All good.
All right. Good afternoon, everyone. Welcome to our Piper Sandler Healthcare Conference. My name is Yas Rahimi. I'm a Senior Biotech Analyst here at Piper Sandler. Really excited to have the team from AnaptysBio here. Dan, thank you so much. I'm excited to have you, given that your data is in December. I was worried every day that you're going to cancel, so.
Our data will be within the next 17 days.
That's right. That's exactly what we'd like to hear, that yes, and I appreciate you getting it in the next 17 days and not during the holiday season, so I guess we know the data is on track. I think I know I have to ask what do you want to see to warn moving forward in phase three in terms of what's competitively appealing of a product profile in the study.
Right. And level setting on this, this is a huge growth market. $30-$50 billion numbers are being thrown out there. And that's inclusive of a second-line market that for biologics doesn't really exist today. And I think it's important to remember that today's landscape of standard of care is treating only Th2-driven inflammation. And this is a heterogeneous disease. And what patients and doctors are looking for, if you don't have satisfactory response on Th2-driven antibody, as reference point, Dupi is plus or minus 48% as a monotherapy. Oftentimes, you're stacking steroid on top of that. Patients are flaring, and it's an every other week treatment. A different mechanism of action is not necessarily the same bar. It's a different opportunity for patients. Amlitelimab, Sanofi's OX40 ligand, had 40% EASI-75 at three months.
But importantly, with that program, and again, this was a top-down focused OX40 ligand cascade that's impacting T-cell modulation and proliferation, they saw continued benefit over time. They had best-in-disease data to date at six months, better than everything in Th2. And then they had impressive durability results three months plus where their results were sustained, those patients in response. You don't see that in Th2 standard of care today. That's from disease modification. That's the low bar of what we're looking to achieve in our trial.
Okay. And has anything changed in terms of what you're going to have at top line? I think you guys had said EASI-90, EASI change. Any other?
Yeah, so the primary endpoint's EASI-75, and it's a 12-week dosing, 14-week primary endpoint. We do have an off-drug portion where we'll be following patients for six months. That will not be at the top line, so it'll be the 14-week data. As a reminder, it's a 200-patient trial, the majority of which is in treatment naive patients. We will be reporting on that data independently, and then the balance of the trial is eight or nine patients per arm. There's three active arms versus placebo. The eight or nine patients per arm are in Dupi experienced patients. We will repeat on that population independently. We're powered from the naive population. The Dupi experienced population is signal finding, but we're EASI-75, EASI-90, IGA 0/1, change on the P-NRS scale. The standard metrics that you're looking for, we'll be reporting out on.
So the 40% EASI-75 that you communicated is on the naive population placebo-adjusted?
Correct. No, no, not placebo-adjusted.
Okay. Not placebo-adjusted.
Right. That's an absolute basis. When you look historically, 15%-20% placebo rates are what you've seen in more or less the 25th to 75th percentile of prior trials. We anticipate being in that range. Something that's correlated to placebo, at least what we found sifting through the data, is how you handle rescue using steroids. Our trial is on the more stringent side, the more conservative side, which correlates to lower placebo. No oral steroid, no moderate to potent topicals. And if you were to use a mild, it has to be after week six and less than one week. So we're not looking for a pitfall, right, by someone going out there and using some OTC cream for a couple of days. It won't change the outcome. But generally speaking, this is a no steroid-driven trial, which does correlate to lower placebo.
Okay. You feel confident to get it in that low?
Somewhere in that range would be reasonable.
Okay. I think that investors are just waiting, right? I think before they just have a difficulty to cap the success. They know OX40. They know BTLA. AD is a graveyard of positive and now quite a bit of negative studies as well.
Yeah.
So it's definitely a readout that some have taken the chosen way to see.
The immunological outcomes from OX40 ligand, they're driving down Th2, Th17 and Th22-driven cytokine activity that are all components of inflammation. They don't see an impact in Th1, or at least they haven't reported. In our hands, there's nothing there. There's been data reported recently at ACR of OX40 ligands where interferon gamma are increasing in RA patients in that case, but similarly. We do think there will be differentiation there for us. We also not only target and agonize the T cells, the activated T cells with BTLA. We're modulating dendritic cells, which are reducing the co-inhibitory receptors like OX40 ligand or CD80, CD40. We're reducing antigen presentation, and we're modulating these DCs such that they are less activatory to the T cells. We're thinking there could be a cumulative effect here from hitting both sides. The OX40 ligand, different mechanism, potentially weaker immunological outcomes.
And like I said earlier, over a six-month time frame, best in disease biologic activity to date in this landscape. And there's not a lot out there today that's treating the more heterogeneous profile of what this disease is beyond Amgen and Sanofi that are ahead of us. So we're really excited about what's coming up. I think there's great proof of concept for the approach we're taking. I've said publicly, so I'll repeat it now, right? We obviously are looking at blinded surveillance data. We think we have an active drug, and we haven't seen an AE profile in the aggregate that would be of any concern. So that's where we stand, and I'm not making further comments on that. But I've been consistent with this since August.
So we're excited about what's coming up, but like we talked about right out of the gate, next couple of weeks, it'll be there, and it's first in disease data for this mechanism that will be presented.
Okay. And I think that every data scenario goes, you hit your bar for success, exactly whether you articulate it. Best case is you're above it, right? And then you will have failure or a mixed baggage. I guess, what if you end up with 30, EASI-75? Would you want to say, "You know what? We need to move forward for competitive need because it's a big blockbuster opportunity, and we're going to need novel new drugs"?
I've set the bar for EASI-75 at 40% absolute basis at three months. It doesn't mean that's the end of the story here. Like I said earlier, we're modifying disease with the mechanism. And while we can't show it definitively in our trial, the trends toward further response over a six-month period are going to be important. But this is not just an EASI-75 story. I mean, we're kind of going down that path right now. EASI-90, IGA 0/1, are reducing itch in a meaningful way. There's a composite here that's going to matter. And that profile of the OX40 ligand, again, I'm not sure every investor agrees with this, but the primary and secondary market research, and then you have your own comps with Sanofi. They're talking about a $3+ billion drug in the U.S. and AD for this profile.
And so there's a huge value here that looks different than just having another DUPY or something that looks like DUPY in the front-line setting. It's not off the table, and I'm not guiding to it, that you're not in the 50% range for EASI-75 or higher. I think that drives a broader market opportunity, but you don't need anywhere near that to have a compelling drug. If we're at EASI-75 of 30%, that's a non-starter, and there's other ways we could spend our capital that we're equally as excited about today.
Okay. So I mean, I think that the data is pretty imminent, right? We have exhaustively spoken with it. Investors are waiting for the data to show me, right? So let's kind of move past that, right? So we'll have the AD data, positive stock, significant stock moving event. And then I think we will pivot back into discussing into the next catalyst, which is your PD-1 agonism and RA, which is expected in February. So definitely caught a lot of people by surprise of Lilly suddenly discontinuing, right, the program. What have you heard over the last three, four weeks beyond what was the decision that led to discontinuation? There's also a recent patent that was filed. So if you could just talk about what we have learned since Lilly's public earnings call of discontinuation.
Yeah. Well, prior to that, it's been out in the public domain. There is IP that Lilly's generated comparing peresolimab, Lilly's PD-1 program, to other candidates that they've developed internally that have different epitopes or different Fc engagements and various combinations thereof p eresolimab was far from the most potent drug in their own IP. And they went as far to describe peresolimab as a moderate depleter. We've been using that language on a relative point for differentiation for two years. I think they were a moderate depleter and a weak agonist. Rosnilimab, AnaptysBio PD-1 is a strong depleter of PD-1 high T cells and a pure agonist. We do think we're going to have differentiated immunological outcomes. So Lilly clearly saw proof of concept with a relatively weak overall drug in RA just by depleting half plus or minus half of the PD-1 positive T cells.
That gets you proof of concept in this disease. There's only room for upside with our drug. So that's been how we've reflected on this for quite some time. I guess we're all a little bit surprised that they were on the lower end of the error bar, it seems like, in the phase 2b study in 500 patients versus the 100-patient study they ran in the 2a. We've heard that they didn't hit a commercially viable TPP. What does that mean? Well, this is a mature market, very different dynamics than in AD that's a growth market. There's established second line, third line, salvage therapy. There's multiple classes of biologics. And this disease, most of them look pretty similar for the biologics. Some of the reference points, ACR 50s of 20%. That's where biologic classes are in the second to third line.
The TPP here needs to be more towards a JAK. It doesn't have to be JAK-like, but it has to be more towards that. The ACR 50 for a JAK is 34% for Rinvoq in the second, third line. So you have a spread there. What we've heard for Lilly is they looked more like the other biologic classes. We've heard there wasn't a signal on the safety side as a class. And folks have to remember the comorbidities for an RA patient are significant. If you look at placebo trials in RA historically, 35 to 50% have all-grade infection. You have a multiplier two to threefold for patients on TNFs, on IL-6, on abatacept, two to threefold increase in MACE, two to threefold increase in malignancy. And that's just for treated patients hitting things like ACR 20. JAKs have a black box.
They're "multi-billion dollar winners" in RA with a black box. What do we look for here? We're looking for something that's JAK-like, towards it in efficacy, and something that's safer than a JAK. And that's a pretty low bar for us to hit on the AE side when you look at the rest of what's out there. Lilly clearly didn't get there on the efficacy, and we've heard nothing that credibly suggests that they had a safety signal across the drug. It was a 60-week trial that they kept patients on for 60 weeks in an uncontrolled setting. I'm sure they saw events given the profile of these patients in an uncontrolled setting, but nothing that we've heard that adds up to that signal.
Okay. What do you see on a blinded safety basis?
Similar comment. I mean, we believe we have an active drug. The AEs in aggregate don't look outside of what you would expect in this disease population. But in this trial, I think importantly, we also have an independent DSMB that sees our safety data on an unblinded basis. They meet routinely, and there's no signal that's been presented to us of any concern. I don't have access to that data nor to the other folks in my company, but we would know if there was an issue, and there would be a recommendation that we haven't seen. And just as a reminder on safety, nothing in tox. We've run a phase one. That was clean. We ran a phase two in alopecia. A lot of issues with that trial on the efficacy side.
We shouldn't have run it, but silver linings, that was six months of on-drug durability at 400 milligrams monthly. The AE profile there looked numerically better than placebo. There's nothing in this field that's stacking up there as a risk on safety from everything we know in the totality of the landscape today.
Okay. Could you maybe talk about one of the other differentiations of your T cell activation versus peresolimab, Lilly's peresolimab? Could you talk about how that could also be contributing to a different product profile in your RA study?
Yeah. So I teed this up a little early. I'll give you more specifics now. Peresolimab is described by themselves as a moderate depleter, and we're saying it's a weak agonist. When you look at their immunological outcome on PD-1 positive T cells in the synovium in their phase 2a study, 80% of these T cells in the synovium are PD-1 active. About half of them are PD-1 high. Sanofi depleted 60% of the half that are PD-1 high. What we believe in the periphery, what we believe is going to happen with our drug based on our phase 1 and phase 2 data and the preclinical data that we've generated and head-to-head with Peresolimab, there's a consistency here, is we are depleting 90% of the PD-1 high cells and then agonizing the other half of the activated cells. That's a big aggregate difference on the immunological outcome.
But importantly, when you step back from that, we talk a lot about restoring homeostasis. About 15% of T cells in a healthy control are activated. You do the math of what I just walked through and the impact we'll have, that really starts to look like homeostasis, not going far. Further, most of the T cells are naive. We don't touch those. There's no PD-1 expressed on a naive T cell. And we will have residual activated T cells that look like a healthy control. That's the hypothesis here based on everything we know. And it's a big difference than really a first-in-class at the time asset with Lilly that truly was just first-in-class and far from best-in-class.
I think you also mentioned the whole importance of tight proximal binding and that could drive differentiation. What is that?
Yeah. So now you're getting to why. What are the characteristics of the antibody that are differentiated? The epitope that we bind to on the PD-1 receptor is more proximal to the immune cell, to the T cell specifically. PD-1 expresses in various density and activation status. What you're looking to create here in terms of where it binds is a tight synapse with clustering across PD-1 that pulls through a synapse of the APC. And that synapse and the tightness of that synapse crowds out phosphatases and allows for SHP-2 recruitment, which downregulates the T cell. And that's functionally what's happening in the biology of the T cell that's reducing the cytokine secretion and thereby reducing the T cell proliferation over time. So that's how the agonism works. But without that synapse and without the Fc engagement, you're not going to get the agonistic signal.
So we have a lot of data out there that shows this point across both the BTLA program and the PD-1 program. It's a pretty fundamental difference between our asset and Lilly's drug.
Okay. And then I guess the data is expected in February. You've communicated what you're going to have in terms of data. Has your thoughts changed in terms of what do you want to see in the study to warrant further development?
Yeah. So it's approximately 425-patient study. About 40% are going to be experienced on biologics. 60% are naive. And it's pretty standard in a U.S., European-enrolled trial. We're dosing patients up to 12 weeks, which is the primary endpoint. If you're in response at week 14, you stay on drug through month six. We will be reporting out data on week 12. We talked a little about ACR 50 in the composite. ACR 70 is going to matter. These are some commercial bars. But the primary endpoint here is changing the DAS-28 score. Rheumatologists focus on this a lot. There's a lot of benchmarking here on what could be differentiated. But the relative difference between JAKs and biologics is kind of consistent step-ups, and that will continue to be the profile that we're looking for.
The safety database will be as of where all patients are, whether that's week 12 or month six for the patients that are out there in aggregate, and what we report will be a snapshot in time. But the week six or, I'm sorry, the month six data and all the other translational insights will come further downstream beyond the February time point.
Okay. What will be, I guess, the data could post the AD readout, the data for Rosnilimab could go again in positive, mixed, or failure. What would that mean for the company on these? I mean, if success is pretty easy to figure out, right, then you'll get ready for running a little steady. But I feel like you're also again put into the bucket, "Let's see what happens. I'm happy to pay multifold higher rather than own ahead of the rest.
There's all sorts of cases. We have a four-asset clinical stage portfolio of drugs that we're invested in. We're really excited about the ulcerative colitis trial that's ongoing with PD-1. There's more literature that exists. There's animal model data that we've generated. We're really excited about colitis. And if Lilly never had positive RA data at ACR a couple of years ago, we weren't running an RA trial. That's all still coming. We're not going to deploy capital chasing mediocre market opportunities. If we saw what we've heard Lilly saw in terms of TPP, we would not move forward there. However, that's.
Will you keep the UC study going then?
We're well into the enrollment. Like I said, we're really excited about that for different reasons than we're excited about in RA. That's rational keeping unless there's some safety signals that, again, we're not seeing today. That would make us scratch our heads on that a little bit. I mean, Lilly was even out there in the summer when they knew the result of their six-month data talking about how UC made sense as a target, as well as type 1 diabetes. This drug and the mechanism of action of PD-1 in UC is spot on. We can talk more about that. But similarly with BTLA in a couple of weeks, there's a bar we need to hit. And there's plenty of other things that we are excited about in this company beyond just these readouts.
I think it's.
But don't take those comments as we're not optimistic about what's coming. But there's plenty of other things to focus on in this company. We have $450 million of cash after Q3, run right through 2026. If we're continuing to enable phase three readiness in AD and RA, that would be extended, obviously, longer if those weren't moving forward. And we have a lot of other option value and how to bring money in. We also have a royalty stream in this company that can get monetized. We have $75 million coming in from GSK in the next one to two years on $1 billion of Jemperli sales, the PD-1 antagonist that we invented at AnaptysBio. So there's lots of ways to continue creating value. But we don't have a clear line of sight for efficacy benchmarks that make sense in pretty different commercial dynamics between AD and RA.
I think what caught the street really by surprise was that Lilly is committed, committed. There's multiple patents that come out at the same time as they're developing second generation. And then out of the blue, not only do they discontinue peresolimab, but they also basically say that they're not moving forward in further development in PD-1.
We could parse through words. I mean, they said at this time that clause gets left out a lot in this context. Look, on record, there's researchers at Lilly on podium saying their BTLA agonist was a partial antagonist. Lilly's BTLA program, they've learned a lot about how to develop an agonist over time. AnaptysBio has a pure agonist, and we've generated next-generation BTLA. Now, why would any company, Lilly or small cap biotech company, sit here and say, "I'm going to deploy the next hundreds of millions of dollars into something stepping right ahead of our data"? I don't think we would do that. I mean, they could say whatever they want. They said at this time. And they know there's molecules out there in this field that are better. But I also remind everyone, they're not out of checkpoints. CD200R, 250-patient trial in AD ongoing right now.
Looks like it reads out next year. I believe that they have other phase one drugs that maybe they haven't disclosed that are also checkpoint agonists. I think there's a lot more to this story than the high-level executive remarks for a company that is focused in metabolic diseases, and this is a secondary area. I think people sometimes overreact on a relative basis to what's important at Eli Lilly versus what's important at AnaptysBio.
No. Perfect. Well, I'm going to give a few seconds back to you. Thank you so much for a great discussion. We can't wait for both of the data readouts, which are pretty imminent.
I agree.
Yeah. So best of luck, and let's say thanks to Dan for being here with us.
Thank you.
Thank you.