Back to school conference. My name is Geoff Meacham. I am the Senior Biopharma Analyst, and my team is with me here, too. We are thrilled today to have Protagonist and CEO, Dinesh Patel. Dinesh, thanks so much for joining us.
It is a real pleasure. Appreciate the invitation.
Yes. As you move into the double digits on market cap, we are thrilled to get you for this more mid-bio type of conference. How does that feel? Getting the credit that you guys have, I think, long deserved for developing ICOTYDE, everything, right?
Yeah. As you know, it has been a long, steady journey.
Yeah.
It's not like things have happened overnight. We have been able to process it. We are appreciative of what we have been able to achieve, right? Statistically speaking, I'm like, "Yeah, we got two drug approvals this year, and a total of 30+ approvals have happened this year," so the statistics are great. But then in the same breath, I'll be like, "Oh, by the way, it took more than a decade with each drug." That's the reality. I'm glad we had a great outcome.
For both the drugs, it was backed up by amazingly strong phase III data, right? With MIMRYLO, the recent approval of the hepcidin mimetic, such a clean and broad label. We are very thrilled. Things are going exactly what we anticipated, the way we anticipated, but we are not taking anything for granted. It is biotech. We will always be on our tippy-toes.
Yep. Yeah. Well, let's talk a little bit about that on the strategy. You have two partnered commercial assets. The model has always been to develop things in-house, and then at some point, maybe in mid-stage, make a call to a partner or not. How do you think about the next, call it, five-plus years? Do you think there could be a Protagonist sales and marketing team on a wholly owned asset? Are you thinking about that strategy differently now that you have two sort of locked in or are going to contribute to the P&L for the foreseeable future?
Yeah, no, definitely there are some implications and differences from how we were acting and behaving, let's say a decade ago or even five years ago, right? With the two drug approvals, and partnered with J&J and Takeda, we believe we are going to have a healthy revenue stream. That should be more than enough not to support our own internal R&D pipeline, but also, in a mindful way, return some value to shareholders.
As you know, yesterday after market close, we announced a $300 million share repurchase program. It's going to be a balancing act, but R&D will always be our top priority. We don't want to be labeled as a royalty play because truly, genuinely, we are first and foremost an R&D center. We would like to be recognized as a company with special expertise and achievements in the field of peptide therapeutics.
And in terms of the strategy, I guess the simplest change is that we can afford to continue to develop assets on our own a little bit longer than what we might have done previously, let's say with icotrokinra, which was partnered with J&J all the way back in 2017 when it was a preclinical asset. Now, we may want to hold on at least up to clinical proof of concept, right? So that way, the terms could be better, and it would be a more fair win-win deal for both a pharma partner as well as ourselves. We are big believers of pharma partnerships. We believe in the expert system. They are great at doing certain things. We are good at certain things. So, let the experts do what they are good at doing.
Having said that, for some of the rare disease indication niche markets, we wouldn't mind taking those all the way through the finish line. In fact, if you think about it with rusfertide, the hepcidin mimetic, we were already in phase III when we did the partnership with Takeda, right? So over there, the original intent was the simple play. Big indications, partner. Small indications, develop on your own. But the terms were amazingly good for both parties, so we took that deal, and I'm glad we did it because now it's like giving away the first two, not actually giving it away, but it's like in return creating almost a financial independence.
Yep. Yeah, and just along that same train of thought, when you think about the indications to go after, so you mentioned rare could be something that you keep in-house. Talk a little bit about the process at Protagonist to look at new therapeutic areas. You're involved and you have the triple GLP oral version of that. Are there disease areas that you think are particularly attractive that maybe could be unmet, that change its priority in your pipeline?
So, Geoff, you can correct me if I'm getting carried away, but the way we are looking at things is like peptide therapeutics. Peptides are the nice in-between space between oral small molecules and injectable antibodies, and we have figured out how to create oral peptides. So now we can have the best of both worlds. In an oral peptide therapeutic, you have the oral component of oral small molecules, and you have the amazing potency and safety of and specificity of the injectable antibodies. So I think this is like a totally unique stuff. And our ambitious agenda is to truly revolutionize the entire landscape of all chronic medication. Chronic meaning patients are unfortunately going to be taking that medication for most or rest of their life.
And over there, if you think about it, currently the field is dominated by injectable antibody drugs, and they have been doing a wonderful job, especially if you look at I&I. So as a first bold step, it's like, let's take on all the important I&I targets and offer oral peptide medicine. So ICOTYDE is just the beginning, if you will. We are already working on an oral IL-17.
We love the phase I data that we got. Amazing exposure levels through an oral. The biology is already validated, so we are going forward in a full-fledged comprehensive phase IIB study in psoriasis with that asset PN-881. But can you imagine, it's like, hey, if there are injectable IL-23 blockers like SKYRIZI and TREMFYA, maybe ICOTYDE is an amazingly great alternative, which captures the potency, specificity of the biologics, but has the convenience of one's daily oral pill.
Now do the same thing in IL-17, where maybe BIMZELX is the gold standard. Do the same thing in IL-4, where you have DUPIXENT currently dominating the market. So I think in a way it's about repeat performance, applying the skill set and the knowledge and the knowhow that we have acquired over the last two decades.
We started working on peptides when we had to go out of our way to explain to people what peptides are. Now, of course, people are explaining to us what peptides are because everybody knows about peptides. So things have changed, but I think our expertise is very unique. So that's just in the I&I space. In the obesity space, if you think about it, the market has been dominated by the two injectable peptides. Wegovy, Zepbound. But look at the response of the oral Wegovy. It's just amazing.
That yet once again demonstrates the preference for an oral. An oral pill doesn't make you feel like you are treating a disease, an injection would. That psychology is also huge. In the obesity space, we will acknowledge we are late entrants, but then our focus is going to be towards very strong, undeniable differentiation. The first thing we are attempting in a big way is the oral triple G.
Retatrutide phase III, the injectable from Eli Lilly, has great data. They can truly claim that is the drug that offers maximal weight loss. Just imagine if our oral idea works, then the impact it could have. That's the mindset that we basically have. Whether it's in the field of metabolic diseases, whether it's in the I&I space or in the rare disease indication. In the rare disease indications, we have been successful with MIMRYLO. It's the first of its kind. It has gotten a broad and clean label. We are developing an oral functional mimetic as well now.
Yep. Yeah, just along those lines, I would say for an oral in the obesity space, Lilly has even said the one killer app that kind of keeps them up at night is a 20% weight loss oral. No pressure there.
With retatrutide, they were able to achieve 28.5% weight loss, if I can recall the numbers correctly from their clinical data. I think, if an oral triple works the way we envision it to work, 20% should not be an issue.
Yep. Well, before we go into there, let's talk a little bit about ICOTYDE versus your oral IL-17. Is there a natural tension between you guys and J&J on the development here?
You mean is there a sibling rivalry?
Yeah.
Kind of yes and no, because if you think about it, right? In a way, the injectables are teaching us everything, so to speak. That's like a preview of what's to come in the oral arena as well. I think the IL-23 blockers will have that uniqueness in the IBD space. The IL-17 blockers are going to have their uniqueness in the more arthritic kind of conditions, whether it's HS or spondyloarthritis or psoriatic arthritis.
In psoriasis, there will be a good overlap. But if you look at the current split between IL-23, IL-17, I think both have almost an equal level of opportunity in the psoriasis space. So I think, yeah, it's a healthy tension. Now, of course, ICOTYDE is partnered away with J&J. They are doing a fantastic job. We couldn't have asked or hoped for a better partner. But it's already approved and off to a great start. With the oral IL-17, we are now moving into phase II, so it's still early days, comparatively speaking, and it's fully owned by us.
Yep. Well, talk a little bit about ICOTYDE in terms of your interaction with J&J. Obviously, they are not going to inform you about where they want to go in terms of development just because of your in-house IL-17. But in terms of the technology, the peptide technology, could you take oral IL-17 into areas that maybe are not as well appreciated by investors into maybe some of the more orphan indications across the I&I landscape, where ICOTYDE may not go there?
Right. Yeah. I think that the IL-17, the first order of business for us to, let's make sure that the oral delivery is working. Now, we have de-risked things as much as possible, right? It is a very proven pathway based on the performance of antibodies. We had our own math of, like, "Hey, we should be about the IC90, EC90 levels of the drug." When administered orally, we overachieved that particular bar or hurdle, and that is why we are going with a full-fledged phase IIB comprehensive study. Having said that, the PK differences are there between orals and injectables, right? With the injectable, right from day one, you have a maximal concentration in the bloodstream, and then it decays over a period of weeks. Whereas with an oral, it is like every day there is a resetting, that kind of thing.
One could keep on debating and hypothesizing, but at the end of the day, let's roll the dice in an indication where we can very clearly measure whether the concept is working or not. The concept has worked pre-clinically. We got beautiful data in the skin/ear inflammation model, but now let's see what happens in psoriasis, right? So that is the first indication we are chasing.
As soon as we get an understanding of how well it is working, right, and with psoriasis, the response rates are fortunately very high. So even looking at the blinded data, you can probably come to some very good conclusions. If we feel good about what we are seeing, then that is when we will be sort of off to the races, meaning chasing different indications, things like that. That is where the KOL community will also be very helpful in guiding us.
Dinesh, so following up on that, you mentioned you going with, for psoriasis first for oral IL-17, then maybe HS down the line. Maybe talk about your thinking behind it, why psoriasis first and then HS, because there is a lot of unmet need in HS first, so why not go after the indication which has the highest unmet need? Psoriasis, it seems like you have oral IL-23s a little bit crowded there. Just your thoughts on that.
The response rates are very high, so there is no confusion or ambiguity around the data, right? We opted for simplicity and easy interpretation of the data in the first instance, because, as I said, this is a very novel concept, an oral IL-17. So that was the reason we chose psoriasis. The other important reason is if you look at all the IL-17 blockers, historically, a psoriasis study will be done first. It gives guidance towards what is the dosing regimen that should be used for a phase III psoriasis study, but also for HS.
Generally, you are going to need higher doses in HS in comparison to psoriasis. So I think it's also more about what doses to go with in HS and other indications. You will get that guidance as well from the psoriasis studies. So I think that there are multiple purposes there. But you are absolutely right. There is more unmet need in HS, and that is where the true and big win would be. Psoriasis also, it's dominated both by IL-17 and IL-23 blockers.
Then maybe talk about the efficacy profile or a safety profile you need to see with oral IL-17 versus injectables to show that your drug could be competitive versus the oral or versus the injectable kind of IL-17 drugs.
Yeah, it's interesting. We have been through this journey through ICOTYDE, right? I think at the end of the day, at a practical level, let's say even if you may be a little bit off the efficacy of the most potent antibody, at a practical level, it becomes a non-issue because if I were to phrase one of the KOLs, they are like, "Okay, I'm going to tell a patient, 'Hey, here is an oral option.' It works through the same mechanism as the antibody. So it's very safe and all that. It might take you a few weeks longer to get to your remission or skin clearance."
What do you think the patient is going to choose, right? It's one of those things. So we are not hung up on we have to exactly match the efficacy of the antibody. It's a good thing to have, but it's not a must-have. We could be a little bit off, but just the advantages of the oral overall, and like I said, at a practical level, what it means is, okay, it may take a few weeks longer, but that is totally overshadowed by the convenience of an oral pill.
No, definitely. Then you presented recently oral data for IL-17, some IC90 and other levels. Talk about your experience in terms of ICOTYDE, the preclinical data you saw, and how it translated into clinical data. Is there any read-through from this oral IL-17 data to what you could see in clinic? I know there's a lot of variations in what you can see in clinic, but anything that you can see translatability from that mechanism to this one?
Yeah. So there are some rough approximations and assumptions around what is the exposure level that is needed to combat a particular target. So with IL-23 blockers, our conclusion was and this takes into consideration all the complexities of each particular pathway and what has been truly observed with the antibodies. So over there, I think as long as you are above IC50, IC75s, the chances of things working out were pretty good, and that is exactly what has happened with ICOTYDE.
Now with the IL-17, I would argue the bar is a little bit higher, and that is why we went for IC90 rather than IC50 or 75. But now the great news for us is it doesn't even matter. If you look at the graph that we have shared, it's like we may be technically above IC99 or something like that. It becomes a non-issue in that regard.
With respect to ICOTYDE and maybe your J&J relationship, are you happy with maybe the investments commercially to maximize the value of it? Maybe give us some perspective on your dialogue with them maybe more on the commercial side.
Yeah. We couldn't have asked for a better partner or a better scenario in terms of their efforts towards the commercial launch. I mean, watching the DCR commercial for the first time at the semifinals at FIFA.
Should've shared.
Wow. It is a unicorn. It is unbelievable. Even the general sentiment and the level of enthusiasm shared by the executive team of J&J, whether it is during their earnings call or at conferences, it is amazing. For them to be saying, this could be the best ever commercial launch, exceeding all their expectations in recent history, things like that. In their earnings call, which is roughly four months after the approval, sharing numbers like 18,000+ prescriptions, 11,000+ patients, 6,000+ prescribers.
We went back and took the liberty of studying those kind of numbers for other big launches, and these are amazingly high numbers. I would say yeah. In a way that, once again, convinces us that pharma partnerships should be an integral component of Protagonist's strategy at all times going forward. Because the things they do, the scale at which they can do, a biotech, at least in my opinion, just cannot achieve that.
I promise this wasn't a setup, but when you think about IL-17 and the development, how do you think about if you were to partner down the road, the economics there, knowing that you could go after maybe different segments across I&I that maybe ICOTYDE doesn't touch, or maybe you could have a differentiated profile on top of ICOTYDE, or relative to ICOTYDE?
Yeah. The last name Patel is very much associated with the hotel motel business. I have nothing to do with that, nor my family. It is like the first time around you are doing business, it is going to be like, "Okay, fine, I'll be happy with a 10% cut." With ICOTYDE, we have 6%-10% royalty. The next time around, you get a bit more gutsy and you'll be like, "You know what? I'll invest as well, and maybe I'll get a better cut," that kind of thing. The oral IL-17, will we partner it with a pharma? Yeah, that is the intention, but we may have more of our skin in the game as well. Just because let's say we partner, hypothetically speaking, after we have phase II data and before going into phase III, doesn't mean we have to disown it.
We can participate in the phase III costs of the study in expectation of retaining better economics. I think we may get more aggressive that way in partnerships, but at the end of the day, it's like if we can create a structure where it's a fair deal for both parties, then I'm a big believer of pharma expertise on commercialization.
Yeah. No, that makes sense. You good, Nishant, on I&I? Should we go to rusfertide?
Yeah, I wanted to ask about your IL-4 oral that you are pursuing. Given some of the mechanism is driven by IL-13 as well, I'm just wondering why you picked IL-4 as your target and why not IL-13, and if there is a possibility with your kind of platform you could target both IL-4 and IL-13, like DUPIXENT does?
Yeah. That is a great question. Let me just reserve an answer to that question for some time in the future when we actually announce the nomination of a development candidate. Both of the targets are intertwined in a way. Yeah.
Let us move to rusfertide, and obviously we will want to leave some room for the triple G. Talk a little bit about, I guess the same questions on Takeda, right? Talk about your level of comfort with their investment to make this successful, whether we will get more launch metrics, more maybe visibility for investors on how that launch is progressing, and maybe how much you are informed of all that.
Yeah. Clearly there are contractual obligations and all that kind of thing. We will get informed in a more regular way. But what we share and when with the street, I think, our first order of business will be to cooperate, and be in sync what the pharma company wants, right? That rather than spilling the beans prematurely. Takeda has been an amazing partner.
They truly impressed us with their knowledge and presence in the heme space. As you can imagine, rusfertide, there were discussions with several companies, but we were blown away by the level of preparedness and awareness they had in terms of rusfertide's mechanism of action and those sort of things. All that has played out very well. We, Protagonist, were in charge of completing the phase III study, which we did, but we were always keeping them fully informed.
Takeda was in charge of the regulatory filing, and they kept us totally involved and informed, and look at the amazing outcome they have had, right? We couldn't have asked for a better outcome. It is such a broad and clean label. This is a drug that is now basically approved for all comers in polycythemia vera, as long as they have erythrocytosis.
Our real-world data suggests that about 78% of the patients who are currently on one medication or the other, they fall in that category. So, this is going to be huge, and Takeda already has experience and presence in the heme space, in the rare disease indications, that kind of thing. Look at the amazing job they did with ENTYVIO over the last decade, right? So they have a very proven track record. Our experience has been super positive with them. We truly believe that MIMRYLO is in excellent hands.
Have your modeling or expectations of the PV market and opportunity evolved over time? In other words, when you first did some of the phase II and the phase III work, in terms of the TAM, and now that you have this in Takeda's hands, do you think that there is a decent upside driver here in terms of awareness, treated population, that kind of thing?
Yeah. Clearly Takeda is in charge of all the commercial forecast and all that, and the forecast they have had is $1 billion-$2 billion in peak sales. What I add in the same breath is that that was something even before we got phase III data. Look at the phase III data, right? It got selected for plenary presentation at ASCO, and the discussant is calling it practice-changing, that sort of thing. Now look at the label. It is an amazingly clean label, broad label. Clearly there is room for optimism, but at the same time, this is also a drug of its own kind. This is a first-in-class hepcidin mimetic. The PV community has not had this kind of a drug before, even though erythrocytosis is the core fundamental, core component of the whole disease indication, right?
It is going to take, and Takeda has been very vocal about it, there will be, quote unquote, "a learning curve," meaning bringing the awareness, because even physicians are not used to having an erythrocytosis-specific agent. Some of that will go on, but at the end of the day, the amazing data, the amazing label, that is all going to come into play.
If we can take any guidance from the observations that we have made in clinical studies, it is very promising. For example, in our phase II studies, the patients who opted for open label extension, we have more than 95% of the patients, 44 out of 46, that have been on the treatment now for more than three years, and about 90% of them have been on the treatment for more than four years.
This is the first time ever for PV the label contains symptom improvement, right? The fatigue improvement, that was one of the key secondary endpoint we had that was achieved, and that has been noted in the label as well. Quality of life improvement is a big thing for patients, and this is also a, quote unquote, "chronic" kind of indications, right? The patients, they stay on this journey for about 15-20 years on an average.
Yeah, it's really exciting kind of treatment for the PV patients. You mentioned broad label, things like that. Maybe, based on the physician and peer discussions you've had since approval, how confident are you that the use can expand beyond the frequent phlebotomy patients? Maybe what kind of earliest evidence we can see that could prove that it's going in that direction?
Yeah. See, if you think about it, at least in my opinion, PV treatment does not have good options. What are the options? Phlebotomy, right? Or bloodletting. Then it's cytoreductives, hydroxyurea. Hydroxyurea is not even approved formally as a drug for PV, and still it's being used. But no other choices are available. Then you have JAKAFI, which is mechanism-based, but it is approved, and rightfully, only towards the end stage of the disease for HU intolerant patients, right?
Then you have interferon, which has been around for decades, and the onset of action is very slow, and there is a lot of baggage with interferon drugs in general. So this is the first drug ever that is so erythrocytosis-specific, erythrocytosis-centric, and that is the prevalent cause of the disease. These are, in a way, if you think about it, the current choices are so moderate, modest, inadequate, whatever term you want to use. I think this is like a breath of fresh air.
Then you also have oral hepcidin molecule, right, that you are developing.
Correct.
Maybe talk about that, the learnings from developing the injectable hepcidin to how you can kind of transfer that learning to the oral, and then you discussed some preclinical data recently. Maybe talk about that in the kind of broader picture of how that can help develop this molecule further.
For those of you who have been with Protagonist long enough will get this. One of the important learning over here will be, we are not going to pursue beta thalassemia as an indication. Because with rusfertide or MIMRYLO, we did take the scenic route, right? Here we will go directly in PV as the indication. But the beauty over here also is like, in a phase I study in healthy volunteers itself, you basically will see the effect on serum iron levels, and you will get your early clinical proof of concept.
So we could go very directly, quickly into a pivotal study. Now the agency is also kind of very receptive towards making some positive changes, in terms of the requirements for approval. A single phase III study could definitely be very appropriate, and especially for a rare disease indication. In a way, we have already been on this path in terms of, like I said before, we, Protagonist, were in charge of the phase III study, right? For rusfertide. So it's like being on the same path, but now with an oral medicine.
Right. Let's switch gears in the last couple of minutes just to PN-477 in obesity. Talk a little bit about what we may see in the next, call it, 6 - 12 months in terms of clinical development. You mentioned retatrutide, and what would you view as a successful outcome in early development that gives you a good signal to go into a larger phase II?
Yeah. As you know, we are already in a phase I study right now with the weekly SubQ administration, and the oral is, let's say, behind by about 4 months or something like that. Now, in a phase I study itself in healthy volunteers with an agent like a triple GLP, I don't know about success, but if we didn't see any weight loss, I would view that as a failure. It's like, okay, something is off, right?
That kind of thing. After that, it will really depend on an individual in terms of how much importance one wants to attach to single-dose administration based weight loss, that kind of thing, right? So I wouldn't get carried away with that, but at least we would like to see some effect in there. Then we would like to observe something similar when we administer the drug orally. And those are the kind of events that are going to unfold next year, right? We will have a very clear idea about whether this bold oral triple concept is working the way we expect it to work or not. But boy, if it works, it could be practice-changing down the road.
Yep. Yeah, I guess given the size of the market and maybe the competitive landscape, hypercompetitive among the pharmas and big cap biotechs, could you partner this maybe earlier in its cycle just to kind of give you the capital to get to an answer quicker? Or how are you considering it?
Yeah, I am really glad you asked that question. So yeah. The whole anti-obesity portfolio, and as you know, we have a triple, we have a dual, we are working with amylin as a target as well, maybe polyagonist, that sort of thing, because we want to keep that differentiation in mind. So it is a whole portfolio. And, right from the get go, this is the project that will be primed for partnerships sooner rather than later. We have no desire to go into phase III studies on our own in the obesity arena. That truly belongs to big pharma.
Okay. That makes sense. I think maybe one last question just on that. When you think about the investments to make to get to the next step, does Protagonist have any additional platform investments to make on things like manufacturing, scale-up, and the like? Or are you still kind of in the let's get past proof of concept into maybe a decent-sized phase II and then hand that off to a partner that can move forward?
Yeah. I think it will certainly be on a case-by-case basis. The place where we have very good clarity in our own head is the anti-obesity space. That is something we have to partner in a timely fashion. Only big pharma can do justice to such a portfolio. With other things, we'll just have to play it by ear. If we have to or want to continue on our own, then we should be in a position to do that. But we still believe that we should be able to fund all of that through the revenue generation from our licensed assets.
Yep. Okay. Thank you very much, Dinesh.
Thank you.