdeg, I think, is that versatile. And so with Roche, it can be put to work in all these different settings. Now in the oncology setting, the combinations are critical. Although our monotherapy activity is 80-plus percent overall response rate, 85%, et cetera, in relapsed/refractory patients who have become resistant to inhibitors, BTK inhibitors. So our monotherapy trial, which is the Phase III against pirto, we're going to -- I believe we're going to see that degradation is superior to inhibition. So this is a big expansion opportunity for the targeted protein degradation in oncology in general. But then you've got all the antibodies with Roche. So the anti-CD20s, Rituxan, obinutuzumab, some of the bispecifics are going to be very interesting.

I completely agree with you there.

And Roche, they were very frank with us. They're like, we don't have an anchor BTK mechanism in oncology. We have fenebrutinib.

But that's just MS.

That's just MS, but we -- that's been missing in our portfolio, and this could -- this is -- and we were not just going to bring another inhibitor into the clinic, but the degradation mechanism is so unique and the profile is so best-in-class like, right, so far. So at any rate -- then if you go to non-oncology, you look at what's going on with BTK, remibrutinib with Novartis has done very well in CSU, and now they've talked about their MS data. And so there, again, degradation can be superior. In fact, we've shown all of our curves comparing to remi and fenebrutinib and others, we're 10 to 100-fold more potent than any of the inhibitors against -- in terms of B-cell inactivation. What's more for MS, and I think very important is the microglial hypothesis for MS. Microglia are basically the immune cells of the brain that are driven by BTK, and they're resident -- and they are responsible, it's thought for the neuronal -- chronic neuronal damage that occurs. Even if you block with an anti-CD20, the peripheral B-cell activity, you're not going to get at those microglia with -- and that's what causes the debilitating progression. And that's what's so exciting about the whole BTK hypothesis. Now the thing is that, again, degradation hits it better than inhibition. And we've shown we degrade BTK in the microglial cells of animals in the brain, and we have brain activity established in our CLL patients who have brain disease. So we have unequivocal brain activity with this drug. Plus, of course, we see the drug levels in the CSF and the plasma. But the fact that we can remove BTK from the microglia, I think it directly addresses a central hypothesis of MS debilitation. And so that's really what the potential is here for the MS. And then there's many other diseases to go after, too.

Yes. When you -- when you sort of add up the potential commercial opportunity across all these different indications and lines of therapy, what does that sort of look like with Roche now as the partner here?

Well, I think it tells you something, first off, that a company like Roche or again, a competitive process is a large market opportunity. That's the only thing that's going to be a driver for any of the pharma, right, it's multibillion. I mean, no matter how you model it. Now you can go anywhere from $2 billion a year to $10 billion a year, depending on what you want to model. But I think the very fact that it has that potential is what we need to know right now.

Yes. No, I completely agree with you. So before we get into the updated Bexdeg data that you presented at EHA not too long ago, can you help level set us on the current CLL treatment paradigm and how that treatment typically evolves across the various lines of therapy here?

So typically, CLL is a chronic disease, so disease of the elderly. It's the most common adult leukemia in the world. And in the old school days, it was watch and wait. You wait and see if the disease progressed, if it got worse, then you would get chemotherapy, which was harsh treatment. And that would be bendamustine and it would be any number of other chlorambucil in the early days. A lot of side effects, very toxic. People used to hold that back. Then you have ibrutinib, the BTK inhibitor. And it was relatively nontoxic. And so people started getting treated earlier and better with a BTK inhibitor. It was one of the first targeted therapy stories after Gleevec, I would say, a major story. And so now it really is a standard of care, start with an inhibitor. Now ibrutinib has sort of fallen away. It was up to over $5 billion, $6 billion a year, but it has off targets. And so then acalabrutinib from AstraZeneca and then zanubrutinib have come up more selective and now they're taking over the market. In total, it's a $10 billion a year BTK inhibitor CLL market. So it's very substantial already. And then -- but after that, after the inhibitors, then you have BCL-2 inhibitors and venetoclax. And they can be given upfront, targeted therapy, a little more toxic, a little bit less tolerable, but really very effective. And the combination seem to be quite good in second line. So a lot -- most patients will start with one drug in first line an inhibitor. They progress, you add BCL-2. Some people believe you just do the doublet up front, start with both drugs upfront. But then after that, you pretty much had nothing. And so that's where these inhibitors are what's called covalent inhibitors. And that's where Lilly came along with Loxo originally with the non-covalent pirtobrutinib. So now pirtobrutinib is trying to pick up that second-line position, but also in first line, it looks quite good. But it's an inhibitor and it's non-covalent. And the question is, what is the real lasting power of that drug compared to a degradation mechanism, which again is stronger, deeper. And so we think that's why we're going head-to-head against pirtobrutinib in the second line as our first Phase III. So that's 620 patients, the trial is up and running. It's an international trial. Roche is going to be driving the ex-U.S. and Asian. We're driving U.S. So anyway, I hope that helps give you the idea of the treatment progression. But after the BCL-2s and such, there's not really much CAR-T mixed bag so far in CLL.

Yes. So now with that as a backdrop, walk us through the data that you presented at EHA for Bexdeg and help frame the expectations around the data update that will be coming later this year for Bexdeg.

So I think at the EHA, the 2 exciting cohorts that we presented for the first time were basically frontline patients. So patients that had naive patients had never been treated. And this is a Phase I trial with 20 patients in each cohort. I didn't think we'd get many treatment-naive patients because there's a lot of treatment options with the inhibitors. We enrolled that very fast. And then we also had patients that had just seen one BTK inhibitor. And so we had our first pure second-line patients, if you will. So we had treatment naive, we had BTK second line. So early patients basically. And there, we're looking at 85% to 90% response rates, very high. And -- and I think that was very encouraging. Plus it gives us the rationale for moving to the front line because we have basically a frontline cohort, which the FDA will allow you to do in a small number of patients in a Phase I. And as I said, it enrolled really quickly.

Yes. I note that you've got 2 pivotal trials ongoing now, DAYBreak-CLL-201 and then the 306 trial. Maybe walk us through the trial design of each of those trials. And with regard to 201, when do you think that we can anticipate trial results from it? And what is the time line for potential NDA submission here to the FDA for accelerated approval?

Yes. So it's a DAYBreak family of trials that we're starting -- and we've started. DAYBreak-201 is in the third line plus. So it's very advanced, a high unmet medical need. Patient population where there are no agents, no approved agents. And so that's the definition of enabling an accelerated approval, if you will. So we're enrolling. We're going as fast as we can. Our goal would be to complete enrollment by the end of this year or in the first half. It's only 100 patients. However, there are not many of these patients yet because they're post-pirtobrutinib patients. So you had a covalent, you had the BCL-2 and you have to have had pirtobrutinib. So it's a slower trial to enroll, but it's a very important patient population for potential accelerated approval. I'm not going to give a time frame now because--

Okay.

We have to work on that.