Sanofi (SAN) Earnings Call Transcript & Summary

Okay. Thank you all. We'll get started. My name is Peter Welford. I'm the European pharma and biotech analyst at Jefferies in London. It's my great pleasure to introduce the next company, which is obviously Sanofi. And here today, we have John Reed, who is the Head of R&D. It's a fireside chat. If anyone in the audience does have any questions, by all means, raise your hand. And I think we've got a mic out there; we can try and get to you. Apologies, we can't actually see you very much, so you might jump up and down as well. But with that, we'll get started. So right John, let's start off.

Can I first say that given how cold it is in here, I wish we did have a fire? This is amazing, yes. But anyway, okay.

You're American, you should be used to it. Anyway, right. Here we go. So let's get started. Can't we start with immunology. The next waypoint for sales for Dupixent was set back in March at your immunology event of at least EUR 13 billion. Obviously, COPD was set as the potential source of upside to that. Can you just talk a little bit about when we should get the COPD data? And what gives you confidence in COPD as an indication and how Sanofi is looking at biologics in COPD?

Yes. Well, first, I would just remind everybody, COPD represents a great unmet need. It's among the top 5 leading cause of death, and there hasn't been a new mechanism in about half a century in that disorder, maybe new devices for delivering inhaled agents, but -- and no biologics approved. With Dupixent, we're using a biomarker-driven hypothesis. There's about 25% or so of the COPD population that has high eosinophil and evidence of a type 2 inflammatory mix picture. And so it's really there that we're testing the hypothesis that Dupixent could be a benefit for these patients. We had seen anecdotal evidence in some of our other studies for atopic dermatitis and asthma, where we had patients, who happened to also have concomitant COPD. We saw improved FEV, et cetera. But the real test was rather than doing a separate Phase II, we did a Phase III with a high bar interim analysis. And that was really the sort of the equivalent of the proof of concept for us. We made it through that high bar interim analysis in the first Phase III study. And then that triggered the beginning of a second Phase III. We'll have data for both of those next year, towards the end of the year. And so that will be the opportunity to test that hypothesis. With our second shot on goal, which is itepekimab and IL-33 antibody, the data that supported that came from a Phase II, where we tested the agent. We had a prespecified subset of patients, who were patients who had been smokers at 1 point in their life, but had then stopped smoking. And there was evidence that those patients had higher levels of IL-33 than current smokers. And so we had set that as a prespecified group. It actually is the largest subset of the COPD, probably about 75%. And in that Phase II, we saw just really, knock your socks off, results of 40% reduction in exacerbations, coupled with significant increases in FEV. So lung function, and based on that, we launched into 2 parallel Phase III studies. We're also doing a smaller, but a sign mechanistic study to further understand the biomarkers and the biology around this subset of patients. So altogether, something probably approaching if both of those mechanisms would prevail, that would probably cover about 80% of the COPD population.

And then sticking with immunology, I mean your ambition is to maybe it's at least 4x, you basically at least EUR 22 billion by the end of the decade. I mean, a key part of that beyond Dupixent is also amlitelimab or mepolizumab, the OX40, perhaps you just talk about -- because a lot of people look at Amgen as well in this room. Can you just talk about how you think you differentiated versus Amgen? And then what gives you confidence as well from the development time line to do this sort of expedited development plan that you've talked about the OX40?

Yes. So the OX40-Ligand is what our antibody binds. This is coming from the Kymab acquisition, nice proof of concept in atopic dermatitis. And interestingly, even after ceasing treatment, there was a very prolonged benefit that suggests there may even be some disease-modifying component. So we're going to be looking at things like whether you can even think about an induction phase to get patients in remission eventually and relatively infrequent dosing maybe over time. But the biggest advantage we think of our molecule over the alternative that Kering and Amgen are developing, is maybe not as much on ligand versus receptor as it is that our antibody is a nondepleting antibody. So it doesn't kill cells. It blocks the pathway, but it doesn't destroy cells. Whereas the alternative is a depleting antibody, and it actually depletes and kills the cells of Express OX40. So that's probably why they see side effects of sort of infusion reaction, like side effects with chills and fever and myalgias. But more importantly, probably is that it's important to note that regulatory T cells in immunoexpressive regulatory T cells Express OX40 when they become activated and do their thing. And 1 really would not want to deplete them in the context of autoimmune diseases, but that's what that antibody will do. So on the long-term basis, we would just caution that you may get some immune imbalances, because of the pleading mechanism of that molecule.

Very clear. And then just if we go on to the BTK inhibitor, rilzabrutinib, lastly, I guess, in immunology, I wanted to cover. It failed in pemphigus, but I think there's a lot of reasons behind that when you look at the study, but you're now taking it into much bigger indications like atopic dermatitis, et cetera. Can you just talk a little bit about the rationale for that and as well, why you're convinced it's going to be safe given what we know about BTK inhibitors today?

Yes. Maybe I'll work in the efficacy part and then the safety. So rilzabrutinib is a reversible covalent inhibitor. So that's, frankly, gets also already into the safety issue and as much as -- while it starts off covalent, a selective covalent inhibitor that then hydrolyzes off. And so that reduces the amount of off-target permanent inhibition you might get of certain kinases, so that is lending itself towards a safety ambition. On the efficacy side, remember, BTK plays a role in a few different signal transduction pathways in a few different types of cells. And in pemphigus, the -- it's an autoantibody-driven disease. And we -- the study that was designed by the predecessor company that we acquired, Principia, included a design where patients were on concomitant high-dose corticosteroids, and it was sort of an add-on therapy. And so this became very hard to see a signal on top of high-dose steroids, which we think was one of the reasons why that it perhaps didn't prevail. Despite the fact that we didn't get a positive result in that autoantibody-driven disease, we have very stellar data in another autoantibody disease and that's relapsed refractory ITP, immune thrombocytopenic purpura. So it doesn't mean that autoantibody-driven diseases are off limits for this. It just may mean that you have to get the right clinical context to show the benefit. But on top of that, as we go in now to the allergic and type 2 types of diseases, now we're playing into the role of BTK, particularly downstream of Fc receptors, such as Fc receptor Epsilon, which is important, the IgE signal transduction mechanism. And that's were in asthma in CSU, chronic spontaneous urticaria, probably in type -- in atopic dermatitis too. That's really where BTK mechanism makes a lot of sense. And so I really see it as an independent test of the role of a BTK relative to the auto antibody-driven diseases that we talked about.

Very clear. Let's move on to oncology then, an important area to discuss. So firstly, the third amcenestrant, I guess, like some of your peers, unfortunately, didn't succeed in the later lines. But can you just talk a little bit about why you're still confident that it will potentially have a place in the earlier lines of therapy? And what underpins that?

Yes. The -- I mean, the oral selective estrogen receptor to greater class, we felt from the beginning that the highest probability of success would be in the adjuvant setting where patients have not yet been exposed to endocrine agents, and they're still sensitive to hormonal suppression. And so that's where we still believe is the sweet spot, particularly that adjuvant setting. And in that setting, it's very important to be well tolerated, because the patients are going to be on the therapy for 5 or even 10 years, and that's where amcenestrant, the Sanofi molecule, has a best-in-class profile. In fact, at the ASCO meeting, I had a chance to meet with some of the investigators of the I-SPY consortium, and I was asking them how is the tolerability holding up? And they said, great, we have patients coming to us saying, you must have put me on placebo, because I don't feel anything. So really a great tolerability profile. And that will be the sweet spot. Now in the late line study that we and others did, I think we essentially confirm that by the time you get to that state, a lot of those patients have become hormone-refractory. And there's not that much we can offer these patients today, unfortunately. But we gave it a try. That was where the unmet need was the highest, that's where we could most quickly get some signal. And -- I think it further bolstered just simply this, the safety experience with the molecule, we -- in other studies, we've demonstrated very robust down regulation, degradation of the estrogen receptor. So from a PK/PD standpoint, we remain confident the molecule does what it was designed to do. And we're just -- we've now started the first of the adjuvant studies in collaboration with a number of the world's top cooperative groups. And we have a frontline metastatic study fully enrolled now. So we'll look at these earlier lines and see if the mechanism prevails.

And then moving on to a recent transaction. I know there's interest in [ BioNTech ] with Libtayo, you returned rights to Libtayo to Regeneron. Can you just talk a little bit about -- what should we infer from that with regards to Sanofi's attitude, I guess, towards immuno-oncology and sort of how that fits in with your portfolio and also attitudes to perhaps business development within oncology given that transaction?

Yes. So we remain fully committed to oncology. In fact, I would just remind that just 4 years ago, we had only 5 molecules in development for oncology. Today, we have 19. So we've almost quadrupled the size of the portfolio, and most of that it's in immuno-oncology. I would say that we're not putting an emphasis or much of any effort on checkpoint inhibitors is the place we're playing. There are plenty of other companies that are very deeply committed to that. But we're trying to lay some new trails in other dimensions. We have a theme around NK cell biology, for example, and several NK cell engagers that we're now moving into -- have moved into development. We have got engineered lymphokines that expand NK cells very safely. We've got an allogeneic NK cell platform. So we're -- all those kind of come together very nicely as a new theme and a way to hopefully make an impact. We've got a whole theme around T cell engagers and 4 molecules in the clinic now, including some really nifty tri-specific designs and conditional biologics that are masked in stealth mode until they get in the tumor microenvironment and doing a lot around engineering of lymphokines. So we're finding other ways to play in that space as well as really beating up our antibody drug conjugate and doing antibody immunoconjugate work as well. With Libtayo, when we first went into collaboration with Regeneron, we were hopeful we could demonstrate a best-in-class profile. And Libtayo is a very high-quality PD-1, but it's hard to -- looking at the totality data to say that it's clearly best-in-class. It's certainly competitive with from an Fc standpoint, but we're really committed to putting our resources in the first and truly differentiated best-in-class molecules. And so we just saw as an opportunity cost that we could place investments elsewhere. I would say also in developing our own IO agents, we found that the path of least resistance was not to add on to Libtayo, but rather just put it on top of whatever the standard of care was in the most case, that was pembrolizumab. And so virtually every study we've done has been in combo with pembro, because that is the standard of care. And fortunately, we've been able to get pembro for free in every case where we've taken a new molecule forward, because we've gone to Merck, they scrutinized the science. They scrutinized our clinical development plan, and they've approved us for getting pre drugs. So we have found that to be, frankly, the path of least resistance to do the PD-1 combos play.

And then moving on to -- you mentioned 1 of the backbones of your oncology portfolio was antibody-drug conjugates something you mentioned. You obviously had an antibody-drug conjugates and CCAM5, which is going to read out next year. Can you just talk a little bit about that as a target and also as well that there's a lot of noise at ASCO around Trop-2. So as well, can you just talk a little bit about how Trop-2 potentially overlaps with CCAM5, why you think there's still a commercial opportunity?

Yes. Well, CCAM5, we found very attractive because as you're looking for these rare tumor antigens that are expressed on the tumor but not the normal. It's about as pristine as they come. Now the CEA, carcinoembryonic antigen space is really complicated. There's lots of variants, but the CCAM5 is very tumor-specific, virtually no expression in normal tissues, very, very little. And so unlike Trop-2, which has quite a bit of spillover to normal tissues, we think it just sort of sets the stage for a nice opportunity in ADCs. We -- our first study is in the second line lung cancer, where we'd had a positive Phase II and we showed long-term follow-up on those patients at ASCO just earlier this week. Some patients out already to 4 years, nice long durability of response, which the KOLs were impressed with. So we're -- we've got a second-line lung [ reactor ] patients have failed chemo and PD-1, and that's a head-to-head with our good old Taxotere, docetaxel, which is commonly used in the second-line setting, where we feel there's a high probability of success. We're now in Phase II, moving into frontline non-small cell lung cancer in combination with PD-1. And we're far enough along to know that the combination is well tolerated. And the question is whether we might be able to offer patients a chemo-free regimen eventually. We're comparing pembro plus R-tusa against the chemo plus pembro, and then also doing some arms where we have either 1 or 2 of the -- either 1 or the other of the chemo agents. So trying to see if we can't get all way chemo-free, can we at least eliminate 1 of the chemo agents. So we're early in those studies. We're also toying with what the right biomarker cutoff should be, because unlike in the second-line setting where we've set a high bar that 50% of the tumor shelf should be CCAM5 positive, because we're really going directly as a cytotoxic there. In the frontline setting, we might be able to exploit the fact that this molecule induces immunogenic cell death and so it will help stimulate the immune system to now respond to the tumor. And if one does that in the context of adding PD-1, then you're taking the brakes off the immune system at the same time. And so it may be that we don't need to be 50% CCAM5 positive, maybe 10% is plenty. So we have some biomarker work to do there.

And then interest of time, let's move on to hemophilia. We've got the Phase III results for efanesoctocog BIVV001 coming up, I think, shortly. Can you just talk a little bit about what it is that you think we'll see in those detailed Phase III data that should make people more enthusiastic about this asset. I mean, it's fair to say, I think everyone is excited about gene therapy, Hemlibra, et cetera. What is it that you think still is the opportunity for this?

Yes. Well, the data that we presented in July will -- most of the data are looking at patients where they've been on prophylaxis with one of the standard of care factors and they're experiencing a certain number of bleeding events a year. And if you look across other studies, that the average is probably about 3 bleeding events a year. And then they go on efa and you see how many bleeding events they get over an annualized basis, and you're going to see a very, very significant decline. And the thing that -- on top of that, we find really exciting is that you'll also see all the sub classes like joint hemorrhages, things like this, the things that really become debilitating are greatly, greatly reduced as well. For those that don't know, efa is a highly engineered form of Factor VIII that has the longest pharmacology of any previously -- relative to any previous factor. And what that allows is with a once-weekly at-home infusion, you're able to maintain factor levels very close to the normal range, so that patients can enjoy a pretty much completely normal lifestyle. And so this is a real step up in terms of both durability and the level of efficacy, so much so that the FDA gave us breakthrough designation that's never been awarded for a factor replacement for hemophilia. Because the level of protection allows the individuals to enjoy a fully physical lifestyle, we think there's a good chance that we'll start to see shift over from subcu nonfactor like Hemlibra that -- because the level of protection you get with Hemlibra is estimated, you can't measure it directly, but it's estimated to be less than 10% of normal. And you really need to be 20% and above to enjoy many of the physical activities that many of us probably take for granted. So we think that, that superior efficacy along with a very reasonable convenience opportunity will be a winner in this setting. Still more than 60% of patients with hemophilia are still doing factor replacement. And so we think this is going to be a real step-up and the FDA agrees with us evidently.

And then perhaps just going back to another area in neurology, you have a -- well, you and many others have a BTK inhibitor in Phase III for multiple sclerosis. So I guess, first, you can you just talk a little bit about how you think tolebrutinib is differentiated in terms of the factor of other drugs. And if you could just talk briefly on the Phase III, and particularly then about Russia, Ukraine, how have you managed to mitigate what I think is a challenge for other for doing these studies?

Yes. All good questions. First, I would say why to be interested in BTK and MS, well they -- this CD20 class is now well established for relapsing remitting MS at least. And with a BTK inhibitor, you can basically put B cells to sleep, you can silence them without killing them. Because it's required for signaling to the B cell antigen receptor for example. And so we see that as being able to at least match that, but on top of it, there are other cell types that use BTK mechanisms, including within the brain, the microglia, which are a source of chronic inflammation and persistent inflammation that's probably very important in the long-term disability progression and particularly in the progressive forms of MS. Now the thing it sets tolebrutinib apart from the other BTK inhibitors, and we show these data at the ACTRIMS meeting is, it's the only BTK that is significantly brain penetrant. It's the only one so far in the race that in advanced development that crosses the blood-brain barrier with sufficient efficiency to get excellent target coverage and neutralization. The others that are in advanced development don't do that. And so we think we're going to get at the CNS-based inflammatory mechanisms that are not probably particularly important in the progressive forms of MS. We're in the midst of a broad Phase III program with 4 parallel studies going and are fully committed to delivering them on the stated time line. Like everyone else, we've got our challenges with Ukraine and Russia, have gone through heroics to keep patients on study, moving them out of Ukraine to Eastern Europe, other things. But while we do that, we've also ramped up sites and reached out to the investigators at other nonaffected areas and are increasing our recruitment to make sure that we're well covered. So we're still on track for the program, not without some heroics due to the Russian, Ukraine situation and some additional expense, but still part charging full steam ahead.

That's great. We've run out of time. I'm afraid, we're in negative territory with the clock. So we've got a call it a day there, and I know John has to go. So thank you very much all for attending. Thank you, obviously, very much, John, for shown up in the fireside chat with us today. And with that, well everyone this next session start shortly. Thank you.

Thank you, Peter.