Welcome, everyone, to the Jefferies Global Healthcare Conference. I'd like to introduce Dr. Barry Quart and Connect Biopharma.
Thank you, and thanks for the opportunity to present today. It's great to see everybody came in early this morning. We'll start with the usual forward-looking statements. Please see our SEC filings for a full description of risks. I'm here really to talk about Connect 2.0. This is a new rebirth of the company. A year ago, an entirely new management team came in with much more experience in drug development and regulatory activities. I personally have taken nine drugs through development to U.S. approval. The goal was to refocus our attention on the lead program, rademikibart, which is a next-generation IL-4 receptor alpha monoclonal antibody. Think of it as a second-generation Dupilumab. We are very focused on moving this product forward in a very novel approach and taking advantage of some of the observations that were made in a large phase 2 asthma trial.
I also wanted to highlight that over the course of what's now somewhat less than a year, but a very busy one, we have been moving quickly to move the company to be much more U.S.-centric, with recently filing our first 10K and 10Q. Looking at the opportunity with rademikibart, one of the things that we identified in the phase two trial, and I'll show some of that data, is really a profound improvement in FEV1, which is what we use to measure airway function. It looks to us to be amongst the largest seen with a biologic in an asthma trial. What was particularly notable is that the onset of effect was within less than 24 hours. That opens up the opportunity to evaluate the product in a different approach than the usual chronic asthma or potentially COPD studies.
There are over a million asthma patients and over 1.3 million COPD patients who visit the annually because of an acute exacerbation. There has been essentially nothing done for these patients in the last 20 years in terms of innovation and new drug development. We think there is a great opportunity for rademikibart to have an important effect in terms of the acute exacerbation and then continuing, because a single dose will last for a month, continue to work to reduce what we see as a very high rate of either worsening or a second exacerbation in the 28 days after that initial index exacerbation. This is a complete white space when it comes to indications. None of the biologics currently approved for asthma or COPD have an acute indication.
In fact, they all say explicitly, "Do not use to treat an acute exacerbation." The opportunity here is to have a very novel indication. We found in market research that that novel indication drives a significant amount of chronic use as well. One of the great things about doing an acute study is that they are much faster and much cheaper. We have the opportunity to generate significant data, what we think will be a major inflection point for the drug and the company in really a very short period of time compared to the usual chronic studies. This is a snapshot of what's been done with rademikibart. The bottom shows the completed trials. As you can see, it's been evaluated in the typical indications for an IL-4 asthma and atopic dermatitis.
We have a significant partnership in China with a large pharmaceutical company Simcere, They are moving forward in both of these indications. While, as I noted, we're focused on moving the product forward for the acute use before we move into chronic studies for asthma and COPD. We want to nail down the acute opportunity and then hopefully move forward into phase three more efficiently by working both of those indications together. I'm not going to go through this whole slide. It's very dense. I think, again, the key thing is to remember large numbers of patients, very large market opportunity, and many, many patients, when they have an exacerbation, either worsen in the first week or come back within four weeks with a second episode. About half the patients. An opportunity to really have an important benefit for these patients.
There is a lot of them with, again, over a million emergency department visits for asthma patients and over 1.3 million for COPD patients. Large numbers in the U.S., large numbers in Europe, remarkably similar numbers, actually, in terms of those that go into the emergency department and that are hospitalized. We see this as a global market opportunity. We own all rights outside of China where we've licensed the product to Simcere, as I mentioned. One of the things that I already noted is that getting this acute indication had a really pronounced effect on how clinicians indicated they would use the product. They were very excited to consider using the product acutely with a 40%-45% preference share.
What we found most interesting is that when the product was used acutely, their preference for using it chronically in a patient who did well, which we expect hopefully most of these patients will do well after acute administration, 75% preference share for moving that patient on to chronic treatment, which is an enormously large opportunity given that this is a reasonably crowded market. The opportunity to have that level of preference share in a crowded market was really quite phenomenal. Just moving quickly, I'm not going to go into the mechanism. Well-understood target with going after IL-4 allows us to block both IL-4 and IL-13. The drug was studied in a previous phase 2 trial in chronic asthma patients, pretty classic trial, looking at two different doses. All patients received a 600 mg loading dose to start and then were followed for 24 weeks.
This is the FEV1. This is the primary endpoint. You can see that one of the things that was done a little differently in this trial versus other studies is that the company had the patients come back in one week to measure their FEV1. At one week, you see a really profound improvement of almost 250 mL at that one-week time point. When I got into the company, one of my first questions was, can we get more granular? I do not think all of this benefit started on day six. When did it actually start? It turns out that there was data from home spirometers available. We were able to find that over 70% of this one-week benefit was obtained in less than 24 hours. 100% was obtained within and on the second day.
Really a very rapid onset, which then opens up the opportunity for evaluating the drug in this acute setting. One of the things that I think everyone has learned in the field is that these biologics work in patients that have an underlying T2-mediated asthma. They do not work in patients who do not have that particular kind of asthma. We are looking here specifically at people with elevated eosinophils, which identifies the right kind of patient. You can see a very dramatic improvement here in FEV1. As you get a higher eosinophil count at baseline, you have an even more pronounced improvement.
One of the things that we were able to do, kind of following in the steps of what was done with Dupilumab, was to call out of this data set COPD-like patients and to give us a sense for are we likely to see a benefit in COPD from the mechanism we would expect to. We wanted to just reconfirm that. As you can see here, very dramatic improvements in FEV1 in this population. That led us to meet with the FDA, agree on a set of studies to start evaluating the drug in the acute setting. What we call CBREST in asthma and in COPD. Two parallel trials, 160 patients each. Both of these studies have started enrolling patients, or at least we started the sites. We anticipate data in the first half of next year.
One of the benefits of having a short-term study is obviously we have the opportunity to get data much more quickly. The goal here is, again, to assess the patients acutely. These are patients who are having an acute episode. We want to see, do we show improvements in FEV1 in these patients? Do we reduce the number of people who become hospitalized? If they are hospitalized, do we reduce the duration of stay? Length of stay is always a gold standard for hospitals to determine whether or not the drug's going to help save money for them. Another area where we can show the product will reduce cost to the hospital is we'll be looking at how many of these patients come back to and come back to be hospitalized in the next 28 days.
As I mentioned, there's actually a very high proportion of patients based on a recently published study called the ABRA study in the U.K. About 50% of patients either have a worsening or a second episode in four weeks. In this particular trial, they used Benralizumab acutely. What you can see is, first of all, this gives us a great snapshot of what we expect the control group to look like. Secondly, you can see very clearly that there's really no separation between the curves for the first three weeks, which is pretty consistent with the long half-life of Benralizumab, where we've demonstrated, as I showed you previously, our drug starts working essentially overnight. This is a cross-study comparison, obviously. Understand that these are not head-to-head randomized trials.
The point here is over to the right side, looking at placebo-adjusted FEV1, particularly in the right kinds of patients. You can see, as I said, we see from the data, it looks like rademikibart produces amongst the highest improvements in FEV1 across the drugs that have been the biologics that have been evaluated in asthma, the different classes that are represented here. We think that the IL-4 target is certainly the best. Amongst the IL-4s, we believe we have the best product. That is both from the efficacy as well as a differentiated safety profile, which I wish I could say this was designed into the product, but it is just a serendipitous observation.
One of the things that's observed with Dupilumab is an increase in eosinophils over the first 8-12 weeks, resulting in some patients who start with high eosinophils—remember, that's the target population—people with high eosinophils getting to much higher levels and potentially toxic levels. As you can see here, with rademikibart, we actually see a decline in eosinophils and a decline in the % of patients reaching these higher levels. So a differentiated safety profile. We had a presentation at American Thoracic Society a few weekends ago and had four posters, one of which was looking at the structural biology. Clearly shows that we hit different epitopes. We bind differently to the receptor. We think that probably is related to the differences in potentially the greater improvement in FEV1 and the difference in the safety profile.
When we take a look at kind of how far the product has progressed and how ready it is to move into larger-scale trials, I just wanted to highlight that we already have a commercial process that's been replicated numerous times at a U.S. contract manufacturer. We have an improved process that will allow us to be able to price this product in the hospital setting at a price point that we believe that we'll see no significant obstacles in getting it used. As I noted from the market research, the more it gets used acutely, the more it will get used chronically based on the surveys. We are working towards transferring this improved process to our U.S. CMO. Hopefully, we'll be manufacturing the cheaper product within the next year. As I've already highlighted, we have the phase two data already completed.
We met with the FDA with the prior phase two chronic data, received the go-ahead to move into phase three. This is a phase three-ready product. We have put that on hold until we complete these acute asthma and COPD studies. Of note, we also have clearance to move forward into phase three with atopic dermatitis. In that setting, we are waiting for our partners in China to complete their large phase three atopic dermatitis study next year. We can take that study and go back to the FDA and talk about how we can hopefully streamline the amount of new data necessary to get an approval. Exclusivity, we have long patent life. With the patent term extension, we anticipate exclusivity past 2040.
Just kind of summarizing, again, we have a differentiated product, very rapid onset, excellent overall safety profile with a very significant commercial opportunity, one where there is currently no competition. As far as we know, no one is doing development of their drugs in this setting. The reality is the biologics coming behind us are generally focused on longer duration, which is the opposite of acute use. When you have something that's got a very, very long half-life, it usually takes longer to see an onset of effect. An opportunity for a multi-billion dollar commercial product with both acute and chronic indications. When the new management team joined last year, we set our targets on moving the product forward, getting agreement with the agency in terms of a pathway. As I said, turning the company into a more U.S.-centric organization.
Our headquarters is now in San Diego. With our filings recently, we essentially should look like any other San Diego-based biotech, even though the company was originated in China. We have been able to really hit almost all of our targets. At this point now, it's just enrolling and completing the two phase 2 trials is the last important activity we're working on. Of note, we should be receiving, as I said, data from the large phase 3 AD study sometime next year as well. Probably a year later for the phase 3 asthma study going on in China. Last but not least, one of the attributes of the company that we found very attractive was that it had enough cash on hand to be able to execute on the plan and still have a cash runway into 2027.
We are currently, as I said, moving as quickly as we can to execute the two phase 2 acute studies. We'll get the data hopefully as planned first half of next year. We have a runway into 2027. With that, thank you very much. Happy to take any questions. Sure. Is there a microphone? I want to make sure that it gets recorded. Sorry.
Thank you for this nice presentation. I would be interested in knowing what the development cost will be until you reach marketing authorization with this product. What do you expect in expenses for the development? [audio distortion]
Yeah. The development cost of that really is a great question. It really depends on what pathway we ultimately take. For example, the acute indications, the studies that we are currently working on, we've powered those studies about 85% plus to have a statistical outcome. If we're right, then a phase three study would not have to be particularly larger than those studies. Those studies are around $13 million each. Depending on where the biotech market is a year from now, what's the opportunity in terms of partnering in the product, there certainly would be one pathway of just developing the product for the acute indication first. That would be the most rapid opportunity because as I said, basically, it's a year from beginning to end in terms of the acute studies.
We think that there's certainly a regulatory pathway to get the product approved for just that. If there's adequate partnering opportunity and my whole goal is non-dilutive dollars or hopefully a potential acquisition, which eliminates the need for dilution. If there's an opportunity to take a much broader approach, then one could do acute and chronic program together. Chronic studies, they are $100 million-$150 million for a program. I think that you're looking at $50 million. I'm just throwing a ballpark number, $50 million for development of an acute indication, probably $200 million if you want to do both acute and chronic. Obviously, both acute and chronic, much greater commercial opportunity. The acute we see as having the opportunity to profoundly change how patients are managed worldwide. There are some opportunities to see very rapid onset of effect in these patients having acute exacerbations.
This could be very broadly used ultimately. That'll take some time. There's certainly that opportunity to change the GINA guidelines and to really see the product and a biologic that has these characteristics used very early. We know that there's price limitations in the hospital. The outpatient setting is definitely more commercially attractive.
Thank you for this comprehensive answer.
Is there a precedent for the acute and chronic in the same study? How did that thinking come about? What maybe doesn't the market get about someone who could potentially be in phase three affordably, I guess you could say, in the near term?
Great question. There's no precedent for acute indications at all in this market. With a biologic, there's never been a biologic that has been studied acutely in a systematic fashion to get an indication.
There has not been any indications achieved. The FDA does not have, "Here's the guideline and what you have to do to get an acute indication." We have a good sense from extensive discussions with them. There is no clear pathway for the acute. We think there are some pros and cons to potentially running these together. I am not suggesting necessarily it would be the same study. Right? Could be. There are pros and cons to that as well, which is a much longer conversation. Certainly, when you are set up at a facility where you are recruiting patients, having both protocols running together would be a more efficient way of generating the studies than doing one program entirely separately from the other.
It seemed to us that, number one, given the economics of raising money today and my being allergic to dilution, if we can avoid it, the goal is to generate this hopefully transformational data from the point of view of how people see the product and then be in a much better position to go forward either partnered or independently for both programs. Thank you very much. Appreciate your attention.