Pleasure to welcome you all to the first day of our healthcare conference, and in particular, welcome our next presenting company, Alumis. This is a company that is one of the most recent to debut on the Nasdaq exchange. I think we have the pleasure of hosting you maybe for your first public fireside chat. I know you've been at other.
Yeah.
Conferences of late, but, my pleasure at least to host you for this chat. And we have with us, from the company, Martin Babler, the company's CEO, who's to my right, and to Martin's right is, the company's Chief Financial Officer, John Schroer. So Martin, John, thank you very much for coming out.
Thank you.
Thanks for having us.
Okay, given your relative newness to Nasdaq and the public markets, maybe Martin, you could just start out with a quick high level view of what Alumis is all about.
Yeah, happy to do so. So we're a precision immunology company, and originally, actually, the company really was founded on the basis that we want to use modern technologies, and data analytics to better understand the immune system and derive our portfolio from that. And the company was founded and incubated by Foresight Labs. We joined about six months later, which was actually now three years ago, almost to the day. And this is mostly the research and management team from Principia Biopharma after the acquisition by Sanofi. The company, actually, as we did early work with genomic data, found that TYK2 is an extremely interesting target. And so we were on the hunt for a TYK2 inhibitor and found a company in Southern California by the name of Frontier and actually acquired that.
And our lead asset is actually coming to the company through this acquisition. We then went on our own search for additional TYK2s, especially to get into the brain, which is our second asset, and within 2.5 years of starting the research, actually put that into the clinic. So we now have two clinical assets. The first one is ESK-001. That is, we're studying that in psoriasis and in lupus. We're in phase III for psoriasis. Both phase IIIs are currently ongoing. There's two parallel studies, and then we are running a phase IIb in lupus that is actually designed as a pivotal study. In case that is a successful outcome, we might only need a second, a phase III. And then we have A-005, which is basically our second molecule. That is a brain-penetrant molecule.
It actually has a blood-to-brain ratio of one to one, and so really good brain penetration because we are strong believers that you have to hit this target hard. We are studying this currently in phase I, and then move into MS for that molecule, and behind that, we're building a portfolio of other molecules. The one target that we have publicly disclosed that we're working on is IRF5, and continue to do a lot of work on the precision side to really understand not just target selection, but also indication selection, patient selection, et cetera, to really ultimately, with the goal to optimize outcomes for patients with autoimmune-mediated diseases, not just alone, but also in combination. A lot of work we're actually doing with TYK2 is also focused on future combinations.
It sounds like at the very genesis of the company, you were keen to kind of investigate or interrogate the landscape of potential autoimmune targets, and you settled on TYK2 as a result of that work. Why, why TYK2?
So in the early findings from our work with TYK2, actually one thing stood out. There is a specific mutation that exists in more than 5% of Caucasians and in lesser, to a lesser extent in others. That mutation is called the 1104 mutation, and that mutation actually only affects the kinase function of TYK2, which is exactly what we're trying to do pharmacologically. And it turns out, when you have that mutation, and some of your friends have it, some of your family members might have it, you might actually have it and don't even know about it. And the reason why you don't know about it is because there's no pathology associated with it. There's no increased risk of infections, etc.
In a therapeutic modality for autoimmune disease, when you have that kind of mechanism, where you have actually no downside on the immune system's ability to respond, that was very attractive. At the same time, those people who actually have that mutation have about a 50% protective effect, so a 50% less likelihood to get psoriasis or lupus compared to the general population. That's a really interesting finding and a really interesting balance between what you might see on the safety side and what you might see on the efficacy side. That's why TYK2 actually became a very attractive target, not just as a monotherapy, but possibly also as a combination partner, because most other targets in autoimmune disease often lead to additional infection risk, et cetera, et cetera.
If you could pharmacologically just affect the kinase function only, that would be a very, very attractive proposition.
Does 1104 have no kinase function?
So basically, it reduces it. In the heterozygous, you have about a 40% reduction. In the homozygous, you have about an 80% reduction, and that is sufficient to get the effect already.
Is there potential biology that can inform what a full target inhibition or coverage would do in terms of safety?
There is none. There are other mutations, and but most of them actually then also affect the scaffolding function or the kinase production or the production of the protein. Those actually have very different phenotypes. All of a sudden, you actually have significantly increased infection risk. That's why we actually chose to go this route and not the degrader route, because there is an increased risk of infection with the degrader approach.
Okay. So obviously, we have others in this field who are also focused on TYK2, including one approved product, which we see advertised on TV almost every Sunday. Tell us why SOTYKTU from Bristol is not able to capture the full value of this opportunity?
Yeah, so one of the questions that had not been answered until we actually had our phase II dataset was whether a maximum inhibition of TYK2 as a target has a different outcome than incomplete inhibition. We know that the first generation molecules that are currently either in the clinic or approved basically get to a good level of inhibition, but not a complete inhibition. And given that we have a kinase, we often see in kinases that maximum target inhibition is really giving you a different outcome than incomplete, because you might have amplification, where even if you inhibit a large portion of the target, the others just fire through harder.
And what we've actually seen in our phase II data is that you see about a 12%-20% delta between the efficacy with maximum target inhibition versus great, but incomplete inhibition. So we do actually believe that what we discovered in our dataset is that to get to the maximum efficacy, you really have to inhibit the target hard and hit it hard. And so we are currently the only molecule that can, that has been able to push that, because we don't necessarily see the same side effects that you see with some of these first generation TYK2 inhibitors that prevented them from really pushing the dose all the way to the maximum inhibition of the target.
I understand that both SOTYKTU, as well as a candidate that's in development, the Takeda compound, they're both allosteric modulators or binders of the JH2 domain. Is that correct?
That is the same mechanism, that one.
How are you different in regard to the way you inhibit this target with greater potency?
So we have a hypothesis, but we don't have the dataset because we didn't study their molecules to the degree that we have proof of that. But our assumption is that, at least for SOTYKTU, that there is actually a metabolite that is also active, and that metabolite might not be as selective as the parent molecule. And we have inactive metabolites, and our TYK2 inhibitor that hits the JH2 domain is extremely selective, so we really have very little off-target inhibition. And we see that actually in the clinical data, where our rate of these skin rashes that you sometimes see with kinase inhibitors is less than 2%. But you see a 10%-20% level of that skin rash with both these other molecules.
And so we do believe that has to do with the selectivity, maybe not of the parent compound, but it could also have to do with the selectivity of the metabolite. And so we do, based on our data and even what we've seen from Ventyx, believe that this is not on target, but it's likely a generic kinase that basically gets triggered somehow.
Okay, so you're developing ESK-001 in psoriasis, at least initially.
Yeah.
In terms of the landscape, we've got a lot of approved drugs, including some very active biologics, as well as, you know, some older oral agents. What's sort of the target product profile and niche that you would expect 001 to address here?
Yeah, so there's actually two components to the answer to your question. The first component is that we do believe that a high-efficacy oral could really change the dynamic of the market overall. To date, there is no high-efficacy oral where you could take an oral instead of a biologic. One of the reasons why a subset of physicians really prefers, and especially the people that have a psoriasis clinic, prefer the injectables, is because you know you can give it to the patient, and ultimately the patient will respond. One of the pieces of feedback we get from our investigators is that one of the fascinating things for them is now that we see that we have more than 90% PASI 75, they basically say, "Look, the great thing with your drug is it works in everybody.
I can ultimately prescribe this and tell the patient, "You take this and come back in four months, because I know it's gonna work for you." That has not existed today with an oral drug. Today, you had to say, "Go take this, and we'll see how it works, and ultimately, we might have to switch you to another one." We're actually. When you look at the switching data, the switching is actually quite substantial. The other piece is that I think actually most people are not aware of the market dynamics in psoriasis to the extent that they exist today. And what I mean by that is that of the 8.4 million patients that get diagnosed with psoriasis today, more than 20% actually don't get any therapy. And of the 80% that do get therapy, a lot of them get a topical first.
Actually, the systemic therapy is only about 20% of these 8 million people. Of the systemic therapy, half of it is actually oral methotrexate. Fundamentally, of the 8.4 million patients that get diagnosed today, only about 10% get systemic therapy with a biologic today. There is a very significant opportunity here for a market-making opportunity in the psoriasis market. Yes, there's a crowded corner of that market, but the overall market actually, especially for patients that might not want an injectable and patients that basically get suboptimal therapy right now, is very, very significant. We do believe that with oral therapy, you have a better chance to really go to that place where you might be earlier and hit the target hard.
and so that is an opportunity set that we're looking at, besides basically being a market taker in that relatively small segment. We do believe that there's a significant opportunity to be a market maker with a high-efficacy oral.
I mean, as we've talked about, SOTYKTU doesn't have the efficacy that you're hoping to achieve, but they probably are looking at that same segment and growing the market in that same regard. Is there anything you can learn from SOTYKTU their initial launch that you can take home to your future prospects?
Yeah, so we've done extensive market research to really understand what happened there. And we came to the conclusion for ourselves that it's really, they ended up in a really in-between situation. Because originally, they launched this product as a high-efficacy oral. They launched it with high-efficacy oral pricing, but the market ultimately pushed them towards the Otezla market. And for the Otezla market, they're actually too expensive, and in contrast to Otezla, they have prior auth, and they also have monitoring. And so you end up in a situation where you're not as convenient and as efficient for practice management as Otezla. You're not basically just writing a script and go to the pharmacy, but the pricing and everything is positioned for a market that you cannot compete in.
And so you're neither fish nor fowl because you're somewhat a little bit in between. And so we do believe actually being really clear what segments that you're going after and how to best position yourself is going to be critical for a successful launch.
You've got these very favorable PASI 75 results in the clinic that you already mentioned from your phase II. Just connect the dots with regard to the biomarker data that you've also shown so that we get a sense that this is through higher target inhibition.
Yeah. So as I mentioned, we do a lot of data analytics stuff, and one of the things we did, probably we collected more biomarker information than any other trial they did in psoriasis for an oral before, at least related to TYK2. And one of the things we actually found in the phase I is that we do have a proprietary biomarker that is highly correlated with TYK2. And so that has really enabled us to understand what happens. And in psoriasis, we're probably not gonna use anything like that for patient selection when you have more than 90% success rate.
But when we actually correlate that level of inhibition with the outcome for patients, we see a really, really nice correlation, and we'll actually present some of that data also at the EADV to just show a little bit more about that work that we're doing. And so in our minds, there is actually a really interesting opportunity here in TYK2, maybe in other indications, to really think about a biomarker approach, for example, in lupus. Can we possibly predict? And we're doing work in preparation for getting our phase IIb, so that once we have the data, we can then really evaluate whether there is a benefit and maybe even a patient selection that would help us find the right patients to give the drug to.
And I guess we are expecting to see updated data from your open label phase II extension this year, correct? Is that EADV?
At EADV, we will have additional data. The data set will still be the 28-week data set, but it will be more comprehensive, and we will also have three: we have PK, new PK data. We have the biomarker data, and so there's a few pieces that we're doing there, and then we'll have the 52-week data at the AAD next year.
Okay.
So I think that's an important piece that maybe just to elaborate on. We did our phase II study, and then we actually enrolled patients into an open-label extension. And this open-label extension is very unique and different from others because we've actually moved everybody at this point to the clinical dose that we're using in phase III. So everybody is at the phase III dose.
Maybe you wanna just talk about that phase III design and setup and how it's going in terms of execution. Those two trials are now underway.
Yeah. So we are running two parallel global trials. Because we see we have seen in the phase II, in the open label extension, that it takes about, like with every drug in psoriasis, it takes about 20 to 24 weeks to really get to the maximum clinical effect, and we really wanted to understand that. We're basically we decided for the phase III that we can only we actually challenged the FDA where we could do a placebo for 24 weeks, but the rule in psoriasis is that you can only run placebo for 16 weeks. So we are actually doing an active comparator for 24 weeks, and after the twenty-four-week trial, basically, patients will then roll into a long-term extension, and this is actually a break of policy a little bit from the FDA.
Because we have that very comprehensive phase II long-term extension, we don't have to run a 12-month trial or a 52-week trial in psoriasis. We can actually run a 24-week trial only, which means we'll read out a lot faster than our competitors, and we actually are going to likely read out at about the same time as our competitors will read out their trial, so we're catching up. We're not behind. We're catching up basically with the competitive molecules by, with this design, and we'll still get the same elements for the label. We'll still have the 24-week active control. We'll have the 16-week placebo control. Then on the safety side and on the durability and maintenance side, we will have data from that long-term extension.
On top of that, given that now we have an ongoing long-term extension from the phase II with about 150 patients, that actually will enable us to even have three-year data, hopefully, in the label at the time of launch as well.
You've chosen Otezla as your active control. Why did that make sense?
At this point, yes, because it's really just because we wanted control data at 24 weeks. We are considering whether we should do another active control trial. What we don't know at this point is what the most relevant active control actually might be. And so we're working through that right now and with the idea that we might do an additional trial with active control as well.
Okay. And then right now, the current formulation is BID?
That's correct. So one of the most important things for us, we are obsessed with pharmacology because we believe in small molecules that plays a really key role. And as I mentioned, we have pharmacologically a very attractive molecule. It's the only TYK2 that we're aware of that doesn't have a lot of variability, and is probably the most linear molecule as well. And so we decided to wait until we have our phase II results to optimize the formulation. What we learned in our phase II is that Cmin is probably the most important factor to optimize for, because when you have the kind of behavior that our molecule has, you do not want to fall below IC 90 for 24 hours a day. And so the new formulation is going to be a BID formulation optimized for Cmin.
We're working on that right now. We'll likely have a formulation that we can announce in the relatively not too distant future. The idea really is that by the time of the launch or within the first year of the launch, we will have a once-a-day formulation for the molecule. That's really gonna depend on the regulatory path we choose, but that effort is ongoing. We do know that in psoriasis, to be competitive, we have to be once a day. Other indications might not be as critical, but for psoriasis, at least we feel like it's important.
And Martin, you alluded to other competitors in the psoriasis space and making sure you catch up or reading out at roughly the same time. You know, in my head, we've got the J&J oral IL-12, we've got the Dice oral IL-17, we've got someone in your own class, Takeda, with the TYK2 next gen. How do you kind of piece these together, and what data sets are you looking at in the future to be more informed of this landscape?
So we did a very comprehensive analysis of all or most of the clinical trials that were run over the last 10 years for many of these molecules. And we actually did a lot of pattern analysis, and we also created an algorithm to predict how these things might work. And one of the most fascinating things about that analysis is to really understand the dynamics of the different pathways. For example, the IL-17 pathway is the fastest pathway for 12 weeks. You will always see better results at 12 weeks, but over time, actually, they are not as efficacious as the IL-23 pathway inhibitors. And so as we think about the competition, we really wanna think about this in the long term and in a very comprehensive way.
And certainly, there are other people targeting different ways to have good oral therapies. We do believe that one of the most important pieces about oral therapy and one of the potential advantages is tissue penetration. So, and it's ultimately, can you have a high-efficacy oral, and can you have a high-efficacy oral that is very safe and that has really good tissue penetration? Based on our own data, we believe that we actually have set the bar relatively high. We have PASI 75, as you mentioned, above 90%. We have PASI 90 above 70%. Even if you do an NRI, it's still above 60%. So the bar is set actually quite high. And so we look forward to seeing the data. What we are going to look for mostly is you have to have a really clean safety profile.
We know from our one-year follow-up data now in the OLE that we have a very clean safety profile. You have to have a really good efficacy profile that is at least almost, or if not competitive with the, with the injectables, and you have to have the convenience and part of that is, You know, is it a once-a-day pill? Can you take it whenever you want this? and if you look at across the landscape, we actually believe we're highly competitive with all of these modalities because we have already efficacy data, we already have safety data, we already know that our drug can be taken with or without food, and you don't have to fast or anything, which you have with some of these others that are especially protein oral proteins, et cetera.
So from our standpoint, actually, we believe we have a very competitive proposition, but certainly, the future will tell. But we also believe that, you know, these are mechanisms that work well in psoriasis, where we want to be competitive, but we also can then go into many other indications driven also by the interferon pathway, not just IL-23 pathway, such as lupus, et cetera, where we can compete, and that's certainly the other place where we're driving things right now.
Maybe bring the CFO into this conversation a little bit when we talk about resourcing this molecule, potential partnerships, or as we'll talk about in a moment, next opportunities that you could take it into. How do you think about the right resource allocation strategy behind 001 ?
So I'll address the cash component, the resources that we bring. At the end of the second quarter, when you include the proceeds from the IPO, we ended the quarter with just over $440 million of cash. That. Those resources will provide us cash runway into 2026. Importantly, that captures the readout from the phase IIIs for the psoriasis programs and for the lupus phase IIb. On the business development front, I'll let Martin address that.
Yeah, I think one of the interesting things for us is that we have more opportunities than we can possibly finance. You know, when you have a molecule that could be used in 10 indications plus, and you have a second molecule that, again, has that opportunity, and once you've established that it's safe, well-tolerated, and it can really inhibit the target, then the opportunity that, of course, is very, very significant. So I think for us, as John just said, resource allocation right now is really on psoriasis readout, it's on lupus, it's on A-005, and then we have to figure out how we capture potentially other opportunities.
That certainly is in the realm of business development, or if we feel like there is a real, real opportunity because it's triggered maybe by an outside readout, then we also believe that we can raise additional capital to pursue some of those opportunities as a best, potentially best-in-class molecule.
Okay, so after psoriasis, at least right now, the next use of proceeds and investment is in lupus. So why was that the right choice of next study?
It's a really interesting question because lupus normally is something that people are a little bit more concerned about compared to other indications. But when you go back to the genomic data, lupus actually, for this target, has a protective effect that is almost as strong as psoriasis. So if you have this eleven oh four mutation, you actually have about a 45%-50% less likelihood to get lupus. And we also have data from the anifrolumab molecule, because that molecule inhibits the interferon pathway, which is the same that we do, and that is one of the two molecules that is approved in lupus. And then the third thing is that there is some data from SOTYKTU that basically shows that they were beneficial in lupus.
Maybe not as clear cut as one would have hoped, but the reality is, in lupus, as you go up in dose and as you lose more patients, and in their case, it probably was a little bit biased by the fact that as they went to higher doses, they had more dropouts, and they count as non-responders in lupus, so that might have influenced their results a little bit as well. But the reality is they actually saw a positive outcome in three doses that they studied.
You're also testing three doses. Do you need to hit SOTYKTU? Do you need to hit TYK2 as hard in terms of inhibitory concentration in lupus as you?
It's a good question. The only analog that we have is actually the anifrolumab data. When you look in anifrolumab, you realize that to get the real good outcome, you actually need to maximally inhibit the interferon pathway. There's a very significant delta in efficacy for maximum interferon pathway inhibition and not in non-complete inhibition. We do believe that that could translate into the way that TYK2s work as well.
With your highest dosing, I think it's 40 milligram BID right now.
Yeah
In lupus, is that, that's gonna be good enough, you think, to fully inhibit the pathway?
Yeah, so because we've done so much biomarker work, we actually, you know how half the data shows, even if you, basically, if you go higher, you really don't get a lot more efficacy. We are - it's actually interesting because there are some other indications where it's probably more about a question of tissue penetration and do you get the right tissue distribution? But so far, all the data we have is that the 40 milligram BID is actually the dose that you need to get to really fully inhibit this target.
Beyond lupus, is there a next clinical indication you think makes the most sense?
We are pursuing MS with A five, with our second molecule. We have a select group of indications that certainly would be immediate next ones that we want to pursue. You know, psoriatic arthritis comes to mind, IBD comes to mind, but there's also some smaller indications that we're very interested in. We have a list of what we would do. The question really is, where do we optimally allocate our resources at this point? We just talked about, do we do an additional psoriasis trial of some sort, or not, or do we actually go into additional indications? That's certainly work that we're going through right now to make sure we're doing the best in terms of using our dollars very judiciously.
Okay. You have made the choice to go forward with A-005 in MS, so tell us about that resource allocation decision, why that made sense?
Yeah. So one of the key learnings that we've had so far is that really you have to hit this target hard. So when we thought about CNS indications, because MS is actually on that list of also really having a protective effect from the 1104 mutation, we decided that you need a molecule that gets into the brain really well. And so we basically developed a second molecule. That molecule is currently in phase I, and we'll have the readout from phase I by the end of this year. Really with three components. The first one is PK/PD, the second one is we do very comprehensive biomarker assessment like we've done with ESK-001, and then the third one is we're actually doing a spinal tap.
So while we do not get biomarker data from the brain, we'll get the concentration required to get full inhibition in the periphery, and we'll get the concentration in the brain. And so then you just have to add one plus one equals two. But for us, that is the most important thing to really understand.
To make sure you've got the human brain, blood-brain barrier.
Yeah
Barrier penetration.
Yeah.
Okay. And then would you start a phase II in 2025? Have you committed to that in MS?
We would start a phase II in 2025, and it would read out in 2026.
That would be MS, you think?
That would be MS.
In the biological?
It's the most comprehensive data set you can create with a three-month study at this point in most of the CNS indications. So if you look across indications, it's probably the easiest one to do, and so that's why we decided to go there. There certainly are other opportunities, both in neuroinflammatory and neurodegenerative disease.
Fastest POC readout?
Yeah
In other words.
Exactly.
Great.
Yeah.
Okay. Any last questions from the audience? Actually, I think we're at time.