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

Good morning, everyone. I'm so happy to be joined by the management team of Relay Therapeutics on the last day of the Morgan Stanley Healthcare Conference. I'm joined here by President and CEO Sanjiv Patel, President of R&D Donald Bergstrom, and Chief Corporate Development Officer Peter Rahmer. So I'll just read a quick disclaimer: visit morganstanley.com/researchdisclosures for our research disclaimer. And let's dive right in to the Relay story. Maybe we can start with you, Sanjiv. And sort of what's been, you know, 2026 has been a very eventful time for Relay with data disclosures across both breast cancer and vascular anomalies. So what's sort of been the company's focus over the past few months? Yes.

So yes, as you, first of all, thank you for the invitation, and thank you for all of you attending, both online and in person today. 2026 has been a very eventful year for us, exactly as you said. We've been pushing forward our lead program, Zovegalisib, which is a PI3Kα mutant-selective inhibitor across three different indications. The first of those is second-line hormone receptor-positive, HER2-negative breast cancer, where in March this year we showed data using our pivotal dose of 400 mg BID that showed a PFS in this population of 11 months. This compares very favorably with the current standard of care, capivasertib. We're heads down now executing a pivotal trial across the world, and we're very happy with how that's going. And later this year, we'll share an update on when we believe the last patient in will be on that trial. In our first-line, hormone receptor-positive, HER2-negative breast cancer efforts, we declared in April of this year that we'll use a regimen of Zovegalisib with Pfizer's selective CDK4. This is a really important mechanism because using a selective-selective approach, we believe we can minimize the side effects and maximize the tolerability of this regimen, which has been the challenge in this field. We know that adding a PI3K pathway inhibitor matters because we've seen that from the INAVOLISIB data. The challenge has really been the lack of tolerability and the lack of ability of these patients to take this regimen for, you know, up to three to four years. And so using this mutant selective and CDK4 selective approach, we feel very comfortable that we'll be able to provide the regimen that patients actually need. And then in May of this year, we showed data in vascular anomalies, where we showed a very robust volumetric response rate of 60% across the doses that we were using. And that compares again very favorably to the current standard of care, Alpelisib. There we're very much focused on the dose expansion portion of our study, establishing a dose. And then later this year, we'll do both a data update and a regulatory update on how we believe that we can get this therapy to patients rapidly. So it's been a very eventful year, but it's still a year to come.

Absolutely. You mentioned that in the second-line breast cancer, you had an update from Zovegalisib earlier this year. Maybe you could talk a little bit about what that data actually showed and you referenced sort of the competition with the standard of care capivasertib. Maybe you can kind of profile that a little bit for us in terms of what you demonstrated.

Yes, and so as you know, this is a very large market, the second-line, hormone receptor-positive, HER2-negative, breast cancer market. And the standard of care has evolved over the last few years. Alpelisib, which is a non-selective PI3K inhibitor, was approved a few years ago. Unfortunately, commercially was not that successful because although it showed a PFS in the kind of eight-month range, the tolerability challenges of hyperglycemia, diarrhea, rash, stomatitis, unfortunately mean that patients just cannot stay on this therapy. And so although it's efficacious, it's unfortunately not tolerable. Then we saw the emergence of the AKT inhibitor from AstraZeneca, Capivasertib. This showed actually numerically a lower PFS than Alpelisib, but was perceived to be more tolerable in that it had in its label lower rates of hyperglycemia, but it did have still significant rash. And so this has been launched a couple of years ago and it's been commercially very successful, moving towards a $1 billion of run rate in its sales. And it shows that if you could have what is perceived to be a more tolerable regimen, you can definitely be commercially successful to the tune of $1 billion here. And so the data that we showed earlier this year in this patient population was in second-line and second-line plus patients using our 400 mg BID dose of Zovegalisib. And the premise of this program was if you can have a mutant selective inhibitor in this field, you can dial down the off-target toxicities of diarrhea, rash, hyperglycemia, stomatitis, which is low rates of all of these. And that means that you can keep patients on therapy with a greater dose intensity, and that should translate into greater efficacy. And that's exactly what the data showed. We showed 11 months of PFS in this patient population, and obviously that compares very favorably to the 5.5 months of capivasertib. And so we feel pretty confident now as we run this head-to-head pivotal trial against Capivasertib that we could be successful in this patient population and create a very commercially meaningful therapy for patients.

Sanjiv, can you talk a little bit more about the Phase III trial design? What are the key timelines? And then, you know, how you think about Zovegalisib ultimately fitting into the evolving second-line breast cancer landscape? Yes.

Maybe I'll hand that over to Donald to talk about the trial design, and maybe then Peter can talk about the landscape. Yes, so it's a one-to-one randomized trial.

Of Fulvestrant plus Zovegalisib versus Fulvestrant plus Capivasertib. The patients who were enrolling have all previously been treated with endocrine therapy and a CDK4/6 inhibitor. The criteria for enrollment are a little bit tighter than what was used in our Phase 1 program to date. For example, we're not allowing patients to have multiple prior CDK4/6 inhibitors or an ADC. So we are looking to enroll as close as we can to a true second-line patient population. The trial is powered to show a clinically meaningful improvement in PFS. We also have OS as a key secondary endpoint. So as Sanjiv mentioned, we opened the trial in mid-2025. Of similar size and a similar population have traditionally enrolled over the course of 30 to 36 months. We just saw an OPERA ONE in second-line patients. This is the oral SERD trial. That enrolled in 33 months. So, as Sanjiv mentioned, we will have an update at the end of the year on when we think we'll reach full enrollment.

On the landscape in second-line PIK3CA mutated patients, there's two pathway inhibitors that have full approval. We've mentioned both of them already. Alpelisib, marketed as Piqray, could be the third line to market as a true cap. The most recent data from both the assets that we have publicly puts their PFS in the same ballpark of about 5.5 months, six months. And so, we feel very confident that with the data we have in hand today that Sanjiv has talked through, which is in almost the median third-line patients, that when we move into this Phase III trial in more true second-line patients, we'll have the ability to see at least close to a maintaining of PFS we've seen so far in Phase 1-2 now across 120 patients. As mentioned, the commercial market today across the class is probably in the neighborhood of about a $1 billion run rate and still growing, which is quite encouraging. And if we can come with a next-generation profile, which we have in hand today and prove that out in a Phase III study, we do believe we should be able to rapidly take some of that market share and continue to grow the market.

And just in terms of trial execution, we're very happy with how things are going. We started the trial in mid-2025. An incident trial for full enrollment takes somewhere between 30 and 36 months. We just, so our recent benchmark for a similar sized trial in this field, taking close to 33 months. So our goal here is to go as fast as we possibly can, knowing that these are the benchmarks, and try to beat some of them if we can.

Okay, great. Thanks to all three of you for laying that out. I want to turn the attention to the first-line opportunity now, and maybe you can spend a moment on the first-line landscape and sort of where do you see the remaining unmet need there.

I'm going to hand that over to you, Donald. Yes, so in the current landscape and frontline trial, current standards of care for most patients is the combination of endocrine therapy plus a CDK4/6 inhibitor. And what we've seen in retrospective analyses that have been run in a number of the trials testing these frontline regimens is that patients with PI3K mutations tend to have a shorter PFS than the patients who are enrolled who have wild-type PIK3CA. So in the case of ribociclib, the PFS that was observed for PIK3CA mutant patients in an endocrine sensitive population was 19 months versus 31 months for PI3K wild-type population. So about a year difference in PFS. So we feel that the current CDK4/6 doublets are, you know, can be improved upon, especially in PIK3CA mutant patients. And I think that hypothesis was borne out in the results we saw for the INAVOLISIB-120 trial of inavolisib, Roche's non-selective PI3K inhibitor, in an endocrine-resistant subpopulation. So these are patients who had shorter treatment-free interval between their adjuvant therapy and recurrence of metastatic disease. And in that patient population, we saw inavolisib be able, in combination with fulvestrant and palbociclib, to deliver on both PFS and OS in a randomized Phase III trial, leading to approval. Now, the challenge here is that that was a very heavily selected patient population, both in terms of being an endocrine-resistant patient population, and the patients had to be very, very metabolically fit because of the hyperglycemia profile inavolisib. So that has translated into limited utilization after the launch just because the physicians that we talked to have a real challenge finding the appropriate patient who's going to be able to handle this regimen. It is a, you know, the toxicity burden of the regimen when you consider the hyperglycemia, you consider rash, diarrhea, it's a heavy toxicity burden. Patients are taking multiple concomitant medications to actually manage the AEs that are associated with the drug so it's being used sparingly and in very fit patients. Our hypothesis is we know that PIK3CA is a negative prognostic marker in these patients. We know inhibiting PI3 kinase can provide additional benefit, and we want to develop a regimen that has the tolerability profile, as Sanjiv mentioned, that patients will be able to be used broadly in a general patient population, and patients will be able to tolerate it and stay on therapy, you know, for three years or longer. So along those lines, we really focused on atirmociclib and the triplet of endocrine therapy plus atirmociclib plus Alpelisib as providing that tolerability profile, as we showed in the data disclosure from earlier this year. And we're focusing right now on the design of a randomized trial in endocrine-sensitive patients, so the more common patient population, where we would be testing the triplet of endocrine therapy, in this case an aromatase inhibitor plus atirmociclib plus Zovegalisib, versus endocrine therapy, aromatase inhibitor plus a CDK4/6, and the investigator's choice. Yes, so it is, it is commercially the larger opportunity. It's a place where, you know, we have the evidence that shows that, the PIK3CA mutant patients.

Can you talk a little bit more about the decision to go into endocrine sensitive population? What's driving that? It sounds like a bigger population, bigger portion of patients.

Don't derive full benefit from current CDK4/6 targeted therapies. So there's clear unmet need there as well. And we're also, in the ongoing ReDiscover-2 trial, we are testing Zovegalisib patients who are post-CDK4/6 inhibitors. So we, with the endocrine-sensitive approach in the front line, and then with the ongoing ReDiscover-2 trial in the second line, we envision that we could have labels that will capture, you know, the vast majority of the metastatic PIK3CA mutant breast cancer population. Okay.

You think physicians will decide between using a PI3Kα alpha targeting agent in first line versus second line and when to kind of engage that opportunity?

Yes, so I think that will be the option that treating physicians will have with these two trials that we're running. And I think, again, it's going to come down to the profile that we're building in our frontline trial and the opportunity to have that. This selective-selective regimen for abemaciclib and Kisqali that we feel the overall toxicity burden for patients with the selective-selective approach with the data we've generated so far is not meaningfully worse than the existing CDK4/6 doublet therapies with current generation CDK4/6. So I think, you know, basically the proposition we'll have is that you can have a very specific meaningfully more efficacious frontline therapy with the triplet, with a safety profile that doesn't bring additional burden on patients. Will be a very attractive option for physicians. There could be cases where you have patients who are maybe older or frailer where the decision is made to go with a, you know, potentially milder, therapy in the front line and reserve Zovegalisib for second-line patients. But I think, you know, again, what we're looking to do with this development program is really to be able to provide that optionality and to be able to have labels where we can capture. You know, patients where we think that the vast majority of patients with the profile we have would be good candidates for a triplet in frontline. But then for the population who maybe wouldn't be candidates for frontline triplets, there's the option to drive benefit from Zovegalisib in later line, too.

And when you think about the triplet with the Pfizer drug, what gives you confidence that the drug-drug interaction with the atirmociclib will not be an issue in this study?

Yes, I mean, I think there we have a good mechanistic understanding of what's happening. And what we've seen is that when we co-administer Zovegalisib with atirmociclib, atirmociclib actually increases the absorption of Zovegalisib. So we get the same blood exposure to Zovegalisib in combination with atirmociclib, but with a lower dose than what we have in the doublet. The doses that we're focusing on that we reported out earlier this year was a 100 mg BID dose and 150 mg BID dose and triplet compared to 400 mg BID in the doublet. This effect is consistent across patients. The interpatient variability is the same in triplet as we see in doublet. So if anything, it's maybe a little bit of a benefit in the sense that it's reduced our dose and we're not concerned about there being new sources of variability or other complications that could make development more challenging.

Just on the point around the atirmociclib, I mean, is there any concern around whether atirmociclib is approved or has a positive Phase III in its own first-line study, the FOURLIGHT-3 study?

Yes, no, I don't think we have a concern. I think there what we're looking for in atirmociclib is a horrible safety profile. The whole premise here is to stack a mutant selective with a CDK4 selective inhibitor to try and minimize the AEs. And so I think what we've seen in the data so far that's in the public domain is exactly that from atirmociclib and that's what we want to use as our foundation. The FOURLIGHT-3 trial is a trial that is looking at superiority in terms of efficacy versus the standard of care, CDK4/6. So in a way, that, whether it is or isn't, is irrelevant to what we're looking for. We're looking for a tolerable foundation to be the backbone of our regimen. And so our focus is on atirmociclib a more tolerable therapy mechanism than the CDK4/6, and I think we feel very confident of that. So it's kind of irrespective around whether FOURLIGHT-3 is successful or not.

Okay. Okay, so just looking ahead to next year, you said publicly you'll actually start the Phase III in the first line early 2027, pending regulatory feedback. So, you know, anything you've kind of contextualized for investors,