Tourmaline Bio, Inc. (TRML) Earnings Call Transcript & Summary

Okay. We are live. Thank you. Good afternoon, everyone. Myself Yatin Suneja, one of the Biotech Analyst here at Guggenheim. Thank you, everybody, for joining us for this Fifth Annual I&I Conference. It is my pleasure to host our next presenting company, Tourmaline. From the company. We have two executives. We have Sandeep Kulkarni, who is the Chief Executive Officer. We also have head of Commercial and BD Gerhard Hagn. Fireside chat format, no fire here. As Sandeep was asking where is the fire? But we'll keep the intro brief. I'm going to hand it over to Sandeep to maybe give a 5-minute overview because it's a relatively newer company. Just help us understand how the company was founded, what are some of the key up-and-coming milestone? Where are you going? And then I do have a set of questions that I want to run through. Sandeep it's all yours.

Sounds good. Thank you for hosting us here at the conference. It's our pleasure to tell you a bit more about our company. So Tourmaline, we are an immunology-focused company based here in New York City. Our goal is to develop medicines that we believe have standard of care transforming potential. Our lead program is TOUR006, which is a fully human pivotal-ready antibody against IL-6 that we licensed from Pfizer in May of 2022. Right? Now the IL-6 class has achieved a fair degree of commercial and clinical success like over the years. However, there are many new insights about the IL-6 biology and just the broad range of indications where IL-6 biology has been implicated that we can take advantage of. Our antibody is, again, is a full human antibody has really great properties. It's been tested in over 448 subjects to date when controlled by Pfizer. Most of that experience has been within every 8 week subcutaneous administration. So we're beginning our development campaign already with the drug that has very attractive drug delivery properties and can be used and has a lot of safety data to back it up. When we were thinking through like what indications to go into, the guiding light has always been to follow the clinical signal, look for real evidence of activity in actual patient experiments and patient trials. And so like on that list, very quickly, TED comes to the top of that list. Thyroid disease is an indication that investors know well. There's a lot of interest from physicians as well as patients on looking for new treatment options here. And so it's kind of a perfect situation where, there is one approved option so far, but the market really is wide open for a best-in-class, best indication treatment to establish itself. With IL-6, the IL-6 class, there's over 300 patients' worth of data across 40 publications to date, also showing a very consistent profile and growing investor enthusiasm about this may be a really unique and ideal way to treat Thyroid Eye Disease in the first-line setting. We're also looking to pursue developing 006 in a broad set of indications of Cardiovascular Disease. It's a really different pattern, these are larger market indications but there's been increasing recognition that the IL-6 pathway is implicated in cardiovascular disease and that by inhibiting this pathway, we can drive like real clinical benefit. So we just met with FDA recently talked through our CV plan. We'll be kicking off that trial in 2024 with data from that about a year later. So things are firing away on all cylinders. We're, we just completed a reverse merger with Talaris. We've come out of that transaction in a strong financial footing with runway through the end of 2026 and being able to get [ 2 ] key inflection points in TED as well as CV.

Got it. Very good. Thank you for that background. So the antibody came from Pfizer. What are the features of the properties of this antibody that you like -- that you in-licensed it and where it was studied earlier?

Yes. So the antibody comes from the Medarex mouse platform, which, as you might know, is one of the most productive and successful platforms for antibody discovery to date. So when we licensed the program from Pfizer, there was a robust data set already in place. So over 400 patients who have been dosed across Phase I and Phase II development. Right? And so most of that experience was with the subcu administration given every 8 weeks, right? And so compared to other agents within the IL-6 class or other agents and other classes that we compete against, every 8 week subcutaneous administration really stands out as being something that is attractive. In terms of pharmacodynamic activity, the antibody is a very good suppressor of the IGF -- excuse me, the IL-6 pathway where with low doses of drug as low as 10 or 30 mg as a flat dose, not per kg, we can get to very good PD suppression for this pathway. So, if the autoimmune disease field is all moving towards easier-to-use treatments, less frequently administered subcutaneous not IV. We're already at the forefront of what folks have tested for this mechanism and for others that we compete against.

Got it. Are there any modification from a half line extension perspective? And also, I think, could you maybe help us understand the difference between the receptor and ligand. Are there benefits or...

Sure. So the antibody itself, again comes from the Medarex mouse platform. It has a very long naturally occurring half-life on the order of 7 to 8 weeks, which has been seen in Phase I and Phase II. There's been no specific Fc Engineering here that's been done. It is a naturally long-lived IgG2 clone, all right? And so we think the lack of Fc Engineering may help explain like why the antibody is so clean from a immunogenicity point of view where, we've only seen 2 patients out of 448 who've shown evidence of treatment emergent ADAs to date. So it does appear to be very clean even for a fully human antibody. In terms of receptor versus ligand blockade, there are examples of receptor and ligand blocking antibodies that have been approved. Now IL-6 and IL-6 receptor form an exclusive binding partnership. So blocking one or the other tends to have similar PD effect. Now, and that's been seen in the PD data as measured by C-reactive protein, as well as in the clinical data in RA, where there's a lot of data for both agents of both classes to date. Now the place like where they do differ is any level of the amount of target that is expressed in the body, the receptor tends to be expressed at much higher levels. There's a soluble form of it. And so to -- and it turns over quickly. So to be able to cover the target for the full dosing interval requires higher doses and more frequent administration. Actemra is the most widely used drug in this class. A standard dose of Actemra is 8 mg per kg every 4 weeks by IV infusion. All right? And so you just need that much drug to be able to cover the target. However, for our drug, we have human data to support every 8-week administration with doses of 50 mg and below given how low the expression is for IL-6 ligand, that more than adequately covers target for the entire dosing interval. So from a patient convenience kind of attractiveness of administration profile point of view, we think 006 really stands head and shoulders above the others.

Got it. Very good. So you're going after TED. So two questions here. So we have TEPEZZA that was approved initially. Obviously, the launch was robust. And for several reasons, nobody knows what happened. Maybe it was a bolus of, demand maybe is the tox profile, it has tapered, right? The launch has sort of tapered. Where is the unmet need? And so that's one. And then second, can you review, because you just mentioned in the beginning that there is 300, more than 300 patients worth of data, could you review for us the data that already exists for IL-6, in TED, and that gives you confidence to go after the indication?

Yes. Maybe I can take this. So TEPEZZA certainly had initially a good start, of course, but for the last [ 3 ] years, we've been seeing declining, if you want to be more positive, stagnating revenues. We've actually conducted primary market research, talking to physicians, payers and patients, also key thought leaders, of course, and our takeaway so far is really threefold. Number one, the side effect profile is, of course, emerging, right? The FDA decided to change the label, added warnings and precautions for hearing impairment and/or hearing loss even. And what we're hearing from physicians and patients is that, that pauses, right? Their thinking process, should they really consider a drug like this for a disease like TED. That's number one. We also see more and more data that questions the durability of efficacy for TEPEZZA. And that's, of course, a relatively expensive treatment. And if the durability is questionable, that may also put some pause on it. And last but not least, we hear a lot of complexity and a high level of inconvenience, its an IV drug, 8 times, 60- to 90-minute infusions, many of the Oculoplastic surgeons, they don't have infusion centers. So it's another referral. It's another trip for the patients. And so it's highly cumbersome. The reimbursement process may take 2 to 3 months sometimes. So all in all, I think those are reasons that explain why the revenue curve has been stagnating or even declining. And what's also really important in this marketplace to come back to the unmet medical need is that 80% of the diagnosed patients in the United States are not receiving TEPEZZA. Even though you have an FDA-approved treatment. So there is a lot of white space, the way I look at this. We also see most of the prescriptions coming from Oculoplastic surgeons, so a little bit later in the treatment journey. General ophthalmologists, endocrinologists do not prescribe so much yet. So that's an area where we believe a profile like TOUR006, where we hope to have, of course, strong efficacy on multiple levels, including durability, a good safety profile as well as 3 subcutaneous injections over the 6 months, would really put us well in position to claim the first line treatment spot and also entrench ourselves more with general ophthalmologists.

Got it. And if you want to review the data because when I started looking at the IL-6, I was also surprised to see how much data already exists. In fact, in Europe, in refractory tract, it is used, right? So I'm just curious for you to articulate for our audience like how strong is the data? And what are the risks as you go into development -- in the Phase II development?

Sure. Happy to go through that. I mean, again, the extent of clinical data was really the guiding line here to say this is a good indication to go into with this mechanism. Now I've been covering the IL-6 class as well as the TED class going back many years, including when I was a public market investor myself, and it is pretty shocking like how much data -- there are 40-plus publications, 300-plus patients where any one publication may not tell the whole story. However, as you, if you view it like part of a mosaic here, there's a very clear pattern that emerges where we see a mechanism that can lower auto antibodies and then drive benefit on both proptosis as well as the clinical activity score, the more inflammatory symptoms of the disease where looking at any one publications may not tell the whole story in itself. Now this isn't just one investigator in one part of the world, but this is fairly broad-based, including in the U.S., in Europe, in other parts of the world, like where we see that there is a small but established practice pattern of reaching for this drug when it is medically necessary when physicians believe that their patient -- who's failed steroids usually by that point would benefit from it. They see good efficacy, and that's why they continue to use it using a drug off label, whether in the U.S., whether ex U.S. involves some degree of like physician engagement, physician hassle, some degree of medical legal risk you may take on [indiscernible], but you do it because you believe it is worthy while to give that a shot. Now that is despite the fact that there has been no systematic industry-sponsored effort to develop a drug of this class in Thyroid Eye Disease thus far, just a lot of disparate data points that all kind of points in the same direction suggesting that this should be a highly efficacious mechanism for treating Thyroid Eye Disease patients. And I understand that most of the publications are open label, it's retrospective, there isn't a control arm. However, we actually think that there may be reason to believe that those publications, by and large, underestimate or understate how effective this class can be in that. Patients often were steroid refractory, steroid resistant by the time they received treatment with an IL-6 inhibitor. They may have been multiple years out from symptom onset raising a question of whether they truly stood to benefit from good immunomodulator. And so as we look at those like literature, we think there's clear signals of activity in the place where that is going to become the most pronounced, is in a clean first-line population where IL-6 is the most relevant and the inflammatory component is very clear. That's where we think this mechanism really should shine.

Got it. So you and Roche both are developing or going into TED, right, both have programs there. What are the differences? And actually, also, if you can maybe explain to us the differences between your molecule and their molecule and then the development timeline also?

Great. I have -- Sorry, I'll ask Gerhard to chime in afterwards. Right. So a year ago, the question we would get from investors often was, if this is a great idea, why has no one done it so far? We think we can put that question to bed now that we think the IGF-1R class has shown that there's a real market here, but that may not be the best way to treat it. And so Roche recently announced a development program with Satralizumab, their drug here, which we think just further validates our belief that there's room for additional innovation here and IL-6 is special, just given the strength of evidence across any number of publications already, Right? Now their drug is a humanized antibody involves a sweeping antibody technology to it, which involves a number of mutations in both the variable as well as consent regions of the antibody and it has to be given more frequently just given that it targets the receptor. So it's given every 2 weeks initially, then every 4 weeks beyond that, versus our antibody is fully human. There's been no FC Engineering for it. It is clean from an 88-point of view, and we have human data to support every 8-week administration. So head to head we think our antibody has like really special properties here relative to what they are doing. But again, like we think having another competitor here talking about a better way to treat thyroid eye disease overall benefits both companies.

Okay.

The only thing I would just add is that we have a real shot here in first-in-class. And if it timing-wise doesn't work out, I think we do have best-in-class potential here. and having launched products when you have 2 manufacturers or even more, that creates more firepower in preparing the market and preparing the physicians for the IL-6 properties and the difference that they can make. And with the best-in-class potential, we will be competitive in that space.

Yes. Gerhard, maybe just here since we are on the competitive dynamics. I think the one question that we got from some investors is that, look, Toci is -- could be a biosimilar, right? How does that affect the commercial appeal or commercial dynamic? If you have any comment there?

Yes. So we are going with our pivotal program into thyroid disease and hopefully, we'll have an approval. And with that, in the United States, in particular, we will be protected from biosimilar competition, right? The biosimilars that are being approved, Biogen has recently received approval for their tocilizumab biosimilar. They have 3 indications approved out of Actemra 7. So they will be able to compete in those 3 indications, but not outside. So, there may be some countries around the world where this, there's more of a gray zone in terms of competition. But in the major pharmaceutical markets, we don't see biosimilar competition for that reason.

Okay. So there's good scientific rationale. There's a lot of preclinical data support to the mechanism. There's a lot of clinical data. Now how does that sets you up for the study that you are running now? Like what are some of the features that you have incorporated in the study that is set -- that will make sure you have a successful outcome?

Yes. Right. So our, we did meet with FDA in May of this year. We've gotten good alignment with them that our first trial or Phase IIb can count as 1 of 2 pivotal trials for TED. So we have designed it as such and we're executing it as a pivotal trial. The design is 27 patients per arm in 3 arms, so 81 patients total. The trial has 2 periods so period A, is the primary efficacy portion. We'll measure the primary endpoint, which is proptosis response as FDA has wanted at week 20. Now that primary efficacy component will be followed by period B where patients who are non-responders to their study drug assignment, period A can receive open-label drug in period B. If you were a responder you'd be followed off-label off any drug at that point. So we think period A is going to establish like how effective the drug can be in that first-line like population. So we think period B is actually going to shed a lot of light on how to actually use the drug in practice, including benefit for extended treatment beyond the initial 3-dose regimen as well as on the durability of effect. So we're really excited for the Period B to help inform what's like the best way to actually use the drug in clinical practice. From like a design point of view, we're very much following the playbook kind of established by other companies in this area. So we are looking to enroll first-line patients who have active inflammatory disease as measured by CAS as well as by a cap on the number of months since onset of symptoms. We try to be a bit more precise as well on how we define who has like anti -- who has inflammatory disease and would benefit from a treatment like this. We're setting a cap on how many, that patients must have at least 3 millimeters of proptosis in excess of what you'd expect for a race/gender standards, as well as a requirement that patients come in with a positive thyroid stimulating immunoglobulin tests. So we will very much try to select the patients who have active inflammatory disease driven by autoantibodies.

Okay. Then I think this study also allows, especially for the part B, right, if you're a non-responder, you can continue on the therapy. Why is that the case?

Right. So the active period of TED can last anywhere from 6 months to 2 years, maybe a bit longer than that. In certain situations it tends to yield to a more inactive kind of fibrotic phase. The choice of 6 months of the treatment duration was a bit arbitrary. There wasn't a lot of dose justification for a 6-month endpoint. It's just the way that the first trial, first pivotal trials were done in TED. And so others have kind of followed suit, but the kind of the rationale to dose Tepro for 6 months, the stop was really based more on what was believed to be a tolerable dose and duration. However, given that fact that the active inflammatory peer can last longer than 6 months, we think there is rationale that in some patients where the treatment -- the inflammation persists longer treatment may be clinically warranted. And so we're interested in kind of exploring that like that component where it is warranted, inflammation persist, there maybe you need to keep someone on drug longer. Now it's much easier to kind of get patients and physicians to agree to that with a class like ours that has the benefits from a lot of class experience across the last 2 decades and administration profile where we're talking about every 8 week subcutaneous administration. So, we think those patients will benefit from a 6-month course, should be enough, but in situations where it's needed, we think we can offer that flexibility for the doctor tailor the treatment for their patients.

What is the timeline for data? And then what is the bar from a data perspective? Especially please bring in the safety component because safety is where, I think, is the biggest issue, I think we see we see with TEPEZZA.

Right. So maybe taking that point first, I mean this is like where we think we benefit from the fact that our antibody is part of a class that has a lot of class experience. Over 1 million, an estimated 1 million people have been dosed with an IL-6 pathway inhibitor across clinical trials as well as commercial usage. So there's already a very well-defined profile as well as good evidence to support the tolerability profile in longer-term dosing settings, including in RA. So we benefit from that for the IL-6 class that we're looking to bring in. There have not been, there's not evidence of the auto toxicity that's been seen with some of the other IGF-1Rs to date here. So we think we can bring to market a mechanism that a physician can very reliably use without -- getting burned by like potentially like irreversible side effects that concur with some of these other classes. If you look at the TED literature with IL-6 inhibition, like across the board, the safety profile has been very good with a very minimal amount of AEs that are being reported. So it is very, has been well tolerated to date, which we expect given that most TED patients tend not to be heavily pretreated with a lot of other classes, they're not on as many concomitant immunosuppressants or other agents and the patient profile tends to be a little bit younger than RA, some of these more severe type indications here. So we're very confident that this mechanism will be well tolerated in the patient population we're looking to go into.

So safety is good. Is there any clinical efficacy bar that we should be looking at?

Right. So we haven't disclosed the exact powering. We'll talk more about that as we get further into trial and closer to data. We've guided to data in the first half of 2025 from this trial. Again, this is 1 of our 2 pivotal studies. We've, we're only 27 patients per arm. And so the way that we've kind of been framing it is that our goal here, as I mentioned before is to create a new standard of care for this disease. We could enroll 100 patients per arm to tease out a small benefit. But if we're talking about a small benefit, we're probably not going to change the standard of care. And so we power this to show a meaningful effect like a clinically meaningful effect size here on proptosis. Now let me just kind of switch gears a bit to just mention that, we speak with a lot of physicians about their patients, about the disease and what we hear pretty uniformly is that proptosis may be the primary endpoint, but it is not present in every patient with TED. It's not necessarily the chief complaint, even when it is present in things like diplopia, pain, eye discomfort, matter, sometimes even more than proptosis to patients here. And so the way we kind of look at is that proptosis is important for gain the approval, but we have opportunity here to kind of generate a more comprehensive data set to really help physicians choose like what is the right treatment option they want for their patient.

Yes. And then given that Roche is in this space as well, I mean, I would assume that you would want to be head-to-head with them and when you come to the market. So what will be the next or when we will find out what the next study, will it be? You have to wait for this too? I mean, the mechanism is that the data is already there. So why wait to start another study?

Right. So it's an interesting point, something that we've agreed with and we continue to speak about like our development plan as currently as Gerhard described that we've laid out is to do a Phase IIb pivotal trial and complement that with a basket study. I mean we do believe the potential for IL-6 inhibition extends beyond just the first-line treatment setting. We think it should work in anyone who has active inflammatory disease. In fact, if we look at most of the Toci literature, those were patients not necessarily in first-line. They were mostly steroid-experienced patients in later line like setting. So there is rationale in that group. It tends to be a little bit more heterogeneous of a group, and so it doesn't make sense to include that in the Phase IIb. And so we've contemplated doing a separate basket trial that we'd look to start in early 2023. Though we agree with you, just given the investor as well as investigator enthusiasm for new mechanisms here along with just the ample volume of data for the IL-6 class, we, with our advisers and investigators have been discussing other ways we might build to upgrade pivotal, upgrade the basket trial into a second pivotal. Now we are in a fortunate financial position. We've raised enough money to be able to pay for a second pivotal trial here. So we would not necessarily need to come back to market before for doing that.

I see. But those plans, you want to sort of outline, let's say, over the next 6 to 8 months, right?

I think it's a fair assumption, yes.

Okay. Very good. Okay. Maybe just one more question on the landscape drive. So you have the IGF-1R, we know the issues. What about the FcRns, how do they play into this dynamic, not enough data on FcRn. I think interesting rationale, we're going to get the data most likely in 2025, but just curious how you are thinking?

Sure. I mean I've been tracking and studying the FcRn class probably as long as anyone on the street versus a public market investor than as COO for Immunovant through some of the kind of early decisions for the company, including taking out public. And so it's an area that I know probably as well as anybody does. The FcRn class works in a way where it depletes IgGs and by virtue of that depletes auto antibodies. Now what we've seen in like TED is data that I think is a little bit hard to kind of make heads or tails of the improvement on proptosis has been -- I would say middle road, the improvement on CAS has been like less clear. And so our takeaway here is that TED may be an auto-antibody driven disorder, but the auto-antibody may only be a component of it. And so lowering auto-antibodies alone may not address all the other components of the disease, including the T cell component, the acute phase response itself, the innate immune response where, and so there may be a limit to how much efficacy you can drive with just auto-antibodies lowering alone. This is what gets us excited about, something like IL-6 is a pleomorphic cytokine like it works on different cell types and by inhibiting that, we may be able to bring like more weapons to the fight. So lower auto-antibodies has been demonstrated across the 40-plus publications, auto-antibody reductions in the 40% to 80% range that's been seen in other indication settings as well, including MG, including NMO, right. But then beyond that, we know there's an impact on the acute phase response as well in T Cell components. So we think we could potentially bring in more comprehensive shutdown of the disease. If that holds true in TED, there's every reason to believe that should hold true in other indications as well even ones that are typically being thought about as being purely auto-antibody in nature.

One more question I have on TED, and then I -- maybe 2 minutes on the CV program as well. So chronic, it's a very big market. That's the area where I think when TEPEZZA was being developed, everybody was thinking now the data is going to be great, and it's going to be pretty big. But obviously, the talks limits it. Because you have to tell everybody that, oh, you could be hearing impaired. How do you see the chronic TED population playing out for IL-6? Are you doing anything to address that these low CAS patients?

Gerhard, do you want to?

What is the -- what is the path to get to chronic CAS patients?

Yes. So 6 years ago, no one thought the TED market was a real indication to go after. And so I think the field the investigators included are trying to figure out the right way to kind of identify patients, segmented. There's even discussion about what's the right nomenclature to use. And so chronic inactive, active -- terms kind of get thrown out, every company defines it a little bit differently. And so we think the best way to kind of think about this market is being divided into active versus inactive. Active, meaning people who have active inflammation that is like driving the symptomatology, versus inactive where patients don't have like less -- don't have immune activation at that point and much more like fibrotic in nature. Now within the active period, we think we can further subdivide that into like the acute versus chronic. I said arbitrary, but like kind of 12 months is sort of the cutoff that we've been hearing, folks, including ourselves, I believe probably is the right cutoff where we think IL-6 makes some more sense in that acute setting where it is an inflammatory like cytokine. It is revved up during the early acute period makes sense to kind of stop intervene early, stop disease at the source quickly, which is, frankly, in line with how physicians have thought about treating autoimmune disease or for generations to stop the inflammation as soon as possible. Now there is evidence from the rest of -- the Actemra literature, which does suggest that even in patients who've seen prior steroids or in many cases, multiple courses of it, they still have seen benefit through using IL-6 inhibition in that group. So we're interested in exploring that group potential in the basket trial to kind of -- trying to shed light on it, but it's an area where we are certainly interested in pursuing.

Okay. One, maybe 1 minute on the ASCVD because I think NOVO is running a big program there. How does that derisk because -- I mean, again, NOVO paid a lot of money to acquire that asset. So just talk about that.

Right. So this is part of the story that we are super excited about, and we never get enough questions from folks on it. Because in some ways, it is such a massive opportunity that's difficult for folks going to wrap their head around. We truly could be on the cusp of a brand-new way of treating a disease that affects tens upon tens of millions of Americans and people worldwide who have cardiovascular disease. Now the NOVO program is also an IL-6 antibody. They are currently in 2 large CV outcomes trials, 1 in atherosclerotic disease, the other in heart failure. That drug is dosed every month. We'll see data from that. We think in the 2025 timeframe based on what their public disclosures are. But again, we think this is a really like exciting like development where the read through is going to be clear. But if that trial looks anything like what we've seen based on the data analysis from CANTOS, from the other CV outcomes trials like where IL-6 has been very clearly implicated and associated with real like benefit. Like that unlocks not just ASCVD, but any number of other sub indications as well, stroke, AAA, heart failure, other subsets where like the biology should hold true as well. So we're really excited to be a part of the lead pack here, pioneering a whole new way to treat a disease that really does drive global disease burden.

If I may just add, I think we are very well positioned here. We interact with the FDA, so we are ready to start off Phase II soon. And the goal is to be Phase III ready when Novo Nordisk data reads out in 2025. And we also want to be a fast learner and then take all the key learnings and really determine the indications that we should go after. So there's a great opportunity to be actually learning from there kind of paving the way. And then on a pure properties at this point in time, we have the opportunity to be dosed quarterly versus monthly. And that's important if you talk about prevention and chronic use as well as it appears right now, a lower immunogenicity. So we're excited about this program, and we'll be ready to initiate Phase III as soon as we see some data.

Very good. Thank you, gentlemen. That's all I had for you guys. Thank you.

Thank you.

Thank you.