Hi. Welcome everyone. Welcome back, everyone, to the next session of this first day of the Leerink Partners Global Healthcare Conference here in Miami. As I've said before, happy to be hosting you guys in my adopted hometown. Hope everybody enjoyed cafecito this morning. I was ready. Still a little bit early, but not that early anymore. I'm lucky for this session to be hosting the team from Absci, Zach, Alex, how are we doing?
Doing well.
Great. Thanks.
Happy to be in Miami.
Happy to have you guys.
Yeah.
All are welcome. For those a little less familiar with Absci, can you give us a very quick overview, or less quick if you'd like, of the platform and where we are in terms of clinical products arising out of it? 'Cause you're in a very interesting inflection point of the company.
Yeah, sure. I have a bit of a perspective here. I'm the chief financial officer and the CBO for almost three years, but for over 10 years prior to that, I was involved with the company as an advisor and investor when I managed a venture firm, a board member, and then really couldn't resist the gravitational pull as we moved into generating our own assets. At a high level, we're using AI internally. We create data, we test our models, and we're using our AI engine to generate differentiated assets. What do I mean by differentiated? We're really laser-focused on our efforts to generate assets against targets that are unaddressable or challenging for traditional methods. We're talking about GPCRs, ion channels, creating agonism on certain types of targets where that's challenging. That's our focus.
We just released a manuscript here in January on our Origin-1 model showing the ability to design against these types of epitopes, these what we call zero prior epitopes. There's no reference binder in the literature. They're on difficult targets. If you look like a layer below that in our early pipeline, which we'll be announcing more about later this year, you'll see assets that are targeting these types of targets, so very differentiated, we think could be well positioned for partnering. On the other side of the coin, we're developing our own internal pipeline as well, using that platform. Our flagship program is ABS-201, as you know, which we're developing in AGA, or androgenetic alopecia, as well as endometriosis.
We're selectively choosing which programs to take forward, and I think that AGA program, which we'll talk about more, is very unique in terms of its potential ROI, given the size of the market and the low cost. It's a really great place to allocate our resources.
This is not on video, so the audience won't appreciate how much more personal experience I have with AGA than you guys. Don't have to take my word for it. Let's talk a little bit about that market, the present therapies that are available and just how you see yourselves fitting in with a very different MOA.
I mean, just to level set, androgenetic alopecia is just common hair loss, pattern hair loss that affects about 80 million people in the US and even more globally. When you think about the standard of care today, it's things like minoxidil, finasteride, which are ROGAINE, Propecia, things like that. The standard of care is really lacking in terms of efficacy, convenience, sometimes safety, and adherence is a big issue too. We'll talk to a lot of practicing dermatologists in clinic will tell us that even when they do try to prescribe these kinds of things, adherence is a big issue if you're trying to take a pill or a topical once or twice a day, even if you're someone who does have, you know, an actual effect on it, which a lot of people don't actually see that effect.
What the dermatologist will tell us too is that the patients are highly dissatisfied with these options, and the ones that do try to take them oftentimes will fall off at a certain point. The patients that they're seeing are coming in more and more asking about hair and then also skewing younger and younger. The market is really ripe for something that can be, potentially a game changer if it has, you know, a better effect on efficacy, convenience, durability, and safety, which is something that we think the ABS-201 product could fit into.
I mean, just to summarize that, there's really two categories of therapy today. Either you're doing a daily or twice-daily topical or oral, and they all have side effects. They have great variability in how well or if they even work at all. You can go to a transplant, which is very invasive, painful, very expensive. Even if you do a hair transplant, you have to take the maintenance therapy of an oral or a topical. What we're looking at with ABS-201 is a completely new category where you could have an administration, a simple subQ injection, maybe three times over six months and be able to set it and forget it and have durable, long-lasting hair growth over multiple years. There's nothing like that on the market. Brand-new category. When we test it with patients, there's a significant amount of interest in that.
I think one of the conversations that we have with people who are a little less familiar with underlying biology is there's a little bit of head scratching about where prolactin fits into the biological pathway towards hair loss. Can you walk us through a little bit of the mechanistic rationale here?
Yeah. It's really exciting. Most people think of prolactin as an endocrine hormone. It's systemic. If you really look into the literature, you'll see that quite a while ago, it's been discovered that it's actually, in addition to being an endocrine hormone, it's also secreted locally and regulated locally in the peripheral tissue, and it's run off of a distinct promoter that's dopamine independent. What we see when we look into the hair follicle biology is we see prolactin really driving hair miniaturization. Really pushing follicles into an anagen phase or a catagen phase, which is regression. Over time, diminishing that cell, the stem cell Professor Paus is actually based in the University of Miami.
He's a world expert in hair biology, hair follicle biology, where we looked at, taking ex vivo biopsies from patients, so multiple hair follicles, treating those with a control with our antibody, which is blocking the prolactin signaling, as well as introducing exogenous prolactin to really flood the system with prolactin, and then doing a rescue where we do our antibody plus exogenous prolactin. Long story short is what we found in that study is not only does blocking prolactin with our antibody produce, or push the follicles into the anagen or growth phase, it upregulates all the growth factors we wanted to see, IGF-1, FGF-7, for example, and it replenishes that stem cell compartment as well as the progenitor cells. We think that stem cell component is what's really driving this long-term durable effect, and that's an effect that's been seen in NHP studies.
I think one of the questions people are gonna ask, 'cause you have data coming soon, and we'll talk about that timing momentarily. One of the questions investors are gonna ask is what to look for in this relatively early data set, and how to think about this quantitatively, evaluating where it fits, how great the effect size is, and help us level set on where that is versus competitors.
It's a great question. When we talk to KOLs and talk to patients, if we achieve anything commensurate with even a topical minoxidil product there. Our aim is really to have something that's at least as good as the high end of minoxidil in an effect size. That's where we're looking to see results at 26 weeks in our study, but with a durable component on that simple administration profile, three injections, for example. That's a home run product. We think when we test that with tumors, that the TAM is worth $25 billion. As we look across this year, in the first half, we're gonna release some top line data around safety and PK. We think this mechanism is abundantly safe, and we can have a whole discussion about that.
In the second half, we'll have a 13 week interim readout. In that readout, we're looking to see a signal that's showing that we're moving in the right direction because we expect to see the full effect at 26 weeks. When I say effect, the nice thing here with FDA is you're really looking at an objective measurement, which is target area hair count. You're measuring in a square centimeter on the patient's head in the transition zone between where there's hair and where there's quite a bit of balding. You're measuring from baseline the amount of new hair growth that's there. That's a quantitative measure. It's done in all the AGA studies. We'll do that measurement at 13 weeks as well as at 26 weeks.
I think also interesting, we're looking at a couple secondary exploratory endpoints that we think are commercially, interesting as well, one of which is the restoration of pigmentation. We think that's a whole other market in and to itself, and we've seen that result in the NHP studies where you treat monkeys that have natural balding and you see the hair regrowth, but you also see the return of the pigmentation. We saw that in our ex vivo study where we saw promotion of melanocytes and increased melanin production. We're gonna be looking for that as well in the trial.
Let's talk a little bit about the other side of this asset. We're gonna bounce back and forth, okay? The other application that you're looking to for the same asset is endometriosis. One of the larger unmet needs in women's health, obviously a source of a lot of misery. Talk about that opportunity, how you see the opportunity to set that disease. Obviously, it's a very different clinical development path. Just walk us through the strategy there and how you plan to balance the two.
Yeah. I mean, it's interesting because our research team, when they were at Bayer, actually were working on prolactin inhibition for endometriosis. There's a rich literature and animal studies showing that prolactin signaling is or expression of prolactin is upregulated in the lesion formation, but also in the nociceptors, so pain sensitization. A dual mechanism there. That there's quite a bit of animal work there. We've done our own animal studies as well with a collaborator in Valencia that shows the increase of pan-pain sensitization. There's quite a bit of underlying biology that really points out the role of prolactin in that disease pathology. Our focus there is to start a phase II trial in Q4 this year. The primary endpoint's likely gonna be focused on pain, so dysmenorrhea.
We think that there's quite a bit of proof of concept there. There's a competitor molecule that our team at Bayer worked on when they were at Bayer that just put out results from a phase II study in endometriosis and showed a significant reduction in dysmenorrhea at the high dose. We think there's quite a bit of de-risking around that program, we'll be looking to advance that starting in Q4. I'd say one other thing I would mention there is we just announced the addition of a new CMO to Absci, a former VP at Vertex who has direct experience running pain trials. We think we're really set up to execute that trial well.
Let's talk about the right patients for that drug. Endometriosis is certainly a painful, highly variable disease. There's surgical approaches. They often result in an outcome that's not that much better than where you started, maybe more, maybe worse, depending on the adhesions you get. Who is the right patient to at least early on study in the endometriosis spectrum.
It's a great question. We had a KOL meeting in January focused explicitly on that question. We'll be having a pre-IND meeting with FDA here pretty shortly exploring our views on that. I would say at a high level, we wanna find patients that have the right amount of baseline pain, because at the end of the day, the primary is gonna be a pain reduction endpoint. We need to make sure that we're bringing in patients with the right amount of pain. We're actively looking at how we diagnose the patients coming into the trial. As you may have seen, the new guidelines are really much more focused on clinical diagnosis, but there is a imaging component. Sometimes imaging misses superficial endometriosis, which we do not wanna miss. There's always surgical confirmation.
We're looking at the entrance requirements, but, you know, and I think we'll announce more about the trial design later this year. I would say our North Star is to make sure we get patients that have the right type of pain profile to come into the trial.
On what time horizon will we be getting that clarity? Just as we think about the sort of the tempo of that data, AGA, what are we getting when? Sort of which questions are we answering on what time horizon?
Yeah.
I mean, if we look out over the next 18 to 24 months, as Zach mentioned, the first half of this year, we do expect to have some safety tolerability and PK data for the AGA trial. It's currently ongoing. It's a phase I/IIa HEADLINE trial that kicked off in Australia this past December. In the second half of this year, that's when we would have the 13 week interim efficacy readout that Zach had mentioned. Looking into the end of the year, in the Q4, kick off the phase II for endometriosis, and then into 2027, have the 26 week readout for the AGA hair growth. Finally, later in the year, second half of 2027, the phase II interim efficacy readout for endometriosis. Really in this next, you know, 24 months, having those two phase II readouts, on the horizon.
Talk to me a little bit, before we go diving back into details about anything. Talk about where you guys are in OpEx, where you guys are in balance sheet, cash burn position, where do we get relative to that data sets based upon where you are on your runway, and the assumptions baked into that, of course.
Yeah. I think at beginning of the year, we announced our balance sheet at roughly $143 million, which gives us runway into the first half of 2028. That would bring us through the full readout on AGA, as well as an interim readout on endometriosis within that runway. In parallel to the investments in those programs, we are generating assets out of the platform with the goal of partnering those assets. We think that the value created by partnering even early-stage assets is much more significant than doing platform deals. We'll be focused on looking for partners for a number of assets during the course of this year, and we'll announce some more about some of our pipeline programs.
Yeah.
I guess you mentioned an OpEx too. One other thing I'll mention is we're consistently finding ways to cut our OpEx spending. You saw that probably starting in July. We did some reorganization of the company. We'll be continuing to look at ways to do that, including by using some more agentic approaches. We're actively building agentic AI workflows at Absci today and piloting and validating those. We expect to see significant savings from those over the course of this year as well.
That's helpful. I wanna dive back into the pipeline here and talk about how to balance two very different product profiles. The analogy that I've heard in the past from other investors is, well, BOTOX once upon a time was a really severe migraine drug, and now it's used for other purposes, including in the city that we're in right now. There is some being used somewhere, I'm sure. Talk a little bit about how that influenced the development of both. I know we talked about it earlier, how that influenced the development plan for each of two indications, how they inform one another and to what extent are they almost a little bit separate?
Yeah. I'm gonna even go a step higher, which is-
Yeah
...we think there are other interesting indications for prolactin, and we're bringing along other molecules early in the pipeline, as we think through some of those. You're right, these two indications are very different in some key ways. For AGA, that's a mass market drug. It's gonna be cash pay.
Yeah.
We think it's gonna be very well priced if we hit anywhere close to our TPP based on the consumer research we've done. We think that it'd be more like north of a $25 billion TAM in the US just for the AGA indication, which is why we're allocating resources to that. For endometriosis, as you mentioned, it's overlooked. There's nothing disease modifying in that space. GnRHs have some pretty negative side effects that prevent them from being used for more than 12 months, typically. We think that market is multi-billion dollar as well, but that's gonna be a very different clinical reimbursement path.
Yeah. I guess the question becomes, Strategically, how do you consider the possibility between applying using the same construct/product both versus for the interest of price, dosing, and development discrimination, using a separate one of the follow-on assets for one asset or the other, and how do you think about that?
Yeah. That's an active discussion internally. Right now, when we look at using ABS-201 for both indications, we feel like there's a pathway to do that, in part because of how we think AGA will be priced. Obviously with endo you'd be looking at insured cost, so you'd be looking at what payers are gonna support and what the out-of-pocket would be to a patient. We think that that's a viable path, and have different dosing, different formulations, all of that will be worked out as we move forward in the endometriosis studies. That's one angle. There is also the option of bringing a backup molecule in and doing a bridging study.
Yeah.
That's something that we've looked at and continue to look at. The other thing I have to mention, because it sort of gets to the platform and we're excited about this, we really believe in this prolactin mechanism for a number of indications. In addition to backup molecules, we're using our platform to try to generate a lot of IP across compositions, because we can create thousands and thousands of designs that we're validating in the wet lab at scale. You can look in the future to see very robust IP coming out from us around the prolactin target.
There has been a movement in competitive data, et cetera. There has been a attempt to use prolactin in AGA in the past. There was some data produced by a Chinese competitor, a mainland Chinese competitor. How do you think about that construct versus yours, that approach versus what you're doing? What lessons have you learned from that data set?
I mean, honestly, I should thank that company. They've done a lot of de-risking for us. That molecule, Hope Medicine's molecule, I think you're referring to is actually the molecule that Bayer initially developed and discovered.
I am
Our team at Absci, some of our team worked on that program. We have a lot of institutional knowledge of that molecule, and I'd say when we started working on prolactin, we had a view to the amazing applications for it and as well as the weaknesses of that molecule, and we used our platform to address those weaknesses. You know, first off, that molecule has a very low half-life. It's a two week half-life, so we've engineered an HLE mutation to ensure we have a long half-life drug, which is very important for the AGA market. You don't wanna be dosing too often, so two to three doses over six months is a winning profile. 24 doses, which is what would be required with that HMI molecule, not a winning profile.
The second, which gets to the same point, is we can formulate our molecule at a high concentration. We have a 200 mgs/mL formulation going into the MAD component of the Phase I/IIa study that's ongoing. That Bayer Hope molecule looks like it can only be formulated up to 60 or 70 mgs/mL, very limiting in terms of the administration and convenience for patients. We've introduced higher affinity as well, which is important when we think about receptor occupancy. If you put all those variables I just mentioned together, including affinity, we think the receptor occupancy here is gonna be key to driving efficacy in AGA. Finally, I would say we think we'll have terrific patent life. We're just prosecuting our patents now. Those initial Bayer patents are gonna expire here around 2032. There's more, but I'll stop there.
Yeah, well It's almost as if you prepared for that question.
We've thought a lot about it, and it really guided the, what we were doing internally when we worked on this target.
No, that makes sense to me. As you think about other indications for this target, should we think of this as a target that has a AGA application, and then broadly speaking, a group of mostly women's health and hormonal dysfunction applications? Or is that the wrong way to think about this?
Yeah, it's a little bit the wrong way.
I'm wrong all the time. People tell me that every day.
I think, you know, when we look at prolactin, particularly peripheral prolactin, so we have to change the mindset of looking at systemic and look at the peripheral prolactin in different tissues where it's regulated independent from the pituitary. There we see quite a few I&I applications for the drug, or for the target. One thing I love about the target is that we think it's abundantly safe. There are humans walking around with loss of function mutations who are perfectly healthy, have good hair. The only thing that they present with is the inability to lactate. We think it's a very safe target, but if you really start looking in the literature and we're doing some more experiments internally, including with collaborators in human tissue, there are quite a few I&I indications where prolactin's highly implicated.
That does create some complexity in terms of development path going forward. Is it reasonable to assume that further I&I implications will probably be a home for follow-on assets?
Yes.
Okay. That makes sense.
Absolutely. That's the way we're thinking about the follow-on assets we're creating.
That's mostly a function of price, a price and dose, etc., discrimination.
Absolutely.
You talked about the global and U.S. TAM opportunity in AGA. I'm gonna pivot back. One of the questions around development globally is, what data do you need? How integrated is the regulatory path globally versus the U.S.? Try to give us a sense of the development cost, because there haven't been a lot of studies recently in this space.
Yeah.
Talk to what the development cost looks like US, EU, etc., rest of the world.
I'm gonna focus on the U.S. We've done a lot of homework there. We have a trial design, and for the registrational studies as well, which we'll be talking to the FDA about here shortly. For rest of world, I won't speak too much about that.
Yeah.
It's something we're evaluating now, but it's also an area where we may seek a commercialization partner. To be involved in some of the later development but in the U.S., what I would say is this is a very. I'm gonna put on my CEO hat or trousers or whatever you wanna say. It's a very attractive ROI for a couple reasons. We talked a little bit about the market size. This is a new category in a market that's 80 million patients that are dissatisfied with standard of care. The two pieces that I think maybe sometimes investors don't appreciate is one, the speed of conducting trials in this market and the costs are very different than traditional indications. Right now, we're doing a phase I/ II combined that's gonna read out here, final readout in early 2027, and that'll position us for registrational studies.
We think we could be in line for an approval circa 2030. If you look at the speed of recruiting for these trials, very rapid. We think there'll be wait lists for the registrational studies. Then the cost is, we think the cost for registrational studies will be well under $100 million. When you look at that compared to oncology or IBD, and you factor in speed and cost.
Mm-hmm.
It's a very attractive ROI. It's a very unique type of program in biotech. I've never seen an ROI like this on any program I've ever been involved with.
transitioning to what kind of commercial infrastructure would be needed.
Mm.
How should we presume, presuming that this program moved as quickly as you suggest, and we've seen that in these indications before, by the by, the sort of aesthetics cash pay market is not a place for companies that typically have a headcount that looks like Absci, if that, if I may.
Mm-hmm.
say so. How do you think about that opportunity set? Is that something that belongs with a partner? Is that something that needs to be geographically chopped up, or is that so far out that it's, that you haven't thought, that that's not a real part of the planning right now?
We've done some preliminary planning, and we have big advice from quite a few ex-Allergan executives. We'll be bringing on a chief commercial officer, I think, later this year. I would say at a high level, the way we think about the market is, the initial go-to-market should be through practitioners because we want to establish this as a premium product-.
Mm-hmm.
New category. It's also very well aligned with derms, plastic surgeons, and med spa, that's over 30,000 locations in the U.S. alone. This is a perfect product fit for them, there's good an economic incentive tied to this versus a minoxidil kinda play. We think that's the go-to-market. The infrastructure to support that we don't think is gonna be as significant as it would be for a typical drug, particularly this revenue potential, because we think we can drive a lot of interest through social media, other advertising into that practitioner network. Patients are looking for solutions already. It's not like we have to go find these patients, they self-diagnose every morning in the mirror. There's a ready population, ready demand there.
Our view is, you know, we'll build a commercialization and a sales force, but it's gonna be heavily focused at pushing consumers into those derm offices.
Great. That makes sense to me. We're winding down to the end of our time. Looking forward to seeing that data throughout the year.
Yeah. We are too. We're excited.
It's gonna be a fun year for you guys. Cool.