All right. Welcome everyone to 2024 Jefferies Global Healthcare Conference. My name is Roger Song, one of the senior analysts covers med tech, biotech in the US. It's my pleasure to have the fireside chat with Protagonist CEO, Dinesh. Welcome, Dinesh.
Thank you.
Awesome. So before we talk a lot. You have a lot going on in the next 12 months, so we will talk each of them. Hopefully, we can go through everything within the next 24-25 minutes. Before that, so what's the opening remark you wanna give to your investors? What's the most recent updates for us?
Yeah. So good morning, everybody. Thank you for being here. As you know, Protagonist is a company focused on peptide therapeutics with a very core and unique innovative technology platform. We also happen to be a company now where we have two assets in advanced stages of clinical development, and these are our homegrown tomatoes, so to speak, came from our technology platform. One of the asset is JNJ-2113. So as the nomenclature implies, this is a drug we have partnered with J&J. It is in different stages of phase III development, and it's fair to say that there are about six clinical studies going on, and the primary endpoint completion dates for almost all the studies have been revised.
Most noteworthy recently is the Phase IIb UC study, where previously the primary endpoint completion was estimated to be around May of next year. Now it is October of this year, so that's a whopping 7-month adjustment, so to speak, in the right direction. But that speaks volumes, I would say, both for J&J's commitment to the drug, and hopefully, it is also a reflection of the enthusiasm that one may be picking up from investigators and patients alike. And so we look forward to a lot of data from JNJ-2113 in, let's say, the fourth quarter of this year and the first quarter of next year.
We also have rusfertide, which is a hepcidin mimetic, that this is in phase III stage of development as well, within polycythemia vera, and this is a drug that we partnered with Takeda a few months ago, in a very lucrative win-win situation, kind of BD deal. Then, of course, you know, the technology platform now is a pro one-one, so we are trying to go for repeat performance, so to speak. We are working on an oral IL-17, where we have promised a development candidate by the end of the year. Then we have various other iron targets, other targets in the heme space, and also in the metabolic space, we are working on oral peptides as well.
So our plate is quite full, but fortunately, we also have a good cash position. In our recent earnings release, we said we have $600 million plus, which is good through the end of 2027, and by that time, if the two drugs are successful, then they should be approved, and the royalty stream should start flowing. And even before that, we get a few hundred million more in milestones from our partners. So I think all in all, Protagonist is in a good, stable situation. That's how it appears at the moment.
Excellent. Yeah, so you do have a full plate here. Luckily, also supported by the, by the capital as well. So okay. So we definitely have a lot of enthusiasm around your JNJ-2113, and the J&J absolutely share the same excitement there. We're gonna talk about that for sure, and then also the earlier pipeline, IL-17, and some other disease area you're focusing. But before that, I do notice a lot of the increased interest on your rusfertide or PV space. Maybe we start from there. So remind us, where are you for the phase III? When we're gonna see the phase III data? And then, you know, given this is a partnership with, with Takeda, how they're gonna make or when and how they're gonna make the decision for the option or about option.
Yeah. So, you know, rusfertide, as you know, it's a mimetic of hepcidin, and hepcidin is the master regulator of iron homeostasis in the body. So, this is a drug where you can seek out utility for various, iron overload kind of disorders, right? And polycythemia vera is a prime example. It's a rare disease, but, in a way, it's not that rare. There are 100,000 patients, seeking treatment in the U.S. alone and almost an equal number in Europe. And rusfertide is designed as an erythrocytosis-specific agent, right?
This is the drug where the way we are seeking the utility is like, "Hey, the patients that we are enrolling in the study," it's like, they have tried anything and everything that is available currently, and yet that hematocrit is not controlled, and they require too many frequent phlebotomies. Our drug, by virtue of being an erythrocytosis-specific agent, takes care of that problem, and our phase II data was outstanding. It had a randomized withdrawal portion, where also the P value was like 0.0003 or something like that, and on the basis of that, we have designed a phase III study. Most of the elements of eligibility criteria and the readouts are very similar to what we saw in a phase II study.
Over here, one of the differences, like, the placebo arm starts right from day zero, so to speak.
Mm-hmm.
So there is a 32-week time period. So over the last year or so, our focus has largely been on the execution of the study, and as we reported, a month or so ago, we completed the enrollment successfully by the end of April.
Mm-hmm.
And, you add 32 weeks to that, so it's like, you know, the primary endpoint portion of the study will be completed by the end of the year. So we feel confident, Takeda feels confident, that sometime in Q1 of next year-
Yep
... we basically should be able to share that, our findings from that study with the Street.
Mm-hmm.
Now, the deal that we structured is really a win-win for both companies. I would say it's a co-development, co-commercialization kind of deal structure. And we got a $300 million upfront, and there are some other milestones eligible before the drug gets approved. But one of the important juncture is, like, 4 months after the NDA filing, we, Protagonist, has the choice of staying opted into the deal, the co-commercialization portion in the U.S., or we could be opting out. If we opt out, then we get $400 million as a milestone payment, $200 million right at the opt-out, and then another $200 million when the drug gets approved, right?
Mm-hmm.
On top of that, now the milestones are increased by almost threefold, and the royalty rates for the US, under the opt-in, it will be a co-co, but under the opt-out, we'll get 14%-29% royalty-
Mm-hmm
... both in the US as well as ex-US as well. So I would say it's a very lucrative setup, but for us, we will just look at the 32-week data. We will undertake a careful analysis of what is the true market potential of this drug, and then it's almost a mathematical choice. Which number is higher, under the opt-in or under the opt-out? But the good news is we have plenty of time to make that decision-
Mm-hmm
... and right now we are just focused on the execution of the study.
Yeah. I believe and you will do a lot of the NPV modeling stuff and see, okay, different scenario, different product profile, market research to be able to say: Okay, how rusfertide gonna generate the market value-
Exactly
... compared to the opt-out kind of options.
Right. Right.
Right. Okay, good. And then in terms of the, you know, the deal, how... You know, we're gonna see the data 1Q next year. How you think will be considered as a very good kind of scenario for rusfertide, and then what will be, you know, a little bit risky for that? And then, and also understanding, you are simultaneously running a, you know, two year carcinogenicity study. How will that factor into the decision for the deal?
Yeah. So all those things will come into play. The good thing is the carcinogenicity study that is basically done by the end of the year.
Mm-hmm.
So even before we get the 32-week data. In terms of the data, if in phase III-
Mm-hmm
... we see data that is similar to what we saw in phase II-
Mm-hmm
... we are going to be very happy, right? That's—that's an amazingly good outcome in our opinion.
Yeah.
Now, if you want icing on the cake, then I would say, are there symptom improvements, right? Because that, that's one of the key secondary endpoints, and, if I was a patient, I would like to see symptom improvement. So, that would be the other thing. Now, the tricky part about the symptom improvement could be, do you see something in 32 weeks, or is it gonna take longer, or something like that?
Mm-hmm.
Now, fortunately, if our phase II study is any guidance, then, then it's like patients, once they start taking our drug, the retention that we have with the patients is just amazingly high. Now we have patients that are, have already completed 3+ years of treatment, so we added a new study, we call it THRIVE, where the patients that are rolling over from the phase II study are now moving into yet another two year extension, that kind of thing. So long-term data is also going to play a big role over here.
Mm-hmm.
But it's like, hey, a dream-come-true, true scenario would be if at 32 weeks, we achieve our primary endpoint, but in an outstanding way, and we, we also see good signs or signals of symptom improvement.
Awesome. Great. And I think on the safety side, it's very critical to this profile as well, but you do have a, you know, increasingly accumulated kind of a safety profile. You will have some long-term follow-up at EHA very, very soon. So tell us a little bit about what you have seen in the clinic, understanding investors a little bit, kind of worry about this kind of cancer incidence, but seems getting more and more comfortable, at least from you and the Takeda perspective.
Yeah, and, you know, dissecting out like, which part of safety-related observations are drug-related versus what is prevalent in PV-
Yeah
It's not an easy thing to do. As we know, just the prevalence of cancers in PV is roughly 2-3 times higher than what you would see in the normal population. And then, of course, if you are on cytoreductives, then the rates are even higher, as you can imagine, right? So but having said that, in our studies now, we have a derm exam as a mandatory step before patients start enrolling in our study. So that clarifies what is a preexisting condition versus what may be happening while on the study. And again, we take all comers, so there will be patients who could be taking hydroxyurea or interferon or Jakafi or whatever it may be, right?
But what we have done is, like, we have made it almost like a religious practice to give a safety update twice a year.
Mm.
Once at EHA in the middle of the year, right? And then towards the end of the year at ASH.
Mm-hmm.
Fortunately, we have been selected for an oral presentation at EHA.
Mm-hmm.
So, you know, we'll give a safety update over there as well. We feel very comfortable with what we are seeing. But the phase III study, the beauty is right from the beginning, there is a placebo as well as treatment arm, right?
Mm-hmm.
So that will also give us a very fair understanding of like, what is it that you are seeing in the placebo versus treatment.
Right.
So at the 32-week junction, that will also become an important component of the results.
Yeah. Excellent. Okay, so, you know, I think we spend, you know, you know, sufficient time on rusfertide, which is very meaningful, right? So given the economics, given the phase III data coming up, but also let's talk about the JNJ-2113. That's, you know, basically last year, a lot of the discussion is around Protagonist is around that program. So remind us of, you know, you mentioned early on, so seems everything is moving up because of the excitement, because the enrollment, and then what-- how should we expect the result from your phase III psoriasis? Now, we even know by the end of the year, you will have the UC phase II data. How should we think about the Street, think about, you know, what we're gonna get, get updated from those trials?
Yeah. I mean, as we know, the IL-23 pathway, the antagonist around that, the injectable antibodies, right? Stelara, Tremfya, Skyrizi, we know it's very well documented. It's one of the most proven, efficacious, and safest mechanism of intervention that is out there. The utilities in psoriasis, psoriatic arthritis, Crohn's, and ulcerative colitis. And if you look at J&J's own numbers, for last year, the combined sales of Stelara and Tremfya, combining all the indications, was over $12 billion.
Yeah.
Now, we are like a breath of fresh air. This is the first and only oral IL-23 blocker-
Yes
... that is out there.
Yep.
You know, J&J is not sparing any efforts. They are so committed to it. All the studies, as I said, there are 6 studies, or 4 studies in psoriasis, including 2 studies where they're doing a head-to-head superiority study with Sotyktu-
Yep
... the TYK2 inhibitor from BMS.
Mm-hmm. Mm-hmm.
All the timelines have been revised and in a positive way.
Mm-hmm.
And the phase IIb UC study, as I mentioned in the opening remarks, that timeline has been revised significantly as well. So I think there is clearly a lot of excitement around the drug from J&J. Last year, during their R&D day, they classified this. That was in December.
Yeah.
Sorry. Right. So, in the $5 billion+ category potential.
Yep.
I think it will be the phase II UC study will also shed some more light on the potential utility of the drug in IBD, so to speak.
Yeah.
So we are super excited, and J&J is super excited. And the way the enrollment has all these timelines have been revised, it suggests to me, this is just a speculation, but a logical one, that hey, maybe the investigators are also you know excited about the drug. And in the field of psoriasis especially, it's like this is an oral drug. That's like a breath of fresh air. It's... And if you look at the phase II data, this would be the first and only oral IL-23-targeted psoriasis drug that has the opportunity to be the best oral psoriasis drug.
Yeah, biological-like efficacy and then not having too much, unexpected safety problems.
Yeah. IL-23 is the safest pathway. I mean, if you look, if you just take the TYK2 pathway versus the IL-23 pathway, it's like the, in terms of safety, there is no comparison.
Yeah. Yeah. I would add the excitement from the patient side well. Given this is oral, given this is, you know, biological-like efficacy, why not just sign up for that kind of clinical trial versus others?
Yeah.
I understand it's a very-
Some of the anecdotal remarks we get from the KOLs is supporting that kind of enthusiasm.
Yeah.
Yeah.
Yeah. And then, so just how are you gonna communicate the result with the Street? I understand it's a partner, you have limited, you know, you're tied to how you can disclose. Will that be driven by you or them, and how the Street will be communicated?
Well, this is where Protagonist is like a little child, and J&J is like the big parents, so the parents will dictate how we exactly communicate. But look, I mean, this is a relationship we have had with them since 2017.
Yep.
We have delivered. Both parties are super excited. You know, last year, we shared the results of the phase II data in a very timely fashion, so both parties are very understanding of each other. So we will do the right thing and share the data in a manner and form that is working for both companies.
Okay, we're gonna stay tuned on that, right?
Right.
Okay, so, maybe before we move on to your earlier pipeline, you did some kind of additional study in the study, you know, recently for the additional kind of a psoriasis so maybe what are the other potential indications can be applied to 2, 1, 1, 3, and then that's understanding maybe you have a discussion with J&J but not necessarily you can disclose now. But just to give us some kind of hints.
Yeah. So, you know, as I mentioned before, J&J, it appears, is going for all potential utility it could have with a drug like JNJ-2113. And yes, the new study, phase III study that they added in this, pustular psoriasis, and I forget the word of the other one-
Subset of the Psoriasis.
But these are very rare-
Yeah
... psoriasis indications where actually, if not treated properly, then that could be fatal.
Mm-hmm.
So it is life-threatening, so they are doing a small study in 16 patients. And over here, I think the idea would be, again, J&J will be the better spokesperson for this, but it's like, it's a small study. It could potentially add to the label-
Mm
... if the study is successful, things like that. But in terms of the main approval, it's the current icotrokinra study in this broader psoriasis population with this moderate to severe degree of severity that will be the main study-
Mm
... I would believe around which one would want to seek approval.
Yeah, psoriasis is big enough, UC even bigger, and then, you know, any indication currently developed or approved for IL-23, it's a fair game, and obviously, they need to, you know, one step at a time-
Yeah
... to develop.
I mean, if you look at the history of some of the best-selling drugs, and I'll use Humira as an example, right?
Mm-hmm.
It started with one set of indications, and then it's like a laundry list. It keeps on getting bigger and bigger.
Yeah. Partner is a J&J, right?
Yeah.
They can do anything.
Yeah.
Okay. Yeah, I'm glad we have a couple minutes to talk about your earlier pipeline, because to your earlier point is, repeat performance, right? So as a small biotech, you partner with big boys, you know, for your lead program and, as you go into kind of later stage development, which is very, common practice, but also, you have this platform be able to, to generate some kind of, early clinical POC to maybe even keep more, economics, for yourself. But just remind us, where are you for your oral IL-17 first, and then we can talk about some other early pipeline.
Yeah. So clearly, I mean, as you can tell, we cannot stop talking about JNJ-2113. But, you know, when my kids were young, and I was young also, they would be like: "Hey, Dad, anybody can get lucky once, right? So can you do it again?" But jokes aside, it's like, we believe we have a very robust, validated platform which can do wonders, come up with oral peptide therapeutics. So, we are striving for repeat performance. Oral IL-17 is a prime example. And the beauty over here is, like, you get the luxury of working on targets that are fully validated through injectable antibody drugs, through biologics in general, and there are very well-established preclinical studies, translational studies, that are all mapped out for you.
Mm.
All you have to do is come up with a wonderful oral peptide. So IL-17 is a very attractive target in that regard. As you know, the IL-17 injectable antibodies will have a meaningful utility in HS and spondyloarthritis and even psoriasi-
Yeah
... or psoriatic arthritis, all those kind of indications. So we have undertaken an oral IL-17 program. The idea over there is, again, the same as JNJ-2113. It's like the convenience of an oral, and at the same time, the potency and the specificity and all the other attributes of an antibody drug, right?
Mm.
So with IL-17, it's like, hey, can you achieve activity both against the A isoform and the F isoform? What we are striving for is a peptide that will have activity against both.
Mm-hmm.
Right? That will be the ultimate thing. Of course, when we share the data, we will share some amount of preclinical information, PD-based POC, something like that-
Mm-hmm
... to give people enough conviction that we have picked the right kind of candidate, which we expect to do by the end of the year.
Okay, by the end of the year, you're gonna select a candidate with some POC preclinical data, give people enough to say that supports your selection.
Yep.
Yeah.
Exactly.
Awesome. Okay, great. So last couple minutes, let's talk about your earlier pipeline, because you are thinking focusing on Heme as rusfertide, focus on I& I as IL-17. Obviously, you're gonna beyond IL-17. And also, you mentioned the metabolic. I cover obesity kind of almost every single day. So, how would you prioritize internally, and then what should we see the cadence of those new pipeline coming out of your platform?
Yeah, no, absolutely. So oral IL-17 is a clear commitment, right? We have made very good progress internally, so we feel confident with the guidance that we have provided. We are working on some other I& I targets as well. In the Heme space, we are working on oral hepcidin-
Mm-hmm
... kind of an approach as well. And then, of course, in the metabolic/obesity space, there are very well-proven targets that are out there. And so we are working on all of those things. But right now, the clarity we are providing is with oral IL-17.
Mm.
With all the other things, it will just depend on how discovery flows, and discovery, in all honesty, is the most unpredictable and vague phase. So we'll just have to see which project lights up with the most promising candidate when, and then we will start sharing it with the Street accordingly. But there are a lot of irons in the fire, as they say.
Mm-hmm.
Fortunately, we are well-funded, so we can support all that. So yeah, net-net, we will strive to try to come up with new candidates every 9-12 months.
All right.
Mm.
Okay, look forward to that. Okay, we went through a lot and then almost covered everything. So anything else that you wanna, you know, highlight and we haven't touched upon?
No, I think we are good. We have covered all the things. Like I said in the beginning, we are and still remain at the core level a peptide technology platform company. That's in our DNA, but at the same time, we are getting an opportunity to move into later stages of development and then ultimately commercialization if we choose to do so. Our partnerships are also a reflection of the maturity we have as a company. The partnership with J&J in 2017 was around a preclinical asset, and the partnership we did with Takeda this year was around a phase III asset, and it's a co-development, co-commercialization partnership.
The company is evolving, but we are still very grounded and staying close to our roots and applying our knowledge and know-how in areas where we believe we can create a strong differentiation.
Wonderful. Thank you, Dinesh. Thank you, everyone.
Thank you.