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

Thank you for standing by, and welcome to the Upstream Bio Phase II VIBRANT Top-line Results Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Meggan Buckwell, Director of Corporate Communications and Investor Relations at Upstream Bio. You may begin.

Good morning, and thank you for joining us today. Before we begin our formal comments, let me remind you that during today's webcast, we will be making forward-looking statements that represent the company's intentions, expectations or beliefs concerning future events. These statements represent our views as of this date and should not be relied upon as representing our views as of any subsequent date in the future. Additionally, please note that this presentation includes comparisons of verekitug against existing treatments and product candidates in development based on third-party published data. Head-to-head clinical studies have not been conducted between verekitug and these products and differences exist between trial designs and patient characteristics. Caution should be exercised when comparing across studies. With me today are Upstream Bio's CEO, Dr. Rand Sutherland; and Upstream Bio's Chief Medical Officer and Head of R&D, Dr. Aaron Deykin. Looking at our agenda today, Rand will begin the call with an overview of the results and introduction to Upstream Bio and our plans for our lead asset, Verekitug. Aaron will then review the Phase II VIBRANT clinical study top line results in detail, after which Rand will conclude the call, and management will take questions. I would now like to turn the call over to Rand Sutherland.

Thank you, Meggan, and thank you all for joining us today. We are thrilled to share the top-line data from the Phase II placebo-controlled randomized VIBRANT trial of Verekitug in chronic rhinosinusitis with nasal polyps or CRSwNP. As Aaron will share in detail in a few minutes, verekitug administered just once every 12 weeks, had clinically and statistically significant effect at the end of this 24-week study on the primary endpoint of Endoscopic Nasal Polyp Score as well as key secondary endpoints, including the Nasal Congestion Score. Remarkably, this trial also demonstrated a significant impact of verekitug on the need for steroids or surgery in study participants. Verekitug was also generally well tolerated with no serious adverse events reported consistent with previous studies. These trial results further extend the consistent body of preclinical and early clinical data from our development program which together suggest the potential for verekitug to deliver meaningful clinical benefit at a significantly reduced dosing interval versus other biologics. These are the first placebo-controlled data for an extended dosing interval agent in the TSLP pathway, supporting our intent to develop verekitug in this and other indications, including severe asthma. I'd like to put the verekitug data in context of the current landscape of approved or investigational treatments for CRSwNP with a focus on TSLP. This comparison is for illustrative purposes only since head-to-head studies with verekitug have not been performed and study methodologies may differ. With these caveats, verekitug administered every 12 weeks, equivalent to 4 times per year, demonstrated improvements in absolute and placebo-corrected endoscopic NP asset 24 weeks that were generally consistent with those seen with Tezepelumab, which requires administration every 4 weeks equivalent to 13x per year to achieve this effect based on published studies and product labeling. Agents targeting other pathways demonstrate clinical profiles that either require far more frequent injections per year to achieve similar clinical benefit as in the case of Dupilumab or demonstrate significantly lower treatment effects in the context of twice-yearly dosing as seen in published trials with Depemokimab, a YTE modified anti-IL-5. Before I turn the call over to Aaron to review the trial results in further depth, I'd like to provide a bit of context about Upstream Bio about our molecule verekitug and about CRSwNP. Upstream Bio is a clinical stage immunology company, and our initial focus is on severe respiratory diseases. We are developing verekitug, the only known antagonist of the TSLP receptor. Verekitug's unique pharmacology has been evaluated in preclinical and early clinical studies and is characterized by rapid, complete and sustained occupancy of the TSLP receptor for up to 24 weeks after the last dose. Our corporate strategy is aligned with our focus on severe respiratory diseases and is designed to maximize the value of verekitug across multiple indications with unmet need. VIBRANT, our Phase II trial in CRSwNP is now complete. VALIANT, our Phase II trial in severe asthma is on track to report top line data in the first quarter of 2026, and VENTURE, our Phase II trial in COPD is actively enrolling participants. TSLP biology also supports future expansion into other therapeutics, including other therapeutic areas, including dermatology and GI. Verekitug targets the receptor for TSLP and blocks its assembly. It is the only agent known to do so and inhibiting TSLP has been shown to reduce both type 2 and non-type 2 inflammatory processes, providing broad anti-inflammatory effects. The TSLP receptors both expressed and renewed at lower rates than the TSLP ligand and our data has shown verekitug by virtue of targeting the receptor is approximately 300-fold more potent than Tezepelumab, an antibody targeting the TSLP ligand. On the basis of preclinical and clinical data supporting verekitug's highly potent inhibition of the TSLP receptor, our clinical programs have been designed to test the translation of this potency to both dosing interval and efficacy in CRSwNP, severe asthma and COPD. CRSwNP is a TSLP driven upper airway inflammatory disease, which causes significant and disabling symptoms. These symptoms have a major impact on quality of life and severe forms of the disease can require recurrent surgery and courses of systemic corticosteroids, which can cause substantial morbidity in the form of osteoporosis and other complications. Because of overlapping disease biology, the majority of patients with CRSwNP will also have comorbid asthma. In recent years, novel biologics have been approved for the treatment of CRSwNP and while sales of these therapies in CRSwNP now exceed $1 billion annually, they are projected to grow in coming years, driven by the arrival of additional agents and expanded use in both surgery experienced and surgery-naive patients. Our market research indicates a high degree of interest among both allergists and ENTs for the use of biologics in this indication with a strong belief that TSLP inhibition could be a highly efficacious mechanism of action in this disease. With that introduction, I would like to turn the call over to Dr. Aaron Deykin, Upstream's Chief Medical Officer and Head of R&D, to take us through the details of the top-line VIBRANT Phase II data.

Thanks, Rand. First, let's start by reviewing the VIBRANT study design. VIBRANT was a Phase II randomized, double-blind, placebo-controlled parallel group clinical trial designed to assess the efficacy and safety of verekitug in adult patients with moderate to severe CRSwNP. Eligible participants who were enrolled from the U.S. and 4 European countries had a documented history of nasal polyps requiring prior NP surgery or systemic corticosteroids in the past 24 months, had a bilateral endoscopic nasal polyp score at screening of at least 5, had ongoing CRSwNP symptoms despite standard of care treatment and had a nasal congestion score or NCS of at least 2 during screening. 81 participants were randomized in a 1:1 allocation to either 100 milligrams of verekitug or placebo subcutaneously administered once every 12 weeks over a treatment period of 24 weeks. The VIBRANT trial was designed with widely accepted and standardized endpoints. The primary endpoint was the change from baseline in nasal polyp score, NPS at week 24. This primary endpoint has been used in several registrational trials for other biologic treatments for CRSwNP. The sample size provided greater than 85% power to detect a clinically meaningful treatment difference of 1.5 points on the NPS. Secondary endpoints included the NCS, sinus opacification on CT scan evaluated using the Lund-Mackay score or LMK. Total Symptom Score, or TSS, Difficulty with Sense of Smell Score or DSS and percentage of participants requiring systemic corticosteroids or nasal polyp surgery. Safety was carefully monitored and characterized in collaboration with an independent data monitoring committee. Now reviewing the disposition of the ITT population, 81 patients were randomized with 40 randomized to receive placebo and 41 randomized to receive verekitug, providing ample statistical power to detect a meaningful change in the NPS over the 24-week treatment period. We do note one subject was a screen failure but was randomized in error to verekitug and was not dosed. All participants in the verekitug arm completed treatment and 5 subjects, all in the placebo group withdrew from the study. As a result, the discontinuation rate from this study was lower than anticipated with 75 participants or 93% of those enrolled completing the trial. Now as we look at the baseline characteristics for the participants in this study, we see that they were consistent with the design and were generally balanced across the dose groups. We did note a slightly higher baseline eosinophil count in the placebo group, but do not believe this affects the interpretation of our results. Furthermore, as we'll detail further shortly, the characteristics of the population studied in VIBRANT are similar to those included in recent studies of other biologics for CRSwNP. Now considering safety, we're very pleased to see that verekitug was generally well tolerated with a profile consistent with that we've seen in our previous studies. Overall, the incidence of treatment-emergent adverse events, or TEAEs, with similar across the treatment groups and TEAEs related to study treatment occurred more frequently in the placebo group. No severe AEs or serious AEs were reported and no grade 3 or greater injection site reactions were observed in this study. Now the most common treatment-emergent adverse events that is events occurring at 5% or greater in the population in this study were up for respiratory tract infections, sinusitis, nasopharyngitis, nasal polyps and headache. All of which are associated with CRSwNP itself. Now turning to efficacy. We are very pleased to report that in the VIBRANT study, verekitug administered just once every 12 weeks had clinically and statistically significant effects at the end of this 24-week study on the primary endpoint of endoscopic nasal polyp score as well as key secondary endpoints, including the nasal congestion score. Specifically, we observed at 24 weeks of placebo-corrected reduction from baseline in NPS of 1.8 points, in NCS of 0.8 points, in the LMK of 8 points, in TSS of 4.3 points and in DSS of 0.9. Now consistent with FDA guidance, these results are based on the observed data without consideration of intercurrent rescue systemic corticosteroid use. And in this regard, the estimates of treatment effects are considered more conservative than results using an approach with sensors data observed data systemic corticosteroids. It's an important point to keep in mind, as notably, this trial also demonstrated a significant 76% reduction in the need for steroids or surgery in the study participants. Now considering the trajectory over time in NPS and NCS, we again see that at week 24 for verekitug treated patients achieved a clinically meaningful 1.8 placebo-corrected reduction in NPS change from baseline and a 0.8-point placebo-corrected reduction from baseline in NCS. And again, I'd highlight here that these do not take into account or adjust for the impact of rescue systemic corticosteroids. Looking at the NPS, we see that the majority of the effect is apparent at week 12, although we do see continued improvement to week 24 and as it does not appear that our plateau in NPS has been reached, a study of longer duration, such as we plan for Phase III, will clarify the potential for additional effects of verekitug on NPS over time. With NCS, we observed reductions occurring as early as 2 weeks, where a nominally statistically significant difference between groups was first seen. Importantly, this effect was maintained throughout the dosing interval and these observations are consistent with the rapid and sustained suppression of inflammatory biomarkers that we have seen in our prior trials. When we analyze the data in clinically relevant subgroups of patients, we also observed that the effects of verekitug on NPS were robust. Our analysis shows that point estimates for the placebo-corrected NPS over 24 weeks are consistently documented favoring verekitug in these subgroups. Now when considering the VIBRANT trial in the context of other studies completed with other biologics, it's first important to compare the population study. As demonstrated here, the baseline characteristics of the VIBRANT participants are very consistent with those enrolled in other studies, including age, disease duration and severity, presence of comorbid asthma and the need for prior surgery. We do note slightly higher baseline eosinophil counts as compared to some trials as well as a lower rate of recent treatment with systemic corticosteroids. We believe the latter may reflect the change in CRSwNP management driven by an increased use of biologics versus systemic corticosteroids in recent years, but overall, I do not believe that either of these aspects meaningfully affect the interpretation of our results. Now putting our results in the context of others and with the caveat that this comparison is for illustrative purposes only, verekitug, again, administered every 12 weeks equivalent to 4 times per year demonstrated improvements in both absolute and placebo-corrected endoscopic nasal polyp score at 24 weeks that are generally consistent with those seen with Tezepelumab, which requires administration every 4 weeks equivalent to 13x per year to achieve this effect based on published studies and product labeling. Agents targeting other pathways demonstrate clinical profiles that either require far more frequent injections per year to achieve a similar clinical benefit as compared to verekitug. For example, in the case of Dupilumab or demonstrate significantly lower treatment effects in the context of twice-yearly dosing as seen in published trials of Depemokimab, a YTE modified anti-IL-5. So in summary, verekitug administered just once every 12 weeks, have clinically and statistically significant effects at the end of the 24-week study on the primary endpoint of endoscopy nasal polyp score as well as key secondary endpoints, including the nasal congestion score. Remarkably, this trial also demonstrated a statistically significant impact of verekitug on the need for steroids or surgery in the study participants. As we've seen in previous studies, verekitug was also generally well tolerated with no serious adverse events reported. These trial results further extend the consistent body of preclinical and early clinical data from our development program, which together suggests the potential for verekitug to deliver a meaningful clinical benefit at a substantially reduced dosing interval compared with other biologics. Taken together, the data to date reinforce our belief that the differentiated profile we've observed is driven by verekitug's unique mechanism of action. So we're very pleased with these data and look forward to maximizing the impact of verekitug for the treatment of severe respiratory diseases. And with that, I'd like to now turn it back to Rand.

Well, thank you very much, Aaron. As I hope you can all hear we are very excited about the positive trial results we're reporting today. How are we interpreting these data? First, verekitug delivered significant effects on the primary and key secondary CRSwNP endpoints in this VIBRANT trial. The clinical activity is delivered at a differentiated dosing interval of every 12 weeks and importantly, verekitug's safety profile continues to be favorable. Verekitug's the first extended dosing TSLP agent to demonstrate this profile, which is uniquely driven by potency rather than antibody engineering which simply extends drug half-life without altering potency. Given the role of TSLP and other respiratory diseases, including asthma and COPD, these data support further development of verekitug in multiple indications with substantial unmet need and commercial opportunity. As I mentioned earlier, TSLP drives inflammation in all of the diseases in which we are currently testing verekitug, along with others, and these data give us confidence that verekitug may also demonstrate meaningful clinical effect in severe asthma and COPD. Our rationale for testing verekitug in both CRSwNP and severe asthma has centered on a number of data points. First, the TSLP plays an important role in driving inflammation in both diseases; second, that many patients will suffer from both indications at the same time and third, by the fact that biologics targeting not only the TSLP ligand, but also the IL-4 receptor alpha, IL-5 and IgE all have demonstrated efficacy in both indications. In general, the relative magnitude of effect of these agents on NPS in CRSwNP studies is commensurate with the magnitude of their effect on reducing exacerbations in severe asthma. Taken together, these points, along with the VIBRANT data in CRSwNP increase our optimism that the clinical benefit of verekitug in severe asthma will be at the very least similar to that observed in the registrational studies of Tezepelumab and Dupilumab will also potentially requiring treatment only 2 or 4 times per year. Very soon, in the first quarter of 2026, we will add to our understanding of verekitug in this context with the planned top line data release of our randomized, placebo-controlled dose-ranging Phase II trial in severe asthma. As we conclude, on behalf of the entire team here at Upstream Bio, I would like to thank the participants who enrolled in VIBRANT, along with our clinical trial investigators and site staff who collaborated with us to execute this important trial. Your support and participation have helped us move an additional step forward in the development of a potentially new treatment option for CRSwNP, and we hope for other respiratory diseases as well. And lastly, to our outstanding team here at Upstream Bio, I appreciate all of the work and dedication you have put in to get us to this point. Thank you. And with that, we are happy to take questions. Operator?

[Operator Instructions] Our first question comes from Tess Romero with JPMorgan.

Congrats on the data here. So the first one is -- to what do you attribute the stat sig results you found across various secondary endpoints beyond nasal congestion score, which I think came in ahead of your expectations? And second, looking ahead, what are your preliminary thoughts around the dose used in the study? And where you think you could go from a dosing standpoint and the indication, do you think you might explore Q 24 weeks here? And why or why not?

Thank you very much. We appreciate the question. I think as we've mentioned in this -- in our narrative this morning, potency is what drives all of this. This is the single defining feature of verekitug. And so at a very high level, it is the attributes of the molecule, the fact that it targets a receptor and the aspects of turnover and refresh of the receptor versus the ligand that we think drives not just the top line, sort of primary and secondary endpoints, but really everything that we've shown today.

Sure. Tess, it's Aaron. And thanks for your question. Really to extend on what Rand said, I think that the very clear results with efficacy demonstrated across a range of endpoints begins with the molecule itself and the fact that it is efficacious, at least as demonstrated in this Phase II study. I'll also point out that a set of results like this really can only occur with a very well conducted study, where variability is reduced and you enroll the population that you intend to. And I think that we've been quite pleased that that's what we've been able to achieve. In terms of the dose considerations, our data here really do validate our model-based understanding of the PK and ultimately, the pharmacodynamics of the molecule. In particular, we do not see any attenuation of treatment effect at the end of the dosing interval. And that really suggests to us that with Q12 weeks, we certainly are controlling disease symptoms very well and completely throughout the interval. That being said, and especially given the validation we have of our PK/PD modeling from this study, there is a substantial probability in our mind that every 24-week dosing could be effective. However, that's really going to be proved out and informed by the coming results from our VALIANT asthma study where we're doing much more complete dose ranging. So ultimately, we expect to get those results and then contemplate a unified dose to move forward with in both indications. So we'll be really looking very carefully at those data that are going to be coming in the first part of next year.

Our next question comes from Yaron Werber with TD Cowen.

Congrats on really solid, solid data. I mean, both on efficacy, I mean, hitting stat sig and steroid use and surgery in a small Phase II is a big deal. Maybe just a question, Aaron. You mentioned -- so Teze, is I think the drug that you're sort of alluding to in the Phase III in the WAYPOINT study, they did not exclude patients that had steroid use. Have you had sensitivity and you did, so you took a more conservative approach. Have you had a chance to run some sensitivities? What would happen to the NPS and potentially NCS scores if you use the same endpoint? And then I have a follow-up as well.

Okay. Yes, Yaron, thanks for the question. And yes, we did use the statistical approach that's recommended by FDA in their guidance document, perhaps that might have been conservative in this Phase II study. But nevertheless, that is what we did. We do have a sensitivity analysis with respect to the NPS, the primary end point taking an approach that's consistent with what some others have done, which is to sensor the data after a patient is exposed to rescue corticosteroids. And when we do that, we do add an additional 0.1 to our treatment effect. So going from 1.8 to 1.9 on treatment effect on the NPS. Additional sensitivity analyses on the other endpoints are not available right now at the top line point that we are.

Okay. And then just a quick question on -- so there's no plateau in the NPS endpoint at 24 weeks. And so do you -- I know -- release everything at a medical meeting soon or at some point in the future. What are the biomarkers showing you on Fino is relating to the half life? I'm kind of wondering if you treat for longer, you'll have even a better effect as the other drugs did.

Yes. So we can only speculate at this time. I do think pretty consistently looking at data in this indication, you do see accumulation of treatment effect beyond 24 weeks in multiple agents. So I think that that's a reasonable assumption that when we conduct a longer trial, we will see some additional treatment effect on the NPS. In terms of the biomarkers, we don't have biomarker available to share at this time. And certainly, we're very eager to see those data when they come in, and we will share them at a medical meeting once we have them. But in some, yes, we do anticipate greater treatment effects in longer studies. And -- but we'll have to wait to see if that actually occurs when we do those studies.

Our next question comes from Yasmeen Rahimi with Piper Sandler.