Relay Therapeutics, Inc. (RLAY) Earnings Call Transcript & Summary

Eric Joseph, senior biotech analyst with JPMorgan. Our next presenting company this afternoon is Relay Therapeutics. And speaking on behalf of the company is CEO, Sanjiv Patel. There's a Q&A session after their presentation. Just raise your hand, and we'll get a mic over to you. If you have a question and if you're tuning in via webcast, feel free to submit questions via the portal. So with that, Sanjiv, thanks for joining us.

Thank you, Eric, and thank you to JPMorgan for the invitation. This afternoon, I'll be making a series of forward-looking statements, which are subject to normal risks and uncertainties. Actual events may differ materially from the actual projections, intentions and expectations laid out. So with all that said, we'll begin. Relay Therapeutics was founded in 2016 as one of the first of a new breed of biotech that sits at the intersection of leading-edge computational and experimental techniques. Our approach has been to focus our Dynamo platform on making validated -- making small molecule inhibitors against validated targets. And our platform to date, we believe, has been very productive. We have 4 clinical programs, already created entirely in-house by our approach, and 1 further program that's being held at IND. But we're even more excited about what lies ahead. We have more than 7 preclinical programs, and we've expanded from oncology into genetic disease. We've moved from being a small molecule inhibitor company to now working on chaperones and degraders. And we have an extensive platform. All underpinning this is a wonderful team and an extensive balance sheet. So let's start with what's driving all the excitement, it's the platform. Our Dynamo platform was created 8 years ago, and over time, we've added a constellation of tools, both on the experimental side, like cryo-EM, room temperature x-ray crystallography as well as tools on the computational side, such as generative AI, machine learning and long-time scale molecular dynamic simulation. Over the 8 years, we've added and subtracted tools on depending on what's been working. Our experience has allowed us to combine different tools to solve different problems. And the more times that we solve problems, the better we get. But most importantly, we've been able to integrate the tools more tightly. And so we have computational tools such as generative AI, working very closely with robotics and the creation of medicines that actually in the lab. And so over time, our platform has become more and more powerful, and it's all netted together through our team. But the platform is only as good as the output. And so if you go back in time to the start of our company, we focused our platform on creating a SHP2 inhibitor, which is a fast follower program. So we try to create as many chemotypes as we could in the short time period as we could. And we eventually created RLY-1971, which we believe had the potential to be a clinically differentiated program, and it was acquired by Roche Genentech in 2020. Then we started to focus on solving a problem that conventional techniques couldn't solve, creating an isoform selective inhibitor for FGFR2. We were pleased to create RLY-4008, which went into the clinic in 2020, and we've been able to generate validating clinical data that our platform has indeed created an exquisitely selective FGFR2 inhibitor. Then we moved our platform into trying to solve one of the precision medicine's holy grails and create a mutant selective PI3K-alpha inhibitor. And RLY-2608 went into the clinic in late 2021. And again, last year, we were able to show validating data that the platform has indeed done what it said it could do. And so all of this shows a very productive platform. And it's all manifested now in an extensive precision medicine pipeline that's spread across precision oncology and genetic disease. And so if we look at forward to our focus in 2024, for 4008, which is our selective FGFR2 inhibitor, we will round out the pivotal cohort for our ICC fusion pivotal population, and we'll continue to gather data on RLY-4008's activity in other alteration types outside of fusions and other tumor types outside of cholangiocarcinoma. All of this will come together in the second half of the year, and we'll engage with regulators and determine our go-forward development strategy. For our platform, we've already talked about, has been extremely productive. And we will unveil another what we believe to be innovative target that we will show later in the year, but the main focus of 2024 for us will be our breast cancer portfolio. As you can see from the San Antonio Breast conference just before the holidays, PI3K is indeed a very important therapeutic target in breast cancer and the emerging profile of 2608 is very encouraging and allows us to double down now and go as aggressively as we can to execute a broad clinical program for RLY-2608, both in doublet and in triplet combinations. And we'll deprioritize our second PI3K-alpha mutant selective inhibitor, 5836, so that we can put all our effort against 2608. Let's talk a little bit more detail now about our breast cancer portfolio. As we said, the foundation of it is our PI3K-alpha mutant selective franchise, but we also have a pan-mutant approach as well as a 1047R specific approach, and we have a CDK2 inhibitor and an ER alpha degrader. Both of those 2 programs have been paused, but stand ready to be restarted at any time. Why are we so focused on breast cancer? It's because it's such a huge opportunity. The market for hormone receptor positive HER2-negative breast cancer for adjuvant, neoadjuvant and first-line metastatic treatment is over $27 billion. The emerging standard of care in this field over the last few years is created by now standard of care being CDK4/6 inhibitors combined with endocrine therapy backbone. So for us, at Relay, we see 2 emerging trends. The first one is that there are now novel therapies in development that could supplant these existing standard of care. And the second one is there's room for additional therapies to be stacked on top of the standard of care. But to do this, you need to have 2 things. First of all, you need to be able to demonstrate efficacy on top of the standard of care; and secondly, you have to have a profile such that the tolerability of this third agent is going to be able to be stacked on the first 2. We believe 2608 has exactly that profile because, firstly, PI3K-alpha is a therapeutically important target. 14% of all solid tumors have a PI3K-alpha mutation, and it's concentrated such that 35% of hormone receptor HER2-negative breast cancer patients have this mutation. That's over 150,000 patients in the U.S. alone. So this is a significant opportunity. Unfortunately, the current nonselective PI3K-alpha inhibitors have a tolerability profile that is challenging. And you can see here the 3 most common adverse effects that lead to dose discontinuation and dose reduction are high grades of and high rates of hypoglycemia, diarrhea and rash. Capivasertib, which is also approved in this population, also, unfortunately, has a very challenging tolerability profile. So all of this leads to dose discontinuation and reduced dose intensity, and unfortunately, that caps efficacy. And what you can see here is the response rates, the CBR and the median PFS is capped. The CBR is in the kind of mid-40% range and the PFS is around 7 months. We believe that if you could create a tolerable profile through creating a mutant selective PI3K alpha inhibitor that you could get greater dose intensity could keep these patients on medicine longer, and it would eventually result in greater efficacy. The second thing that I wanted to share with you is the great data that we saw at San Antonio that showed that you could take a nonselective PI3K inhibitor and combine it in earlier and earlier lines of therapy. Roche Genentech reported out a study with inavolisib, palbociclib and fulvestrant, where they showed a doubling of PFS, and that's a wonderful result. Unfortunately, it was only in a very small segment of the first-line patient population. It was in endocrine-resistant only patients, and it was in metabolically selected patients that were essentially metabolically very fit and they had to be because they were trying to minimize the tolerability -- or maximize the tolerability profile of the triplet. And so we believe that if you could create a much more tolerable, safety profile with a pan-mutant alpha -- PI3K-alpha selective molecule, you could address a much greater patient population than the inavolisib triplet could. So we think there are various ways for a PI3K-alpha inhibitor to be successful in the clinic. First one, obviously, is to create a selective molecule. Second, we -- that should then result in a more tolerable safety profile. And thirdly, that could result in greater efficacy. And fourthly, that could address a much greater patient population. The unfortunate issue, though, is creating one has been challenging, and the industry has used all the tools that it has and has been unsuccessful. So we set out in 2016 to do exactly this with our Dynamo platform, and we created the first full-length structures using cryo-EM of both the wild type and the mutant PI3K-alpha. We then built what was, at that time, the largest molecular dynamic simulation and identified a novel allosteric pocket. And that eventually led to the discovery of RLY-2608, which entered the clinic in the back half of 2021. We went through dose escalation in monotherapy and then started the dose escalation trial in combination with fulvestrant in April of 2022. And what you can see here is a very flat PK profile with doses above 400 milligrams BID, exceeding 80% inhibition of the target, which is the target that we had set ourselves. And then from a data cut from last summer, what you can see here is 17 patients at 600 milligrams BID, and it shows very early, but encouraging signs of efficacy. In the 5 measurable patients, you can see that we have 1 partial response. And in the patients on the swimmers plot, you can see 6 out of 7 of the clinical benefit rate eligible patients reached the benchmark. And so remember, that's in context of response rates in the nonselective inhibitors of 20% in terms of the response rate on the tumor dimensions and in the mid-40s on the CBR. So we were very small end but showing signs of target engagement. And what we were much more encouraged about at this stage is the tolerability profile. And what you can see here is the glucose -- and what you can see is that we've seen no Grade 3 hypoglycemia at doses that we can believe from the previous slide are clinically efficacious. That Grade 3 is something that we wanted to avoid, and we believe is a clear sign that our molecule is selective and that Dynamo platform has done exactly what we hoped it can do. Now if you look at the safety profile in context, you can see for RLY-2608, lower rates of hypoglycemia, diarrhea and rash. And if you put that in context with some of the nonselective inhibitors in the trials, you can see that various trials have been run with different metabolic entry criteria. If you look at the generalized patient population, which is on one side of the slide, you can see a very challenging tolerability profile for the nonselective inhibitors. Whereas, if you look at the other side of the slide, you see a very selective patient population with much more metabolically fit patients, and that leads to a better tolerability profile. You can see, although it's early, RLY-2608 has a great safety profile, and we believe has the potential to have a safety profile that is much more generalizable in its use than the nonselective PI3K inhibitors are. So all of this gives us the confidence now to accelerate RLY-2608 as rapidly as we can towards clinical development. And so we will now accelerate our doublet. And so we've been through dose escalation now. It's complete. And we have 17 patients at 600 milligrams BID that were in the dose escalation cohort. If you remember back to July of last year, we commenced the 600-milligram BID expansion cohort. I can say that, that is now fully enrolled. So we have now 37 patients that have been fully enrolled 600 milligrams BID. And we're about to open another expansion cohort at 600 milligrams for a further 20 patients. And then for Project Optimus reasons, we'll open a 400-milligram BID, 20-patient cohort. So as you move into the back half of 2024, we'll have an extensive data set on safety and tolerability for the doublet, and we'll have an emerging data set on durability. And as we come to the back half of the year, we will share this data with you, which should be very informative as we try and design our pivotal trial. As we've talked about, there is a much more extensive patient population that is in need in early and early lines of therapy. And to address this, we've initiated a triplet trial with RLY-2608, fulvestrant and ribociclib. We'll do this in dose escalation with the 2 label doses of ribociclib and we'll also use the 2 expansion cohort doses of RLY-2608. Again, in the back half of this year, we'll share safety data, which will be early for the triplet. But all of this data should provide us with a huge amount of information as we think about design of the pivotal cohorts as we move into 2025. So to summarize, we've initiated the 600-milligram BID expansion cohorts. We've already enrolled the first 20 patients in that cohort. We'll share data as we come to the end of the year on the doublet cohorts from 400 and 600 milligrams. And we've initiated the triplet, and we'll share data in the second half of the year on that. So all of that is an extensive development program for RLY-2608 and obviously explains the deprioritization of 5836, our second pan-mutant PI3K-alpha inhibitor. So I'll move on to our FGFR2 inhibitor, RLY-4008. Unfortunately, these patients that have FGFR2 alterations have been underserved because they've only been able to be treated with pan-FGFR inhibitors, which are plagued, unfortunately, with toxicities of hyperphosphatemia and diarrhea. And so the industry has always looked to try and find a solution for creating an exclusively selective FGFR2 inhibitor, which the theory would be to dial out some of these off-target toxicities and allow greater efficacy. Again, I'm pleased to say that we employed our Dynamo platform back in 2017 to create what we thought and what is now the first exquisitely selective FGFR2 inhibitor, and it went into the clinic in September of 2020. And here we are, just over 3 years later, and we've now treated 450 patients across a range of alterations and tumor types, and it speaks to our clinical execution capability. We've been able to share data that is validating across cholangiocarcinoma fusions, and we believe has the potential to be differentiated from the nonselective FGFR inhibitors. And also, at the triple meeting last year in the fall, we were able to share data for the first time to show our RLY-4008 has a broad activity across alteration types outside of fusions and also outside of tumor types that are not cholangiocarcinoma. So our plan for this is to enroll the pivotal cohort for cholangiocarcinoma, which is now fully enrolled, allow the data to mature, which hopefully should mature across the course of 2024, continue to collect data in tumor types outside of cholangiocarcinoma and alteration types outside of fusions and to look at the totality of the data in the second half of this year and determine a go-forward regulatory pathway. And we'll update you in the second half of this year. Moving on to our final clinical program, RLY-1971, which is a SHP2 inhibitor. This was the first of our programs that went into the clinic. And as we've said, this was licensed to Roche Genentech in 2020, and we're excited about doing that transaction because we wanted to try and combine RLY-1971 where this broader precision oncology portfolio as we could. And obviously, Roche Genentech was the ideal partner. We've been very pleased with the collaboration to date. RLY-1971 is in 3 different combination trials: firstly, with the KRASG12C inhibitor; secondly, with the PD-L1; and thirdly, with the EGFR inhibitor. The data disclosure strategy here lies fully with Roche Genentech. All we can say is we are very encouraged by the way the collaboration is going, and we continue to retain meaningful economics in that. So to summarize, here we are 8 years later. The Dynamo platform has produced a very extensive precision oncology pipeline. We have a rich range of catalysts as we look out towards the year ahead of us. We have an execution culture as a company. The last 4 years, we've shown the same slide around the objectives that we've set out to achieve. Each year, we've achieved every single one of the objectives that we've set out to achieve. This year, we hope will be no different, and we look forward to being back here in the year and going through all of the milestones that we've been able to achieve. And to summarize, those milestones are for RLY-2608, sharing the additional clinical data, both on safety and efficacy, in the back half of this year. For our triplet combination, which we've just initiated, we look forward to sharing early safety data in the back half of this year. For RLY-4008, our FGFR2 inhibitor, we look forward to sharing data, both on the data that we are collecting as well as the regulatory strategy, in the back half of this year. And we will also reveal an additional target that the Dynamo platform has created. Obviously, the data disclosures for 1971 lie with Roche Genentech. We have a 10-year team that is stable as an execution culture. We have $811 million on the balance sheet as of Q3 of last year, and that should take us into the back half of 2026. So we look forward to executing across the broad range of catalysts that we have. And with that, I thank JPMorgan again and invite your questions. Thank you. So I'm joined by Don Bergstrom, President of R&D; and Pete Rahmer, Chief Corporate Development Officer.

Great. And just a reminder, if folks have questions, just we'll bring a mic over to you. If you have, just raise your hand. Maybe it would be a good place to pick up -- it would be a good place to start by picking up on some of the updates in breast cancer with 2608. I guess, having sort of nominated 600 milligrams BID as one of the expansion dose cohorts, and you'll also be looking to fill out the 400-milligram dose cohort, I'm curious to know sort of what informed 600 milligrams is the upper end. Perhaps you can kind of speak to a little bit of the experience at a higher dose levels 800 and above.

Maybe Don, maybe you can take that one.

Yes. So we had announced in August of last year that we would open the first expansion cohort at 600 milligrams twice a day, and that was really based on the totality of the data that we were seeing. We've yet to identify a maximum tolerated dose. So 600 is not an MTD, but it's a dose that we feel represents a potential optimal dose based on PK, PD, safety and tolerability and early antitumor efficacy signals, as outlined by Sanjiv in his remarks. I think we continued dosing through higher doses, 800 milligrams, 1,000 milligrams. We're still collecting data on those doses on the patients that were enrolled in those doses. But as we continue seeing experience with the 600-milligram dose, we anticipated, based on looking at that PK curve, that a clear question that regulators, especially FDA, would have around dose selection is always, "Can you go to a lower dose and see similar benefit for patients?" So based on that, we opened the 400-milligram cohort to have that data to facilitate interactions with FDA. So I think where we are right now, we feel 600 milligrams likely represents an optimal dose. But again, we're still collecting data on other doses. It doesn't rule out that we couldn't open another cohort at a higher dose to explore it. But I think we're really encouraged by the data we're seeing at 600 milligrams today.

Sanjiv, you, I think, did a pretty great job of sort of kind of speaking to the unmet need that's sort of left on the table in less metabolically fit patients with the competitive -- competitor update with the -- competitive triplet update, excuse me, with inavolisib. Can you just maybe speak a little bit more to, I guess, the size of that opportunity? And I guess, is there sort of an upper bound in terms of metabolical -- metabolically unfitness, for lack of a better term, that you think you may not be able to address with 2608?

Look, I think that, as we talked about, the opportunity is broad. If you just look at the absolute numbers of 150,000 patients in breast cancer a year with a PI3K-alpha mutation, you just see the scale of it. And obviously, you start to look at the subsegments inside of that. We believe that there are opportunities in the later line, as we've talked about, in combination with fulvestrant. And there, the tolerability profile that 2608 could achieve could obviously allow us to get greater efficacy. But I think that the inavolisib data from San Antonio in the triplet showed an absolutely wonderful result of the doubling of PFS. And so one of the questions that I think some people have had, obviously, not us is, is there going to be additional benefit from a PI3K inhibitor in combination with on the stack of a CDK4/6? Trial clearly showed there was. And so the INAVO120 study, we believe, only addressed about 20% of the addressable frontline patient population because of the fact it was in endocrine-resistant patients and because they put these metabolic criteria around hemoglobin A1C and fasting blood glucose. And so if you lift that, the whole addressable patient population that remains is 80%. And so I think the question for us is, as we generate data and the safety profile that we've already created shows that in hyperglycemia, we're not seeing those higher rates of Grade 3, which is, I think what physicians are really worried about because that leads to potential hospitalization and having IV insulin. I think the question as the data plays out across the year is how much of that 80% can we address? Our belief is that we can address a large chunk of that. And so I don't know, Don, if you have any additional comments.

Yes. The only other thing I'd say, Sanjiv, can you flip back to the slide that's got the comparison across the 5 groups by metabolic fitness? So yes, I think it's really interesting when you look at the experience with inavolisib its Phase Ib trials because I think Genentech was actually quite clever in terms of teasing out the impact of baseline metabolic status on the risk for hypoglycemia. And you can see in that RMF over on the far right, that reflects patients who are largely excluded from the INAVO120 trial. So these are patients who either have, in that case, either BMI over 30 or an A1c over 5.7%. And as you can see, those patients, despite all getting prophylactic metformin, still had a 70% rate of integrated hyperglycemia and a 44% rate of Grade 3 hyperglycemia, with blended efficacy of the triplet. So I think what that speaks to is that there is this significant population of less metabolically fit patients that are very challenging to be able to address with a nonselective inhibitor given the hyperglycemia liability, even with prophylactic metformin being used. In contrast, our population for RLY-2608 includes a number of these patients who either have BMI over 30 or hemoglobin A1c over 5.7%. And as shown here on the slide, we've yet to see grade 3 hyperglycemia. So just consistent with what Sanjiv saying, we think with loosened metabolic inclusion criteria, there is a potentially much larger population that we'd be able to address with a selective inhibitor.

So you have 2 expansion cohorts at 600 milligrams. I guess 1 is fully enrolled, 20 patients, and another one that opened in the fourth quarter. I guess is there sort of a meaningful difference between the populations comprising those 2 cohorts?

Can you take that one?

Yes. Sure. Yes. The -- so -- the only real difference in the second 20 that we just recently initiated, one of the things that we're seeing, given that we are the only mutant-selective inhibitor open for all mutations right now in clinical development. We do see a little bit of an overweighting of kind of the non-hotspot mutations. And so we will control -- try to get a little bit more balance back to the study by making sure in this next 20, they're only helical or kinase-domain mutations. And we'll also restrict that to patients with measurable disease only. And the goal there, again, is as we get -- this should grow the 600-milligram population to about 60 patients and have pretty good distribution to what we would see in the general patient population.

In another, meaning, we're all part of, somebody asked a question about recruitment rates in the INAVO120 study, kind of using that perhaps as an analog for what enrollment might look like in a pivotal study with 2608. That being said, you sensibly would have a wider field to pursue in terms of addressable patients. So I guess maybe you can just kind of talk a little bit about sort of that time frame and how you might be able to sort of improve on that as you're pursuing a pivotal study?

I mean the first thing is this is not a small patient population. So as we talked about the numbers here are large. So hopefully, this is not a rare disease. The second thing is the INAVO data obviously removes the doubt around is there going to be therapeutic benefit from adding a PI3K-alpha inhibitor. And so I think we have a wind in our sails already. And maybe, Pete, you can just talk about the length of time.

Yes. I mean if you look at their study, they enrolled that -- they did -- they ran that over the course of about 3.5 years or so. It was 325 patients enrolled across 225 or so sites globally. Certainly, they have a very robust clinical trial infrastructure to execute that against, part of the reason why we were so excited to partner our SHP2 inhibitor with them. As we think forward to us running our own global randomized Phase III study, I think, as Sanjiv alluded to, there's a number of tailwinds, not to mention our own data, which we would intend to share in greater details to the back half of this year before we would anticipate the quickest kickoff that we could get to of a randomized Phase III study, which, for us, we have yet to have a regulatory interaction. So we don't want to put the cart too far before the horse, but we think that we might be able to have the data in hand to start those discussions this year.

[indiscernible] Copenhagen, Denmark. So as a diagnostic developer of a biomarker company, I love when someone say they have a precision medicine pipeline. Can you speak a little bit to how your strategy is towards biomarkers? And is it something you do yourself? Or are you partnering with other companies?

Do you want to take that?