Thank you, everyone. Super excited to have AnaptysBio and looking forward to catching up with Dan after a while. I'll let you kick things off.
Thanks. Appreciate you having me here, Umer. We have two very big catalysts coming up in the next plus or minus two months. Our two lead programs are going to read out phase IIb data. The first is their BTLA program in atopic dermatitis, and the second is our PD-1 agonist in rheumatoid arthritis. So I'll leave it there. Beyond the fact that we're well capitalized, we have more or less four programs going into the clinic, but two things right in front of us. It's been a long time coming since we reset the company a couple of years ago.
Got it. I guess maybe let's start with sort of extreme scenarios. If things work, I mean, things work and everything's on a path. Let's start with an extreme scenario where there's a rocky start on these two trials, but you guys are well capitalized. Could we start with that scenario first, Dan, and what does that look like in terms of cash situation, but also sort of beyond? Maybe you could speak to the CD122, et cetera, as well, and any external BD you're looking into.
Yeah. We have very clear TPPs on these readouts, and what we're not going to do is look through pages and try and figure out squinty-eyed stretching what's not going to work. We have $450 million of cash coming out of Q3. We have two other programs. You mentioned our CD122 antagonist. That is in phase Ia. We're with healthy individuals right now and ramping through the SAD-MAD, and we will talk about where we're going in the Ib trial. Next year, we'll do an R&D day. We also have our fourth program. We filed an IND recently. It's a BDCA2 modulator. There's one other in development at Biogen. They have a couple of phase III readouts in lupus and CLE over the next year, year and a half. We have a more potent version of that, so that's about to start the phase I.
So a lot going on here. And then beyond arthritis for the PD-1 program, we're really excited. And it's actually the primary focus for the company. In resetting the PD-1 was this colitis trial. Lilly's proof of concept in RA reprioritized the order of operations for us. But colitis has strong literature on this mechanism in this disease, animal model data. That's enrolling. So that's another catalyst. Q1 2026 is the phase II readout there. So there's a lot going on at the company. And lastly, we do have a royalty stream from GSK on Jemperli, which is a PD-1 antagonist. There's a $75 million milestone that'll come in in the next one or two years on $1 billion revenue. Wall Street consensus for GSK is that's 2026. Plus, there's a value in the royalty tail as well.
What's the royalty rate?
Eight percent to twenty-five percent. Now, we have monetized the near-term royalties in a non-recourse transaction, but based on run rate year's value there.
You have monetized?
We have monetized in a non-recourse deal. So they will cap out at some point, and we'll get a return on the future milestones in the mid to long run.
So when royalties go beyond 12%, which means sales beyond $1.5 billion, that's when you get it back?
No, it's $600 million of total royalties that need to be paid out on milestones and royalties to pay back.
That happens in what time frame?
Depends on the estimates, but you can do some of the modeling on it. Two, three, four, five years. It just depends on the curve. There's actually a second-line non-small cell lung cancer readout that they've guided to in the first half of 2025, which is chemo plus chemo plus Jemperli versus chemo plus Jemperli plus TIM-3. That's another AnaptysBio milestone. That reads out soon. I mean, the kink in the curve from that type of market, if we see positive data there, is huge, and that's not built into the consensus forecast.
Interesting. Interesting.
So a lot happening here beyond two pretty big milestones coming up.
Because presumably, if that trial hits and let's say your royalty rate's even 10%-12% on a $2.5 billion product, presumably the valuations.
Worth more than the company is worth today.
Right. So the ROI, okay. So maybe can I just drill down that a little more? Because that completely changes Anaptys versus this for a second. So let's just go down that some more.
I love you, Umer. You're the only one who asks these questions.
The current indication for Jemperli is let me.
So what's driving growth is frontline endometrial cancer, where they were first to market there with a PD-1 antagonist. And that's what's driving the growth.
It's endometrial.
Yeah.
Because the Jemperli data that's high on my mind is when Summit Therapeutics showed their PD-1/ VEGF, it had this incredible PFS and OS. However, Jemperli had shown a trial, I think it was a PERLA study, where OS hazard ratio was in the 0.7s.
Correct. It hit head-to-head.
But it missed it on the P-value a little bit. So it wasn't.
That's the trial.
It wasn't on the label. Which reminds me now, and I didn't know there's a chemo combo trial going on. So presumably, they should be able to hit. And is that versus Keytruda, that trial?
It's chemo versus Jemperli plus chemo versus the triplet with TIM-3 and chemo.
Chemo versus.
Right, and second-line lung standard of care is chemo.
Versus Jemperli plus chemo plus triplet.
Yep.
But your basic point is right now, the estimates are off of endometrial. And if they can get lung on label, it changes. What's the peak sales expectation right now on this?
$2 billion-$3 billion, depending on the analyst.
In the consensus numbers. So let's just call it $2 billion. Let's just go with the $2 billion. So presumably, lung adds something, which could be $1 billion-$2 billion, something along those lines.
Yeah.
Got it.
Look, POS in this is low, right?
No, no, no.
To set the right expectations, but they are guiding the data in the first half. They're guiding a BLA filing on the.
Data in first half 2025.
Yeah, and they're guiding on BLA for second half of 2025.
I see. So if I just think about it out loud, let's say the royalty rate hangs out in the lower side of that 8%-25% range. Let's just call it around 10%. And the sales run rate currently is about $600 million. So yeah, in the next three to four years, the royalty caps out.
Yeah. And the $75 million payment's excluded. So that one comes to us the next quarter.
Right. So what that means then is, realistically speaking, you have a path to having an annual royalties of $200+ million starting 2028 time frame or so.
Step back from this for a second. Because for the last two years, we have two huge co-inhibitory receptor programs. I know you're driving into the royalty. We are not going to advance both of them ourselves into phase III in derm, rheum, and GI. It's three huge areas. It's an operational lift that's too heavy beyond a financial overhang. If I have two winners here, we go to the flip side, we will partner one.
Sure.
They're novel mechanisms. We're the only mid-cap in development with checkpoint agonists. And we have two distinct agonists in different markets. And we can advance all these on their own and execute phase III. It doesn't mean we're going to commercialize globally. I'm not saying that. But we will find a partner for one of these drugs over the next 12-18 months. And we're capitalized through the year in 2026 if we never advance to phase III. And we are capitalized to enable phase III. So I raised a little bit of money in August to invest in the drug supply ramp-up plus other operational things we're doing to get ready for the phase IIIs. So there's a lot that's going to happen in 2025. There's a number of different ways I could pull through capital across four programs. And we're going to have a lot of strategic optionality here.
Outstanding.
Whether one drug works, two drugs work, no drugs work, we're in a good position from a capital and other catalyst cycles with non-correlated assets to the agonists.
Got it. So in terms of data readouts, you have BTLA with atopic derm by year-end. You have PD-1 in RA in February, and then UCs further out. So RA with the PD-1 and atopic derm with the BTLA.
Correct. With two best-in-class checkpoint agonists.
Correct, so let's start with maybe the PD-1 agonist, and I want to focus on BTLA next because that's the main focus with something coming up. On the PD-1 agonist in RA, remind me, Lilly also ran it in RA ahead of their business reasons related. Any other color on that? Was that efficacy related or tolerability or?
They ran a 60-week trial, 500 patients in phase IIb. I think everyone's aware. In phase IIa, they showed compelling efficacy, proof of concept with a self-described moderate depleter and AnaptysBio described weak agonist. So they had partial efficacy or a moderate efficacy profile. They showed proof of concept in RA. In the phase IIb, 60-week trial, they've had six-week data there for eight or nine months. They've known what they've had. You don't run a trial for 60 weeks if there's a safety issue. What we've heard is that they showed efficacy. It looks like other biologics. That's a TPP that does not work in a mature market.
So it's efficacy like a TNF, and then they're just worried about biosimilar hence the business reasons.
Right.
Which then means, presumably, if your molecule's better, you could come in presumably better.
We have a materially more potent molecule and are very excited about what we hopefully will see in the next couple of.
Can you speak to that materially more potent?
Yeah. Lilly is a moderate depleter and a weak agonist. We are a strong depleter, PD-1- high T cells, and an agonist of the remaining PD-1- expressing T cells. A lot of data in vitro, head-to-head with the Lilly molecule and other molecules in the space for PD-1 that are showing this. We have clinical data sets in phase I in healthy individuals. The company, in a prior life, ran an alopecia trial. So we have translational data that suggests this potency relative to the translational data that Lilly has shown in phase IIa.
Got it. Excellent. Anything unique about your trial design versus how Lilly ran it? I don't think you're running 60 weeks.
For the first three months, it's similar. It'll be a similar, most likely a similar data set. The inclusion and exclusion criteria is more or less in parallel. About 60% of the trials in naives, 40% in biologic experienced. It's a U.S. Europe-driven study. After three months, at week 14, if you're in low disease activity, you're eligible to stay on trial if you're on active through month six. The Lilly trial was a step beyond that, going out a year. Our colitis trial will generate efficacy data out through a year and safety data out through a year. So there's differences in the colitis trial in terms of longer term.
If there's an issue, let's say this trial disappoints you, the upcoming trial in RA, UC trial still stands regardless.
We're excited about the UC trial. There's different corollaries to proof points that have driven efficacy that we are spot on with our mechanism of action in UC that exist in commercialized programs today.
Got it. Makes a lot of sense.
Enrollment's been underway for the better part of this year, and we're rocking and rolling there.
Got it. Any differences in background methotrexate usage or steroids?
Methotrexate is on background for all these studies, and it's a good plug here. These are meaningfully comorbid patients in RA. These are not atopic derm patients, and they're all methotrexate. Your immunosuppressed infections are going to be there. It's 35%, 50% all-grade infection in any of these trials on placebo, and then, look, here's the benchmark. Rinvoq, 4%, 5%, 6% MACE, black box. That's what's getting used. That's the growth asset for these patients who are on third, fourth line. Salvage therapy is rituximab. That drives infections beyond what you'd normally see. The AE profile here is horrendous in terms of on-drug, off-drug because of how these patients are treated, so it's a different bar to be better than on efficacy. What we're seeing on a blinded surveillance basis is nothing that would look uncharacteristic to what you would see on placebo.
I've said since August, and this is the same for both of these drugs, we believe we have active molecules, and for the PD-1 program, we do have an unblinded DSMB that has looked at this data routinely, and there is no signal to date, nothing of caution.
Got it. Primary endpoint, I think you guys are using DAS28.
Correct.
The activity score. I remember historically just looking at trials, ACR 50, ACR 70.
That's what we're guiding to. We're guiding to ACR 50 and 70. That looks towards where the JAKs are. And this gets back to the TPP. If you see something that's biologic-like, that's where there's not enough benefit. And then there's now risk in developing new mechanisms of action. That's the Lilly commentary and what they saw. You need something that looks towards biologics. For ACR 50, that's in the low mid-30s on an absolute basis. On ACR 70, that's in the mid-teens. That's the bars we're looking at to be commercially incredibly exciting here. And then an AE profile that's better than the JAKs.
Got it. Excellent. Excellent. Maybe transitioning to the BTLA, could you remind us the trial design for atopic derm?
Yeah. So we'll have data within the next couple of weeks here. It's a 200-patient trial. The majority of that is in naives. Over 160 patients will be in naives to biologics. We are powered for that naive population. The residual are in dupi experienced. So it's three active arms versus placebo. And we've stratified by those two populations. So it'll be about eight or nine patients per arm in the dupi experienced population. Signal finding. We will report out through week 12 dosing. Week 14 is the primary endpoint. We'll report out the primary endpoint as EC75. We'll hit on the other key secondary as EC90, IGA 0/1, change in EASI score. Importantly here, not just skin clearance, is reduction in itch. So change in PNRS and greater than four-point change on that scale. We'll report all that out for naives.
That's going to be your apples-to-apples comparison for monotherapy, non-including steroid, and a placebo-controlled trial. For patients who in our trial, baseline EASI score is in the mid to high 20s for the patients enrolled in this population. Severe cutoff is 21. So we have a meaningfully severe population, which is a good comparable to drugs like dupi, lebri, amlitelimab, Sanofi's OX40-l igand in terms of their backgrounds in their phase IIs and IIIs.
Got it. Remind me, was there a Gilead molecule here that's relevant as well?
Gilead acquired a company 18 months ago out of the U.K. that also has a BTLA and PD-1 agonist. They are in phase Ib in RA, rheumatoid arthritis, for both of their drugs. So somewhere in phase Ib. There's no guidance there.
Got it. Okay. So there's no randomized evidence on the Gilead side yet.
Correct.
Okay. Excellent. So the trial finished when? The BTLA, the last patient in, last week?
Over the summer was the last patient in.
Oh, wow. So that long to clean up the data?
It's a 14-week trial.
Oh, that was the last patient in.
Yeah.
That's not when the last patient finished the trial.
We're within two weeks of having data.
Oh, I see. I see. Okay. Got it. Got it. Excellent.
Yeah. So it's exciting. We're coming right onto it. Now, other components of this that are going to be exciting for folks, selective translational data over time. So what's the cytokine activity? A big thesis here. This is why OX40- ligand has been exciting as a comparable to the IL-13s and TH2. This is a heterogeneous disease. There's more going on here than just TH2. IL-13 reduction is important, but so is interferon gamma reduction, IL-17 reduction, IL-22 reduction. We'll have translational insights over time later. We also have a six-month off-drug portion of the trial that we're tracking patients. We'll be looking for durability response. So only dosing through 12 weeks. We'll then be looking for how sustained are the responders out over six months or up to six months.
The reason this is compelling, and this is where the OX40- ligands have really potentially started to change the game. By modulating the immune cells, they're modifying disease. You're seeing disease modification and six-month off-drug results. Sanofi reported after six months, another six months off-drug, about 80% of patients sustained response. That's because of disease modification. We're going to be looking for that after dosing only through 12 weeks. That'll all come in 2025.
Got it.
So a big part of this and where these markets are moving, Umer, is there's a lot of benchmarks out there. What's EC75? Is it 40%? Is it 50%? We're looking at a second-line market, dupi generics in the early 2030s. Giving patients a different alternative, a TH2-driven molecule isn't enough with all the onesie, twosies differences there to give a broader treatment regimen that you could have a broader impact on patients, potentially deeper responses over time and modifying disease. That's the profile where this market's going to move, and the second-line market here is going to. It doesn't exist today, and it's going to be huge.
Got it. Maybe in the last minute or so, could we just touch up on the CD122 and also the Calypso program and maybe some of those comparisons?
Sure. So CD122 is a dimeric receptor that blocks IL-15, IL-2. It's found dominantly on CD8-positive cytotoxic T cells, subsets of T cells like TRMs, resident memory T cells you find in various tissue, and NK cells. IL-15, there's a number of them out there. Amgen has one prevention. That's a first-generation molecule. Novartis, Calypso, Teva's is developing one. They're looking at EOE and celiac disease. In the CD122 landscape, there's Incyte acquired a private company a year and a half ago. They've advanced that drug into vitiligo. And there's another company that recently initiated a celiac phase Ib trial with the CD122. We have a more potent version than the other CD122s on the market or in development.
We will do an R&D day next year to walk through differentiation relative to other CD122s, as well as the IL-15 class, and really walk through the story of where we're going in the phase Ib and why.
I guess what's the. I know Teva is going to put out some celiac data on a single dose in early 2025. Could some of those initial data sets form the basis of something much more rapid for a phase II planning for you guys? I know you're going through phase I right now.
Yeah. I mean, you're hypothesizing that we're moving to celiac. But what's interesting about big companies moving into celiac disease, mapping out what the endpoints are going to be in phase II is going to be really important with these mechanisms of actions and differentiation moving forward. It doesn't really exist well today in a robust setting. These phase Is are in gluten challenge studies where you're looking for prevention of villus- to- crypt depth ratios.
Exactly.
Getting worse, right? Looking for prevention. We need to see this in disease and phase IIs. That'll happen over the next couple of years. But the Calypso data was incrementally pretty exciting in terms of what they were able to do.
The Calypso data was on the celiac side as well?
It was in celiac. Well, they were in both, but the abstract that was pulled. They didn't end up presenting it. But the data is out there from the abstract. It exists in terms of the prevention and the gluten challenge.
Got it. Excellent.
Non-correlated the agonists, we're really excited. There's a lot happening in this space. There's more places you can go. But there will be a number of read-throughs between celiac disease and vitiligo in 2025 while we're moving through and entering into phase Ib with a best-in-class program.
Outstanding. Listen, best of luck into the data.
Thank you.
I know the data is the data, so it'll be. But I have to admit, I did not appreciate the scope of the royalties properly until just now.
There's a lot happening in this company.
So we'll come through that.
I appreciate you asking.
Thank you again.
Thanks for having me.