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

Okay. Great. Thanks. Good morning, and welcome to day 2 of the 43rd Annual JPMorgan Healthcare Conference. I'm Eric Joseph, senior biotech analyst with the firm. One of our first presenting companies this morning is Relay Therapeutics. And presenting on behalf of the company is CEO, Sanjiv Patel. There's a Q&A after the presentation for those who have questions, just -- we'll bring a mic over to you. And for folks tuning in via the webcast [Operator Instructions] so with that, Sanjiv.

Thank you to you, Eric, and thank you to JPMorgan for the kind invitation to speak at this year's conference. But most importantly, thank you, those of you on the West Coast attending at 7:30 a.m. It's very much appreciated. So I'll be making a series of forward-looking statements today. I ask you to check our website for all the full disclosures. And so with all that said, let's begin. Nine years ago, we set out to use our research platform, which we term the Dynamo platform, which is a combination of computational and experimental tools to make novel medicines against targets in both precision oncology and rare disease. And whichever metric you want to measures us on, we've been very productive. We've nominated 8 development candidates. We've received 4 INDs. We've generated 2 clinical data sets that we believe show true proof of concept for these novel assets. And we're very excited about what lies ahead of us in research. We've got 4 unnamed programs behind the -- all the programs that we've talked through -- we will talk through this morning. But 2025 is a year for us to turn the page and really focus a large part of our efforts on clinical execution in very large commercial opportunities. The biggest of those and where we'll spend most of our time today is in breast cancer, where we'll start our first Phase III pivotal trial with RLY-2608. The first mutant-selective PI3K-alpha inhibitor. And behind that, we -- even though it's such a large commercial opportunity, we're not just a breast cancer company, and we'll start 3 additional clinical programs this year. One of those will be in oncology targeting NRAS-driven solid tumors and 2 will be in rare diseases, targeting both vascular malformations and Fabry's disease. So with these 4 large clinical programs, you can see why 2025 for us is all about execution in the clinic. And so let's just linger for a second on why breast cancer is such a large opportunity for us and where all of our focus really will go in 2025. The first reason is it's such a large opportunity. There are 140,000 patients in the U.S. alone that have PI3K-alpha mutated-driven breast cancers. The second reason is we've got a long way towards validating this opportunity in the clinic. And just before the vacation period, we were in San Antonio, and we shared a very robust data set. It was early, but it showed 9.2 months' worth of PFS in hormone receptor-positive HER2-negative second line and second line plus breast cancer patients. And that's against a comparable standard of care of 5.5 months. So we have gone a long way to show that we can create a step change in efficacy for this very large group of patients. The third reason why we're excited is we have a very clear pathway now in the clinic to generating clinical data that will get us an approval in a very large slice of a very large pie. And we have a clinical execution machine that has been shown over the last 5 years to be able to execute very successfully across trials across the world and has already executed its first pivotal trial with our FGFR2 program. And finally, we have a very extensive balance sheet that would allow us to run more and more novel combinations and take more and more slices of this very large pie. So hopefully, that gives you the logic for why we're so excited about our opportunity in breast cancer and where the majority of our focus will be in 2025 and beyond. So let's start talking through the 4 clinical programs. First one is PI3K-alpha driven. PI3K-alpha mutations are one of the largest precision medicine opportunities that's left out there unserved. There are over 0.5 million PI3K alpha-driven mutated patients in the U.S. alone. And that's spread across breast cancer, vascular malformations and solid tumors outside of breast cancer. Unfortunately, they are targeted with nonselective inhibitors. And these are challenging to be taken by patients because they are plagued with off-target toxicities, such as diarrhea, rash and most importantly, hypoglycemia. So unfortunately, those patients cannot have the dose intensity that they require, and that leads to a lack of efficacy in these patients. And so several years ago, we set out with our Dynamo platform to address this. By creating a mutant-selective inhibitor that would allow us to dial out these toxicities, allow these patients to stay on therapy for longer and allow us to get the efficacy that these patients really need. And we believe we've done exactly that with RLY-2608. It's the first mutant-selective isoform-selective allosteric inhibitor of PI3K-alpha. And we're very pleased over 3 years ago now to bring it into the clinic. The first place we're going to deploy our RLY-2608 is breast cancer. And the reason why is it's such a large opportunity, as we said, over 140,000 patients in the U.S. alone have PI3K-alpha mutated-driven breast cancer. And we see already approvals in both first and second line with the nonselective inhibitors. And so we have a clear pathway towards getting this approved and making RLY-2608 the combination partner of choice across all lines of breast cancer therapy. And it's a very large market. And so we'll start our first pivotal trial this year, and that should give us a very large slice of this market. Now it's very confusing, breast cancer, because you see all these kind of dynamic nature of agents. We see agents appearing against the cell cycle where you see CDK2 and CDK4 selective agents appear. And there's obviously a lot of agents now that are oral, targeting the hormonal space. And so we just want to simplify you for this whole complexity. So let's be clear. In precision medicine, is a very simple paradigm, which is target the mutation. So there are 140,000 patients with PI3K-alpha driven mutations. And this mutation in the end is foundational. It appears early and is a clear driver of the disease. And so to simplify this for you, we believe that PI3K alpha-driven inhibitors will be the foundation of all of these treatments. As these additional agents appear and add efficacy, they are purely additive to RLY-2608. And that's why we believe it's such a big commercial opportunity. PI3K alpha-driven mutations will be treated by PI3K-alpha inhibitors and the best and the first one, we believe with the data that we've shown is RLY-2608. So let's get into what is making us so excited. It's the data. And so the ReDiscover trial started just over 3 years ago and has 3 arms to it, a monotherapy arm, a doublet arm and the triplet arm. And so just before the vacation period in San Antonio, we showed a very clear robust data set from the doublet arm. So these are in hormone receptor positive HER2-negative breast cancer patients, second line and second line plus. And so what you see here is some of the cross-trial comparisons, which are difficult to do given the slightly different patient populations of the approved agents and the agents in development. And what you see in these agents is numbers such as 5.5 months' worth of PFS, CBR rates in the 40s and response rates in the teens. What we showed in 64 patients of 9.5 months' worth of follow-up, is a very clear step change in efficacy. We see 9.2 months' worth of PFS. We see 67% clinical benefit rate, and we see a confirmed objective response rate of 39%. These are numbers that we've never seen in the class before and it's going to step change efficacy. Now if you dive into the details and start looking at second line only patients to give you a like-for-like comparison. This 9.2 months' worth of PFS moves to 11.4 months. The response rate is now 40% as a confirmed objective response rate. So if we believe that we go head-to-head with any of these therapies that are either approved or in development, we feel very confident in our agents. We also know there are a range of sponsors that are running trials that are specifically targeting the kinase domain mutations of PI3K-alpha. And again, here, we showed a cut that shows 11.4 months' worth of PFS across all lines of therapy, second line and second line plus. And what we believe to be a remarkable 67% confirmed objective response rate. And again, in San Antonio, we saw some of the other sponsors report their data in this space, and it wasn't on the same page. So we believe our RLY-2608 does exactly what we hoped it would do. Dials out wild-type toxicities, allows patients to have greater dose intensity, and that translates into greater efficacy. And so you can see that in the tolerability profile, which is very clearly, we believe, again, early, but shows a step change, very low rates of grade 3 AEs and very specifically, very low rates of grade 3 hyperglycemia, which is the toxicity that oncologists really do not want to manage. And so again, if we take a step back here, in heavily pretreated patients with hormone receptor positive HER2-negative breast cancer. We see a step change in tolerability and that translates into a step change in efficacy. And so our 11.4 months' worth of PFS translates very nicely against the standard of care of 5.5 months. So this gives us the confidence to start a Phase III pivotal trial this year. That Phase III pivotal trial will be in post-CDK4/6 pretreated patients, and it will be RLY-2608 plus fulvestrant, up against the emerging standard of care capivasertib, which has had a remarkable commercial launch in its first year. And it just shows you the unmet need that sits in this market. And so this trial will start this year. We'll provide further details on that once we are on the other side of an FDA interaction with written minutes and a clear clinical plan trial in hand, and we look forward to sprinting towards getting this started this year. So with all of that said, let's just take a step back. This is a very large market commercially and a very large pie. This first trial will be in post-CDK4/6 patients. So it will take all of the second line and second line plus market. And this is where the real unmet need is. These patients have benefit today from the current standard of care of 5.5 months. And so if you increase that to the numbers that you've seen today, you can see that in this very large market, 13,000 patients, if you can extend that, you end up with a very large commercial opportunity. But given the fact that we're in post-CDK4/6 patients, and post-CDK4/6 -- and CDK4/6s are now being used in the adjuvant setting, we'll also capture a sliver of the earlier lines of therapy with this trial. And so we take a very large slice of this market with this first pivotal trial. But that's not where we're going to stop. We continue to try and build, take further and further slices of this pie. And that's why you see us run novel triplets. And so we're in dose escalation, both in RLY-2608 plus fulvestrant plus ribociclib, current standard of care and 2608 plus fulvestrant plus atirmociclib, Pfizer's selective CDK4, which we believe will be the emerging standard of care. And so this positions well to take additional slices and we'll continue to add novel combinations to our armory. And so if you just take a step back, you see the excitement for RLY-2608. This is clearly a very large opportunity. This is clearly a standard of care that needs to be disrupted. The data is early that we've shown in San Antonio, but it's robust, 64 patients, 9.5 months' worth of follow-up, 9.2 months' worth of PFS. We have a very clear clinical plan to take a very large slice of this market, and we set ourselves up to take all of the other slices over time. So that's our breast cancer focus. Now RLY-2608 can be used outside of breast cancer because as we said, PI3K-alpha driven mutations exist outside of breast cancer in both in other solid tumors but also, there's 170,000 patients with vascular malformation-driven PI3K-alpha mutations. Now this is an umbrella term that's PI3K-alpha mutated driven that leads to overgrowths in both lymphatic and venous vasculature and appears in various different phenotypes. But they share one thing in common, which is they are poorly served with therapies today. They are unfortunately treated by surgery, local bandages, sclerotherapy and 25% to 40% of them end up with systemic therapies. And again, these systemic therapies have one thing in common. They're ineffective. They have tolerability challenges. Alpelisib is approved, for example, in the sliver of this market. And we know it's plagued with the tolerability challenges of diarrhea, rash and most importantly, hypoglycemia. So unfortunately, these patients do not stay on therapy. And unfortunately, these patients do not get the efficacy that they need. And we're very excited about the profile of RLY-2608. As we've seen from the robust data sets that we've shared, it has a very safe, clearly tolerable profile. And remember, these patients are diagnosed early in life and can be on therapy for decades. And so having a very tolerable profile is important, and we hope, and we believe these patients can stay on therapy for much longer and get the efficacy that they deserve. And so again, in this very large market, 170,000 patients. We will deploy our RLY-2608 for the first time this quarter and hopefully get these very large patient population, treatment that they deserve. So if we move to our third clinical program that will start this year, it's another oncology program, and we have a program targeting NRAS-driven solid tumors. There are 25,000 patients that have NRAS-driven solid tumors in the U.S. alone. They're concentrated in tumor types such as melanoma, non-small cell lung cancer and colorectal. And again, there are no specific agents that selectively target NRAS. So today, the therapy is really target agents and nodes in the MAP/RAS kinase pathway, RAF, MEK and also, you see the emergence of the Pan-RAS agents. Again, all of these non-selective agents are plagued with tolerability challenges. And again, you hear the familiar story. They have tolerability challenges, leads to lower dose intensity, leads to lower efficacy. And so again, we set out with our research platform a few years ago to create the first exquisitely selective NRAS agent. And the hope was that we could dial out the toxicity challenges and provide a step change in efficacy. The preclinical data that we have shows exactly that. And here is a range of different tumor PDX models in the different tumor types and different NRAS mutations. And what you see is a very rapid and deep regression, and you can see the standard of care on there as well. And so we believe we've achieved what we wanted to achieve. In exploratory animal toxicology studies, we can achieve very high levels of exposure in the study that we have just completed, 10x above the efficacious dose, very tolerable. And so again, we've achieved what we hoped we would achieve with our research platform. Exquisitely selective inhibition of NRAS that leads to deep and rapid regression in these PDX models, and that is very tolerable. And so we will be excited to have this in clinical trials later this year. The final clinical program that we'll start this year, and you can see why we're so excited about focusing on clinical execution given the opportunities that sit in front of us is in rare disease in Fabry's disease. Fabry's disease is a genetic disease, lysosomal storage disorder that is caused by a very broad range of mutations in the gene that codes for alpha-Gal, which is an enzyme that traffics substrates in and out of the lysosome. And when it becomes disordered, it's ineffective, and it leads to a substrate buildup that then leads to all the complications of Fabry's disease. About 8,000 patients in the U.S. alone. The current therapies sit with enzyme replacement therapy for alpha-gal. And then there's a small molecule chaperone marketed as Galafold that is doing commercially very well, peak sales are going to be close to $0.75 billion. So it's a significant market that has been created here. The challenge is, unfortunately, alpha-gal has some very significant limitations. It's an inhibitory in nature. Now it's doing exactly the opposite of what it sets out to do, which is to activate alpha-gal. It only is amenable to 40% of the patients with Fabry's disease, and the other 60% are termed nonamenable. And the fact that it's inhibitory means you can't combine it with the standard of care enzyme replacement therapy. So we set out a couple of years ago to make a non-inhibitory small molecule chaperone, and the data that you see here shows that we've done exactly that. We've created an allosteric inhibitor of Fabry's disease that is non inhibitory. So it leads to greater activation of alpha-Gal, hopefully greater benefit to these patients, has a much broader coverage of the mutations outside of just the 40% that migalastat, Galafold covers. And given its non-inhibitory nature, it's combinable with the standard of care ERT. So we believe this will be a step change in efficacy and in coverage for Fabry patients and look forward to having this in the clinic later this year. So if we start to summarize, you can see why 2025 for us is a year of turning the page and focusing on clinical execution. We have 3 new starts in vascular malformations. Remember, 170,000 patients in the U.S. alone that are today unserved. NRAS-driven solid tumors, 25,000 patients today that are currently served with nonselective inhibitors. And then Fabry's disease, 8,000 patients today, many of them, unfortunately, are termed nonamenable. And so we'll start all of these 3 clinical programs this year. But the giant in all of this is hormone receptor positive HER2-negative breast cancer. And we will start our first pivotal trial in this very large market this year with our RLY-2608. The data that we have is very compelling, 9.2 months' worth of PFS, 11.4 months' worth of PFS in second-line only patients. In kinase domain, 67% confirmed objective response rate. These are numbers that we've never seen in the class before. And so we are going to sprint towards starting this pivotal trial this year and we believe we have the team and the execution capacity to do it. And we have a very extensive balance sheet that will allow us to continue to take larger and larger slices of this pie. So I look forward to updating you across the year as we execute on all of these priorities. And with that, I'll hand it back over to Eric Joseph for Q&A. Thank you.

Well, great. Yes, we have time for questions. So maybe just picking up on the addressable markets served by the pivotal study that's expected to underway later this year. It seems as though it's not perhaps a strict sort of second-line opportunity, right? There could be prior CDK4/6 experience could extend to those receiving treatment in the adjuvant setting. So maybe just talk about sort of sizing, I guess, of the opportunity that could be conserved by the patients comprising the -- making up the study population.

Yes. As you know, it's a very dynamic space. As we've talked about, CDK4/6 inhibitors are being utilized in different indications. We believe up to 25% of patients in the adjuvant setting may receive over time a CDK4/6. And so this traditional kind of term of first line, second line may become rapidly antiquated. And what we are looking at here today is a population that we will go after, which is post CDK4/6 treatment. And so traditionally, those 13,000 patients in the term traditional second line are going to be applicable to our trial. But increasingly, as you see CDK4/6 come earlier and earlier, they'll be applicable too. So the exact numbers will evolve over time as the use of CDK4/6 has evolved. But I think all we can say is it's a step change in market opportunity for us. In that second-line market, there's already 13,000 patients and it's only 5.5 months' worth of PFS. So even in that market, if you could extend it to the numbers that we've talked about, you end up with a very significant commercial opportunity. And then you tack on the additional kind of first-line patients that become applicable to this, you end up with a giant commercial opportunity that sits in front of us.

And is there data or sort of the experience of capivasertib in -- capivasertib in the post-CDK4/6 adjuvant setting. I don't know if that's kind of part of their existing label. Is that sort of perhaps preclude being able to accrue that particular population given that agent being the comparator arm?

Yes. Yes. So the CAPItello-291 trial did allow patients on who had progressed rapidly through adjuvant therapy. But at the time that trial was run, there was very usage of CDK4/6 inhibitors in the adjuvant setting. And that trial did not require prior CDK4/6 inhibitor therapy. So we've not seen a subgroup analysis of the performance of capivasertib in patients who progressed on adjuvant CDK4/6 inhibitor therapy.

But the one thing we do know is even in that study in CDK4/6-naive patients, which would be an even healthier set of patients to see how capi performs and the PIK3CA-mutated patients that are CDK4/6-naive, you saw ostensibly no difference in the median PFS.

Okay. And I guess, is there a particular, let's say, quota or cap of prior adjuvant CDK4/6 patients that you'd want constituting the study?

Do you want to take it?

Yes. I mean I think at this point, the trial that we're proposing would have the ability for patients who had seen an adjuvant CDK4/6 inhibitor to come on therapy, but we're not necessarily proposing at this point any prespecified cap on how many patients or minimum for how many patients that would need to represent.

Okay. All right. So just wondering a little bit. So it sort of could enable an initial approval in an indication that doesn't align perfectly, but sort of runs adjacent to the indication where Roche's Itovebi is currently approved. So maybe just kind of make the contrast between the addressable population perhaps served by that agent and relative to where you hope to be with 2608?

Yes. I think the interesting thing is when you look at the traditional definitions of front line and second line. You have to keep in mind in the frontline setting, it is clearly bifurcated in terms of the standard of care regimens for those patients that are deemed endocrine-sensitive, which is about 60% of the frontline population and those patients that are deemed endocrine-resistant. That's about 40% of the frontline population. So the absolute numbers of patients that are addressable are actually almost twice as many in the traditional second-line definition because those patients come back together in the second line. And so inavolisib's label sits in the endocrine-resistant population in the front line and is even further narrowed by the strict metabolic criteria in which they filtered for that trial. And so at the largest, the best size of the market that inavolisib could address is about 40%. But when you take into consideration the metabolic restrictions, it really drops down to about 15% to 20% of the Western population. And so it's -- there's not a lot of overlap between the way we are designing our Phase III and the patients we would aim to address. And the current label and metabolic restrictions that would exist based off their entry criteria for their Phase III trial.

Right. And that trial was run exclusively in CDK4/6-naive patients, including in the adjuvant settings.

Maybe just kind of picking up with the point about metabolic fitness, where are you planning to kind of set or metabolically fit or eligible -- metabolic eligibility in your post-CDK4/6 study, particularly around sort of the A1c as a threshold for entry.

Do you want to take it, Don?

Yes. So consistent with what we've done in the ReDiscover trial, we've enrolled patients on study who have hemoglobin A1C up to 7%. And who have fasting plasma glucose up to 140. So what that's translated into in our ReDiscover study is a population that's actually quite reflective of a Western population with about 1/3 of our patients who have either a BMI over 30 and/or an A1C over 5.7. So patients certainly at risk of developing diabetes and developing hyperglycemia with a PI3K-alpha inhibitor. And I think we'd be consistent with that going forward into a pivotal trial. So allowing a patient population, again, very reflective of a Western patient population, allowing patients on study with metabolic syndrome, prediabetes, obesity. And given the data we've seen so far in the very limited hyperglycemia we've seen so far, I think with a representative patient population, we'll be able to continue to maintain a differentiated profile with regard hyperglycemia.

Yes. I think just to comment on that, the AE profile that we've shown in the ReDiscover trial, has about 1/3 of patients that have high BMI or at the upper end of the hemoglobin A1C. So again, it shows how impressive the tolerability profile is. I think we will exclude kind of active type 2 diabetics in the study. And it's not that we don't think that the RLY-2608 will be beneficial to those patients. We can run that in an additional kind of studies on the side in parallel. I think our view is, in the end, these trials are going to have cross-trial comparisons made to them. And so let's try and get those comparisons to be as accurate as possible.

You made a point that patients with a PI3-kinase alpha mutation will be treated with a PI3-kinase alpha inhibitor. Will they also be treated with ERs -- with fulvestrant or an ER engagement. I guess the real question is there optionality for any PI3-kinase inhibitor monotherapy in the setting do you foresee?