Welcome everyone, to the afternoon session of the JPMorgan 40th Annual Healthcare conference. My name is Anupam Rama. I'm one of the Senior Biotech Analysts here at JP Morgan. I'm joined by Priyanka Grover, Malcolm Cuno, and Caleb Smith from the team. Our next presenting company is Kiniksa. Presenting on behalf of the company, we have CEO Sanj Patel. I want to remind all the attendees of this session that there is an Ask a Question feature in the portal, and I would be happy to ask a question on your behalf. With that, Sanj, take it away.
Thanks, Anupam. It's good to be here again, albeit virtually. Thanks also to JPMorgan for hosting us today. I'm happy to highlight the commercial launch of our first approved product, ARCALYST, which is off to a very strong start. I'll also review our pipeline, which includes additional immune-modulating assets, all of which have the potential for multiple follow-on indications. There's a lot to cover, so let's get started. First, please note that I will be making forward-looking statements today that are subject to risks and uncertainties.
A review of those statements' risk factors are found on this slide, as well as under the heading of Risk Factors in our SEC filings. On slide three here, you can see an overview of our sequential pipeline as well as the opportunities for each of the assets. All four are based on validated mechanisms and have the potential for differentiation.
In 2021, in addition to the launch in recurrent pericarditis, we continued to execute across our pipeline of clinical-stage product candidates. On slide four here, I'll highlight the key 2021 accomplishments. Starting with ARCALYST, we've had a very strong first nine months of sales in recurrent pericarditis. Moving forward, we plan to continue this robust commercial execution. For mavrilimumab, we generated phase II and phase III data in COVID-19-related ARDS. While the phase III data did not replicate the positive results we saw from the phase II study, we continue to be excited by the potential of mavrilimumab in other indications, and we're assessing the next steps for this molecule.
Our next program, VIXA, is potentially a first-in-class molecule. We're enrolling a phase II-B dose-ranging study in patients with prurigo nodularis, and we expect data in the second half of this year.
KPL-404 is our CD40 program. We believe this is a potentially best-in-class treatment for a range of autoimmune diseases. In December 2021, we started enrolling patients in a phase II proof- of- concept study in rheumatoid arthritis. I'll now move into key areas of focus for 2022 that I just mentioned in a bit, in a wee bit more detail. Slide five. For ARCALYST, I'll focus on our commercial strategy. As a reminder, ARCALYST is a once-monthly or weekly IL-1α and IL-1β cytokine trap and is also approved in America for CAPS and DIRA, both of which are rare autoinflammatory diseases. In March 2021, we received FDA approval for ARCALYST in recurrent pericarditis, which is a debilitating autoinflammatory cardiovascular disease for which there are no other FDA-approved therapies.
On slide six, you'll see that our focus right now is on the patients with the highest unmet need, and these are the refractory, the multiple relapsing, and the steroid-dependent patients. There are approximately 14,000 patients in the U.S. who meet that criteria, and a good snapshot of the patients that were studied in the RHAPSODY pivotal phase III trial. RHAPSODY also generated data on four key areas of unmet need. That's the resolution of the episodes, prevention of future episodes, steroid-sparing disease control, and their quality of life. We're focusing on these patients first because they have the highest unmet need, and they are also the easiest to identify. They also provide a clear call to action for physicians to prescribe.
Based on the broad label as well as the physician experience over time, there could also be even broader utilization, and this could include patients with a single recurrence associated with a risk factor such as cardiac tamponade, effusion, or constriction. This will, however, be a decision between the physicians and the patients, and our current promotions are within the FDA-approved label. Turning to Slide seven. We've built a highly specialized and collaborative field force, and that's to help drive awareness, overcome access barriers, and to help ensure a positive patient and physician experience. Our field teams include clinical sales specialists, the payer teams, medical science liaisons, and patient services. We've made sure that each of these teams are aligned and coordinated with the goal of creating the best possible customer experience.
These effective specialist teams are educating physicians on the scientific evidence showing that ARCALYST targets the primary mediators of the disease pathophysiology. On slide eight. That collaborative field force has driven impressive ARCALYST revenue growth. In our first quarter of sales, we reported net revenue of $7.7 million. In Q3, our second quarter of launch, we continued with very positive momentum and ended with a net revenue of $12.1 million, and that represented a 57% quarter-on-quarter growth. As expected, CAPS and DIRA patient demand remained broadly consistent and stable. On slide nine, we dive into more detail on the drivers behind the current pericarditis growth, and that we've seen through the end of Q3 2021. The growth we saw represents continued uptake and adoption of ARCALYST from physicians, payers, and patients.
At the end of Q3, there were more than 200 unique prescribers who had prescribed ARCALYST for recurrent pericarditis since the launch. There was also an increase in prescribers who are writing for multiple recurrent pericarditis patients. On the payer side, in Q3, more than 90% of completed patient enrollment cases for RP were approved for coverage. Additionally, while it's still early to provide definitive updates on the duration of therapy, it's important to state that so far, two-thirds of ARCALYST prescriptions for recurrent pericarditis were written for 12 months of therapy.
We believe this is an excellent indicator for how specialists are thinking about the duration of treatment for patients with recurrent pericarditis. Ultimately, this will depend on the duration of the underlying disease, as well as the patients who are willing to remain on therapy, as well as compliance, adherence, and payer approval duration.
We plan to provide full- year 2022 net revenue guidance with our fourth quarter and full- year 2021 financial results. Slide 10 highlights how we're engaging and educating patients and healthcare professionals on recurrent pericarditis through our digital marketing. These efforts are helping us to reach more patients in need, and that's a key focus in the coming quarters and years. The image on this slide depicts a recently launched promotional breakthrough campaign that reflects the strength of the ARCALYST data shown with the Kaplan-Meier curve here, and of course, the compelling desire to patients to want to return to normal lives. We've conducted disease education webinars, social media, and advertising, and approximately 2,000 patients and caregivers from our U.S. database have actively opted in to receive further education on the disease treatment and the disease itself.
We've also designed a tailored communication plan to fit this patient group. We created targeted information on recurrent pericarditis depending on the stage of the patient's journey. We've also given patients the tools and the resources to ask their physicians about ARCALYST. Moving on to slide 11 and vixarelimab. Our lead indication here is prurigo nodularis. This is a devastating chronic inflammatory skin disease characterized by pruritic nodules. There are currently no FDA-approved therapies. We believe that VIXA is differentiated in this space because, in addition to blocking IL-31 signal, it also inhibits oncostatin M, and that's been implicated in both fibrosis and hyperkeratosis. It's important to note that in our successful phase II-A study, we saw a more rapid lesion improvement compared to placebo. Slide 12 shows the data from that successful phase II-A study.
The study met its primary efficacy endpoint, which was a statistically significant reduction in the weekly average worst itch NRS at week eight in the VIXA recipients. It also met the secondary efficacy endpoint, which was a statistically significant percentage of the VIXA recipients achieving an IGA score of zero or one at week eight compared to the placebo recipients. The images on the right of this slide show a representation of the pruritus relief and the nodule improvement. Slide 13 highlights that, based on our phase II-A data, we believe that vixarelimab has the potential to deliver a differentiated profile based on its mechanistic targets, dosing, and presentation, certainly compared to the other assets in development for prurigo nodularis.
As I mentioned, we believe that VIXA is differentiated because it blocks both IL-31 and oncostatin M, and the latter of which has been implicated in both fibrosis and hyperkeratosis. As you can see from slide 14, we're enrolling and dosing patients in a randomized phase II-B study of VIXA in prurigo nodularis across a range of once-monthly dosing regimens. The primary efficacy endpoint is the percentage change from baseline in weekly average worst itch NRS at week 16. The objective here is to define a minimally effective dose level with practical monthly subQ dosing. A key secondary endpoint is the proportion of patients achieving a score of zero or one in PN-IGA at week 16. This could be a key differentiator owing to the additional OSM mechanism that VIXA has. We believe prurigo nodularis could be a meaningful commercial opportunity.
There's a prevalence of around 300,000 patients in the U.S. alone, and we believe that this market could sustain multiple entrants, especially one with a differentiated mechanism and data. We expect data from this study in the second half of this year. As outlined on slide 15, I'm really excited to review our CD40 program, KPL-404. This is a monoclonal antibody that inhibits the interaction between CD40 and CD154. We believe this is a highly attractive molecule for blocking T-cell- dependent and B-cell- mediated autoimmunity. Importantly, Kiniksa owns the vast majority of the economics for this asset. Turning to slide 16. In May of 2021, we announced positive data from our phase I study with KPL-404. Based on that data, we started a phase II study in rheumatoid arthritis at the end of 2021.
This 12-week study was designed to provide PK data and an early signal of efficacy with chronic administration, as well as the optionality to evaluate KPL-404 across a range of other autoimmune diseases. On slide 17, the CD40-CD154 interaction has been implicated in a number of devastating diseases such as rheumatoid arthritis, Sjögren's disease, Graves' disease, systemic lupus, and solid organ transplant. These are all diseases where the external proof of concept has been demonstrated. KPL-404 could also make a meaningful impact in multiple diseases, including first-in-class, de-risked, or fast follow-up opportunities. We think it has the potential to be a best-in-class therapeutic. In closing, Kiniksa is rapidly becoming an emerging leader in immune modulation.
We've continued to demonstrate impeccable execution, and that's been demonstrated by the fact that we're able to commercialize ARCALYST and bring it to patients with recurrent pericarditis in only three and a half years after in-licensing it. We generated data from the phase II and phase III studies in COVID-19- related ARDS. We're highly encouraged with the data with vixarelimab in progressive myositis, as well as KPL-404, our CD40's potential in a range of autoimmune diseases. Importantly, we are very well capitalized, and we have cash reserves expected to fund our operating plan into 2024. Ultimately, we are determined to continue to help patients in need, and we firmly aim to fulfill our plan of becoming a global generational company. With that, thanks very much, and I'll hand it back to you, Anupam, to MC the questions.
Yep. Thanks, Sanj. If you wanna just take a quick second and introduce the broader team on the line, we'll get started with the Q&A.
Yeah, happy to do it. We have John Paolini, who's our Chief Medical Officer, Eben Tessari, who's our Chief Operating Officer, Ross Moat, Chief Commercial Officer, and Mark Ragosa, our CFO.
Great. Sanj, you mentioned in your presentation that over 200 physicians had prescribed ARCALYST. What portion of the total target prescriber base is this? I think you, in your comments, you had also talked about you're seeing repeat prescribers. What are the trends on repeat prescribers?
I mean, maybe I'll ask Ross to jump in there. I mean, we're overall very happy with the continued expansion and the breadth of awareness and prescribing for ARCALYST. Ross, why don't you comment on that?
Yeah, very happy to, Sanj. Anupam, thanks for the question. Yeah, firstly, we're delighted with the breadth of prescribing since launch. In Q2, our first quarter of launch, we saw more than 100 prescribers write ARCALYST for the first time. In Q3, we doubled that, and we had more than 200 prescribers. I think all of this really demonstrating that physicians have been very receptive to the ARCALYST launch. Our initial targeting strategy is to focus on around 350 accounts across the country that have the largest throughput of recurrent pericarditis patients. Then, to expand, once we're comfortable with the uptake in those initial accounts, to around 800 accounts, which will result in a coverage of around 70% of the total recurrent pericarditis patients in the U.S.
Given the nature and the rarity of the disease, the fact that this is a flaring disease as well, it will take some time for this to really build into repeat prescribing. Although our focus and targeted approach in the field will ultimately provide us with the very best opportunity for those initial prescribers to see the next batch of patients and become repeat prescribers further down the line.
What are you seeing in terms of time from script to written to prescription fill?
Yeah. Happy to take that as well, Sanj, if that's okay. I mean, the patient experience is of vital importance to us. We know that many patients are in debilitating pain, particularly at the point of initiation, if they are indeed in a flare at that time. That's why we implemented our Quick Start program, which allows eligible patients to receive their first fill prior to any insurance approvals as well. It will really help patients to get the help that they need very early on. We also partnered with a robust specialty pharmacy network, and that's really to provide a rapid delivery to patients and a good quality of service to those patients across the U.S.
Finally, we've discussed in prior calls as well, many of the payer coverage policies are now formalized, meaning we have less reliance on the medical exception processes and ultimately faster times through to approval, all of which go into helping patients get access as quickly as possible. Our patient services team, Kiniksa OneConnect, are ultimately dedicated to supporting all of the patients right from the time of the very first prescription all the way through their complete journey on ARCALYST.
You talked about this a little bit in your presentation, Sanj, but the duration of therapy being a lever to be thinking about. My understanding is that, you know, patients on anakinra could be on for 12-24 months, and you guys are seeing 12-month scripts being written. How do you guys think about, say, duration of therapy with this product long- term, and particularly as it relates to, I think, Street models, which have maybe some 12 months of therapy?
Yeah. John, maybe you can cover some of the real-world evidence, what we've seen in the history of recurrent pericarditis. It might be good, Ross, for you to jump in and talk about the activities post-launch.
Yeah, happy to do so. Hi Anupam, nice to talk to you again. Thanks for the question. Yeah. Maybe I'll speak to the natural history of recurrent pericarditis. We know from that is that the length of treatment really should be contingent upon the duration of the underlying autoinflammation. We also know that premature cessation of treatment often results in recurrence of disease signs and symptoms. When you dig into the real-world evidence on the natural history, you know, what we see for the broad recurrent pericarditis population on average, the underlying autoinflammatory process usually lasts for about two years from about the first episode. However, it can be substantially longer when patients have a greater burden of recurrences, and we certainly saw that in RHAPSODY.
Now, from a patient management perspective, when you think about how physicians are looking at this, you know, a lot of attention in this disease has really been put on the flares, right? The recurrence of flares. We actually believe that the treatment paradigm for recurrent pericarditis is really resembling the long-term management of other chronic diseases, which are really aimed at trying to keep the disease under control. What we know, historically, with the long-term treatment with the standard oral therapies, they're often associated with lots of toxicities, right? GI toxicity from colchicine and NSAIDs, you know, the many side effects of long-term steroid use. What we're seeing is that physicians are constantly weighing the trade-off between taking patients off therapy 'cause of tolerability and the risks of the underlying disease.
What we see are serial cessations of treatment, and they're often premature, and they're often repeatedly unmasking the underlying disease. That, of course, then leads to those recurrent pericarditis episodes that we hear so much about. Let's contrast that with rilonacept, because in RHAPSODY, from that experience, the data showed a profound and sustained reduction in pericarditis recurrences. That's without the long-term toxicity factors that have historically limited the standard oral therapies. In fact, what we saw in that trial was that continuous therapy resulted in continued treatment response. There's a 30-fold reduction in annualized incidence of recurrence while on treatment compared to pre-trial, and 92% of trial days were characterized as none or minimal pain.
That's kinda what the data show, both in terms of natural history, and specifically to rilonacept, but I'll turn it over to Ross to talk a little bit about what we're seeing in the post-launch world. Ross.
Yeah. Thanks. Thanks very much. I think John nicely covered what we know from the epidemiology and how long the disease persists. Ultimately, the duration of ARCALYST therapy will be linked to the physician's assessment of where the patient is in their particular disease course. Then, of course, factors, you know, such as compliance, adherence, duration of payer approval, will also need to be taken into account for what the ultimate duration will be. At this stage of launch, we've got two real-world insights into the duration, and Sanj mentioned one during the main prepared remarks as well, which is that so far, two-thirds of the physicians wrote ARCALYST for a 12-month duration. I think that's an insight into the thinking of physicians and their assessment of the patients when they first see them.
Then the second point is that of the patients who initiated ARCALYST in our launch quarter, Q2 of last year, almost all of those patients were still on therapy right through the end of Q3. Then, of course, the data will build as we move forward from here. Additionally, the compliance and adherence was strong for those patients, and they're generally getting the refills on time. Overall, I think we're very pleased with what we've seen so far. We're very pleased with how physicians are reacting and how they're prescribing and identifying the patients for recurrent pericarditis. It's early days, and we'll learn more as the data builds over time.
To date, you've provided quarterly guidance on ARCALYST. Is that a trend we should expect to continue, or is there any thought to giving annual guidance in the future?
Yeah. Obviously, in the early parts of the launch, as you saw last year, we provided quarterly guidance to say Q2, Q3, and Q4. We had a press release out this morning, which said that we'll provide full- year 2021 and the Q4 results, obviously during the time of the Q4 results call. At that time, we'll also provide an annual expectations for 2022. You know, we haven't really sort of specified the real cadence at the moment. We're still thinking through it. Certainly the early part of the launch, I think it was appropriate to do the quarterly expectations. Moving forward, from this point at least, we'll enter in the first quarter Q4 results, we will do an annual guidance. Q4 expectations were $16 million-$17 million FYI.
Yep. For 1Q specifically, are there any seasonal trends we should be thinking about in terms of the launch? I know 1Q is always an interesting dynamic for many products.
Ross, do you wanna cover that?
Yeah, happy to, Sanj. In terms of epidemiology, we don't expect any seasonal difference in when recurrent pericarditis patient events actually occur. I think many of the variables that we've previously been looking at will continue to be important in Q1, particularly around the trajectory of new physician prescribing, as well as repeat prescribers, as we've already touched upon. I think to your point, Anupam, the gross to net may be a little fluid going into Q1, particularly as copays reset, and that's seen across the board. We don't really anticipate any big swings in the gross to nets, and we've said that previously as well. Overall, we're just very focused in Q1.
We feel like we've had a good launch through in Q2 and Q3 of last year, and we're focused on continuing to execute on the strategy, determined to help patients in this severe, debilitating disease where there was previously no approved therapies to help these patients.
Yeah. Maybe switching a little bit to the pipeline. What is the phase II-B study in prurigo nodularis powered to show? What's a clinically meaningful outcome, and what is your assumption on placebo performance?
Yeah. Maybe I can tackle that one. I think it's first important to start with the phase II-A study, since phase II-B is really a continuation of phase II-A in terms of outcomes, expectations, and many of the powering, you know, assumptions. When we looked at the phase II-A study, that established proof of concept for dual inhibition of IL-31 and OSM, and that's of course by targeting OSMRβ. That trial, of course, met the primary efficacy endpoint, which was the reduction in weekly average worst-itch NRS from baseline at week eight. And it was significantly greater in those who received vixarelimab versus placebo.
However, in addition to the pruritus reductions, you can also look at it from the disease perspective, and there, nearly a third of patients achieved statistically significant clear or almost clear at week eight. The important finding is also that the magnitude of response is also significant at week six, with early curve separation as early as week four. Now looking forward, when we look at that phase II-B study design, that's again a placebo-controlled dose-ranging trial. What we're doing is we're testing three different monthly subcutaneous dose regimens of vixarelimab to 180 patients. They have moderate to severe prurigo nodularis. They're experiencing severe pruritus, and that drives the primary efficacy endpoint, which is the percent change from baseline in the weekly average worst-itch NRS, this time at week 16.
The objective of the study, though, by testing these three different regimens, is to demonstrate dose response and also to define a minimum efficacious dose using that practical subcutaneous dosing regimen. We're gonna use the totality of the data that comes from that trial, both the weekly data from II-A, the monthly data from the base study, II-B, as well as the long-term extension, which actually has bi-weekly dosing. Now, importantly also, a key secondary efficacy endpoint is the proportion of patients achieving that score of zero to one on the PN-IGA or the Investigator Global Assessment score, and that's at week 16. That's important because that's a measure of the change in disease severity, and that also could provide key differentiation data via the OSM mechanism.
In this sense, it extends the experience from the phase II- A experience of eight weeks all the way out to 16 weeks in the phase II- B. We can then pull all of that data together for then figuring out the appropriate dose to carry forward into phase III. Thanks for that.
Okay. Maybe a quick question on your cash position and runway. Does the setback with mavrilimumab in COVID potentially extend the cash runway at all?
Well, we announced this morning in our press release that the current year-end cash reserves of $182 million will fund the operating plan into 2024. That obviously includes the other milestones that are gonna continue, which is the second half of 2022 data for vixarelimab. You know, we did also just preemptively start enrolling and dosing with our CD40 program, the anti-CD40 program, KPL-404. That was in a phase II study with rheumatoid arthritis, and we're gonna continue that. That really includes all that. We are assessing next steps for mavrilimumab. Really like the molecule. Obviously, shown efficacy and safety in a range of indications, rheumatoid arthritis as well as GCA. It's a molecule we very much like. It's got a lot of value, and we're gonna announce next steps when appropriate.
Yep. Maybe final question from me here. What are the range of potential future indications we should be thinking about for KPL-404 post this proof of concept study?
Maybe Eben, give you a chance to jump in there. I know this is a hot topic for us, and we're very excited about the molecule. Eben, why don't you jump in?
Sure. I wanna echo Sanj's excitement. Really, we believe that inhibiting the CD40, CD154 pathways is really inhibiting a central control node of aberrant immune activation. You can really imagine leveraging those RA data, which, given the long history of RA development, have relatively solid and benchmarkable clinical outcomes. From there are a whole host of diseases that are sort of RA-like in that they're canonically Th1- driven, which you can imagine, and other companies are currently exploring, such as Sjögren's, lupus nephritis, et cetera. That's not all.
As CD40 does play a central role in these responses, there are many other opportunities within that subset to explore based on positive data and a robust PK/PD relationship coming out of phase II.
Okay. Sanj and team, I wanna thank you guys, so much for-