Rigel Pharmaceuticals, Inc. (RIGL) Earnings Call Transcript & Summary

Okay. Great. Hopefully, everyone can hear me. This is Yigal Nochomovitz. I'm one of the biotech analysts at Citi. I'm pleased to have with me, my colleague, Joel Beatty who covers one of the companies on the panel. I cover Eiger and Rigel, and Joel covers Pliant. I am very pleased to have with me several leadership members of the panel. From Eiger, we have David Cory, President and CEO; from Pliant, we have Scott Turner, the Head of Biology; and from Rigel, we have Raul Rodriguez, who is also the President and CEO. Welcome, everyone, to the panel. Looking forward to a good discussion. Obviously, the focus here is on the COVID-19 therapeutics that all of you have embarked on. [Operator Instructions]

So with that, I guess, maybe just to get off for everyone, and we can kind of go around the panel. Everyone can answer. It would be interesting just to get your high-level perspectives. And how each of your COVID-19 programs originated? Be interested to know whether the hypothesis around the biology programs. It was something that originated internally or whether it was something where some of the outside academic experts noticed an interesting possibility of using one of your drugs for COVID-19. And they approached you in terms of starting the program. So maybe, Raul, you want to opine on that one?

Absolutely. Sure. So thank you for having us, Yigal. I appreciate the opportunity. So our product is fostamatinib, sold in the U.S. is TAVALISSE. And it's a sick kinase inhibitor, which is a very interesting signaling pathway in most immune cells. And it's interesting because it affects downstream signaling and in particular, areas where there's an overreaction of the immune system. So one of the things -- it's currently approved for the treatment of immune thrombocytopenia, which is an autoimmune disease where the body destroys its own platelets. And so using that, we thought that it might be useful in thinking about the utility of fostamatinib in preventing the immune system's overreaction, which is really what causes the most deadly, steadily greatest mortality in COVID conditions and causes destruction of lungs but also heart and kidney and other tissues that substantial inflammation. And because of that mechanism, we thought it might be useful. So to answer your question, a year ago or so, we published a paper showing animal models of ARDS, acute respiratory distress syndrome, where we show that our product was able to reduce the histology, the symptoms and the mortality in these animals with this condition that we're creating. And so we are very excited about using it broadly in pneumonias of all origins, viral, bacterial, other sources that lead to pneumonias and eventually to ARDS. There's a published paper we did last year. But independent of that, once COVID hit us this year, we really began focusing on what to do ourselves with our product clinically. Independent of ours, a group at Harvard and an MIT did a screen of about 3,700 approved compounds in the U.S., seeing if they could repurpose those for the purpose of addressing the most deadly symptoms of COVID, as I said. And so what they found is of those using a key biomarker, Mucin 1, which is a marker of lung construction, fostamatinib was found to have be the molecule that impacted that most greatly. And so independent of us, completely, they were able to identify fostamatinib as the molecule that's lends itself for repurposing for treating COVID lung destruction. And likewise, the group at the University of Amsterdam identified fostamatinib also in their studies as a molecule that could have real benefit. So it's kind of a mix of us, both internal interest, external interest preclinically. And now we're working on ISTs. We've put one in place with Imperial College in London, where they're studying our product in COVID pneumonia and the sequela. And we're also putting in place others in addition to considering our own study in this area.

All right. Very nice. Maybe, Scott, you want to say a few words on this?

Yes, absolutely. So PLN-74809 is our clinical candidate that's currently in trials for idiopathic pulmonary fibrosis, and it targets the activation of TGF beta by alpha V beta 6 and alpha V beta 1. And the alpha V beta 6 knockout mouse was generated over a decade ago and studied quite extensively by Dean Sheppard at UCSF as well as his collaborators who identified activity against various models of influenza and other inductions of ARDS with this mouse model. And we had looked at ARDS early on in the development of our alpha V beta 6 inhibitors. But the activity in IPF is much more established since there had been some clinical trials with an antibody previously. So when COVID came around some of -- Dean as well as some of the collaborators who've been working on alpha V beta 6 for the last decade, approached us and suggested that we begin working with them to further establish the activity of these small molecules in that setting. And there's been data in various mouse models with influenza as well as bacterial infections that the knockout mouse is protected and has prolonged survival. And there's also an enormous amount of data with the role of TGF beta in promoting the injury in ARDS. And so that's really what led us to look at this. We've since started studies in animal models as well as cell systems, looking at cellular injury and survival with small molecule inhibitors of alpha v beta 6 and alpha V beta 1. And we've also established that in lung tissue from COVID and infected patients. There's a dramatic upregulation of the alpha V beta 6 target, indicating that it's indeed involved in the lung injury pathology. And of course, more recently, as this pandemic has evolved, we're getting an increasing understanding of the role of lung fibrosis in the persistent disability from people who recover from COVID lung infections. And so there may be also a potential activity there.

Great. David, do you want to give a little background on the [ IDO ] program?

Sure. And thanks, Yigal and Joel, for allowing us to participate in this conference. Very much appreciate it. To your question, Yigal, pegylated interferon lambda is actually in the clinic in hepatitis delta virus infection. We've now completed 2 Phase II trials and have agreement with FDA for a single pivotal trial for pegylated interferon lambda in the treatment of hepatitis delta virus infection. With the COVID pandemic, we were not planning on initiating or running pegylated interferon lambda clinical trials. However, in February through March, we began to receive a lot of reach from academic institutions, from investigators and from investors alike, pointing to a lot of literature pre-COVID that suggested that interferons are the first line of innate immune defense, and specifically type 3 interferons or lambda interferon is a first line of innate immune defense in the epithelium of the respiratory tract. And so in this time frame, we started seeing independent peer-reviewed recommendations from people like Tom O'Brien at the NIH that was published in March, April time frame regarding weak induction of interferon expression by SARS-CoV-2, supporting clinical trials of interferon lambda to treat early COVID-19. And in that same time frame, we saw from the International Cytokine & Interferon Society COVID-19 and emerging viral infections, the case for interferon lambda. And again, all of these positions and independent recommendations were based on the fact that SARS-CoV-2 induces a very weak expression of interferons in infected cells. And absence of the interferon production, they believed, likely hampers the early innate immune response to SARS-CoV-2 infection is suggestive that potentially exogenous interferon to stimulate antiviral immunity might be successful for treating SARS-CoV-2 infection. And because interferon lambda, we believe, has less proinflammatory properties versus type 1 interferons, like alpha or beta interferon, there was a strong and growing groundswell, if you will, to start looking at interferon lambda in SARS-CoV-2. And so in the following weeks and months, in April and May, we engaged and collaborated with what are now 6 investigator-sponsored trials looking at pegylated interferon lambda in mild to moderate COVID-19. And we're very excited as these studies continue to screen and enroll, and we're looking forward to results.

All right. Awesome. So moving then to -- that was a great background. Moving then to some of the key design considerations for COVID-19 trial. I'd just like to get each of your thoughts on that. Obviously, each of you are pursuing different lines of therapy. For instance, with Eiger, you're looking at, as you mentioned, David, the mild to moderate Rigel-led testing TAVALISSE and the COVID-19 pneumonia, and plan is looking at a, I believe, severe and critical COVID-19 patients. So I'd just like to get a better understanding of what are the design considerations that go into COVID trial? And how do you decide which patient population you’re going to [ put in the more ] mild spectrum or the very severe hospitalized, if not intubated population?

Would you like me to go first, Yigal?

Go ahead, Raul.

Yes. Yes, so as you may know, the initial infection occurs, and there's substantial viral replication that occurs early on in the course of disease. The body generally begins to fight that off. Obviously, if there's a bad scene, that's where within a fear or an antiviral. But by the time many patients are hospitalized, it's found that the viral levels are actually low. That is as not quite substantial at this point. If the immune system's overactivation that is really causing substantial damage and impairment of the lung's function. And that's where we are focusing on hospitalized COVID patients who are really run the spectrum here, and there's an established ordinal scale of about 8 points from functional to, frankly, fairly close to death at the end. And really, the key thing is deciding where you're going to interfere here. Clearly, the -- I think at this point, the antivirals are not having much of an effect on these hospitalized patients. And if they're too far gone that is far in the scale, where there's such lung impairment already, it's unlikely something like an immune modulator like fostamatinib will have much of an impact. So it's really choosing those hospitalized patients that are in the hospital, purely they're already having some difficulty, that's why they're there. But maybe not the most severe one, so running in that spectrum. But in all frankness, don't know for sure exactly where is the best place. So it's, at this point, useful to have trials run internally or, in our case, for now in ISTs. In terms of looking at a broader spectrum as possible so you can ascertain as to exactly where your product is likely to have an impact. We'd like to study it from -- in hospitalized patients, not -- so those are not mild cases anymore. These are patients that are more severe, more significant, but probably not the patients that have such impairment and are on mechanical ventilation on high oxygen levels because I don't think that, that's a place where we likely will have all that utility. We, in fact, like to prevent that. So that's an important consideration to do that. Obviously, our product is an oral product, which is helpful because it gives you broad latitude to try that, to try it in a variety of different patients doesn't require even a doctor visit to take the product, if that would be useful. So effectively, patients could also continue on product even after they are released from the hospital.

Okay. Scott, you want to, both, put in your thoughts there?

Yes. Absolutely. I think Raul summarized the thinking very nicely when you're approaching ARDS and COVID and what patient population you need to treat is I think the most important consideration of when to intervene in the disease. Our product is also an oral medication that we think will reduce lung injury, which comes later in the infection. It's not necessarily having anti-infective response. Although there is some evidence of effects on type 1 interferons that are inhibited by TGF beta and alpha V beta 6. So as we begin to collect more clinical data that may also be a relevant place to pursue. But -- so like Raul said, we also went for looking at patients minimally on supplemental oxygen that were severe or critical by the conventional standards. Our trial is a Phase II safety trial. So we're really, right now, looking for just safety and tolerability in this very sick population, which is in contrast to IPF patients who are comparatively healthier. So that was really the biggest consideration for us.

And David, you've taken a bit of a different approach, as I understand, looking at more of the mild to moderate patients. So I'd love to hear the thinking and the strategy around that for lambda.

Yes. And as I mentioned upfront, we've been largely guided by recommendations from the investigator and scientific community. Much of what has been published was prior to COVID-19 pandemic. But in the last few months, there have been multiple peer-reviewed publications and recommendations, as I mentioned, that have come forward, suggesting that interferons, especially lambda interferon, tends to be modulated down in SARS-CoV-2 infection. And there's a strong belief that revving up VNA immune response in mild COVID infection, and that is confirmed mild COVID-19 infection with uncomplicated disease immediately after diagnosis is an ideal approach for pegylated interferon lambda. Lambda is delivered via subcutaneous injection once weekly. And in most of our clinical trials, the investigator-sponsored studies, one single injection is all that is given upon confirmation of SARS-CoV-2 and consent by the patient to participate in these trials. And so we're very excited, as I stated, to continue enrollment and get to data. Our hope and our belief based on the science is that revving up the innate immune response upon either exposure or defined SARS-CoV-2 infection can sort the virus from becoming serious before inflammatory responses take place and before the patient is hospitalized.

Okay. Great. So let's talk a little bit about some of the endpoints that you've all selected for the trials. David, I understand that you're looking at duration of viral shedding during symptoms of -- during symptoms and hospitalization. And I think for Raul, for your study, you're looking at a proportion of patients progressing from mild to severe COVID-19 disease. Scott, I'm not sure what your endpoint is, but I'd just love to get your thoughts as to why you've chosen the endpoints that you've selected and how that best fits with the therapeutic strategy for each of your drugs? So Raul you want to give that one a shot?

Sure. Sure. So as I mentioned earlier, there's a set ordinal scale from the World Health Organization that classifies these patients based on their clinical status in the hospital and includes things like intubation, oxygen, mechanical ventilation, various others. And this is a fairly standard scale. So it's useful to compare products across different mechanisms using the scale. And so patients are given such a scale at entry into the study and classified as such. And then we measure how they progress over time. Our product is being tested at 14 days of therapy and then followed on after that. Obviously, if patients want to continue on, they can. And so it's really measuring the progression within that scale, that's useful. And in our case, it's being compared to standard of care and another molecule of JAK inhibitor. And we think that that's the right way to doing it. There's numerous other measures that are being studied beyond that outward no scale in terms of days of hospitalization, days in an ICU, kind of utilization of hospital resources and things like that, I think, is also very telling and useful as people look at it. But that's the main one that we're using. In addition, obviously, is numerous safety measures as well.

Okay. And Scott?

Yes. So our primary and secondary objectives for this initial study in COVID patients are really evaluating safety and pharmacokinetics in this setting. Since we've done a lot of work in IPF as well as completed all our Phase I trials, but I think it's important to appreciate that patients with COVID have maybe perhaps a different safety risk profile. So those are the primary and secondary outcomes. We are also collecting data similar to what Raul described on sort of clinical outcomes, but it's a fairly small safety trial. And so it's not really powered to demonstrate efficacy at this point. We haven't released all the details of the study yet, so I'll be slightly concise in my summary. But suffice it to say, this will all come out on clinical trial -- clinicaltrials.gov in due time, and you can look at it then.

Okay. Perfect. And David, maybe a few words on why you selected the viral shedding -- the duration of viral shedding and duration of symptoms hospitalization?

Sure. Based on, again, the preponderance of the published literature and the data that we have on lambda, and I will point out that we are lucky in that pegylated interferon lambda has actually been in over 3,000 patients across 19 clinical trials. And so we have a great deal of experience, and regulators are very familiar with pegylated interferon lambda as the only type 3 interferon currently being developed. With that said, the point made earlier that SARS-CoV-2 is a very new infection and a new patient population. And so assessing safety as well as efficacy is critical. We are, as a primary endpoint in the majority of our 6 investigator sponsored trials, looking at duration of viral shedding and also RT-PCR negativity usually at day 7, but in some cases, as late as day 15. So again, because we're looking at patients who've been recently exposed and, in most cases, recently confirmed with SARS-CoV-2. Our goal is to drive patients to PCR negativity on the virus, importantly, because these patients can all be spreaders, reduce the duration of viral shedding. And then in secondary endpoints, we are using the ordinal scale, as was mentioned at a couple of our trial sites and looking at resolution of symptoms and duration of symptoms among other clinical end points, all of which we believe should help us better understand and hopefully prove concept that lambda can pose benefit in SARS-CoV-2 infection.

Okay. Great. And then for Raul and for David, since you guys have efficacy endpoints, can you talk a bit about what the sort of internal threshold is for what you guys would define as a successful trial? Or is this more of a exploratory signal finding, and it's really more difficult to kind of draw a line in the sand and say, go, no go? And then assuming the data do look promising, what would your thoughts be as far as a company-sponsored trial down the road?

Sure.

Raul?

So our study -- the study we have with Imperial College is size -- well, a sizable study. I think still a signal-seeking demonstration of some efficacy signals as well as a safety signal as critical. But it's not powered to be a definitive, say, for registration study. That would be a larger study that we would undertake ourselves. We're currently evaluating that. But I think it will give us very useful direction in terms of what is useful. And I think being able to hone in on what the key metrics is, is one of the key purposes of our IST strategy. The other simply is that ISTs are in place. They're able to kick off studies rather quickly, and it's useful to do so. But they have to be paired, I think, with a company study. And that's something that is still under evaluation by us. And -- but that should be -- if we do a study, it will be substantially larger to allow us to file in this area. And by necessity, it would probably have to be multi-centers. Whereas the Imperial College, for example, is conducted exclusively at Imperial College hospitals, of which there are 3, but that's still a fairly focused effort. We're also looking at potentially other ISTs to supplement this effort in addition to our own.

Okay. Good. David?

I'm happy to -- yes, happy to opine a bit on selection of primary and secondary endpoints. We collaborated with each and every one of the investigators that ultimately, we agreed to work with. And those institutions include Stanford, which is right across the street from us here in Palo Alto, Mass General, Toronto General, Soroka University in Israel, Mount Sinai in New York City and Johns Hopkins in Baltimore. And as I mentioned, in most cases, patients received a single subcutaneous injection of lambda upon enrollment in the trial. In some cases, patients, upon a second visit, receive a second dose of lambda divided by 1 week. And again, we felt that because we're treating mild to moderate COVID-19 that reducing viral shedding and driving patients to PCR negativity would be a good place to start. That being said, we are looking at secondary endpoints, which are clinical in nature. And we're learning in this COVID environment every -- literally every week news and new information. And so it's definitely evolving. So we're excited to be able to explore and analyze the data from these trials. Importantly, we also plan to go to FDA because we have 6 different investigator-sponsored trials. We plan to consult with a division of antivirals at FDA, and we're hopeful that we may have some data to share with the agency from one, if not multiple, of these clinical trial centers. We announced in April that Stanford actually was the first to enroll in these investigator-sponsored studies. And so again, we're excited to track and, when ready, analyze and announce data.

And just one point of clarification. The 6 ISTs, are they generally the same design and structure? Are there any notable differences amongst those 6?