Still the morning? Yep. Good morning, everybody, and thanks for joining us for day two of the Citizens JMP Life Sciences Conference. My name is John Walden, senior analyst here, and we're pleased to have KalVista Pharmaceuticals and CEO Ben Palleiko. Ben, thanks for joining us.
John, thank you for the invite. It's always nice to be here, and really happy to be at the conference today.
This is, I think, one of the coolest areas in biotech, hereditary angioedema, because it's a rare disease. We've got a lot of drugs that are available now for patients, so it shows that the industry can, you know, make things available and sell well. Now it's becoming a more interesting competitive dynamic because there's so many options out there for patients and physicians, and now you guys are part of that story. Talk to us a little bit about kind of the history of KalVista and where you guys are today.
Sure. Yeah. You hit it on the head. HAE is really interesting because it's a disease that, you know, 20 years ago had really no great options, and now you've got a lot of great, really good options and, you know, they get better every day. KalVista was founded in 2011, and really as a scientific specialty company.
We had a particular expertise, the scientific team in working on proteases and particularly oral protease inhibitors was the skill set of the company. It evolved into plasma kallikrein inhibitors, which as we all know, is actually the mechanism of what is now EKTERLY. Fairly quickly, the company turned into a more or less of an HAE pure play.
We've done since, you know, 2017 or so really nothing but HAE. It turns out, even though we just launched the company six months ago, we launched the drug six months ago, we've been in the space probably among the longest companies around.
I mean, you know, 10 years as a company, almost, you know, continuously working in the area, which I think has really benefited us as we've come into the launch. Because to an extreme degree, you know, we've really learned about the patient population, what the needs are of this community, how to work with them.
We've really been able to work with docs and learn from them and educate them as well as the data set has come along. The longevity of this company in this space has really been a terrific benefit as we brought EKTERLY to market as the first oral on-demand therapy.
What do we know about, you know, prevalence in the U.S. these days and for HAE?
Yeah, the numbers, as befits a small disease, the numbers, you know, kind of vary a little bit. One in 50,000 is the commonly accepted number, although you sometimes see people go, you know, sort of more like to one in 35,000, so somewhere in that vicinity. It leads you to a market size, we call it right around 9,000 people.
Yeah.
We do that mostly because it sort of sits in the middle of a few different places. I've seen estimates that are a little bit lower. I've seen estimates a little bit higher. The HAEA, the Hereditary Angioedema Association, just last year published a publication that suggested it was something 10,000 or so people north of that, maybe a little bit. Something that's definitional, too. Are you including peds?
Are you including people, you know, who may not be in what typically would be a TAM? We, when we talk about it, we go with 9,000 because it seems to be reasonably accurate, and not pushing too far one way or the other.
The other interesting thing about the market is we have kind of a prophylaxis side and an on-demand side, but then there's, you know. A bunch of people in the middle of the Venn diagram. Can you talk a little bit about kind of that bifurcation and then overlap as well?
Absolutely. Yeah, we'll only talk about the U.S. here because the rest of the world is kind of a very different environment. In the U.S., around 70% of people with disease use prophylaxis. There's varying forms, and most of them have historically been injectables, although there's been an oral on the market now for the last several years. 100%, virtually 100% of people use on-demand because even people on prophylaxis generally have breakthrough attacks.
A very small proportion of people on prophylaxis go for a long time without breakthroughs. Actually, a fairly significant number of people, despite being on prophylaxis, could have very high attack rates. What's interesting about the on-demand space is it really is for everybody. There's virtually nobody with HAE in America that doesn't also have a prescription for an on-demand therapy.
On-demand is a space where there really hadn't been any innovation until EKTERLY came along. The last on-demand therapy was launched right at just over 10 years ago. So it's been a long time. Again, until EKTERLY came along, what you had was a space where the therapies are very efficacious, but they're extraordinarily burdensome.
The market leader is a drug called Firazyr, generic name icatibant, that's subcutaneously injected. It works really well, but because it's an injection, because it hurts, because of a lot of reasons, people just didn't treat enough attacks with it, and they don't treat them often enough. They only treat about 50 or 60% of their attacks at all. The other therapies are even more burdensome. They work quite well, but they are IV delivered.
You have had a lot of people in the space who historically were giving themselves IVs to treat their disease, which is obviously even, you know, dramatically more challenging to do, especially if you're trying to live an active, kind of normalized life here.
The whole premise of EKTERLY has been to bring to market a therapy that is injectable like efficacy, so it's comparable to what's out there in the space, with an absolutely pristine safety profile, but in a way that really allows people to treat their disease in a much more robust fashion, treat more attacks, treat them vastly earlier than they do nowadays, and really make a tremendous advance in the quality of their life as a result.
Yeah, 'cause EKTERLY is very appropriately coined Ecto Early.
Can you talk to us about, you know, what you guys, you know, the importance of treating an attack early and then what you're seeing now that the drug's available and in patients' hands?
Yeah. You hit it on the head. Acting early is the key of the whole thing. There are guidelines that have been published by physician groups that talk about what how people should treat their HAE. There's a fairly you know, short list of things. People are supposed to treat attacks early. If you feel attack coming on, generally you should treat.
Our trial protocol, in fact, emphasized that. We told people in our phase III study, "If you feel an attack coming on, just treat it right away." You should treat early. You should consider treating all your attacks, is one of the other guidelines, because even attacks that start off as mild can absolutely escalate to much more significant attacks.
Attacks can also kind of propagate across your body, right? It can start somewhere and escalate somewhere else. Considering treating all attacks is really important. People shouldn't just ignore an attack because it seems minor or it's in a part of their body where they feel like they can just tolerate their way through it. People are also supposed to always carry enough medication on hand to treat at least two attacks. That, of all the things, I mean, all of those are commonly ignored.
Again, I come back to the statistic, roughly 50%-60% of attacks historically are all that people have treated. With the icatibant, which again is a very efficacious drug when used properly, on average, studies have shown that people wait about 3.8 hours before they treat when they do treat.
They're delaying entirely too often. I'll come back to that in a second. Then we've also found is people just for a lot of reasons, including the fact that injectables are burdensome, IVs often obviously even more so, people just don't carry it with them. They go about their lives, they'll go shockingly far distances without carrying their therapy at all.
When you have an attack, it isn't handy. You know, you're at work and you have to go all the way home, you have to treat. It just puts friction in your life and really has a significant impact on both the severity of your attacks, which can go on for a long time if not treated properly, or just infringes upon your life generally.
Just to tie back to the early treatment, we actually showed a poster at AAAA I, which I know you were at, which was really interesting, confirming how much it matters to treat early. What the poster actually showed data based upon people treating within 30 minutes of attack initiation or after that. It has a substantial influence on the progression of the attack and the time it takes to resolve the attack.
When you mention about a half attacks historically aren't treated, and there's a bunch of different reasons. You know, what do you think of those attacks, you know, should or could be treated with EKTERLY could solve the problem of like not actually treating attack versus like, it's not that mild, I know this is gonna be okay. Even that should be treated, but do you think you're gonna get all of those people coming around?
Well, the best data set that exists on that is our open label extension study. We've conducted with EKTERLY, I think this also benefits the largest clinical trial program ever conducted in HAE. We've treated the most number of attacks. We've treated effectively attacks in all circumstances, all attack severities, all attack locations, people using all types of approved prophylaxis. Effectively anything you can think of, we've actually generated data in that subset.
When we treated something like 2,500 attacks, just to give you a sense in the study, a very, very big study, you know, what we found was that people just get to the point where they need to treat this attack, but they just don't because again, the injection hurts primarily or there's some other instance. It really, again, it really just comes back to the sort of the burden of the treatment, the fact that they're not treating early enough.
As a result, what we have shown is that with EKTERLY, they will treat earlier, and they'll also treat a vastly higher proportion of attacks. You know, the specific question you asked about just sort of how do treatment rates change. In our open label extension, we showed that people were treating something like 85% or more of their attacks with EKTERLY. Which goes to the point of that 50% or 60%. It doesn't go to 100%. It never goes to 100%, but, you know, it goes vastly higher than it is now.
When someone is going to treat an attack, you talk about injectable efficacy. What's like a typical pattern of, you know, I'm having an attack, when do I treat, and then what happens next?
In the world today or in the world with EKTERLY?
With EKTERLY.
Yeah. With EKTERLY, what we've found again, is coming back to the open label extension, people treat very, very quickly. Coming back to that 3.8 hours with icatibant that I talked about, in our open label extension, people were treating within nine minutes on average.
Children, people, kids, adolescents ages 12 to 18, who were also included in the study and in the initial approval, they were treating in something like seven minutes. Actually in the historic data for that group shows that they were even more challenged to treat it because of course, they're younger, you know, IVs. Icatibant was never approved for under age 18, so their only approved therapy is actually an IV.
Mm-hmm.
They were waiting on average for something like 7.7 hours to treat. There's been an even bigger benefit with that group.
I wanna try and like, contextualize the opportunity. You know, historically, what have we seen for sales for, you know, the acute therapies?
Well, yeah, that's interesting because you've got sales and then you've got doses and then the numbers kind of dramatically diverge. If you just looked at the market on a dollar basis, as of, you know, last year, it was something probably in total, something under $700 million in sales, which doesn't sound, you know, overwhelmingly compelling to a lot of people.
What that reflects is in a very consistent way, right around 84,000 doses being sold every year. That number has been remarkably stable. We've gone back as far as 2017, and it's been remarkably stable since then, despite the fact that since 2017, something like three or four new prophylaxis therapies have been approved.
It doesn't seem to really have been impacted at all by the evolution of therapies, which goes to, you know, for probably a few reasons. You know what, so what matters is really these 84,000 doses. They just happen to be, a lot of them nowadays tend to be generic doses because of the icatibant generic which is a much lower priced alternative.
If you actually looked at those 84,000 doses and you put a branded price on all of them, an EKTERLY price or an EKTERLY's price roughly comparable to all the other branded, on-demand therapies, so it isn't like we've premium priced it. That market size, dollar size is something on the order of $1.3 or $1.4 billion even now, without any growth, without expansion in treatment, without a lot of things that could happen, without pediatrics treating more attacks, without any of those things.
The first order market opportunity looks sort of okay. When you actually think about the fact that when you convert a person from icatibant to EKTERLY, you've meaningfully increased the TAM, the numbers get very large, quite quickly.
Because of the pricing?
Yeah, just simply 'cause the pricing.
Out of 84,000 doses, any sense? You know, you mentioned everyone should have two doses of rescue medication at all times. Are those 9,000 patients though just, you know, refilling up their stock, making sure? Like, what is it? Is it every year supposed to get new medication? Does it have a shelf life like an EpiPen? Like, there should be just like a baseline opportunity of people just following the guidelines, right?
Yeah. Right. That's 84,000 doses sold and presumably used, not just stocked, right?
Yeah.
That for 9,000 people, that would be a lot of doses to be stocking. That number's getting used. And in the data we've seen so far on the EKTERLY launch, we're quite comfortable that that's being used. The way prescriptions are typically written for folks with HA is, you know, a well-controlled patient's gonna see their doctor once, maybe twice a year, so not all that often.
Prescriptions are most commonly written for a one-year duration, and they tend to provide for an initial fill, right? You get a certain amount in your first shipment, and then typically they're written refill as needed.
People don't have to get another prescription to get it needed. They don't have to call their doctor to get it refilled. They just call the pharmacy like anyone does with anything else and get it refilled. It's very easy to get more access as you require.
Again, this is where I tie in a little bit to our commercial data, our early data, which is we're seeing, you know, that process live now for the first time. Again, our refill rates are much higher than we expected. Which is simply not explainable by just people getting a box on hand or having it.
Sitting on it.
Not expire, right? You know, we have standard shelf life, right? Pretty much for everything, it's kind of at least two years in the channel.
You know, it can go. But it doesn't. Your EpiPen example has been a common one, but the more I've seen of it, the more it feels like a less good example, because those are by definition very infrequent, episodic, you know, extreme form attacks, right?
You know, you will have occasionally stock expire before you get a chance to use it. Thank goodness for that, right? HAE is just different. HAE, these folks are having routine attacks, and they're going to treat them, so you're not dealing with this kind of shelf life expiration issue that you might see in some other indications.
You know, it's a tricky dynamic to wrap our heads around 'cause you mentioned 84,000 doses, but that's not necessarily attacks treated also.
No.
We're talking about, growing and people treating more attacks.
Yeah.
What do you think happens to like that dose number now that you guys are out there? Is it, you know, switching over or is it treating more attacks?
We gotta model this thing out, and it's. It's really very intriguing.
It's been a challenge for people. Right. Yeah. It's and I will freely acknowledge this has been a very hard thing for people to model, because a lot of time is also people trying to break down the population into attack rates. That can be a struggle.
Like there's a lot of dynamics that make it tricky. That's why we tend to just point to the 84,000 number. It's been validated multiple times. It's utterly consistent. Like it's a great base to start from. Again, you know, we're comfortable that's a fraction of the total number of attacks that are treated nowadays. That number should absolutely go higher in the presence of EKTERLY.
You know, how high does it go, I guess, depends on how much of the market converts over to orals. Fundamentally, we think oral therapies, EKTERLY is just a better product. It's just a better option. It has all the benefits of what they use now with literally none of the downsides. Our view is this market should overwhelmingly convert over time to oral orals.
I mean, it's. Whatever that means, whether that's 80% or 90% or some other number is, you know, kind of personal choice. But this market should be displaced by oral therapies. What you should see is the vast majority of those doses switch to orals. You should see increased usages by everybody treating more attacks, all the way from adolescents up, treating more attacks, sometimes meaningfully more attacks.
You start to see things where on the margin some stuff could change. People assume prophylaxis is gonna grow forever. It's gonna, you know, it's got the classic sort of attributes of becoming an, you know, this truly spectacularly enormous, in some people's minds, marketplace.
You know, I can create for you a world where people who are on prophylaxis now because it was historically the least burdensome therapeutic option, but their disease severity is such that they may not really have a lot of attacks they have to deal with. Could easily say the compliance to prophylaxis is not nothing.
A tablet a day is still something you have to do, and if you forget, you can have breakthroughs. You know, a couple injections a month is still not nothing. If you're sitting here with a certain baseline attack rate, you could easily say, "Why do I need to do this? Why do I need to do that if when I have an attack coming on, I take EKTERLY and it solves the problem, and I go about my business?" You know, the treatment burden has then been reduced substantially for that person.
Yeah, the paradigm makes perfect sense. It'll be fascinating to watch that p otential evolution. You guys are still less than a year from the launch, early innings, but things are going tremendously well. Talk to us about kind of the metrics you're looking at at this stage?
When we launched, we said that, you know, we expected growth to be fairly continuous and linear, and to date it has been fairly continuous and linear. We generally start forms would matter in the early days, right? There's just a, you know, a baseline number of people getting on drug is the first test.
We've talked fairly consistently about start form numbers and how they've gone up at a very consistent rate. We have started to say to people, however, not all people have the same the equivalent level of disease here in on-demand, as I talked about, or the equivalent attack rates.
Unlike prophylaxis, where more people is unambiguously just better, and actually what you're gonna see is as you broaden into the patient population, you're gonna be picking up people who have lower and lower attack rates over time, presumably. It isn't or at some point in the future, simple start forms aren't a great predictive measure of how the business is growing.
We've already started to say to people, "It's a useful metric. We're gonna talk about it for the near term, but there is a point at which it's probably gonna lose a lot of its predictability and that because at the end of the day, usage refills is really what drives on-demand." We already said that in Q4 of last year, refills represent the majority of our revenue.
It will be an even higher percentage this quarter and every quarter going forward. I mean, this is a majority refill usage marketplace. What you will see is start to evolve, and I'll be perfectly frank and say we haven't decided when yet, is you know, you start talking about metrics like that more so because I think that'll help people understand how the business is growing at a more refined level than simple start forms are gonna get you.
Are you seeing any, you know, typical patterns in patients starting EKTERLY early? Like, are they coming from prophylaxis? Are they switching from just acute? Yo u mentioned a little bit about disease burden, but you know, w hat are you seeing?
Certainly, the initial start, the initial pickup was by people with higher disease burden. We define someone with high disease burden as someone who has two or more attacks a month. That group of people came very early to EKTERLY. I mean, they were, they were probably, you know, the meaningful majority. You know, probably close to 60% of start forms in the first few months after launch. A very high proportion, despite the fact that they're probably, you know, something close to 18%-20% of the market overall.
Mm-hmm.
They're very much over-indexed on high unmet, I mean, high disease burden, people. What's happened as the launch has progressed is that, those people have continued to come at an above average clip or, you know, overrepresenting their percentage of the population. But the launch has broadened very nicely into people with lower disease burden as well. It's not like we're seeing fewer of them, we're seeing more of everybody else.
Yeah.
The launch has really broadened out very, very nicely. In terms of what they're coming from or what they're using, actually, pretty much all statistics mirror what's in the market nowadays. About 70% of people coming to EKTERLY also use prophylaxis.
That tends to split pretty much according to the market share of the prophylaxis nowadays, so most of them are on Takhzyro. The second most used therapy is Orladeyo, and then the other ones are all obviously much smaller percentages. In terms of on-demand, it also mirrors the marketplace. Most of the people coming to EKTERLY are coming from Firazyr or Kalbitor, right?
Mm-hmm.
You know, relatively small proportions of all the other products that are smaller in the market. It looks like it's a snapshot of the market as it stands. It just confirms that, again, I think the team has done a really good job of generating data and showing people that everyone can benefit from EKTERLY, and as a result, we're seeing everyone come to EKTERLY.
The other kind of wrinkle you mentioned that makes this tricky is that not everyone's attack period is the same or treatment pattern.
Yep.
How long before you get a sense of refill rates where, you know, like, you know, Molly from Toledo is gonna get, you know, four doses this month in perpetuity. Like, any s ense of the granularity you can get to about refill rates and how important that is?
Yeah, you're hitting on some really interesting topics, one of which does go to the point that to some degree, because HAE is a small disease, the therapies can be a little bit bespoke, right? You know, someone who has very high attack rates will be known to the payer as having very high attack rates, and so them getting more therapy will be.
They'll be aware of that. Like, the payer will know those needs and will support their requirement for more therapy. What we're seeing to date is that we went into this launch pretty conservatively in terms of our expectations on basically all the how the metrics are gonna flow.
The result, they've all flown I think much better than our initial forecast was. We thought that people would initially start with more or less one carton of EKTERLY, right? It's important to point out, 'cause this may come up later, like Quick Start is this whole separate thing that's not commercial, and people get a carton when they first get a prescription for EKTERLY.
But as soon as they switch to a commercial prescription, they get a carton of EKTERLY to start. Well, that was our expectation. They get one carton of EKTERLY to start, and then we thought they'd refill with another carton of EKTERLY after something like four or five months. You know, a few, couple, three times a year.
That was basically created using data from the Firazyr sales, which was the closest comp we had, although it's imperfect. We've gone well past all of those numbers to date. People, it turns out, on the initial fill are getting something right around two cartons of EKTERLY to start, and they're actually on average getting a little bit more than two cartons per refill.
Mm-hmm.
They're refilling in something closer to less than two months as opposed to, you know, four plus months. What's been really interesting is that you'd expect that early on in the launch when you had, again, these high burden users. That made a lot of sense.
It's continued at a very stable level, you know, all since then, despite the fact the launch has broadened out and in theory you're getting into people who have lower burden disease. One of our views is that probably reflects the fact that, again, what you've seen in the space is that people were just massively under-treating before. They're treating at just higher rates like the way they should.
With all these, you know, dynamics and refills and new people starting, rubber hits the road with sales going to the top line. Remind us of where you guys were and how we should think about 2026.
Sure. Yeah, I mean, the partial quarter ended September 30th, it was right around 13. The fourth quarter of last year was right around 35, which was meaningful, I think, higher than anybody expected. We've been pretty clear saying that some of that there was some amount of pull forward in the fourth quarter, we think.
You know, whether that was people stocking up a little bit in anticipation of the holidays. Certainly the specialty pharmacies, you know, kind of make sure they end the year with enough inventory on hand. You know, there's definitely a little bit of pull forward in the fourth quarter. That said, you know, the growth continues to be consistent since then.
We don't give guidance at this point in the cycle, but the trend lines look as they have, you know, since the end of the year. Certainly the Q1's got some weather impacts that I think as everyone has suffered through. I mean, it's important to point out that these folks are generally seen by allergists. They're generally have to go for an in-person visit to get a prescription. Also, everything an allergist writes requires a prior authorization, including all their HAE therapies. If offices are closed, prior authorizations aren't getting processed. That does definitely have some impact on days when the weather's bad.
Yeah.
It is quite interesting to us that days when offices are closed, you definitely notice it in the numbers, but the fundamentals are that days that the offices are open, everything continues to look quite solid. You guys are just scratching the surface. We talked about all these interesting dynamics that make it a little bit challenging, but also makes it r eally fun to watch moving forward.
It's a really cool drug, a really cool option for patients. You guys are doing really good work. Thanks for coming and joining us and telling us about the progress, and we'll look forward to seeing how well things go for the rest of the year and moving forward.
Thanks again for having us, John. Thank you.
Thanks, Ben.