Odyssey Therapeutics, Inc. (ODTX) Earnings Call Transcript & Summary

Good morning, everybody, and welcome to the Morgan Stanley Healthcare Conference. Very pleased to have on the stage Gary Glick, CEO of Odyssey Therapeutics. Before I kick off, just a few important notes. Please see the Morgan Stanley research disclosure website, www.morganstanley.com/researchdisclosures. And if you have any questions, please reach out to your Morgan Stanley sales representative. I was very concerned about finding this disclosure language. And now that that's out of the way, we can kick it off.

So perfect. Gary, great to have you. Actually, I think this is the first time we're hosting you as a public company CEO at the Morgan Stanley Healthcare Conference. You've had a long history in both biotech and academia before you moved on to the private side. Can you give the audience just a little bit of background on what led to you founding Odyssey? And what was the sort of gap either from a scientific or medical standpoint that you were looking to fill and are looking to fill?

Well, first, good morning, and thank you for the introduction. Good to see you again. So I've been working in inflammation and autoimmunity, I think, since 1990 when I started my faculty position and over the course of a number of different companies. And I've watched the sort of the space evolve over, I guess, close to 40 years now. And one of -- despite the fact that there's been, I think, advances across the field in making immunomodulators for a variety of different conditions, one of the things that really is still standing out for patients, the ability to treat large numbers of patients, put patients into deep long-lasting remission and to do so in a very durable way. And Odyssey was set up to capitalize on novel insights in biology, I think that's emerged over the last 15 or 20 years that has significant potential to achieve all of those goals.

Okay. And this is the first company that you've brought to the public markets out of the many that you founded and been involved in. What was the thinking behind that? And I guess, why does Odyssey need to be public, whereas some of your other endeavors were a little different?

It's true that 7 of my last companies were all sold to large pharma. Most of those organizations were 1 asset or 2 asset companies, and one of the things that I wanted to be able to do different at Odyssey was to be able to work across a larger portfolio of medicines and to work in different modalities. There's exciting things in small molecules. There's very exciting developments in biologics. I think the ability to work on both of those in one organization is one of the visions that we have for Odyssey when it was established. And really, the only way to finance an organization like that is in the public markets.

Okay. Let's move on to OD-001. You'll probably have a nick name and RIPK2. IBD has become increasingly interesting, but also there's a lot happening from a development standpoint. RIPK2 may be not as advanced today as some of the other sort of mechanisms. What is it about sort of RIPK2 that you saw an opportunity either from a biological or scientific standpoint within UC?

Yes. So maybe let's start with the overlying medical question because that's really important in how we think of everything at Odyssey. And I'll start with a personal story and maybe go into a little bit broader. So my son, who's now 31, was diagnosed with Crohn's disease when he was 13, and I've watched him go from Remicade to Humira, Skyrizi and now he's looking for his fourth medicine. I think the journey -- his name is Jeremy, that Jeremy has sort of gone on over the last 17 or so years is characteristic of many patients with inflammatory bowel disease. Medicines may put them into symptomatic remission. That remission is usually short-lived and then they have to go on to another medicine. That second medicine is usually much harder to put them into remission. Oftentimes, they'll lose response there and go on to a third and sort of a fourth. So that is really the kind of the big picture we're trying to address. RIPK2 is a target in the innate immune system. It recognizes bacteria that translocate when the epithelial barrier is breached and it really starts the inflammatory process in inflammatory bowel disease. And it has the chance to block, if you will, the root cause of inflammation and turn off multiple downstream cytokines and effector molecules rather than target any one specific inflammatory pathway. And that's important because we know that inflammatory bowel disease is caused by multiple cytokines, multiple chemokines, multiple inflammatory mediators. So if you could kind of turn all of them off at once, you have the potential for a broader therapeutic response, deeper remission, and more long-lasting remission.

And I guess if it's such an intriguing and obviously sort of broad-reaching target, why has nobody else done it? And how do you drug RIPK2 successfully?

Good question. So the target was discovered in the early 2000s at the University of Michigan, where I actually was on the faculty and I knew the inventor of the molecule or the inventor of the target, his name is Gabriel Nunez, in the pathology department. And it took a better part of 18 years to actually understand the biology that led from RIPK2 activation to the production of inflammatory cytokines. And we now understand that in order for that to occur, there needs to be binding to RIPK2 of a second protein known as XIAP. And when XIAP binds to RIPK2, it activates the protein, leading to the production of things like TL1A, TNF and IL-23. And that discovery really only was made and published around 2018. And in pharma years, that's yesterday. So it takes time to understand that biology and translate that into a small molecule understanding. The ability to block 2 proteins coming together is among the harder problems in medicinal chemistry and drug development. And we're very fortunate at Odyssey to really have an outstanding team of chemists and biologists that were able to put together the right set of assays and the right chemical matter to do that and do so in a very safe and effective manner.

Okay. Perfect. Moving on to beyond the science and into the clinic. You have reported your first proof-of-concept data for OD-001. Maybe just a few highlights of that data and what stood out to you in terms of connecting the results you're seeing with the biology that you've described?

So just to take a step back for a second, we conducted a open-label Phase IIa study where 41 patients completed a higher dose and now 15 patients have completed a lower dose. And we reported top line results of a 27% clinical remission. And one of the interesting things about the trial was not only the remission rates we're seeing for induction very similar to what one sees in today's advanced therapies, but all of the data across the board is completely concordant. So we're seeing good reductions in inflammation histologically, endoscopically. And perhaps most important, we do not see a diminution of activity when looking at patients that have seen prior advanced therapies. This is really a big problem in inflammatory bowel disease. As I mentioned earlier, taking you through my son's journey, patients that fail after they fail a particular therapy, it's much harder to put them into remission on a second therapy or a third therapy. And virtually every -- all of the marketed therapies that we're familiar with and ones that are in development, all lose significant activity. RIPK2, on the other hand, patients that have seen 1 or 2 therapies, they do not lose activity relative to patients that have been naive to advanced therapies, which is a very important differentiation point. And from a biology standpoint, we believe we understand that because the cells that drive resistance are the target cells of RIPK2. Again, RIPK2 is the first protein target in the innate immune system that is going forward in the clinic for inflammatory bowel disease. And by taking advantage of this target and the biology, we're able to achieve things that you simply can't achieve with any individual, any cytokine therapy as an example.

And was there anything -- I mean, reviewing that, as you said, very, very impressive first data set, the fact that you were able to see responses in refractory patients that have been on advanced therapies. Was there anything else that kind of stood out to you that sort of increases your confidence moving into later-stage development?

A number of different things, I think, give us very strong confidence in the data that we see and moving forward in a robust way. First, as I mentioned, all of the data that we see is concordant, whether we're looking at biomarker data, fecal calprotectin data, histology data, endoscopic improvement or the clinical remission data, everything falls in line. From a patient standpoint and a development standpoint, one of the important things for patients is a rapid response. People want to stay on drugs that are working. And the rate of response that we're seeing, looking at rectal bleeding as an example, is very similar to what you see with Rinvoq, upadacitinib. So within a couple of weeks, patients start to feel good, and that differentiates from most of the biologics where it takes usually multiple weeks, if not months, before you start to see improvements. So that was pretty exciting.

So you have a great setup into sort of later development. But I think as I've alluded to in the outset, there's a pretty fulsome pipeline in development across the sort of mechanism target, maybe some of the usual suspects. But as you sort of look at 001's positioning over the next 5 to 10 years, we're seeing bispecifics, combination therapies, some other sort of novel late-stage orals. In your mind, where does the IBD go in terms of, are we going to see combination treatments? Are we going to see expansion due to orals? Like what is your view of how the market evolves over the next 5 to 10 years as you come to market?

So we have to -- and you're right, there's a lot of activity in inflammatory bowel disease, which is, again, great for patients. But I think we have to start with what is the North Star that the patients need. And that is higher remission rates, deeper remissions and more durable remissions. And by deeper, I mean true histologic healing. And if you start to think about trying to come up with a therapy that really hits all 3 of these and maybe perhaps on top of that, convenient for patients. And that should not be underestimated. It's having, for example, an oral therapy, which patients can easily take during the day, the morning is very important for their lifestyles and for their daily well-being. I think RIPK2 is very unique there because, again, it has the potential to turn off the immune response early, lead to more durable remissions and to deeper remissions because you're blocking, if you will, the smoldering inflammation that's constantly present even when patients are "in remission" on a biologic. From a combination standpoint, it's completely orthogonal to every other mechanism that's being tested. That's very important from not only an efficacy standpoint because it gets you a completely different arm of the immune system to attack. So you're kind of working up a ladder and walking down the ladder versus kind of going down the same sort of rungs together. But it's also important from safety. From an immunosuppression standpoint, RIPK2 would only be anticipated to lead to a modest increase in mycobacterial infection, which is very different than a number of the biologics. And then some practical sort of thinking about biologics. If one is combining 2 mechanisms that patients have seen before, it's quite possible that a patient may have failed one of those mechanisms. How does one ethically put a patient on, let's say, an alpha-4 beta-7 IL-23 where the patient may have failed the IL-23. Is one really expecting to see more activity there? Is the payer going to pay for that? And then if the patient actually fails that, you're now sitting with perhaps 2 half-life extended antibodies where the patient is not doing well. How do you add a third potentially immunosuppressive agent on top of that? So I think having the where RIPK2 positions across all of those is unique, and I think sets it up for success and really as a backbone, if you will, toward a number of different combinations.

Maybe we come back to the combo opportunity specifically for 001. So you've announced plans to study OD-001 in combination with -- I'm going to say Entyvio because I can't pronounce the alternative.

Vedolizumab?

Yes, there we go. I think you've sort of touched upon it in terms of this being orthogonal to everything else that is out there. What -- why choose that combination? And sort of any plans to look at other combinations beyond Entyvio?

It's a great question. First, the preclinical models of inflammatory bowel disease are really not predictive of efficacy in the clinic or even how to compare compounds. So this has to be one that's sort of science and empirically driven. We know that Entyvio is the standard of care for patients right now that have ulcerative colitis. So we're dealing with a medicine that is very well known to physicians. Physicians have used Entyvio off-label and feel very comfortable with its safety combinations off-label. So they're very comfortable with the safety. Safety is very important when one are combining a novel mechanism with the standard of care. And then third, as you mentioned, it's completely orthogonal. It is the most adaptive, if you will, of the adaptive immune therapies because it blocks the trafficking of pathogenic T cells into the gut. So again, thinking about working from the bottom up, turning off the root cause of inflammation, top down, blocking pathogenic T cells from entering the gut, releasing more cytokines to cause more tissue damage, I think, gives us the best chance for a safe and powerfully effective combination.

Perfect. Let's just move on to kind of what comes next, and then I do want to have some time to touch on the rest of the pipeline, which was a key reason for going public. In terms of upcoming clinical studies, you've said that you expect to initiate 2 clinical trials later this year, a monotherapy Phase IIb. We've talked about the IIa combination study, and you will be providing an update probably at some point this quarter or next quarter. But is there anything else you can sort of share today in terms of the design and the sort of outlook for those studies?

So the study for the combination study with Entyvio will be presented at the ACG conference in Nashville by Dr. Bruce Sands in a couple of weeks. So we'll learn more about that. And I think that will be viewed as a very robust trial to really determine efficacy and the level of efficacy in combination. As you mentioned, we'll -- we haven't provided guidance yet on the design of the monotherapy. One should expect that to be coming. And then in addition to that, at UEG, Bruce Sands will present more of the sort of the data, if you will, that came out of the IIa study, and we'll be providing a more robust update on a number of exploratory biomarkers and different data cuts at the company presentation following his presentation.

Perfect. And last one on 001. Beyond the updates, obviously, the study initiations, the UEG presentation through 2027, what more should we look out for from 001?