Annual healthcare conference in very toasty Las Vegas. My name is Jason Zemansky. I'm one of the mid-cap analysts here at the bank. Very pleased to have join me Biogen, and specifically Adam Meyers, Head Immunology and New Disease Areas Franchise. Adam, thank you so much for joining us.
Yeah, thanks. Thanks for having me.
Maybe for those of you who may be less familiar with your role at Biogen, could you please provide an overview of your focus within the organization?
Yeah, absolutely. As we open the session, just disclosing, obviously I'll be making forward-looking statements, suggest folks looking at risk factors we outline in our SEC filings. Yeah, very happy to be here. I've been with the company actually about 14 years, and I'm leading our immunology and new disease area franchise. Really, immunology is a growing space for the organization. My team works to lead our late-stage immunology programs cross-functionally in prep to bring these new assets to market.
Excellent. You know, Biogen seems to be making more of a deliberate pivot towards immunology. Certainly Chris has spoken a lot lately about multiple sclerosis being not only a neurology-based disease, but also an immunology-based disease. Can you expand on how, I guess, you and the organization as a whole envisions immunology fitting in moving forward?
Yeah, absolutely. I mean, immunology is obviously a broad area treated by a variety of specialists. When you look at Biogen's history, and really the field of MS, history in MS, most of the therapies that have been brought forward are really targeting an underlying source of inflammation that is causing multiple sclerosis. The time that we've spent building expertise around the biology of MS helps us as we expand into new areas of immunology with different specialty call points. You know, when you look actually at some of the therapies currently used for MS, something like a CD20, obviously there's a lot of interest in BTK inhibition. These assets are being studied not just for MS, but a variety of autoimmune diseases.
The history that we have in MS, the research team that we continue to expand, some of the expertise that we've been acquiring through business development, all of these things position us well from an immunology perspective.
Maybe just to delve a little bit deeper, I mean, what specifically aligns with, in immunology with the company's core capabilities? Is it more of the research side? Is it something else?
I mean, I think that, certainly it has started from an R&D lens. You know, we certainly have the capability to develop therapies with underlying I&I type implications. Beyond that, I think it translates very well also into medical and commercialization. When you think about MS, obviously, the main call point there is an MS specialist. You know, we've been very successful with a portfolio of therapies for MS over the past many years.
From a commercialization perspective, not just a scientific perspective with the shared underpinnings, the ability to build a portfolio, build a set of relationships in a specialty space with customers, you know, follow science, demonstrate that we can build value, and frankly some of the underpinnings, things like patient services, and we really have some world-class patient services to enable education and access for patients. All of these things I think are immediately transferable from what we've done, say, with an MS neurologist to a rheumatologist for lupus or a nephrologist for IgAN.
You know, as you think about moving forward, how willing is the organization to stretch? You know, when you think about some of the parameters of an I&I based disease, you know, while it might align biologically, pathologically, in terms of, you know, the market opportunities, they're a little different from neurology and rare diseases. They tend to be, you know, much more competitive, patient populations much more heterogeneous. You know, help us walk through some of the puts and takes here.
Yeah, I mean, I think, look, there's always synergies in, you know, being in the call points you already have. There's no doubt about that. Obviously we needed to diversify beyond neurology, and I think you can see demonstrated where there's good science and a substantial unmet need, we have been willing to go towards in particular nephrology as a new area. I think, willing to stretch, but in the end the science and the patient need have to guide that this is a place Biogen is really well positioned to uniquely bring value to the patient and physician community.
Got it. Well, let's turn to certainly the pipeline. The next potential commercial asset, litifilimab, has two phase III that are reading out for SLE. Lupus is a challenging indication. What do you think you need to show to differentiate the profile, whether it's skin joint or SRI-4?
Yeah, I mean, I begin by reflecting on our phase II program, and we were able to run a two-part phase II study, one in SLE patients with skin activity, and another in CLE patients with or without SLE. We really were able to study a very broad spectrum of patients with lupus. In the SLE part, the primary endpoint was focused on joint. The reason being, joint is the other most common manifestation of lupus beyond skin. The idea is through demonstration of proof of concept in being able to reduce joint activity in that part of the study, complemented by the CLE side of the study and also measuring skin in SLE patients, we have proof of concept in both skin and joint disease.
In the SLE side, we also did measure the primary endpoint we're now using in phase III. That's called the SRI-4. It's probably more complex and not as clearly understood in clinical practice, but it is the regulatory endpoint. We saw a treatment effect in phase II on that SLE SRI-4 of over 25%, which was very marked. You know, when you think across these two areas, entering a lupus market that is growing and will probably become very crowded over the next few years, and I think we're on the precipice of tremendous gains for our SLE patients and potentially creating a new CLE market, I think we feel very good about where we are.
It is a heterogeneous disease, these study designs have been very thoughtful, and we've taken really the best of the phase IIs and the confidence we gained and implemented that into the phase III program. What do we need to see from that phase III program to think that we're successful? I mean, really when you think about these patients, you know, an SRI-4 does not mean a whole lot to them. It may mean something to the physician, that physician is looking to protect their organ systems. Obviously, it's a multi-organ impacting disease. The patient, what we hear from them is, "I just wanna be able to approach every day and live my life." That comes to fatigue, reducing pill burden. On the cutaneous side, obviously, there's a huge psychosocial impact of very visible scarring lesions.
They just wanna be able to engage in their life with their family, their job, their community. I think what you'll see is, of course, we're gonna focus on skin, joint, and those composite endpoints. I do think that litifilimab has the potential to be very, very competitive, and certainly superior on the CLE side to no option being available. I think we'll have to complement that with additional patient-focused data coming out of phase III.
In terms of the actual SRI for outcome, I mean, what should we look for, come Q4 here? I mean, what level of benefit here would be enough to differentiate, as you said, you know, the level there that you think you could drive, you know, a pretty sizable commercial outcome?
I mean, ultimately, SRI-4 will be one piece of the puzzle. When you look at the current competitive set that is already approved, SRI-4 outcomes or BICLA, which is a similar composite outcome, have usually been in the low to mid to maybe upper teens, and we saw 27%, I think, in phase II. Ultimately, that's a piece of the puzzle, but I think that number alone really isn't going to be, in my mind, what drives use of litifilimab. The totality of the data, the potential, from a safety profile perspective of having a very targeted mechanism of action, you know, blocking production of problematic type 1 i nterferon from these pDCs versus broad blockade of interferon, which does have some positive benefits, or heavy B-cell modification or depletion.
You know, there's some potential benefit from a safety perspective as it relates to infections and other things. The convenience factor is going to be very real in this patient population. You know, right now we're at subQ monthly delivered at home. That is very different than a weekly subQ or an IV therapy. So those components combined with a breadth of efficacy across skin, joint, and hopefully some good patient-reported outcomes, I feel like litifilimab is in a good position relative to incumbents and even other products in later development.
If litifilimab performs as expected, how do you think it will compare to dapirolizumab in SLE? Is there an ideal subpopulation in SLE for each agent, or is it more of a staging question?
Yeah. I mean, we're very fortunate to have two late-stage assets in the portfolio. In fact, right now, that is an anomaly in industry, and that's because we actually believe lupus is heterogeneous enough as a disease that one therapy is not going to be the answer for all patients. For us, it's really more about complementary and building a portfolio with options for patients than it is about viewing or comparing and contrasting the two assets. You know, when you think about what Dappy was able to show in its phase III study with the second study, due to read out in 2028, you saw a breadth of efficacy and certainly some nice response on composite endpoints, but you saw the ability to reduce steroids, reduce disease flares. You've seen nice impact on fatigue.
These are things that you will see out of a larger phase III study. In the end, there isn't a one-size-fits-all therapy, and thinking about how we've been successful with MS in developing a portfolio, the option is really what matters. I don't think at this point the world of biomarkers and patient segmentation in lupus is strong enough to say it's easy to pick the right patient for a product, but having multiple options, you know, litifilimab more on the innate immune system side for those that have type one interferon, perhaps driven disease, Dappy more on the adaptive immune system targeting BT exchange and that type of signaling gives you the ability to perhaps provide some judgment as to right drug for right patient.
I think Jackie from the team has a follow-up on the APRILs deal.
Switching over to BD. As you think about the APRILs deal, Biogen has focused a lot on its outlook for both assets, but can you give us more of a sense of the commercial implications or benefits as you build out a nephrology franchise?
Yeah, I mean, obviously pending close of that deal, the intent was to do two things, right? One, it does represent new products, growing products, that can add to top-line revenue. The other, for me, that sits with these pipeline products that I'm especially enthusiastic about is the expertise coming from Apellis and the established field force. Nephrology is an area that has really exploded in activity for the past few years, but the number of people that have deep expertise in nephrology, especially working in the field building relationships, is very limited, and that's something that we would have built, but Apellis immediately brings. When you think about the broader opportunity, I think when we think about the next couple of years, somewhat in line with consensus, we think these products can grow in the mid to upper teens space.
SYFOVRE, obviously, it's really about building what is an under-penetrated market and educating on the value of staying on therapy. With EMPAVELI, it's very early in its launch cycle. It has a broad label. It is a rare disease. We obviously have a lot of experience in that space, and we do see a progressive linear growth that is consistent with other rare disease products we've commercialized over the longer term. Between what it does in terms of near-term revenue and then also preparing us with a field force for felzartamab is a really valuable set of attributes.
Yeah, Chris mentioned felzartamab a lot in his discussion following the acquisition. I guess drilling down a little bit further, what particularly, what asset, what about these assets or the infrastructure will be key to unlocking felzartamab's potential?
I mean, I think in terms of unlocking Felza's potential, obviously, really enthusiastic about entering this growing nephrology space. Certainly, I think that, looking at Felza and its unique CD38 targeted biology, along with now what we have coming to us from Apellis, really our job is to conduct these late-stage programs well, make sure we do the right disease state education, especially as we try to build a new AMR market, understand how we can differentiate an IgAN. As we build out that strategy and complement with a talent base, I think we'll be in a very nice spot.
Over the years, Biogen has advanced a number of ophthalmologically based, assets. Does the acquisition, and, you know, specifically, SYFOVRE signal, renewed plans to enter this space?
You know, honestly, I think that really you have to look at the acquisition holistically, and obviously I've spent time sort of emphasizing the nephro side of it and really what we believe is a significant growth opportunity with EMPAVELI. I think those synergies are probably a greater driving force. Certainly, I think Biogen has proven on multiple occasions that, again, where there's science and where we think we have a unique ability to provide value to patients and payers, certainly I think there's always that possibility, and a lot, I think, will be dependent on, you know, how SYFOVRE performs and then what else appears in potential pipelines.
Got it. Maybe pivoting back to felzartamab, you're looking at three different opportunities, so AMR, IgAN, and PMN. What's the evidence for CD38's broad role in these indications, and what gives you confidence that it's going to be efficacious in each of these?
I think, you know, it really is something I would dichotomize between transplant, which is AMR and MVI, which we opened the phase II registrational quality study in as well, and more on the GN side of things with IgAN and PMN. I'll maybe start with transplant and specifically focus on AMR. This is a space where with AMR, there's potentially 11,000 patients.
You know, AMR is a leading cause of kidney rejection. Obviously that's highly problematic because you think about the patient experience, usually there's some form of kidney dysfunction or disease that has led to the need for dialysis and a transplant. That is not only an expensive proposition for the healthcare system because these transplants in the U.S. average about $450,000, but it's a really, really terrible experience for a transplant patient who has basically been given the gift of life to immediately find that over time they're developing AMR. Certainly, CD38 in this space and targeting and depleting the plasma cells appears to play a strong role.
When you look at the phase II data, we were fortunate to see about 80% of patients having a reduction in disease activity and actually 2/3 having full resolution of AMR, and that's biopsy confirmed. That's a really, really strong indicator coming out of phase II that will hopefully replicate in the ongoing phase III study with 120 patients. On the IgAN side of the equation, obviously, a very active space, and the common question is, you know, how will you compete against Apellis and what is happening with these first few accelerated approvals and probably several to come. CD38 biology is quite different in this space. You're talking about, again, depleting plasma cells that are CD38 positive.
In doing so, we know those plasma cells are creating the autoantibodies that lead to the immune complexes that are finding themselves on the fold of the kidney and impacting kidney filtration. It is those plasma cells creating that effect. Really targeting the direct source of the disease, whereas these APRIL are broader, a B-cell modulators, but maybe not as directly implicated in the production of these autoantibodies. Between the unique mechanism, some of the unique constructs of Felza, so for instance, lack of CDC potential implication for longer-term chronic use, the fact that Felza has a chronic tox and repro package that most CD38s do not, these things will hopefully provide some data to reinforce safety. Ultimately, we think the CD38 biology will play a strong role in treatment of IgAN.
When you look at that phase II data after the initial course of therapy over five months, you have patients showing potential durability out to two y ears. An APRIL mab is a chronic therapy, weekly, twice weekly, maybe monthly, you can take Felza over the course of 5 months and then potentially not need another course of therapy out to 2 years.
Got it. Maybe one quick follow-up on IgAN. Does this mean that you think Felza is a replacement for the APRIL, or is it something that could be used to complement them?
Yeah, I mean, it's hard to think about combo therapy at this point. I think it's early days with the Apellis. I think when you combine immunomodulators, there are things we don't understand. I think that at least to start, the view is, this is a very viable alternative to an APRIL. Based on the phase II data, we saw roughly 50% reduction in proteinuria. That's very consistent with what these phase III programs have been demonstrating for their accelerated approvals. Time will tell on the eGFR. I think the idea is, it is a potential choice that, again, targets CD38 as a key mechanism of disease and potentially provides durable treatment outcomes rather than sort of constant chronic therapy.
Got it. Pivoting back to AMR, I guess, what do you need to see from the data to feel optimistic about kind of the broader opportunities of an anti-CD38 monoclonal?
I mean, I would say that as I think about this development program in general, I mean, AMR is a very different disease than IgAN. So successful efficacy in AMR will be confidence inspiring, but not necessarily predictive of a positive IgAN outcome, for instance. I think what we will learn is, one, we'll get a much better sense of the safety profile through larger studies. Then from a dosing perspective, from a PK/PD perspective, things we learn in AMR may help us understand some of the PK/PD that we can anticipate in the IgAN program. In some senses, distinct opportunities, but some of the foundational information we'll get from AMR should help build confidence for IgAN to follow.
What fractional of the as you mentioned, 11,000 transplant patients could benefit from an agent like this?
Yeah, you know, with these 11,000 patients that are developing AMR, we know time to onset median is about two years. We know over the course of a decade, probably 75% of them are at risk of losing their graft and hence needing to go back to dialysis or needing another transplant. Again, I think about that in terms of not only that patient and needing a new kidney, but what it means to a patient that otherwise would be waiting for that next kidney. Clearly, treating AMR benefits the patient and future patients. I think, you know, on the whole, when we think about this, it is, AMR is a leading cause of kidney rejection in the 25,000 transplants a year. The prevalence is about 11,000.
You know, how many will stay responsive beyond the data we've generated thus far, very contingent on the long-term studies, but obviously very appreciative of the results we've seen in the phase II and at least getting to that high efficacy rate.
Well, is there a chance that they could hold off rejection indefinitely, or do you think that there's, at some point, it's gonna happen?
Yeah, I mean, I think the premise is with the dosing regimen we've placed into phase III, the goal, of course, is for this to be chronically there to hold off rejection indeterminably. We're going to have to obviously follow these patients in the phase III program for much longer to see if that plays out.
Got it. Let's finally pivot to you have a number of upcoming proof of concept readouts, I think, that are somewhat overlooked, but let's focus in on BIIB091. This is your BTK inhibitor. What prompted the reinvestment in MS after, you know, essentially not investing that much in the space for some time?
Yeah, I mean, what I would say is I probably don't characterize it as a reinvestment. We've been working on BTK inhibitors for MS continuously since, well, as long as I've been working in immunology at the organization. Obviously, finding the right BTK, given what we've learned about covalent versus non-covalent, potential hepatotoxicity, all of these things play a role in what would make for a BTK with the right benefit risk profile, not only for MS, but potentially more broadly in autoimmune diseases, because we know these BTK inhibitors are being used more broadly. Additionally, on top of that asset, we do have a BTK degrader, so would degradation provide advantages versus inhibition? That readout is pending mid-year, and we will provide an update on it.
You know, I think the idea being very much though that this is really just a continuation of the work we've been doing, and BTK inhibition has been one of the more promising areas for MS.
On VUMERITY and the legacy portfolio, they've continued to do well. How attractive an area of growth is the landscape still for the company?
I think VUMERITY has certainly done very well and certainly happy to see that it is continuing to grow. It's the number 1 prescribed oral, branded oral, in the U.S. You know, it's fair to note that the other products in the MS portfolio have still been undergoing that slow decline. I would say, in general, the RMS patient is probably more well-served than patients with progressive disease, in particular with that type of disability progression. I do think opportunities remain in particular in that space when you can find the right molecule with the right safety profile. You know, we'll see this data set shortly, looking forward to sharing what we think are the appropriate next steps for the asset.
Just give us an idea of the benchmarks here. I mean, what does it take to compete, essentially, given that a lot more new agents have launched in MS?
I mean, you know, on the RMS side, I think what we've seen is there are several good agents that really control formation of new lesions, right? You have to meet the bar that is already set by the heavy players in the field. On the progressive side, you know, even the products approved for progressive MS seem to be working more in the patients with active lesions versus the patients without active lesions who are still seeing disability progression. I would say the bar is lower in that space because there's limited treatment options, and ultimately, again, even the things that have been successful are really more in an active type of patient than not. It's hard to give you a specific bar in that type of patient because the efficacy is pretty modest.
All right, well, we're heading up on time here, but maybe just to finish things, you know, given the new focus on I&I mean, what part of the portfolio do you think that's gonna look like in a couple of years? You know, understanding a lot needs to play out.
Yeah, I mean, you know, as I think about it, I've been fortunate to work in I&I at Biogen for 12 years through the ebbs and flows. What you can see, especially under Chris's leadership, is a diversification of our portfolio. Obviously, one of the great benefits about targets in I&I is they have multi-indication potential. They have the ability to generate proof of concept data, sometimes in weeks or months rather than years. You know, I think we'll continue down the path we have of making select investments where we really appreciate the science and find a disease where there is less saturation and substantial unmet need. Ultimately, that just brings more balance to the portfolio that we have.
I think the future is bright for I&I at Biogen, starting with the lupus readouts end of year and going into next year with Felza for AMR.
Perfect. Adam, thank you so much for joining us.
Yeah, thanks very much for having me.