Let's get started here. Welcome, everyone. Thanks for joining. I'm Gavin Clark-Gartner, one of the Senior Biotech Analysts here at Evercore ISI. And I'm really happy to be here with Jasbir Seehra, fresh off an exciting deal with Takeda. Thanks for joining us, Jas.
Gavin, thanks for having us here. Yeah, we're very excited about the partnership with Takeda on our lead asset, elritercept. I think it's a great deal for Takeda. It's a great deal for us, and an even better deal for patients because they have the development capabilities, the commercial team to really optimize this asset in hematology, where they want to take over our Phase III RENEW trial, which is in second line, but broaden it out to really include patients in front line and also the myelofibrosis. And I think what we've seen from Takeda is a shared vision for the drug. And we're excited to have found a partner that's aligned with our vision, has both the experience in terms of development, commercialization, and the capital to really put to optimize this asset. So it's an exciting time for us.
Yeah, I think it was pretty well received by investors as well. So congrats on that. I'll only ask one more question on this deal, and then we'll roll over to the rest of the pipeline. Maybe you could just kind of frame additional expansion opportunities this could go into over time, and then how to think about the deal financially, like in terms of OpEx reduction and where this puts your cash runway.
Well, I think for Takeda, they're really focused on the two indications that we've talked about. But I think there is proof of mechanism for this pathway in much broader indications. And I think you have to start somewhere where you end up, okay, right, depends upon your development plan as things progress. So I think with sotatercept, similar molecule in terms of increasing red blood cells. You see the biology in lots of different indications. So I think the opportunities are there, but you have to do this in a stepwise manner. And I think for us, it's exciting that they're really excited about MDS and MF.
Yeah. All right, that's great. So let's switch gears. Let's go over to KER-012 or cibotercept in PAH. Maybe just quickly remind us, how is this program differentiated versus sotatercept? When you were designing the molecule, what were you trying to do with it?
Yeah, so I'll start with sotatercept. Put it into the clinic as the former CSO of Acceleron. We put it into the clinic in 2006, and it was going to be a drug for treatment of bone disorders. We observed the increase in hemoglobin, and it became an anemia drug. When that opportunity was not fully capitalized upon and the drug was just sitting there doing nothing, Acceleron decided to take it into PAH. They knew from the onset that there was an increase in red blood cells. That was the dose-limiting pharmacology. Therefore, they had to titrate, design a study whereby they would get enough target engagement and yet keep the increase in hemoglobin to around 1.5 g per dL. They chose the 0.3 and the 0.7 mg per kg dose.
But also, they dose on a three-week schedule with a drug that has a 23-day half-life so that you would get dose accumulation. And after the fifth and sixth dose, you get to steady state, where steady state now allows you to see about 60% target engagement at Cmax and about 40% at trough level. That's what we model. Okay? So in 2014, after closing down the last company, I was sitting at home after Thanksgiving dinner and saying, what am I going to do next? And it was, wouldn't it be nice to have a sotatercept-like molecule without the increase in hemoglobin? Because it was a great drug at increasing bone mineral density. So that's what we set out to do. And in 2019, we discovered KER-012, which increases bone mineral density and does not have an increase in red blood cells.
Now, in that intervening time, the data in the literature was quite compelling that such a molecule would have benefit in PAH. And in January of 2020, Acceleron announced that they had met their primary endpoint. And we knew at that point that we can take this drug into bone indications or into PAH, right? And PAH is the higher value opportunity.
Yeah. All right. That's great. And do we know, kind of to your comment before around Cmax, Ctrough, do we know what portion is driving the sotatercept efficacy? Is there any evidence from any exposure response analyses that they're leaving some room on the table that you may be able to take advantage of, safety aspect aside?
No, actually, when you look at the Summary Basis of Approval, it's a pretty rapid drop, and then it's flat, okay, right? So there is no evidence on that. And I think that's a fair question and comment because in vascular development, there are multiple pathways at work. But we do believe, based upon preclinical data, that there is more efficacy to be captured. So we've looked at 10 mg per kg in a rat pseudohypoxia model. We see similar efficacy with activin receptor IIA ligand trap, sotatercept and between 012. Well, 10 mg per kg would translate to 1.6 mg per kg in a human, right? So we think there's more efficacy to be captured. And we're doing the experiment.
Yeah. Awesome. Actually, you're approaching PAH data now, so it's not that far off. But one of the pieces of evidence that we have before we see that data is FSH as a pharmacodynamic measure. Maybe just remind us. I haven't looked at this data in a while, to be honest. Have you shown the single-dose multi-dose? What have you laid out? How does that compare to sotatercept?
Right. We only shared the single dose. And I think on FSH, you have to think about what's the biology here. In the pituitary, there's constant signaling by activin through the activin receptor. And the way that you control FSH is through two arms, gonadotropin-releasing hormone and through the activin arm. And there, you reduce the signaling through activin by producing an inhibin in the ovaries, which then circulates through the pituitary. Okay? And what the literature teaches you is that you can get 50% inhibition of FSH through either arm, and that's it. So that's 100% target engagement. And what we observed in our Phase I study from a single dose was indeed that 50% reduction. In the multiple ascending dose, we also saw the same thing. Okay? But we have not reported the data from the second dose and the third dose. Okay?
But that's only about instructing a cell that's sitting there to make FSH. It's not about differentiation, which is what you wanted remodel in the vasculature. There, it's the smooth muscle hypertrophy that's leading to narrowing of the blood vessels. You want to stop new cells from differentiating into smooth muscle cells. You also want those existing smooth muscle cells to now apoptose so that you get opening of the blood vessel. That's differentiation, right? That's involved. And I think there you can see in the bone axis, you see changes in bone biomarkers. They follow the PK, where you get to high levels of bone-specific alkaline phosphatase consistent with high target engagement. And then you get continued increase, but declining. And then when you come in with the second dose, you get even bigger increase because you've now brought more cells into the osteolineage from the first treatment.
So I think the data is there. It's compelling that mechanistically it's doing exactly what sotatercept does on these axes, but it lacks the bleeding events, we believe, and it lacks the hemoglobin effects.
Yeah, that makes sense. All right, so looking ahead towards the Phase II data, we'll kind of separate the different components, right? So on the PVR side, what is the bar to match sotatercept? What are your expectations on that endpoint?
Yeah, so look, in PULSAR, the Phase II, the changes were dose-dependent. 0.3 and 0.7 was 150 and 250 dyne, so a mean of about 200 dyne. That's what we're targeting. Okay? We think that with greater target engagement, we have potential for bigger changes. But I think that's the bar that we sort of think about. Okay? That takes care of the PVR, okay, right? But I think at the highest dose of 4.5 mg per kg, we have the potential to have much greater efficacy. But we're doing the experiment.
Yeah. Awesome. All right. And then moving over to the 6-minute walk side. So hemoglobin does contribute to a 6-minute walk benefit. There's definitely a debate as to how much it contributes. I think Merck has noted around a 4 m impact, give or take. Did you guys find anything? Do you know how they got that number after reading the review documents? How much do you think that the 6-minute walk impact is?
When I saw the PULSAR data for the first time, where you got an increase improvement in the 6-minute walk test from the first dose, I said, this is all driven by hemoglobin. When you look at the STELLAR, the data is not so clear, right? And so I don't know what contribution is coming from the 6-minute walk test. But you're right. Merck did quantify it as four out of the 40 m from STELLAR. How they did it, I don't know. I've gone through the Summary Basis of Approval 3.5x . I'm going through the fourth time. And I cannot find, okay, right, how they got to it. But there's no question in my mind. If you deliver more oxygen to the muscle, it's going to function, okay, right? So there is a component.
On the other hand, that increase in hemoglobin comes with an expense. That one and a half gram per deciliter increase in hemoglobin results in an increase in viscosity. You can do the arithmetic whereby that increased viscosity contributes to the increase in PVR. It's about 25 dyne that contribution to PVR. So your PVR is higher by 25 dyne approximately for an increase of hemoglobin of one and a half grams. So swings and roundabouts.
Yeah, it's complex, very complex interplay for sure. From an investigator perspective, do you think they put a lot more weight on PVR as compared to 6-minute walk?
They don't care about the 6-minute walk test. It's the PVR. Worsening of the PVR is a predictor of disease progression and bad outcomes for patients, right? So they only look at PVR. Unfortunately, the regulators look at the 6-minute walk test. So you've got to include the 6-minute walk test in your trial so that it informs you about how to design your Phase III, where it's going to be your primary endpoint. That's why PVR is the primary endpoint in TROPOS, and the secondary endpoint includes the 6-minute walk test.
Yeah. And on the safety side, other than the lack of hemoglobin impacts that you noted, what other measures should you be looking at as potential harbingers of longer-term bleeding with longer-term exposure? I know maybe thrombocytopenia could be one of those measures. Maybe it's helpful to frame how you're thinking about those.
Yeah. So I think the regulators did a really nice job for us all. When you look at the warnings and precautions, the first one is erythrocytosis and hyperviscosity. You get an increase in red blood cells. It leads to increased viscosity. There is a potential for disruption of vasculature and hemorrhage as a consequence. Hemorrhage was observed in the kidneys of the rat tox studies and in the monkey tox studies. So it's there. We have completed those studies as well. We don't see that. So part of the bleeding is due to the increase in red blood cells. In addition, in the rat and the monkey, thrombocytopenia was observed with 012. You don't see any thrombocytopenia. We did not see increases in red blood cells in the healthy volunteer study in multiple dosing, nor did we see any reductions in platelets.
I think that, to me, those two things are settled. And therefore, that alone means that we have a lower risk for bleeding event. And then on top of that, there's the BMP, bone morphogenetic protein binding, we're more sparing of it. And that, I think, can also lead to potentially better vasculature that doesn't have the susceptibility to break and therefore bleeding events.
Yeah. That makes sense. Awesome. All right. I'm going to try to squeeze in a little bit on 065. And I think I'm likely only going to get one question in here, which is going to be, how do we interpret the recent news in the SMA space from Scholar Rock, from Biohaven? How is your program differentiated? And what are your plans for this asset moving forward?
So I think I'll give Scholar Rock a lot of credit for picking a disease where myostatin levels are higher. If you've got an inhibitor of myostatin, then you want to go into a disease population where that's playing a big role. And so they did a really nice job on that. I think the Scholar Rock data, I always anticipated they would get signals of activity. I didn't know the exact design and the power calculations and so on, and therefore didn't know if they would reach statistical significance. They did at the lower dose, but not at the higher dose. I think that's just the variability in the patient population that they had in each arm. So I think it's positive. It's great. Biohaven went into the ambulatory patients, more heterogeneity. Myostatin antibody inhibitor, just like Scholar Rock, but more heterogeneous population. Not surprising outcome, okay, right?
That they didn't meet the primary endpoint, but you look at the data, there's signals of activity there, right? It's not as if the drug is dead. There are signals of activity. How does that inform our thinking? Well, look, I've always been excited by neuromuscular indications. I think going in with a myostatin inhibitor in SMA is a good idea. I think SMA is diagnosed in children shortly after birth. You don't want to treat newborns with an active inhibitor. You can do it in older children, six-year-old, seven-year-old, eight-year-old, where they've gone through most of the development and have had the growth. No issues there, but very young children, I don't think it's a smart idea.
Makes sense. And maybe in the last minute or so, you could quickly frame the upcoming data for this program, what you're looking to see.
Yeah. So Phase I study is ongoing. Multiple ascending dose has male subjects that have a BMI of 27-33, so overweight to mildly obese. And what we hope to be able to show from that is that there's an increase in lean mass muscle as measured by DEXA scan, decrease in fat mass as measured by DEXA scan, and then potentially changes in bone biomarkers and increase in bone mineral density. If this was a postmenopausal woman, I'll be telling you that we would see it, but this is young, healthy males, okay, right? And experiments have never been done, so I don't know the answer to that. In addition, we have imaging of the thigh by MRI, where we hope to be able to show increase in muscle volume, but also reduction in fat infiltration of the muscle, right?
So that's in Q1 of next year with cibotercept readout in Q2.
Yeah. Exciting first half of the year. I'm sure we'll be back to talk more. Thanks for coming, Jas.
Thank you, Gavin.