Good afternoon, everybody. Thanks for joining our next session. My name is Derek Archila. I am one of the senior biotech analysts here at Wells Fargo, and I am very happy to have Q32 Bio for our next fireside. So from the company, we have Jodie Morrison, CEO, Shelia Violette, CSO, and Lee Kalowski, CFO. Thanks to you for joining us.
Thanks for having us. We appreciate it.
Maybe Jodie, starting with you, if you want to just give us at a high level what you guys are working on, state of the business. You had some data, positive data-
Yeah
earlier in the year. So walk us through what transpired, and we can get into the more granular questions after.
Absolutely. A big year for us, obviously, with the readout from the Part B of our SIGNAL-AA program. An exciting turn for us, I think, as that data matured, and we were able to really show that we're in the JAK class, as far as efficacy goes. That was what we were looking to accomplish with the program, and we certainly did, both on the mITT and the ITT data, now showing that 30% and 40% SALT20. Really exciting for the company and for patients. We're excited to move to the registration program next for alopecia areata. That'll be the next step, and then beyond that, we're internally starting to think about what indications we can target next with lots of opportunity, both in the derm space and non-derm adjacencies as well.
Got it. Maybe just looking at the data from Part B and maybe talk us through the two populations that you looked at, the mITT.
Modified intent to treat, and the intent to treat populations. I guess what will you be really pointing to regulators in terms of the data and the path forward here?
Yeah. The good news for us, both data sets look really good, so we're very pleased with that. We thought it was really important to put the ITT data out. We had a pre-specified mITT population defined in our statistical analysis plan, so that included, in the end, two cuts that were applied to the program. The first was patients who had not received at least 50% of the doses. In a 36-week dosing regimen, they needed to have received at least 18 weeks. That was five of the patients that were removed fell into that category, including two that actually didn't even get past a couple doses. I think one had transportation issues, and the other had a needle phobia that hadn't been disclosed to the treating physician in a subq trial, so that was unfortunate.
We had three others for various reasons, mostly moving states, moving sites. I think one patient that went to jail, that was a first one for me.
Wanted to stay in, was actually a responder, but for reasons you can imagine, we could not keep dosing them. We lost that patient. Then we had another cut that got applied for unstable disease defined in the SAP as more than a 25% worsening of disease in the early part of the program, really representing that these patients needed to be stable under the criteria of inclusion, exclusion. Those three cases, two of them were patients at a single site that were transfer patients to the site that did not come with records on their stability. They should have provided those. The physician took patient report for that stability, and likely they were in a hair loss kind of contingency or period of time where they lost their hair. Unfortunately, those two were not appropriately eligible for the trial.
The third was actually a patient who had a medical history of NASH, reported that they had come off their NASH sort of diet that kept their disease in check, and in tandem with the worsening of NASH for a period of time, they lost their hair, which can happen during NASH. Those were the three that were cut for that.
Understood. I guess as you think about going forward into other trials, how do you control for some of these variables and ultimately-
Yeah
I guess the question being, how translatable, which population is probably more representative of what we would see in the phase III trial?
Yeah, I think ultimately what happens is in small studies, you apply these criteria because one patient can really throw your data set. In a large phase III trial, we are not as concerned about that, but there are some learnings. So if we think about the patients with unstable disease, we are obviously going to require that there is a paper trail of their stability provided. As part of our central review, we will do confirmation steps of that moving forward for diagnosis and stability of data. So that is manageable. I think needle phobia is an obvious question that they need to ask.
We will have more sites in this program, so that will allow us to sort of address patients who move locations when you have other, if you cover more of the states in the U.S., if a patient moves from one state to another, you may have optionality of another site for that patient. So there are ways we will address that within the program, but expectations are you would lose some patients to things like that.
I n a larger trial, it does not really impact your data. So ultimately, the ITT ends up being your-
Yeah
sort of primary analysis set, and then you apply the endpoint to that.
Understood. So less noisy, but that is kind of table stakes.
Some learnings, though-
Yeah.
... but it is some learnings that can get applied to the phase III, so.
Got you. I know you, so you were talking about JAK-like efficacy with bempikibart in this trial. Maybe, talk about the response rate on SALT20 relative to those JAKs and what do you think that means in terms of potential commercial opportunity?
Yeah. We can talk about the JAKs, and then we'll talk about the commercial opportunity. I would say in the JAK phase II trials for the approved drugs, it ranges from a SALT20 of sort of 21% at the low end to like 31%, I think, for Sun's asset at the upper end. So that's your range of SALT20s. Here in the mITT, we saw 40%, and then in the full ITT set, we saw 30%. So right in the range of where we wanted to be overall in the ITT alone.
So really encouraging finding from that perspective. Obviously, we think that puts us in an incredible position for getting out into the market. The reality is, though, we don't really view JAKs as the thing you've got to benchmark against. All the data tells us the same thing. Patients don't want to be on JAKs. It's a small population of patients that are currently on. It's a small population of physicians that are willing to write JAKs. Our data shows that about 50% of the patients currently on JAKs are covered by 5% of the derms. So you don't have a huge subset of docs that are comfortable with the JAKs. From a commercial standpoint, I think what this market continues to be waiting for is a safe biologic option. Efficacy is critical in that context, and I think we've delivered that in our phase II.
We would anticipate delivering that in our phase III. I think that will incredibly well position us to take the first line position here. The data we've seen in post-JAK encourages that patients who are on JAKs at the time we launch could move over to the drug. That's encouraging as well. I think we have both the best of both worlds here with JAK-like efficacy and a solid safety profile. We're really excited about that combination in the setting of this. We think it has the opportunity to be effectively the DUPIXENT for alopecia areata, just like you see in a topic where despite JAKs having great efficacy, DUPIXENT takes 90% of the market.
Yeah. Maybe you can describe the efficacy for bempikibart in that post-JAK exposure. There were some patients, I think, that had maybe prior JAK exposure and just curious, do you have the ability to play in the entire population or broadly?
Yeah. I think more to come on that as we put more data out later this year. I think ultimately what we've seen is certainly patients who had shown prior response to JAKs, we feel like we have access to those patients. We are still evaluating patients who either were non-responsive to JAK or partially responsive to JAK. We'll gather that data and provide more detail. It's a small data set, though, right?
Yeah.
It's a 33-patient arm. 40% of that had seen prior JAK. We want to make sure we're not jumping to any major conclusions on response or non-response. Ultimately, we're very confident that post-JAK responders are going to be good responders here.
Got you. Based on the data you guys have already generated from Part B, how should we be thinking about placebo response going forward? What would you be underwriting for a phase III trial and how you power that trial?
Yeah, I think we're going to be very conservative with our estimates there. The data for the phase IIIs that have been run to date kind of range in that sort of 2%-5% range. I think we'll be sort of pushing up towards 10% in our estimates just to cover ourselves there. I expect we're going to overpower this trial to make sure that we're both ensuring success in the program as best we can, but also building in enough of a safety database for the purposes of a single trial registration.
Got you. You talked about a little bit before, but one of the big things is whether or not you can just have better safety than a JAK, right?
Yeah.
Thus far, bempikibart looks pretty clean, but maybe you can just elaborate in terms of the safety profile that you've seen across the entire program, even-
Yeah
what you've seen with prior, and ultimately the overall kind of exposure experience.
I think ultimately the biologics in general will be a step removed from any of the black box issues that you see with JAK inhibitors. The risks of cardiac issues, the risk of cancers, we think will be outside of all of that, certainly from a mechanistic standpoint. What do you look at? ISRs, because it's an injectable. That's an important one, and I think it differentiates us from the other biologic that's in development right now. We're seeing 4% ISR rates in the trial overall. Where we see them, they're mild. They appear and resolve within a day, and they really follow the characteristic of a 2-mil injection site reaction, which is this is a 2-mil injection at the moment in the trials, but we'll be dropping that to 1.3.
Even with the 4%, which I could live with, I think we actually could see the numbers come down even more. We're really encouraged by that. The other thing we're tracking closely is the lymphocyte reductions. That's on target and on mechanism, so we expect to see that occur. We're seeing a flattening of that between 24 and 28 weeks. We saw no patients discontinue from the drug as a result of it. We also saw no patients discontinue for ISRs, by the way. We aren't seeing any patients discontinue for adverse events overall. We saw no effect infection correlation with the lymphocyte drops that we're seeing. There's no association there. Overall, we're really pleased with the safety profile here.
Mechanistically, what's really interesting about bempikibart is the opportunity to potentially have these deep responses and have them be quite durable.
Yeah.
Do you want to walk through not only the biology, but what you've actually shown in terms of, again, I'm not saying there's a remission on the table, but some sort of-
Yeah
remittive effect that we're seeing?
Yeah. Overall, and always important to start here, we do expect this will be chronic dosing. What we're testing with these off-drug periods is how long could you go between doses? Right now we're dosing every two weeks in the primary study. As we're moving into open label extension for the Part B patients, we're actually looking at both monthly and every two weeks. We're going to gather some data there. In the sort of remittive period, we're moving into a four-month period of no drug. From 36 weeks to 52 weeks in the program, those patients that elect to go into that, we're following those patients during an off-drug period. The expectation we'll be looking for is that durability. Do we hold that durable response? Patients who showed a response, do they hold it?
The second question we'll be asking is whether patients who didn't respond move into a response cycle. We did see one such patient in the last trial that we ran. It was a pretty remarkable case that was in our deck for a while. We have new pictures we're showing now, but it was a pretty encouraging finding in that patient. We're looking to see, could we see another of those? Is there a phenomenon where you do see these late responders convert in the off-cycle period? Collectively, that data will be put together to think about long-term cycling for the chronic dosing.
Mechanistically, what is going on there? What are we actually seeing? I guess is it really just kind of specific to this mechanism potentially?
Yeah. I think we definitely believe it is mechanistic in nature. Maybe I will kick this to Shelia to talk about some of the preclinical models that actually support seeing this and the why of that.
Yeah. There has been a number of studies that have shown these long-term durable responses that you dose in preclinical studies for a period of time, stop dosing, and then follow the animals for a long period and see that you could get suppression of disease long after the drug is out of circulation. So we knew lots of preclinical data to support that. Then there have been studies that have shown that if you take tissue in a DTH model in baboons and isolate the cells that are responsible for the durable response. The understanding in that model is it is these antigen-specific T memory cells. We know that IL-7 is important not only for the regulating the generation of the effector cells, but also the maintenance and survival of the T memory cells. So that is sort of the leading hypothesis.
I think that there could even be more going on there in terms of the effects on shifting the ratios in favor of the Tregs, how long we could sustain that. We have collected optional biopsies from our Part B, and it gives us an opportunity to look deeply at the biology there. We are encouraged by what we are seeing, and I think it will really put a little bit more of a different lens on how we think that we are maintaining this durable response.
Got you. When you think about phase III, will you continue to just kind of dose like you were doing prior in Part B, then let the remittive effect be something down the road in terms of how doctors want to do the dosing or taking drug holidays? Would you work that into a phase III design looking at another type of regimen?
Yeah. Two different studies that we will run effectively. You will see the phase III, we anticipate a primary endpoint of 36 weeks. We will dose patients to 52, though. We want to see what that additional tail might look like with actual dosing. Then the expectation is patients who elect to will roll into an open label extension, and within that, we can start to evaluate different dosing regimens. Obviously, if recruitment all happened on one day, that would be amazing. That is not how it will work in the phase III. So we will see patients who come in in the front end actually moving through those regimens before we submit for the BLA. So we will have a wealth of data on that dosing paradigm.
Obviously, we can do additional work in open label studies that we will be running in parallel with this, which will both expand the database, expand the population of alopecia areata patients we look at, so including moderates, maybe patients who are not eligible for the phase III, pediatric patients. We anticipate adolescents will be in the phase III, but that is a question for the agency. Overall, we will gather more data there, and we can be looking at those dosing paradigms there.
Okay.
We do not anticipate after phase III patients would go through a four-month holiday before continuing dosing.
Yeah.
They would roll right to the next regimen.
Understood. Okay. I know you covered this a little bit already, but what are some of the remaining questions that you want to have answered when you have the meeting with the FDA, particularly around the trial design?
Yep. I think there's a few. I think number one, can we include adolescents, as I just mentioned? We want to confirm that. We believe the data's supportive, and most of the programs have moved to adolescents for their phase III, so we think that's a reasonable assumption. Single phase III for approval. Given the C criteria, we think that's obviously pretty reasonable to assume. We also have fast track, and there's two precedent in the space between Pfizer's LITFULO, as well as most recently, Nektar's announcement of a single phase III. We think that's a reasonable assumption, but we will look to confirm that. Dose ranging, whether it's required will be the other question I think largely we need to answer here.
We believe the PK/PD model of the sum total of the data we have will support why 200 mgs is the right dose moving into it. If the agency requires additional dose ranging, we have a design for that that is still encompassed within the fundraising we've completed already.
Got it.
So either way, we can still run that program on existing dollars. Then lastly, what is the sample size we need for the safety database? We will need to confirm that. Our expectation is we will be running this phase III alongside that safety study. Collectively, that would be the sample size that we will need, and we need to confirm that number with the agency.
Got you. So maybe just thinking about the overall landscape for alopecia areata currently. So JAKs there, a couple of them.
Yep.
Other emerging biologics. Obviously, IL-7, TSLP, one mechanism. We also have CD122 that is also being investigated, and others. I guess, how do you think it all kind of breaks down from a biology standpoint, and are there multiple winners here because it is a big market, or do you think there is going to be a certain go-to, and what do you think is really going to be driving that? Is it more safety, efficacy, or again, just kind of cycle through a variety of different mechanisms?
Yeah. I think this is an indication where safety sells, right? You can look at the data that is out there to say that that is certainly something that will move the needle in the setting of derms in general, and patients who have to be on chronic therapy. There is not a lot of tolerance, I think, for these drugs that have compounding risk over time if you have to be on it for 30 years, right, to keep your hair. If you think about this versus atopic, right, it is even worse. In atopic, where you see 90% going to a biologic versus staying on a JAK, I think the issue is with atopic, you can have a resurgence of the disease and take it and get it under control. Contemplate the fact that you lose all your hair if you come off a JAK very rapidly, typically.
If you come off, you lose all your hair. Okay, I decide to go back on it. I need five more years to grow my hair out, right? It is not like you can just immediately get enough hair for coverage, especially for women. You think of this is five years of hair growth, right? So it takes a long time to grow hair for patients. So it is not something where cycling on a JAK is even an option. But we see 90%, even when that is tolerable, going to the biologics. So I think overall, there is a lot of room for the biologics to move into this space. But efficacy will matter, right? Speed does not matter as much.
Yeah.
We can play around with speed, but s peed only matters once, right?
If you do this right and it is a safe and tolerable drug that you can stay on for life, on a cycle, then it does not matter once you get there, right? So we will look at 36. We believe we are quite quick and we can get there at 36. We will also look at 52 and look at both from that perspective. I think ultimately when I look at the competitive space, I think it is going to be a blend of those two. From a biology standpoint, anything you would want to add on the other drugs that are in development?
No. I think what we can see here, at least from the data that is published now with rezpeg and the data that we have generated, is that we have always sort of understood this to be a T-cell mediated disease.
I think everybody will now be figuring out how can you go after particular pathways that are important in regulating. I think one of the questions always was for our program early on IL-7 signals through JAK-STAT signaling. What is the likelihood that this particular pathway is an important mediator? I think this has really highlighted that, yep, the JAKs do work, but this pathway seems to be an important regulator of the pathogenic T cells. I agree with what you are saying. I think it is going to be safety. The speed is less important, but also maintaining if you miss some doses.
Got you. I know you talked about putting out some more data for Part B later this year. What should we be paying attention to? Ultimately, what specifics will you provide that either further de-risk a phase III or at least give us some direction on maybe what that phase III design will ultimately look like?
Two separate things. Putting the data out and then the phase III. I would say the phase III design and details as far as runway and timelines, all of that will be provided when we complete the end of phase II meeting.
Okay.
We anticipate being able to guide to the market by the end of this year or early next year at the latest based on FDA schedule and the back and forth conversations we have with them at the end of phase II. More to come on that.
Okay.
Although we have a general sense of what the design is, as I mentioned. I think as far as new data that's coming, we do have an expectation of data at EADV, which is coming up in about a month. We anticipate having data there that is more fulsome data, the 36-week endpoint. This would include biomarker data, including some biopsy data. We're pretty excited about that, so we'll be putting that out, as well as the 52-week data in the majority of patients. I'm not sure I'll have every single patient depending on schedules, but it's going to be pretty close. We anticipate having that. In the 52-week data, what we're looking for is really making sure we're seeing good stability off drug. That's the goal in that portion of the program.
We'll also look to see if we see any of those patients who had originally been non-responder convert. Harder bar, but we're hoping to see somebody in there as well.
Got you. You started this conversation also saying that exploring new indications and where you can go from bempikibart.
Yeah.
I guess, what are you contemplating, and ultimately, what indications make sense for you guys-
Yeah
as a small company with resources that are finite, but your number one priority is alopecia areata, but what can you generate proof of concept in, and how do you do that in a reasonable fashion?
Yeah. I think first and foremost, our primary goal is alopecia areata. We are not going to take our eye off that goal of getting the right trial running, getting the right operations team executing that. So that's going to be a critical point for the company. I think as we think about additional indications, there's a wealth of opportunities. This is definitely one of those drugs that is sort of the pipeline in a pill, or in this case, an injection. We have a huge amount of opportunity to take this beyond alopecia areata. I think we need to be strategic about how we do that. There are adjacencies within derm that are particularly interesting to us that obviously we could do sort of a expansion at the existing sites we're working through. So that's attractive. That would include things like vitiligo, like lichen planus.
Those are a couple of the areas we're thinking about there. Then there are areas that are sort of outside of derm that certainly we believe there's opportunity here, some of which are easier for us to run as a small company. Others might take a partner to take forward. Those include the respiratory indications on the TSLP side.
There are a couple indications where both IL-7 and TSLP are both in play. COPD comes to mind, RA. Celiac is another option we could move towards. There are other indications, but clinical trial designs, endpoints, duration to an endpoint, whether you need a placebo-controlled trial or whether open label data is meaningful, those are all things that will be contemplated within the strategic decision. I would anticipate that first half of next year, we should have some more guidance on that.
Okay. When you talk about guidance for that, would that be, again, providing the proof of concept trial and the design and what your approach will be, or is it just like, "Hey, we're going to go into this indication, and then we'll give another follow-up update?
Yeah.
How fast are you trying to move is essentially-
Yeah, I think we need to move fast.
Yeah.
I think we would like to move fast and come out in the first half with more details what we are going to do, but it depends on capital raising strategy, right?
Depending on what design we get completed with the agency, we may have more runway that we could use towards that, or we may need to think about other approaches like partnership for some of these indications. I think we want to make sure we are being really thoughtful about that. We do not want to burn our runway yet until we know what the design of the phase III is going to be.
Fair.
Or else Lee is going to come and give me a hard time.
There you go. I guess in terms of thinking about the OSE program, they were exploring IBD, and they had some interesting results there.
Mm-hmm. They did.
Is that something that you guys are contemplating as well, or is that more of a-
Yeah
partner or something like that?
No, I think it's an interesting one. UC is an interesting indication from the perspective for IL-7, it's already been de-risked.
Yeah.
Right. They were IV. We have a subcu asset. We feel very confident. There is great opportunity here. Spending some time really thinking through what the design of that would look like and how the competitive landscape tees up against what we could provide there. I think we want to make sure we are thinking about it through that lens, but it is one I think we could take forward on our own should we choose to.
Got you. Then maybe just the other pipeline agents. You talked about ADX-914.
An extended half-life.
Yeah.
Is that necessary, or is that just more life cycle? Ultimately, how do you want to develop this without bempikibart still?
Yeah
just been through the phase III, so how do you balance that or stage it out at least, having that in the background?
I will start, and then I will hand it to Shelia to talk through because she is leading that program. I would say we think of it really as life cycle management as a starting point. Obviously, with a drug like this where we already think we are going to have nice dosing paradigms on the back end of this, we do not necessarily need an XL, but I think from a sort of defensive standpoint, it is a good place to go as well. So life cycle management and defensive positioning, I think, are the two things I would say. The overarching goals for the program is to really push beyond what we are seeing now for the duration between dosing.
We think what we have now for alopecia areata is wonderful and a great setup for those patients, but if we can improve that as a life cycle, that is something to think about once we are through and on the market.
Yeah. I will emphasize what you said. What we learned about bempikibart is that we do think it is a best-in-class asset, in large part because of the PK properties. We are getting really excellent coverage of the target in circulation as well as in the tissue, based on biomarkers. There are ways you can extend the dosing interval, just even around what dose you give. If you go to a 300, you could extend that way. So the way I think about the XL is that it is a defensive strategy. But I would want something that is not small and incremental. It would have to be really meaningful to the patients for us to really bring something like that forward. So we are looking at it. It is in pre-clinical development now to see what might be the advantages with the next gen molecule.
Got you. Do you think there is better efficacy on the table with the molecule like this, beyond just the dosing advantage?
I think it's less about efficacy.
Yeah.
It's more about the sort of convenience considerations.
Yeah.
I think at this point, we feel like we're seeing the efficacy that this can deliver. I think more of looking at the 52-week might see some tail efficacy that we could get there. I think-
Yeah
we're doing a really good job of, I think, addressing this and not seeing patients that just don't seem like they have enough.
Yeah.
I think we're doing a really good job on that front. So we're very confident in bempikibart from an efficacy standpoint. Anything you'd add?
Yeah. No, to me, it's just about dosing interval.
Not an efficacy play.
Yeah. Then just in terms of, I know it's not an efficacy play, but I guess when you think about development in the future, would you go straight into alopecia, or would you look to do other indications? What would be your plan once you guys get into the clinic?
Yeah, I think it's early to make a strategic decision on that, but I think our intent for bempikibart is to move that forward for alopecia areata. I don't see us making a shift for alopecia areata at this time. I think from a life cycle management, we could consider that later. W e're proceeding with the phase III because that is the registration path we're taking-
Yeah
bempikibart for alopecia. I do think there's an opportunity for an XL to move to other indications over time, and then potentially to be life cycle in alopecia.
Got it. Let me, to wrap up, just in terms of funding, you guys did a raise. Seem well funded, but what's that get you through? Does it get you through all the way from the phase III and ultimately some of these other opportunities that you were talking about in terms of indication expansion? Is it enough to kind of fund through proof of concept for some new indications?
We aren't guiding on whether we can get through the other indications until we complete the end of phase II and have the final design, so that we can actually lay that on a piece of paper and tell us how much do we need to get there from a runway and capital standpoint. That'll be impacted by the safety study and the safety size, and then the single phase III approach, whether it's a single dose or multi-dose. Once we have that answer, which is coming very soon, I think then we have the opportunity to really see how much of the additional capital that we have can be deployed for other indications, for expansions. We certainly will get the opportunity within the safety study to expand on alopecia indications as a minimum.
That's baked into our assumptions already on the moderate alopecia areata, which is a huge population of patients that are underserved right now. Obviously pediatric will be part of that. Adolescents will be part of the phase III, most likely. So within the capital we have now, you're going to get the alopecia areata phase III and these additional alopecia indications. Beyond that, thinking about things like lichen planus, vitiligo, other indications like UC, all of that we'll guide out in the first half. Lee, anything to add to that?
No. Well said. I think, just to be crystal clear, we are funded through phase III with runway beyond, in any circumstance that could be contemplated.
Got it. Maybe last question, just sketch out the next 12 - 18 months, some of the updates that we'll get, and ultimately where you kind of see the inflection points.
Super busy.
Yeah.
That's what the next 12 months are going to be. I think we'll be seeing, obviously, this data at the EADV. We're looking forward to providing more mechanistic data on week 36 biomarkers and biopsies. We're looking forward to showing the durability data at the week 52 endpoint off drug. Then we're looking forward to providing guidance sometime near year end or the beginning of next year on the phase III design, and the tee up and lineup of milestones that might come from that. In addition, we'd have the open label extension for both two weeks versus a month, and we would look at that data at the second half of next year for the patients in Part B who have moved into the open label extension.
We'll also be providing details on the design for the open label study that'll be run in tandem in these other alopecia indications. We'll have all of that over the course of the next 12 weeks. We're building the team. We'll be having some new hires announced as we build out the team and really fulsomely build this engine that will power the operations of the program.
Excellent. Well, Jodie, we'll leave it there. Shelia-
Thank you.
Lee, thank you so much.
Thank you.
Thank you.
Yeah.