Protagonist Therapeutics, Inc. (PTGX) Earnings Call Transcript & Summary

Good afternoon, and welcome to the Protagonist Therapeutics Regulatory Update Call for rusfertide PV. Please note that today's conference call is being recorded. At this time, I would like to introduce Don Kalkofen, Protagonist's Chief Financial Officer. Please go ahead.

Thank you, operator. Good afternoon, everyone. Please note that a replay of today's call will be available at the Investors section of our website at protagonist-inc.com. Before we begin, I'd like to remind you that today's discussion will include statements about the company's future expectations, plans and prospects that constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of our annual and quarterly reports on Forms 10-K and 10-Q which are on file with the SEC. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views should change. With that, I will now turn the call over to Dinesh Patel, President and CEO, to provide the company update.

Thanks, Don. Good afternoon, everyone, and thank you all for joining us today. On today's call, we'll also hear from Dr. Samuel Saks, our Chief Medical Officer; and Dr. Serge Verstovsek, Professor of Medicine and a hematologist-oncologist at MD Anderson. Dr. Serge is a highly respected researcher and clinician and a key opinion leader, and he has been involved as an investigator in the currently ongoing Phase II clinical study of rusfertide in polycythemia vera. Also present for the call today are Dr. David Liu, our CSO; and Dr. Suneel Gupta, our Chief Development Officer; and Tracy Woody, our Executive Vice President of Corporate Strategy. And we will all be available to address questions during the Q&A session of today's call. Let's start on Slide #3. As you are aware, Protagonist has a diverse clinical pipeline with 5 different new chemical entities or NCEs, advancing in 6 different clinical indications. And we have a strong cash run rate through mid-2024 to support execution of all these studies across the portfolio. We have set up 8 specific objectives for 2021. And today, we are pleased to announce the accomplishment of our first major milestone, highlighted in the purple box on this slide. The objective was for us to obtain and share regulatory guidance for a registrational clinical path forward for rusfertide in polycythemia vera, or PV in the first half of the year. We are in the fortunate position to share this with you today in the first quarter, and this is indeed a very promising outcome and a truly exciting time for Protagonist. As a reminder, rusfertide, also known as PTG-300 is a peptide mimetic of the natural hormone hepcidin, a key regulator of ion homeostasis. Rusfertide was discovered through our proprietary technology platform, and it has been designed and demonstrated to have superior drug like properties in comparison to the natural hormone. Slide 4 summarizes our progress to date with rusfertide during the past year. In May of 2020, we announced the prioritization and selection of PV as a lead indication for rusfertide. The clinical responses we observed then were in a small number of patients, 7 to be specific, but the responses were robust and compelling. In September, we highlighted the potential commercial opportunity for rusfertide in PV, given its unique natural hormone mimetic based mechanism and its excellent ability to control hematocrit levels, coupled with the significant level of unmet need in this therapeutic area, affecting over 100,000 diagnosed individuals in the U.S. alone. Finally, in December last year, in an oral presentation at the ASH annual meeting, we shared the data for 18 patients from the ongoing Phase II study. As then, we continue to remain pleased with the consistency and retention of the robust clinical responses we are observing in this ongoing study. Now let us go to Slide 5. The company has now had the opportunity to consult with key regulatory authorities globally. We are very pleased to report that an End-of-Phase-2 meeting with the FDA and written comments from the EMA, both support further advancement of rusfertide in PV and today, we are sharing our plans to initiate a global Phase III study for rusfertide in PV. As we prepare for this Phase III study, we would like to emphasize that the current Phase II study of rusfertide in PV is progressing very well, and we look forward to providing data updates from this study in the coming months. With a highly differentiated and novel mechanism of action, we maintain our strong conviction that rusfertide has the potential to fundamentally shift the treatment paradigm for patients living with PV. I will now turn the call over to Sam to provide additional color on our recent consultations with U.S. and European regulators and on the path forward from here. Sam?

Thanks, Dinesh, and good afternoon, everyone. I'll start on Slide 6. This is indeed an exciting day for Protagonist. We have had very constructive feedback from regulatory authorities on both sides of the ocean around rusfertide in PV, providing clear and timely guidance to us. Based on their feedback, as Dinesh mentioned, we plan to initiate a global Phase III trial of rusfertide in PV in the first quarter of next year. Outlining the broad contours of the Phase III, it will be a randomized, placebo-controlled study of about 200 to 250 adult patients. Frequent phlebotomy will be the primary inclusion requirement. High- and low-risk patients on all available therapies including cytoreductive will be eligible. Our planned primary end point for the Phase III study will be the proportion of patients achieving a response. In patients completing 32 weeks, response is defined as absence of phlebotomy eligibility based on hematocrit control between weeks 20 through 32. In addition, there will be a durability follow-up during the weeks 32 through 52 of the study. After which, participants will be offered open-label treatment for a valuation of long-term safety. Frequency of phlebotomies as well as symptom improvements as measured by MPN-TSS criteria will be among important secondary endpoints in the study. It's important to recognize that the Phase III endpoints as outlined are qualitatively very similar to the endpoints of our ongoing Phase II study of rusfertide in PV. This allows for a seamless transition to the steps ahead. It also brings us an increased degree of confidence in rusfertide's potential to reach patients in the clinic at some point in the future, pending successful Phase III outcomes and regulatory approval. As a reminder, as shown here on Slide 7, the Phase II data we presented at the ASH conference last December demonstrated dramatic decreases in the need for therapeutic phlebotomy in patients with PV while maintaining control over blood hematocrit adequate levels and reversing iron deficient deficiency. We look forward now to finalizing the protocol and formally initiating the Phase III study. With respect to the ongoing Phase II study, we plan to provide additional data updates in the coming months. I'll now turn it over to Serge, who can speak from his perspective as an investigator on the Phase II trial and as a PV clinician and leading expert. Serge is a treating hematology-oncologist and Professor of Medicine at MD Anderson, very well recognized in the field, and it's an honor to have him here with us today. Serge.

Thank you, Sam. As an investigator in this trial and someone who has been involved in a number of PV trials over the years, I'm really pleased to see rusfertide advance in its clinical development. It's encouraging to see plans taking further shape for the Phase III study in consultation with the FDA and the European Medical Association. I would like to briefly remind everyone of the current treatment options for the treatment of PV to understand the significance of this development. This is outlined here on Slide 8. On the left, you see the phlebotomy, which is commonly used to treat lower risk patients. This treatment has been a mainstay treatment for PV but has posed some challenges for some patients. Per guidelines, patients move on to hydroxyurea, if they are unable to maintain their hematocrit which is the goal of the phlebotomy and then move on to combine it with hydroxyurea. Hydroxyurea is the standard practice for patients with a high-risk disease, about 2/3 of the patients, with the goal to eliminate phlebotomy. When patients become resistant or intolerant to hydroxyurea, then they move on to ruxolitinib or Jakafi. Let's move to the next slide, Slide #9. This shows the real-world claims data presented at the American Society of Hematology by me in December of last year. We looked at the large group of PV patients treated over 2 years and then analyzed a subset of those patients where we were able to obtain hematocrit levels. Our aim was to look at treatment patterns, whether patients were being managed to NCCN guidelines, the standard guidelines and thrombotic risks. Let's move to Slide #10. As you can see in Slide 10, the data is very revealing and suggests that to a considerable extent, actually, polycythemia vera patients are not being treated to NCCN guidances. Overall, only 22% of all patients had all hematocrit test below 45%, which is the goal of the therapy. What is really striking to me is what occurred in the high-risk patients. 60% of high-risk patients initiate treatment on phlebotomy alone when they should be given hydroxyurea. Only 31% of them were given cytoreductive therapy and the majority never switch therapies. Per guidelines, the high-risk patients should have initial treatment with a cytoreductive therapy to limit phlebotomy and the risk of thrombosis. Only 25% of patients in the high-risk group had all hematocrit tests below 45%, only 25%. So there is clearly a room for significant improvement. Therefore, in my opinion, to summarize, rusfertide represents a unique and exciting investigational treatment for many PV patients whose hematocrit levels remain unacceptably high relative to guidelines. And I look forward to participating in this Phase III study as an investigator. Dinesh, I will turn it back over to you. Thank you.

Thanks, Dr. Serge, and thank you, Sam. Turning to the last and final slide, Slide #11. Once again, this is a very, very proud moment for Protagonist, and we are extremely pleased with the pace and extent of our progress with rusfertide to date and with the increasing prospects now better than ever before of moving this promising therapy closer to the patients in the coming years. To further emphasize the points made earlier, we believe the registrational path for rusfertide in PV is now clear, and the data from the ongoing Phase II study provides us with a lot of data-driven confidence as we enter into this major inflection point for the rusfertide program. The milestone announced today is just one of the several objectives we have in mind for rusfertide for 2021. Specifically, we also look forward to sharing preliminary results from the second indication, hereditary hemochromatosis for rusfertide from the ongoing Phase II study. And we also plan to disclose a third indication for rusfertide in 2021. Across our full portfolio encompassing all of the drug candidates besides rusfertide, we have several more milestones, specifically around the oral gut-restricted and fully owned integrin blocker PN-943 and also the oral I6 receptor antagonist, PTG-200, PN-235 and PN-232 that are partnered with Janssen Pharmaceuticals. I will note that our ability to capture the opportunities at hand is bolstered by our strong cash position through mid-2024, which enables seamless execution across our entire portfolio of drug candidates. As I close out our formal remarks on today's call, I want to emphasize a key point, and that is Protagonist's ability to execute on these extraordinary opportunities at hand. Our senior leadership team has exemplary track record of success in advancing drug candidates from discovery through full clinical development, registration and commercialization. As we prepared to initiate our Phase III study of rusfertide in PV, we extend our thanks to the FDA and EMA for the prompt, high-quality and constructive feedback they have provided to us in recent consultations. Lastly, we are, as always, very thankful to all of the Protagonist employees, partners and advisers, clinical investigators and study participants for their outstanding contributions to the progress announced today. With that, let us now open the call for questions. Operator?

Our first question comes from the line of Anupam Rama from JPMorgan.

Thanks so much for taking the question and congratulations on the progress here. I'm just looking at Slide 3 here, and it says the Phase III here in PV is supposed to start in early 2022. So I guess what are the gating factors to starting the study, now that you've gotten this feedback. And I guess I'm surprised with the length of time between now and, say, starting the Phase III.

Thanks, Anupam. As usual, as you know, it's better to be conservative rather than aggressive. But hey, let me have Sam answer the question.

Yes. So obviously, we've just recently got this regulatory feedback. We're now going to move to finalize the fine details of the protocol. And then we have to stand up an international study in many sites around the world. Our guidance relates to the patients being enrolled, actually enrolled, but it's going to be a very busy time between now and the end of the year standing up the study. And obviously, we'll get it off the ground as fast as we can. But again, given its complexity, given that we don't have the final protocol in hand as of today, we're being conservative, but we're very confident of treating patients early next year.

And can you remind us of how many sites you have in the Phase II? And what type of site overlap you're thinking about for the Phase III?

I would just make this comment that the Phase II is predominantly in the United States. And because we want to have a global program and just the need to access as many patients as rapidly as possible and get the full patient diversity, we'll be looking for a global study with all the major treatment centers around the world that are willing to participate.

Our next question comes from the line of Yasmeen Rahimi from Piper Sandler.

Congratulation on the amazing progress. I have a number of questions for you. Maybe the first place to start is, is the eligibility requirement to be part of the Phase III similar to the Phase II, which was defined as greater than 3 phlebotomies in 6 months with and without concurrent cytoreductive therapy. So if you could specify both the number of phlebotomies and the duration of time that they were not controlled? Second question is, can you tell me what is the safety data set that is required for regulatory filing? Third question is can you comment on which -- how many doses you're planning to move forward? And I understand -- I'm not asking for the exact dose, but I don't know whether it's going to be 1 dose or 2. That would be really helpful. And then I have one last question.

Okay. Let me -- go ahead.

Yes, thanks for the big list of questions. I think we have jotted them all down. Now clearly, today, it is all about that we got this clear guidance, which enables us to sort of carve out a single study that we believe should fulfill the requirements of both the U.S. and the European agencies. And as Sam pointed out, and I want him to elaborate further, now the next few months is about the details and finalizing the protocol and so on and so forth. Sam?

Yes. I would say, again, that the key eligibility criterion is related to phlebotomy. So that is we're looking at people with high and low risk and on all cytoreductive therapies. We're saying it's generally similar to Phase II, but we're not giving out the details because we don't have the protocol finalized. So a lot of the specifics that you're asking me of fine protocol details, I'm not ready to disclose yet because we have to get regulatory approval of the final protocol. I may have some very good ideas about those, but I'm not going to say them today until, again, we have the protocols firmly blessed by the regulatory authorities. You asked me about the safety database. I would say that the pivotal study will be complete when the last patient finishes 52 weeks because although the primary endpoint is in the 20- to 32-week time frame, responders will be evaluated for durability between week 32 to 52. So we have to get that last durability data point in before we file. So the last patient completing the pivotal study in 52 -- the last patient hitting 52 weeks will complete the database with respect to filing.

I mean what gets us really jumping with joy over here, Yasmeen, is just so many similarities around some important measurements. And in a way, from the Phase II study. We already know the answer to those criteria, right? So we'll be addressing, just like in the current Phase II study, here also, we will address low- and high-risk patients. The primary endpoint, just like in the Phase II study, in a way, centers around control of hematocrit, which our drug has been doing an excellent job over there. So all in all, we believe we are in very good shape, and we are deriving tremendous confidence from the results that we have on hand with the current Phase II study.

And just a quick follow-up. How are you guys thinking about the distribution of low risk and high risk, at least from the ASH data, it was nicely balanced. Is it fair to assume that a similar distribution would be also seen in the pivotal study?

Well, we're open to all patients. So that's the guide that we would have of previous experience as we grow global and go to more centers that could back the balance somewhat. But one of the advantages of the patient population being about 200 to 250, we believe that will allow us to have all these various subgroups included so that people will be able to see the activity based on risk and other therapies.

Congratulations on such an incredible important milestone.

Thanks, Yasmeen.

Our next question comes from the line of Chris Howerton from Jefferies.

I think a lot of them have been asked previously, but maybe I'll ask one more or a couple more. One would be in terms of Sam, the temporal components of the responder analysis. I guess help us think about the rationale or justification in terms of seeking that specific period of time of 20 to 32 weeks. And then the second question would be, I guess, also to Sam or to whoever, but essentially, given that you have a pretty good idea of what the Phase III design already looks like, how do you envision the randomized withdraw data that's going to be coming up from the Phase II to guide those decision-makings moving forward?

Yes. So with respect to the time frame, I would only point out that this is a chronic disease, so you have to have a durable effect to be meaningful. This time frame is similar to time frames that have been historically for other drugs. So if you look at recent approvals in PV, you'll see that this time frame has precedent. I would also say that it's enough time to also see the iron deficiency begin to add because we're assuming that part of the secondary endpoints are the symptom scores, and we need the time frame to see that the iron deficiency has resulted in symptomatic improvement. And of course, that will guarantee by week 20 that we're through the initial titration of the drug so that the initial titration phase where you might have a phlebotomy here and there during titration is not counted against us, so to speak. It's just part of the natural titration of a chronic therapy. So that's -- but again, the responders will again have this additional look back of durability. So net-net, it's a precedented time frame. We think it's very useful for us. It's a long period of time so that we know it's a clinically meaningful, and the durability will help to show us that the effect is maintained. With respect to the randomized withdrawal, if you look at the time frames we're discussing here, we will have basically launched the Phase III study by the time we unblind the Phase II randomized withdrawal. So as we sit here, it will be supportive data to the NDA, and I think it will be very useful data, but it will not directly influence our design since we'll be blinded during the design phase.

Our next question comes from the line of Joseph Schwartz from SVB Leerink.

Great. Congratulations as well. I was wondering if you could give us some insight into your powering assumptions. How did you arrive at the 200 to 250 patient target for this study? And what are you expecting to see for the control arm in terms of the primary and secondary endpoints? How well do you feel like you have a handful on that? Obviously, you have a strong handle on what to expect from the drug arm-based on the Phase II data, which is pretty dispositive, but what about the control arm?

Yes. So we think the study at this size is extremely well powered on the primary endpoint if we look at the Phase II data as any guide to the magnitude of our effect, keeping in mind that in at least in the Phase II study, the patients had to have at least 3 phlebotomies in the prior 6 months. So we believe the study is extremely well powered with respect to the hematocrit control. We did want to make sure, though, that the study was also powered with respect to symptom control because the symptoms are an important secondary endpoint. And so we wanted to have a robust study to one, include all the subtypes of the disease in terms of different therapies and different risks and different age groups, but we also wanted to make sure that we also check that box as well.

Okay. That makes sense. And then in terms of the secondary end point on frequency of phlebotomies, will there be any standardized guidance or criteria used to guide when it's appropriate for patients to do that? Or will it be entirely up there in their physician's discretion?

There will be an algorithm for phlebotomy eligibility. And the reason we're talking about phlebotomy eligibility with phlebotomies being the secondary is if you lose hematic control, whether or not you were phlebotomized, you didn't have a response. So the notion is we will have an algorithm, but it will be disclosed eventually once it's finalized. That's been true for other therapies and development in the past. And if you hit phlebotomy eligibility on that algorithm because you lack hematic control, you will not be a respondent.

Okay. That's very helpful. And then it's encouraging that you're able -- and impressive you're able to get both the FDA and EMA on the same page. Were they both completely aligned and just were they -- did they want this -- did they both want this trial design? Or were there -- does this trial design incorporate elements that each agency wanted independently. Can you give us any insight into what was were more important to

I would say this -- yes, I first want to say, for those who have been bashing the FDA lately and complaining about review times and their performance, we have none of those issues on either side of the ocean. It's been very gratifying to see that, and our responses have been complete and very useful. That being said, what we're saying is that we believe the basic design will suffice on both sides of the ocean. That being said, there may be different statistical analysis or different statistical plans for analyzing the data for 1 regulatory and agency versus the other depending on what's important to them and how they want to see the data cut. But as we sit here today, we believe 1 study will do it.

Yes. And Joe, just to reemphasize, so clearly, the later part of your statement, meaning this single study should enable us to meet requirements for both the agencies. But some of the fundamental characteristics remain identical. So low-risk and high-risk category of patients, right? The primary end point being like a single entity, if you will, meaning hematocrit/phlebotomy control and the single study design encompassing and covering the requirements of both agencies. So we believe all in all, we are in a very strong position.

Our next question comes from the line of Douglas Tsao from H.C. Wainwright.

And just maybe following up on Joe's question. I mean I think you said that 22% of patients on the NCCN guidelines sort of maintain hematocrit below 45%. Obviously, this is placebo-controlled. So what do you think a reasonable target for sort of the placebo-controlled response rate will be? Or how should we think about that?

Well, I think that if you take patients who start off requiring frequent phlebotomy to hematocrit control, you would assume that the minority of them would be able to sustain hematocrit control in a placebo-controlled study for a long period of time without phlebotomy. But that being said, I want to remind you one important difference between the study in the real world. In the real world, people check hematocrits however they check them in whatever way they do it, and some people are more skilled than others as certainly, Serge will tell you. But that being said, in this study, because it's a clinical trial, everyone knows clinical trials are more rigorous form of treatment, patients will be monitored very closely and have frequent hematocrits. And so chances are, if anything, and again, with a clear phlebotomy algorithm, patients, if anything, in the placebo arm should tend to be phlebotomized more than their historical experience given what I just said. But I'll let Serge comment on if he wants to comment any further.

I think, Sam, you made a very good point. The rigor of the performance of the study will, I'm sure, leads to actually more phlebotomies than not because the -- what we see from the analysis of the activities in the community practices that is unsatisfactory controlled through unsatisfactory management style. And so it will be even worse on the control arm. I'm suspicious and unfortunate and I agree with your assessment.

And Sam, as a follow-up, do you have a sense of how frequently patients phlebotomy will be measured during the study? Or is that still a detail that you need to finalize?

Well, again, remember that the criteria will be the lack of hematocrit control. So the real question you're asking is, how often will we measure hematocrit. And we're not ready to discuss those details, but of course, eventually, that will become clear when we finalize the protocol.

Okay. And just one final question. In terms of getting alignment between the FDA and the EMA, I'm just curious, were there any sort of noticeable sort of differences from a philosophical standpoint or things that one agency was looking for more so than the other that you needed to sort of reconcile? Or was it pretty simple, just given sort of the relative straightforward primary end point that we're looking at.

Yes. I think that you always have differences on both sides of the ocean. But one thing that made this more straightforward than a lot of other situations is because there is such uniform agreement everywhere on the guideline of hematocrit at 45 . That is clearly in every textbook. It's in European guidelines. It's in the U.S. NCCN. So if there was disagreement, this is sometimes true in certain diseases where things that should be treated one way in U.S. and other. But this guideline of 45 is about as well agreed upon as anything in medicine.

Our next question is a follow-up from Yasmeen Rahimi from Piper Sandler.

This was a question for Tracy. Can you maybe comment on what endpoints are really meaningful or important to payers? Obviously, hematocrit control and hematocrit control to reduction in thrombotic events are really important. But if you could just maybe help us understand from a commercial perspective, what are design elements that we should really have under consideration. So that would be helpful.

Yes. I think, as I think what Serge presented at ASH, those are important. So certainly hematocrit control because without hematocrit control, as he mentioned, that leads to thrombotic event. So payers are very conscious of things like stroke and heart attack. But certainly, patients or payers are also very conscious and aware of symptoms and want patients to improve. So there's a number of things that patients will look at. And this -- it's a good question because with this milestone, as Dinesh has mentioned, this regulatory milestone. This really gives us now the green light to go out and talk to all those stakeholders, find out what's most important to payers, what's most important to physicians, but also what's most important to payers and so that we can collectively put those together for a value proposition as we move forward.

And clearly the inclusion of both low-risk and high-risk [sites], we really have a broad spectrum of patients that we could be addressing. So that's really very positive outcome for us.

Thank you. And with that, this concludes our Q&A session. I would like to hand it back over to Dinesh Patel for closing remarks.

Thank you. So once again, I would like to reiterate that this is a great inflection point for Protagonist. The outcome that we have shared with you today is highly positive. We will be able to capitalize on a lot of things that we have learned and observed from the ongoing Phase II study. We couldn't have asked for a better inclusion criteria of both low and high-risk patients, a simple clean, single primary endpoint. And I can go on and on, but you get the idea. Once again, finally, this is all possible with the great team we have over here. And once again, I would like to thank all the employees of Protagonist, our partners and advisers, clinical investigators and the study partner participants for their great contributions so far and looking forward to many more contributions and participations in the future. Thank you all.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.