Welcome everyone to the 42nd annual JP Morgan Healthcare Conference. My name is Anupam Rama. I'm one of the senior biotech analysts here at J.P. Morgan, joined by my squad, Malcolm Kuno, Priyanka Grover, and Lorea Hall. Our next presenting company is Kiniksa, and presenting on behalf of the company, we have CEO Sanj Patel. Sanj?
Thank you, Anupam. Always a pleasure, and thank you to JP Morgan for hosting us today. It's good to be here and see all of you in person. I'm joined by a fabulous team. I must say, they've helped us position ourselves for both near and long-term growth. Today, I'll provide a corporate overview, also our strategy moving forward, our commercial execution with ARCALYST, as well as give you an overview of our portfolio. Please note, I will be making forward-looking statements today that are subject to risks and uncertainties. A review of those statements and risk factors are found on this slide, as well as under the heading of Risk Factors in our SEC filings. This is what Kiniksa is all about. The patient on this slide is Anna, and she suffers from recurrent pericarditis.
It's our goal to help many more patients like her by providing life-changing therapies. I'm gonna show you a short video of just some of the patients that we've been able to help to date, as well as just how serious and debilitating this disease is.
I usually start off getting pain. It's usually in my left side. Eventually, it will start sort of radiating through my back. It makes it difficult to breathe, speak, just doing any activities. I can't sleep because lying down, it hurts so much.
I would get a flare. I would be so sick. My children would be off at school. I would be on the couch. They would come home from school, and I would be on the couch, and, you know, they would see Mom sick a lot, too much. I would miss my children's school events. I would miss birthday parties. I would miss holidays.
I missed out on a lot of time with my kids because I couldn't give them the attention that they deserved.
I don't normally feel depressed about things, but when it's something like this that feels like it's the end of the world, it affected my life and affected my, my mental health considerably. Pericarditis flare is absolutely one of the worst pains I've ever had in my life.
Thank you for watching that. We are building a generational company by acquiring, developing, and commercializing our assets. The company was formed just eight years ago, and we focused on creating significant optionality. We acquired programs that had differentiated mechanisms and all with the aim of helping those patients with debilitating diseases. Fast-forward to today, we have a commercial asset called ARCALYST that has growing revenues. We also have a pipeline program called KPL-404, or abiprubart, or Abby for short. We just had results announced last week. Our corporate strategy has allowed us to really focus in on capital allocation.
Looking to the future, we plan to increase value by focusing on the following key areas, and that's continuing to build the recurrent pericarditis market with ARCALYST, completing the phase II study of abiprubart and announcing next steps for that program, maintaining a strong financial position, and allocating capital to the greatest value drivers. Kiniksa offers a unique and compelling value proposition, and we're well positioned for significant growth. We're in a position of financial strength that's largely driven by the growing ARCALYST revenues, and it's thanks to our thoughtful investments in the commercial infrastructure that the ARCALYST collaboration was profitable after only three quarters after launch. Our near and midterm financial priorities are to continue the solid double-digit revenue growth from ARCALYST, increasing the collaboration profit, and importantly, self-funding our pipeline growth. The two pillars of the company are the cardiovascular and the emerging autoimmune franchise.
I'll focus on the cardiovascular side first with ARCALYST, which is an IL-1 alpha and IL-1 beta inhibitor. In just three and a half years, we ran both a phase II study, a phase III study, got breakthrough therapy designation, orphan drug designation, and attained FDA approval in March 2021. In fact, it is the only FDA-approved therapy for recurrent pericarditis, and since launch, we've been establishing ARCALYST as the standard of care for this disease. It's certainly our goal to reach as many more recurrent pericarditis patients as possible, and we're doing that by having a strong focus on sales force excellence. In fact, since launch, our field teams have been working diligently to reach those patients with the highest unmet need.... They initially focused on the approximately 14,000 patients that suffer from 2 or more recurrent pericarditis events every year.
But on top of those 14,000, there's another approximately 26,000 patients that are on their first recurrence. And thanks to the broad ARCALYST label, we're already seeing some physicians prescribing for those additional patients. It's the registry and other initiatives that are allowing us to continue to expand the knowledge, both around ARCALYST and recurrent pericarditis. And we have a personalized treatment support program that is called Kiniksa OneConnect, that is helping patients through their journey. Slide eight shows our unaudited net revenue numbers. Q4 represented another quarter of consistent growth for ARCALYST. The net revenue number of $71 million represents roughly 78% annual growth versus the Q4 of 2022. Our full year net revenue for 2023 was $233 million, and our most recent guidance was $220 million-$230 million.
At the end of Q4, we've penetrated roughly 9% into the target patient population, and our goal is to increase that number significantly going forward. Slide nine. So we've already made tremendous progress towards that additional growth, and we're already seeing increasing patient and physician adoption. In fact, thanks to the experience we've had to date, as well as the data that we've generated to date, we've outlined some core priorities to help us achieve that future additional growth. And this includes ensuring that physicians have a proactive mindset when identifying and treating patients with recurrent pericarditis. It's overall increasing the awareness around ARCALYST, advancing the steroid-sparing treatment paradigm, and educating the entire community on the duration of disease and the treatment duration. It's because of all of those and the importance of face-to-face interactions with physicians that we've recently expanded our sales force.
We're now starting 2024 with roughly 85 representatives, and our goal here is to increase the number of patient enrollments starting this year. So slide 10 shows you that we've had tremendous growth with ARCALYST since we launched in April of 2021. And it's thanks to that execution, as well as our projections for future growth, that we anticipate that our net revenue for 2024 will be between $360 million and $380 million. Slide 11, and moving on to the advancing autoimmune franchise, and that's now particularly with KPL-404 or abiprubart or abi. This is a monoclonal antibody that inhibits the signaling between CD40 and CD154. And I mentioned that we announced data last week from the phase II study.
That study was designed to evaluate the efficacy, dose response, PK, and the safety of chronic subq dosing over a period of 12 weeks. Slide 12 gives you an overview of that data. We saw a meaningful clinical effect in the 3 doses reported so far. In cohorts one and two , multiple doses of abiprubart were well tolerated and supported the advancement to cohort three, which is the proof of concept portion. In that cohort, the primary efficacy was statistically significant at the 5 mg per kg weekly dose level. However, owing to a notably high placebo rate, the 5 mg per kg biweekly dose level was not statistically significant. And in terms of safety, overall, abi was well tolerated, and there were no dose-related adverse events reported. In terms of target engagement, abiprubart significantly reduced rheumatoid factor by over 40% in both dose levels of cohort three.
This is an important clinical marker of disease activity, as well as an autoantibody PD marker. Overall, the data demonstrates that abiprubart showed strong biological activity and the potential to reduce autoantibody production in autoimmune disease. Obviously, we're looking now forward to the cohort four data that we anticipate in Q2 of this year. We'll look at the totality of the data and then determine the next steps for the program. Obviously, very excited about that. We'll, as always, be incredibly data-driven and thoughtful about our capital allocation. As you can see, we've made a lot of progress over the last few years with both ARCALYST and abiprubart. Kiniksa also has a molecule called mavrilimumab. This is an anti-GM-CSF molecule that we've taken through successful studies and in fact, through phase II studies now in RA and giant cell arthritis.
We're now positioned and looking for potential partnerships because we believe that mavrilimumab has a number of indications that it could be, have an impact on.... We, in fact, do have an existing strategic license agreement with Huadong Medicine, and that's to develop and commercialize both ARCALYST and mavrilimumab across the Asia-Pacific region, excluding Japan. We also have a license agreement with Roche Genentech to develop and commercialize vixarelimab. This is an anti-IL-31 and oncostatin M antibody that we developed through phase II-B in prurigo nodularis. Our execution has laid the path for continued commercial success and advancing our portfolio in 2024. Obviously, very excited about the growing ARCALYST revenues and the pipeline in general. But business development is also a key part of our overall corporate strategy, and we continue to look for molecules that have strong biologic rationale and validated mechanisms.
We're particularly interested in late-stage immunology products and cardiology products, where we could leverage our existing specialty field force. Importantly, we are well-financed, and our cash flow and cash reserves allow us to operate our business into at least 2027 and give us immense optionality to invest in our business. Ultimately, we're also very excited about the future. I'll end how I started, which is that we're determined to produce more life-changing therapies to help patients and to also build sustainable value. So with that, I want to thank you all for being here or listening in. I'll hand it back to Anupam for the Q&A session, and some of the team members may join me on stage. Thank you.
Thanks, Sanj. So like I've said in other sessions, there's kind of three things I want to highlight. There's three ways to ask a question, right? So old school, raise your hand, and, you know, I'll call on you. There's the portal. You can, submit your question in the portal. It'll show up on the iPad, and I'll ask it for you. Or there's, like, an intermediate route where you can just email me. So, and I'll ask you a question. But we do actually have a couple email questions that came to me, so, I'm, I'll ask them. But, so there have been no US-based American guidelines for recurrent pericarditis. With the efficacy that you've seen with ARCALYST, how is the company working with KOLs to get, guidelines in place?
Sounds like a great John question to me.
Thanks, Anupam. I appreciate the question. So as you know, professional guidelines, whether they're coming from the American Heart Association, American College of Cardiology, are initiated by those organizations. And so in that sense, that they take the initiative. What we can say is that the last guidelines that were taken up were in 2015, and those were the European Society of Cardiology guidelines. And those predated pretty much all activity in this space. The American Heart Association, American College of Cardiology have picked up on those, and those are the guidelines that are out there. But I think importantly, you know, these European guidelines, because they predated a lot of this work, positioned interleukin one pathway inhibition after a failure for NSAIDs and colchicine, as well as corticosteroids.
What we're seeing is initiative on the part of individual academic investigators who are writing in the literature their thoughts about the management of recurrent pericarditis and the advancement or the evolution of that treatment paradigm with the availability of ARCALYST as the only approved therapy of recurrent pericarditis. And specifically, pointing out that the data from RHAPSODY pointed a steroid-sparing paradigm, as Sanj mentioned. Meaning the idea here is not only in taking patients who are dependent upon corticosteroids and helping them to come off of that with monotherapy rilonacept or ARCALYST, but also advancing the treatment paradigm, such that patients who are failing NSAIDs and colchicine could be started on ARCALYST instead of going to corticosteroids, and thus the two manifestations of corticosteroid sparing.
So that approach in the literature is where the academic community is at this point in providing guidance to other clinicians about how to manage the disease.
Another email question we have is: What are the range of scenarios that could come to fruition for KPL-404?
Well, first of all, we're very excited about the molecule, and I think what we've learned from phase II across all cohorts is that we have a very active molecule. Obviously, very pleased with what we've seen so far. Clearly, I did say, though, that there was a notably high placebo rate, which unfortunately meant that the 5 mg per kg dose level didn't meet statistical significance at the biweekly level, but it certainly met at the weekly. But having said that, certainly pleased with the activity level. I think there are a number of next steps. There will be a next step. I think we will look forward to the full dataset, and what we've showed so far is the top-line data.
But once we've seen the totality of the data together with the data from cohort four, I think the plan is to elucidate next steps, and I'm sure there will be a clinical trial plan, and we hope to... We expect to announce that shortly after seeing the cohort four data. You know, what that exactly will be remains to be seen. I think we'll look, obviously, the dosing dynamics, which is very important to ensure we design the next trial correctly. Obviously, the big question on everyone's list is: What's the indication? And we look forward to announcing that shortly after the cohort four data. Anything to add, John?
It's great .
Questions from the audience? Okay. Yeah.... Next, next. Yeah.
Just on and off? Just on cohort three, the statistics on that, are, would you have any statistics you could do with a placebo arm or to a prior placebo arm or something along those lines?
Right. So the analysis that was undertaken first shows, you know, change from baseline. And so in that sense, using the model that adjusts for baseline characteristics, it shows a very strong effect, if you will, in both the weekly and the bi-weekly dose. And then, of course, there's the placebo adjustment that took place, and so while numerically similar in terms of the weekly and the bi-weekly, it was only the weekly dose that, you know, that achieved statistical significance. And that, as Sanj mentioned, is, you know, due in part to a high placebo effect.
You know, in terms of looking into the statistical analysis further to understand, you know, any we have not seen so far any particular markers that point to, you know, why that result, you know, might be the case. It is what it is. We can always speculate a bit, but one thing that, you know, we have noted, of course, is that the nature of that portion of the clinical trial was that there was weekly intervention. If you will, the patients came in for dosing either of placebo every week, active drug every week, or alternating active and placebo. And so sometimes in clinical trials, when you have a high-touch environment that can increase the placebo effect. It can also increase the compliance with oral medications that patients are taking in the background.
You know, there are a number of different factors. I think at the end of the day, you know, it is what it is. I think one other piece that we can distill from the dataset beyond the DAS28-CRP is to look at responder analyses, as well as to look at the ACR results, which again point to a similarity in response between the weekly and the bi-weekly dose. So maybe that's helpful.
Cohort three, set in the Q2 ? Am I-
Cohort four.
Cohort four.
Cohort four, sorry.
Yeah.
Cohort four.
Yes.
What would be the statistics you would use in that?
Ah.
-press release?
So, well, let me just tell you about the design of the study. The design here is a 3:2 randomization of 400 milligrams, given subcutaneously, monthly after a loading dose, and it's a similar, 12-week DAS28-CRP endpoint. The difference in the trial design, however, is that, it's a lesser touch intervention, if you will, in that patients are coming in only every month, for their clinical dosing. And so in that sense, it more replicates, for example, a clinical practice. Whether that, how that plays out into the actual dataset, we just simply have to see. But it's similarly powered, to be able to discern a difference between active and placebo.
Thanks.
Questions from the audience?
Can you talk about where you think the therapy that you're developing for rheumatoid arthritis would fit in? There's lots of drugs in that disease, but clearly you've chosen to do this because you think it's going to be additive or in some way. How do you see that issue?
Yeah, maybe I'll start, and then-
Mm-hmm.
John, you can take over. Actually, the phase IIb in RA was primarily because RA is a well-characterized disease, and it'd be a very good proxy or a good marker of disease activity. And so the idea was always that we would do that phase II trial, understand the data, and really apply it to other indications that are-
Mm-hmm.
more suited to a company of our size, that could potentially commercialize that really well. So really, RA. Now, not, not to say that potentially there is a path forward in RA with partnerships and larger companies. Obviously, it remains to be seen on the totality of the data, and as John mentioned, this is a highly active drug, and there was, as I showed on the presentation, a very significant reduction in rheumatoid factor, over 40% in both dose levels of cohort three. But really, RA was chosen as a sort of first step into smaller indications, and that indication would be announced after cohort four.
Good. Good. That makes good sense.
Yes. Thank you.
No, that makes sense.
Yeah.
Questions from the audience? Oh, there's one right there.
How should we think about the peak sales opportunity in recurrent pericarditis?
Yeah, I mean, I'm sure I'll let Ross say a few words as well, but we've not discussed the peak sales opportunity. Suffice to say that we have said that we believe it's a great opportunity with ARCALYST. It's the right drug, as I mentioned earlier on. We've said that we've now around 9% penetration into the target patient population. That's up from 5% last announced, which tells you that there is significant room for us to penetrate with ARCALYST. But yeah, we're very pleased. I mean, we're obviously investing in the infrastructure. We've said that we've increased our sales force from 50 now to around 85. That tells you, again, we're willing to invest in that, and we believe that we can have a positive return. But as far as the peak, it remains to be seen.
On the guidance that you gave for ARCALYST, $360 million-$380 million, that came in, I think, around $20 million ahead of consensus at the bottom end. What were the key metrics and levers that were underpinning this guidance?
... Yeah, thanks, Anupam. So, I'm happy to take that one. Yeah, we were happy to, you know, share that the final revenue for the close of the year was $233.1 million, which is a 90% year-on-year growth, and then guide into 2024, $360 million-$380 million. And our ability to do that is ultimately through the underlying fundamentals of the commercialization. So whether we look at the prescriber rates and the number of prescribers that we have, we ended 2023 with more than 1,700 prescribers, which is up more than double from the year previously. If we look at the compliance rate on therapy, we've got a strong, robust compliance rate of around 85%.
The payer approval rates continues to remain very strong across the board, across all the different payer mixes, of greater than 90%. And then if you look at duration of therapy, that has continued to elongate since the time of our launch. Most recently, going up from an average around 20 months of treatment duration per patient to now around 23 months. So I think with those underlying fundamentals that we have across the business, as well as the expansion of the field team that Sanj mentioned, and the fact that we ended last year with around 9% penetration into the 14,000 patient population, which is those with multiple recurrences. And also acknowledging that on top of that, there's another 26,000 patients on their first recurrence of pericarditis.
That gives us the belief and the trajectory to get towards the guidance we provided for this year.
And you mentioned duration. So, that seems to be driven by about the 45% or so patients that restart, right? And how do you expect duration would evolve, and what about those 50% of patients that don't restart? I mean, the data suggests that the symptoms return quickly from RHAPSODY. So, like, what's stopping them from restarting therapy?
Yeah, maybe I'll take that one as well, and, John, feel free to add anything if you wish. So when we look at the duration of therapy, firstly, we look at the initial duration of therapy. So once someone starts on ARCALYST, we see that they usually stay on ARCALYST for an average of around 15 months for the initial duration of therapy. Then we've seen, as you alluded to, around a 45% restart rate, so that's the total number of restarts versus all those that have stopped, regardless of how long they were on ARCALYST treatment for in the first place. And that percentage has stayed stable throughout the time since launch, coming up towards three years now.
And then if you look at the total duration, that's grown through to 20-23 months on average. So for those patients who have restarted, the 45%, that's showing us that, you know, some patients are having treatment throughout the course of the disease. And when you stop therapy, if there's underlying autoinflammation still present, it's assuring that the disease will come back, and the patients will continue to suffer from recurrent pericarditis and go back onto treatment. And if they are not going back onto treatment, then they've probably been treated throughout that disease course.
A big part of our job is around the education of recurrent pericarditis, the natural history of the disease, and now that we see in the commercial setting that the average duration is around 23 months, we're getting more towards the clinical setting that showed in the long-term extension of our RHAPSODY phase 3 study. The median duration was 24 months, so we're edging closer towards that. Then also acknowledging that the natural history of the disease shows that there's a median duration of disease of around three years, and still 1/3 of the patients are suffering from the disease at five years out, from the initial flare.
So we're making progress on that, but we stay very, very focused around the education of the natural history to try to make sure the patients are firstly identified as early as possible, and then they stay on ARCALYST throughout the course of the disease. So in an ideal world, we'd actually like to see the restart rate go down and patients be treated throughout the course of disease.
Question from the audience? Sanj, you mentioned, 9% of the approximately, 14,000 sort of multiple recurrent pericarditis patients have been penetrated by ARCALYST to date, right? Which is, you know, double what you almost did last year. So are there any trends in the phenotypes of patients that have tried ARCALYST to date, and how do patients segment sort of... physicians segment the sort of multiple recurrence market? Are there, is... you know, are the most severe patients going on? Like how do, how... what trends do you have? Can you give us-
Yeah, I think it varies a lot, and we're still relatively early in the launch period to really sort of understand that. But I know, Ross, maybe you want to talk about some of the trends we've seen.
Yeah, I think the most important point is that the majority of the patients that we have on treatment with ARCALYST are those that are coming from within the 14,000 patient population, so those that have had two or more recurrences. And that's where we're really focused as a commercial organization, where there's the clearest call to action for physicians to treat those patients and identify them, and it's what's most closely associated with what we saw from the clinical trial as well. Acknowledging that there are patients earlier on than that as well, and we are indeed seeing some patients to a lesser extent being treated that are just on their first recurrence as well.
I think the other dynamic is that we have a split between those patients that are actively in a flare versus those that are not in a flare, but it's being used as a preventative medication to, again, treat throughout the course of the disease to try and make sure those patients don't flare. So we see a 60% split of those patients that are actively in a flare when ARCALYST is prescribed and 40% where they're not. So both of those elements are very important, but we're really targeted within that 14,000 patient population.
Questions from the audience?... Maybe we'll switch gears from ARCALYST, but what do you think the street is missing on the KPL-404 update and RA? Are there trial design differences? You mentioned placebo factors worth considering when we look at the totality of the known data.
Yeah, maybe I'll make a few comments, John. Feel free to jump in. I think obviously our plan to elucidate next steps is gonna be important. So, you know, it's hard for people to react if they don't actually know what our next steps are, and we really are looking forward to the totality of the data before we elucidate that. I think that's a big piece of it. You know, I think, you know, RA, as we've said, has always been an approach to understand the molecule, understand the power of the molecule. I think that's the big thing. Of course, it's unfortunate that high placebo rate confounded the data somewhat. But I think overall, it's excellent. We're really pleased. It's obviously a highly effective drug.
I think it's important for us to define next steps, and I think we'll do that in a very careful, as I said, sort of capital allocation driven, and measured way.
Okay. For mavrilimumab, you've transitioned the program to now more of a partnership focus versus maybe doing, like, investigator-sponsored studies, you know, in a trial fashion to see what the drug can do in sort of rare cardio indications. Why the strategic switch there?
I think it goes back to capital allocation. I think we're still very excited about mavrilimumab and the potential across a number of indications, including some of the more rare cardiac indications. But obviously, you know, as a company, we've shown that we can do innovative deals. I mentioned the two other deals we've done with Huadong Medicine, and also the deal with Roche and Genentech for vixarelimab. I think in the end of the day, it comes down to priorities. We feel that, you know, that that development from here would be better in somebody else's hand and allow us to continue to focus on really building the recurrent pericarditis market for ARCALYST, and really then, you know, undertaking next steps with KPL-404 and abiprubart.
You know, I often say, "You can do anything, but you can't do everything." But, it's important that what we do we do well, and so that's the focus.
Any final questions from the audience? Maybe final one from me. You noted cash into 2027. I'm assuming that cash position includes at least one indication for KPL-404?
I mean, certainly development and next steps for KPL-404 and abiprubart are included in our cash runway, but as I said earlier, you know, it just gives us an awful lot of optionality to be able to invest in the business, both commercially and from a development standpoint. So without a doubt, next steps for KPL-404 are definitely within that guidance.
Okay. Any final questions? All right. Thanks, Sanj and team.
Smashing. Thank you. Thank you so much.