Good morning, welcome once again to TD Cowen's 46th Annual Healthcare Conference. I'm Philip Nadeau , one of the biotech analysts here at Cowen. It's my pleasure to moderate a fireside chat with Annexon. We have Douglas Love, President and CEO, with us this morning. Doug, could you give us a brief state of the company overview, biggest strengths, biggest challenges, and what is Annexon gonna do to create shareholder value over the next year or two?
Yeah, happy to do so. Well, first, thank you, Phil and Cowen for having us back. I think this is our tenth Cowen conference, and happy to be here. Annexon Biosciences, for those who are not familiar with us, we're targeting the classical pathway with a next-generation neuroinflammatory approach. I think we fixed the mic there. Great. We're good. Okay, excellent, which we're really excited about. 10 years into the journey, what we've shown is we're providing the most complete protection against complement, classical complement-driven inflammation to drive a host of different diseases. 10 years into the journey, we are led by two late-stage programs with the opportunity to address more than 10 million patients suffering from these diseases in a commercial setting of more than $10 billion. Really two very unique opportunities. We're quite encouraged by both.
One is geographic atrophy, in which we're in a late stage Phase III program. We'll talk more about that. Suffice to say it's the only program to provide significant vision preservation against this devastating disease. The second program, Guillain-Barré syndrome, or GBS for short, there we had a significant landmark Phase III win. We are now seeking global regulatory approval. We're on file in Europe and looking forward to filing in the U.S. Finally, the third program relates to the first-in-kind small molecule drug candidate against the classical pathway, ANX1502. We're in a proof of concept study there. We're excited about reading out that program later in the year. All that leads us to an opportunity to have game-changing effects across this neuroinflammatory landscape with these 3 candidates. That's both a strength and an opportunity area for us.
From a strength perspective, we're innovating in all three of these areas, and none of these areas are we pursuing a me-too approach. We're looking to change the entire outlook in the market and for the patient populations in which we're targeting, so we quite love that. Innovation is what we're about, which we're encouraged by. From a opportunity perspective, however, when you're first, you have to go against dogma. The education curve is a lot higher in what we're doing. When you think about GBS, for example, there had not been a placebo-controlled study run in over 50 years. We're the first to do so. We've not, excuse me, run across an investor and many institutions who have done real work on GBS prior to our program, but we're educating, and so we're excited by that. Same with geographic atrophy.
Coming on the heels of two approved therapies that show protection against a surrogate biomarker for vision, we're the first to actually demonstrate significant vision preservation. The question is, how did you do that? We consider those are both challenges and opportunities, but we love it.
Start with the GA program, since that is a big year with the Phase III data. For those less familiar, can you review the Phase II data?
Absolutely. This is a 270 patient placebo or sham-controlled Phase II proof of concept study, we're really encouraged by the outcomes. Importantly, as I said before, it's the only program to demonstrate significant vision preservation, there we did so on all measures of vision, which from our perspective is really, really important to show consistency of the data. Best corrected visual acuity, which is the gold standard endpoint for visual acuity, we were highly significant against showing protection against loss of vision and dose-dependent, which is important. We also did that against low luminance visual acuity and LLD, low luminance visual deficit. A host of vision measurements. Perhaps most important in the data set is that were we able to do that?
There we show protection of photoreceptor neurons in the eye that are responsible for visual acuity, particularly in the center of the retina, which is most responsible for visual acuity. We're the only program to have shown that thus far, our protection is whopping at the, you know, 12-month mark, where we're showing 50%-60% protection in the central retina. Last thing I'll just say is from a safety perspective, we really like the differentiated profile of this drug candidate from a safety perspective. There we showed that, you know, conversion to wet AMD or CNV was pretty similar across all treatment groups. Really no difference between sham versus treatment arms, where we know in the other approved therapies, you know, that's in the neighborhood of the low teens, if you will, in conversion to wet AMD.
Other measurements for safety were also quite good there.
What is Annexon's theory as to why C1q inhibition leads to visual preservation, whereas C3 and C5 inhibition does not?
Yeah, really good question. I think the first thing to note that all complement components are not the same. C1q is a recognizing molecule which initiates the classical pathway, and why that's really important is it localizes on diseased tissue in the case of geographic atrophy, which is a neurodegenerative disease, that is photoreceptor cells and synapses in the eye. C1q localizes on these photoreceptor cells that are responsible for vision and drives inflammation, which results in, excuse me, the loss of vision. Our approach is simply by blocking C1q, we're stopping all of the inflammation associated in the classical pathway and thereby protecting the photoreceptors, which are allowing patients to retain their vision. That's very different from C3 and C5, which is targeting downstream components of the classical pathway.
there they are removing dead and dying debris associated with RPE cells that provide trophic support underneath the photoreceptors. It's important to note that you lose your photoreceptor neurons and your vision before you lose your RPE cells. By targeting the downstream component, C3, C5, and the RPE cells You're protecting against RPE or lesion growth, but you've already lost your vision. It's a highly differentiated approach from a mechanistic perspective.
Can you describe the design of the pivotal study that's gonna read out later this year?
Really important study. Really proud of the team and the way they've put this study together. This is a 659 patient Phase III program, single protocol. It's involved all types of geographic atrophy, foveal and non-foveal. In effect, an all-comer study, which we think is important for the overall study. The primary endpoint is best corrected visual acuity. Again, the gold standard for visual acuity, which we have full alignment with the regulators both in Europe and the U.S. on, which is highly important. It'll read out at month 15, we're well underway into the study.
What gives you confidence that the Phase II data will be replicated in the phase III?
Yeah, a lot of what we see in the Phase II data. As I said before, the key to us in demonstrating vision preservation is the how. Structurally, what we're doing is we're protecting that, the structures in the eye that are associated or responsible for visual acuity. Those are the photoreceptor neurons. We did that again at whopping numbers at 12 months, 50%-60%. You compare that in contrast to the approved drugs that are targeting a different structure in the eye, RPE cells that, as I said before, are a lagging indicator of vision loss in the disease. Even still, if that were relevant, they show protection in the neighborhood of somewhere between 14% and 17% at 12 months. A very differentiated approach in the target in the eye that we're pursuing and our impact on that.
I would just say the consistency of the visual functional outcomes across all the measures on vision.
Is there an opportunity to differentiate on safety, for example, a lower rate of new-onset exudation?
Yeah, as I said before, you know, by targeting C1q, we are providing protection against inflammation in the classical pathway. However, it's a very selective or targeted approach. We are allowing inflammation to go through the lectin alternative pathway. We think that's highly important from an immune perspective. As we've seen in our Phase II study, thus far, we're showing a very differentiated profile from a safety perspective as well.
Should ARCHER succeed, what are the next steps to get to an FDA filing? For example, is your manufacturing, all ready to go, and what else would you need to discuss with the FDA?
Yeah. Well, really good alignment with the FDA and in Europe. First, just to say with that, we're running a single protocol study with the FDA. There are two sub-study analyses, both are powered at high Phase III levels. We'll take that data in and review that with the FDA. From a manufacturing CMC perspective, we're doing that with Lonza. We've run multiple campaigns. We're in process of completing our commercial campaigns now. We're ready to go upon approval here. One thing I left out just with regard to the Phase III study, which also gives us confidence in the outcomes, is candidly how the team designed the study with regard to the patient profile.
One of the things that's really important about treating geographic atrophy and protecting vision is catching patients in that window where they're losing vision at a rate where you can stop that loss of vision and they're not so far gone. We learned that in our Phase II study. Roughly 20% of the patients were so far advanced in their disease, we could not protect against vision loss. However, we've excluded that patient profile in our Phase III study. This is a much more targeted patient population than what we saw in the Phase II, just based on the learnings from the Phase II and other studies that have been run in this space. We love the enrichment strategy and the way the study's being executed.
What has Annexon learned from the early commercialization of SYFOVRE and IZERVAY? Where do you think ANX007 could fit into the treatment paradigm? How has your commercialization strategy changed based on those early launches?
Really good question. Well, firstly, I'll say that I think they both did a reasonably good job coming out the gate from a commercial perspective. If you look, for example, at the first, you know, six, nine months of the SYFOVRE launch, they were well on their way to being a blockbuster or a $1 billion drug in the first 12 months of launch. They ran into were both safety and efficacy topics from a benefit risk perspective. The thing we like about the GA space is that it, you know, the larger treatment practices really do drive adoption, and one practice, in particular, drives roughly 50% of the scripts in this particular disease. We've got great relationships with all of them.
I think it's important for our launch to be successful for, one, folks to really understand our mechanism of action and our data, obviously, really, really important. Then two, that we partner with the treaters out there to ensure that they understand our drug and it's, you know, effective for them to prescribe it to their patient population. Then three, we see real opportunities from a disease education campaign with patients in this space. There has not been as much done in the geographic atrophy space with the patient groups as it has been with wet AMD and other diseases in the ophthalmic space. So we think that's a real opportunity to really enhance our launch and uptake right out the gate.
Last but not least, we're providing protection against vision, which we know is the most important or most relevant endpoint for both physicians and patients in their well-being going forward.
Turning to tanruprubart in GBS. For those less familiar, can you provide a brief background of the program and the pivotal data that's been generated?
Yeah, we love the program. Excuse me. GBS is the number one cause of acute neuromuscular paralysis. It impacts roughly 7,000 Americans a year, another 15,000 in Europe. And it's a devastating disease for those who are unfamiliar with it. It's a disease that is completely indiscriminate, and it can strike at any time. And it's completely life-altering. The way the disease works is you get some type of preceding infection, could be something like food poisoning. Your immune system kicks on to clear, you know, these sick cells in the body so that you can recover. That's all very normal and highly regulated. Unfortunately, in GBS, in about 7,000 Americans annually, about a month later, your immune system kicks back on, driving harmful inflammation at your peripheral nerves.
What you see is in a matter of 2 or 3 days, you're completely bedridden. You know, 20% of patients are right into an ICU, 1 in 4 are on a ventilator, and after a year, 20% of patients are unable to walk. A completely devastating disease overnight, irrespective of who you are. With our program, we're targeting the locus of the disease very much like geographic atrophy. We're targeting classical complement inflammation right where it localizes on diseased tissue. In the case of GBS, it's on the peripheral nerves, different from GA where it's on the photoreceptor neurons. The same mechanism, which we really, really like, and we think it provides a lot of validation for what we're seeing in the GA program.
Suffice to say, by blocking complement right where it starts on diseased tissue, we're immediately stopping this inflammatory cascade, and we're allowing patients to get better, in effect, within a week. Roughly 90% of our patients improved by week one with this disease, which is unheard of in the history of this disease. We're really encouraged by this program. As I said before, we had a resounding Phase III win. It's a landmark win. We won on every measurement, the primary endpoint, every other measurement. I'm sure we'll talk about that. We have now filed in Europe, and we are shortly to file, hopefully, in the U.S.
Great. I guess from the Phase III data, what is the conclusion of the data? Would a, would a patient do better having taken tanruprubart versus not, based on the results that you've shown?
Yeah, we've shown that versus both placebo patients as well as against the standard of care, which is an unapproved IVIG arm in the real-world evidence. Yeah, they get better on every measurements. First and foremost, by week one, their muscle strength improves, which is really important. That then translates to a more than 2 times likelihood of improvement by week 4 on the GBS Disability Scale and week 8, which is the primary endpoint. What that translates to by month 6 is that you have more than a 2 and a half times likelihood of returning to a state of normal or full recovery, which is really important in giving their patients lives back. You wanna treat early, you wanna treat completely in stopping this entire inflammatory cascade, and that's what we're doing with tanruprubart in this disease.
In addition to the pivotal study, you did the RWE study. Can you describe that analysis as well as why it was conducted?
Yeah. This is a real world evidence analysis. For approval of this drug, given that there have been no approved drugs here and there is a standard of care on the market that is unapproved, we were required to run placebo-controlled gold standard studies. To do that, we had to go to jurisdictions that do not currently have IVIG readily available to them. We did this in Southeast Asia with the alignment of the FDA and EMA in Europe for this approach. We had to demonstrate two things: One, substantial evidence on the Phase III study, and two, that the patient populations that we treated and the outcomes from our drug are generalizable to the patients here in the West and the US and Europe. The Phase III study checked box one, substantial evidence. Box two is the real world evidence study that we did.
There, that study was designed to do a propensity score matching of the patients in our study with patients in a natural history dataset. This is a 2,000 hit patient natural history dataset run out of Erasmus. It includes all developed countries in the US, many developing countries. There we showed that our patients were highly matched with the patients in the US and Europe. We took the additional step of comparing the patients' outcomes in our study with those patients who were treated with IVIG. Again, we showed improvement versus IVIG on all measurements. We feel really good about our real-world evidence data, and that data will be published shortly.
Can you provide an update on the discussions with the FDA over filing in the US, and in particular, has alignment been reached and how is the FDA thinking of the generalizability of the data you've produced to the US population?
That's the key open question with the FDA. We feel really strongly about substantial evidence and generalizability. We've not yet had a review of our generalizability package. What we are doing really for belt and suspenders with the FDA is in addition to our submission of the Phase III study and the generalizability data, which is the package that we've already submitted to Europe for approval, we're providing additional or supplemental data to the FDA in the form of open label real-world open label data from what we call a FORGE study in the US and Europe. This is an ongoing study where every patient is being treated with tanruprubart in the US and Europe, really to assure ourselves and the regulators that the outcomes we saw in our Phase III are consistent in this patient population.
We're encouraged thus far, very much so with what we're seeing in this FORGE study. We look forward to pulling all of that together. We will release that data to the marketplace, and we'll also be looking to file that data with the FDA.
How many patients in with what follow-up will you file with the FDA?
Yeah, really good question. Don't have a defined answer on that yet. We think it's in the neighborhood of 5-10 patients. The reason for that is the high consistency in what we anticipate and what we are seeing in the FORGE study with that we saw in the Phase III study. As I said before, roughly 90% of the patients in our Phase III study showed improvement by week one. That is just a really significant bar. And, you know, showing consistency in that data in the U.S. and Europe is really important. In addition to that, PK and PD is important to show or demonstrate for the regulators. We're using the antibody. We know the antibody is very consistent in its effects from a PK/PD perspective in the U.S. and Europe. Excuse me.
In fact, we've dosed multiple patients in other diseases in the U.S. and in Europe, and we're seeing the consistency in our current patient population.
You said the generalizability package hasn't been approved yet. What is the timeline for that? Just this conversation, what happens next? Also this sort of-- all of this predates the current FDA. How does it mesh with today's FDA?
Yeah. No, it's a good question. It's, it's part and parcel. Part of this predates the FDA's, this current FDA. The prior FDA agreement was the substantial evidence and the generalizability package. What we're doing with the new FDA is providing supplemental data from the U.S. European FORGE study. We don't, we have not met with the FDA with this data in hand, so we anticipate filing and having those discussions with them.
Can you talk about the market opportunity in GBS? How many patients in the U.S. and Europe, and where could tanruprubart fit into the treatment paradigm?
I think this is one of those rare instances where you're dealing with a rare disease that is an actual blockbuster. The reason I say that is there are 7,000 patients in the U.S. and another 15,000 in Europe. What we know is that 100% of the patients who are diagnosed get treated. That's roughly 95% of all of the patients in total. You have a ready-made market there, which I think is really, really important. The second thing I'll note is that they are being treated with unapproved therapies that have shown really just fair to middling effect in stopping this disease process.
Some of the data I quoted earlier about one in four patients being on a ventilator, 20% being in the ICU, et c, those numbers are on top of the current therapies out there. Our opportunity here in the U.S., given that everyone is treated, is where do you identify the patients? There are two. We see that GBS appears to be a population-based disease. Roughly 50 of the larger practices in the U.S. control 50% of the patients year-over-year for 70 years. That allows us to have a very efficient, targeted commercial footprint with this patient population, which we're really encouraged by.
We think the commercial opportunity, given that everyone gets treated and we have a disease or a therapy that gets people better by week one and fully recovered by month six, we think there's an opportunity to really differentiate in the paradigm out there.
Where is Annexon at building its commercial organization?
Well underway with regard to the U.S. The key for commercialization in this disease obviously is education of those 50-75 practices that we really are focused on right out the gate to ensure them that they understand that with a single infusion versus 5 days of infusion for the unapproved standard of care, that we can really quickly change patients' trajectories. Which is also very important with the FORGE study because physicians here are getting real world hands-on experience with our therapy. That's going really well. In addition to that, we've got a really robust med affairs group that is currently out with some of the larger practice centers, making sure they're educated on the disease and the therapies. It's important to note that no one has promoted in Guillain-Barré syndrome from a commercial perspective ever.
It's greenfields for us, and we're doing a lot of work there. We really love the opt-in that we're seeing by physicians across the country into our disease awareness campaign, seeking more information. We're really active on that. The last thing I'll just say is it's all about getting on formulary and reimbursed. 2/3 of patients have commercial reimbursement, which is really quite good for this disease. We're really active with the payers and ensure ourselves and the hospitals that we will be on formulary early on and that we'll get full reimbursement for this drug.
How does Annexon think about pricing? What is the right range?
Yeah. We haven't disclosed it publicly yet. I will tell you the analysts are in the neighborhood between $100,000-$150,000 for a course of therapy. It's probably not unreasonable. Could be a bit conservative, not unreasonable, particularly given the cost savings. One of the things we know by getting you on your feet 30 days sooner versus placebo, getting you off the ventilator 30 days sooner versus placebo, getting you out of the ICU more than a week sooner, we are saving significant dollars to the healthcare system. It costs more than $7 billion a year to treat GBS in the U.S. alone. It's a whopping number. We have a series of health economic papers that'll be coming out over the next 1 and 2 quarters, which will really elucidate that for the marketplace.
Those hard dollar costs are really predominantly in hospital stays, ICU, ventilation, et c, and we're saving on that. You know, the analyst number of $150,000, not bad. We're okay with it. There you're in a blockbuster status. Perhaps there's more than that, but we're really encouraged. We'll do the right thing with regard to pricing, though.
Turning to ANX1502, for those less familiar, can you review your small molecule program?
Yeah, we like it. I mean, this just really kind of furthers our mission to provide game-changing therapies in the marketplace that are different in kind from anything out there. In all three of our therapeutic areas, we're looking to be the market leader. 1502 allows us to do that, particularly here in neuromuscular antibody-mediated neuromuscular autoimmune diseases, first in kind oral small molecule targeting diseases like myasthenia gravis, CIDP, et c, where patients are currently being treated by, you know, every other week or once a month IV. See the advent of Sub-Q coming along. These are devastating diseases. Patients have to literally plan their lives to go get an IV. The ability to bring forward a small molecule for them to take it home, we think is really, really compelling. We're in a proof of concept study now.
We're really just trying to elucidate the drug's treatment profile, so really understand target drug levels, its safety profile, et c, in a diseased population. It's in cold agglutinin disease , not a disease we would be looking to move forward from a commercial perspective, but a disease with really objective measurements, so we can get a reasonable read, a reasonably objective read on our drug's treatment potential.
Can you talk a little bit more about what would be proof of concept in this disease? What measures should we pay particular attention to, and what's the bar?
Really three key measurements there. From a disease perspective in Guillain-Barré syndrome, we're looking at hemolysis, which is elevated in this population and measured by things like bilirubin, which are really, really objective. There, we're looking to normalize bilirubin in the patient population. The other measurement which is really important for us, particularly from a PD perspective, is elevated classical complement C4 in particular. There, we would be looking to normalize that in the patient population. Of course, safety tolerability, obviously, really very important from a small molecule perspective.
You've disclosed that ANX1502 has some food effect in the current formulation. Can you describe what that food effect is and what you're doing to understand it?
Really good question. Look, this is a translational program. We've been on a journey with regard to the formulation of that. We initially ran into a bit of nausea with a film-coated formulation, transitioned to an enteric-coated formulation, which is really appears to have solved the nausea topic. What we are seeing is that when you take it with food, you are losing the drug's effect in the gut, you're seeing very limited exposures. When you take it without food, you're having, you know, 3, 4, 5-fold level target drug levels. We're really encouraged by that. We've been able to elucidate this in a really small data set. We're doing BID dosing. In the morning, patients were taking the drug without food. In the evening, they were taking it with food.
What we are now doing is a study where both BID doses are without food. The food effect is, you know, taking it in and around one to two hours of the drug or having food within one or two hours of administering the drug. We are just fasting patients during that period of time. It feels solvable. I will tell you, though, I think that what we will need to do once we get the full data set is take an assessment on whether we move this current formulation forward or whether we do some additional formulation work to optimize this drug without a food effect, because it does appear that it's something that's probably solvable with some formulation work.
In addition to formulation work, what would be the next steps? What diseases are being contemplated? When could you tell us of the plans?
Yeah, we'll do that when we, you know, update on the data on kind of the next set of indications. As I alluded to before, we really like this for, you know, the classic neuromuscular antibody-mediated autoimmune diseases, and we know a lot about them. When you think about GBS, it is the most acute and most aggressive neuromuscular disease there is. There are cousin kind of chronic diseases or forms of it, like myasthenia gravis, CIDP. We know, as I said, quite a bit about targeting these diseases, and those are really quite interesting to us.
Maybe to finish up with a couple corporate questions, what is your strategy for developing these programs? Would you take them yourself through commercialization? Would you look for a partner?
Yeah. I mean, our current strategy is to absolutely move these forward. What we love about them is these are really kind of our beachhead indications. Each one of these indications de-risk indications behind it that are mechanistically related. You think about geographic atrophy, we, you know, we like intermediate GA. We've already had discussions with the regulators on that. We like, you know, the aggressive form of glaucoma in there as well. When you think about Guillain-Barré syndrome, as I said, you know, this is kinda the tip of the spear. We like the chronic neuromuscular ones behind that. You know, the other thing about GA as a neurodegenerative disease, it also gives us really good line of sight into brain neurodegenerative disorders.
The current kind of strategy of the company is certainly to commercialize these assets ourselves, particularly in the U.S., which is our strength. Ex-U.S., perhaps a little further afield. There, we've been having some very interesting, targeting or partnering discussions for ex-U.S. commercialization.
Can you remind us of your cash balance and cash runway?
Yeah. It's in excess of $200 million with cash runway into the late second half 2027. What's important about that is we're through all of our key catalysts. We're through our GA data, plus well beyond that, the Phase III there. We will have a, you know, MAA approval with Europe in the first part of 2027, and we'll be on file and be shortly, hopefully thereafter, having approval with GBS. Of course, we'll read out on ANX1502 at some point this year as well. We're well past our initial catalyst with some room to grow from there.
You've answered all our questions. Anything else that we should have asked you that would be important for investors to know?
I think you've got it. I mean, look, the thing we're really encouraged about is 10 years into the journey is the consistency of this platform approach, right? I mean, I think that is certainly our secret sauce, is our understanding of the classical pathway and this immune system in driving a host of neuroinflammatory diseases. That's 1. 2, our ability to translate this platform in a host of different diseases. Guillain-Barré syndrome could not be more different than geographic atrophy, and we're seeing similar outcomes in different patient populations worldwide, which we're really encouraged by. The third thing I would say is that we're really sitting here with real asymmetric value. When you look at our valuation today in relation to what's ahead of us over the next 12 months, we're really encouraged by that. We know we can execute in this company.
We've been doing it for over 10 years. We look forward to doing it for the next 10 years.
Perfect. Well, thanks for making the trip out to the TD Cowen conference.
Thank you. Thank you, Phil. Thank you, all. Bye.