All right. Hello, everyone. Good morning. Welcome to day one of the Cantor Global Healthcare Conference. For the first session today, we have AnaptysBio. My name is Prakhara Gurwal. I'm a biotech analyst on CANTER. Joining us from AnaptysBio, we have Dan Faga, President and Chief Executive Officer. Dan, thank you for coming to us.
Good morning. Thanks for having me.
A lot's going on at AnaptysBio, and you have a bunch of catalysts for the next 6-9 months as well. Maybe before we dig into the specifics, just give an overview of the company and some of the key priorities right now.
Yeah. Great. There is a lot going on right now and always is. It's an exciting time at AnaptysBio. We have three development stage antibodies, all of which modulate overexpressed or disease-driving immune cells. Our goal is to restore immune homeostasis for patients with autoimmune inflammatory diseases. That's the premise of where we're focused. Our lead program is called rosnilimab, which is a selective and potent depleter of pathogenic T- cells. In the last six months, we've had multiple readouts in a Phase IIb arthritis study. Excitingly, we just announced last month that the study concluded. We were able to update that three months off the drug. Now we're out nine months in the treatment of arthritis. We saw not only remission rates in this disease that surpass the best-in-class medicines on the market today, but three months off the drug, we're seeing those responses sustained.
We'll update that specific data in detail at a future medical conference. We're excited to see that. Importantly, the safety profile of the drug continues to be maintained. We also have run an ulcerative colitis trial, which is now fully enrolled. We do anticipate reading out initial data in Q4 of this year. Our second program is a CD122 antagonist. It's ANB033. We did announce recently that the initial Phase Ib indication will be in celiac disease, which starts imminently. We are hosting an IR event to go through this program in detail later in Q4 as well. Our third program, ANB101, is a BDCA2 modulator. This is moving through Phase IA in healthy volunteers right now. A lot going on there. We have a big asset in royalties that are generated from a drug called Jemperli, which is sold by GSK but discovered by AnaptysBio.
We have upwards of $300 million coming out of Q2. Well financed through the next two and a half years out through year-end 2027. A lot going on, but we have the capital to proceed and continue developing these programs.
Great. I did want to touch on probably each of these assets. Maybe on Rosnilimab, before we go into the specifics, just talk about why you believe this is a differentiated mechanism and differentiated depleter of pathogenic T cells.
Yeah. Yeah. A lot of key words there. We designed rosnilimab for potent depletion. We've been talking about this for a long time, the differences with the antibody relative to prior competitors that were in the space. What we've done is we've targeted an epitope on the PD-1 receptor that is proximal to the immune cell. What this facilitates is potent depletion. I think it's important to note here the specificity of what we're targeting. Not all cells express this checkpoint receptor. Activated cells do in enough quantity where we're seeing the potent depletion through the clinical trials. This is expressed here in the clinical data. We saw rapid ACR20s, as well as the primary endpoint, which is a change of DAS28 CRP in our Phase IIb trial in arthritis, which was in over 420 patients. Those responses deepened over time out through six months.
The patients who achieved CDI at a pretty early CDI LDA at a pretty early stage at three months, we saw deepening responses and remission of disease. We saw potent activity from the depletion, not just in the periphery, where we see a multiplier of these specific T- cells, but also in the synovium. A feature of our study is we did have a robust set of translational data we conducted in about 50 patients' synovial biopsies. We saw greater than 90% depletion in the periphery. We also saw greater than 90% depletion of these specific cells in the synovium. That's a really high number. That's really where we've now seen differentiation versus drugs that were developed by Eli Lilly or J&J. Lastly, the tolerability. Less than 2% of patients dropped out of this trial due to AEs. Only one patient dropped out after three months.
It's a highly tolerable drug as well. I think that really speaks to the targeted nature of what we're doing in these overexpressed T- cells in the setting of this disease.
Got it. You mentioned positive data in RA already. You have an upcoming readout in the ulcerative colitis trial. I wanted to touch on that before. Just talk about the scientific rationale of testing PD-1 in UC. What's the evidence relative to RA?
Yeah. There are similar features between RA and UC. They're both systemic heterogeneous diseases that are T- cell driven in the setting of particularly moderate or severe disease. In ulcerative colitis, you also see a multiplier, two-plus-fold increase or expansion of these PD-1 positive pathogenic T cells, which typically are TPH cells. The function of these TPH cells, they express CXCL13, which recruit and mature B cells into autoantibody-producing plasma cells. You're seeing this in ulcerative colitis, but also in ulcerative colitis, similar to the synovium in an arthritis patient, in the gut, and specifically in the lamina propria, you see upwards of or north of 40% of the T cells are activated or pathogenic. The biology is there in a very similar way as in arthritis. Preclinically, we've run animal models. We've shown that Rosnilimab treats colitis in mice.
Plenty of biomarker data through PBMCs, as well as in the literature. There's a correlation between the reduction only in the periphery of these TPH cells with remission of disease. When you look at other drugs that have worked in ulcerative colitis, drugs like the alpha-4-beta-7s, all they do is block these TPH cells from moving from the blood and migrating to the lamina propria. Drugs like S1Ps, they prevent the efflux of T-c ells migrating out of the lymph system. We should be depleting these exact same T- cells in the lymph system in the periphery, as well as giving up drug to target the already expressing T- cells that exist in lamina propria.
I think there's good body that is in terms of rationale relative to RA, preclinical data and translational data to date, as well as read through from other mechanisms that do something similar to what we do. We're just doing it in a more potent, targeted way across all tissues and periphery.
Got it. Maybe just talk about the trial design in UC, because I believe this is a treat-through design, which has been not common in historical UC trials and a little bit different than the RA trial that you run as well. Just walk us through that.
Yeah. We had a lot more flexibility here with the GI division of the FDA than we did with the rheumatology division on how we're able to design the trial. We're treating patients for upwards of 12 months in this Phase II trial. The whole point going back two and a half years ago was to drive towards maximum remission. What's going to ultimately be differentiated here is max remissions that are stable out through a year. I'll come back to that point later. It's designed to be 130. We ended up enrolling 136 patients. Two active arms were placebo, one-to-one-to-one. In the first three months, you mentioned it's a treat-through. In the first six months, you're going to be receiving drug.
In the first three months, if you happen to be randomized to placebo and you're not in symptomatic response, you would cross over to the higher dose of rosnilimab and then remain on drug through six months in a crossover format. You remain blinded. We're dosing either Q2W or Q4W for that first six months. Once you hit six months, as long as you're in symptomatic response, so relatively low bar, you can stay on drug out through that 12th month. We do shift from Q2W, Q4W dosing, depending on the arm. Everyone moves to Q8 week dosing. It is technically a placebo-controlled trial out through the entirety of the study. We don't expect placebo patients to have response out over these periods of time in any meaningful way. The trial does remain blinded. This is all by design. You're saying it's not typical.
What you see often historically in these trials, particularly by smaller cap biotech companies, is three-month design and then you move to a response. The issue here is you look at the IL-23P19s, drugs like Skyrizi, even the T1As. You've seen differentiation at three months on the margin on clinical response, a lower bar than remissions. What happens, though, when you get out to a year? The 30% patients that hit clinical remissions at three months, a third to half of them drop off the trial and lose remission. When you look at this on an ITT basis out of the year, we're talking 15% to 20% of patients who are still in remission from these drugs. There's no differentiation. Slight differentiation in the early months, no differentiation out by a year.
If we could show max remissions at six months that are then stable out through a year, all we have to do is look Skyrizi-like at 12 months with a very different mechanism of action than what else is out there. We have a huge room to operate. I also think there's a chance for a lot of upside to that, is that we see over six months better remission rates that are stable. What we just saw in arthritis, I hit this in my opening remarks, three months off drug at least, we're seeing stable remissions in arthritis. The biology is the same. You're depleting out these cells. The PD profile that we're seeing, we showed this translationally, is a long PD. These cells do look like they're returning towards baseline. In the arthritis study, we're still 50% lower than where we started in that three months off drug.
We're really excited about if we can get remissions in UC that they will be stable over time and we could see a very differentiated profile.
OK. Remind us about the doses that you're testing in UC. You mentioned Q2W and Q4W. How does that compare to RA?
Yeah. We had three doses in RA. The high and the mid dose, all three doses were highly effective in the periphery. We saw potent greater than 90% depletion. However, when we got to the synovium, the lowest dose, we did see more marginal depletion there. The difference in UC is it's a lot harder to get to the gut than the synovium. You have to dose higher. We learned a lot in the RA drug where we saw a dose response translationally. A lot of that likely had to do, since the same potency was in the periphery, with getting antibody into the synovium. In the colitis trial, we are at a higher dose than we are in RA.
OK. Got it. What percentage of patients in this trial would you expect to be biologic-experienced?
Yeah, that's a good question. We enrolled 136 patients. About half of them were biologic-experienced, which is on the higher end relative to present in trials. I think that's an important point when you look at read-throughs from other diseases. We'll see how this plays out. In arthritis, there's a clear step down between bio-naive and biologic-experienced patients. When you look at the aggregate response rates, it'll probably be important to understand, are those response rates similar or differentiated based on prior background therapy?
Compared to RA, is that a similar trend that you would expect in UC as well, biologic-naive versus biologic-experienced?
Yeah. That's a good setup question here when you look at, you know, again, what we're observing happening in this space and why ulcerative colitis is such an attractive space for us. RA is a, let's consider, a mature market. The first line, even the second line, is hit with a lot of biogeneric programs right now. While it's great to see results in naive patients, the real commercial opportunity is going to be in the third and fourth line. You're competing with larger companies that are contracting and providing discounts based on their portfolio. Colitis is the exact opposite of that. We see rapid penetration of branded biologics, including drugs like Skyrizi in the frontline setting and an emerging second, third, plus. I don't even think it exists today in any real way, a fourth-line biologic class.
Historically, what would happen with ulcerative colitis patients is they'd fail one, maybe two advanced therapies, and they would move on to a surgery. We're trying to prevent that. That's cost ineffective. There are a lot of challenges with patients when they undergo these surgeries to help try to clear disease. What we're seeing happen in ulcerative colitis is an emergence of class cycling, which looks very characteristic of the RA market. Second-line plus biologic therapies in the U.S. alone, over $10 billion of revenue in the U.S. in RA. In colitis, it's a $6 billion market today. This is going to look very, very different in five years when we're into our launch curves in ulcerative colitis. You're seeing a very different market uptake.
This is why I'm saying, as long as you can look like IL23P19s and potentially the profile if and when they're approved, presumably the T1As, there will be cycling as long as you have an offering that is a different mechanism of action that provides some chance for patients to have a response if they didn't stay in that remission. Again, approximately 80% of patients are not in remission out of a year. There are a lot of patients to still treat here, even if you end up in the third line. Huge market opportunities. This is actually one of the reasons we think UC for an independent biotech could be a more direct path to commercialization if we had to choose one between RA and UC on our own.
OK. The data that will come in Q4 will be a three-month time point. Maybe just set expectations on what you would expect at three months versus six months next year.
Yeah, thanks for bringing that up. In Q4, all patients will have been at three months by the time of the data cut, which clearly sets up a six-month readout and a 12-month readout in the subsequent year. Three months is pay-to-play. You got to show that your drug works. Our primary endpoint is to change MMS, which is a combination of symptomatic relief as well as response on the scope. The reason we chose change MMS is it's a continuous variable. It's not the biggest trial to Phase II. We want to see a change versus placebo, but also potentially detect a change across doses. The three-month data is only three-month data. We sat here for a little while talking about max remissions at six months and having them sustained at a year. We need to show that we're a drug in Q4.
The biggest readout will be in that subsequent six-month read where we're looking for that max remission rate, where you then start to proxy off of can you look competitive out over time. The other things we'll be looking at at three months is the drug tolerable. We'll be looking at the safety profile. What we'll end up having in Q4 will be an update on the safety database for other patients at three months, six months. We'll probably even have a couple at 12 months at that point. I think that's an important read-through for the class as well on safety tolerability, how many patients are staying on this drug that have a chance to get to that max remission rate in six months.
On safety, anything you can comment on the blinded safety and the tolerability profile that you're seeing? This has been an issue or a key debate point with the class.
I think the data hasn't been an issue at all when we've looked at data states that are in the public domain. Just to highlight, in arthritis, we had no malignancies, no severe infections of any real regard. The profile was clean, and in the first three months, it looked placebo-like. What we've announced, and we'll continue to update on this as we go in ulcerative colitis, is that we see nothing of concern in the trial on a blinded basis.
OK. On the competitive landscape here, can you talk about the PD-1 targeted drugs in UC? I think J&J had some issues with the UC trial or UC cohort that they tested. Maybe just provide your perspective there.
Yeah. I think J&J's major issue is that they can't dose high enough to have an effective drug. They have a cell line stability issue with their program. We've known this for multiple years. They ran an IST, or sponsors ran an IST in RA, Sjogren's disease, and ulcerative colitis. What we learned there was really important. Their highest dose was about as much drug as we were giving in the mid dose in our arthritis trial. They only saw about 50% depletion in the periphery. We were seeing greater than 90% in all of our doses, high, medium, low. In the synovium, they actually gave biopsy data. There was only about 40% depletion at that mid dose.
Either they weren't getting enough drug, which we do believe they should have based on what we were seeing at our mid dose, and therefore, the second read-through is they're just not as potent. That's an issue. You asked a question earlier about the doses we're giving in colitis. You have to be at higher doses to get enough drug to the lamina propria. We don't think they dosed it was the same exact dosing in ulcerative colitis. They weren't dose optimized. They can't dose any higher, given their own challenges with that molecule in ulcerative colitis. They enrolled only five patients. Three dropped in the first five or six weeks. You're not going to see results by then. You probably didn't get enough drug to the lamina propria to begin with. You're not depleting out these cells, even in the periphery, enough to get an effect.
The other two patients did make it through. They didn't say anything. There's almost no read-through to our drug. If you can't get enough drug to the target tissue and you're not potent to begin with, I'm not sure I can read that through to what we're doing.
OK. Maybe you can talk longer term here about the strategic options for rosnilimab in RA and UC. You have a three-month readout in Q4, six months next year. What is the path forward for partnership opportunities? What could be an attractive structure for the company?
Yeah. There's multiple paths forward. We've leaned into two of them that are the primary focus. I've been saying for years, since I took this job, that when you're a biotech company based in San Diego, you're not going to be a commercial player in Europe and Japan in any real way, particularly in these large-scale competitive markets. It would also be cost prohibitive and a negative impact on ROE if we were to advance in both RA and UC on our own. At some point, you have to pick one. We're prioritizing UC, assuming we hit our target product profile, which I walked through, given the commercial dynamics. It doesn't mean there's not a path forward in RA. It just means the preference on a relative basis is ulcerative colitis. Our data in ulcerative colitis is coming soon enough.
We have a big option play that we're walking through, and we'll make decisions there. The preference would be UC on a relative basis. That said, if the drug works in both diseases, at some point, it's rational to work with a larger player, particularly given we're going to have to do this eventually commercially. It's inevitable. If we want to move forward to multiple things at the same time, we need to find a partner. There's a viable path forward for us in UC on our own in phase III, and there could be in RA. Those first two are our priorities, assuming things play out well in the ulcerative colitis trial, which we'll know soon enough.
OK. In the last five, six minutes, I did want to touch on ANB033, CD122 Antagonist, because I think that's kind of an under-the-radar target. A lot of companies have been developing similar mechanisms. Just walk us why you're excited about this target.
Yeah. There's a lot of growing hype, I think, in the space right now. That's really coming from positive read-throughs and early data sets to date. See the CD122 program, while we have these Jemperli royalties, which are a huge asset, rosnilimab, which is front and center, a big market in a later stage, CD122 could be its own company. It just is shadowed right now. What happens with CD122, it's a dynamic receptor that blocks both IL-15 and IL-2 on specific types of immune cells in an activated state. You see this a lot in NK cells. Ubiquitously, 70%, 80% of NK cells are expressing CD122. You're also seeing this receptor on cytotoxic CD8s, as well as subsets of CD4 cells, particularly in specific states. In healthy tissue, only 25%, 30% of CD8 T cells are expressing CD122. It's very different in selective autoimmune diseases.
By ANB033, designed to be a potent, high-affinity blocker of the dual expression of IL-15 and IL-2. It's not similar to a lot of other receptors that are only blocking or absorbing one cytokine. There's a dual mechanism of action here, which is why we're excited about targeting the receptor as opposed to only IL-15s. There are IL-15s that are being developed, particularly in diseases like celiac disease, which we did announce will be our initial Phase IB, where we've seen positive data. We've also seen positive proof of concept from other CD122 players in celiac disease. We're already pseudo-de-risked in terms of we know the mechanism. There's a biologic rationale that makes sense. There's also clinical data that supports the thesis. We do have the most potent drug.
OK. You mentioned about some de-risking from other companies. Obviously, Amgen is one. Novartis, Teva, Incyte, Forte Biosciences had recently some data from their drug. Are all of these targeting IL-15 receptors? Just lay out the landscape for us and the benefit of CD122 with your dual mechanism.
Yeah. There's a number of IL-15s that are ahead. Amgen's, I don't think they're progressing. They were pretty low affinity on a relative basis. It's generally accepted. Teva and Novartis, which acquired a company called Calypso, have much higher affinity. You're seeing better data out of them. Those are the ones moving forward. Those are the IL-15s. On the CD122 side, you have one company called Forte, which sounds like just initiating Phase II trials in celiac disease. You also have Incyte, which bought a company called Velaris, progressing a Phase IB trial in vitiligo. I think in the order of operations there, the Velaris drug is also a relatively low affinity drug, an antibody that's been around for a long time compared to the others in the landscape, ourselves included.
OK. I believe you are planning to test in Celiac first. Why celiac versus, let's say, vitiligo?
Yeah. As I mentioned, I think there's already proof of concept there. In celiac disease, this is a huge market. Over 2 million patients in the U.S. have celiac. Diagnosis rates are moving up. At least 30%+ are diagnosed with celiac in the U.S., and there's nothing on the commercial market. There's a lot of big pharma interest in this space: Sanofi, Takeda, Amgen, Pfizer. We'll see if Velaris moves forward with the Calypso drug. There's a lot of big pharma interest in this disease, and there's an interest because there's a real market need for drugs. Historically, a lot of drugs that have failed in celiac have targeted gluten and the immediate impact of the breakdown of gluten.
Where we've started to see some success here is treating celiac disease like a lot of these other autoimmune diseases, where you're treating the inflammation, which is what we would be doing by blocking CD122. There's an upregulation of IL-15 within the gut that's measurable. There's also an upregulation when you see digestion of celiac of IL-2. We'll spend a lot more time on this in this IR event that we have coming up in the next couple of months between the scientific rationale, differentiation of our CD122 versus others in the space, and the IL-15s. We'll walk through the Phase IA results in healthy volunteers, as well as outline what I think is a pretty unique way to approach trial design for celiac disease in Phase IB. We're really excited to get there. It's coming up soon to provide all this data.
We've been pretty cloaked about it so far to date, but we do believe we have the most potent program, both driven by the affinity as well as the binding epitope of our CD122 targeted program.
Maybe just talk about the milestones from Jemperli and the long-term royalty stream related to the collaboration with GSK. What do you expect there?
Yeah. I know we have like a minute left here. Jemperli, the value of the Jemperli royalties to us, net of a pay down that we have with a group called Sagard, where we've done some non-recourse monetization, the value here is significantly north of our market cap today. Jemperli has been on the commercial market for a number of years. It was a drug discovered by AnaptysBio. We have very high royalty tiers here on this drug. Based on GSK's Q2 results alone from this year, they're at over a $1 billion run rate. In the first $1 billion, we get an 8% royalty. It moves up very quickly from there. The next half a billion is a 12% royalty. The next half a billion is a 20% royalty. It moves to a 25% royalty.
$80 million for the first $1 billion, that's what we're going to book this year, at least. It's going to be well north of that, we think. GSK has guided to $2.5 billion of peak sales on monotherapy indications alone. We're ramping there. We think we can end the year towards not just $1.5 billion, but $1.75 billion run rate. This is a significant, very tangible asset for the company as we think about future value generation.
Got it. That's all the time we have today. Thank you, Dan, for joining us. Thank you to the audience for listening in.
All right. Thanks everyone.