Hello, everyone. Welcome to Oppenheimer's 36th Annual Life Science Conference. I'm Jay Olson, one of the biotech analysts here at Oppenheimer, and it's a pleasure to welcome you to our discussion with Q32 Bio. It's an honor to introduce Jodie Morrison, the CEO, Lee Kalowski, CFO, and Shelia Violette, the CSO. Thank you all so much for joining us here today. With that, I'll turn it over to you for a short, few slides to set up our fireside chat. Thank you again for joining us.
Thanks for having us, Jay. We appreciate the opportunity to be here to sort of introduce the company and drill down on some of the ongoing work with bempikibart. From a high level, the company has a lead asset that is our primary focus right now, which is bempikibart. We are driving that forward in alopecia areata, which we have already seen proof of concept with. This is a fully human antibody. The approach here is that it binds to IL-7 alpha receptor, and actually blocks the signaling of two different cytokines, both Th2 and Th1, allowing us to really have broad impact across a series of different diseases.
Right now, we're focused on alopecia areata, as I mentioned, and we have some interesting data from our Part A, but we're doubling down on that in Part B and really expanding on the opportunity there. We think alopecia is a significant unmet need, in the concept that there is not yet any biologics in that space. It's dominated by JAKs, which we believe are sort of a misfit for the population. Expected to have a $2.6 billion market by 2030, and we think the biologics are necessary in that place, and we have a lead asset we expect to take forward in there. Let's go to the next slide. This gives you an outline of the programs we've run to date.
The SIGNAL-AA phase IIa study started with a Part A, which we completed and read out at the end of 2024. We subsequently had a lot of inbound patient demand for an open-label extension from patients that had participated in Part A. We've expanded on that in the OLE for both safety and repeat dosing information. We've now moved into Part B, where we've enrolled an additional 33 patients. We expect top-line data for week 36, which is our dosing period, by midyear this year. We would anticipate then seeing the remittive data on that in the off-cycle for 16 weeks, out to week 52, later this year. From there, we will take that data and really design and finalize our plans for registration-directed studies.
There's lots of precedent for sort of this jump from phase II into that setting for alopecia areata. Let's look a little bit at the data from Part A. Here you can see the data that we've presented in Part A. You can see a meaningful drop in the SALT percentage here, so patients showing a response that's statistically significant. This was seen in our Part A study. Importantly, that vertical line there showing the last dose patients received, and you can see that stability subsequent to that, and in fact, in some cases, actually an impressive increase of hair growth during that period of time, and we saw that both in the per protocol as well as the intent to treat. The dosing cessation was at week 24. Here we are changing that as we move forward.
We're dosing patients out to week 36, and then following patients to week 52 as we move forward, so that'll be one of the differences we'll talk about as we talk about the design for Part B. We also have shown good findings of durability response even after week 36. We did some additional inventory of patients out past that time point and showed both continued durability, as well as in some cases, significant hair growth. We show some of the images of that on our corporate deck that certainly people are welcome to take a look at. Let's move to the next slide. The summary from Part A for the proof of concept really was that hair growth showed durable responses in patients.
We believe this could be a transformative paradigm for patients, certainly a difference in what you're seeing in JAKs, that once patients are removed from JAKs, the hair falls out very rapidly. Our MOA literature supports that this is an expected effect of this drug, and we're gonna look to expand on that as we move to Part B. Mean SALT score certainly continued there, and we expect to see more of that data as we move forward, and we saw that all the way through week 55 in some cases. SALT responses are observed in hard-to-treat populations within the study, including patients out past that 4- or 5-year mark of duration of episode, and we saw responses in both the severe and the very severe patient populations.
The mean current episode, though, in our AA study was more than five years, which is actually very high compared to the JAK studies, and we'll talk about how we're refining that in the Part B study. Importantly, the safety profile here, as expected for a biologic, really putting us in a nice position for competitive positioning against JAKs, and I think, again, setting the stage for why biologics are needed in the front position here as we move forward in alopecia areata. The design for the Part B is outlined here. You can see the screening period leading to a now 36-week dosing paradigm. These patients receive both a loading regimen for four weeks, and then 32 weeks of every other week dosing.
That dose is at 200 mg, same dose we used in Part A, then we follow these patients for 16 weeks. Couple things in the design that we've changed here. In particular, we've included a central review process at the front end of the study for eligibility, then in addition, we have reduced the duration of episode to less than four years. The JAK studies have shown that patients get past this point, they start to show a significant drop in response, as much as 50% as you get out past five years. We wanted to be in line with the JAK studies. We were significantly over what the JAK studies had for duration of response, we brought that more in line.
That being said, we have said the observations for Part B support that the enrolled patient population is consistent on medium baseline SALT score with Part A. We have lowered the duration of episode appropriately to approximately two years, which is similar to what the JAK studies have done. Importantly, we have announced that based on the preliminary PK, our loading regimen is working as expected. We're getting patients now to steady state nine weeks earlier than what we had done in Part A. We're getting patients at the steady state and holding them there for an extended period, both the nine weeks earlier on the front end and 12 weeks more at the end, and we're looking forward to presenting the data mid-year on what the impact of this can be for patients.
I think that's all the slides we have, but we're happy. We know you have a series of questions, Jay, and we're happy to take them.
Yeah, thank you so much, Jodie. Appreciate that update, and thanks again for making time with us here today. You know, one of the questions that we get a lot from investors is that mechanistically, it seems like bempikibart should work in a potentially a number of different diseases with benefits that might be broadly applicable. The question that comes back to us typically is, what makes benpi ideally suited for alopecia areata?
Yeah, I spoke to this, I think, a little bit. JAK, right now, JAKs are the only class of drugs approved in this setting, right? I think that if you look at all the other JAK approval populations, you've got a biologic in front position ahead of them. This is the sole indication where you do not have that availability of a biologic in the front position, so I think it is ripe for the opportunity to put one there. In particular, in a population where the average age of diagnosis is in the forties, and there's also a substantial amount of children that have alopecia areata, it is a population where the risk-benefit issues with using of a JAK is mismatched in that population.
A safer drug that can be used in a chronic setting, ideally with cycling, which we think our durability data would support, we think is going to be the key driver of use patterns in this population. Important to note that JAKs are on par with minoxidil, right? Which does not have data that supports that it works very well in this population, but their sort of commercial lift has been limited, and we think that that's an indicator that patients are looking, and treating physicians are looking for a safer avenue for their patients.
Okay, makes sense. Yeah, it sounds well-aligned with our thesis as well. Really appreciate that. I guess, I mean, you touched upon the Part A data. Could you just highlight for us some of the key points from that data set that really gave you the confidence to move into the Part B of the program?
Yeah, I mean, I think the entry-level point, right, is on safety, and we saw what we wanted to see there from a safety standpoint, so that was sort of the bar to entry. Certainly, we're seeing that. We also saw good signs of both hair growth and robust hair growth, as well as durable hair growth over time. I think those were the key things we were looking for. It was a limited dosing period with only 24 weeks. I think we recognize now we need to dose longer, and we've moved towards that in Part B, so that was a piece of what we could expand on. We learned a lot, I think, from running Part A, and we've adjusted our approach to Part B, I think, appropriately so, and we're encouraged by, you know, what we're seeing so far.
Okay. Yeah, I guess, you know, you mentioned a lot of the lessons learned that you leveraged from Part A into Part B and some of the differences. I guess, what are, in your view, the key modifications for Part B versus Part A?
Yeah, I think the central review process is a critical point for the eligibility and diagnosis of patients with alopecia areata, so we've built that into our program for the diagnosis, point. I think that's a key differentiator. In addition, that duration of episode, I think we can't underscore how important that is to the data set as well. Then we've taken a functional service model moving forward, not relying on the CROs to do the work for us, but actually having direct relationships with our sites and working closely with them as we move forward, which we believe has an impact on retention and our ability to sort of drive patients through the dosing paradigm.
Okay, great. It seems like the AA community is also well-aligned with what you've observed, and there's a lot of enthusiasm for Part B. Congrats on enrolling 33 patients. I think that pretty significantly exceeds your original goal of 20. Can you just talk about the level of interest that you're seeing from physicians and patients during the enrollment period, and any particular trends you're noting, in terms of, like, key demographics?
Yeah, I mean, I think the interest in the asset and enrollment in the clinical trial is widespread across all the different sort of both regional locations we were talking to, and the treating physicians, and the patient, sort of whether they were 50-95 in the severe population or the very severe, 95-100, there was significant interest in enrollment in the program. Our original goal was 20 evaluable patients at the end. We definitely are gonna overachieve that on the evaluable data set. I think we feel very confident on that with the over-enrollment in the trial, we're encouraged by that finding.
I think that, you know, the safety of this drug plays a role in that, and the opportunity, I think, for the durability of effect here in a cycling treatment paradigm is of high interest to the treating physicians and to the patients.
Okay, makes sense. Is there anything you can share with us so far on the retention rate for patients in the study?
I think this is a population you follow with, that you know has a challenge when it comes to retention in clinical trials. I think we have managed it very closely in this program, and we feel confident we've done taken good steps that will retain the majority of these patients as we move forward. Again, I think we will definitely over exceed our expectations of 20 evaluable when we get to the final data set.
Okay, fair enough. We're definitely looking forward to that.
Yeah
... I guess, not to be too invasive, but it is an open-label study, so I know people probably-
Yeah
-ask you this. Any early observations or signals that you're picking up that increase your confidence ahead of the top-line readout?
We've been public on the fact that the PK data has shown that we're getting to steady state early. We're encouraged by that, giving us the best opportunity for these patients. You know, most of these patients remain on study at this time, so it is still early in the data set, but we're encouraged to date, and we really believe we're on track to provide a data set that will be meaningful to the population, and we believe will raise the bar.
Okay, excellent.
That's all I can say.
All right. All right, fair enough. That's totally understood. I don't know if maybe if Lee wants to jump in on this next question, but I know that you see all the sell side models, and you probably have your own view of the commercial opportunity. Moving to the, to the AA market opportunity and some of the recent clinical readouts from other programs, can you maybe give us your view on the, on the commercial opportunity for bempie in AA?
Sure. I mean, we think it's a substantial one. There's probably a couple of ways of looking at it. One, based on the existing paradigm, of which JAKs have not done a tremendous job penetrating the market. As Jodie mentioned, the JAKs are the only drugs approved for this population. Penetration still, while it's improving, still has a way to go, and tied with minoxidil, which really speaks to the need for alternative agents. I think you have, you know, in the first instance, a drug like ours that will be able to significantly penetrate, but also then, the second point is be able to expand the market in the way that we've seen biologics do in other cases, such as, you know, with the atopic derm landscape, when you've had a biologic enter and really build out the market.
It's ripe for a biologic, a drug that's safe, safer than the JAKs. Responses that are more durable. We think that will lead to better penetration and expansion of the market. We see a sizable opportunity here.
Okay. All right. Any numbers you want to throw out there for us?
We haven't given, you know, a revenue guidance per se, but it's a very substantial opportunity.
Okay. All right. You spoke about JAK inhibitors and some of the unmet needs there. The AA market is still dominated by JAK inhibitors. Why do you think that's the case, despite the sort of the unmet needs with JAK inhibitors? What do you think are the largest unmet needs that bempie can address?
I think, you know, it's really the only option patients have.
Right.
That explains.
Right
... it's dominated there. But also tied with things that aren't approved in the area, as we've mentioned, with minoxidil being on par with the JAK. I think that that speaks to the need, but I think the advantages for something like bempie and biologics in general, will be that safer profile and a better risk-benefit to patients. I think ultimately, provided patients are growing hair, that is the goal, right, at the end of the day. The time of onset may be a slightly slower for biologics. I think at the end of the day, that's going to wash out. I think it's ultimately going to be a driver of what allows patients to be on therapy chronically, if they need to be, or cycling. They can miss a dose and not lose their hair, right?
They can stay on it and not have significant compounding risks that, you know, a patient in their 40s would have to live with for 40 or 50 years, right? That's just not a good trait for patients. I think it really will come down to a risk-benefit and the comfort of the treating physicians. You're talking about dermatologists, largely, that are treating these patients. You're talking about consenting for black box risks. You're talking about monitoring for those risks in those clinics. There's a mismatch there. I think as you think about a biologic with a safe profile that has the potential to be at-home dosing for these patients, you know, and have a cycle treatment for patients, that could be a significant driver of use.
Okay, that makes sense. I don't know how much needle phobia comes up these days-
Yes
... especially with widespread use of injectable biologics and peptides, but how are you thinking about patient receptivity to using an injectable biologic for treatment of AA for those patients who are accustomed to oral treatments?
Yeah, I would agree with you. I think the days of that being a key driver for patients not using it, I think have been asked and answered, right? You look at Dupixent, right? Certainly market leader in that concept, and they have a every two-week injectable dosing paradigm. I think in the context of bempie, the other key driver here is going to be ISR rates. I think we've seen very low injection site reaction rates in patients and very mild when we do see them. I think that's going to be a key sort of piece of the puzzle that'll be really important for the biologic class in general, is what that ISR rate is.
Okay.
I think what we haven't, I guess, explicitly mentioned, too, is our doses are flat, so they are conducive to fitting into the current commercial paradigm of being able to, down the line, as we think about the commercial opportunity of being, you know, prefilled.
Yep
... self-injectable, something that can be delivered to someone's home. It would fit right into, you know, the normal paradigm of an I&I drug in the commercial setting. We're already You know, obviously, we have to, you know, continue in the development, but we're well set up for that commercial opportunity.
Okay, excellent. The commercial presentation will be consistent with other-
It'll fit right in. Yep.
Right in.
... Okay. All right, understood. Now, with regards to, potential sequencing of therapies, I guess, how are you thinking about bempikibart as it fits into the treatment landscape relative to JAK inhibitors? Do you think it could be used before JAK inhibitors, or where do you think it'll end up eventually?
Our expectation is it would be used before. I think that's a reasonable presumption when we look at all other JAK markets and see the biologics taking that front position. I think ultimately, there's an opportunity to move this even back in the disease setting into the moderates over time. That's gonna be a tougher sell for a JAK, right? The opportunity to both expand the market and take that front position.
Okay. All right. Makes sense. I know you've got a lot of market research and discussions with KOLs. What kind of profile do you think physicians are looking for in a biologic in terms of efficacy, durability? I know you've emphasized the importance of safety, based on your market research.
Yeah, I mean, as I've said before, I think entry level for a biologic is gonna be on safety. That's gonna be important for the treating physicians to know that's there and effectively check the box. I think we're ultimately gonna see that continue as we have to date. There is an efficacy piece of this, right? That's critical. We believe that, you know, the biologics to date, ourselves and Nektar so far, have shown that there is utility of biologics in this setting. We're still working through the kinetics of what that response pattern will look like for patients. I think there is a efficacy bar there. I think ultimately, our Part A and Nektar's recent readout were very similar. If you look at the 24-week, they're practically overlapping.
I think we're anticipating we're gonna drive a higher efficacy mark here in the setting of our Part B. We look forward to sharing that with the market as we, as we get through the completion of this study. I think that's gonna be a key part of it as well. There's certainly gonna be an efficacy need. I think the bar that's been set so far is probably insufficient. We need to come on top of that. We believe we're gonna get there with what we're doing in Part B, and then we'll move forward from there, but I think that's really how it comes together.
You put it together with that sort of durability piece, the potential for at-home use, the sort of fit within the dermatologist office, where they don't have to be dosing and weighing their patients to figure out their dosing every two weeks, or consenting their patients to major risks and monitoring those patients on a frequent basis. I think ultimately, we're gonna have advantages across all of that, and I think what we're developing is a target product profile that's spot on for what a patients and dermatologists are looking for.
Okay, excellent. That's super helpful. Since you did mention Nektar, maybe just to follow up on that, there were some recent results for rezpeg in the phase IIb AA study. Looks very interesting. You commented on it a little bit, but any further thoughts on that data, and do you think those data kind of set the bar for biologics in AA?
I would say, you know, kudos to Nektar for showing biologics have utility here, right? They've confirmed what we saw in Part A. As far as raising the bar, I don't think they have. Ultimately, all their data shows on top of what we saw in Part A is a 36-week endpoint, right? We only dosed for 24, and if you line up our 24, they're pretty much on top of each other. I think largely, we think the bar has already been set by Part A. What we're looking to do is beat our own with the new regimen and the new approach that we're taking for patients, and for patient selection and control. I think, you know, I think there's a lot of white space here, Jay, is what I would say.
I think Nektar remains on track with what we've seen for Part A, and then you've got a limited pool of competitors here in the biologic space. The OX40s have been all but abandoned in AA at this point, and so the white space just continues to grow.
Yeah, absolutely agreed on the OX40s. Maybe just another follow-up on Nektar.
Yeah.
They unfortunately had a few patients in their study that had eligibility violations, which kind of skewed the overall results. Can you maybe comment on the trial execution for Part B of your SIGNAL-AA study and any specific risk mitigation methods that you deployed in your Part B?
Yeah. Although we don't have the specific details regarding the site that they excluded, due to those GCP violations, what the nature of them were. You know, certainly, we've had our own hand at that in Part A, where we had to exclude a site for something similar. I think we've put in place, in the learnings from Part A, we took forward a central review process where we are checking, the diagnosis of patients on the front end very carefully. That addresses the concerns that we saw, at least in our Part A, as we move forward. We've, you know, used a functional service model where we've sort of segregated out complete reliance on a CRO for this.
We're working closely with our sites, we're working closely with the coordinators at those sites, making sure we're overseeing the trial in a very direct, hands-on nature. We think that's a key driver to making sure there's control of the data set as we move forward, and we think that's gonna provide sort of a mitigation for some of the risks that have been seen in the space at large, including our own.
Okay. All right, that makes sense. A lot of investors are super focused on the top-line results, around midyear, for bempi and AA. I guess, what are the most important endpoints that investors should focus on, and kind of how do you want to set expectations around that?
Yeah, I think the sort of two on the efficacy side really are gonna be mean % change in SALT and the SALT 20s. I think SALT 20s are gonna be the key one. We know that's gonna be the endpoint for the phase IIIs based on the precedent that's been set with the JAKs, and so that's probably the key one people will focus on, despite our primary being mean change. You know, I think mean change needs to be in the ballpark, but the SALT 20s are gonna be the gating point of moving into the pivotal side. Obviously, we'll have safety and durability data that will come later in the year, and safety at both time points we'll be looking at.
ISR rates will be something we watch closely, but to date, we've been very confident in what we're seeing for ISR rates being in the low range and not being an issue for this asset.
Okay. All right, well, we'll look forward to that. Since you're also running an open label extension for Part A, can you just talk about how that data set will contribute to the totality of benpi's overall profile?
Uh
... do you plan to provide the results from both the OLE and Part B at the same time?
I don't think we've determined the time frame for the OLE. Couple things to talk about there. As a reminder, we started that based on patient demand, right? Patient demand and physician demand to get their patients back on. We'll look at that data probably in more of a case report basis and look for opportunities to present that. I think the critical contributions to the overall profile of bempikibart is really to look at what cycling looks like for these patients. Is it safe? Can it be done? Can you drive more efficacy? Can you stabilize patients? Do you know, increase ADA rates? Those are the types of things we're looking at.
To date, we've been very confident in what we're seeing there, that cycling in these patients is going to be acceptable. We look forward to putting that data out in the near term.
Okay. All right. Understood. I guess, in terms of your plans to advance into phase III, what kind of efficacy signals are you hoping to see? How are you thinking about the phase III study design?
We'll start it in reverse. I think it's premature to say exactly what the study design will be. Certainly, we'll have some learnings from the Part B as the readout comes to conclusion, both on the remittive side as well as on the 36-week endpoint. That'll play a role in the finalization of the design, but there's plenty of precedent in this space coming out of the JAKs for what those designs can look like. I think you could expect that they'll be in the range of what's been done before, but ultimately, we'll take the learnings from Part B and finalize that. The sort of first part of your question. I'm trying to think of the right way to answer this. Can you ask it again? Sorry.
Yeah.
I lost my train of thought.
... I guess, what do you guys hope to see from you kind of commented on this a little bit earlier, but?
Yeah
... sort of what's your target for efficacy signals that you would feel confident moving into phase III?
I think we look back at what we saw for Part A, right? Where we saw sort of that 9%-14% SALT 20. We're looking to certainly be north of that and be, you know, somewhere in the SALT 20, in the mid-20s would be a goal for the company, I think. That would be a good place to start. I think being in that 20-25 is sort of the gating point for SALT 20. We'll look to potentially expand on that with the mean percent change that we're seeing. The durability will play a role in that. Obviously, safety will weigh in as well.
Understood. I wanted to follow up on the first question that we always get from investors. Based on the mechanism, it seems like benpi has opportunity across a range of inflammatory diseases. I guess, how are you thinking about additional opportunities beyond AA, and are there any particular indications that have direct read-across from AA?
Let me start, and then I'll hand it to Shelia. I would say, first of all, our primary focus will remain AA. That is the plan that we have for the company, so we're laser-focused on that at the moment. It is not lost on us that there's substantial opportunity beyond AA for this asset. Maybe Shelia can speak to that a bit.
As Jodie mentioned before, it's a bifunctional antibody, so nature has given us something that's not a bispecific. We didn't engineer it that way. It's bifunctional. The biology where it probably has direct application include things where are driven by pathogenic T cells. ulcerative colitis is obviously high on our list, especially because of the OSE data that looked promising there, and a disease like celiac disease, driven by NKG2D-positive T cells as well. There's a pretty long list of diseases, but I'm still very bullish on the fact that in the phase II atopic dermatitis trial, we saw very robust changes in Th2 biomarkers. There are indications where you'd get a benefit from hitting both pathways. RA is a perfect example of that. There might be other diseases like asthma and COPD.
Very specifically, the T-cell disease is probably ulcerative colitis, celiac disease, maybe MS, Type 1 diabetes.
Okay, excellent. Thank you. That's super helpful. We'll look forward to updates on those. Glad to hear that atopic derm's still on the table. I don't want to neglect your other programs. We're running a little bit low on time. Maybe if you could talk about the deal you did with Akebia for 097, the rationale behind that. I guess, is there any read-across from 097 to 096?
Let Lee take the lead on this one.
You're right. We completed the sale of ADX-097 to Akebia in the fourth quarter, very consistent with what we had said earlier in the year. We announced about a year ago, in February last year, that we were gonna be seeking strategic alternatives for the tissue-targeted complement platform, including ADX-097, so that we could be laser-focused on bempikibart. We're really executing on that. As part of the deal, we announced $12 million in upfront and near-term milestones. We received some of that, you know, at signing as well as some that are guaranteed for this current year.
Of course, that's been helpful, extending the runway. Then we're also eligible for, in total, up to about $592 million in milestones and with royalties as well. Now is in the hands of a company that's solely dedicated on treating renal disease. We think it's in good hands, enables us to be laser focused on the advancement of bempikibart. It really is just a matter of us doing what we said we were gonna do earlier in the year. We're glad to have that behind us.
Okay, understood. I think we're just about out of time, but is there anything else you'd like to highlight for investors?
I think we've covered most everything. I think we talked about the OX40, we talked about the Nektar readout. I think ultimately, the target product profile here is gonna be a key part of the story. As we think about sort of the readouts, that's where the safety and I think the sort of flexibility, the ISR rates, you know, coupled with the data on efficacy, is gonna be a key part of the way we think about this as we move forward and the way I think treating physicians and patients will think about it long-term, if successful for commercial launch.
As, as mentioned, Jay, we have our top-line results from the 36-week data coming midyear. That is very much on track, and we're really excited as we get closer to that.
All right, well, we will stay tuned and look forward to that update. Thank you all so much for joining us here today, bringing us up to speed on all the progress you're making at Q32. Appreciate your sharing your time with us.
Thanks for having us, Jay. We appreciate it.
Thank you, Jay.
It's our pleasure. Thanks, everybody!