Sanofi (SAN) Earnings Call Transcript & Summary

Okay. Good morning, everybody. Thanks for joining Day 2 of Barclays Global Healthcare Conference here in Miami. My name is Emily Field. I lead the European equity research team covering European pharmaceuticals out of London. And we're pleased to be joined today by the leaders of Sanofi's immunology team, Shaju Backer, who is the Global Head of the Immunology franchise; and Naimish Patel, who Heads Development for Immunology and Inflammation. So as we were just getting started here, we thought maybe a good place to start was big therapeutic conference over the weekend, AAD. So I don't know if maybe that would be a good place to start because I know you guys presented a lot of data there. And then we can get into Q&A.

Sure. Naimish, would you like to kick off with the amlitelimab data we presented at AAD?

Yes. Thank you, absolutely. And Emily, thanks for inviting us. It's great to be here today and talk about the pipeline. So Shaju and I just returned from San Diego, where the American Academy of Dermatology conference was. And we presented our data on amlitelimab, a Part 2 of our Phase IIb study. And so we presented the Part 1 data back at EADV in Berlin in the fall, and that was the first 24-weeks period of that study, where we had four doses compared to placebo in patients with atopic -- severe atopic dermatitis. And what we showed in the Part 1 data, at week 24 at the highest dose, there was a response compared to -- an IGA 0/1 response of almost 50% at week 24, which is as good as any biologic during that time span. So very, very interesting data. And we also had some data around biomarkers showing effect in both type 2 and non-type 2 biomarkers suggesting effects of -- by amlitelimab on both type 2 and non-type 2 pathways in a different type of patient population that probably the anti-IL-13s alone get. And this data that we shared at AAD was Part 2 of that study. So in Part 2, we took the patients who are responders in Part 1 at week 24 and randomized them to either continue their dosing at 24 weeks that they did in Part 1 or withdrawal of therapy. And we follow them for -- out to week 52. So their last dose of drug was at week 20, and they had 32 weeks follow-up after that. And what we were able to show is that, if you include the data from the patients to topical steroids, somewhere between 70% to 80%, depending on the dose, had a sustained response in terms of IGA 0/1 or EASI-75 at week 52. And this is really very interesting and very novel data. No compound in atopic dermatitis has shown this. Essentially patients, despite even not having detectable levels of drug for the last 8 to 10 weeks of that withdrawal period, still had a sustained response in terms of efficacy. And if you looked at their same biomarkers, the ones I mentioned, the non-type 2 and type 2 biomarkers, they also stayed at similar levels as to when they were actually taking drug as well. And this really started the conversation among the experts in this field about true remission in atopic dermatitis, a very new concept, where patients have long-term sustained and deep disease control. And this is somewhat -- or I shouldn't say somewhat, but very consistent with the mechanism of action of amlitelimab, where it blocks OX40 ligand, which is a key step in promoting T effector and T memory cell function as well as inhibiting T regulatory cells. So if you block that, you decrease the level of memory cells, T effector cells and increase the function of the regulatory cells, really rebalancing immune response in a sustained way that's even present beyond the exposure of the drug. So this is really interesting data and very novel data in the atopic dermatitis field.

So at R&D day, Emily, as you know, we -- that's when we first announced we are taking this asset to Q12 weekly dosing. So this was our confirmation that we can -- or this asset, this product, can carry through from a durability standpoint. In addition to the amlitelimab data we presented, we also showcased our entire pipeline. We have started doing that more often at these major conferences. The feedback was phenomenal. We had a couple of experts telling us, "This is an exciting time to be working with Sanofi. You have a phenomenal pipeline. You're leading with science. The number of trials you're rolling out." From a dermatology standpoint alone, as you know, we have multiple assets in AD, HS, PN. So yes, this only is just beginning.

Great. And certainly, out of R&D Day, I thought that was one of the most exciting components that we learned about amlitelimab, was the Q12 week dosing. Maybe just from a commercial perspective, I believe in the Phase III, you are also [indiscernible]. In that EUR 5 billion peak sales target, are you getting to sort of the higher assumptions? Is that really hoping to get that to Q12-week dosing? Or do you think this could still be competitive Q4-weeks?

I'll let Naimish answer the question on the dosing regimen and I'll get back to the commercial question.

Yes, it's a great question. One I would point that also, even for the Q4 dosing arm in Phase III, there's an induction study and a maintenance study. And in the maintenance, all the patients will roll over into a maintenance study where they will also switch to Q12 after 24 weeks of Q4. So we still anticipate, even if for some reason, Q12 at the outset doesn't work, that patient still will be able to switch over. So long term, it is really Q12 dosing regardless of regimen. And we think the data that we have accrued, both in terms of modeling data we showed at R&D Day [indiscernible] is not new data, as you mentioned, in terms of sustained response, really at least will allow us [indiscernible] Q12. And hopefully also actually Q12 from the outset will also show equivalent efficacy.

So from a commercial standpoint, Emily, to your question, Q12 will be a big differentiator for sure. But more importantly, I think we need to come back. It's the efficacy, it's the safety, durability, that will carry the most weight of the commercial positioning. And Q12, the convenience factor comes in. And you can draw parallels from risankizumab in psoriasis, if you look at coming in much later and what they've been able to accomplish in the psoriasis space. For your EUR 5 billion-plus peak sales forecast, we announced six different programs with this asset. So that includes AD and asthma [indiscernible] will be reading out in quarter 4 this year. And from there [indiscernible] programs in systemic sclerosis, in alopecia, in HS. And I'm missing one.

Celiac.

Celiac, thank you. That is the high unmet need disease. And that we're very excited about that. The -- currently, there are no treatment options available for Celiac disease.

Yes. And I know this was covered at R&D Day, but it's still a question that we get. And you brought up type 2 and non-type 2. Obviously, for AD and asthma, phenomenal data for Dupixent in type 2-driven disease. So should we think about amlitelimab as the opportunity really being in the non-type 2? Or do you think that it will have an opportunity across the whole broad spectrum of patients?

So if you look at the biomarker data that we shared at EADV, you saw a very potent effect on blood levels of IL-13, blood eosinophils and TARC, so your classic type 2 biomarkers. So it does cover that. And atopic dermatitis, I would say all patients generally have a facet of type 2 inflammation. It's just that some patients have a mixture of type 2 and non-type 2. And it tends to be the patients who have more long-standing atopic dermatitis with really older lesions, some pediatric patients, Asian patients and also patients with dark skin, African-American patients. And so we anticipate that there's probably a different patient profile that might respond better to amlitelimab than versus an anti-IL-3 team. We don't anticipate requiring any type of diagnostic looking at biomarkers, but it's more clinically, and we're doing studies within special populations, both within our randomized controlled trials, but also within our long-term trials to show efficacy within these different subpopulations, especially populations with dark skin is also a very important area because we think maybe those patients might have a slightly different profile. And those sort of things could help guide physicians on choosing one for the other in the clinic, in the real world.

And we can't have a Sanofi immunology discussion without talking about Dupixent. So -- and we were just -- you helpfully just reminded me that the PDUFA for COPD is June 27th here in the U.S. So a lot of excitement in the investment community about the potential for this launch. How are you thinking about launch preparations? What the slope of this curve could be like? Because it does seem like the feedback from KOLs is they can't wait for this approval.

Yes. We're very excited about this launch as well. It's a high -- COPD, you almost have to think like oncology. It's the third-leading cause of death. It's unlike any other immunological diseases in that sense. From a launch preparation standpoint, one, Dupixent, the pulmonologists are familiar with the assets from their utilization in the asthma treatment -- for asthma treatment. Having said that, the type 2 signature in COPD is actually a unique phenomenon in the sense that community pulmonologists are still trying to get their head around the data. For example, when we presented the data at ATS last year, the first question was, surely, you must have had some asthma-like exacerbations in there. But the fact is FDA had asked us to make that an exclusion criteria to be very clear on the patient profiles. So we believe there is a bit of education that needs to be done. Of course, you will see the tertiary centers, academic centers adopting very quickly because they are -- many of them would have taken part in the trial, very familiar with the data. But it will take a bit longer for the community pulmonologists to come around.

Yes. And then in COPD, there obviously will be a number of readouts. Another IL-5 towards the end of this year, we're expecting; and then your own IL-33, itepekimab, next year. So maybe first question on -- I know that there's different patient segmentation between where dupilumab could be effective in COPD and itepekimab. So how should we think about, what we should look forward to that data for next year in itepekimab?

I'll give you a sense of the patient numbers, and I'll hand over to Naimish to talk about the profiles of the drugs. So from a patient population standpoint, there are 1 million GOLD E biologic-eligible patients in the United States alone. Of that, 36 percentage of them will have eos over 300. That's our estimate. So roughly 350,000 patients will be eligible for Dupixent at launch. Then itepekimab, which is -- which we hope to be indicated for prior smokers. With itepekimab and Dupixent, we hope to reach 80 percentage of the GOLD E-biologic eligible patient population. Now that 350,000, if you include EU 5, that's 500,000, 0.5 million by the way, just for Dupixent alone. And then with itepekimab, we want to reach the 80 percentage of the GOLD E biological population. Naimish, on the profiles and the IL-5s?

Sure. My favorite topic. So maybe going back to Dupixent and the data, Dupixent blocks IL-4, IL-13, which are two key steps in the initiation and propagation of type 2 inflammation. The IL-5 drugs are fairly specific in getting eosinophils, but they're not as broad in covering type 2 inflammation. And we have seen within asthma a difference in the outcomes that you can see that where, especially with regard to lung function, the IL-5s don't really affect lung function as nearly as much as Dupixent probably because the IL-13 component, especially in dupilumab, is very important for controlling airway mucus and airway inflammation and probably responsible for the effect that we see in terms of lung function improvement. And this translated very well to what we saw in COPD with dupilumab, where all the patients or -- in both trials and noticed in BOREAS, we saw significant reductions in exacerbations, 30% to 35%, which is significantly greater than what has been seen with the anti-IL-5s, which is in the range of 15% to 19%. And then also the improvement in lung function, 100 to 150 mls. None of the IL-5s has really shown any significant changes in lung function. And this is very impacting -- impactful in this patient population because they are already on triple therapy maximal inhaled therapy and still having symptoms and exacerbations. And this also translated to improvement in symptoms and quality of life in these patients, where many physicians thought that was not even impossible in this severe population. So that's now, I think, the gold standard for what we are -- what we think is now possible in COPD. And we hope, and a lot of the key experts have told us is, that this will really open up the entire field of COPD because now people see that this is possible to do with the right agent. And so we anticipate IL-5s reading out, but we don't think that we'll see what we've seen with dupilumab. And now so going towards dupilumab covers the patients with screening 300 -- eosinophils that of 300 or greater. But what about the patient with less than 300 eosinophil? So itepekimab, our anti-IL-33, the only anti-IL-33 class drug that has shown, in a moderate-sized COPD trial of about 350 patients, a reduction in exacerbations of greater than 40% in former smokers. And this was regardless of baseline eosinophil count. High and low eosinophils both responded. And so we think this is truly a different type of drug than dupilumab, IL-33 is fairly upstream in the initiation of inflammation and involves both the type 2 and non-type 2 pathway. We think that's probably responsible for the efficacy we saw in the low-eosinophil COPD in the former smokers. And the challenge you mentioned, there's some overlap with smokers with high eosinophils -- I mean, excuse me, former smokers with high eosinophils for both drugs. But then the former smokers with the lowest eosinophils are not covered by any of the IL-5 or IL-13 agents. And so recently, we've announced that we plan -- we will -- we're on track to finish recruitment of both studies, the Phase III study for itepekimab this year with the readout in 2025. And we've also seen some data from tozarakimab, the AstraZeneca anti-IL-33. They had -- they failed their primary endpoint in the recent asthma trial, and they also shared some PK data suggesting that exposure was a little low from what they had planned. And so they added a third COPD study which -- with a more frequent dosing regimen. So there is some evidence here that maybe the doses they chose for the first 3 might not be the right dose, and they've added a third study. And they also announced that all three studies, now the readout will be post 2025. So it looks like they're delayed. And probably similar to what we experienced as well, it's been so hard to recruit COPD studies coming off the COVID epidemic. So it's not completely surprising. We did start first and looks like we will finish first and be first-in-class, and hopefully best-in-class as well.

Yes. There's certainly going to be a lot of readouts next year. But maybe sticking with exciting data from ATS last year, lunsekimig, which I believe a lead indication in asthma. Really exciting data last year. We do have TSLPs approved, a recent deal for a longer-acting TSLP. So maybe could you just help us understand why this bispecific approach could be so differentiated?

Sure. So maybe I can talk about it. Shaju, again, if you want to talk about what you think of these long-acting biologics. So what we saw with anti-TSLP, tezepelumab in asthma, is they've gotten the indication for all of asthma, just not eosinophilic asthma. But if you really dive down into their data, most of the effect seems to be in the high-type 2 population, both in terms of exacerbation reduction and lung function. And if you take truly non-type 2 patients, the patients that are low in eosinophil and low in FeNO, exhaled nitric oxide, the other type 2 biomarker, there's not much of a response in those patients. So it's probably more of a type 2 agent. But what we did observe is that, if you compare similar patient populations, the other interesting thing about their Phase III study is that they recruited patients with two or more exacerbations at baseline, where the dupilumab studies only had one or more. And doing that actually selects for a more intrinsically type 2 populations because those are the patients at risk for more exacerbation. So if you compare a similar population, we published this for the dupilumab studies, two or more, you see dupilumab has a better exacerbation reduction and better lung function improvement in the same type of population. And you can also compare the OCS sparing studies [indiscernible] successful tezepelumab. Was not suggesting dupilumab is a better type 2 drug. And so when we designed lunsekimig we thought adding IL-13 and anti-IL-13 would enhance that part that we see that it's not as competitive for anti, just TSLP alone. And TSLP, as a cytokine, works very upstream as an initiator of type 2 inflammation, and IL-13 is very downstream causing the tissue damage we see in type 2 inflammation of the airways. And combining those, we saw in preclinical models potential for synergy. And so we did a Phase Ib study of lunsekimig. This past year, we reported ATS looking at FeNO, which is a biomarker of airways inflammation. And we showed that, after a single dose in a mild-to-moderate asthma population, we've reduced FeNO by greater than 40 parts per billion. And so if you compared that to single-agent studies of either anti-TSLP or anti-IL-13 alone, those generally have an effect of 10 to 15 parts per billion reduction in FeNO while we're talking about greater than 40. So true synergy where 1 plus 1 equals 3 or maybe even 4 and adding these together. So we're really optimistic that this will potentially be the best biologic in asthma, and also adding -- spreading to additional disease. We announced that we're going into milder forms of asthma with that drug. It's a CRS with MP with that drug and eventually COPD as well, and atopic dermatitis.

Yes, it is an exciting asset, as Naimish mentioned. For us, the ambition is the launch timing of this is towards closer to 2030, all program running in parallel, fingers crossed. That gives us the ability to really raise the efficacy ceiling and to continue our leadership in the [indiscernible] space with asthma, of course, and then exploring into COPD, then further by taking it to AD once we have more proof of concept data in hand. But more exciting part of this NANOBODY platform. We also have an OX40-Ligand TNF NANOBODY, which we announced. We have HS data reading out in quarter 4 this year. So with that, we will have now three assets. There is an approved asset from the company that we acquired in Belgium, Cablivi for rare blood disorders; [ on ] lunsekimig, we have the data in hand in asthma; and with the OX40-Ligand TNF with HS, we have three NANOBODY coming out of this platform. So we are now looking forward to having this platform delivering a pipeline of molecules for us with this unique ability to combine proven mechanisms and really raise the efficacy ceiling. So we're very excited about this platform in its entirety.

Great. And one asset at R&D Day where, I think, obviously, the company is very excited, but maybe the investment community is still a little bit skeptical, is the oral anti-TNF. And I believe we're [indiscernible] two data this year. But could you just remind us of particularly why you're excited about this from a commercial perspective, obviously, with the biologics still going biosimilar here in the U.S. now.

Yes. So I will try to address the positioning, and I think it's important Naimish talks about why we think this will be a differentiated molecule. So I'll start with that. We believe this will be a differentiated molecule. First of all, it is a TNF-R1 signaling inhibitor. It's not an oral Humira, so we want that to be very clear. So our first step will be we are having internal discussion with our regulatory team to engage with the regulators to have that dialogue. How do we deal in the two mechanisms? One is the MAB and this one is a different mechanism. That is important [indiscernible]. The other reason we are excited about is the efficacy. We hope our TPP is -- and Naimish will describe why we think we can have a differentiated efficacy from a mechanistic standpoint. But also safety. The safety from our Listeria preclinical models, we're not seeing any infections. If we can replicate that in the clinical trials, we have a completely differentiated molecule that hopefully will have TNF-like or better efficacy and no black box warning. And having that safe orals, that is our play here. In dermatology space, as you know, you've seen Otezla coming in creating that pre-biologic gateway medicine with orals. And we see that opportunity wherever TNF has gone. So this could have the potential to be a prebiologic in rheumatoid arthritis, for example, in the rheumatology space, in the dermatology space, and especially IBD where TNFs still are considered in many ways the gold standard. On top of that, we talked about this being a backbone of combination therapies. So we're exploring other oral-oral combinations, also looking at fixed dose combinations with which we can raise the efficacy ceiling once again, similar to the NANOBODY platform we're doing with MABs. With that, I'll hand over to Naimish describing mechanistically why we think this will be differentiated.

Absolutely. Due to your clock, I'll be quick.

So many questions.

No, great discussion. So we're expecting to readout for psoriasis to be for H1 2025. And the mechanism is unique in that it binds the soluble primers of TNF and prevents their binding with TNF-R1. Does not inhibit the interaction between membrane-bound TNF and TNF-R2. And so we think that unique mechanism will provide improved safety, as Shaju mentioned, and also potential for improved long-term efficacy. Improved safety because TNF-R2 seems to be important for protecting for excessive inflammation and increasing T-regulatory cell activity as well. And so in preclinical models, we're able to show with our compound that it actually preserves a response to a listeria bacterial infection model compared to the biologic, it actually prevents mice from dying from listeria infection. And also, we know that patients with -- on biologic TNFs often lose response in the long term due to antidrug antibody formation. And this molecule, of course, because it's a small molecule, there's -- it's not something where antidrug antibodies play a role. And because of this T regulatory cell effect, it's an additional potential mechanism for long-term disease control. So for those reasons, we think it's potentially a really unique profile that's more effective and safer than TNF biologics.

Great. And unfortunately, we're out of time. I have so many more questions to you. There's so much going on in the pipeline. But thank you guys so much for joining, and I hope everyone has a great day, too, here in Florida. Thank you.

Thank you.

Thank you.