Good morning, everyone. Thanks for joining us for another session at the 41st J.P. Morgan Healthcare Conference. I'm Brian Cheng. I'm a senior analyst at the firm. Presenting next is Protagonist Therapeutics. I'll turn the floor to Dinesh Patel. After his presentation, we'll go into a Q&A mode. At that time, we'll take questions from the audience. Also, if you want to submit questions on the portal, please feel free to do so. Dinesh, the floor is yours.
Thanks, Brian. Good morning, everybody, for being here this early morning. Appreciate it. Just a quick disclaimer that we are a publicly traded company, and we'll be making forward-looking statements today. Protagonist works exclusively on peptide therapeutics, and we are a late-stage clinical development company. We have two very diverse assets, and the genesis of these assets is our core technology platform, which enables de novo discovery of new peptide therapeutics against almost any target of interest, including protein-protein interaction targets, which typically are not amenable by small molecules. The two assets are Rusfertide and PN-235. Rusfertide is a synthetic mimetic of the natural hormone hepcidin. Hepcidin is an iron homeostasis regulator. Its function is to manage the storage, distribution, and absorption of iron in the body.
As you can imagine, a mimetic of this natural hormone could have relevance in the intervention of numerous blood disorders, specifically those that could be influenced by iron overload or erythrocytosis. In particular, we are focusing on polycythemia vera. This is a blood disorder of excessive red blood cell production. We have multiple studies going on over here, including a pivotal phase III study. The drug has an Orphan and Fast Track status. PV is a rare disease, and in itself, we believe it represents a multi-billion dollar opportunity in the rare heme space. The asset is fully owned by Protagonist. PN-235 is an oral peptide, an oral IL-23 receptor antagonist, and this is something we have partnered with Janssen. As you can see, Janssen is doing full justice to this asset.
There are multiple phase II studies going on in psoriasis. The big vision here is really the extension of the $10+ billion STELARA TREMFYA franchise and the transition from injectable to oral targeted therapy. It is also very comforting to highlight that, you know, in these challenging times in our sector, Protagonist is fortunate to have a credible cash runway through the end of 2024, which then enables us to achieve multiple milestones, including completing the phase III PV study, getting it to top-line data before we run out of cash. Let's talk about Rusfertide and polycythemia vera. PV is a myeloproliferative neoplasm. It's characterized by excessive production of red blood cells. An elevated hematocrit is a characteristic of the disease.
Hematocrit is nothing but the ratio of the volume of red blood cells to the total blood volume. A number above 45% is a characteristic of the disease, and it is affiliated with numerous risk factors, so including a thrombotic and cardiovascular risk. PV is a rare disease, but not that rare in the sense that there are about 100,000 patients in the U.S. alone and almost an equal number in Europe as well. It is a chronic indication, so the median survival time spans over several decades. This is a slide that basically highlights that there is a very significant unmet need in PV. Number one, hematocrit needs to be maintained below 45% per guidelines.
Number two, there is a very, very clear and direct association of higher hematocrit with higher rates of mortality and morbidity arising from cardiovascular and thrombotic events. Not only that, as I said, people live for decades with the disease, and the day-to-day quality of life gets highly impacted. The symptoms are very burdensome, including symptoms such as fatigue and concentration problems. Number three, which is really an eye-opener, is that our real-world data shows that majority of the patients do not control their hematocrit and have tests registering above 45%. When you combine all these facts, what it states is that the current standard of care is not getting the job done, and there is an unmet need. Finally, the therapy involves phlebotomy and cytoreductive agents for the large part, but there is no pharmaceutical option that is very RBC or erythrocytosis specific.
In that context, R usfertide could be the solution over here by being a synthetic mimetic of hepcidin, the iron homeostasis regulator in the body. These are two examples that demonstrate clear affiliation of increased hematocrit with increased morbidity and mortality events. On the left is a CYTO-PV study where you will see that the mortality rates are four times higher in the group that had higher hematocrit in comparison to the group that had hematocrit below 45%. On the right, what you see is that for patients who were also on hydroxyurea treatment, if they have fewer phlebotomies, they are kind of in a so-safe zone. If you are having three or more phlebotomies a year, then that is where your thrombotic risk is four times higher. How does Rusfertide work?
In PV, in a sense, as you can see on the left-hand side, there is excessive delivery of iron into the bone marrow, leading to excessive red blood cell production. That's fundamentally what the disease is. Hepcidin is a inhibitor of ferroportin, the iron channel through which iron is transported from the storage systems, the macrophages, into different parts of the body where it is needed. Rusfertide blocks ferroportin, thereby modulates or decreases the supply of iron to the marrow and normalizes the production of red blood cells. I would also point out that hepcidin, the natural hormone in its own right, was never a drug in its own right in our eyes. It was always a starting point for drug discovery. It simply doesn't have the characteristics of a good drug.
Through our platform, we discovered a superior mimetic, which is superior in the context of all the pharmacological and drug-like properties that one could think of. Our drug is now in 3 clinical studies, and I will quickly highlight some of these studies. Phase II REVIVE study has been a source of constant information and updates for the performance of R usfertide in PV. The eligibility criteria in this 70+ patient study is patients with excessive phlebotomy requirements in spite of their current standard of care. They could be on phlebotomy alone, or they could be on other cytoreductive agents. The study has different parts. The first phase is the dose-finding and efficacy evaluation phase. The second is a 12-week randomized withdrawal, where the patients are distributed in a blinded manner in a 1-to-1 fashion in placebo versus treatment.
Finally, there is the open-label extension. Originally it was for one year, then, keeping the interest of the drug, in mind, both from the patients and the investigators, we extended the open-label extension now for three years. For the 70+ patient study, we now have five patients who have completed more than two years of treatment, and we have more than 50 who have completed over a year of treatment. Clearly there is a lot of good stickiness, of this drug with the patients and the practicing physicians. The demographics are self-explanatory, very quickly, we have a good proportion of both low and high-risk disease patients. As you can see on...
in the therapy part, there is almost an equal distribution of patients on phlebotomy versus patients who require phlebotomy in spite of being on various concurrent therapy. This is a data-rich slide. This is a money slide. It's a very busy slide, but just follow the colors, and I think you will appreciate the simplicity and the impressive data. For now, we'll just focus on the sketch on the left, the phlebotomy-only group. The gray area with the red triangles is basically the pre-dose phase. This is when patients were not on the studies. Each red triangle is a phlebotomy. The bottom line is these are patients requiring frequent phlebotomies. Now, once they enter into the study, that's the green area, and you can see the triangles are almost eliminated.
Essentially, the punchline over here is, like, this is a drug that essentially eliminates phlebotomy and exercises amazing hematocrit control in a consistent and persistent manner. You see the kind of the shaded gray area with some red triangles. This is the time when there was a clinical hold, and while the hold was lifted in a record time of three weeks only, it took a few months for the patients to get back into the study. For a few months, the patients were without any drug. As you can see, now the phlebotomy requirement has come back when the dosing was suspended, which then, in a way, talks to the strong influence of the drug in controlling phlebotomy. The other component we have is the randomized withdrawal.
This is the 12-week period, placebo versus treatment. We are nearing the completion of this phase, and in the first quarter of this year, we expect to share the highlights from this study. We'll save the details for presentation at a major medical conference. This is basically the dataset. Now when you look at the other arm, phlebotomy at versus cytoreductives, at a high level, the data trends are essentially identical. Clearly the drug is doing an amazing job in terms of controlling hematocrit and eliminating phlebotomy. This is a summary slide. I won't go through any of the details. Last December at ASH, we provided a safety update that only no new safety findings. The drug appears to be well-tolerated.
Now our exclusive focus is on the 250 patient pivotal phase III VERIFY study. The most important thing to remember about this study is like the study design, the enrollment criteria, the primary endpoints, all of those things essentially mirror what we had in the phase II REVIVE study, and where, as I just showed you, we have achieved amazing success. Patients with excessive phlebotomies are into the study. They are distributed 1-to-1 between placebo versus treatment. There is a week 20-32 primary efficacy evaluation phase. After that, all the patients go into 20-week durability phase, and at that junction, we believe we'll be ready for an NDA filing while the study still continues with additional two years of safety follow-up.
We have forecasted that, the enrollment for this study will be completed in the second half of the year. As we are in the thick and thin of a phase III study, it's only right for us to now start paying attention to the commercial positioning. The punchline over here is that we believe that Rusfertide is almost like a precision medicine, if you will, that works exclusively through controlling erythrocytosis or the RBC production, by controlling the hematocrit and thereby eliminating the need for phlebotomies. We would like to see this as foundational medicine that should be applied to a majority of the patients for a majority of the lifespan of the disease. When you're in a very low-burden state requiring only one or two phlebotomies, that gets the job done, you're fine.
Then we are at the very late stage, moving towards myelofibrosis, you do need control of all cell counts, and that is where you need a pan inhibitor. For most patients, for most of the time, an RBC-specific drug will do a great job, and it will do a safer job. All right. Now let's switch gears and talk about our oral IL-23 asset. This is a partnership we have had with Janssen for more than 5+ years now, and it has been a very satisfying journey for the Protagonist team to move the asset from early discovery preclinical now into multiple clinical studies in the with PN-235. The big vision, as I mentioned over here, is really extending the STELARA and TREMFYA franchise and transitioning from injectable to oral-targeted therapy.
As you know, this is the most important franchise for our partner, $11.26 billion in total global sales in 2021 alone, and application in multiple different indications, including psoriasis and inflammatory bowel diseases. PN-235 is a very unique molecule, and we can claim a first-in-class status for the drug at least three different levels. One is over here, we are targeting the receptor in the IL-23 pathway, unlike the antibodies that are targeting the ligand. The other is, obviously, this is an oral, a huge plus compared to the injectable antibodies. The third is like, this is a small peptide, unlike the big biologics, and that is why it could be oral. Now when you look at the psoriasis space, obviously, you know, JAK inhibitors and TYK2 inhibitors are gonna have their presence.
It is the IL-23 pathway blockers and IL-12/23 pathway blockers that have unprecedented efficacy and safety in psoriasis. When we come up with an oral drug working along this pathway, that could really be a game changer for both companies. PN-235 could be a potential, not just a first in class, but a best in class oral approach in the IL-12/23 pathway. This is a protein-protein interaction target, the barrier to entry is high, unlike JAK or TYK2 inhibitors, where it's a small molecule approach, and relatively speaking, it's simpler in nature. As I mentioned before, that there are multiple studies being conducted by Janssen. The two most noteworthy ones are the FRONTIER 1 and SUMMIT. FRONTIER 1 is a 240 patient Phase IIb placebo-controlled study in patients with moderate to severe plaque psoriasis.
We are glad to report that the enrollment has been completed. It's not just the enrollment, even the study has been completed as of the middle of December of last year. As you can imagine, data analysis is in progress. The other study, Summit, it is with the same drug and in the same population, but with a different delayed-release tablet formulation. Clearly, Protagonist and Janssen are getting two shots on goal over here. This has been a very lucrative partnership for us. We have already benefited from $112.5 million in different kind of payments. There is a lot more to come, I guess. $855 million to be precise, and these are not just biobucks, right?
As you can see, close to $200 million is something that could be achieved over the next 2-3 years. Of course, this is all depending on that PN-235 is a success. The royalty rates, at last but not least, of 6%-10% for a $10+ billion dollar franchise, the numbers add up. If 235 goes forward, this partnership in its own right would become such a nice non-dilutive financing arrangement for Protagonist and a very steady stream of reliable income over the coming years.
Currently, even without that arrangement, we are comfortable with the cash position, $267 million, as reported at the end of third quarter of last year, cash runway through end of 2024, enough to allow us to finish the pivotal phase III study of Rusfertide in polycythemia vera. What are the things we could look forward to in 2023? Clearly, for us, it is all about Rusfertide and PN-235. With Rusfertide, we will get the randomization data from the phase II REVIVE study, sometime in this quarter. We look forward to sharing some of the highlights, and then we'll save the details for presentation at a major medical conference around the middle of the year.
Towards the end of the years, we also expect completing the enrollment of the Phase III VERIFY study. With PN-235, thanks to Janssen, we are getting two very clean, robust shots on goal, and we believe the fate of 235 will become pretty clear in the first half of this year. This really completes my narration about Protagonist and its amazing group of employees through whose efforts, we have moved on from being a technology platform player to a company with multiple assets in late-stage clinical development, one being developed by us entirely, another being developed by an amazingly well-qualified partner, Janssen Pharmaceuticals. Thank you.
Thanks, Dinesh. Oh, you can...
Yes.
You have a seat. We're gonna start the Q&A session. For those of you who are in the live audience today, feel free to use the mic runners who are on stage.
Actually, Arturo and Sam-
Oh, yeah.
Why don't you sit here? I'll stand.
We're gonna have more members from the management team joining us. Maybe it'll be good to have an introduction of your team members who are on stage today, and then, for the audience who have questions, we have mic runners, so feel free to ask questions. We have Dinesh. Go ahead.
Sure. I'm the CEO of Protagonist, a medicinal chemist by training. I've been in the industry for 33+ years. Who is counting, right? Just enjoy the journey of bringing innovative new medicine in the hands of patients who need it the most.
Yeah. Arturo Molina. I'm a practicing physician, medical oncologist by training. I've spent time as faculty at City of Hope on the hematology team and in industry at IDEC Pharmaceuticals, CMO at Cougar Biotechnology, acquired by Janssen, Sutro Biopharma, and really happy to be at Protagonist for the last couple of months.
Hi, I'm Sam Saks. I'm an oncologist by training. I've been advising Protagonist since 2018. In the 1880s, I was part of Genentech's first oncology group. In the 1990s, I was with Ernest Mario at Alza, helped sell it to J&J. Stayed on to run it for a short time for J&J. In the 2000s, I was the founding CEO of Jazz Pharmaceuticals and took that public. In the last decade, I was part of the Auspex team that sold to Teva for $3 billion. Again, I've been here since 2018.
Great. It's great to have you guys. So maybe just to start us off, we'll focus on Rusfertide and PV. You know, heading into our next readout, for the REVIVE study, we're getting randomization data from the phase II. What should we focus on in terms of, you know, what we should expect at the top line readout, from investor standpoint? Can you just recap on the expectation of the number of patients and the respond measures that, you know, you could potentially read out at, you know, later this quarter?
No. I would like to mention that this is the first instance where it's truly a blinded randomized one-to-one placebo versus treatment kind of study. All the data we have generated so far has been in the open-label kind of open study format, right? It will be very revealing to see and understand how the drug performs in that kind of setting. Maybe Arturo and then Sam, you should elaborate on, like, what will be our expectations here.
I can start. Dinesh showed you the data where you saw a lot of red. That's bad. A lot of phlebotomies that are required. A lot of green once the patients start on Rusfertide. When there was a clinical hold, the red comes back, and that's in the gray-red area. The purple rectangles is the data that we'll be analyzing this quarter. In some ways, you got a sneak peek of what the data could look like. We haven't seen it yet. That'll be analyzed soon. We know that for patients who are deriving benefit from Rusfertide, if the drug gets stopped, the requirement for phlebotomy comes back right away. This data shows you prior to dosing, the phlebotomy rates and then post Rusfertide.
These P values are very significant in terms of the Rusfertide effect, in controlling the hematocrit and thereby obviating the need for phlebotomy. I think it will be very rich data because this will be a prospective randomized withdrawal as opposed to the suspension of treatment related to a clinical hold. There'll also be some data from the patient-reported outcomes, but the sample size for the PRO, it will be better in the phase III study where we have 250 patients where we'll be assessing the PRO. It'll be more robust in the phase III, but we're already getting hints from PRO data that patients are experiencing clinical benefit, improvement in concentration and the total symptom score.
You get a pretty good sense of how this drug will perform in the Phase III. Are there specific factors that, you know, are different fundamentally between the Phase II REVIVE study versus the Phase III VERIFY study?
The Phase III study recapitulates all the key elements of the Phase II. They're very similar. The main difference in the protocol design is that in the Phase II study, all patients start out with Rusfertide, and then they get randomized to a withdrawal of Rusfertide. In the Phase III, patients up at the get-go are randomized to placebo versus Rusfertide. It's a double-blind, placebo-controlled study, so no one knows who's getting what.
One thing I would add is one of the difference is the size of the study.
Yeah.
If we were just focused on efficacy, we could have gotten away with a 50-patient study. Phase II was a 70-patient study. This is a 250-patient study. The idea here is to really have a broader set of data and get more clarity and assuredness in terms of the other outcomes, such as the symptoms scores, and things of that nature.
Have you talked about, just the powering assumptions around it? What is the bar that you would like to hit, in the phase III?
Yeah. Sam, you want to?
No, I'd just say that again, the powering assumptions are based on the PROs, because with the PROs, we can only show a benefit in those people who have a particular symptom and have it at a moderate or severe, you know, elevated level so that we can see it decline. Again, the primary endpoint from the two studies is nearly identical, but in phase II, it was powered solely for that. In phase III, it was powered for the patient-reported outcomes.
Okay.
I also want to point out that the demographics that we see in both studies mirror the marketplace. If you think about the marketplace, about half on phlebotomy alone, about a third on Hydrea, a small percentage on Jakafi. That's exactly what we see in our patient population that we're accruing, is basically what you would expect from the broader marketplace.
I guess maybe just, you know, we focused a lot on efficacy. If we can also talk a little bit about the safety as well, that'd be great too. How confident are you of the safety profile now based on, you know, what you have seen? Can you talk about the baseline skin cancer screening that, you know, you have in place in VERIFY? How often is the screening done during the study? Are there IDMC meetings periodically to just review the blinded data?
Yes. That's a good question. I think, with the baseline dermatologic exam that we're doing, an advantage there is that when we find lesions, and we are finding lesions, they become part of the patient's past medical history. They get diagnosed, they get worked up before the patient starts Rusfertide. As we've been studying the literature, if you look at the increased risk of non-melanoma skin lesions, we know that hydroxyurea increases that risk. In patients who have been on hydroxyurea, if you take, for example, a snapshot of a large patient population, you'll see that the risk of non-melanoma skin cancers is over 10% in patients. It's particularly if they're on Hydrea already. If they're not on Hydrea, it's up to 5% just with phlebotomy only.
If you look at the incidents that we've seen so far in our patient population, it's in that 5%, which is consistent with the background rate that already exists. With having the baseline dermatologic exam, we'll be able to capture that. That gets done approximately every six months. Obviously, there are gonna be meetings of an independent data monitoring committee that monitors the safety data.
I notice, Arturo, you brought the ASH.
I like props.
Yeah.
Maybe I can tell you. I've been with the company for about two months, and I have a lot to learn. I learned a lot at ASH. I got to talk to a lot of the investigators. For me, it was very important to just ask the investigators, "Can you tell us about a patient or two that you've treated on the clinical trial? Why are patients staying on treatment so long?" You know, Dinesh already mentioned we have five patients on treatment two years or more. 50 patients on treatment a year or more. 21 patients on treatment 18 months or more. 92% of patients came back on study after the clinical hold. What makes patients wanna come back on the treatment?
Every PI had a story of a patient who was deriving a lot of clinical benefit. There's one patient who's a triathlete. There's a patient who had disability based on PV who is now working. Some patients were very upset that the drug got put on hold temporarily because they feel better while they're on drugs. For me, hearing these patient journeys stories was very powerful. We're working with patient advocacy groups to see if we can get patients connected with these groups so that they can share the stories with other patients. At ASH, we also, in addition to the investigator events that we had, we had a lot of one-on-one meetings. We met with patient advocates. We had a CME symposium where KOLs presented our data. It was well-attended, well-received.
Then we had this ad in ASH News Daily. This gets given to all the ASH attendees, whether they want it or not. It was in circulation three days. We have a full-page ad of the VERIFY trial. This has the trial design. We also have a website for patients, where patients can get information from the VERIFY phase III study. Basically, by clicking like eight different questions, they can determine if they're eligible. If they're eligible, then they're provided with a list of sites close to where they live. Now we're taking that a step further in facilitating patients being referred to these sites if they're interested in participating in the study. We have a lot going on in terms of getting the recruitment up and running.
If you monitor ClinicalTrials.gov, you'll, you're gonna see that there's more and more sites coming on board. The site contracting process takes months, getting the contracts, the ethics committees, the IRB reviews, but now we're in a roll. Like, this week, we have six site initiation visits that are happening. We have many scheduled for the next few weeks and anticipate that enrollment's gonna be very robust.
How has been the pace of enrollment, you know, been in the last couple of weeks?
I mean, the high level answer there is like, you know, we guided towards completion in the second half of this year, and we are retaining that guidance.
Okay. Maybe switching gear to your 235 partnership in plaque psoriasis. Maybe just on the expectation from J&J. Are we expecting data from J&J or, you know, your press release? What is the, you know, the lowest bar that you want to show to advance this program to the next step?
I think those are the kind of details that will be shared at the right time. What we can forecast at this stage is like, in the first half of this year, the fate of PN-235 will be decided. And that will be a material event for Protagonist. That is something we believe we should be able to share at a high level sometime in the first half of the year. As I mentioned before, the main study, the Frontier study, that has already been completed. The data analysis is underway. Large pharma, they do things a certain way, and we are very respectful and mindful of all those kind of things.
We have worked so cooperatively together for more than five years now. There is a very clear understanding of what is the need of Protagonist versus what is it that Janssen needs to do in terms of PN-235, and what its plans are and when they would like to disclose those plans, right? I mean, as you know, it's a very, very competitive area. PN-235, it works. It's like a crown jewel. This is the only oral IL-23 antagonist that is out there. As I was mentioning before, you know, the small molecule space, whether it's the TYK2 inhibitors, JAK inhibitors for other indications, S1P modulators, those spaces are gonna get very, very crowded pretty soon, if not already.
Whereas over here, we don't see anyone else, in sight nearby. We are the only game in town.
Okay. Assuming that FRONTIER is positive, what will be the next steps for J&J outside of plaque psoriasis?
I think, I mean, I can only assume rather than saying with certainty, but, you know, one obvious thing is to take the drug in a phase III psoriasis study as soon as possible. The other parallel step would be go after all the other indications, right? There are at least three other. Psoriatic arthritis, ulcerative colitis, Crohn's disease.
Okay. Maybe just to wrap our conversation up, how do you think about the re-resource allocation near term, and, are you in a position to look for partnerships?
Yeah. So, well, clearly we are a company that is not averse to partnerships, as you can tell. Partnerships, I believe they pay off in a great way. Our partnership with Janssen is a great example of that. Having said that, you know, the first time we did a partnership was when we just had a preclinical asset. Now, the independent asset we have is like in a pivotal phase III study. Having So, we are doing two things. At one end, it is in the best interest of the company and all the stakeholders that a company like Protagonist, which by the way is fortunate enough to have partnership inquiries all the time, to be open-minded about these things.
At the same time, as you can see, we are creating full preparedness. It's not that easy to get great MDs here at the podium as part of the Protagonist team. As I also shared, we are also creating the commercial preparedness and all that kind of thing. Clearly we have the vigor and the agenda of developing Rusfertide on our own all the way through approval and commercialization. Partnerships is part and parcel of the biotech play.
Great. Maybe last question with our two minutes left on the clock. What are the key highlights that you think investors should focus on for the rest of the year?
I think the first half of the year is very critical, right? With regard to PN-235, there are two studies, so two shots on goal. Based on the findings from this study, all that we or the street need to know at a certain stage is whether PN-235 is a go or not. If it's a go, it's a victory lap. Then if not, Protagonist becomes a company focused exclusively on Rusfertide. With regard to Rusfertide also, we are moving full speed ahead. As we mentioned, just in this quarter, we will share some of our findings from the randomization data. If that turns out as we expect, then that is really a more additional as-assurance towards the amazing efficacy we have seen with the drug so far.
Towards the end of the year will be the completion of the phase III REVIVE study. After that, the clock starts ticking in terms of, like, when is the top-line data, when is the NDA filing, and those kind of things. Clearly a next big step for Protagonist in the coming months.
Great. We definitely look forward to it. Look, it seems that you have a very busy first half coming up very soon. That concludes our Q&A today. Thanks so much for your time today.
Thank you, Brian.
Thank you.
Thank you all.