RAPT Therapeutics, Inc. (RAPT) Earnings Call Transcript & Summary

Good morning, and welcome to RAPT's conference call. [Operator Instructions] As a reminder, today's call is being recorded. I would now like to turn the call over to Sylvia Wheeler, you may begin.

Thank you, operator, and good morning. Thank you for joining us to discuss our press release issued this morning, which is available in the Investors section of the company's website at rapt.com. On the call with me today are Dr. Brian Wong, Chief Executive Officer, with prepared remarks and Dr. Bill Ho, Chief Medical Officer; and Rodney Young, CFO, will -- who will join us for the question-and-answer period. We remind you that during this call, we will be making forward-looking statements that are subject to risks and uncertainties. Our actual results may differ materially from those described. We encourage you to review our risk factors in our most recent quarterly report on Form 10-Q, which can be found on our website. While we may elect to update these forward-looking statements in the future, we specifically disclaim any obligation to do so even if our views change. I will now turn the call over to Brian.

Thank you, Sylvia. Good morning, and thank you for joining the call today. Late afternoon, on Friday the 16th, we received verbal notification from the FDA of a clinical hold on our ongoing Phase IIb study of zelnecirnon in atopic dermatitis and our Phase IIa asthma trial. The clinical hold determination was based on a serious adverse event of liver failure in 1 patient in the atopic dermatitis trial. The patient underwent a successful liver transplant and is currently recovering. The cause of this serious adverse event is currently unknown, but has been characterized as potentially related to zelnecirnon. Due to the hold, dosing of zelnecirnon has been halted in both trials, as has the enrollment of new trial participants. Patient safety is our top priority, and we plan to work closely with the agency to resolve this as quickly as possible. We expect a formal letter from the FDA with more details, including information needed to lift the hold. This formal feedback will be critical to direct our investigation and identify the best path forward. We are undertaking a thorough investigation of this case. Although there are considerable gaps in our knowledge, we do know that this patient had a particularly complex medical history First, the patient had a drug ology to dupilumab. Second, the patient had Hashimoto's disease, a serious autoimmune disease that damages the thyroid and impedes normal thyroid function. In this patient, the disease resulted in the need for thyroid hormone replacement therapy. Third, the patient had a history of taking an herbal supplement called Ashwagandha, which is known to be associated with liver failure. And fourth, the patient had a reported active COVID-19 infection at the time of the event. Known causes of acute liver failure includes certain infections, toxins, chemicals and autoimmune conditions. We are seeking additional information about the etiology of this liver failure, such as gathering additional medical history and laboratory test results including the pathology reports from liver biopsies. Due to this isolated event, we have looked at the blinded data related to liver function from the 2 Phase II trials. Together with our earlier Phase Ia/Ib trial, we now have liver function data on a total of approximately 350 trial participants spanning those 3 trials. From these data, no evidence of liver toxicity has been observed with any other trial participants. Additionally, no evidence of liver toxicity was observed in nonclinical studies, including the chronic toxicology studies. As you might imagine, this is an unfortunate and fluid situation. This is the extent of the information that we can share with you at this time. We continue to diligently investigate the matter and to work with the agency to resolve the hold as quickly as possible. Our plan is to provide an update when we have confirmed next steps for zelnecirnon. In the meantime, our trial with tivumecirnon, which is not affected by the whole continued in oncology. With that, we'd like to open up the call for questions. Thank you.

[Operator Instructions] Our first question comes from Eli Merle with UBS.

Can you talk a little bit more detail on what the process would be for investigating this case? And then second, if the clinical hold is in fact lifted, what would the path forward be for restarting trial? And what proportion of patients have gone to the last dose in the atopic dermatitis study? And do you have plans to unblind or analyze that data in terms of efficacy from those that have completed the study?

Eli, I'll answer the last 2 first. So as you know, we were very much on track to have completed enrollment and be on track for that midyear top line data release with 268 trial participants. In terms of the process, we do need to receive the formal letter from the FDA, which will have details on the information that they're seeking. And then that will help really direct our investigation to lift the clinical hold. So we're very much looking forward to working with the authorities and the agency to lift the hold as soon as possible. What was the first question? Well, so in terms of what we'll be doing in the investigation, we're still very much in information gathering mode from this case, and there's a number of gaps in what we know. As we investigate the cause of the liver injury, we'll need to first complete the acquisition and confirmation of the patient's medical records in history and also review laboratory tests that are still outstanding, including the pathology reports, for example, from the liver biopsies.

Understood. Sorry, I'm just -- if you were to restart the trials, would you need to start a new study? Or could you resume those things in the current study? And just how would that work?

Yes. At this point, it's difficult to know without the formal letter. We hope to, in a normal circumstances be able to lift that hold with required information, but we kind of need to hold off until we see the formal letter and get details.

Our next question comes from Yatin Suneja with Guggenheim.

Two questions for me. Brian, it seems like for these 350 patients, you are able to see liver-related parameter. So could you give us a little bit more what exactly are you seeing? How are these LFT changes that you might be observing, any liver related enzyme that might be getting elevated in these patients and to what level? So that's first. The second question is related to mogamulizumab, which is also a CCR4 blocker. And it seems like that has also been associated with hepatitis B reactivation. So what do we know about the mechanism that might be causing, have we for that drug? And if we know that is associated with [ either abnormality ]?

Yes. Yatin, thanks for the good question. That's true. We do have liver function test data from approximately 350 trial participants. And there's been no evidence of liver toxicity with any other trial participant. What I can share with you is that the LFTs that we have observed were only transient. They're isolated and we're only observing a small subset of subjects that result on continued treatment. I should point out that these isolated transient elevations were also seen at baseline prior to any treatment and also in the follow-up period at least 2 -- but up to 8 weeks after the dosing period, which demonstrates that as one might expect, there is a noise in these laboratory tests. And of course, for our transient fluctuation of liver enzymes that occur naturally. For example, during exercise or during pregnancy. In terms of the actual cause and whether there's a viral cause, the -- there are certain viruses that can result in acute liver failure. That is something that we are currently exploring in our investigations. As I mentioned before, we're still waiting for some key information such as the pathology report from the patient's liver biopsy and additional serology as well. So this is certainly part of our investigation. I should point out that mogamulizumab is a very different mechanism of action to zelnecirnon. This is a depleting antibody that systemically removes a range of immune cells that are both anti-inflammatory and pro-inflammatory. And at this point, we do not believe that there's any mechanistic link of zelnecirnon, which is a small molecule, non-depleted approach to the liver failure that we've observed in this subject.

Got it. One more question, if I may. Could you also talk about the drug's CYP inhibition profile if there could be any DDIs or potential CYP inhibition related to the herbal supplement this patient was receiving? And what is if -- and should we be concerned about any active metabolite for the drug?

Yes. What I can say, Yatin, is that based on the preclinical studies, there's a low potential for DDI. And this is obviously something that we are currently investigating. But at this point, we do not believe that, that is the cause for this event.

Our next question comes from Anupam Rama with JPMorgan.

Just a quick clarification question. When are you guys expecting the formal letter from the FDA? And then a quick second question, are you willing to disclose the dose the patient was on in the AD study and the sort of time course like how far into treatment before the event occurred?

Anupam, we're obviously in contact with FDA. We hope to get the letter as quickly as possible, but we don't know when that will arrive. In terms of -- what was the other question? The dose, yes. I realize that there's a lot of details that are going to be of interest. What we'd like to do is gather a lot more information from this patient's history to complete -- to obtain a more complete picture of what happened before we're willing to share that level of detail. So stay tuned. And as we gather information and get more context, we'll share that with you.

Our next question comes from Yanan Zhu with Wells Fargo.

Just wondering on the liver toxicity analysis it was something like ALT/AST was mentioned, was the bilirubin also a parameter that you looked at? I was wondering whether, based on these patients, liver parameter change, would it be possible to monitor and potentially catch the event early? And what might -- could have been done -- what could have been done if monitoring has caught the signal from the liver toxicity. I was just thinking about potentially maybe going forward, what might be implemented in the trial? And then I have a couple of follow-ups.

Yes. The [indiscernible] I think you were mentioning we're all normal across all the other trial participants. And along with the only, as I mentioned before, in a very small subset, there was [indiscernible] in some LFTs that went away with -- on the subsequent testing and bilirubin was fine. So this is an isolated case. It's a very unfortunate incident. There was really no monitoring, I think that could have been done this case -- at the time, but this is something that we'll need to take a look at it more carefully.

Got it. And in terms of I think one question earlier alluded to potential immune response in the liver. Is that a known mode of liver failure. Obviously, the alternative is maybe a typical drug related or a drug-induced liver failure, I guess, a lot of small molecules may do that on a molecule specific base either, for example, the herbal supplement you mentioned or perhaps the drug itself. So I was just wondering, any learnings from past liver failure cases in clinical trials that might inform whether a immune-related mode of action or it's more likely a molecule specific interaction? And lastly, I think it was asked on the call earlier, whether you might unblind the study and look at efficacy based on in the atopic derm study, given how close you are to enrollment completion? Is that something you will be contemplating?

Yanan, regarding your last question, at this point, there's no plan to unblind the study. We're very much waiting for the formal letter from the FDA understand the information that will be required to lift the hold. Our base case is that we'll be able to work closely with the FDA to lift the hold and then continue on with the study. In terms of other potential causes of liver entry, as you know and as you mentioned, there are certain chemicals and medications that have been linked with acute liver failure, certain herbal supplements. Viral infections such as hepatitis B, C, Epstein–Barr virus, cytomegalovirus, herpes simplex virus as well as COVID-19 certain toxins as well as autoimmune triggers such as autoimmune hepatitis. All of these potential causes are under investigation right now based on gathering of those patients' medical records, confirming the information and gathering additional laboratory tests and reports that are still outstanding. So we are actively investigating all potential causes. And as we start to form a better picture, we'll be able to provide more details to you.

Our next question comes from Leiyang Wang with Barclays.

So based on what you said, it looks like there's a few things that you're waiting on or other [indiscernible] investigating...

Leiyang, we cannot hear you. Could you repeat the question, maybe speak up?

Can you hear me right now? Is this better?

Yes.

Awesome. So yes, based on what you said, there are a few things that you're waiting on and other things that you guys are currently investigating. So on this next update, should we expect -- what should we really expect in terms of what you guys plan to share? Should we get something when the form -- when you formally receive that FDA letter? Or would you have to wait until you have more background on the patient that had the liver failure? Can you talk about the timing of these? And I have a follow-up.

Very fluid situation, as you can imagine. We are in parallel to waiting for the letter, which I think will be very instructive as to the best course of action. We are still in the process of investigating the patient's history. We'll probably need both to make a full assessment of the best path forward. So stay tuned for that.

Got you. And it seems like this patient had a pretty unique background. Do you have insight into kind of -- do you have other patients enrolled in this study that with similar type of backgrounds, like such as allergy to dupi or anything you can share from that perspective?

It's a good question. We really can't answer -- I'm not able to share that at the moment just because we haven't done a full survey yet. Maybe I'll just follow up by saying that the patient did meet all inclusion criteria.

Our next question comes from Alex Thompson with Stifel.

I guess maybe you could talk a little bit about your preclinical tox margin relative to the 400-milligram dose in the study. What was the dose [ of the ] tox saw preclinically? And then maybe if you could talk a little bit about time lines. I know there's a lot here that's fluid, but if there is a clear path to resolution and a lift of the clinical hold, do you think that there's still potential for data -- top line data this year?

Yes. Alex, in terms of the timing really fluid, we really won't be able to provide that estimate until we see the letter and as we gather more information from this patient. With respect to the nonclinical toxicology studies, I'll just say that we have not seen any evidence of liver toxicity. And in fact, we have not identified a target organ even at multiples above the exposures that are generated by that 400-milligram dose.

Our next question comes from Prakhar Agrawal with Cantor Fitzgerald.

Clarification here, does the other 350 patient number that you stated, include healthy volunteers, too? Or was it just the Phase I atopic dermatitis in the ongoing Phase II trials?

Yes, when we said 350, we met all trial participants. So that includes the Phase II -- the 2 Phase II studies, the Phase Ia/Ib study -- and the Phase Ia/Ib study, which included the healthy volunteers.

Okay. And maybe I missed this, but how many patients in the atopic dermatitis trial have been dosed for the 16-week treatment duration?

Yes. we haven't provided that information. What we have said is that we were very much on track for completion of enrollment. And reporting out that top line data on 258 trial participants in the middle of the year. It gives you a sense of where we were.

Got it. And Brian, I guess lastly, given it will take some time to lift the clinical hold, even if it gets done quickly, I think there's some confusion around the logistics of the trial integrity and operations. So I guess, what are the factors you will consider whether to blind or whether to unblind the trial, whether to see if the drug is actually working or not before deploying more capital here?

Yes. I think I know what you're asking. And we have not made any -- those are certainly options, but we have not made any decisions on that until we see the letter and are able to assess the situation a bit more fully.

Our next question comes from Mitchell Kapoor with H.C. Wainright.

Could you talk a little bit about the particular patient with the liver failure and the kind of course of the liver decline. Was it more sudden or progressive? And can you talk about some additional baseline characteristics with respect to that patient that may have contributed to the course of the progression or acuteness of the issue?

Yes. Obviously, there are a lot of details like that, that we'd like to be able to share with you with more context. So obviously, we're continuing to gather information. I think -- so just stay tuned for that.

Our next question comes from Andy Chen with Wolfe Research.

And I'm just thinking about the expected duration for this clinical hold for this investigation. And I'm wondering if you can point to any industry precedent for a liver failure issue such as this, like how long does it take to be resolved?

Yes. I mean there have been examples, but I think it really is case by case. And so let's see what the feedback from the FDA looks like I think that's probably going to give us the best sense of the timing, what will be required to lift the hold. So I don't want to give any sort of benchmarks or guidelines at this point. I don't think that would be accurate.

And I'm not showing any further questions at this time. I'd like to turn the call back over to Brian for any closing remarks.

Thank you, operator. This is an unfortunate and unexpected event, and we are working diligently to get more information on this isolated case and are working with the FDA to resolve this as quickly as possible. With that, operator, we can close the call.

Thank you. Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.