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

Welcome, everyone, to the 40th Annual JPMorgan Healthcare Conference. My name is Anupam Rama. I'm one of the senior biotech analysts here at JPMorgan. I'm joined by Malcolm , Priyanka Grover, and Caleb Smith from the team. Our next presenting company is Protagonist. And I just want to remind attendees of this session that there is an ask a question feature in the portal. And if you put a question in the portal, I would be happy to ask on your behalf. With that, Dinesh, I'll pass it over to you. Take it away.

Thank you, Anupam, for the kind intros and thanks, everyone, for joining us today. Happy New Year. It's great to be presenting once again at JPMorgan, one of the best ways to kick off the year whether virtual or in person. As a reminder, we are a publicly traded company, and today's presentation will include forward-looking statements. Let's go to Slide #3. Protagonist is a clinical development stage company with a focus on peptide therapeutics. We use our proprietary technology platform to discover new peptidic entities aimed at addressing significant unmet needs in both rare disease and common diseases. As of now, we have 3 specific peptide therapeutics, rusfertide, PN-943 and PN-235, all discovered internally through the use of our platform. And these assets are now in different stages of clinical development and are described further in our pipeline, Slide #4. So our diverse portfolio is geared towards addressing significant unmet needs in 2 different category of diseases, hematology and blood disorders and inflammatory and immunomodulatory diseases with each category representing a multibillion-dollar market opportunity. In the heme and blood disorder space, our principal asset is the hepcidin mimetic rusfertide which is poised to enter a Phase III registrational study in polycythemia vera in this quarter on the basis of strong clinical data that has been generated to date from multiple clinical studies. As you can imagine, the journey from discovery to a registrational study has been a very exciting and satisfying one, and it represents a key inflection point for Protagonist. Besides polycythemia vera or PV, we have also established a clinical proof of concept in a second indication, hereditary hemochromatosis with the intent to expand the rusfertide franchise for maximum clinical and commercial utility. In the inflammatory and immunomodulatory disease space, we are developing orally stable peptides that work through intervention of those biological pathways that have already been validated by injectable antibody drugs on the market, thereby derisking the biology, but yet offering a strong differentiation. Specifically, we are developing 2 assets, 1 independently and another in partnership with Janssen. Our fully owned asset is PN-943, an oral gut-restricted antagonist of the T cell target alpha 4 beta 7 integrin. Entyvio is an approved injectable antibody drug in this space, and it generated about $5 billion in revenues last year, speaking to the potential scope and market opportunity we may have in hand here. 943 is currently in a well-powered Phase II ulcerative colitis study, and we expect to share top line results from this study in the second quarter. It is fair to say that this is probably the most eagerly awaited data-driven event in the Protagonist news for this year. Our second asset in the I&I space is PN-235, an oral IL-23 receptor antagonist. This has been an outcome of 4-plus years of highly productive partnership between Protagonist and Janssen. PN-235 will hopefully serve to extend and strengthen Janssen's $7 billion plus Stelara and Tremfya franchise. We expect Janssen to progress 235 into multiple Phase II studies in psoriasis and IBD indications this year. So with that overview, let us now share some more details about our clinical programs, beginning with rusfertide for polycythemia vera. So moving to Slide #5. Polycythemia vera is a disease primarily characterized by overproduction of red blood cells. While classified as a rare disease, there are about 100,000 people living with PV in the U.S. alone with similar prevalence numbers in Europe. PV is commonly diagnosed in individuals 50 to 70 years of age. It is a chronic condition and with a median survival of 20-plus years. An elevated hematocrit, which is the ratio of volume of red blood cells to total blood volume, is the hallmark of the disease, and it is linked to a higher risk of thrombotic events, including stroke and heart attack, which are the major cause of morbidity and mortality in these patients. The NCCN treatment guidelines call for control and maintenance of hematocrit levels below 45%. Moving to Slide 6. To develop a better understanding of the PV patient journey, we undertook a retrospective analysis of real-world patient data using the Symphony claims database of over 28,000 patients. We focused on 3 specific topics, prominent treatment regimen, hematocrit management to NCCM guidelines and factual thrombotic events and risks in these patients. The key findings are as follows. First, there were no surprises in the assume treatment patterns. Phlebotomy is the most common treatment alone or in combination with the cytoreductive agent hydroxyurea. The real shocker though, was in the hematocrit control. The symphony data suggested that only 22% of patients had all hematocrit test below 45%. This is very revealing and frankly, unacceptable because majority of patients are walking around with high thrombotic risks. Finally, the thrombotic events are very concerning with patients with a prior thrombotic event, about 40% had another thrombotic event while being treated, and that's a significant number. This data was an eye-opener and clearly underscored the unmet need prevailing in PV. So we hypothesized the rusfertide, a mimetic of the natural hormone hepcidin that controls iron homeostasis in the human body could be a viable intervention approach for treating a disease like PV affiliated with excessive erythrocytosis. And this encouraged us to undertake a Phase II clinical proof-of-concept study in PV as summarized on Slide #7. The REVIVE trial shown here was designed to assess safety and activity of rusfertide in PV patients requiring excessive phlebotomies with the current therapy with or without cytoreductives. The trial is composed of 3 parts: a 28-week dose finding and efficacy evaluation phase during which all subjects receive rusfertide, a randomized withdrawal phase of up to 12 weeks during which half the patients are randomized to placebo and an open-label extension phase where everybody receives the drug treatment. The most recent data disclosure from this study was made last month at the ASH medical conference, and these results are highlighted in the subsequent slides. Slide 8 summarizes the frequency of phlebotomy treatment, both in the group treated with phlebotomy alone or in combination with cytoreductive agents. Clearly, there is a night and day contrast between the pretreatment and treatment periods in both the groups. As you can see, in contrast to the pretreatment period with too many red triangles representing the frequent phlebotomies, the green 28-week treatment period is almost divide of these red triangles. In other words, phlebotomy requirement is essentially eliminated by treatment with rusfertide. Also, we will note that the 60-plus patients in the 2 groups are a great representation of the broader PV population and also offer a good sampling of real-life concurrent treatment regimens with cytoreductive agents like hydroxyurea, interferon and Jakafi. Finally, as you can observe, we have now had patients for over 2 years of treatment indicative of a promising durability of response. Let's go to Slide #9 now, which summarizes various pharmacological and symptom effects of rusfertide in the REVIVE study. First, we see sustained and durable control of hematocrit levels below 45% as per NCCM treatment guideline objectives. Second, rusfertide normalizes iron stores, as indicated by effect on ferritin levels. These patients are in an iron-deficiency ferritin range at baseline and they rapidly go towards normal levels upon treatment. Note that phlebotomy treatment can often lead to iron deficiency. So this reversal of iron deficiency could be a specific advantage of rusfertide. Finally, we observed beneficial effects on symptoms as analyzed by the MPN-SAF TSS scores, which includes measures such as concentration and fatigue. The positive results suggest that rusfertide treatment could be decreasing this iron deficiency-related symptoms in these patients. We should note that we have seen significant patient enthusiasm for rusfertide since the start of our studies stemming largely from restoring iron homeostasis and symptom improvements. So to sum it up then, it is this REVIVE study that has truly revived the fortunes and future prospects of Protagonist, if you will. And rusfertide could be a great and much-needed addition or alternative to the treatment regimen of PV patients. Now let me quickly highlight on Slide 12, our findings from a small open-label Phase II study in PV patients with high hematocrit levels. The PACIFIC study had subjects with a main hematocrit of at least 48% despite phlebotomy and our local standard of care therapy, and it spanned patients both from low and high-risk category. The trial had an induction phase of twice-weekly dosing and a maintenance phase of once-weekly dosing after hematocrit levels were brought below 45%. And the clinical endpoint was hematocrit control by week 16 and safety follow-up over a year. The PACIFIC study results shown on Slide 11 demonstrate that rusfertide reduced the hematocrit levels rapidly to the target level in just a matter of 4 to 8 weeks. This is significantly less time for hematocrit control than what has been described for other therapeutic options. As expected, we also see a rapid reduction in red blood cells. And while not shown here, we also see restoration of iron stores in these subjects. So the overall cumulative data from the PACIFIC and REVIVE studies are suggestive of a potentially prominent role of rusfertide in the treatment regimen of polycythemia vera. Now let us talk about the Phase III PERSIST study on Slide 12, which is designed with global registrational intent and for which we have already received feedback from the U.S. and European regulatory authorities. PERSIST is a multicentered, double-blinded, placebo-controlled, randomized trial of rusfertide treatment when added on to current therapy. Similar to the Phase II REVIVE study, eligible subjects here are those requiring excessive phlebotomies prior to enrollment despite an irrespective of underlying treatment. Eligible subjects may have high or low-risk disease. Subjects with a history of invasive malignancies within the last 5 years are excluded from the study. The primary endpoint is the absence of phlebotomy eligibility based on hematocrit control during weeks 20 through 32. Key secondary endpoints include phlebotomy frequency, symptom improvement and safety. So at a high level, you can appreciate that the Phase III PERSIST study design capitalizes highly on the study design and primary and secondary endpoints where we score very positively in the Phase II REVIVE study. Slide 13 provides a schematic of this 250-patient Phase III study. The study will enroll patients from approximately 100 sites globally and has 2 parts: a year of dose titration, primary efficacy evaluation and durability measurements and 2 years of long-term safety follow-up. The NDA submission will follow after completion of the first year of the study and the data from the second part will provide additional durability and long-term safety data. On Slide 14, we are summarizing our market preparedness related activities and have started preparing for a successful commercial launch of rusfertide post approval. We are building a medical affairs team focused on increasing scientific engagement with health care professionals and broadening the awareness of unmet need in PV patients. We are laying the groundwork for early alignment with payers and the disease community on how to effectively demonstrate the value proposition of rusfertide. A key focus is on building a strong health economics outcome strategy focused on eliminating the burden of disease in PV to payers and then tying that back to the financial burden. We believe that early engagement with all stakeholders, including patients, payers and physicians will effectively prepare and drive us towards a robust product launch. Moving beyond polycythemia vera, we also intend to expand the commercial scope of rusfertide through its evaluation in other diseases influenced by excessive erythrocytosis and/or iron overload. And one such indication is hereditary hemochromatosis shown on Slide 15. So HH is a very common genetic disorder with prevalence in about 1 million patients having mutations affecting the hepcidin pathway. The actual clinical manifestation is in less than 100,000 patients and a majority of them get by fine with a few phlebotomies per year, although the disease progression can ultimately lead to iron overload in the body and more serious consequences if left unattended. So this prompted us to conduct a small open-label 6-month proof-of-concept study in a handful of patients. The study endpoints included safety, incidents of phlebotomies and measurement of various iron parameters in blood and measurement of lever organ iron content by MRI. The study results are summarized on Slide 16. And in broad strokes, we achieved a very positive clinical proof of concept. Rusfertide essentially eliminated the requirement for phlebotomies in these patients who require typically 3 to 4 phlebotomies a year. The post-dose iron parameters of serum iron and transferrin saturation were notably lower. And what is very noteworthy is that the liver iron content was maintained with the average amount actually lower at the end of the study even in the absence of phlebotomies. So with this positive proof-of-concept data, we are working towards identifying specific subpopulations with the most bracing unmet needs, that is where phlebotomy is either just not effective or where phlebotomy is not a suitable treatment option for various reasons. So now let us go to Slide 17 and transition from the hepcidin mimetic rusfertide program to the oral peptides we are developing in the inflammatory and immunomodulatory disease space. So Slide 17, PN-943 is our fully owned asset, and it has a first-in-class potential as an oral gut-restricted alpha 4 beta7 integrin-specific antagonist for inflammatory bowel diseases, such as ulcerative colitis and Crohn's disease. As demonstrated by the injectable antibody drug Entyvio in the space, the mechanism has achieved outstanding clinical validation and commercial success. Entyvio's peak sales consensus estimate is around $6.5 billion by 2025. Just as a quick refresher, PN-943 has consistently demonstrated threefold or more potency by all preclinical and clinical measures in comparison to our first-generation oral drug PTG-100 and which had previously provided us with the clinical proof of concept of the gut-restricted hypothesis in an 80-patient Phase II ulcerative colitis study. So with that proof-of-concept data in hand, we felt confident about moving forward with a well-powered Phase II study with PN-943 as described on Slide 18. IDEAL is a global 150-patient study in patients with moderate to severe ulcerative colitis. The study is comprised of a high dose, low dose, and placebo arms. The primary endpoint is clinical remission at week 12, and we expect to announce top line results in second quarter. Needless to say that we are very eager and excited about this major catalyst for our company. And the study results, if positive, will be truly transformative, both for Protagonist and the IBD community. The next immunotherapy asset in our pipeline is an oral IL-23 receptor antagonist, PN-235, and it is summarized on Slide 19. We expect our partner, Janssen, to initiate a Phase II psoriasis study in this quarter and an IBD indication in second half of the year. The core objective, as you can imagine, is to strengthen and extend the $6.5 billion plus Stelara and Tremfya franchise and envision and oral Tremfya in a pill kind of scenario for these patients. So this now completes the R&D overview of our pipeline. Allow me quickly to highlight on Slide 20 that we have an outstanding team of employees with great breadth of experience and commitment. We have progressed from a 50-plus employee company to 100-plus employee company in 2021, emphasizing all along the elements of talent, passion, and diversity, and we look forward to continuing with a similar operational philosophy in 2022 and beyond. Now turning to our cash position on Slide 21. We had over $350 million in cash and investments at the end of third quarter of last year. We are forecasting cash runway extending through 2024, which should enable us to complete a number of key events, including the Phase III study completion and NDA filing for rusfertide PV with the preparedness for commercial launch and also having the readiness of initiating a Phase III study with integrin blocker PN-943 in ulcerative colitis. So now on Slide 22, let me wrap up by summarizing 8 key events that you can anticipate from us in 2022. We are striving for significant developments and data disclosure with all of our 3 assets during the year. So number one, initiation of PERSIST Phase III registrational study of rusfertide in PV in the first quarter. This is a highly critical inflection point, especially for a company that started as a technology platform and discovery shop just a few years ago. Number two, continue to enroll and evaluate patients in the ongoing Phase II REVIVE study with the objective of gathering long-term durability, efficacy, and safety data. We obviously plan to participate at major medical conferences like EHA and ASH and provide updates from these ongoing studies. Number three, complete the market opportunity assessment for rusfertide in hereditary hemochromatosis that could provide the basis for a new clinical study in specific subpopulations. Now let's move to 943. As I mentioned early on, the most highly anticipated data readout event for Protagonist is going to be the top line results from the 150-patient Phase II study in UC. We remain very confident about our Q2 time line. So as they say, please stay tuned. Number 5 and 6, we expect Janssen to initiate a psoriasis study as well as an IBD study this year with PN-235 which should make us eligible for receiving $35 million in milestone payments from Janssen. At last but not least, we believe that our discovery will deliver 2 new development candidates this year, an oral hepcidin mimetic and the new peptidic agent against a new biological target for new indications. So in summary, we foresee tremendous opportunities for value creation during the year. Each of these 3 drug candidates has clear potential to impact the lives and health of many, many patients for whom current therapeutic options are simply inadequate or ineffective. So with a cash runway through 2024, we are fortunate to be able to take multiple shots on the ultimate goal of addressing unmet medical needs and returning great value to stakeholders. So thank you, and now we'll be ready to answer any questions.

Great. I just want to remind those who are participating in this session. If you want to send me a question via the question portal, I'd be happy to ask on your behalf. Dinesh, if you want to just introduce the broader team on the line, we can get started with Q&A.

Excellent. Our top team is here with us. We have Sam Saks, our Clinical Development Adviser; David Liu, our Chief Scientific Officer; Scott Plevy, our Executive VP and Therapeutic Head of Gastroenterology; Paula O'Connor, our SVP of Clinical Development, and that's the team.

So we do have a bunch of questions in the question portal here, which is the first is, can you comment on the recent clinical hold of rusfertide and how that is going to impact your clinical studies going forward essentially?

Yes, absolutely. So there was a small safety finding in a preclinical rasH2 mouse oncogene study that basically was the trigger point for the clinical hold. But as you know, we were able to get that lifted in a record time of 3 weeks. But maybe I will siphon this question to Paula who can elaborate on what is the impact, if any and how are we managing it going forward.

So I think the most important thing when you think about the preclinical finding that we had with our rasH2 model, is that it is a hazard model and is not predictive of what's going to happen in the clinical realm or in clinical trials. That having been said, we like the agencies, absolutely committed to making sure that patients who participate in our trials are safe. And so in response to the clinical hold, we basically updated all of our materials that made investigators and patients aware of the finding. But most importantly, what we did is we relooked at our safety monitoring in our trial and said, okay, this is good, but we're going to enhance it even further by making sure that patients who enroll in our studies make sure they have a good examination at the beginning of the trial to make sure that we don't see any preclinical lesions or cancerous lesions. And then we're going to follow them throughout the course of our study to make sure that we're not finding anything. And this is actually fairly standard for all cancer clinical trials. So we have worked with the agency to make sure that people are informed in a timely fashion, and then we have a robust monitoring system to make sure that we identify any potential early signals. And that's basically it.

I would add, it's like what Paula typically says is like this is all with an abundance of caution, but at a practical level. Our ongoing studies have resumed. We are glad to share that the sentiment is that more than 80% of patients are coming back to the current studies. And Anupam, as you know, we have stayed firm on our guideline of starting the Phase III registrational study this quarter.

Yes. We've got a super broad question in the portal. But what does your market research suggest about the peak potential of rusfertide in the 2 indications, and UC for 943?

We truly believe and the analyst reports, including yours and the other analysts that have coverage on Protagonist that the fair conclusion will be that each asset is easily a multibillion-dollar market opportunity.

We've got another question, switching gears a little bit to 943. But for the UC trial, what is the split between biologic-naive and biologic experience in the study?

Yes. I think all of those kind of facts and figures, we'll be happy to share that at the right time, but I should have Scott Plevy, our GI expert respond to the question as well.

Yes. So I think it's premature to download on demographic data. We're probably 12 to 16 weeks away from full disclosure on everything, including efficacy. I think you'll see this is going to be in the realm of what you would expect to see in the Phase II study in moderate to severe ulcerative colitis.

Okay. What -- a question for me is like what takeaways can you take away from PTG-100, right? And reading through to this upcoming Phase II study.

Yes. I mean, again, my brief answer is like when we looked at the totality of data with PTG-100, meaning clinical remission from a Phase II study in part with the typical results that you see with both Entyvio and even other agents in Phase II studies, coupled with the 44% of histological remission, it's the totality of the data that allowed us to conclude that we have validated the gut-restricted hypothesis. And that is where we get all the confidence in the world to move forward with 943, which appears to be at least threefold more potent than 100.

Okay. So what will be the size and scope of the data that we'll be getting for 943 in the second quarter with the key focus endpoint? What will you disclose in the top line versus what do we have to wait for in a medical scenario?

Yes. Scott?

Yes. So this is all posted on clinicaltrials.gov. So it's in the public domain. We will be looking as our primary endpoint at a stringent definition of clinical remission using the 3-component Mayo score with a comparison of high dose versus placebo and then low dose versus placebo. We will comprehensively look at all of the requisite secondary endpoints, including endoscopic response and improvement, histologic response and improvement and a series of other concomitant biomarkers as secondary endpoints at both doses.

Okay. Can you walk us through some of the reference benchmark for UC here? And when you flip over the 943 card, what do you think would be a win scenario? What would get you super excited particularly a primary endpoint of clinical remission at 12 weeks?

12% delta is my short and succinct answer, but Scott, go ahead.

Yes. So the number 12% comes really from benchmarking this potentially against many of the agents that have been approved in our field in moderate to severe UC, but particularly Entyvio. And if you just think about a target product profile of a safe and effective oral agent with safety and efficacy that looks like Entyvio, this, in my mind, is a major advance in the field.

And the oral will bring in not just the convenience advantages, but the advantages of oral combination therapy with other agents which is where the whole treatment paradigm seems to be shifting in IBD.

Maybe just switching gears to PV, just a couple of questions. I guess what are the final sort of gating factors here to study initiation for the Phase III.

Paula?

We are -- we, as you already know, have gotten feedback from the agencies or the authorities globally. And so we're really in the start-up phase. And that, as you know, requires time to go through IRBs, et cetera. And we're employing sites that are both utilizing central and academic IRBs. So we don't control those rates, and we're just pushing on as fast and as hard as we can.

Okay. Maybe another question here that just came into the portal. I guess, asked a different way to the prior question from the oral, which is in the UC trial, did you put a cap on the percent of biologic experience patients that were enrolled?

Scott?

Yes. So there, again, will be with the demographic’s information will become clear. Yes, there was a cap put on the number of biological experience patients enrolled.

And the good thing is like there is a whole host of data out there, which will allow you to compare and contrast your responses with 943 in comparison to the other drugs in the "2 subpopulations."

Yes. And just as a reminder, there has not been a drug that works exclusively in the bio-naive or bioexperience population, with the biologic exposed population, sometimes you need to power a larger study to see a delta. But both groups can serve as readouts for the other groups in the proof-of-concept study.

Maybe final question for me, kind of thinking about next steps for in HH and potential subpopulations that are being considered to look at here.

Yes. So David, it will be great if you could take on this question. And Sam, I know you have been radio silence. So if you wanted to make or any overarching comments after David is done, that would be great.

Absolutely. And up on the -- really the data that was shown and described by Dinesh on Slide 16 was quite exciting for us as well as for the KOLs because one, we just didn't know, even with the experience of PV behind us, whether we could actually maintain stable iron regulatory homeostasis in the face of an absence of both in hepcidin as well as the absence of phlebotomy. And sure enough, we were able to do that. And the 2 findings that really piqued the interest and I think, and hope guide us for future steps is the fact that the liver iron is maintained at the healthy normal levels as assessed by MRI even in the absence of phlebotomy. And secondly, that half of the patients were -- had pretty high TSATs in spite of being in this maintenance period or a regimen of phlebotomy as needed. So we know now that even in spite of those conditions rusfertide was quite effective in reducing the TSAT to healthy levels as per the guidelines. So that is pointing us the way forward about what are the -- really the benefits of rusfertide in various subpopulations determining that.

Yes. And look, we would like to make it clear that rusfertide will not be needed by all 100,000 HH patients with clinical manifestations. Having said that, though, this could be a wonderful drug for those specific subpopulations who are just not able to manage their disease with phlebotomists, either phlebotomy is not working, or they just cannot take phlebotomies. Like, for example, if you are an anemic HH patient, phlebotomy will be a nightmare for you. So the trick is in identifying those few thousand, if you will, a subpopulation category of patients that will truly benefit from a drug like rusfertide. So that's on HH. Sam, you want to make concluding remarks.

I would just say, echo what you were just saying, Dinesh, that rusfertide is going to be a high-end specialty drug for patients with serious unmet medical needs. And that's where the populations in hemochromatosis fit in. And that's where in PV, I just want to reinforce the concept that, hey, people can use any other therapy, phlebotomy alone, any of the cytoreductives, we're not going to get into that debate about which patients need what therapy when. The treaters have their existing paradigms. But we know and Dinesh said it, that a lot of the patients are not treated to guidelines and have excessive morbidity and mortality. And again, that's another one of those high-end specialty unmet medical needs that Protagonist is all about.

Okay. Dinesh, Sam, Scott, Paula, David, I want to thank you guys for a super informative session here. And I hope you guys have a great rest of the conference. And thank you for all the attendees as well.

Yes. Thank you, Anupam, and let's promise each other and hope that maybe next year, this will be in person.

Yes, hopefully, hopefully.

All right.

All right, guys.

Bye. Thanks.