Thank you for standing by, and welcome to the Krystal Biotech R&D Oncology Program Announcement Investor Conference Call. As a reminder, today's conference is being recorded. I would now like to hand the conference over to your host, Meg Dodge, Head of Investor Relations and Corporate Communications. Please begin.
Hello, and thank you for joining us today for the announcement of Krystal's oncology program. Joining us today from Krystal is Chairman and Chief Executive Officer, Krish Krishnan; Co-founder and President of Research and Development, Suma Krishnan; Dr. Samuel Broder, former Director of the National Cancer Institute; Dr. David Chien, Senior Vice President of Clinical Development; and Dr. Trevor Parry, Vice President of Research and Scientific Affairs at Krystal. Also with us on the call is Dr. Jason Luke, Associate Professor of Medicine in the Division of Hematology/Oncology, and Director of the Cancer Immunotherapeutic Center within the University of Pittsburgh Medical Center's UPMC Hillman Cancer Center Immunology and Immunotherapy Program.
As we begin, I would like to point out that we will be making forward-looking statements that are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to consult the risk and factors discussed in our SEC filings for additional details.
On today's call, we will be sharing an initial overview on Krystal's recently disclosed drug development program in oncology. We will then provide a description of our therapeutic approach in cancer and potential target indications. This will be followed by a summary of preclinical data and a discussion of our clinical development plan. Finally, Dr. Luke will share a clinical perspective on the unmet needs in solid tumors and immunotherapy before we open the call up to Q&A. Please note, the Q&A will be limited to only questions about the KB-707 program. With that, I will now turn the call over to Krish to share a few words. Krish?
Thank you, Meg. Last evening, we announced that KB-707 IND has been cleared by the FDA. Three exciting things to note about KB-707. First, the foray into oncology leverages our learnings in two tissues, the skin and the lung. Second, it demonstrates the ability of our platform to deliver and redeliver all types of exogenous genetic materials to cells of interest. Third, this unique idea of combining these two particular cytokines, IL-2 and IL-12, is very interesting, and in the context of solid tumors, we see a clear opportunity to improve outcomes for patients who are refractory to currently available immunotherapies.
With safety, CMC, redosability, clearly validated by VYJUVEK and other pipeline programs, the risk for any one of our pipeline products is mostly clinical, and to that extent, we spend a lot of time in ensuring that we design our trials right, we learn from them to move forward towards approval. We are excited to move this program forward, and the pace at which this program moved through pre-IND shows how we can leverage certain common aspects of our platform with the FDA to move pipeline products into the clinic expeditiously. With that, I'll turn it over to Suma and Dr. Broder to describe in more detail our therapeutic approach in oncology.
Thank you, Krish. I would like to begin by talking a little bit about Krystal's strong foundation in gene delivery to the skin and lung. Key features of our HSV-1 based gene delivery platform that support targeting solid tumors in those same tissues. We have now demonstrated that we can safely and efficiently deliver genetic cargo to the skin by a multiple route of administration. Our lead product, VYJUVEK, when applied topically to the skin of patients with dystrophic epidermolysis bullosa, can efficiently transduce local skin cells, leading to the expression of genetic cargo, COL7A1, and restoration of healthy skin.
We also do not see vector shedding or systemic dissemination, underscoring our ability to restrict delivery of the genetic cargo to a specific site or tissue of interest. The safety, efficacy, and redosability of VYJUVEK were clearly demonstrated in clinical trials.
Topical application was also well-tolerated, with minimal related AEs and no discontinuation. The recent FDA approval of VYJUVEK in May of this year further validates the platform for gene delivery to the skin. In addition to VYJUVEK, we also have two other clinical stage programs, KB-105, a topical treatment for autosomal recessive congenital ichthyosis, and KB-301, an injectable for aesthetics, both of which demonstrated gene delivery to targeted tissues and are well-tolerated to date, further supporting the versatility and the safety of Krystal's platform technology to the skin. We have also made significant progress advancing our programs for lung gene delivery by inhalation and recently announced our first patient dose with KB407, an inhaled therapy for cystic fibrosis. We expect to have multiple clinical programs targeting pulmonary diseases before the end of this year.
In preclinical studies, we have consistently found that respiratory delivery with our HSV-1 platform is well-tolerated, leading to broad expression of the genetic cargo throughout the airways, including in a repeat dose toxicology study in non-human primates. Based on these data and other unique attributes of HSV-1 based platform, our research team began exploring our ability to deliver novel therapeutic payloads and in particular, cytokines, to treat more common diseases of the skin and lung, including cancer. Dr. Broder has joined us today to share his unique perspectives on the potential of cytokine therapy to address treatment gaps in solid tumors. Sam?
Thank you, Suma. My name is Dr. Samuel Broder, I am the former director of the National Cancer Institute, the largest research institute of its kind in the world. I've had the privilege and experience of helping launch a number of large-scale clinical trials related to the prevention, diagnosis, and treatment of cancer. I have authored over 340 scientific publications, I'm an inventor on a number of patents that relate to cancer and human immunodeficiency viruses. I would like to say at the outset that in my view, Suma Krishnan and her team are truly brilliant scientists whose talents are well suited to making breakthroughs in cancer treatment. Therefore, I think a great deal of the success of these programs will depend on Suma and her team.
I would like to also briefly say that Suma and her team's commitment and efforts that led to the FDA approval of the first-ever redosable gene therapy, VYJUVEK, for the treatment of dystrophic epidermolysis bullosa, was a major achievement with relevance to what we are going to be talking about today. This demonstrates an ability to take ideas from the lab to the clinic with practical effect.
Let me now first address the fact that there is a major unmet need and therefore extremely important unmet opportunities for patients with advanced cancers that are either refractory to or progress on checkpoint inhibitor therapies or other available therapies for cancer. The burden of solid tumors in the US is high, with an estimated 1.6 million or more new cases expected in 2023. There's a significant burden of mortality that accompanies these statistics.
We all know that checkpoint inhibitors have dramatically improved outcomes for patients with many types of solid tumors. It's important to add that currently approved agents in this class are concentrated in a small number of therapeutic targets. For example, the PD-1 or PD-L1 target, CTLA-4, and LAG-3. It is also important to note that a significant proportion of patients have cancers that are either non-responsive or will progress while on checkpoint inhibitor therapies. For some patients, there may be additional treatment options, ultimately, many patients with checkpoint refractory status will require treatment beyond the range of what we have available today, or will require a therapy that is comparatively toxic with significant side effects. In any event, many will succumb to their cancer.
Even with newly available therapies that include checkpoint inhibitor regimens and targeted therapies, more than 450,000 solid tumor deaths are expected in the US this year. It is clear that new therapies and new ideas are needed. The success of checkpoint inhibitors highlights the therapeutic potential of immune-boosting therapies. We need new medicines and new mechanisms of action to truly expand the utility of immunotherapy or to break new ground when immunotherapies are unavailable or no longer work. Cytokines are secreted proteins that have important roles in the therapy of cancer by their capacity to regulate immune effector cell functions, they are attractive targets for next-generation cancer immunotherapy.
Of particular interest are the cytokines IL-2 and IL-12, each of which have been shown to boost antitumor immune activity in preclinical or clinical models and have potentially synergistic functions boosting lymphocyte-mediated immunity.
Despite the promising signals of efficacy, it has in fact proven difficult to harness these cytokines, and in particular, when we just discussed IL-2 and IL-12, there are a number of issues that prevent their application for maximal therapeutic benefit. For example, systematic or systemic administration is often poorly tolerated by patients, and their inherently short half-lives necessitate high dose levels and extremely frequent dose levels where a therapeutic index may be difficult to achieve. One point that may be worth emphasizing is that therapeutic levels of IL-12 could not safely be reached in the clinic in prior studies.
This is unfortunate because IL-12 is known to be a bridge between innate and adaptive immunity. Therefore, an appropriate and regulated administration of IL-12 may be of significant value, and I believe Suma will provide interesting opportunities and data to discuss and advance these issues.
recombinant IL-2 is approved for certain metastatic cancers, but carries a number of black box warnings with drug-related deaths and also a lack of efficacy in many common cancers. Local cytokine delivery to the tumor site carries a number of attractions, but direct protein injection is hindered by rapid turnover and complexity of manufacturing and administration of multiple cytokines. A sustained local delivery option, as might be provided with an appropriate gene therapy paradigm, could be the critical advancement needed to unlock the potential of cytokine-based therapy.
I believe this will be an important advance by virtue not only of a targeted tumor effect at a specific site, but I believe there is also a basis for understanding the abscopal effect, that is, the induction of tumor immunity against other sites distant from where the original tumor was treated. This provides a number of very important opportunities.
I'll now hand the call back over to Suma to discuss how Krystal's HSV-based delivery platform may address these particular needs and opportunities. Thank you very much.
Thank you, Sam. We believe that KB-707 is well suited to accomplish both local and sustained delivery of IL-2 and IL-12 into the tumor microenvironment of solid tumors of the lung or skin. The key advantages of HSV-1 delivery are efficiently transduces a wide variety of cell types, maximizing reach within tumor. DNA payload persists in transduced cells, extending the window of cytokine expression. Lack of replication avoids premature lytic cell death or host cell shutdown. Redosability to further boost local cytokine expression. Safety profile suitable for both inhaled or intratumoral administration. Collectively, these properties make HSV-1 an optimal vector system to maximize cytokine expression and immune activation. Our first in-human phase I study will be enrolling a heterogeneous population of patients with injection-accessible solid tumors.
Based on the results of our phase I, we'll select one or multiple indications for advanced clinical development, which we expect to include certain injection-accessible cancers of the skin. Some of the areas of greatest unmet need in the skin cancer are listed here. Melanoma remains an area of unmet need in skin cancer. The National Cancer Institute estimates there will be nearly 100,000 new cases of melanoma reported this year, including over 14,000 that will be classified as regional or distant at the time of diagnosis.
Checkpoint inhibitors are often used as first line, with overall response rates defined as measurable reduction in target tumor size in the range of 40%-60%. Although the checkpoint inhibitors are significant improvement in the management of melanoma, most patients are either non-responsive or will experience disease progression on checkpoint inhibitors and often end up on chemotherapy.
The prognosis of chemotherapy is poor, with an overall response rate of 10% or less. Basal cell carcinoma and Gorlin syndrome, in particular, are overlooked unmet needs in skin cancer. Basal cell carcinoma are generally considered low-burden cancers and minimal surgical removal, Gorlin patients are genetically predisposed to recurrent basal cell carcinoma. These patients can have hundreds of basal cell carcinoma over their lifetime, regular surgery can impose a heavy and costly burden on these patients. Critically, there are no specific FDA-approved treatments for Gorlin syndrome patients to reduce their tumor burden. Systemic therapies approved for the treatment of unresectable, locally advanced or metastatic basal cell carcinoma are either too toxic for regular use in Gorlin patients or have exhibited modest efficacy. Patients with squamous cell carcinoma would benefit from additional therapeutic options.
Every year, there are over 1 million new cases of squamous cell carcinoma in the US Treatment options for these patients are limited to checkpoint inhibitors, with overall response rate of 30%-50% of chemotherapy. As with melanoma, patients that progress on checkpoint inhibitors may have a poor prognosis. There is also an acute unmet need in RDEB patients with squamous cell carcinoma, which is both aggressive and has a very high mortality rate. Severe RDEB patients only survive a median of 2.4 years after SCC diagnosis. Here, as well, there is no specific FDA-approved products. As David will share later in this call, we intend to initiate a phase I study in 2024 to evaluate inhaled KB-707 for the treatment of solid tumors for the lung. Here, a large unmet need remains for effective therapeutics.
Lung cancer is number one cause of cancer-related mortality in the US The National Cancer Institute estimates there will be 230,000 new cases and over 127 deaths in the US this year. Checkpoint inhibitors-based regimens are increasingly used in the first-line setting and have improved outcomes for many patients, but benefits are transient and vary by PD-L1 expression levels. For example, data shown here highlights that for patients receiving a PD-1 targeting checkpoint inhibitor plus chemo, two-year survival, even in the PD-L1 high group, is only a little better than 50%. Outcomes are worse in patients with lower PD-1 levels.
Targeted therapies are another option for some patients, but benefits relatively small subsets of those afflicted with this disease. There's a clear need for new therapies in both frontline and checkpoint inhibitor refractory setting, as well as to reduce reliance on chemotherapy. With that, I would like to turn it over to Dr. Trevor Parry to discuss the preclinical data. Trevor?
Thank you, Suma. My name is Trevor Parry, and I'm Vice President of Research and Scientific Affairs at Krystal Biotech. In addition to focusing on preclinical activities at Krystal Biotech, I help manage the company's intellectual property portfolio, advising on IP management and licensing issues. Prior to joining Krystal Biotech, my academic background focused on innate immunity and host pathogen interactions, with a particular emphasis on bacterial pathogenesis. As an overview, today I'll be sharing highlights from the non-clinical development program of KB-707, including in multiple checkpoint inhibitor refractory syngeneic cancer models in support of our growing oncology franchise. The non-clinical development program for KB-707 had three specific aims.
First, to demonstrate that the vector is capable of expressing high levels of both human IL-12 and IL-2, and that these proteins retain their ability to initiate signaling through their respective receptor molecules once secreted from transduced cells, indicating proper bioactivity. Next, given the extremely short half-lives of both IL-12 and IL-2 in vivo, we set out to determine the persistence of localized transgene expression in treated tissues to understand the potential durability of cytokine exposure in the tumor microenvironment upon KB-707 therapy.
Finally, we wanted to evaluate both the safety and efficacy of repeated dosing of KB-707 in multiple stringent checkpoint inhibitor refractory animal cancer models, which we believe most closely approximates the late-line patient population we initially intend to target with KB-707. Our KB-707 construct encodes both human IL-2 and IL-12, each individually under the regulation of constitutive promoters.
We first assessed the ability of KB-707 to transduce mammalian cells and drive the production of bioactive IL-2 and IL-12. Initial studies were conducted in HEK293FT cells. Cells were exposed to KB-707 at an MOI of 1, and cytokine secretion was assessed in cell culture supernatants. Both IL-2 and IL-12 were clearly detected within 24 hours of treatment with KB-707, confirming proper protein trafficking to the extracellular space. Vector-derived IL-2 in these cell culture supernatants was assessed for function in a PBMC co-stimulation assay and was found to elicit a comparable Interferon gamma response as commercially available, fully functional recombinant IL-12. Vector-derived IL-2 was also shown to be equivalently bioactive to recombinant human protein in an IL-2 reporter HEK-Blue IL-2 system.
Cytokine secretion was also confirmed in KB-707 transduced clinically relevant primary human dermal fibroblasts and small airway epithelial cells, with evidence of increasing cytokine production for at least 48 hours post-transduction. We subsequently evaluated the ability of KB-707 to deliver its payload in vivo via injection in an immunocompetent mouse model. In this study, animals were administered approximately 8 x 10^8 PFU of KB-707 by intradermal injection, and punch biopsies of the treatment site were collected at various time points post-dose to assess the local IL-2 and IL-12 expression at the transcript and protein level. Three independent animals per time point were used for this analysis. Peak protein levels were observed at eight hours post-injection, and cytokine expressions, both RNA and protein, remained detectable through day seven. We found that intradermal administration was well tolerated with low systemic cytokine exposure.
To assess the efficacy of local IL-2 and IL-12 delivery via injected or inhaled vector therapy, we used checkpoint inhibitor refractory syngeneic mouse tumor models. Constructs encoding murine IL-12 and IL-2 equivalent, KB-703 and KB-704, respectively, were generated and used for these studies as a proxy for KB-707 to ensure full cross-reactivity between the vector-derived effectors and their cognate receptors in treated animals. Shown here are results from a single flank B16-F10 melanoma model. B16-F10 is a subclone of the B16 cancer cell line, originally derived from the skin of a C57BL/6 mouse with melanoma. B16-F10 tumors are highly aggressive and minimally responsive to immunotherapy, including refractory to PD-1 chart targeting checkpoint inhibitors, are among the most stringent melanoma cancer lines for the evaluation of a candidate immunotherapeutic.
Mice were administered 200,000 cells subcutaneously in a single flank, the tumors were allowed to grow for one week prior to treatment initiation. Tumors were then directly injected with 10 to the eighth PFU of combinatorial KB-703 and KB-704 once weekly for three weeks to mimic an induction regimen, then dosed with a single maintenance dose injection three weeks later at day 42. As you will see, direct injection elicited a clear anti-tumor effect and tumor control in a significant proportion of the tested animals, with greater than 50% of the animals surviving out to at least day 70 and achieving complete tumor regression, as indicated by the absence of palpable tumors at the study endpoint. In this next slide, we evaluated the efficacy in a dual flank model of B16-F10.
The dual flank model mimics metastatic checkpoint refractory melanoma seen in late-line clinical treatment settings. Here, only the primary tumor administered to the first flank on day zero is injected with vector starting at day seven, and both local anticancer effects in the primary tumor and systemic response of the secondary tumor are monitored independently. Again, we observed a robust anti-tumor effect and control of the injected tumor. We also observed a delay in secondary tumor outgrowth and significant improvements in survival out to day 50, suggestive of systemic anti-tumor responses following local injection. In addition to direct tumor injection, we've also evaluated local lung delivery for the treatment of lung metastases of K7M2, a highly aggressive osteosarcoma line with a pulmonary metastatic rate of over 90% in mice.
K7M2 has been previously shown to be minimally responsive to PD-1, PD-L1 targeting therapies, with only partial benefits reported from some combinatorial therapies. In this model, we observed dramatic improvements in survival and no evidence of tumors by histology at day 100 for combinatorial IL-2 and IL-12 therapy. In order to assess the adaptive response elicited by local treatment, we evaluated the effect of tumor rechallenge in mice previously exposed to K7M2 cells and treated with KB-703 and 704. In the initial challenge setting, we saw again that three inhaled treatments with KB-703 and KB-704 led to a significant improvement in overall survival.
Survivors were rechallenged on day 75 with new K7M2 cells without any further therapeutic intervention. Even in the absence of additional treatment, the majority of previously treated mice survived the otherwise lethal rechallenge, suggestive of effective immune memory.
Altogether, we view the non-clinical data package generated to date as supportive of clinical development. We demonstrated that KB-707 efficiently transduces cells in vitro, leading to secretion of bioactive IL-2 and IL-12, and found that the vector can drive localized, durable cytokine expression in mouse skin and airways after treatment. Furthermore, in stringent checkpoint inhibitor refractory syngeneic animal tumor models, we've shown that our platform technology capably delivers IL-2 and IL-12 that elicits robust anti-tumor effects and survival benefits in single and dual flank B16-F10 melanoma models, as well as metastatic K7M2 osteosarcoma models, with evidence of protection from tumor rechallenge in both models, suggestive of prolonged adaptive immunity. With that, I'll turn things over to David to talk about our clinical approach with KB-707.
Thank you, Trevor. I'm David Chien, Senior Vice President of Clinical Development at Krystal Biotech. I have over a decade of global clinical development experience across all phases of drug development, including taking a product from the first patient dose through BLA filing. I had leadership roles at Amgen and AbbVie. Prior to Krystal Biotech, I was at Nektar, leading the development of immuno-oncology products, including Bempegaldesleukin, an engineered cytokine that had multiple registrational studies. I am very excited about KB-707 because it leverages Krystal Biotech's platform to address the challenges facing cytokine therapies. KB-707 directs tumor and surrounding cells to deliver a sustained high dose combination of potent cytokines to the local tumor microenvironment, all while having low systemic exposure and toxicities associated with the cytokine therapies.
While immunotherapy with immune checkpoint inhibitors have dramatically changed the treatment paradigm, there is still much to improve on in both the large percentage of patients that do not respond and responders that progress after immune checkpoint inhibitors. The goal of our development program is to deliver response to all solid tumor patients with immunotherapy, including immunologically cold tumors. The phase I, first-in-human study with intratumoral administration is designed to evaluate the safety and tolerability of monotherapy with ascending dose levels. It is to demonstrate single-agent anti-tumor activity with pharmacodynamic biomarkers and clinical efficacy endpoints.
The study will enroll patients with solid tumors that have progressed on standard care and have no established treatment options. The data from this study will support further assessment in disease-specific indications. We plan to amend the IND with the addition of inhaled administration later this year.
The route of administration has an advantage in delivering therapies to the respiratory tract cancers, such as lung cancer and head and neck cancers, as well as cancers that metastasize to the lungs. The start of the inhaled administration study will be staggered to begin after intratumoral administration study. We can leverage the safety, tolerability, and pharmacodynamic data from the intratumoral study. The intratumoral administration will be studied in a phase I open label study to assess safety, tolerability, and preliminary efficacy. The key enrollment criteria are on the bottom left of this slide.
We will enroll adult patients with locally advanced or metastatic solid tumors who relapse or are refractory to standard care. Patient must have at least one measurable or injectable tumor accessible by transcutaneous route. We will enroll patients with solid tumors, including, but not limited to, melanoma, cutaneous squamous cell carcinoma, and basal cell carcinoma.
We believe our therapy will be effective in many tumor types. We kept enrollment open to all solid tumors for all the cohorts of this study. The objectives are listed on the top left of the slide. The primary objective of the study is to evaluate safety and tolerability based on thorough assessment of adverse events, physical exams, vital signs, and lab results. We will evaluate for maximum tolerated dose based on dose-limiting toxicity criteria, which are most grade three or higher adverse events related to the study drug.
The secondary objective is to evaluate preliminary efficacy by radiographic assessment per RECIST criteria. The endpoints include early signals of overall response rate, complete response rate, and duration of response, as well as hard endpoints of progression-free survival and overall survival. We will also assess immunological effects of tumor tissues and blood.
We will assess the levels of IL-12 and IL-2, also downstream cytotoxic cytokines such as Interferon gamma, anti-angiogenic factors, as well as immune cell proliferation of cytotoxic T cells and NK cells. We will evaluate injected lesions, transient lymph nodes, and distant metastasis to demonstrate activation of tumor-infiltrating lymphocytes and the scopal effects. The study schema is on the top right of the slide. The dose escalation portion of the study is a standard 3+3 design with three dose levels as listed on the slide.
The 3+3 design enrolls three patients at a given dose level. If none of the patients experience an adverse event that qualifies as a protocol-defined dose-limiting toxicity, dose may proceed to the next level. If one of three patients experiences a dose-limiting toxicity during the evaluation period, the dose level is expanded to include three more patients.
If none of the additional three patients experiences a dose-limiting toxicity during the evaluation period, then dosing may proceed to the next dose level. If a second patient at the same dose level, so a total two of six patients, experiences a dose-limiting toxicity, then the maximum tolerated dose is considered to have been determined. Based on the totality of safety and efficacy data from the dose escalation portion of the study, the sponsor, with input from the investigators, will determine an appropriate dose for the expansion cohort, where we plan to enroll approximately 60 patients.
On the bottom right is the patient treatment schedule. For each patient, the dosing regimen starts with an induction period of three weekly doses on day one, day eight, and day 15. This is followed by maintenance dosing every three weeks, starting on day 36 for up to two years.
The dose-limiting toxicity evaluation period for each patient is from day 1 after dosing through day 36, prior to the first maintenance dose. There is a safety follow-up 30 days after the end of treatment. The long-term efficacy follow-up occurs every 90 days. For KB-707 intratumoral administration program, we had our IND accepted by FDA with no clinical comments and was clear to proceed with the study. In engaging with oncology leaders across the country that I have experience working with, they were very excited about the product and study design. Many of them were interested in participating in our study and currently are at different stages of study start-up activities. At ASCO in June, we had very positive feedback from additional oncology leaders that we currently are following up with.
With the strong momentum, we are on track to dose the first patient this year and expect to have interim data update in 2024. We are pursuing both intratumoral and inhaled administration of KB-707 in parallel. We plan to file our IND amendment this year and expect the first patients to be dosed with the inhaled administration in the first half of 2024. With the staggered start of the inhaled administration, we will be able to leverage the clinical insights gained from the intratumoral administration study. With that, I'd like to turn things over to our lead investigator, Dr. Jason Luke, to provide his clinical perspective. Dr. Luke is an associate professor of medicine in the Division of Hematology Oncology at the University of Pittsburgh at UPMC Hillman Cancer Center. Dr. Luke?
Hi, I'm Jason Luke. I'm an associate professor and director of the Immunotherapy and Drug Development Center, as well as associate director for clinical research at the UPMC Hillman Cancer Center here in Pittsburgh. I'm going to be presenting a presentation titled Cutaneous Oncology Landscape for Refractory Disease. As we think about melanoma initially as sort of the test case for drug development and skin cancer, here we present a current melanoma treatment algorithm, starting from a new diagnosis at the top on the upper left, flowing through resection and then consideration of perioperative therapies with either neoadjuvant or adjuvant treatments, and then the development of metastatic disease and initial treatment with checkpoint inhibitors or BRAF-directed therapies.
As opposed to going through each one of the boxes that's shown here, rather, it's important to note that there are multiple strategies that can be taken, both in the perioperative and then in sequencing of targeted therapies towards BRAF versus checkpoint inhibitors, and even amongst those checkpoint inhibitors, then combinations of checkpoints with PD-1 as a backbone, either with LAG-3 or CTLA-4. To be somewhat more specific, however, and granular with our data, it's now clear that long-term survival is possible in metastatic melanoma, relying on anti-PD-1 and anti-CTLA-4 antibodies, either alone or in combination. On the upper left-hand side, you see a schematic looking at the interaction of PD-L1 and PD-1, and then mechanistically, how we believe this interaction works, our antibodies that interrupt this allow infiltrating T cells to kill the tumor.
On the right-hand side, you see the data from the KEYNOTE-006 study, which established pembrolizumab as a frontline standard of care with a five-year overall survival in melanoma of 38.7%. On the bottom left, you see a schematic outlining the mechanism for ipilimumab, which blocks CTLA-4 as a negative immune regulator, allowing more immune cells to be active to kill cancer. On the right-hand side, down on the bottom right, you see the combination of ipilimumab and nivolumab from CheckMate 067, with the five-year survival for that combination at 52%. We quote for patients in clinic that despite the development of metastatic disease, more than half of them are expected to be alive at five years. Now, we have a newer player in this field, which is the use of anti-LAG-3 antibodies.
On the upper left-hand side, you see a schematic or mechanism slide showing the interaction of LAG-3 with this canonical binding partner, with class two MHC. In a clinical trial known as RELATIVITY-047, the combination of nivolumab and relatlimab was clearly superior in terms of both progression-free survival and response rate as compared with anti-PD-1 monotherapy with nivolumab. On the right-hand side, you see the overall survival, which also looks to be clinically meaningfully different, though it did not hit its pre-specified statistical difference. A complication in the field of melanoma oncology is that in the United States, Opdualag, which is the combination of nivolumab and relatlimab, is approved as a frontline treatment option in melanoma, and yet in some countries in Europe, notably Germany, this is not approved.
Drug development strategies then are starting to splinter between the United States and Germany, which is just something that has to be taken into consideration when one thinks about a global registration program. As I alluded to earlier, many, if not most patients who have melanoma, will be offered perioperative therapy as they proceed through the various stages of melanoma. Here we show the various clinical trials that support this, starting from stage 2B and 2C disease, which is a deep primary lesion without nodal involvement, as well as stage three, which includes nodal involvement, then in the neoadjuvant setting, which would be stage 3B through stage four resected prior to surgery, giving therapy.
The reason I emphasize this point is as patients are progressing through therapy now in this modern era, nearly all of them have actually already had an immune checkpoint blockade. That has significant impact on the development of drugs in the metastatic setting, because the data I just showed you may or may not actually be the most relevant over the next few years, because those trials were done predominantly in patients who had not received perioperative therapy. This is a moving landscape that will be only more complicated as the field continues to proceed. To discuss melanoma, sort of a classic case that we might think about.
Here's a patient who had a 3.2 millimeter melanoma, which we think is a moderately deep melanoma on the right leg, then undergoes resection and nodal evaluation and is found to have two nodes involved. For simplicity's sake, the tumor is BRAF wild type. Adjuvant treatment with nivolumab is given for eight months, with progression in new nodes and lung. Patient is considered for various different combinations as their next step in treatment, and the combination of nivo plus ipi is given. Unfortunately, the patient has obvious new lesions within 1.5 months, with rising LDH, showing that there is no treatment response. The question then is what to do?
In the United States right now, in the standard of care setting, the NCCN does endorse the possibility of pembrolizumab plus lenvatinib as a treatment option, with a clinical trial of approximately 100 patients showing a response rate of 20%-30%. Unfortunately, thereafter, in the standard of care setting, there is no other treatment option for such a patient. In this sort of case, where a patient has cutaneous lesions that could be injected, then consideration of a locally delivered therapy that could have systemic implications, could be quite attractive. We'll move on to go over other areas of cutaneous oncology, now talking about cutaneous squamous cell carcinoma, where one of the biggest impacts for anti-PD-1 immunotherapy has been seen.
Here we show the data for cemiplimab, the anti-PD-1 antibody, from the publication of Migden et al. in 2018, showing patients who had locally advanced cutaneous squamous cell carcinoma and their response in terms of the waterfall plot and progression-free survival over time. What you can see is that anti-PD-1 is a tremendously powerful treatment in this disease, and yet approximately 50% of patients do not have treatment response. For those patients who do not respond, unfortunately, treatment options are very limited. We do historically use chemotherapy, vis-a-vis, mucosal head and neck cancer, which is also squamous cell carcinoma, with platinum-based treatments or EGFR inhibitors. Unfortunately, rates of response are low, you know, maybe 10%-20%, and progression-free survival is on the order of about three months.
Again, similar to melanoma, we see that this field is also shifting, with perioperative management also becoming a standard. Here, the data for cemiplimab in the neoadjuvant setting is presented by Gross et al at ESMO last year and published in The New England Journal this year. Again, emphasizing that in the perioperative setting, patients can have a very good outcome. I believe it's likely to be the case that the field will start to split, with those patients who have major responses in the perioperative setting actually doing very, very well. Unfortunately, the patients who don't have a major response in the perioperative setting are still going to be those who go back to needing novel therapies, because treatment options for this disease, when it is advanced, is very limited. That's a somewhat similar story for basal cell carcinoma.
We have data for Hedgehog inhibitors, which have been around for more than a decade at this point. The data on the left are for vismodegib and sonidegib. You can see the treatment response, especially in a locally advanced setting, is pretty, pretty good. These patients do tend to respond to these Hedgehog inhibitors. The kicker comes in, unfortunately, in that these are a tremendously toxic class of agents, and so almost no patients can tolerate taking this therapy for more than maybe a few months, maybe up to four to five months, because there's this chronic development of GI and musculoskeletal toxicities that are noted in the table here.
I won't go through all of them, except to make this point, that was taught to me as I was a fellow at Memorial Sloan Kettering Cancer Center back in the days, by Leonard Saltz, who said, "Chronic grade one, two toxicity is actually worse for patients than any one episode of grade three, four." There's still obviously an opportunity space to develop new drugs in basal cell carcinoma. Anti-PD-1 antibodies have now entered this space. On the right-hand side, you see data for cemiplimab, where you can see that this agent is active, anti-PD-1, albeit with rates of response that are lower than what is seen in melanoma or in cutaneous squamous cell on the order of about 31%.
Somewhat oddly, responses here actually seem to be rather delayed, so we commonly don't see the response until the second or the third scan. It's important to note that in the labeled approval for cemiplimab in basal cell carcinoma, the FDA actually did not require prior treatment with Hedgehog inhibitors, as it could be deemed that the patient would not tolerate Hedgehog inhibitors as an opportunity to use anti-PD-1. I think that's important when we think about drug development. In thinking about a vignette then for squamous cell carcinoma, here's a patient with a history of multiple early-stage non-melanoma skin cancers, who develops a bleeding ulcer on the scalp. A Mohs procedure removes the lesion, within only four months, the skin graft erodes and the ulcer returns.
A second resection attempt is considered, but it's aborted when it's noted already that the margins are positive. An anti-PD-1 with an cemiplimab is initiated, but the lesion continues to grow anyway. What then would we do? I've mentioned this previously, but this is a really bad situation for patients.
We think about anti-PD-1 as having this amazing effect in squam, but if you happen to be in the 50% of patients where it do esn't work, treatment options are very bad, and these patients often end up dying of infections actually, instead of cancer, because the locally aggressive nature of eroding through the skin and into deep tissues is really at the heart of the morbidity and eventual mortality that these patients see. Again, a locally administered therapy that could overcome this problem would be very advantageous for this population of patients.
In conclusion, in melanoma, there remains an unmet need despite the great effects we've had from immunotherapy with anti-PD-1. We'd say that KB-707 has high upside potential for combinations with PD-1 in earlier lines of therapy, given the arming with IL-2 and IL-12, which are both agents that are being combined with PD-1 by other companies. The therapeutic landscape is open in non-melanoma skin cancers, and I tried to highlight that, noting that anti-PD-1 is a standard of care, but only 50% of patients respond in cutaneous squamous cell carcinoma. In fact, the FDA has green lighted development of therapeutic agents in basal cell carcinoma despite the known activity of Hedgehog inhibitors, due to the toxicity of those agents.
KB-707 is well positioned to overcome previous cytokine therapies by leveraging the unique biology of this agent and the field-leading cytokine combinations that are entailed there. Thank you very much for your attention.
Thank you, Jason. This concludes our presentation. Before opening the call to Q&A, I'd like to reiterate our enthusiasm about the 707 program, which leverages our learnings and clinical experience and underscores the broader potential of our HSV-1 platform to deliver all types of exogenous genetic material and improve outcomes for patients with debilitating diseases. Please open the call to Q&A.
Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, press star one. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. We will pause here briefly as questions are registered.
They are.
Our first question is from the line of Robert Finn with Guggenheim. Please go ahead.
Hi, team. This is Robert Fink off of Deutsche Bank. Congrats on the IND for KB-707. Two questions from our side: As Krystal Biotech moves into oncology, can you remind us of any key recent hires within the organization to lead the programs? Oncology files are rather expensive. What is the internal ORR hurdle for the phase I, and will there be any specific guidance for cash burn for this program going forward? Thank you.
Thanks, Robert. I'm gonna answer the first part of the question with respect to hiring, then turn it over to David Chien to answer the second part with respect to ORR. With respect to hiring, you saw we recently hired doctors, David Chien, he introduced himself. As we progress through the clinical, and as things continue to progress well, we definitely anticipate hiring like we did with the pulmonary program as we move forward. Of course, we're surrounded, as you know, in the call, by a whole slew of experts in the industry, Dr. Broder, Dr. Luke, and many other PIs who've been part of us going through the preclinical program, kind of designing the phase I program, et cetera. That's the situation with respect to hiring.
With respect to ORR, while it seems a bit early, I'll turn it over to David to see if he has any comments or even Dr. Luke, any comments, thoughts on that?
Hi, thank you. Krish, this is David Chien. Yeah, we're looking at our study in patients without treatment options, right? You know, getting, you know, responses are going to be excellent. You know, we could benchmark it to other developers. You know, 'cause there's no approved options available for these folks no good approved option for these folks. I think, you know, we'd be excited to be able to demonstrate, you know, any responses and get and be able to compare with our competitors. Jason, would you have anything?
Well, I, as I kind of alluded to, I think there's opportunity space for a high unmet need population and kind of in, in several different ways. Again, to emphasize that in the continuous oncology space, a number of these diseases really have a locally aggressive character, which makes that delivery into that anatomic space really attractive. Moreover, if you go back decades, looking at systemic administration of IL-2 and IL-12, that was limited by toxicity, as already been alluded to in this conversation. There's an upside of using these two molecules, those two cytokines, within the context of this delivery vehicle.
Moreover, in those previous studies, going back a decade, in advanced solid tumors, combining IL-2 and IL-12 actually looked to be synergistic in terms of, you know, the biology, but as well as the clinical effect. We couldn't harness that due to toxicity. This molecule then comes forward as a really attractive way to kind of bring those two cytokines together, and then obviously, you know, in enhancement with anti-PD-1. I think in the, as, as we hopefully, you know, demonstrate proof of concept, that then I think raises a priority to move into earlier lines of therapy, albeit that obviously we're getting farther into the future than what we're immediately discussing right now.
Thank you. The next question will be from the line of Alec Stranahan with Bank of America. Your line is now open.
Hey, guys. Thanks for taking our questions. A couple from us as well. The first one is on the intratumoral localization of IL-2 and IL-12 with seven oh seven. I think Dr. Broder alluded to an abscopal effect or a potential for an abscopal effect. Is the thought here being, immune cell activation in the injected tumor impacting the distal tumors, or could it actually be cytokine IL-2, IL-12 expression that goes systemic and activates the immune system in a distal site? As a follow-up to that, I think it's pretty well appreciated that the vascularization of a tumor, especially in, say, melanoma, can be compromised.
I guess what gives you guys confidence that the amount of IL-2 and IL-12 that could enter the circulation wouldn't impact safety at all? I've got a follow-up. Thank you.
I'm gonna turn to Trevor, do you wanna take the first?
Yeah. Thanks, Krish. I'll talk first a bit about your first question in terms of the mechanism of action of local versus distant tumor therapy. The way that we think about the mechanism of our drug is, you know, high expression locally of IL-2 and IL-12, which drives, you know, expansion and activation of lymphocytes in the local tumor, will train those lymphocytes to recognize and treat that local tumor. It's actually those lymphocytes that will traffic systemically and have an abscopal effect on distant tumors. You know, the way that we think about our drug is not, you know, systemic delivery of IL-2 and IL-12, and, you know, that's going to each of the tumors.
It's that we get really high concentrations of, of those proteins in the local tumor, and we then train the immune systems to recognize that, and then those immune cells traffic systemically. It's not the proteins themselves that we're delivering from the systemic effect. It's actually, you know, the, the training that we do at the local site that then traffics systemically. You asked, you know, about how do we think about, you know, safety of treatment and the potential of systemic exposure to the cytokine that has had toxicity issues in, in the clinic in the past. That's certainly something that we thought very carefully about and something we've studied diligently in, at least in animal models. We've done comparative studies looking at.
An animal equivalent of the clinical doses used of these proteins recombinantly when administered systemically, as compared to proteins that are delivered with our vector treatment. We do know that we've tipped the scale towards high concentrations in the local site and low concentrations systemically of the cytokines when it's delivered by our vector, versus when they're delivered systemically as a recombinant protein. We, we know, you know, we, we have confidence when we go to the clinic that we are in a place where we see good efficacy with limited systemic exposure, which is suggestive of potential safety of the treatment.
Yeah. I'll add to Trevor's point. Again, think about it, our HSV we deliver, you have continuous expression. Low levels of IL-2, continuous expression. If you look at half-life of IL-2, it's like minutes, and IL-2 has a very short half-life, and that's what we overcome. Because our vector can, it's transient, but it still can express for seven to eight days at systemic. It's almost like a pharmacodynamics of thinking of the drug is changed. Instead of getting peak levels and dropping and giving continuous and tipping that balance to safety, we give a continuous expression of IL-12 and IL-2. That's the most important point, and that's what we see in our preclinical study.
You see the, as you see, you see the effect, I mean, in the bilateral model or in the, you know, challenge model, you see good efficacy that continues because of the way our pharmacokinetics of this molecule is changed.
Okay, got it. One more follow-up, if I may, on capital allocation, maybe for Suma or Krish? You obviously, you know, you're launching VYJUVEK. You're, you're starting to dose your CF study. You've got aesthetics in the clinic as well, and now oncology. You know, how do you think about pushing that arm of your pipeline forward? How would you prioritize, say, internal development versus seeking to partner?
Oh, that's a good question. I think we have a pretty strong balance sheet. I mean, as you know, north of $500 million or so, we don't necessarily need to, from a capital allocation, have to prioritize one to go ahead or below the other. Our long-term strategy, however, has been very consistent. We want to be fully integrated in rare diseases, and with respect to larger indications, our objective is to find a suitable partner at the right time. That kind of goes for our aesthetics program, a little bit for the KB-408, for afamelanotide, which is anticipated to come online the second half of this year. Whenever we think about these larger indications, we definitely at some point will choose to find a partner.
Okay, thank you.
Thank you. The next question will be from the line of Joseph Pantginis with H.C. Wainwright. Your line is now open.
Good morning, everybody. Thanks for all the details today. Very exciting program to look forward towards. I guess my first question is more specifically, what are your current, do you have the current manufacturing capabilities for the initial KB-707 program, and what are your near-term, more nearer-term, any expansion that you may need for the oncology program? Number one, number two, in the phase I, in the early part of the 3+3, is there any early required safety stopping intrapatient? Lastly, if you look at SCC, I'd like to apply my question directly to the RDEB patients. Can you envision, or what is your sort of a wish list for the future of potentially co-administering KB-707 with VYJUVEK for either treatment or even preventive for SCC? Thanks a lot.
Thanks, Joe. Appreciate the questions. I'll touch on manufacturing. I'll have David talk about the phase I stopping criteria, Suma Krishnan directly will address the squamous cell carcinoma question. With respect to manufacturing, look, our second-largest manufacturing facility, Astra, is anticipated to come online in a matter of weeks. It'll be up and operational, we don't intend to produce any VYJUVEK at the second manufacturing facility from a commercial perspective. I mean, it'll serve as a backup, from a commercial, all of Astra's capacity fund for the next 18 months or so is dedicated to the pipeline. We don't anticipate adding the oncology program to have any new requirements for manufacturing.
I think between that and Astra, we're fully, we're in a really good place with respect to the current pipeline. On the second question, David, with respect to the safety stopping criteria, can you touch on that?
Yeah. Yeah, thanks, Krish. for the study stopping rules of any patient that were deemed related to IP, led to death, is one of the stopping rules. With the 3+3 design, you know, we're, we're expected to enroll three for per dose cohort up to six, and so I think we, we should be able to do well in that.
If I could just interject with that one, I just also wanted to, was curious, like even in the first dose cohort, is the FDA requiring, after dosing of the first patient, that you need to wait a certain time before the second patient is dosed?
Yeah.
Yeah.
I can address that question. Obviously, yeah. I can address that question because we have preclinical toxicity studies, and we had all of the preclinical studies that related to safety was presented into the IND. As David said before, we did not get any comments or any concerns or questions with regarding to this program regarding safety. Truly, there is no stopping rule criteria. I mean, again, it is depends on the investigator at the site. If that investigator deems, then that will be that will go through an internal safety committee board to decide if it's drug-related or is it disease-related. To answer your question, no, the FDA has not put any specific requirements for us to have strong stopping criteria rule.
With regarding to the third question, on SCCs in our DEB patients, that's a very good question. As you guys all may be fully aware, right in around the age of 20-21, even younger, these patients, 90 patients or more, will get SCC. We already see that in our clinical trials. We already see that in our DEB patient population. This is a very good question that you raised because there are several patients that do have SCC right now, that will get on our commercial product, and some of them were in our OLE study. In those studies, these patients, the only option they have is some of them do get on immunotherapy, but it doesn't seem to work. I mean, it does have some improvement, these SCCs do come back.
The only option for these patients is resection. There are clinical sites where the tumor was resected and was treated with B-VEC, and we see very rapid and fast healing. We will continue. There is no, at the moment, patients can be treated with B-VEC, where areas have been resected for the tumor. This is where, again, I think we have the opportunity to study these patients and get these patients because these patients already exist, so maybe we can, you know, as they are getting treated for on commercial B-VEC, and if they have SCC, instead of resecting, we would certainly enroll them in these studies to study the impact of KB-707 on the tumor.
Thank you very much.
Thank you. The next question will be from Dae Gon Ha with Stifel. Your line is now open.
Hey, good morning, guys. Thanks for taking the question. Congrats on the announcement of the IND clearance. Two from us. One, on the strategic front, you mentioned, Krish, that over the long term, the larger indications would be a prime opportunity for partnership. We just wanted to ask the question head-on: Had you engaged anybody for a partnership for KB-707? If so, can you comment on sort of the industry sentiment around the combined IL-2/IL-12 delivery genetically? The second question is more on the preclin data that was discussed today. On slide 17, I was just kind of curious on the evidence of systemic immune response. It seems like you have the distal site tumor reduced pretty robustly, but the overall survival was reaching about 20% by day 50.
Can you comment on sort of that disconnect, if I'm missing anything? Thanks so much.
On the strategic fit... Hold on one second.
Yep.
On the strategic fit, look, we have a few things to do before we engage on the strategic fit. We wanna do the phase I study, which is kind of, which affects all types of solid tumors. Then kind of narrow down into, are we gonna go into borderline? Obviously, B-VEC, I mean, DEB patients with squamous is an obvious area. We got to figure out what are we gonna move forward with in phase II, with respect to skin cancer. Then on the lung side, if we get good proof of concept, similar to KB407, like inhale into the cytokines. We are, at least in my opinion, 10-12 months away from engaging aggressively on finding a partner.
Obviously, if we need to have a combination of PD-1 going forward, then that would also, to some extent, dictate who we align with. Yes, we do intend to align, hopefully with someone, but we're at least 10-12 months away from actively doing that. Trevor, on the preclinical?
Yeah. Thanks, Krish. Just some clarity on the way that these studies are designed with respect to slide 17 and how we're tracking, you know, effect at the secondary, you know, non-treated tumor and as it relates to survival. The study is defined such that, when the tumors reach a size of 150 millimeters squared, the animals are euthanized from a humane perspective. When you look... When you're tracking tumor size over time, from a secondary tumor, once an animal reaches, you know, crosses the threshold of 150 millimeters, those animals are taken off study, they're removed then from, you know, the tumor tracking data over time.
You know, it's, I know it's a bit hard to see, once the animal crosses that kind of threshold of 150 millimeters squared, they're taken off study. The average tumor size decreases because that animal's removed from further analysis of secondary tumor. That's reflected in the survival data. I know the data can be a bit confusing looking head-to-head there.
I would say the fact that we see, you know, 20% survival in the study, and we see a complete response of no outgrowth of tumors at either the treated or non-treated sites of that, those animals is a pretty robust, given the fact that these animals are treated three times, and then that's it, and that they can control both the local tumor, and they also can train the adaptive immune system to then completely respond to the distant tumor. Even in 20% of animals, that's, I would say, a very high threshold of success on this study.
That's very helpful. Thank you very much.
Thank you. The next question is from Tim F. Lugo with William Blair. Your line is now open.
Thank you. You have the weekly dosing for the intratumoral delivery phase I. Is that something you're also going to pursue with the inhaled program?
For the inhaled program, again, we have our ongoing toxicity study that's needed to finish. Depending on the toxicity study, I think that's when we'll decide the dose and the frequency of administration.
Okay. I know you began dosing with the inhaled HSV cystic fibrosis program. Is there, you know, is there maybe, I guess, should we have some positive read through to the initial patient or maybe patients, which have been in that study, given your confidence to go into the inhaled dosing for, you know, for this program as well?
Look, today, you know, we announced we dosed the patient in CF. To date, we have not made any announcements with respect to safety. That's kind of like a proxy saying we are progressing reasonably well in that front. As we continue to dose, you're right. Like, based on what we saw in the simian studies, what we're seeing in a handful of patients in the CF, I think we feel good about pulmonary and, you know, that's still, you know, maybe six months to eight months away from dosing our first patient. We'll have more experience on the CF side. Presently, Tim, based on what we know, we feel good about progressing into that.
Great to hear. Thank you for the questions and congratulations on the program.
Thanks, Tim.
Thank you. At this time, there are no additional questions remaining. As a reminder, it is star followed by a one on your telephone keypad to ask a question. We will pause briefly to allow any remaining questions to be registered.
Thank you all for joining the call. Appreciate it. Thanks for your time.
At this time, we do not have any questions remaining. That concludes today's conference call. Thank you for your participation, and you may now disconnect.