Thanks for joining us for this next session. I am Steve Seedhouse on the biotech team here at Cantor. It is a privilege to welcome AbCellera, our next presenting company. I am joined, of course, on stage by President and CEO, Carl Hansen. A really exciting time for the company. We have been following closely as you have updated the market on your lead program and many other developments. We will try to cover as much of it as we can here in the next 30 minutes, Carl, but thanks for being here. We will start off, I guess, just since reporting top-line data of your lead program. Maybe you can reintroduce that program for the mixed audience as you talk about this. What are the next steps that AbCellera has taken here as you think about the strategic path forward in this indication, which is vasomotor symptoms in menopause?
Thanks, Steve, and thanks for having us. We are super excited about the data. Maybe just to set the table. In about 2023, AbCellera transitioned from a platform company to building our own assets. The lead program, ABCL635, is a first-in-class antibody against NK3R. It is being developed for the treatment of vasomotor symptoms or hot flashes that are associated either with menopause or with induced menopause or a menopause-like state that comes alongside of endocrine therapy in breast cancer and in prostate cancer. That program went into the clinic only at the start of the year and quickly moved through phase I. I guess it is now three weeks ago, we released the top-line four-week data. Frankly, that data, I would say, blew the doors off even what we thought was the most bullish case for the product.
I think the punchline is that we have an antibody that is following a couple small molecules that are now approved and on the market. One is LYNKUET by Bayer, the other one is Astellas. The phase II data that we have shows efficacy of roughly twice those two products in reduction of the frequency of moderate to severe hot flashes and anywhere between, let us say, four or five times the efficacy in the reduction in a severity score, which is a 3-point score. In addition to that, the data showed an excellent safety profile. The two small molecules do have some issues with elevated liver enzymes, which we posited was because of metabolism of small molecules. An antibody, we believe, should not have that, and the data supports that. We have no evidence of elevated liver enzymes.
In addition to that, we saw remarkable efficacy in terms of patient-reported outcomes, like 80% of patients said they either felt much better or better. Surprisingly to us, a very obvious signal in sleep, so improved sleep, which is one of the really frustrating parts of menopause and hot flashes associated with menopause for many women. Across the board, in efficacy, in safety and convenience, we think we have a product that if we can translate this through to phase III, and there is no reason to think that we cannot, that it could be the dominant product for non-hormonal treatment of menopause symptoms. That is three weeks ago. Since then, a lot of thinking about how that real upside in efficacy has changed the commercial opportunity. We think it has very significantly changed the commercial possibility for the drug.
Then thinking about what are the plans to move as quickly and as safely and smoothly as possible into regulatory studies. That really means finishing this study. So we've got 12-week data and an open-label extension for 12 weeks. By the end of the year, we should have that. We'll start engaging with the regulatory agencies, with the FDA, Health Canada, EMA, maybe Australia as well, and then try to set up to start a phase III trial in the back half of next year. So from a preclinical company, less than a year and a half ago, to being on the precipice of having a phase III asset in what we think is a very de-risked asset and a multi-blockbuster opportunity, we are pretty excited.
Yep. Can I follow up on one of the points you made there?
Sure.
It was interesting, which is the sleep effect that you-
Yeah.
...saw with your drug. You mentioned it was surprising, and I'm wondering if I'm remembering this correctly, I'm not sure if VEOZAH, the NK3R small molecule, has any effect or maybe that's why you didn't expect it. I think LYNKUET, maybe there was some evidence that it might, and I think it was mechanistically attributed to NK1R activity-
That's right. Yeah.
....of that molecule. Am I getting at why it was maybe surprising that you saw it, and mechanistically you wouldn't have expected it, but it turns out it's maybe secondary to just potency on the hot flashes?
I think you basically answered the question.
Okay.
But just to sort of fill it out a bit. The two small molecules, one is VEOZAH. That is a straight NK3R antagonist. The second product, LYNKUET, it began development as an NK1R antagonist, and it also has activity on NK3R. NK3R is the target that is known to be important in the infundibular nucleus on KNDy neurons for driving hot flashes. NK1R antagonism is associated with somnolence. We believed that the improved sleep quality that was seen in LYNKUET but not in VEOZAH was attributable to an off-target effect.
Yeah.
Coming into this, because our antibody is clean and doesn't have a somnolent side effect, we didn't think we'd see the same effect on sleep. But as it turns out, because we have such profound efficacy in reducing hot flashes, and hot flashes themselves contribute to poor sleep, and once you get someone less anxious about sleep and get them into healthy patterns, they tend to sleep better. We saw that, I think numerically, we might have even been better, but statistically, at least on par with LYNKUET. That was very exciting because we thought that might be the one spot where we wouldn't have a strong case against the existing products, but it looks like we do. We do so without, at this point, a reason for a warning on somnolence and sleepiness.
Yep. This was the four-week data from the study that you announced that was obviously as exciting as you've summarized. You're following these patients for 12 weeks following that single dose, and that data is forthcoming. Also, there's an open-label extension aspect of this study that patients are rolling into, and they're getting redosed. So maybe starting with the 12-week data, what is important from that data for AbCellera? What are you going to share with investors, and what are the timelines on these?
Sure. Maybe I'll start by just describing the study because I get a lot of questions on this. The study was a phase II, which was a single 600 mg injection. Then we monitored. We have only one efficacy readout, and that's at four weeks. In the registrational studies, there will be both four-week and 12-week endpoints. But if you look at the class, the effect that you get is basically saturated at four weeks, then you just maintain through to 12 weeks. So the reason we did it like that, so we dose once at 600 mg and then we monitor for 12 weeks, is that we are looking to see a degradation of the efficacy as the drug washes out over 12 weeks.
On a patient-by-patient basis, we will have data on the efficacy, because it's a daily diary of suppression of frequency and severity, as well as the PK. Using that matched efficacy and PK data, we will then build out a model that proposes what will be the doses or dose that are used in the phase III study. We have been admitted to the FDA Model-Informed Drug Development Program. That is a program that uses modeling of the kind that we have to support the design and acceptance of a phase III study. That's why we designed it that way. To your question, what do we expect to see at week 12? What we expect to see is that the efficacy starts to wane as the drug washes out. That's actually what we want to see. That's part of the design.
We did see that at four weeks, there was no sign at all of degradation. We've already made our target of being able to dose once a month. That 600-mg dose would not be the final dose, but it is the dose that simulates what would be the steady-state antibody concentration on a once-monthly dose of 300 mg. At 12 weeks, we will see the degradation that will help inform the study. We basically know now that we will be able to dose not more frequently than a single shot once a month.
Probably the most important thing is that there's nothing else in safety that comes up, and so far it looks good. I think it's good to have the complete study. It'll be interesting to see how long it lasts. I think it probably is lasting longer than some of the biomarker data would've suggested. All that is scientifically interesting. From a drug development and investor perspective, provided that the safety is clean, I think it's fully green light.
Okay. Revisiting the strength of the data and maybe how that's made you rethink or at least think critically and with some urgency about some of the decisions you'll have going forward. One of the things you've mentioned is the prospect maybe of, at some point, an active control study against one of these small molecules. You've also talked about if data like this were replicated in phase III, you'd have to imagine it might command a premium price in this marketplace. Maybe you can elaborate on those two things in particular. What's sort of the company's current, as you've had a few weeks to digest. I know it hasn't been that long, but what would you guide people to expect on those two points in particular?
Yeah. I think right now I wouldn't use the word guide at all.
Sure.
I could give you some impressions. Given the very big gap in efficacy that we see between our data and the registrational data, and of course, those are cross-trial comparisons, so they should be done with a grain of salt. We don't think that it's going to be important to run a direct head-to-head to convince patients or caregivers. I think you're going to be able to look at these graphs and from across the room you can see, hey, one is much, much more efficacious. There may be some value in doing that in pricing discussions. I think we're doing the work to understand if that's the case.
At this point, I'd say our priority is to move as quickly and smoothly with as little risk as possible into a registrational study to get the readout and get this drug forward to submission as quickly as possible. We may well decide that a direct head-to-head is worth doing, but we could do that as a side study after, and so we don't need to incorporate that in the registrational trial or trials.
Okay. Thinking about both the menopause market and this oncology market, and probably more of an unmet need at this point given the launch of the small molecules into the menopause market, I think has been more prominent. How would you characterize the overall scope of the market from your perspective? How well established is it? Then help us understand your perspective on the launch of VEOZAH, which has been in the market for a few years. What have you seen from the adoption of that product? What have been done right and wrong? Has anything held it back? Has anything spurred it on recently? Just a general market perspective from you on VMS.
On non-hormonal treatments of VMS-
Yeah.
...in general.
Yeah.
Yeah. I'll start with some thoughts on the VEOZAH launch. I get a lot of questions as, "Hey, VEOZAH's tracking has been well below what the original guidance was," and people see that as a sign that perhaps the market's not there. I see it actually in the opposite way. I think they're tracking to do maybe CAD 400 million in sales this year. They had about CAD 90 million in the last quarter, about 40% year-over-year growth, and they've done that despite what was two or three years trying to get payer coverage. I think they have the payer coverage now. As a first-in-class, they had some work to do there. And with quite intense liver monitoring, and with a boxed warning, and with the entry of a competitor.
I'd say that clearly shows that they're on track to break CAD 1 billion in peak sales. That's my view at least. And that's consistent with the guidance that Astellas has been giving. Bayer is also projecting sales on that front as well, and we don't know much about that launch yet. We get to see some scripts. They've been keeping that data quite close. But my sense is that is going well, full stop. If you bring those two products together, the two small molecules, and you track usage rates, you see very robust growth.
Despite the fact that they have in total patient number, not really scratched the surface of what's available. We see that as a huge opportunity and a strong launch in absolute terms. I had an investor ask me this afternoon. I said, if you were to compare this to some other first-in-class launches, Prolia would be a good example, where you look at early sales years were below VEOZAH, and I think it sells CAD 4 billion a year now. It's normal in a new class, and it takes some time to catch on.
We think that the current commercial performance of VEOZAH and what we think is happening at Bayer strongly reinforces this is a multi-billion dollar opportunity, and we love that we're going to be coming behind it when a lot of that groundwork is done with a product that we think has differentiation across several dimensions, including convenience, safety, and efficacy.
Yeah.
We're feeling good about that.
It's interesting. PCSK9s, I guess, would be another example of.
Yes, that's a good example.
Yeah, in that case, the statins would be sort of the equivalent of the hormonal therapy in that case, and the launches stunk, right? Everyone gave up on PCSK9s, and now you turn around and they're multi-multi-blockbuster markets and-
Yeah. People are impatient.
They're still growing.
People are impatient.
Yeah.
Yeah.
Okay. That's a good perspective. What about scientifically? There was this debate heading into the data, just about the anatomy and the neurophysiology of hot flashes and what-
Yeah.
...neurons you need to target, and you sort of empirically squashed a lot of that debate. But as you sort of do the postmortem view and perspective on that, what's the view of it now? What have we-
Yeah.
...established or what do we know about the biology?
That is kind of a deep science geek question. I will maybe set the stage a little bit. The NK3R is expressed in KNDy neurons, and they are in part of the brain called the infundibular nucleus, which is a part of the hypothalamus. When we started the program, in sort of perhaps a contrarian way, we thought an antibody should be able to get to this part of the brain. The reason is that this part of the brain does interact with soluble factors, and it is responsible for controlling hormone levels. That was a risk, but we were able to put much of that risk aside pre-clinically because we were able to show in primates that we could engage with those neurons, and you can read that out in male primates and in male rats and pretty much every male species by monitoring testosterone levels.
We had a good sense that an antibody could get to the infundibular nucleus, and we need to show that in people. We did the phase I, and we showed that we had profound testosterone suppression that lasted for the full dosing interval, and so had conclusive evidence that, yes, the antibody gets to the KNDy neurons. A lot of people were excited about that, and I probably was the number one person saying, "Wait, you should have some caution here," because in the pathway that governs hot flashes, the KNDy neurons are not the only place where NK3R is expressed. What happens is when KNDy neurons fire, they have projections that go into another part of the brain, called the preoptic nucleus, and the preoptic nucleus expresses NK3R, and that is what drives thermoregulation.
We didn't know if small molecules, which probably can penetrate to that part of the brain, were getting part of their efficacy from hitting NK3R there. The bull case argument was that, well, that is downstream of the KNDy neurons, so it shouldn't matter. If you stop what is upstream, you don't need to stop what is downstream. But it wasn't really clear. I think that I am careful to always make sure people understand all the risks in programs, and I probably said it so many times, I even psyched myself out. Coming up to the day, you are like, "Well, how important is that?" With the data that we just got, we know it is completely unimportant. Internally, we say, "The preoptic nucleus is dead to me. It is all about the KNDy neurons.
One thing I can't get out of my head, and I have mentioned this to you a few times and would love your reaction, though, is that that debate now has flipped completely in the sense that you are getting all the efficacy you are getting without accessing that deep part of the brain.
Yeah.
Presumably, small molecules are getting more diffusely in the brain. NK3R, as you mentioned, is expressed elsewhere. I would imagine you do not want to just indiscriminately hit NK3R on random neurons that have nothing to do with the hot flash that you are trying to treat. Is that now not an advantage for your antibody that you can push with investigators and maybe out in the market eventually?
If we needed yet another advantage, I think I would definitely bring that one up. I think we do not. We have got plenty of advantages on performance and efficacy and safety that we hope to see through to phase III. I would say that, anytime you are going for drug development, you want to hit the target. Ideally, you want to hit it only where it matters, and you want to avoid messing with any of the other biology.
I am not aware of any really good evidence that antagonizing NK3R in other parts of the body is problematic. I am not aware of that. But I would not want to take the risk if I did not have to, and an antibody has got the nice feature that it has very low penetration into most of the brain, and so we can rest pretty sure that is not going to come up as a problem.
Okay. Can we talk about phase III, in the hypothetical terms, I guess, for now? But there are some things I think you probably do have a pretty good idea of. First, maybe just minimum number of patients that you would need in a phase III program and what the safety database requirements are for VMS.
Yeah. Because it is a common indication, you would expect a pretty robust safety database. We are currently thinking that roughly 1,500 patients, which is in line with the small molecules, would be appropriate.
Okay. Then endpoints of interest here, including primary endpoints in a pivotal study.
Yeah. The co-primary endpoints would be reduction in frequency and reduction in severity. On the severity side, statistical significance is the bar for approval. On the frequency side, it is statistical significance and a reduction of at least two events per day. In the phase II, we had, I think, 5.1 was our reduction, so we are well over that bar. Which, of course, is great because you have efficacy. It also means that you are not tempted or forced to really increase the baseline rate in enrollment, which can make enrollment hard. If you are just on the edge, you might want to have 15 or 16 baseline events. We can keep it to basically where we were, which is 10, and be very confident we are going to have enough of a signal there.
Yep.
In addition to those, we are thinking about endpoints. One of the really unprecedented and I would say very exciting parts of the data was that in 37% of patients, after a single dose of ABCL635, they went from a baseline of around 10 events per day to zero. For a significant subset of patients, like more than a third, a single dose was essentially curative at four weeks. On the severity side, I think that number was like 25%. That is important because severity, if you have even a minor event, which you kind of are aware of it, but it does not stop you, it does not really interfere your events, that gets a score on severity.
So we had about 24% with zero severity score, which means there were no events. So not a single incident. So from someone that was really struggling with this to essentially it is gone, that is something that you rarely see in drug development. We definitely think that that's a big leg up over everything else that's been done and is something that we would think about including as an endpoint. I think that makes a strong case with medical practitioners and with payers.
Yeah, that's fair. What about dose selection and dose interval? How much flexibility do you think you have there based on the data?
Well, the dose selection and interval will be informed by the modeling.
Yeah
That's part of the program that we're in with the MIDD. I think there's a good chance we'd be able to look at that data and propose, "Hey, here's a single dose, single interval to go forward." Given that we'll have no difficulty powering the trials. To put it in perspective, the phase II trial, if we'd had 15 patients in each arm, we would've been adequately powered. You're going to run 1,500 patients for safety, and you need very, very few patients to get the signal that you're after. It means that we can and probably want to include more than one dose because it gives some extra optionality, both in development and commercially. I think we're looking at that, but these are currently impressions and not plans yet until we talk with regulators.
Okay. The oncology indication side of things here. Would that be phase III ready right away or would that entail maybe an exploratory phase II study initially?
Yeah. For both of those, thanks for bringing that up. In addition to preparing for the registrational study in menopause-associated VMS, we will initiate before that two phase II trials. One for breast cancer probably first, and then for prostate cancer.
Okay.
Those, I think, will be of the nature that they could go phase II-III ultimately, but they start as phase II trials. If Sarah was here, our CMO, she'd give you the details of why that is. We've already done some groundwork for the sites, and one of the things we need to really understand is what is the natural history, what's the prevalence, and what should be the proper inclusion criteria to do that study effectively.
Okay. There was one study that was interesting, in the LYNKUET, the Bayer development program, I think it was OASIS-3, where the sort of-
Yeah.
...baseline VMS frequency requirement was eliminated-
Right.
...they had a lower average baseline. It was still effective in those patients, and maybe that leads to expanded demographic that is a candidate for therapy. Is that something that you think about running as well?
Yeah. Again, too early to guide on direct plans.
Okay.
We are definitely aware of that study. That study, I think, is important because it is a way to get a broader safety database and also show efficacy in a patient population that is not as severe. As you mentioned, I do not remember exactly, but I think that study was positive. I do not think it met the two reductions-
That is right.
...per week.
It was a lower effect size.
Right.
It was sort of directionally.
Exactly.
Yeah. Okay. Just fast-forward here, assuming phase III is successful, which I think based on your phase II data is not really that far-fetched of a call. I wish I could make-
That is an important point. Maybe you are able to do that, but I think it is an important point that in investor conversations, I think doesn't always come across. There is this sort of coarse grain thinking. It is phase II to phase III is this percent success, and so we are going to discount things. I look at the data and think, how do you miss on that? The efficacy, I think is highly unlikely to miss. I think we are very bullish on that.
Yeah, I don't think you are out of turn saying that.
Yes.
It is pretty clear. But how prepared is AbCellera? Because, again, this pivot to internal pipeline development for the company was really only less than three years ago?
2023. September 2023 was the official stamp on that, yeah.
Right. Yeah. We are talking three years. I guess how ready are you to commercialize this product into a mass market like this? Is manufacturing there? Are you already thinking about how do we build a global sales force and commercial team? Where are you from maturation of company standpoint in that regard?
Well, 15 months ago, we were a preclinical company, so we are not commercial- ready.
Yeah.
We do not need to be commercial ready now.
Yeah.
If we go on the plan I just described to you, we'd start the phase II study in the back half of next year. It's probably two, two and a half years for that study, if you model off of LYNKUET and VEOZAH. Then you apply, then you have a year or so. A launch around 2030 would be about right. There's time between here and there. It's not too early to be making plans and figuring out strategy, but we're also not in a rush to put everything in place right now. I get asked the question a lot about, "Hey, would you commercialize this?" That's not yet decided, but we are trying to build a multi-product commercial company that competes and wins on global markets. That's what the vision is. We're going to go there eventually.
Could ABCL635 be the first one? I like that idea a lot. I think the way that commercialization is changing quite quickly, particularly with things like direct pay and direct to consumer and more technology-forward distribution. There's an exciting opportunity to build something that is not just 1,500 sales reps running to all GPs. That's something I think we have less appetite to do. We're excited by that. On the flip side, the right commercial alliance with the right partner under the right terms could also be a game changer for the product.
I think there are some strategics out there that would probably be good fits if you could come to the right deal. From where we're sitting today, I think the drug and the company just gets more and more valuable as it moves forward. We're entertaining conversations, but we're making sure that we're fully capitalized and that we have plans so that we're able to go on our own. Frankly, that's my favorite scenario, although it's not decided.
Yeah. I think it makes sense, and you've proven in very short order that obviously you proved during COVID with the neutralizing antibody what you could do scientifically, right? On an expedited timeframe, and now you've proven through clinical development what you're capable of and just smart choices on that trial and setting expectations. Then, the further you can take it, I think it will just continue to sort of validate the company's capabilities, b ut on the pipeline that you're building, just in the last couple of minutes-
Yeah.
...help frame for us the company-
Yeah.
...the vision you have for the company and as you bring forth new products, and some of them are still in stealth, so even just speaking to sort of why that is-
Yeah.
...and how you think about constructing this story around AbCellera going forward. Would love your closing thoughts.
Hey, I appreciate the question. I think I even said just at the end of our phase II press release on the data that there is this danger. The danger is that as soon as you have a big winner that knocks it out of the park like this, suddenly no one sees anything else about the company. So two months ago, no one was paying attention to 635. Now it is all they pay attention to, and this discussion is, I think, a pretty good example of that. But there is much more in play and much more under the hood that we are excited about. In fact, I think if I was to ascribe value, the platform and the drugs that it is going to make from here are going to be the most valuable thing about the company moving forward.
We have two programs, ABCL688 and 386, that are on track to be in the clinic next year. If you had asked me two months ago to grade them, I would have said, "Hey, they are on par with ABCL635." Now, we just had a terrific data readout, 635 is my favorite right now, but you never know. And we are going to continue to press our advantage in making antibodies against difficult targets and to look for those high-conviction bets where we think, "Yeah, this is one that I wouldn't bet against it being a drug and being a successful drug that returns." And we are going to keep putting those forward moving forward. We have two more in the pipe. We expect to have another development candidate this year.
We have not disclosed much about those and to your question, we do that because we recognize, as many people do, that the world is hypercompetitive, and the moment that you tell people what you are doing, you have 20 other companies in the U.S. and in China that are lining up to eat your lunch. And we want to make sure that we are out as far as possible before we do that. In fact, for ABCL635, we have already brought into IND-enabling studies a follow-on that is engineered for even longer half-life because we see that as white space. This is a giant opportunity. We want to leave no white space for anyone. And after this year, I am not even sure that we will announce development candidates. We will probably just wait until things get to the clinic, because you do not get much value and you expose yourself too much.
Well, I will make this commitment to you, Carl, that-
You will keep asking me.
...if those other two products are in the clinic next year and we are following those clinical trials, then we can focus the conversation next year exclusively on those, and we can leave VMS maybe until the phase III is on deck.
That is great, Steve.
Okay.
I look forward to it.
Okay, fair enough. Well, thanks so much, Carl, for the conversation. Appreciate you going through all the details. Thanks to everyone in the room and on the webcast for listening, and look forward to following the progress from here forward.
Awesome. Thanks, Steve.
Sure.