Upstream Bio, Inc. (UPB) Earnings Call Transcript & Summary

Annual JPMorgan Healthcare Conference. My name is Tess Romero, and I'm one of the senior biotech analysts here at JPMorgan. We're pleased to welcome to the stage Upstream Bio and presenting on behalf of the company we have President and CEO, Rand Sutherland. Rand, over to you.

Hello, everyone. Tess, thank you so much for the kind introduction. It's a real privilege to be here today and to share our story amongst all the innovation that's happening at this conference. It's really an exciting time for our industry. So I'm very pleased today to share our story at Upstream Bio. Thank all of you for being here. And with the requisite disclaimers, I will move into maybe a little bit of an overview about who we are and what it is that we're doing. And I think it's fair to say that at Upstream, we're a dedicated team focused on a single mission, and that is to develop an antibody called verekitug for severe respiratory diseases. Now, what is verekitug? Well, it's the only known drug in development that targets the receptor for Thymic Stromal Lymphopoietin or TSLP. TSLP, as I'll share with you in a moment, is an important mediator of a number of different diseases. And we actually have generated some very interesting data to suggest that we have a nicely differentiated profile for this molecule. Now, the provenance of the molecule is actually quite interesting. We did not discover it. We are developing it. Having acquired it outright from Astellas, who discovered the antibody actually in a collaboration with Regeneron. So, the molecule is fully human IgG1. It's a product of the Regeneron antibody discovery platform. And as I will share with you in a moment, it has very differentiated pharmacology that we believe could translate to an important and differentiated clinical profile. What we've learned so far from our clinical trials to date is that our antibody very quickly and for an extended period of time occupies 100% of free TSLP receptors. That translates to a pharmacological profile that is marked by potency. And that potency has actually allowed us in our Phase II programs in both severe asthma and chronic rhinosinusitis with nasal polyps, to evaluate dosing intervals as infrequently as every 24 weeks. So, I'll show you on what basis we made that decision. And I'll also show you really data that we believe prove proof of concept in asthma. And we'll show you some differentiated data on both exhaled nitric oxide and blood eosinophils to support that. On that basis, we've actually moved into Phase II, both in severe asthma and in CRSwNP. And also on the basis of emerging data that suggests a role for TSLP and COPD, we will actually be initiating a Phase II program in COPD in the second half of this year. Now that's an important catalyst for us, but I think data are always the most important catalysts. And so what we will be providing in the second half of this year are the top line Phase II data from our CRSwNP trial. And about a year from now the top line data from our Phase II trial in severe asthma. And it's important to know that all of our Phase II studies have been designed not as exploratory trials, but as potentially definitive studies that could serve as an important part of a BLA registration package. And that's following a very well trodden regulatory path in these diseases. I'll just say that we've got a great team, who have been doing this kind of work for a long time. I'm very proud to be part of the team. And we were also very happy to have a successful IPO towards the tail end of last year that has, given us great funding. We are actually funded into 2028. That will get us through the 2 catalysts that I mentioned and allow us to really get our COPD program well along. Now, I talked about our multiple ascending dose trial in patients with asthma demonstrating proof of concept, And I will go into those data, but suffice it to say, when you sort of take what we've learned about the molecule and you stack up our attributes versus potential competitors in tezepelumab, dupilumab, and mepolizumab, what you see is that by virtue of targeting the receptor for TSLP, we're able to dose this drug either every 12 weeks or every 24 weeks in clinical trials. We are able to do that actually in an injection volume that is very competitive. Even our, largest dose, 400 milligrams, can be administered in 2 milligrams subcutaneously. And when you look at the data from our program, what you see is the effect on exhaled nitric oxide is actually superior to that observed with tezepelumab or dupilumab. Of course, IL-5s do not traditionally affect exhaled nitric oxide and so there's no effect with mepolizumab. And also important to note, we are not an eosinophil depleter. And yet, despite that, we have an effect on eosinophil that also appears to match or potentially exceed that observed with tezepelumab as well. Because we're prosecuting TSLP, we don't anticipate being restricted on biomarkers, and that has been a feature then that has allowed us in our Phase II programs to move forward without restriction, again, in severe asthma, CRSwNP, and COPD as well. I mentioned the catalysts. I won't reiterate them again, but they are important, and they are coming, and they are coming on time. The leadership team is great, both on the executive side, but I think even more importantly on the functional leadership side. We've got people who have really been doing this for a long period of time despite the fact that we're small and relatively young. We are stocked with talent and we are focused on execution and we really plan to continue to getting this medicine as far forward and potentially to patients. I won't spend a lot of time on TSLP because I know many of you understand what TSLP is, but suffice it to say that it's an alarmin, which is a type of cytokine, and it's produced at the epithelial surface in the skin, the gut, and the lung. We've decided to go after respiratory diseases, but that sort of breadth of expression actually gives you a sense of where this drug could potentially go from the standpoint of therapeutic areas. And what's a very unique and I think nice feature of TSLP is not only does it abrogate type 2 signaling, but because of its breadth of effect, it also has an effect that could be viewed as sort of down modulating type 1 inflammatory pathways and also potentially fibrosis as well. There's really, I think, good human genetics and actually human disease biology that have validated and even into the commercial space with TEZSPIRE, TSLP and a lot of these diseases. And so we want to be able to leverage that biology, but then also take advantage of differentiation to potentially bring an even more efficacious and preferential medicine to patients. As I mentioned, we're focused on respiratory because we think that this is actually the sort of nexus of reduced risk, highest probability of success, actually highest degree of unmet need, and therefore highest potential commercial opportunity. But as I mentioned, there are a number of potential other disease states where the biology has been validated in one way or another and where over time we could potentially consider going forward. So let's turn to the data, because I think these are what matter. And I would just say that our data come not just from the preclinical space, but also from Phase I studies. All of the preclinical work and actually the Phase I single ascending dose study were conducted by Astellas before we acquired the molecule. We've now taken it forward from the multiple ascending dose trial and forward. And what you can see is that not counting the folks in our Phase II trials, 120 patient's participants have actually received this drug so far. And what we've learned is that the drug is generally well tolerated. It has a very predictable and reproducible pharmacokinetic profile, which is great and has been very helpful in terms of planning and dose selection. It's quite available subcutaneously. And so, as I mentioned, we're going forward with a subcutaneous presentation. There's been nothing in the way of clinically meaningful immunogenicity thus far. And importantly, the profile of this molecule is marked by rapid, substantial, and sustained effects on disease associated biomarkers. Now the data from the Phase I single ascending dose trial in healthy volunteers actually put on the table very early in the clinical life of the program the fact that this drug could potentially be dosed at least every 12 weeks, if not potentially every 24 weeks. And it was really those data that then led to the design and conduct of a multiple ascending dose trial, which, was placebo controlled, was actually randomized and blinded and really performed in a way that was, designed to give us a really broad data set to help us understand how this drug might or might not work and if it did, how might we take it forward from the standpoint of dose selection. Importantly, this MAD study was conducted in patients with asthma, all of whom were, because this was a signal seeking study, required to have evidence of type 2 inflammatory tone as manifested either by blood eosinophils or exhaled nitric oxide concentrations. And there was a range of background therapies, but all of these patients did in fact have asthma and, and were enrolled in the study, again in 4 different cohorts, 6 receiving per cohort active drug to placebo with the regimens that you see here ranging from a 25 milligram single dose all the way up through 100 milligrams dosed every 4 weeks. The primary objective, of course, was safety and tolerability, but we were able to obtain very useful pharmacodynamic and pharmacokinetic data as well. First, importantly, from the standpoint of safety, the safety and tolerability profile seen here is very consistent with other agents in the class. The class writ large noted for actually fairly bland safety. There is nothing here that was concerning, nothing that required discontinuation of the drug or subject participation, and importantly, nothing that prevented us from moving forward into Phase II with these doses of dose regimens. Now, I mentioned the reproducibility of the pharmacokinetic profile and what we're showing you here are the modeled curves from the Phase I SAD overlaid with the individual points from the Phase I multiple ascending dose trial. And what you see here across healthy and patients, participants with disease is that, actually the profile is quite reproducible, with perhaps the exception, actually notably, that at the higher dose regimens, further out, there's actually a bit more drug available on board than would have been predicted, sort of helping push us even further, to understand that Q24 week dosing could actually be an opportunity here as well. But what really got us excited were the pharmacodynamic data. I'm showing you 2 different things here. On the left of the slide, you're seeing receptor occupancy data going from 100% of receptors being available sort of at the top and 0% of receptors being available at the bottom. You see a black line showing the effect of placebo, which is no effect. But with all doses administered, what is observed is that at 2 weeks there is 100% receptor occupancy. And that with all doses except for the 25 milligram single dose, that effect or that occupancy of the receptor persisted for up to 24 weeks after the final dose. Now even with that low dose single administration of 25 milligrams, you see an effect for 12 weeks. So these are really quite durable effects from the standpoint of receptor occupancy. And then if you just move to the right, what you see is a very similarly durable effect when it comes to the disease biomarkers of blood eosinophils and exhaled nitric oxide. Now these both probably represent different things. Eosinophils may be representing a bit more of systemic type 2 tone with exhaled nitric oxide, really, because it's produced in the airway epithelium, reflecting airway inflammation. And what you see with both of these and really very much overlapping both the kinetics and the magnitude of effect with these different dose regimens, reductions of blood eosinophils essentially to normal circulating concentrations and reductions to approximately normal of exhaled nitric oxide as well, recognizing that there's some variability in starting concentrations. Now just to contextualize these data a bit, we sort of stood them up against what's been reported in the tezepelumab development program, and with the important caveat that we're comparing data from a Phase I multiple ascending dose trial to data from the Phase II and Phase III programs from TEZSPIRE. What we see is that when we look at the absolute change in parts per billion of exhaled nitric oxide across these 3 different dose regimens, we saw between a 28 and 47 part per billion reduction in exhaled nitric oxide, which when translated to percent reduction from baseline, equated to about a 51% to 54% reduction in exhaled nitric oxide. And when you look at these versus what was observed in the TEZSPIRE program, you see that the absolute magnitude of reduction there was about 17 parts per billion, with a percent versus baseline change of about 25% reduction as well. So at a very high level and sort of, qualitatively, quantitatively looking at comparability versus TEZSPIRE, it appears that there's evidence here of an effect that is at least, if not greater than that observed with tezepelumab. And we were then able to take those data and actually use them to do fairly sophisticated PK and PD modeling to really understand how our potency and how that observation we made about receptor occupancy then translated to dose selection for our Phase II trials. And so what we're showing you here are the results of that modeling and comparing it against the outputs from the tezepelumab program. And what you see when we calculate the Emax, which is essentially the calculated maximal effect of verekitug on exhaled nitric oxide. And when we compare that versus tezepelumab, you see that our Emax is calculated at 43.4% compared with around 28% observed with tezepelumab. But I think most importantly, and when you look at the EC50 and the EC90, so these are the concentrations of drug required to achieve an either 50% or 90% maximal effect on exhaled nitric oxide, you see that our concentrations are 0.008 or 0.07 micrograms per ml, which are approximately 300 fold lower than required for tezepelumab. So this is a very strong sign of the potency of our molecule. These data were very helpful to us in terms of being able to do robust modeling and dose selection for Phase II. And on the basis of these data, we were actually able to select 2 doses for our Phase II program in severe asthma. We're taking forward 100 milligrams Q12 weeks and 400 milligrams Q24 weeks in that trial. Now what you see here is that we've shown the sort of population predicted drug concentrations for both of these dose regimens and we stacked them up against the EC90 for exhaled nitric oxide. And what you see is that very comfortably, 100 milligrams Q12 keeps drug concentrations above the EC90 for the entire 48 week period that we modeled here. And in the case of 400 milligrams Q24 weeks, the same is true with perhaps the exception of like the last couple of days of that 24 week dosing interval. And that's important to note, because that 2 days may or may not matter, but we'll find out in our trials. Importantly, however, we have used the EC90 for exhaled nitric oxide as our threshold for efficacy here. And that's a very conservative way to look at this. Normally, you might use an EC50. Had we chosen the EC50, we would be well above that for the entire period with both of these dose regimens. So our going in hypothesis actually in the severe asthma program is that these 2 doses and dose regimens may not be distinguishable from each other. We'll see what happens. But we're working hard to get the data and see what's true and what isn't. Now, as I mentioned, we've got these 2 clinical programs underway. I think in the interest of time and maybe because we'll discuss a little bit about this in the Q&A, I won't get into the details in great depth other than to say again that both of these have been designed with sufficient power with the right end points, such that if they are positive trials, they will give us a reasonable basis to go to the regulators and have a discussion about including these trials as potentially one of 2 registrational studies. And I would also note that we fully intend to take the same approach with our COPD program in which we intend to dose the first patient in the second half of this year. So again, just as a reminder, the nasal polyps program will read out top line data in the second half of this year. Recruitment is going well, and we feel very good about that commitment. Similarly, with severe asthma, which we intend to read out in the second half of next year. I think just maybe quickly to wrap things up, these are large markets that we are looking to address. Biologic sales in severe asthma in major markets are still growing, despite the fact that there are now 6 biologics approved for this indication. And it's projected that there will continue to be growth at approximately 6% through 2032 in severe asthma with sales maybe exceeding $12 billion. And you might say, well, there are already 6 drugs on market. Is there really an opportunity here? And it's been really interesting to observe this market and watch it sort of maybe evolve over time because what has become clear is that even though there are efficacious biologics available, that there still is a lot of opportunity in terms of penetration and the ability to treat patients who need to be treated with biologics who are not yet receiving them. And a very interesting feature of this market has been that when new differentiated and efficacious drugs come to market, they actually can take substantial share. I think all you have to do is look at the TEZSPIRE launch to recognize that that's true. And when they take that share, they don't really do it by eroding the share of others. They do it by driving penetration. And so, we believe that this will be a feature of the market that will continue to, be operative for a substantial period of time. And it's also one, by the way, that we would read forward to the COPD market as well, recognizing that that's a much younger market now with Dupixent only having been within the last few months approved in the United States for the treatment of COPD. So we think there's substantial commercial opportunity here, differentiated assets. I've shared with you our data and the rationale for why we believe we could be differentiated, and I've shared with you that we're doing the trials to understand, if we are differentiated. So we're looking forward to reading these out, and I think it's an exciting time for the company. We are not just using our belief here. We're using data, and we're actually using the results of market research to help inform our understanding. And just working from the bottom up, we know that the TSLP mechanism is an attractive mechanism of action. It's differentiated in a number of ways that are clinically meaningful from IL-4, IL-13, from IL-5, from IgE. And so from the standpoint of just prescriber preference and understanding of this mechanism, there is a strong understanding and a high preference for it that's an attractive mechanism of action. And then when you move up and you just test, for example, the performance of a teze-like efficacy profile, but then add to that Q12 or Q24 week dosing, we see that that's very attractive to prescribers. And also very much supported by payers as well. And I think probably most importantly, something that patients are really excited about, because the ability to take a drug maybe 2 or 4 times a year versus every 2 or 4 weeks is a big difference for patients. And so our base case for differentiation, I think, is extended dosing. We've showed you the reason to believe there with even a TSLP class like effect. But we do believe that there's an opportunity for an upside here that could potentially involve even a higher degree of efficacy because of the potency of our molecule and because we're targeting the receptor. So all forward looking statements, we have to do the work. We need to read these trials out, but we're excited to see what we will show there. So, having already said what I was going to say about COPD with the exception that it's an even bigger market than severe asthma, I will finish there and Tess, happy to chat further.

Great. Thank you, Rand. So you talked just now about how verekitug is the only therapy currently in development targeting the TSLP receptor and not the ligand. Why is that? And can you briefly maybe orient the listeners to the history around the target?

Sure. All right. There we go. So it's hard for me to exactly answer why because we're not in the heads of everybody making decisions, obviously, in all the companies. I think there have been previous programs or at least one program that we know of targeting the receptor that was Roche's program. We also know that that program was terminated in Phase I. The reasons for that are have not to my knowledge been publicly disclosed. But I think suggest, given the phase of termination, that there could be a number of important limiting approaches there with that program that do not appear to apply to us. As you have already alluded to, it is important to note that we are the only drug in development targeting the receptor. Everybody else is going after the ligand. And we're doing some very interesting work at Upstream trying to understand the why behind why this makes a difference. And there's some very interesting observations that we've made about relative expression of the receptor versus relative expression of the ligand, which indicate that there's a lot less receptor being expressed than ligand. We've also observed that there appear to be differences in turnover of these targets as well with a much slower rate of refresh, if you will, of the receptor as a target than of the ligand. So we're working on these data and we'll be publishing them, but it suggests that it's simply hard to get enough drug on board for enough of a period of time to really, sop up enough of the ligand to have an effect that's similar to what we observe.

So maybe we'll move stepwise through the readouts here. Oh, question? Okay. Go ahead.

Thank you. Thank you very much. [ Meiyu Bukhana ] here from PACS Group. I was wondering, given your really high potency and reasons we've seen or we're guessing from past failures in atopic dermatitis, what criteria are we watching for internal or external for potential indication expansion there?

Yes. So the atopic dermatitis question is a really interesting one. And you've seen, I think, even over the last few weeks, other companies been licensing assets, targeting TSLP and deploying them in AD. We have looked very carefully to the extent that we can to the data from Amgen's 2 robustly designed and executed Phase II programs in atopic dermatitis with tezepelumab, both of which were negative, and have concluded that those trials were robustly negative. Now, it's interesting that that was the observation given the genetics and sort of human disease biology that would suggest a strong role for TSLP in atopic dermatitis. So we don't quite understand why that turned out the way it did. But it does lead us to believe that the biology there may be a little more complex than simply just TSLP, TSLP, TSLP. So we are not pursuing AD at this point in time. We are not pursuing other indications at this time, not for similar reasons, but just because right now we're focused, we're resource not constrained. But we have enough resources to do the work that we're doing, but not to go after other indications. So we'll be focusing on severe respiratory diseases for now. As we move forward and as our sort of book of business and resources change, we may consider either other dermatological diseases or potentially gastrointestinal diseases as well, including Eosinophilic gastrointestinal diseases.

Yes. So moving stepwise here, I thought maybe we'd start with CRSwNP just because it's data expected this year. Rand, you alluded a little bit here, but how is enrollment going and how should we think about when you could complete enrollment to meet that guidance?

Yes. So enrollment is going very well. We're not specifically communicating where we are right now, but we have committed to read these data out by the end of the year and we will do so.

Okay. How was the trial designed to optimize its chance for success?

Well, I think it's been interesting, even over the course of the last few years, the regulatory guidance, at least in the U.S, for CRSwNP has evolved. And so we are taking that into account. And so the first thing to do is design your trials in a way with endpoints that not only are meaningful to payers, patients, and physicians, but also to regulators. So it sounds obvious, but that's important to do. We have also really, again, designed these trials in a way that they are sufficiently powered to detect effects that are not only clinically meaningful, but are clinically meaningful from a contextualization standpoint versus the potential competitors. And so this has really been designed as a very robust potentially registration enabling trial. And I think we're in a good place to have it read out positive or negative in a way that will be robust.

Can you quantify putting the numbers around that for us?

Yes. Well, I mean, let's just say that if you, for example, look at the label for dupilumab, there's about a 2 point change in the endoscopic nasal polyps score that was reported there. We think that that's probably relatively a floor for efficacy that we would want to see to be competitive. I mean, there's a little bit of room around that. We've powered to be even a little bit more robust than that. So, I'm not going to put specific numbers on it because it's also a question in the field about the dynamic range of the nasal polyps score versus some of the other endpoints in disease. But we are well positioned to read out if positive a competitive profile from that standpoint.

What were your impressions of Amgen's Phase III readout in November for TEZSPIRE and the indication? And what are you monitoring for in the fuller results?

Well, we were left wanting more, which hopefully we're going to get sometime in the next couple of months, maybe even, we don't know. But there are conferences early in the year that would make sense for a readout there. We were happy to see sort of their top line notification. And that's reassuring, I think, for patients that this is a tractable pathway. Of course, their secondary analysis from their asthma program already had suggested that. And we've seen with the dupilumab and others that modulating this biology can really lead to significant clinical benefit in these diseases. So we're excited to see what they've done. We're excited to learn from it and it should provide yet another very nice way to contextualize our data.

Switching gears now to severe asthma, similar question that I asked for CRSwNP, how is this enrolling and how should we think about timelines to data?

Also enrolling well, also on track to read out when we have committed.

Can you characterize your expectations a little bit more around what constitutes good data and what would be a home run?

Well, good data, we don't always talk about this in these kind of settings, but high quality data from well conducted, carefully monitored clinical trials where the team is very much on a daily basis engaged with sites and with CROs is actually really important. It's something that we've put a lot of effort to as a company and really feel very strongly about. So we want data that are interpretable. We want data from trials, as I mentioned. We've taken the same approach with severe asthmas, with NP and well with COPD in terms of robust trial design. And again, I think I sort of showed you a competitive context, which included TEZSPIRE, Dupixent, Nucala. We need to be in that range for efficacy. And we also potentially need to differentiate on dosing interval as well. So we would not see lesser efficacy necessarily being worth the trade off of an extended dosing interval there.