Ladies and gentlemen, thank you for standing by. Welcome to the Connect Biopharma conference call. At this time, all participants are on a listen- only mode. After the speaker's presentation, there will be a question- and- answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I would now like to turn the conference over to David Szekeres, President of Connect Biopharma. Please go ahead.
Thank you. Good morning, everyone, and thank you for joining us. With me today from Connect are Barry Quart, Chief Executive Officer and Director, and Kimberly Manhard, Executive Vice President and Chief Development Officer. For those of you participating via conference call, the slides are made available via webcast and can be accessed by going to the Investor Relations page of our website following the conclusion of today's call. Before we begin, I would like to remind you that this call will contain forward-looking statements under applicable securities laws.
These statements involve substantial risks and uncertainties and include statements concerning the top-line results we are announcing today, the timing and content of additional data analysis and future data presentations, our anticipated regulatory strategy and interactions with the FDA and other health authorities, the design, initiation, timing, and results of future clinical trials, our cash runway and anticipated use of capital, and our future expectations, plans, prospects, corporate strategy, and performance. Actual results may differ materially from those indicated by these forward-looking statements due to various important factors, including those discussed in the Safe Harbor slide, the press releases issued by the company today, and our filings with the SEC. Forward-looking statements represent our views only as of the date of this webcast and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update these statements.
Now, I will gladly turn the call over to Barry.
Thank you, David. Welcome, everyone. Thank you for joining us this morning. I would like to specifically thank Dr. Surya Bhatt for being on the call with us. Dr. Bhatt is director of the University of Alabama at Birmingham, UAB, Center for Lung Analytics and Imaging Research, and the lead author on both dupilumab phase III COPD studies published in the New England Journal of Medicine. We are very excited to have this opportunity to review with you the exciting results of the Seabreeze STAT COPD study. Overall, we achieved our primary objective and several important secondary objectives, demonstrating that rademikibart significantly reduces the number of patients returning to the hospital or emergency department for additional care in the month following an exacerbation. In fact, we achieved an 81% reduction in treatment failures, 85% reduction in new moderate to severe exacerbations, and 100% reduction in ED visits and hospital admissions.
While the study did not achieve the secondary endpoint of day seven FEV1 improvement, we did see robust improvement in FEV1 at week four. As observed in the asthma study, rademikibart continues to be remarkably well-tolerated. I will not spend a lot of time on the design study, but I do want to note that we used the same general design and similar entry criteria as the ABRA study out of the U.K., which studied benralizumab in asthma and COPD patients experiencing acute exacerbations. Our study was also powered based on the ABRA study with an expected 45% treatment failure rate on placebo and a 50% reduction on active. Here is the schematic of patient flow. We screened 325 patients in order to enroll 159. 81 patients on placebo, 78 patients randomized to rademikibart. Here is the breakdown of baseline characteristics.
There is a relatively high rate of current smokers, which likely resulted in lower FeNO than observed in the asthma trial. Similar to the asthma trial, enrollment in the COPD study went quickly in Eastern Europe, resulting in a high proportion of patients coming from Serbia and Georgia. Different than the asthma trial, we achieved a higher treatment failure rate, more commensurate with the rates we identified in our recent claims database study. Although lower than observed in the ABRA study. Fortunately, our treatment effect size was much larger than we used for powering the study, resulting in a game-changing 81% reduction in the rate of treatment failures with rademikibart compared to placebo, with a p-value of 0.0122. The majority of treatment failures observed with placebo resulted in either a hospital admission or an emergency department visit. The remainder were unscheduled medical visits or intensification of pharmacologic treatment.
With rademikibart treatment, there were zero hospitalizations or emergency department visits for treatment failures, and only two unscheduled medical visits. The seven hospitalizations or ED visits on placebo versus zero on rademikibart is also statistically significant with a p- value of 0.0137. Based on 2025 claims data, the reduction in hospital admissions and ED visits would have a huge economic benefit, which we will discuss later in the presentation. A Kaplan-Meier graph of treatment failure shows the separation beginning between the arms in two weeks and increasing through four weeks. Within the patients experiencing a treatment failure, there were seven exacerbations in the placebo group compared to one in the active arm for an 85% reduction, p equal 0.0301.
Just for clarity, treatment failure is a broader category than new exacerbations, as it includes patients whose treatment is intensified, or they may go to an ED or hospital due to worsening of their index exacerbation. Although these latter patients are obviously very important, in this table, we are only looking at the exacerbation endpoint, which would be used in a chronic treatment study to obtain FDA approval for maintenance therapy. Different than asthma patients, we see little difference in post-bronchodilator FEV1 improvement in the first week of treatment. Both groups improve approximately 120 mL. As a reminder, while we normally use pre-bronchodilator FEV1 change to isolate the effect of drug therapy, in the Seabreeze STAT studies, patients immediately get bronchodilator therapy as soon as entering the ED, and it would be unethical to withhold standard of care.
Therefore, by default, we have to use post-bronchodilator assessments, where patients receive the bronchodilator immediately before spirometry, making it more difficult to see a difference between arms. By week four, however, we do see a clinically meaningful increase in 70 mL in FEV1 with a single dose of rademikibart. Beneficial effects of a single dose is gone by eight weeks. Of interest, we also evaluated use of rescue inhalers. We see a separation very quickly and a significant reduction with rademikibart in the need for rescue inhalers by week two, which is maintained through week seven. Exacerbation of Chronic Pulmonary Disease Tool, or EXACT-PRO, is a validated patient-reported outcomes measure designed to assess the frequency and severity of exacerbations in patients with COPD. It consists of 23 items that capture symptoms and impacts on daily life.
EXACT-PRO has been an important secondary endpoint in the phase III programs of numerous approved drugs, including OHTUVAYRE. Rademikibart significantly improves symptom scores by week one, with important differences observed through week four. The next two slides cover safety, which are entirely unremarkable, with fewer AEs and SAEs on drug than placebo. Of particular note is the substantially lower rate of SAEs on rademikibart than observed with placebo. Slide 15 breaks out the individual SAEs and adverse events of special interest. The most common SAE in the placebo group was exacerbations, confirming the previously noted significant reduction in exacerbations with rademikibart. There was one unrelated death of a patient randomized to rademikibart after 37 days in the study. Of note, there was also a death in a patient pre-randomization during screening in this population.
We recently engaged Komodo Health to generate a contemporary picture of the COPD market as it was in 2025 based on actual claims data. The results were remarkably positive for a product with rademikibart's profile, with approximately 1.6 million ED visits in the U.S. for acute COPD exacerbations in T2 high patients in 2025. There is essentially zero biologics penetration into this acute market and still very low penetration into chronic COPD market as well, leaving a massive untapped market. Approximately 1.6 million ED visits in 2025 by T2 high COPD patients flows into three buckets. The slides provide the percentage of each bucket who returned within 30 days based on actual claims data and associated costs. From that, we can calculate the total cost for patients returning to the ED or hospital and how much can theoretically be saved by reducing returns.
Different than asthma patients, the largest group of patients are those admitted to the hospital. These patients have the highest rate of returning to the ED or hospital within 30 days from the initial exacerbation and the highest cost of treatment. These patients would have the most benefit from rademikibart treatment. The middle group are patients who are held in an intermediate unit where the patient can be observed to see if they are improving and can be discharged or admitted if they fail to improve sufficiently. They also have a high average cost for post-discharge treatment. The second-largest bucket are patients who are treated and released. Even these patients, the rate of return within 30 days, and the average cost per patient of almost $2,000 for the 30 days post-discharge, making them an important future target for rademikibart treatment.
The total cost of treating all of these patients for the 30 days after the index exacerbation was approximately $6 billion in 2025. We believe a large portion of these costs could be saved by early treatment with rademikibart, based on our trial, with 100% reduction in ED visits and hospital admissions for COPD within 30 days after randomization. We achieved an 81% reduction in treatment failures, 85% reduction in new moderate to severe exacerbations, and 100% reduction in ED visits or hospital admissions. While the study did not achieve the secondary endpoint of FEV1 improvement, we did see robust improvement of FEV1 by week four. As observed in the asthma study, rademikibart continues to be remarkably well-tolerated.
Lastly, the potential commercial opportunity for rademikibart in COPD is far greater than previously appreciated based on recent claims data, with an opportunity to keep patients out of the ED and hospital, reduce the need for steroids, and reduce healthcare costs for these patients by billions of dollars. With that, we are happy to entertain questions. Operator?
Thank you. Ladies and gentlemen, as reminded, to ask a question at this time, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, simply press star one one again. Please stand by while we compile the Q&A roster. Now first question in queue coming from the line of Olivia Saunders with Cantor Fitzgerald. Your line is now open.
Hi. Good morning, guys, and thank you for the question. How are you thinking about the pivotal design from here for both acute asthma and also acute COPD, just given the differences in FEV1 that you are seeing between the two indications? What do you think actually makes the most sense for a registrational endpoint strategy? Does today's data around the 7-day FEV1 endpoint change how you think about using FEV1 as a primary endpoint either for asthma or COPD?
Yeah. Thanks, Olivia. I appreciate the question. Certainly does not change our view in terms of FEV1 for an acute asthma program, which we have indicated previously is our number one priority. It is a clear path in terms of our view of a registrational program utilizing FEV1. Asthma patients, as you know, have a much greater response to both bronchodilators and biologics than COPD patients. FEV1 is certainly a utilized regulatory endpoint. So we would still plan on going to FDA later this year to talk to them about a phase III acute program in asthma utilizing FEV1. COPD patients, a much more challenging population to show FEV1 improvements. A lot of these patients are completely resistant to bronchodilators as well.
We are in a situation, as already noted, where we are maximizing bronchodilator treatment right before we give drugs, so we are trying to see an improvement on top of that. In this particular setting, obviously FEV1 is not quite as useful as an endpoint in that first couple of weeks. We do have several different secondary endpoints where we do see substantial benefit and statistically significant endpoints. Obviously overall, in the one month, a very significant improvement in treatment failure and exacerbations. So we will go with that information to the FDA and talk to them about the opportunity of using some of the other secondary endpoints that we obtained data on in this trial as a potential endpoint. But we are also not going to completely give up on FEV1. As you know, OHTUVAYRE utilized the area under the curve of FEV1 for their primary endpoint.
Using area under the curve over the dosing interval would give us a very strong opportunity to show a statistically significant difference based on the 4-week data in this trial. So there is certainly an opportunity to have that discussion with the agency. I am sure that we will have a very positive response from them based on the data we obtained. They acknowledged in our previous meeting that this was a clear unmet medical need. I think we crushed the endpoint. So now is the question of working out a resolution with them on what is the path forward.
Okay. Thank you, Barry. Appreciate it.
Thank you.
Thank you. Our next question coming from the line of Thomas Flaten with Lake Street Capital Markets. Your line is now open.
Good morning. Thanks for taking the question. Barry, with respect to the study enrollment from a geographic perspective, this is pretty similar to what we saw in the asthma study, maybe a little bit less Eastern European concentration. When you are planning for phase III, how do you think about maybe trying to skew the enrolled population towards more of a U.S., Western Europe population? Do you think the data holds up on a read-through basis that you could achieve similar effect with a slightly different population?
Yeah. Thanks, Thomas. Appreciate the question. We certainly learned a lot from the phase II program in terms of regions to go again and regions possibly to avoid for phase III. We also learned that in terms of how to enroll patients more quickly in the United States, it's really the large academic centers that are going to be the most prolific enrollers. They take a lot longer to get on board. The contracting negotiations can take months and months. Fortunately, we've already spent that time now and have agreements with many academic centers. Starting up phase III, we already have in place agreements. We're very confident that we'll have a much faster start in the U.S. than we did in the phase II program. We'll add further academic centers going forward.
We'll certainly do everything we can to shift the curve in terms of where we enroll patients.
Got it. You've mentioned in prior conversations that from a prioritization and capital allocation perspective, you would lean towards asthma rather than COPD with your own money, if I can put it that way and potentially partnering COPD. Can you just walk us through the logistical challenges of partnering out one indication versus both at the same time? I'm kind of trying to think that through from a longer-term commercial perspective as well.
Yeah, sure. I think just for greater clarity, when we talk about that we plan on moving forward with the acute asthma program on our own dime, that obviously is a smaller, less expensive program than a COPD program. We would be looking for partnering. It's not so much partnering, separating out the two programs. It's just that we feel like we can get moving on our own quickly with asthma while we're in discussions with potential partners. That always takes an indeterminate amount of time. Then ultimately reach an agreement on a commercial partnership or another potential transaction that would allow the funds for COPD development to come out of somebody else's deeper pockets. We wouldn't plan on separating the two.
We want a commercial entity that is going to focus on selling rademikibart in hopefully all territories outside of Greater China, where as you know, we already have a partnership, but we would like to see somebody selling it in all of those territories for both asthma and COPD.
Got it. Thanks for the clarification, Barry.
Thank you.
Thank you. Our next question coming from the line of Brandon Folkes with H.C. Wainwright. Your line is now open.
Hey, Barry. Thanks for taking my question and congrats on the data here.
Thank you.
If we just look at the FEV1 challenges in COPD patients historically, right? Then we look at the statistical significant effect on treatment failure in the COPD population. Take a step back to the asthma data. How much more confident does today's data give you that you can actually reach the treatment failure endpoint in asthma in a phase III trial just through whether it be trial size, powering, enrichment or just a placebo arm closer to the historical claims data? Thank you.
Yeah, thank you. Great question, Brandon. Look, I think hitting the endpoints here as strongly as we did gives us even greater comfort in terms of our ability to hit treatment failure, decrease in exacerbations in an asthma trial as well. We think that for the acute setting, FEV1 is still the fastest measurement that we can show benefit in. If the FDA came back and said, Hey, we want to see treatment failure in 30 days, I don't think we have any concerns about doing that in asthma. As we talked about, we just missed it. Now with confirmation in COPD, when you have a higher background rate, we don't have any problem hitting it.
We adequately power the study if we had to do it in asthma. We've learned which territories maybe we wouldn't go back to from the treatment failure perspective, and you'll have to wait for a scientific poster for that one. But we certainly learned how to increase the background rate just by where we enroll patients. I don't think we have any concerns if we needed to hit that. But overall, between the two studies, I think that we have great confidence that from a perspective of a chronic study where exacerbation rate is the required endpoint generally, that with the results we've seen so far, we feel extremely confident.
As I might point out, we saw a 65% reduction in exacerbations in the prior phase II study in asthma that we feel very confident that we will crush that endpoint in a chronic study in either asthma or COPD. That's an investment that certainly makes a great deal of sense down the road. Again, hoping somebody with deeper pockets is the one who's spending those dollars.
Great. Thanks very much.
Thank you. Our next question coming from the line of Julian Harrison with BTIG. Your line is now open.
Hi, this is [Andrew Caston] on for Julian Harrison. Congrats on these results and thanks for taking our question. First, do you expect to have a consolidated set of interactions with the FDA for acute asthma and COPD, or will they be separated for each indication?
We're still in the very early stages of making a decision on how best to present the information to the FDA. The COPD data is really hot off the press. We haven't made a firm decision yet in terms of will we go and ask them questions on both simultaneously or possibly have a short period in between so we can get their 100% mind share on each potential indication. Still working that out. Definitely will be happy to answer that over the course of the next few weeks as we will be submitting the meeting request here coming up soon. Good question. Working with a lot of outside experts who ex-FDA Pulmonary Division folks, trying to make sure that we handle this as correctly as we can.
Got it. Just on the potential size of each of the programs for acute COPD and asthma, what do you expect in terms of potential enrollment numbers and on the sizing there?
Sure. Again, the sizing is going to be based on the two main considerations whenever you're dealing with FDA, and that's how many patients we need to reach the statistically significant endpoint and then how many total patients do we need for safety. From the safety perspective, we have over 2,000 patients already treated with rademikibart, really a remarkably clean safety profile as noted. We have another phase III asthma study coming out of our partner in China early next year providing both efficacy and safety data. We'll have to negotiate with FDA how many more patients they'd like to see from the safety perspective. From the efficacy perspective, if we are looking at for asthma FEV1 endpoint we'll probably do larger study than the phase II, but not dramatically larger study in order to have a very well-powered study for FEV1.
From the perspective of COPD, once we come to an agreement on the endpoint for the acute indication, that's going to drive the patient numbers. That's a little harder to project at this point.
Thank you.
Thank you.
Thank you. Our next question coming from the line of Thomas Smith with Leerink Partners. Your line is now open.
Hey, guys. Good morning. This is Brian on for Tom. Congrats on the data, and thanks for taking our question. Just on the study of the IV formulation, as we look ahead towards engaging with regulators on a potential phase III for the sub-Q, can you just comment on the status of the IV study and whether you may be able to leverage any findings there for your ongoing discussions with the agency? Thanks so much.
Yeah, thank you. Yeah, we didn't touch on it in today's presentation. The study that we just reported, both Seabreeze STAT studies, both asthma and COPD, use subcutaneous administration. That's the administration that's been used in those over 2,000 patients historically. That's the discussion we'll go to the FDA with. But in parallel, we have recently begun moving forward an IV formulation, which would be ideally suited for treatment of patients in the ED and hospital. It gives us the opportunity for lower pricing in the hospital setting, very easy to administer, and allows for drug levels to be achieved very quickly versus subcutaneous administration, which has about a six-day Tmax. We expected to see, and we did see in our small IV study, much more rapid onset of effect.
We have ongoing phase II, looking at larger population of patients having both asthma and COPD exacerbations utilizing the IV formulation. We'll continue to collect that information through this year and then would go to the agency as soon as possible to talk about transitioning to that in the future, or certainly adding that, I should say, to the ultimate package insert, giving the opportunity for an ED setting using an IV in the outpatient clinic, urgent care setting using the sub-Q for treatment of an acute exacerbation. So really not locking ourselves into just hospital sales, but having the opportunity for acute treatment elsewhere. We probably have enough data there late this year to be able to work out a plan for moving that forward.
Got it. Thanks so much.
Thank you. Our next question coming from the line of Mazahir Alimohamed with Oppenheimer. Your line is now open.
Thank you. Thanks, Barry. Thanks for taking our question. One on reimbursement. If rademikibart is given to hospitalized patients, it may fall into the DRG bundled payment. I guess on that, three pieces. One, how are you thinking about pricing and access in that setting? Two, the new CMS's new technology add-on payment, which it does pay hospitals extra for qualifying new drugs, would that be an avenue that could be pursued with rademikibart if approved? The third one is, we're trying to just think about the ED visit, and if you come in and just got dosed in the ED visit and then discharged from the ED, could it be billed separately under Part B in that situation? Thanks for taking our questions.
Sure. Thanks, Mazahir. Appreciate it. Pricing is something that we've discussed previously when we first noted our work on the IV formulation. One of the opportunities with having an IV presentation, which is both a different route of administration as well as a different dose, we would have the complete flexibility to price that differently on a milligram basis. That's one of the things that we find very appealing about it in the hospital setting, where we understand that we're running up against a DRG ceiling in terms of how much the hospital's going to be willing to pay. With that IV formulation, we would be able to charge an amount that based on our interactions with payers and hospital pharmacy would be very comfortable under the DRG, but still be a very high profit item with normal pharmaceutical margin.
I think that the IV is really beautifully suited to allow the product to be used within the constraints of how much reimbursement there is, not have to deal with the new technology payments, which tend to be very problematic and certainly in the past not utilized nearly as much as they should be, just because the hospitals frequently didn't have the mechanism for going after those dollars and the pharmacy never saw them, and so they were quite recalcitrant about using these very high-priced products. Pricing and reimbursement, something very keen in our mind, and the goal is to have a product. I will say that we have a group in China that's 100% dedicated to process improvements in terms of the manufacturing process for rademikibart.
To improve that to the point where cost of goods allows additional flexibility in terms of appropriate pricing in the population. The last thing I will point out is that the claims data certainly provide a very strong health economic argument for hospitals that with an appropriately priced product, it would be a no-brainer for them in terms of their potential cost savings of not having that patient return in 30 days where they do not get a second payment. To avoid that, I think is going to be extremely attractive, and that is the feedback we have gotten from payers and hospitals. They totally understand how much this costs them and are certainly very open to bringing biologics into the hospital setting when they are appropriately priced and the health economics make sense. Thanks, Mazahir. Appreciate it.
Thank you.
Thank you. At this time, showing no further questions in the Q&A queue, I will now turn the call back over to Mr. Barry Quart for any closing comments.
Thank you, operator. Appreciate everybody's participation today. Thank you for joining and look forward to keeping you updated in the future. Thank you very much.
This concludes today's conference call. Thank you for your participation, and you may now disconnect.