Good morning, everyone. We're going to kick off our next session. Our pleasure to host our next presenting company, Alumis . My name is Eric Schmidt. I'm joined on stage by Imogen Mansfield, and we're delighted to have with us Alumis ' CEO, Martin Babler, as well as the company's CFO, John Schroer. Martin, maybe you can just kick us off with a brief sort of two-minute overview of the state of affairs at your company.
Thank you, Eric, and thanks for having us. Alumis is a precision immunology company. We have three clinical assets at this point, plus a very strong research organization. We're also calling ourselves a precision company, mostly from the fact that we have a lot of machine learning and actually have discovered some additional biomarkers related to our programs. We're in phase III with psoriasis. That read-out will be early Q1 of next year. We're also in a phase II-B that is pivotal for lupus. That read-out will be in the third quarter of next year. We have two other assets in the clinic. One is A-005, which is a TYK2 inhibitor that gets into the brain about one to one. We have lonigutamab, which we're evaluating currently on how we're going to move forward.
The main focus today is probably going to be on the lupus and on the psoriasis program.
Okay. The main focus, of course, for your company has been on TYK2 as a target. Why TYK2? Why should we be excited about inhibiting this enzyme?
TYK2, we selected actually because Mother Nature is doing a pretty nice job to show us why TYK2 is so important. There is a series of mutations in TYK2, and when we selected TYK2 as a target, it was actually based on a lot of machine learning work we did around mutations in the human body. About 5% of the human population actually has a TYK2 mutation, which is a mutation that just downregulates the kinase function. It turns out that these patients have two phenomena. One is they actually have no phenotype, despite the fact of having this mutation. The second one is that this population actually has a high level of protection against autoimmune diseases. In the case of the homozygous carriers of this mutation, that protective effect is about 80% for psoriasis or for lupus or for other indications.
We do believe actually Mother Nature really shows us how effective TYK2 should be. We're in a situation where actually to date we believe no molecule has really shown the full benefit of TYK2 in a phase III trial because none of these molecules that have gone through phase III so far actually had been able to fully inhibit the target above IC 90 for 24 hours. I think actually we're only now learning what TYK2 really can do. We hope that we'll be able to show that this is a highly competitive molecule, whether it's in psoriasis or lupus or other indications.
Okay, so target's been validated. You think you've got a better mousetrap to attack that target. How do you think you are differentiated either from the approved agent, Bristol Myers Squibb's TYK2, or a drug that's maybe, you know, shoulder to shoulder with you in terms of its development, TAK-279?
Yeah, the best way to describe it is that our molecule actually is the only one that did not have to dose reduce after phase I, going into phase II and phase III for patients. We were able to drive really to maximum target inhibition without having a probability or safety issue that forced us to dose reduce. The risk-benefit profile of our molecule seems to just be slightly improved, but in a clinically relevant way for patients. We don't fully understand yet what the mechanism is of this significant increase we see in efficacy as we go from above that IC90. It's likely going to be, it's like the amplification or something like that. It's really about getting to maximum target inhibition without incurring tolerability or safety issues.
Okay, we used to call your molecule ESK-001. Now we're calling it envudeucitinib or envu for short, I think. What have we seen in the phase II data set for envu that supports sort of clinical differentiation, not just superior pharmacology?
Yeah, we think the most important thing is really that we've seen a very clean safety profile and a high level of efficacy. In fact, if you look at our PASI 75 scores that we saw, especially in the long-term extension in the NRI analysis, they are the highest we've ever seen with an oral drug. PASI 90, PASI 100 are very competitive with other molecules. For us, it's really about the level of efficacy we see. That approach is really what we see with injectables now, and at the same time, a very clean safety profile and really not as much of those TYK2-related side effects that others have been seeing with their TYK2 related to skin manifestations, etc. We do believe that that's likely actually not necessarily TYK2-driven, but more driven by metabolites that might actually hit some other kinases.
Coming in the second half of the year, we've got the phase III data for TAK-279, a TYK2 inhibitor. It's probably going to be to 16 weeks, which is the primary endpoint. Does this provide a benchmark for you? Because we did see also very impressive data in the OLE over a longer period of time.
Yeah, so we do believe actually when you look at how physicians evaluate drugs, it's not necessarily the speed of onset. The patients need to see a benefit so they stay on drug. What dermatologists really tell us matters most to them is how many of their patients ultimately benefit and benefit well from a drug. Actually, where these molecules plateau out is probably more important. I think the way to look at these drugs is probably the 24-week data and the 52-week data is more important for dermatologists than the 12 or 16-week data. However, we are aware that there's other molecules out there. We do believe that our most important comparator is the oral IL-23 because that's really the one that we will mostly compete with in the market. For us, that benchmark data is more important.
We will see some of that data come at AAE this year. So far, the only data set we've seen was the data set that included adolescent patients, which we know always do a little bit better. We will now see the data set that includes just the adult population. That's going to be an important data set for us to see. I do not know when and what exactly Takeda is going to present, but we will see how that data stacks up. Ultimately for us, the most important thing is that we can repeat what we've seen in our phase II, in our phase III, which is really that 80-60-20 kind of phenomenon where we see about 80% PASI 75, about 60% PASI 90, about 40% PASI 100 in the long term. I think that is where we hope we can repeat what we've seen in phase II.
I guess one more on that. The different PASI numbers that you just mentioned, we hear different KOLs focusing on different ones. It's often challenging to compare between studies because of which one you choose. What do you look at when?
Yeah, we just completed some interesting market research, and it turns out that while the KOLs are focused more on PASI 90 at this point, many KOLs at the same time tell us that the PASI 100 at week 12 or 16 is really not a good measure because it's too variable still. The average physician out there actually still considers PASI 75 as the long-term key measurement. They have not yet made that transition. However, we believe that ultimately we have to measure up on PASI 75 and PASI 90 for sure. PASI 100 is certainly what is the most achievable or what we want to achieve for patients, but it seems like we're probably in the 75 and 90 if you look at the overall dermatology population.
As you know, Martin, investors love to do cross-trial comparisons. They also like to look at phase II data and see how it might predict phase III results. In both cases for your drug, are there things that you've altered or changed between phase II and phase III that might impact the results? When you look at your baseline entry criteria, are there things that are different or similar relative to the competitive landscape?
Yeah, you bring up a really good point. We actually did do an analysis where we looked at all the trials that have been performed over the last many years, and there's a slide in our deck that actually shows that. In that, you actually can see that it is, in many cases, phase II actually is quite similar to phase III, but there are some exceptions. Often in those exceptions, what has been changed is not necessarily the patient population, but the formulation of the drug or the dose. Given that we haven't changed the formulation or the dose, we do believe that we should be able to repeat that. In terms of demographics, we have expanded. Our phase II was mostly focused in the U.S. and Canada. Our phase III trials are global trials. In our phase II, we saw over 35% patients with biologic experience.
Our assumption is that could go down a little bit. From the overall standpoint, we believe it's going to be very similar. One other interesting factor that we probably have to look at as we do cross-trial comparisons is also BMI. We know that with oral drugs, BMI actually plays a key role. I think we have seen the effect of that a little bit when we compare trials that have been performed only in China and on a global level. One of the phenomena that you see is that there's a very large difference in BMI and how that might actually affect efficacy. It's risky to do. I think biologic experience, BMI, and the level of disease and duration are probably key factors to take into account as you compare across trials.
What are you doing to protect against BMI being a confounding influence?
There's really not that much we can do, to be very frank with you. We believe that ultimately we're at least in our phase II, we were at a relatively high BMI level, but we have performed extremely well. We believe that that's just what it is. It's something that you cannot really account for, but you just have to keep in mind as you do cross-trial comparisons.
Do you expect it to be lower with more European patients?
It's a global trial. Our assumption is it might be slightly lower compared to the phase II.
Maybe let's zoom out and talk about the market opportunity here in psoriasis. We've got these high-end biologics that have very gaudy response rates. Why is there a need for an oral? What role will an oral play in this market?
This is a really good question. I think one of the most important ones. Because the dollar share of the biologics is so high, there's a perception that many patients are actually on biologics. It turns out of all the diagnosed psoriasis patients, less than 10% are actually on a biologic. It turns out when you look at patient share, we did a very thorough claims analysis. The oral drugs have about the same patient share as the biologics. Topicals have a key share. We really believe that when you actually look at the market research and you ask patients, they still prefer an oral drug over an injectable. I think one of the biases that we have a little bit is when we talk to key opinion leaders, they're often in tertiary centers. They are actually seeing those patients that have already gone through several things.
I fully expect them to continue to use biologics. However, there are many offices where this is about high throughput and get these patients in and out, where an oral can actually be a lot simpler. We believe that simplicity of the oral treatment combined with the patient preference for an oral could really shift now that we have orals that actually have high levels of efficacy. The other phenomena that we are not yet clear about is whether the durability of the orals is any better than the biologics. When you look at the biologics, actually many biologics do see basically antibodies against the drug, et cetera. We see at least in our market research that patients stay on biologics, but that durability has increased from what it was under the TNF inhibitors, but it's still not done five, 10 years.
The question then is there going to be a phenomenon where you roll people over to an oral potentially once they actually are clear?
Do you think that there's an opportunity to expand that systemic share of treatment to have some of those patients who maybe have slightly more moderate to severe disease but are taking a topical therapy?
We do believe, based on what we've learned now in our own market research, that there's a group of patients that are more in the mild and moderate camp that are more likely going to move to systemic therapy. There's actually some interesting data out there that shows how patients that were on systemic therapy versus topical actually have done better long term, and the skin aging is actually slower, etc., etc. We do believe there's an opportunity not just to go after the systemic market and redistribute things in the systemic market, but you could possibly also expand the systemic market overall with better tolerated, simpler, and more efficacious drugs.
TYK2 is an imperfect drug, as we've talked about, but it also is at a fairly imperfect launch. What have you learned from what Bristol has done, and how do you bring this drug, envu, to patients in a maybe more efficient and successful fashion?
I'm not going to go in detail what our understanding is on why the launch didn't go that well, but we did a lot of work around it. We do believe actually the positioning, the pricing, the data, and basically really making sure that people understand what you're offering truly is critical. We do believe that there's an opportunity here that's quite significant to expand that market. There's also going to be multiple players with orals, which we believe will help expand that overall market. From our standpoint, we do believe that where you position a drug, how you position a drug, how you price a drug ultimately all matter quite substantially. We're certainly doing a lot of work to make sure that we get this right.
Can you talk in broad strokes about positioning and pricing?
It is a little bit early, and I don't want to necessarily completely disclose what we're planning on doing, but we have done a lot and continue to do a lot of work to really think very carefully around that. The key piece here really is about simplicity and really having an offering that is actually complete in its combination of simplicity, price, data, et cetera. We're still going to learn a lot in the next 6- 12 months around that. Not only is it what happens in the psoriasis market, but for us, one of the other key phenomena will be how our lupus trial comes out and how we believe we need to position between psoriasis and lupus, et cetera. We will learn a lot about competitor data.
We'll have a way better understanding of how our molecule fits into the overall picture from an efficacy and a safety standpoint. We'll also have more information around our own molecule and its opportunity.
What about the resources required to address this market? Is this something you could do on your own, or are you thinking about collaborations, partnerships?
I would say the easiest way to describe it is it's unlikely that we will launch this drug on a global level by ourselves. We do believe there are opportunities if it makes sense for us to tackle certain markets in certain ways. We actually have interesting examples right now. I think Sun Pharma, the way they actually ended up making their psoriasis drug into a billion-dollar molecule, as a molecule that in the IL-17 space that is not necessarily competitive with all the others. There are clearly examples that we have where you can do that. I think the key setup in terms of resources is really whether direct-to-consumer advertising is still going to play a key role or not, because that is actually the one piece that is harder for a company like ours to stem.
If it was just the marketing cost and the salesforce cost, you could actually really find models that we believe are highly viable. The one factor here that is a critical one that is hard to deal with is the DTC aspect.
Maybe last question for me on envu. We'll get to, sorry, envu and psoriasis. We'll get to envu and SLE in a moment. What is the latest update on the QD formulation?
Yeah, so we do have a formulation. We actually have multiple formulations, which really gives us additional flexibility. Our plan is and remains to have a once-a-day within the first year of launch. What we're doing right now is just really figuring out what the best plan forward is with that formulation. We're very happy with what we've been able to do there. We always said that it should be really possible with this molecule to get a really good formulation because it has a very well-behaved PK/PD relationship and is actually quite tight in terms of PK/PD. We are where we exactly wanted to be at this point in time. It's just a matter of how we best move forward and do that with the least risk possible.
Here's one more for me on psoriasis. When will you be able to file if you'll have data in early 2026?
We haven't publicly disclosed yet, but I think we certainly are looking at being as aggressive as we can with our timeline. Our goal is to file in 2026, but we haven't said exactly at what point in time.
Okay, let's transition over to SLE. Why TYK2 and SLE? Remind us of the genetic evidence here for the role this receptor plays.
Yeah, so if you actually look at the 11-04 mutation that I alluded to before, which is really that mutation that gives protective effect, it turns out SLE is actually, after psoriasis, the second highest protective effect. In the mixed population, it's about 50%. In the homozygous population, it's closer to 80% protective effect. The other piece of validation that we have besides the genetics is that we have actually an interferon pathway inhibitor with anifrolumab that has already been studied, successfully completed development, and has been launched. Given that we have basically an effect on the interferon signature with TYK2, we do believe that there's a very significant opportunity there. The last one is that one of our competitors has phase II data in lupus that has, across all doses, actually shown really a beneficial effect. We really believe that there's very strong validation.
We are in a phase II-B right now. That phase II-B is designed as a pivotal trial with the idea that if it's successful, we will have a conversation with the agency where we could possibly only have one phase III trial after this. That will read out, that phase II-B will read out in the third quarter of next year. We're very excited about this because we also believe that it can open up many other indications of diseases that are driven by interferon, whether that's Sjogren's or other diseases. We already know in CLE, actually TYK2 is doing really well. That's another subtype of lupus that would be also very interesting. For us, this is actually really, besides the IL-23 axis, really going after the interferon axis. That's why we chose those two different ones.
We could really show how TYK2 can actually have a broad effect across multiple indications that are driven by both of these pathways.
In terms of the phase II-B Alumis study that you're conducting, just remind us of the entry criteria, the type of patients, the endpoints, benchmark for us, what good data might look like.
Yeah, so one of the key elements in lupus is really the trial design. We did want to make sure that we have a very robust trial. We have enrolled 408 patients in our trial. There's basically three active doses, one placebo that we're testing. We're testing a low dose with 20 mg daily. We then test a 20 mg BID and a 40 mg BID dose. Ultimately, we believe that the 40 mg BID is the dose that is likely going to be the winner. Our enrollment criteria here are very much driven by minimizing the placebo effect. We actually have an adjudication panel that looks at every patient. They have to have active SLE. It's only SLE patients. We do not necessarily have patients with other lupus diseases in there. We're reducing the co-medications to make sure that we don't have a placebo effect from that.
We're basically doing a lot of work to make sure that as they go through the trial, we monitor exactly what comes in. We've actually put a kind of a crawler over the data that crawls over the data on a regular basis to see whether there's any inconsistencies in the data set. We can go right back to the site and make sure that as we collect the data, there's no inconsistencies in the data. The tools that are used in, as you know, in lupus are quite complex, and we want to make sure that the sites are using those appropriately.
I guess a question on the tools then. You were saying they're quite complex. BICLA and SRI4 are both fairly complex endpoints. You decided to have BICLA as the primary endpoint. Could you tell us why you chose that? Are there any advantages for a TYK2 inhibitor in lupus for having that as the primary endpoint?
Yeah, one of the interesting aspects of BICLA versus SRA4 is actually that it captures some of the skin manifestations in more detail because it's a less crude scale. Given that we wanted to make sure we capture some of this well, we actually chose to use BICLA because the SRI4 is more a crude instrument when it comes to that. We are measuring SRI4 as a secondary endpoint, so we will have that data, but we believe that the BICLA was the one that we preferred just given what we know about the disease and what we want to make sure we assess.
Can you be better than anifrolumab in this indication, or is interferon signaling sort of the driver of what you hope to accomplish?
This is a very interesting question that we are still grappling with. The reason why we're grappling with this is because we are too crude in the way we think about the mechanism of drugs. It's not just interferon, and it's not just IL-23, but there's also effects of TYK2 on cell types. We just don't know enough about what other cell types matter and how TYK2 affects this. We know this from the work we're doing with our other molecule, with our other TYK2 in the brain, where actually the cell type of the microglia, for example, plays a key role. We just don't know yet whether there is an interferon plus piece here or whether it's just basically the interferon itself. We don't know the answer to that, but our assumption is that we should be at least where anafilumab is.
We've heard a lot of enthusiasm from KOLs for this, TYK2 phase II data. Do you think that you could do better than that?
We think we now know what doses that they're using in their phase III. Based on our own assessment, it's still the question of what kind of level of inhibition do you get. Is ultimately the level of inhibition that you get as important in lupus as it is in psoriasis? Our contention is that that matters because we believe that there might be an amplification effect or something like that. We'll have to see, but fundamentally our contention is that from a risk-benefit ratio, we have a drug that could potentially be superior to abrocitinib.
You've got a whole other molecule that we should talk a little bit about in our last few minutes here. I also want to get an update, John, from you on the cash and the very clever strategy you had to increase your cash earlier in the year. First, just on the brain-penetrant A-005, Martin, what's interesting about this compound and what are the next steps?
Yeah, so we've done a lot of work preclinically, genomically around TYK2 and really believe that there is an interesting aspect here when it comes to inflammation. That really translates both for inflammatory or inflammation-induced diseases in the brain, so things like MS. Also, through that inflammatory component for neurodegenerative diseases because we believe that actually inflammation plays quite a role in those, whether that's Parkinson's or Alzheimer's, et cetera. We have discovered an interesting biomarker on the Parkinson's side that is very unique and is affected by TYK2, which is really one avenue we're also going down. To really understand what the best dose is, we believe that the best way is to run a phase II in MS for dose-finding purposes and do a three-month basically imaging study like we've done that in our prior lives with tolerant nib. That's the trial we're basically about to start.
We, for internal research purposes, pushed that back a little bit in the first half of next year. That's the plan right now that we're doing an MS trial and the three-month basically imaging trial.
How detailed a result can you get from a three-month MS MRI-based study? What marker are you really trying to zero in on to get a sense of efficacy?
Yeah, so because the experience we've had with tolerant nib, we believe that actually if you're at that 80%-90% reduction in lesion, that's the bar. It is not yet clear because the N is just still too small how you translate that ultimately into outcomes. There are two interesting aspects here that we believe are really interesting for TYK2. The first one is that we know now that if you affect the microglia well, you have a significant effect on disability. At the same time, we know from tolerant nib that you also have to have a strong anti-inflammatory effect. The anti-inflammatory effect of TYK2 is actually very, very strong. The question really is, can you actually get a BTK plus kind of response where you combine a very strong anti-inflammatory effect plus a strong effect on disability? That's really the piece that we want to get to.
To your point, it is not a one-to-one translation from that study, but it will help us really understand what the dosing is that is required to then move it forward in other indications as well.
Okay, John, just a half minute or so left. What's the cash balance, cash runway? Anything else you want to give us in terms of cost bar?
We ended the second quarter, the June quarter, with $486 million of cash and cash equivalents. That is expected to carry us into 2027 for cash runway. We did highlight that with the acceleration of the phase III trial enrollment, that near term we would see a spike in R&D. We expect that to significantly decrease in the back half of the year.
In the back half of this year, even before the phase III read-out, just as patients roll off.
That's right.
Great. That's all we have time for. Martin, John, thank you very much for the update.
Thank you.
for having us.