Sanofi (SAN) Earnings Call Transcript & Summary

Good morning and good afternoon to everyone. I'm Felix Lauscher, with Sanofi Investor Relations. Welcome to today's Sanofi and neurology event, which coincides with the ACTRIMS forum 2022 in West Palm Beach, Florida. We are looking forward to spending the next hour with you to review and discuss recent data for tolebrutinib and to share more information about our broader neurology portfolio. Moving to Slide 3. I would like to remind you that information presented in this call contain forward-looking statements that involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. I refer you to our Form 20-F document on file with the SEC and also our Document d'Enregistrement Universel for a description of these risk factors. Now turning to Slide 4. We will start with a presentation followed by a Q&A session. Let me now turn the call over to Dietmar Berger, Global Head of Development and Chief Medical Officer at Sanofi. Dietmar?

Thank you, Felix. Moving to Slide 5. I will start with short opening remarks followed by my colleague, Tom Snow, Global Franchise Head for Neurology, who will share an overview of Sanofi's neurology strategy; Erik Wallström, Therapeutic Area Head, will then discuss our pipeline, focusing on several key programs, which have advanced quickly in the past year. We will then delve more deeply into new data for our investigational product, tolebrutinib. We're very pleased to have with us today, Dr. Tony Traboulsee, Professor and Research Chair of the MS Society of Canada at the University of British Columbia and Vancouver, who will review data from the 18-month extension of our Phase II study in multiple sclerosis. Finally, Tim Turner, our Global Project Head for tolebrutinib, will present important data around the pharmacology of the molecule. This will be followed by a Q&A session. Moving to Slide 6. Over the past 2 years, you've heard about the impressive strides Sanofi has made in strengthening our oncology portfolio and in building one of the most impressive immunology pipelines in the industry. What perhaps hasn't been as visible is the significant progress we've made in neurology with clinical candidates targeting several high unmet need neurological conditions. Our investigational brain-penetrant BTK inhibitor, tolebrutinib, leads the way, with 4 ongoing studies across the full spectrum of multiple sclerosis as well as a Phase III study in myasthenia gravis, which we initiated last year. Among our other investigational compounds, we also advanced SAR441344, our anti-CD40 ligand monoclonal antibody program into Phase II in relapsing MS. SAR445088, our anti-serine C1s monoclonal antibody also started its Phase II study in chronic inflammatory demyelinating polyneuropathy, or CIDP. CIDP is an acquired autoimmune disease of the peripheral nerves with significant disease burden and high unmet medical needs and 088 has received Orphan Drug designation from the FDA. Last but certainly not least, is SAR443820, the brain penetrant inhibitor of RIP Kinase 1, which we in-licensed from Denali. RIPK1 is implicated in necroptosis and we believe that 820 has strong potential in multiple neurodegenerative conditions. ALS, amyotrophic lateral sclerosis, will be the lead indication we pursue for which we've received Fast Track designation from the FDA, and we're advancing the molecule quickly into Phase II. Erik will provide more details about these exciting programs later. Along with advancing our internal pipeline, Sanofi has also been quite active on the business development and M&A front to further strengthen our neurology portfolio. We completed the acquisition of Principia in September 2020, which provides us full ownership of tolebrutinib as well as other interesting assets in the BTK inhibitor space. I mentioned our ongoing collaboration with Denali, which has given us the opportunity to bring a potential first-in-class RIPK1 forward in ALS and potentially other neurodegenerative diseases. Just recently, we also announced an exciting partnership with ABL Bio on a brain-penetrant bispecific antibody directly targeting alpha-synuclein, a key protein in the pathology of Parkinson's disease. We also continue to work closely with the broader neurology community. We're partnering with the International Progressive MS alliance to explore AI, artificial intelligence enabled MRI biomarkers to help discover new therapies faster. We're also working with the Parkinson's Foundation on PD GENEration, a research collaboration to advance the availability of genetic testing and counseling for people living with Parkinson's disease in the U.S. I will now turn the call over to Tom Snow, our Global Franchise Head for Neurology, who will share the overall strategy we have in neurology.

Thank you very much, Dietmar. Moving on to Slide 7. As you said, we made important progress over the past several years as we look to build on our global presence and expertise in MS to become global leaders in broader neurology. Turning to Slide 8. First of all, it's important to point out that we're not starting from scratch. Over the past decade, Sanofi has built a leading global MS franchise. Aubagio continues to be an important contributor to Sanofi and is currently the #1 selling to oral disease-modifying therapy in the U.S., thanks to its reliable combination of efficacy, safety and once-daily dosing. Lemtrada by offering long-term disease control in the absence of continuous dosing has significantly impacted thousands of patients worldwide, more than 24,000 of whom are currently controlled with no treatment. And of course, we hope to eventually offer even more to MS patients with tolebrutinib, our investigational brain-penetrant BTK inhibitor, which aims to treat the entire disease spectrum. We're on track to be the first-in-class and best-in-class BTKI in MS. One of the reasons we're excited about tolebrutinib is that, as you can see on the left, the MS market will remain highly attractive and will continue to shift towards higher efficacy therapies like anti-CD20s. Despite the entry of oral generics the overall market is expected to grow to around USD 25 billion by 2026. Roughly half of that is expected to come from the anti-CD20 such as OCREVUS. We believe this would set the market extremely well for tolebrutinib with its proposed MOA of modulating B cells plus inhibiting the microglia in the brain. In Phase II, tolebrutinib has shown an effect on GAD lesions in the range of anti-CD20s. And tolebrutinib meets its profile in Phase III then we believe it would capture a leading market position in the B-cell targeting class, plus benefit patients with progressive disease who have limited to no treatment options. Moving to Slide 9. Our ambition in neurology doesn't stop with tolebrutinib. We want to apply our expertise and understanding from MS to address a broader range of neurological conditions. Historically, neuro might have been viewed as a very risky area for companies to go into, but there are several reasons to believe that today, neurology is actually a very good place to be. Over the next 5 years, as you can see on the left, neurology indications are projected to outpace most other therapeutic areas in terms of size, growth and share of the overall market. And there are several reasons why. Many neurological conditions strike early in life and have a very high burden of disease. For instance, on average, people with ALS survived just 2 to 5 years after their diagnosis and Parkinson's disease costs society an estimated $23 billion in the U.S. alone. The good news is that the science is advancing rapidly. Today, we have a better understanding of the mechanisms driving neurodegeneration. The understanding of human genetics and biology has also advanced better facilitating forward and back translation. New enabling technologies are also making drug discovery and development more efficient. Advances in human brain imaging, including new PET tracers and AI-based analytics, we're making it easier to select patients and to measure treatment response. New digital clinical tools, employing wearables and fluid biomarkers like neurofilament light chain are making it easier to measure disease progression. Recognizing all of the above, stakeholders are highly engaged. Governments and payers understand the high individual and societal burden of neurological diseases. Regulators are enabling expedited registration and becoming more willing to consider surrogate endpoints for these serious and life-threatening neurological conditions. Turning to Slide 10. With that vision of leadership in broader neurology in mind, our strategy focuses on 3 core pillars where we believe Sanofi can win. Neuroinflammation includes diseases like MS, where we obviously already have a strong presence in promising pipeline as well as adjacent conditions such as myasthenia gravis and CIDP. Neurodegeneration includes devastating diseases like ALS as well as important diseases which share key pathologies. These include synucleinopathies such as Parkinson's disease and multiple system atrophy, which are characterized by alpha-synuclein aggregation. And tauopathies, such as Alzheimer's and progressive supranuclear palsy, where the aggregation of tau proteins is implicated in disease progression. A third pillar is genetic disorders where Sanofi's expertise in rare diseases and a dedicated genetic medicines unit put us in a strong position to help change the practice of medicine in those conditions. I'll now hand it over to Erik Wallström, our Head of Development for Neurology, who will cover our pipeline and dive more deeply into a few specific programs. Erik?

Thanks, Tom. I'm looking at the pipeline on Slide 12, I'm sure that you are eager to hear about tolebrutinib, but I want to quickly run through 3 interesting development projects before that. So why are they interesting? Well, they are all first-in-class in development for their respective mode of action, and they all target significant unmet needs. And turning to Slide 13. The first project is the bi-specific anti-alpha-synuclein antibody from the license agreement with ABL Bio that was announced last month. And we are excited about this project, both based on the brain shuttle in this case, the insulin-like growth factor I receptor and the specificity for pathological aggregates of alpha-synuclein. Both the brain shuttle and the specificity are important for their ability of the antibody to reach to central nervous system and avoid inbound too much to alpha-synuclein monomers. And preclinical experiment indicates that this bi-specific antibody has the right properties to inhibit the spread of alpha-synuclein. And that is what you see in the figure. And stopping the spread of alpha-synuclein results in protection of the pulmonary neurons and prevented a loss of motor function in PD mouse models. And as far as we are aware, this is the first anti-alpha-synuclein antibody with a brain shuttle in development. And Parkinson's disease represents a major unmet need. It is the second most common neurodegenerative disease, and there is no treatment today that can delay progression. The next milestone for this project will be the generation of human Phase I data next year. And turning to Slide 14, the second project is the RIPK1 inhibitor project, the central RIPK1 inhibitor called DNL788 or SAR-820. And it is the first in development brain-penetrant with K1 inhibitor lines, a key regulator of inflammatory cell base and microglia mediated neuro inflammation. And programmed inflammatory cell deaths or necroptosis is a relatively newly described pathway, and it's different from apoptosis and necrosis. And this pathway is activating several of neurodegenerative immunoinflammatory conditions, including ALS, MS and Alzheimer. And as depicted in the figure, several cell types are involved, including microglia in the RIPK1-dependent necroptosis pathways. And the next slide shows 3 different pieces of evidence that link ALS specifically to RIPK1. And as you know, ALS has a very high unmet need, it's one of fastest progressing neurodegenerative diseases and it typically leads to death within 2 to 5 years. The left panel displays genes that have been associated with ALS and the year of their discovery and their rare direct angles indicate genes that are linked to the RIPK1 pathway. The middle shows an example of a SOD mouse model of ALS treated with the RIPK1 inhibitor. And that is the blue line on the right, showing slower disease progression than in controlled mice and that is the black line on the left controls. The right panel shows some analysis of spinal cord tissue from ALS patients, and RIPK1 is up-regulated in the tissue as measured by Western blot. And the combined genetic model and tissue data has led us to test SAR-820 in Phase II in an ALS trial. And on Slide 16, we have that ALS trial. But before the trial came alive and it's just about to start. We aim to have the first patient in the trial next month. And I would like to highlight the relatively robust sample size, 261 people with ALS. And that is important since it may be possible to approach regulators already at the Phase II if the data is robust enough. And longer term data, including mortality is also important. And therefore, we have an extension trial. And the next data point for that project is Phase II data that we expect in the second half of 2022. And let's now turn to the third program. That is the CD40L MS program that we have highlighted on Slide 17. This is the third development program that is first in development for the specific mode of action and indication. And the CD40 ligand pathway is important for T and B cell interactions, and results from B cell depleting therapies in MS indicate that T and B cell interactions are central for disease propagation. But in contrast to B cell depletion, this is a nondepleting antibody. And as the figure indicates there may also be innate immune effect. And together with the lack of B cell depletion, the potential for inmate effects provides differentiation for this anti-CD40 ligand approach in MS. And on Slide 18, we have highlighted 2 pieces of evidence that link CD40 ligand to MS and the left figure presents the conclusion of an analysis of quantitative trait locus data, expression and methylation data and genome wide association studies in people with MS, and they were matched with the list of druggable genes that are not just targeted by available MS therapies. And 3 genes came out on top, CD40, MERTK and PARP1. And this analysis was performed by an academical independent of Sanofi. On the right side of this slide, some of our own work is presented, and this is for a concern was from people with MS before they started treatment and entered trial. We measured mRNA expression in peripheral blood mononuclear cell samples from 260 patients. We measured mRNA with RNA seq and we have ranked the patients according to the level of CD40 ligand pathway activation. And this was quantified by something we call the CD40 ligand activation score. The score was developed based on re-characterization of cells with or without anti-CD40 ligand antibody added. And based on this, we have atticized that the CD40 ligand activation score before treatment may be linked to response to anti-CD40 ligand treatment with the monoclonal antibody SAR-344. And the next slide show how we test this. And turning to Slide 19. We use an MS trial design with 2 doses of SAR-344 and new gadolinium-enhancing MRI lesions as primary endpoint and treatment response will be into the CD40L activation score. In addition, we also activate -- we also -- sorry, we also explored CD40 ligand activation in a separate study in samples from patients with progressive MS. And if we succeed to link the response to the biomarker, this book represent a new way of treating MS more rationally. Currently, MS patients are started on treatment and follow-up with MRI and relapse monitoring. If they have enough MRI activity or relapses, then treatment is typically switched. And that goes on until hopefully, disease activity stabilizes. And we believe that there is a significant unmet need in finding a more rational biomarker-based approach to patient selection for a specific treatment. The next data point for the SAR-344 program in MS is the Phase II data that is expected in the second half of this year. And this concludes the quick overview of 3 different first-in-class development projects, attempting of the significant unmet needs in their respective indication and mode of action. I will now hand over to Professor Traboulsee, who will update us on the 18-month Phase II extension data, also a little bit on his personal experience from treating with MS with tolebrutinib.

Great. Thanks, Erik, and hello, everyone. It's a pleasure to be here. I'm Tony Traboulsee. I'm a practicing neurologist and a researcher at the University of British Columbia and Canada. I've also been involved in clinical trials for over 20 years now with multiple different studies as a principal investigator, Steering Committee member, did a quarantine board member as well as an imaging expert. And I have personal experience with this -- with tolebrutinib as the principal investigator at our site and also involve some of the Steering Committee member roles. And so I'm one of the co-authors of this poster that's long title, looking essentially at the 18-month results of the long-term extension study of tolebrutinib. And if we go to Slide 21, this slide has so much invaluable information about this tolebrutinib. I just want to explain it a little bit. So you have 4 different lines or 4 different colors, that represents the 4 different doses that were studied in the blinded Phase II study, which is shown in the shaded area on the left side of the graph. And this shows you the MRI disease activity called Gd-enhancing lesions, which is our surrogate for relapses for inflammation and is commonly used to determine the dose that's best for going into Phase III. And so you can see, again, the Phase II results where the yellow line being the 60-milligram dose had the greatest suppression of enhancing lesions, 85% suppression, which is amazing. And then what happens after that, we go into extension. Initially, patients are kept on the original dose of drug. But then once we determine 60 milligrams was the best dose, they all switched over and look how those lines come together by week 48, everybody is on 60 milligrams and a beautiful treatment response on the MRI activity. And so I think that's one of the key slides of this data. In addition, in the extension study, we also looked at some of the other MRI outcomes, including T2 lesion volume and that you can see on the poster, and that remained quite low on the 60-milligram arm. And another biomarker that's more exploratory of MRI marker called slowly evolving lesions. And one of the reasons we're interested in that is it could be a future biomarker for progression for a more efficient way to determine if we're impacting our progression, still being explored, of course. But it had the numerically lowest volume of these chronic type active lesions in patients who started on 60 milligrams from the start. So this data really makes me enthusiastic. And if we go to the next slide, this is additional supportive data of efficacy. This is the looking at clinical outcomes, which is the annualized relapse rate, and patients on 60 milligrams was quite low at 0.17 and about 85% of patients were free of relapses. It's difficult to compare across trials. We always say that. But from my personal experience, I would say this is in line with the strong effect on focal inflammation that we've seen in other core Phase II trials. Turning to Slide 23. Now the -- so -- for me, I'm seeing a lovely efficacy picture. The other exciting thing for me was the safety profile. This was, for me, a new type of drug to work with. I was so impressed with how well my patients did in terms of tolerability. So I think that's actually a good name for the drug and as well as the lack of infections. So -- and during the study, I guess, as expected, during the extension, some patients did get COVID-19, which was going through our world. There were 20 confirmed COVID-19 cases. They were either mild for 11 patients or moderate for 9. All patients had good recovery and remained in the study. And tolebrutinib treatment continued uninterrupted in the majority of patients and only temporarily interrupted in 4 patients, and there's more details on another poster at this ACTRIMS meeting. But again, the data is not suggesting any increased risk for severe COVID-19 or other infections. And also importantly, we're not seeing any suggestion that there's a dose effect for treatment emergent adverse events or serious adverse events in the long-term study. And so there's no emergence of new safety signals for participants who went from the lower dose to the 60-milligram dose throughout the extension study. So the safety and tolerability results are really consistent with the experience that my patients have had in the study and all of my patients have continued on this medication into the phase or extension phase. It's going quite well. We could have the next slide. So I guess my very brief overview of the -- what I think are the highlights of the efficacy and safety. I just want to conclude that how patients enrolled in long-term extension study have remained on study by the 18-month cutoff, and safety data continues to show a favorable tolerability without the emergence of new safety signals. I really want to emphasize, no one dropped out of the study because of any side effects from the medication. That's remarkable in the stain age of clinical trials. So I think that's really -- again, from my personal experience, really remarkable. New MRI Gd-enhancing lesion counts remained low for the tolebrutinib 60-milligram arm and became reduced low dose arms once they switched over to the 60-milligram dose. Again, that reinforces the dose effect in that 60 milligrams a good target dose. The annualized relapse rate in patients was low and 85% of patients were free of relapses, which has been quite good. The disability, EDSS scores remained stable throughout the study as well, and 18 months is a good time frame for that. So given this promising data, I'm really looking forward to seeing the clinical efficacy and safety from the ongoing Phase III trials. Truly looking forward to that. I think it's going to be exciting to see -- and with that, I'm really pleased to hand over to Tim Turner, who will present some very interesting CNS pharmacology data that supports the hypothesis that tolebrutinib may have more value beyond the peripherally driven focal inflammation, Tim?

Thank you, Tony. Moving to Slide 25, as Dr. Traboulsee just explained, tolebrutinib has promising data on reducing focal inflammation in our Phase II trial. But the remaining unmet need is to reduce disability accumulation that precedes in the absence of relapses. And our working hypothesis is that neuro inflammation compartmentalize behind the blood-brain barrier is driving much of this disease activity. And in order to slow these processes, we need to target inflammation within CNS. So tolebrutinib was specifically designed and selected with the aim to penetrate into the CNS to modulate neuro inflammation. And with this in mind, we set out to compare the pharmacological properties of the 3 investigational BTK inhibitors with respect to potential modulate BTK signaling inside the brain. We assess the relative potency in biochemical assays and in vitro cellular assays, along with in vivo pharmacokinetic studies in nonhuman primates in an effort to learn whether these investigational candidates have the potential to engage BTK in the brain. So turning to Slide 26. In these biochemical experience, we assess the potency of 3 BTK inhibitors to inhibit kinase activity using measurements. And the rank order of potency showed tolebrutinib inhibited BTK with subnanomolar potency. While fenebrutinib was 9-fold less potent and evobrutinib was about 50-fold less potent. And further in a separate series of experiments, we measure the rate at which these candidates block the kinase. And again, tolebrutinib reacted rapidly approximately 64x faster than evobrutinib and 1,780x faster than fenebrutinib. And the speed of action here is especially important for blocking BTK at the low concentrations seen in the CSF. So now moving to Slide 27. This biochemical approach was translated to a cell biology context. And here, we measure the ability of the 3 inhibitors to block activation of Ramos cells, which is an mortalized line of human B cells. Here, the apparent potency of all 3 inhibitors were shifted slightly to the right but the rank order of potency was maintained. Now on Slide 28, pharmacokinetic data from nonhuman primate allowed us to determine the intrinsic ability of these candidates to penetrate the CSF. This parameter labeled Kp, uu, CSF is a partition coefficient, that's determined from the ratio of unbound drug in the plasma to that in the CSF. So the higher the ratio, the more brain penetrant we'd say a drug is. And as you can see, the partition coefficient is 0.4 for tolebrutinib, which is about 3x higher than that for the other 2 candidates. And this is empirical confirmation that the medicinal chemists have delivered a potent inhibitor that's relatively brain penetrant, the 2 key features of an inhibitor with activity inside the brain. So conclusion on Slide 29. Tolebrutinib was more potent in terms of BTK inhibition than evobrutinib or fenebrutinib and a relative potency to the B cell activation was consistent with those biochemical results. Tolebrutinib demonstrated intrinsic CNS penetrants in those nonhuman primates based on unbound partition coefficient approximately threefold higher than the evobrutinib and fenebrutinib. And then as sort of summarize the figure on the left, it's this combination of high potency, high reaction rates and CNS exposure that suggests tolebrutinib has the ability to inhibit BTK signaling in the pathways in the CSF by greater than 90%, conferring pharmacological activity inside the brain. And with that, I'd like to turn it back to Dietmar for conclusions.

Thank you, Tim, and thank you to all of our presenters today. Moving on to -- on Slide 30. As you've seen, we are optimistic about neurology. We feel the science and the environment have advanced rapidly to support innovation, and we are excited about our neuro pipeline, which we're bringing forward in some high unmet need conditions. And we believe that in tolebrutinib, we have the best profile of the BTK inhibitors currently in development for MS. With that, handing over to Felix.

Everyone here in the room, we will now start the Q&A session. [Operator Instructions] And with that, I think we have already the first question in the line, and I would ask Richard Vosser at JPMorgan for his first question. Richard?

Thanks, Felix. Thanks very much. Two questions, please. Just looking, first of all, on tolebrutinib in terms of your recruitment. Could you give us an update on the recruitment of tolebrutinib? It looks as though clinical trials, that's not finished. When I look at other BTKs, there's one that finished recruitment in October 2021. So just wanted some understanding of where you are in recruitment and whether that would potentially put you, I mean, a very slightly splitting hairs behind than other BTK? And then the second question is on the brain penetrant. I think a couple of years ago or maybe a year ago, when we first had a call about tolebrutinib, there was some discussion about the relative importance of brain penetrants in RMS versus PPMS. And I just wanted to just touch on, as you've developed the product and looked at it more, is that more important in RMS or more for PPMS to try and be superior to OCREVUS. So and really maybe what sort of incremental benefit do you think that brings over, say, on OCREVUS?

Dietmar?

Yes. Thank you for the questions. Let me start on those and then we can also ask Erik and Tim to comment, obviously. Now with regards to the recruitment, we've not communicated the exact numbers of recruitment, but let me just reassure you that we see good recruitment on the studies. We see a strong interest from investigators and the clinical and scientific community, if anything, Tony has transported some of that during our call here. We are still with the time lines that we have communicated before, which is the RMS studies will readout at the end of 2023 and then we'll file immediately basically then in 2024. For the SPMS and PPMS studies, we're expecting readout end of 2024 and then filing in the beginning of 2025. So we do not see any issues there. On the contrary, we see really good engagement from the scientific and investigator community. Then with regards to the different subtypes of MS, it's really important to realize that we have these 4 Phase III studies. We believe in the broad opportunity for tolebrutinib across the spectrum of disease. And really, that's why we've structured the program as we have structured it. And we think it's important because the unmet medical need is there really across the spectrum of disease and across the spectrum of disability development. And maybe I can call on Erik and Tom really to speak more about that positioning. Erik, do you want to start?

Yes. Yes. I mean, the simple answer, I think, we say, well, it's a straight answer I think important for RMS or PMS that wouldn't be say, yes, it's more important for rest of MS. But that's not the whole truth. Because there is also progression going on and probably very early in relapsing remitting MS. And if you want to have a good long-term outcome in MS, it's important to try to touch upon these mechanisms already before the patient goes into progressive disease. So I think the more complex and more correct answer is actually, yes, it's important for both types of MS. And we think that the pharmacological properties we have discussed today, the compound has good potential to target mechanisms driving progression within the central nervous system, both in patients with progressive MS and with CNS.

Then let's move on. Next question is from Graham Parry at Bank of America. Graham, please.

So firstly, just if you give us more on the biologic rationale for tolebrutinib in MG, any clinical data you've got sporting trial start and thinking ahead where you think the treatment paradigm that could be positioned just given oral administration. Secondly, on the CD40 ligand in the past, you've seen a number of these sort of failed to make it through development thrombotic events. I think it was one of the issues there. I just wonder what gives you confidence in this one and any sort of safety tolerability data you can share there? And then actually just a cheeky one for Dietmar, we noticed the MR3 primary completion data probably the 15th is now showing is actual. So we just wondered if that data -- if that study is now in data lock?

So let me just get the amcenestrant question out of the way, which is really -- yes, we're sticking to our current time lines. There's not been any change to those time lines. Erik, handing over to you with regards to tolebrutinib, myasthenia gravis and also the CD40 ligand. And I think both of those are molecules that we're really -- both of those are indications that we're really excited about.

Yes. Well, with myasthenia, it is a B cell-driven disease, but it's also important with the interaction between B and T cells. So we do think that the rationale for a BTK inhibitor in that indication is quite strong. But of course, we will need clinical data to actually confirm our hypothesis. When it comes to where it could fit in therapy, I mean most of the or pretty much all of the escalation therapies and the sort of pipeline in myasthenia are monoclonal antibodies. So it could fit very nicely to have an oral once daily small molecule to have perhaps ideally in the segment of patients before going to monoclonal antibodies. So we think there is a significant amount of patients that could benefit from having such an oral treatment in myasthenia. And then when it comes to CD40L, definitely, you're absolutely right. Thrombotic events were associated with the first generation of these molecules, but we do believe that, that has been engineered out in the second-generation molecules. And we have not seen signs either in our preclinical models or so far in the clinic of any type of thrombotic events or something like that.

Thank you, Erik. The next question goes to Laura Sutcliffe at UBS. Please, Laura.

Hello, I think you can hear me. First question is just on the trial program for tolebrutinib. It looks some kind of trials like you've got almost 40 trial sites in Russia and Ukraine in the Phase III program for obvious reasons those patients might be in a position where they have to prioritize their safety and potentially not be making visits. How robust is your trial program to its geographical distribution? Apologies for the background noise. And then just a second question also on tolebrutinib. Obviously, your dropout rate was quite low. But were there any specific reasons for the 6% of patients who did not make it to the end of the 18 months on therapy?

Thank you, Laura, for those questions. I mean obviously, we're following the Russia and Ukraine situation very closely. Both of these countries are countries where we and other companies across the industry are conducting clinical trials. And then obviously, our first concern here is for the patients, for the investigators, also for our staff, right, that we have in those countries. And also for that reason, we're following the situation very closely. It's very hard to comment on where the situation is going. But I want to say at this point in time, we are obviously conducting our studies on a global level. That also includes the tolebrutinib studies. These are global studies involving sites in the U.S., in Europe, in Asia, in Latin America. So this is a really global distribution of sites. We have the information, obviously, how many patients do we have in individual countries. And we have the ability to react to that quickly and mitigate the impact. I will leave it at that point, but I'm really quite confident that the impact can be mitigated. But right now, obviously, our main concern is for the patients in those countries and especially in the Ukraine. And for the question on dropouts and the dropout number was very small. I'm going to hand over to Tim.

Yes. Thanks, Dietmar. So we did have -- we started out with 124 in the extension, and we went down to 118, several of those patients dropped out early in the course of the long-term extension that we're on what we call subtherapeutic doses. So one patient in particular in a 5-milligram arm suffered severe relapse, and that patient was appropriately, I think, switched on to another therapy. We lost 2 participants because they moved. So they moved out of the country, and we weren't able to follow them. And aside from that, 6 out of 124 dropouts, so a very modest attrition in that trial.

Our next question goes to Jo Walton at Credit Suisse, please. Jo, can you ask?

Yes, I can. Can you hear me now?

Yes, we can.

Perfect. I've got a couple of questions. One for the doctor first, please. By the time tolebrutinib is available, Gilenya and Aubagio will both be generic. How much better does tolebrutinib have to be the drug of choice to start patients off or do you think that it's going to be so compelling that those generics would not be used? My second question is a little bit -- well, sort of tied to tolebrutinib. You use the 60-milligram dose in the Phase II, given how well tolerated that was, would there be any benefit in going in an even higher dose? And my third question is a more sort of philosophical one. And it's about the other indications that you're going for. I can understand that you've got some biomarkers and it's fairly clear how you choose patients, particularly in multiple sclerosis. But some of the other areas such as CIDP, do you think you're making progress there in biomarkers that this is going to become tractable. And the reason that I ask is other companies have given up there with products that seem to work, but they can't work out an appropriate way to target the right patients. So it's broader than MS, many facts.

Right. Thank you Jo for these questions, right? The first one is really a clinical one. Obviously, we don't have any data on the direct comparison, so we don't have head-to-head studies or anything. But -- and obviously, we think that from a disability perspective, from a perspective of how you dose, from perspective of the large benefit that we see and the strong tolerability that tolebrutinib has clear advantages. But you want to hear from Tony. So Tony, your comments.

Thank you. And it's a great question. It's a crowded market, right? There's a lot of different medications out there. And so we're the advantageous ICR. It looks like a safer profile. We're not seeing severe immunosuppression like you can see with fingolimod-type drugs where you get a lot of decrease in lymphocytes that increases the risk of infections, such as COVID. Where also the tolerability and safety margin is so much easier than a drug such as fingolimod. We don't have to do pre-cardiac monitoring for a day before they start the medication. So it will give us access to a broader group of patients, especially if this is effective for older patients with progression. They often have cardiac issues and so a medication like fingolimod, which doesn't work in that group anyways, becomes unattractive. And then we don't have issues with what's called -- we're not seeing any issues with what's called rebound, which can happen when you stop fingolimod, you can have this really unfortunate explosion of inflammatory activity, and that makes it very difficult to -- sorry, hard on the patient. And so we don't -- I'm not seeing that at all with this class of drug. And I guess, finally, if we do need to switch to a different class of drug, we're not having lymphocyte suppression. It's going to be much easier to switch to a different drug if we had to switch off a BTK inhibitor. So I think that package to me as a clinician is much cleaner and better for my patients.

Yes. And so thanks, Tony. And that's also what we're hearing from other people from the investor and physician community. And it really speaks to the fact that despite the current medications that are available, there is still ongoing unmet medical need in multiple sclerosis. And you see that especially from a disability perspective, and we believe with a brain penetrant BTK inhibitor that can target microglia in the brain that can have a different effect there. We really hope we can address some of that unmet medical needs. So we think there's a very clear differentiation here. Now with regards to the dosing question, the 60-milligram dose has been highly effective, right, it has been highly effective and has also been clearly tolerable in the data that we've seen so far. So we believe we have a best-in-class profile here from a benefit risk perspective. But let me also ask Tim for additional comments as we are exploring that.

Yes. Thanks, Dietmar. So there is an opportunity, we think, to push the dose at some point. However, given the existing data, there's no evidence to suggest that we would improve efficacy. And there is a concern about when you increase exposure that you can increase adverse event profile. So where we stand right now with a very effective compound with an extremely favorable safety profile, there just isn't any incentive right now to try higher doses. Now the one caveat to that is that we don't know what tolebrutinib has the capacity to do inside the brain. It's very difficult to measure impact on processes behind the blood brain barrier in the brain. We don't have good biomarkers. We have a collaboration with the NIH with a 7-tesla imaging trial, where we're attempting to explore that. But for the time being, we're convinced that 60 milligrams will deliver a highly effective product that's very safe for use by the patients.

Yes. And if you look at the data that we're presenting here also at ACTRIMS, you can see more information on the biological rationale on the IC90 on the relevant concentration in the brain. And you also see more information from the long-term study. And I think all those data really support the profile that we see for tolebrutinib. Finally, the more philosophical question, it's really why we are thinking that neurology has so much potential and so much opportunity. Our understanding of the underlying disease mechanisms, our understanding of biomarkers, our understanding of imaging also is becoming deeper and deeper and similar to other therapeutic areas with that deeper scientific understanding that opens up additional possibilities for targeting those disease mechanisms. Erik, do you want to comment further also on CIDP?

Yes, absolutely. I mean, first, yes, it's correct. I mean we don't have the equivalent of MRI as we have for MS for CIDP. So that's correct. The approach we have taken though is to actually some group of patients on clinical runs. So we have separately segment the patients into therapy refractory patients, naive patients and standard of care treatment patients, and we look at them in separate cohorts. And specifically for our approach, which is the C1s inhibitor, there are pathway biomarkers, there are complement-based biomarkers that we are investigating in the study. So that's our approach we're taking to CIDP.

We move on to Peter Welford at Jefferies, please.

So 2 questions I would ask you. Firstly, just with regards to the patients who are on the long-term extension or I guess maybe any of the other studies, I wonder whether you have patients who have been vaccinated while on drug. And if you can comment a little bit about whether you've studied at all the vaccination of the antibodies and whether or not there's any impact at all on vaccination rates and whether any additional studies could be done to show that while studies are ongoing? And then secondly, just wondering whether you've done any comparison also either internally or otherwise also comparing to Remibrutinib and orelabrutinib to other obviously BTK inhibitors in development and whether you've got any comment versus no with regards to the CNS or otherwise potency on time?

Very good. Thank you, Peter. The question on the long-term safety and COVID, we have some information, as you've seen from the -- also from the presentation here at ACTRIMS. Tim, do you want to speak further about that?

I'm sorry, Dietmar. What was the question?

The question was whether we have any further information with regards to the COVID patients in the long term -- with regards to COVID in the long term safety study which might impact on vaccination, et cetera?

Exactly. It's particularly the vaccination because obviously, there's been a lot of discussion, I think, for CD20s and perhaps Dr. Traboulsee commented on this. Just in regards to C20 antibodies and vaccination and whether or not tolebrutinib, you've vaccinated people in the long-term extension and that you've done any studies showing their responses.

We've not collected those data in the extension. I mean, we try to record vaccination or adverse events, but it's not -- it wasn't prespecified. It wasn't part of our investigational plan to begin with. I believe there are pretty good data on BTK in the oncology setting in terms of COVID vaccine response, and I think that's been fairly positive. It certainly hasn't been the issue that we've seen with the anti-CD20s and the failure tomato humoral response.

And maybe one more general comment with regards to this, right? If you use an anti-CD20, you have a pretty lasting effect on your B cell population that's pretty much a B cell depleting effect versus a BTK inhibitor that has -- allows much more modulation from a timing perspective, right? It's a shorter-lived impact. And that has, in our view, or can have advantages also from a safety perspective. And obviously, when we talk about vaccination, it's a bit more complex because you need B cell help, you need a T cell impact, obviously, you need antibodies to be generated. So it's a more complex immunological phenomenon, but the fact that you do allow for the impact on B cells to be much more modulated than with an anti-CD20 should theoretically clearly have advantages. We don't have data to support that at this point, as Tim said. And then with regards to your question on Remibrutinib or orelabrutinib, the data we're presenting here at ACTRIMS is really data comparing to evobrutinib and fenebrutinib. So at this point in time, we don't have data on the other BTK inhibitors.

Yes. Just to point out that, as you know, it's become such a crowded space that we can't possibly work on all of our competitor products. So we focus our attention on those 3 candidates that are in Phase III.

Having said that, I believe in the poster, there are some theoretical predictions on brain penetration for a couple of other BTK inhibitors.

Certainly, Remibrutinib looks to be fairly low down that list, but of course, we don't have any data. I think orelabrutinib looks like it could be brain penetrant. However, we don't know much about its potency. And secondly, orelabrutinib is a fair distance behind us. So right now, we're focused on our Phase III activities.

Peter Verdult at Citi, please.

Firstly for Erik or Tom, I know evobrutinib trials recruited or finished recruiting in October, but I understand their trial design is slightly different. I think they are observing each patient over 2 years. So Q4 next year is definitely when they'll have their data. I just wondered, I think yours is slightly different, more sort of event related. Just wondered of any of the 4 trials that you're doing could we see a readout sooner than end of next year? And then my second question is to Dr. Traboulsee. Every sponsor that we hear talking about BTK and MS claims, their blood brain penetrant, they've got great ARR, SLE biomarker data, they're all best and first-in-class. I mean we've heard the Sanofi pitch today. Just wondered whether how you handicap the Phase III assets in terms of runners and riders and whether the twice daily dosing for evobrutinib counts against that product?

All right. Let's start with Tony, Erik, any information on the study. So let's keep the answers a little shorter because we only have a few minutes, and there are several people who still want to ask questions.

The quick answer to that is unlikely that we have data earlier and then I hand over to Tony.

Thanks, Peter. Great question. And so only 2 of the 3 products have Phase II data. And the Phase II data is critical to getting your right dose. And then when I look at that from the one parameter, which is enhancing lesion, which is our classic Phase II outcome, the best data, I think, is still with tolebrutinib. So I think Sanofi got the right dose. And I think evobrutinib could actually be pushed more to keep the right dose. Their dropout rate was higher. Their discontinued rate was higher. I think part of that was preplanned when they started elevation in liver enzymes, they didn't tolerate that, and so they stopped the drug. And also, I think this once-a-day dosing is going to be the way to go anyways, but that's probably more of a -- but I'm basing my crystal ball, so to speak, on the MRI outcomes, which I think is a very valuable outcome. So when you're comparing these Phase II studies, that's what I would recommend you to look at is that -- and if I could quickly jump to Pete's question about why there is a slow response in switching over to 60, that's artificial. In fact, the drug works really quickly, the 60 milligrams decreases inflammatory activity really quickly. Why it looks slower in that crossover phase is because patients crossed over at different time points, and there is a longer time period between the MRIs and in the blinded Phase II. So it looks like a delay, but it's not going to be a delay. It's going to be just as fast as a response.

Let's continue with Luisa Hector at Berenberg. Luisa maybe one question only since we have a few minutes left only.

Thank you. So my question is for Dr. Traboulsee. Based on the data you have today, in which patients would you first want to use tolebrutinib? And is there a rationale to be combining the BTK inhibitors, assuming they're successful, any potential for a combination with other agents in MS?

Well, it is a great question. This -- I see this as a very -- assuming that the Phase II data is translated to excellent Phase III data, I would say this is a very broad from first line to second line treatment, so treatment-naive patients. We also looked at the patient at a very highly active disease. And so those are higher risk patients. They had a beautiful response, similar magnitude of impact with the treatment. So this is going to be -- I'm predicting it's going to be what's considered a high-efficacy oral therapy. And so you're going to have a wide range. Now what we're hoping is it's going to have a big impact or a significant impact on progression, and that's a realistic expectation, but it has to be proven. If that's the case and going back to some of the earlier discussion, progression is a process that's happening under the surface from day 1 of diagnosis. And therefore, this really puts some interest in starting with a drug that has dual -- potential dual mechanism of action, both anti-inflammatory and anti-progressive as your starting point. But that's why I'm really excited about this broad program that Sanofi has not just with relapsing but progressive disease. Are we going to hit those targets. It's very exciting times in the field.

And let me just quickly -- Luisa, let me just quickly take the question on combinations. Obviously, if you combine different BTK inhibitors, you're doubling down on one mechanism. And we already think that if you look at the IC90s that you get with tolebrutinib, you get pretty much maximal inhibition. So that combination, we would not prioritize that. But we have different mechanisms actually that we're studying in MS, as you've heard, for example, the CD40 ligand molecule. So we believe looking at further progress if you want to combine, for example, in progressive MS, you would rather look at those different mechanisms to be combined.

Maybe we have only room for 1 last question from Wimal. Wimal at Bernstein.

So we had a lot of tolebrutinib questions. So I'll go a little bit less, I'm going to ask about the brain shuttle instead if that's okay. So clearly, a very interesting technology. But can I just ask, you're targeting the incident like growth factor 1 receptor. One of your peers is also developing a brain shuttle targeting the transferrin receptor. So just how should we think about the 2 differences between -- the differences between these 2 approaches and their ability to really trigger penetration of the brain?

All right. Erik, that one goes to you.

That's a great question. It's actually quite difficult to compare because there is relatively limited data and there's no data comparing against each other. We do think that both work. And actually, we do have in-house technology also looking at the transferrin receptor. So we're actually in both areas.

Yes. I think we just need to generate more data to really compare the 2, and I think that's really where we are at this point, and we're exploring both as well.

Okay. With that, I think we should conclude the call. Dietmar, do you want to provide a few concluding comments?

Thanks a lot to -- for all the questions. I think it really highlights the discussion, and the interest in both the neurology portfolio because we're not only focusing on tolebrutinib but also then in tolebrutinib specifically. I hope what you've heard really answered some of those questions and specifically, we're very confident that tolebrutinib has the potential when you look at the tolerability, look at the efficacy, look at how many patients are really staying on the long-term safety study, look at the biology and what we were able to show with regards to active concentration in the brain, that all these different components really come together as a story that clearly positions tolebrutinib as a potential best-in-class in the BTK field. And we just really hope that we can make a difference for patients with MS, with that approach and for the broader patient community in neurology with our neurology portfolio. So thank you very much.

Thank you very much. We had a number of other questions on the line. But with that, we would conclude the call. Please reach out with any questions. Thank you so much.