Vera Therapeutics, Inc. (VERA) Earnings Call Transcript & Summary

The CEO, Marshall Fordyce, welcome. Thank you. And special guest, Robert Brenner, CMO. Thank you very much as well for joining us up here.

So a lot to talk about. You're late stage, of course, in IgAN. But maybe just set the stage and tell us where you are, tell us about the recent data, of course, at ASN and what the time lines are for getting to market.

Great. Yigal, great to see you, and thanks for your great science-based coverage in the space. We need it today. I'm Marshall Fordyce. I'm the Founder and CEO of Vera. I am a physician by background. We're incredibly excited to bring Vera to the stage. We have now read out Phase III data that are both positive and very compelling in a new category creating area of kidney medicine in glomerulonephritis, specifically IgA nephropathy. We had Phase III data that was shared at the opening plenary session of the ASN or American Society of Nephrology, the biggest kidney meeting of the year last month. We had concomitant publication in the New England Journal of Medicine, and we submitted our BLA filing on November 7. So the timing of the review of that in the cardiorenal division is 2 months plus 6 months. So we have breakthrough designation. We expect to hear about a PDUFA date in early January, which would time a potential PDUFA date in July. This is a very serious unmet need that we have been approaching with atacicept, our lead product candidate. The patient population in IgA nephropathy, also called IgAN is about 160,000 biopsy confirmed cases in the United States. All of them are at risk for progression to end-stage kidney disease. End stage kidney disease means your kidneys don't work and you need to be hooked up to a machine for dialysis or you need a transplant and the 5-year mortality of people with ESKD is on par with cancer. Is a terrible outcome for patients and in IgAN patients happens early. It happens on average at the age of 35 years old, and you can look at the baseline characteristics of our late-stage trials and others. Vera is in a position to be the leader in this space. We have the longest efficacy data. We have 2-year kidney function data by estimated GFR, which is now published in both Jason and the New England Journal medicine from our 2-year extension study in Phase II. We are the only program to be approaching an auto-injector at launch next year. So a small volume auto-injector. And there have been other programs that have approached trying to solve this problem, but none have had the efficacy, placebo-like safety and patient convenience profile that we're coming to market with. So it's an incredibly exciting time for Vera and really for patients with glomerular disease. And I'm happy to have our Chief Medical Officer, Dr. Rob Brenner, who's been a multi-decade nephrologist, I think has built the best nephrology talent within the industry within Vera, and we're excited to have the groundswell of interest in atacicept that we've created.

I love to hear your perspectives on the data and what it means for patients?

Yes. It's a very exciting time in nephrology and in particular, for those who care for patients with glomerular disease. The development cascade that's unfolded in IgA nephropathy is truly remarkable. And on the heels of the most recent Kidney Week, the annual meeting of the American Society of Nephrology, there was kind of palpable excitement about where we are as a field. Not just within IgAN but even more broadly, with IgAN exemplifying the kind of progress we can make when we harness the power of new scientific learnings with great new therapeutics and an integrated focused effort by industry, the academic community, the societies and regulators to advance for patients that we collectively serve. The data we showed at ASN was a follow-on from our Phase II program. In Phase II, we had a 96-week experience where we looked at the impact of atacicept on patients who had a biopsy-proven kidney disease and showed that for the very first time in the history of drug development in nephrology that patients with this biopsy-proven kidney disease could have a GFR profile, a measure of their kidney function. That's the same as a healthy 40-year-old. It was a remarkable achievement. And we piggybacked upon that with our Phase III experience, which we've now shared where we looked at proteinuria. We looked at resolution of hematuria, a marker of inflammation, and we looked at a reduction in the autoantigen, which drives the immune complex formation of this disease and showed that we had a huge impact. That was done at the same time with a safety profile where atacicept looks similar to placebo. This is a drug that is modulating the immune system by acting on B cells, but we don't see any evidence of opportunistic infection. We don't see an imbalance of infections overall between active and placebo, and we see a profile that looks very similar to patients who are getting the injection of placebo and not the drug commensurate with the potential for it to be a chronic therapy. So we integrate the safety profile, the efficacy profile and that is underpinned by a very palatable presentation, which is a small 1 mL volume administered in an auto-injector at home by patients once a week. We think the future has never looked brighter for patients with IgA nephropathy.

Tell us -- love to talk about all those things, the efficacy, the safety, but start with the safety. So what is it about the drug that is -- because when you talk about B-cell suppression curves and you think about Rituxan and other things like that, you start to worry about the things you highlighted, what's different?

It's a great question, Yigal. And I think the first thing is to recognize that for decades, both within nephrology but in medicine, the tools we've had at our disposal to treat patients who have autoimmunity or who are inflamed are blunt instruments. Whether we're thinking about corticosteroids or B-cell depleting agents, they're kind of a one size fits all. B-cell modulation as exemplified for the first time by atacicept is a new category of drugs. And we recognize that B cells are the target cell of interest in a disease that is characterized by immune complex formation. Why is it the B cell is so important? Because both the autoantigen and the auto antibody that come together to form pathogenic immune complex are derived by B cells and plasma cells. So we want to intervene just on that 1 cell. Is there a way to do that gently. And the answer is that there are 2 cytokines that fuel the activity of B cells. One is called BAFF, the other is called April. And nature has created a receptor called TACI, which binds both BAFF and April, these 2 cytokines with picomolar binding affinity. And in the era of modern biotechnology, we can create a rationally designed therapeutic agent. We can take that binding affinity from the extracellular binding domain of that receptor, fuse it to an activated Fc. And now we've got a soluble receptor with a 35-day half-life that reduces the circulating levels of BAFF and April and decreases the activity of B cells, just like walking over to that wall and turning down the thermostat. We can do that without creating an environment where there's frank immunosuppression or patients who are at risk for opportunistic infections. That's what's novel, combination of amazing efficacy unimpacted by the overhang of a safety profile and adverse experiences that lead to the ability to only treat on a transient basis and in those patients who are treated to have to manage them differently. It's a new era for autoimmunity and it's absolutely a new paradigm for patients with IgA-mediated disease.

Yes, I'd like to add a little to that, which is an example during the time of COVID-19 with a highly virulent airborne virus, patients who, for their underlying illness took high-dose steroids or Rituxan were at higher risk of severe COVID and death. So we have now significant experience with that medically. We ran our Phase II trial of atacicept 150 weekly in the time of COVID and saw no difference in the rates of COVID positivity or severity. This is a really different profile than when you think of other immunomodulatory agents where you might see an imbalance of an opportune infection like zoster. So this is really a truly different type of safety profile than what we've seen with other immune-directed therapies.

And then, of course, on efficacy, just to keep it really simple. If I'm an IgAN patient and I walk into the clinic and the physician says, you're losing whatever x units of GFR per year, and now they have this drug, which is about to be on the market in short order, what will -- how will they present the efficacy picture. We'll just talk about it as a patient would understand what the benefit would be in terms of slowing the GFR decline or saying to them you don't need to worry about ESRD or X years or you stay on the drug. It's just out of -- it's not a risk that you need to be concerned about.

Yes, I think you summarized it. So let me provide a little bit more. Patients are identified as having IgA nephropathy because they have a kidney biopsy. That means they presented to the health care system. They've identified as having one or more of 3 findings. They can have blood in their urine, protein in their urine or their measure of kidney function or GFR can be below normal. At some point, they'll make it to a nephrologist. And the nephrologist, the only way I can find out exactly what's causing your problem is to get a sample of the kidney tissue from a biopsy. So they'll go to the biopsy suite, and a few days later, the diagnosis will come back, you have IgA nephropathy. At that point, physicians who are educated in this disease will know that, while historically, we have thought of this as a slowly progressive disease and one that doesn't rise to the top of our focus because it progresses slowly. It turns out that based on more recent data from the United Kingdom, we see that patients' lifetime risk of needing dialysis or a transplant is extremely high, and it's particularly high if they don't achieve an annual rate of loss of kidney function of only 1%. Anything above that because they're identified young, means their lifetime risk for going on dialysis or needing a kidney graft is very high. So now we can start to look at their kidney function over time with a simple blood test. And doctors are used to either looking at the automated lab printouts or to actually take out a piece of graft paper and plotting their creatinine over time and saying, this is the rate that you're losing. We now have a drug like atacicept in the future when it's fully approved based on GFR that has the potential to say we can now attenuate the rate of loss of GFR. And based on our Phase II experience, that impact was obvious. It was unprecedented. So that's the narrative. That's the conversation. I don't think patients really care as much about, hey, how much protein do I have in my urine or how much microscopic blood do I have in my urine. What patients want to know is, am I going to need to go on that machine? Do I need to find a donor for a kidney transplant? Or am I going to go onto dialysis or how am I going to stay alive with kidney failure. The hope is with drugs like atacicept that we're going to have an ability to change the outcome for patients. And when we talk to the IgAN Foundation, the patient societies, I think what they see in atacicept and other drugs like it is the opportunity to have hope that they can live with their disease chronically and not have the overhang of the potential for renal replacement therapy as a future of their health care.

Have you sort of modeled or characterized the data in terms of the reduced risk of ESRD. Have you -- is it presentable that way or modelable that way? Or are there long-term studies that will give you that answer more concretely?

Yes, to all of the above. So Vera is taking a lead in capturing long-term data for patients who are treated with atacicept. Our Phase II program went out for a long period of time. And a year ago, we initiated what we call ORIGIN Extend, which is a long-term open-label program that someone can move into after they complete any one of our previous trials, and we will keep them on study drug until the drug is approved in the region in which they reside. This will create ample opportunity for us to do long-term assessment of the impact of the drug. In addition, the community in general is very attuned to the lifetime risk of kidney failure in patients with IgA nephropathy. And so it's a straightforward exercise to think about if you can really change the trajectory of their eGFR slope decline to one that is losing, let's say, in the neighborhood of 5 to 8 ml per minute per year to one where they're only losing, let's say, 1 ml per minute per year over 10 years, that impact is extraordinary. And you don't have to be a sophisticated mathematician to understand that the difference between losing, let's say, 50 mls per minute over 5 to 10 years versus 5 mls per minute over that amount of time is enough to keep you off the machine.

Of course, it's a competitive space, which is a good thing because there's a lot of interest, so there are other drugs out there. How do you think about your drug with respect to the players that are already on the market that have different mechanisms. Just kind of talk about how nephrologists are seeing potential implementation as a potentially foundational therapy, disease-modifying potentially foundational therapy.

Yes. Happy to start here. So there are 5 drugs approved in this space in IGA nephropathy, only one of them has had an approach that targets the B cell signal. So there's an April only approach that was just approved last week. And when we look at the comparison, I think consistent with what Rob said, we have the only ones with 2-year GFR data. So I think that will be interesting to see if even the currently approved drug that targets April only has an ability to stabilize GFR over long term. We've seen some neutralizing antidrug antibodies in that program that has an effect on efficacy that's in the label. So that was notable. But what's important about that label is that it's for patients at risk of progression in kidney disease, and that hasn't been seen before. So really, 2 updates really in the last few days have been one, that's a significantly broader label for the first program in the B cell modulator space into the pricing is at a relative premium to 3 out of the other 4 drugs. So I think there's a broad recognition that an ability to target B cells and extend time off end stage kidney disease is extremely. So very helpful. I agree with you Yigal. This is a great time for patients because there are multiple programs coming to market and very promising profiles as the second B-cell modulator on track to get to market, the first with the dual BAFF/April inhibition mechanism, the first with an auto-injector, these are really important differentiating factors for us. We think this is going to be great for patients.

So let's switch a little to some of the commercial. So obviously, you've been planning for this for many, many years, planning for success. Well, a few things. So talk just about the commercial strategy, who you're hiring all the basic sort of blocking and tackling there. Are you -- and you say are you going to launch with the auto-injector? Or that's going to be kind of like fast right soon after the launch, just talk a little more detail there. And then some questions on -- just on the regulatory. We saw with another company, they had -- their AdCom was canceled for FSGS. Do you expect an AdCom or not. What's the pulse from cardiorenal.

Great. Happy to go backwards here. So we don't expect an advisory committee. We are expecting to launch with an auto-injector. We have high confidence in that given all of our work as well as our interaction with FDA. So we are a breakthrough designation program, and so we do have frequent contact with FDA around those topics. Commercially, we're ahead of the curve in terms of ready to launch in the U.S. We've had a core of commercial leadership at the company now for multiple years preparing for this. More than a year ago, we brought in significant commercial leadership. DJ Johnson is our Chief Operating Officer, former Chief Commercial Officer at Global Blood; Matt Skelton, who has launched renal drugs at Amgen with Rob previously and then was at Seagen before leading our U.S. commercial effort. He's really built each of the verticals, commercial operations, marketing, value and access and more recently with our Phase III readout, we have national sales leadership in place and regional leadership in place for sales as well. We've sized and structured our sales force. They're going to be in their seats in the new year. And it's an incredibly exciting time at this point with the type of profile we have and the groundswell that we've created around awareness of the disease state, the urgency to treat, the promise of atacicept as the first BAFF/April inhibitor and with the type of profile that we've been sharing in the peer-reviewed publication space and at ASN this year, there's a lot of awareness, a lot of excitement for this drug.

What about guidelines? Is that -- how is that going?

Yes. The guideline process in nephrology is led by an organization called KDIGO, and the guidelines get updated as new drugs come to market. We're still evolving the pace with which that occurs in clinical nephrology, but there is a broad recognition amongst leadership in the academic community and the guideline authors about what new drugs are poised to come over the course of the next few months. And I think there's a very strong motivation on the part of those authors to try and have the guidelines that come from KDIGO to be as relevant and as timely as possible as quickly as possible after those new drugs are approved. So we look forward to participating in those -- in that process. And I think the future will have physicians to be able to have a resource both from KDIGO and then from other sources that will help contextualize the development of the new drugs, so they can figure out how to implement that into the day-to-day care practice that they have.

And once you have good synergy there? Because I mean, if I just do the math, like you're going to get approved in, I guess, July or potentially, and then KDIGO, they're doing the update in the fall period, no. So won't you benefit from that -- having that inclusion certainly after the launch?

We will. And I know the motivation on the part of leadership at KDIGO is to tailor key updates to when they are impactful new approvals to drive a reassessment of how to provide guidance.

Okay. So IgAN is the tip of the spear, but there's more. So maybe we can expand a little bit on some of the other nephrotic diseases where there's applicability of this tool, BAFF/April mechanism and where you are in development with those?

Yigal, I would go broader than that and say this is really a novel paradigm for treating autoimmune disease generally, which we would say currently sits with steroids and other immunosuppressive approaches the safety profile that we've been spending time describing really could be applied well beyond nephrology. But Vera's corporate strategy is to begin with IgAN and move to additional adjacent glomerular diseases like membranous nephropathy, FSGS, minimal change disease that are driven by autoantibodies, but atacicept has experience reducing autoantibodies in a variety of diseases even outside of renal disease. So Rob can speak to our current trials ongoing within renal, but the potential certainly is much broader. If you take a survey of autoimmune disease where there is evidence of elevated BAFF or April or both, there's quite a broad set. If you look at clinical regulatory pathways and assess feasibility, there are quite a lot of approaches and then where we see the emerging profile that we now have in a reproducible both Phase II and Phase III that really gives us broad optionality. And we don't like to say we can boil the ocean here. We would probably define and haven't fully disclosed each one of these, but we've defined about 11 different indications outside of nephrology where the atacicept 150 weekly profile is likely to generate very significant improvement in clinical outcomes, and we're bullish about that. But the corporate strategy is to build first in renal and make sure that we are the leader in that space and then expand from there. Rob, maybe you want to speak to just the PIONEER study.

Yes. In October of last year, we had a Research and Development Day where we came forward and shared with the community, our plans to move beyond the ORIGIN program to secure registration for atacicept in this disease. And the first thing that we realized was on the underpinnings of this incredible Phase II data package that it made sense for us as a -- from a corporate decision-making process to pull forward our spend, to learn about the use of atacicept in sort of all comers with IgA mediated disease and not only to look at patients who would meet Phase II, Phase III enrollment criteria. That program is called PIONEER and there are 6 cohorts of broader IgA nephropathy that are captured in that. Patients with very low proteinuria, patients with very high proteinuria, lower GFR, pediatric patients, patients who have concomitant vasculitis along with their kidney involvement and the unfortunate patient who's had a kidney transplant and now has recurrent IgA nephropathy. All of those patients would have been excluded from traditional registrational activities prior to first approval. So Vera is the only sponsor that said, let's go ahead and study those patients now.

Can I just ask to clarify, is that -- does that -- what you say there, is that beyond the 160,000 biopsy proven or within it?

It's to get to probably 50% of that 160,000 would be excluded because of who we studied to date. So it's to get to that full 160 if you will. But we know that the same investigators who are caring for patients with IgA mediated disease are caring for other forms of autoimmune kidney disease. Among those are membranous nephropathy particularly those patients who have an auto antibody to an antigen in the kidney called PLA2R, so they have anti-PLA2R antibodies. In addition, there are patients who have forms of focal segmental glomerulosclerosis, or FSGS, along with minimal change disease who have an auto antibody to another glomerular antigen called nephrin. They have antinephrine antibodies. The thesis is that atacicept by reducing the production of antibodies will reduce the production of the auto antibodies to these kidney-specific antigens and could be a game-changing intervention in patients with membranous, FSGS and minimal change disease. Those patients are also included in other cohorts within the PIONEER protocol umbrella, and we're studying them now. And amongst those, we're particularly keen on membranous nephropathy and think that that's a really great opportunity for future registrational work with the drug.

And the reasoning behind that is because of competitive reasons? Or you believe there's a higher probability of success? Or is there something about membranous nephropathy that presents an easier path forward?

We can identify those patients. There's a big unmet medical need. We have an assay that's available to measure the antibodies that are binding to the kidney antigen. We've got proof of principle not just for other sponsors work but because we're conducting our own Phase II experiment, and we think there's a path forward for registration. So for all those reasons, we like membranous nephropathy, a lot as an area where atacicept has the potential to be an unlock for clinical benefit.

So you're going to read this out. When is it reading out by the way?

So we started enrolling patients this year, and our plan is to start to share data publicly as we get to the next series of academic congresses in the first half of 2026.

So we'll see the results across this broader set and then you'll determine -- I mean you have a favorite, it sounds like, but you'll look at the data and determine which one or one or more of those would go into Phase III?

Yes. I would say we're able to do a lot of that work in parallel. And what I would hope to do is come forward and say, here are some results that we've learned. And when the time is right, we'll be able to articulate what our plan is for the next series of development activities.

Okay. Tell us a little bit -- there's more in the pipeline, right? You have a few other assets. So can you maybe enumerate some of those?

We do. So the first thing I will say before we get even to the new assets is one of the other things that we initiated this year was a dose range finding study, looking at 3 different potential monthly doses of atacicept compared to weekly administration with 150 milligrams. And we expect to have early data from that monthly program also in 2026. And if we find a dose that we think is the right dose to carry forward for label investigation activities, we'll be able to articulate what the plan is to secure label claims for monthly dosing. That was also part of our activity at the end of last year, which we announced at JPMorgan of this year, which was the acquisition of VT-109 from Stanford. So atacicept is an Fc fusion protein that utilizes the extracellular binding domain of the TACI receptor. But there's another receptor on the surface of B cells and plasma cells that binds BAFF and APRIL, and it's called BCMA. And through our work with Stanford, we've now gained access to a molecule that has been engineered to have very high affinity for both BAFF and APRIL. And from the get-go, the Vera team has been focused on trying to deliver against a target product profile that would have a very differentiated profile versus what we have with atacicept or other drugs that are currently in development by other sponsors. The next catalyst for that program is filing of an IND, and we look forward to that as the next step as we move forward with that molecule.

Is the therapeutic hypothesis different there? Just are they same or just...

Same therapeutic hypothesis, but we're looking at a very different dosing algorithm. And I think it would be phenomenal if we could complement atacicept with a molecule that could be dosed, let's say, once a quarter.

Okay. And then just kind of the usual questions around the cash spend and the time lines to -- I don't know if you probably haven't talked about this yet, like P&L dynamics and things like that.

Yes, we're very well resourced ending the year in the range of $400 million to $500 million and have access to an additional $500 million through our facility with Oxford. So we have roughly $1 billion access as we get into next year for a first launch year. Having provided specific guidance beyond that, but we're well capitalized to launch this drug next year.

And when you think about executing on the launch and being very successful and front footed, what are the key things that you just maybe lessons learned from some of the prior launches you've obviously watched very closely to make sure that you execute most effectively and getting the message exactly right to nephrology community.

Yes. Great question. The Vera team leadership, both within commercial and beyond have held leadership positions in multiple blockbuster drugs so -- in those launches. And so I think we have a lot of cumulative experience going into this launch. Drug launches are dynamic. They're different now than they were even a few years ago. And so this is a very front-footed group, and we're watching all of that and making full use of that information to make a very successful launch next year.

What -- do you have details in terms of like the Medicare versus commercial and the split of the market and how you're going to support all those segments of the payer landscape?

Yes. We know this market very well at this stage. We've been preparing this for some time. I can share some insights, I won't share them all. But these are young patients. So it's about a 75% private commercial pay population. These are patients who are seen by a wide variety of the roughly 8,000 nephrologists in the United States. There aren't deeply established centers of excellence. These are distributed in terms of the caregivers for these patients. There's a lot of detail to this population in this market that we understand. We are working on for some time. We have a very clear strategy to win in the space.

And you would expect that patients that may be on another modality would be available to atacicept, right? I mean just because they're on another mechanism doesn't exclude them in any way.

Yes. I mean this is...

Just so we're clear on that.

What we would say is we would project a future prescription for IgA nephropathy to be grounded on using a B-cell modulator to turn off pathogenic immune complex and have an impact across all the measures that are relevant for this disease. It wouldn't make sense to use a steroid on top of atacicept given the mechanism of action, nor do I think there would be much need for a complement inhibitor. In contrast, I think using drugs that we would say are good for CKD hygiene in general, ACE inhibitors, angiotensin receptor antagonist, SGLT2 inhibitors may be very reasonable to use. And in our own development program, everybody was on an ACE or an ARB and in the Phase III half the patients were on an SGLT2. Now we also have endothelin receptor antagonist approved and I think that would be fine to use if someone wanted to substitute one of those instead of an ARB or an ACE inhibitor. So if I would project a future prescription, I think it would have a B-cell modulator as the cornerstone therapy and it will be complemented with an ACE, ARB, ERA and/or an SGLT2 inhibitor.

And have you pressure tested those assumptions with payers in terms of dual coverage of both of those mechanisms? That's more than feasible approach?

We certainly share this concept. And they've asked us where do we think the prescription patterns are going to evolve to, and this is very consistent with the narrative that we shared.

Excellent. All right. Well, thank you so much. Appreciate it. Super interesting. Good luck with getting the PDUFA date, which is soon. And we'll pay very close attention.

Thanks so much, Yigal. Thanks for the time.

You're welcome.