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Hi, everyone. My name is Maury Raycroft, and I'm one of the biotech analysts at Jefferies. I'd like to welcome Nevan Charles Elam, the Founder and CEO of Rezolute. It's a late-stage ultra-rare disease company focused on treating refractory hypoglycemia caused by congenital or any acquired form of hyperinsulinism. Thanks so much for joining us today, Nevan. We're going to do fireside chat format. Maybe starting off, you guys had a press release, multiple titles at the upcoming Endo meeting next week, June 13th through 16th, which will largely build on the prior sunRIZE data alongside additional analyses, and real-world THI data sets. What specific new insight should investors expect that could further clarify the efficacy profile across THI and tumor HI?
Well, first, Maury, thanks for having me, as usual. It's always good to be here and have a bit of a chat about the status of our company. You're right, this week we did make an announcement regarding interim data for our tumor HI study, and that announcement, we think was impactful insofar as the data we released demonstrates substantial activity of our drug, ersodetug, in this patient population, where we're enrolling 16 patients, and we're halfway enrolled. What we've seen is that we have one patient that's newly enrolled, but six out of eight have met the criteria for the primary endpoint, which is fantastic, and it largely mirrors what we've seen in the expanded access program as well over the last few years.
I think that provides a lot of reassurance to investors and others in terms of the activity of the drug, as well as the potential efficacy that we would expect overall. A lot of the information we'll be showing at ENDO is further analysis across both tumor HI as well as congenital HI, and some of the other details that we've shared at other presentations and in other formats as well. Again, I think it's the body of evidence that we're all looking at in terms of understanding the activity of the drug and expectations for what this drug can mean across the different patient populations.
Yeah. I think that's a great overview. For your ongoing phase III study or the upLIFT study in tumor hyperinsulinism, you've got top-line data from approximately 16 patients expected second half of this year. You just had the interim data update on Tuesday. Can you walk through the key takeaways and the totality of the interim and expanded access program data and how that de-risks the pivotal readout?
Well, we think it definitely de-risks the program in case there was any question about, again, the efficacy of erso in the patient population. What we need to demonstrate out of the 16 is at least 50% of 16 can achieve a 50% reduction in glucose infusion. And clearly, we're tracking very far in advance of that, even in the first half of the patients enrolled. From an expectation perspective, I think it emboldens us to finalize the study, to complete enrollment here in the second half of the year, and hopefully to have a good top-line announcement in terms of the results and the impact to hit the actual endpoint in the substantial number of patients.
Yeah. It makes sense. Just digging into the data a little bit, the initial EAP data set showed about 85% achieving greater than 50% reduction in GIR by eight weeks. That was in six of seven evaluable patients. You're tracking much better than the pivotal's 56% stat sig bar. How are you setting expectations for the study completion?
Yeah. We are definitely tracking very well. I think as we've seen in the EAP setting, and even in the first eight patients here, this is a very serious disease, and it's unfortunate even in our current first eight, we had one patient withdraw study consent, late stage colon cancer, and to actually elect to receive hospice care, and that patient died a week later. That just underscores the severity, and what we've seen in the EAP as well, including in that data set you're referring to that we've shared. I think overall, again, we're going to look to enroll the full 16, even if from a stat sig perspective, we get to the nine or 10 patients sooner. We will still look to enroll the full 16 and then look to engage with the agency and look to advance the program onto the next stage.
Got it. Makes sense. For the top-line data second half of this year from the study, what should we expect beyond the primary endpoint? Are you planning to incorporate functional clinical outcomes, including hospital discharge rates?
We will. It'll be time to discontinuation of glucose infusion. We'll look at the hospital time to discharge from the hospital for sure, will be part of it. We'll look at quality of life as well and how the patients are doing. All of that will be reported in summary format.
Got it. Okay. One doctor highlighted quality-of-life improvements and reduction in hospitalization as critical for payer reimbursement. What are you using to assess quality of life, and what are you seeing here?
Well, I think quality of life we're seeing, this is a very impactful drug at a very pivotal time in the patient's journey of their overall cancer and their treatment. This is about as dramatic as it gets as we see and what we hear from patients. Insofar as if often if these patients are hospitalized and on a glucose infusion, there really is not much else that can be done, particularly in a malignant setting, as they cannot receive their radiolabeled therapies. Often it results in discharge to hospice. This makes the difference. The quality of life outcomes are very real, very direct. We don't believe from a payer perspective that based on all the work that we have done, that there's a ton that needs to be demonstrated because the evidence is clear. We're focused on refractory hypoglycemia.
These are the very severe patients that have failed all other therapies that we can, medical management as well as surgery debulking, all that's been done, and yet they remain severely hypoglycemic. We think from a medical necessity perspective, we don't expect much pushback at all from payers.
Yeah. Okay. Makes sense. Wondering if you can comment on the tumor HI pivotal enrollment trajectory, the screen failure rate, and when do you expect to complete enrollment, and how does your EAP and clinical experience inform the ability to identify patients and ultimately the market opportunity?
I think there are two different things, is the market opportunity as well as the clinical study that we're conducting because we are conducting the study largely in hospital environment with the sickest possible patients. These patients are not in a queue waiting for you, as there often is the case in clinical studies. These patients appear, they may appear at any site across the country. One never knows. That's been our experience in the EAP, and we've treated in the EAP over a dozen patients across the country, and there's no specificity of where those patients will appear because, of course, cancer is not regional. It affects folks all over. That's what we're seeing in our enrollment for the first eight, and we would expect that for the second eight as well here in the upLIFT study.
Our expectation based on what we've seen in enrollment is that we remain confident that we'll be able to complete the study this year.
Got it. Okay. Can you briefly walk through pricing in some scenarios and how you're projecting this market opportunity?
From a pricing perspective, our therapy, again, across hyperinsulinism, so as an ultra-rare disease, will be based on weight-based dosing, for whether it's a child in the congenital setting or in acquired forms in the adult setting. From the pricing perspective, given that it is weight-based dosing, we think that we'll be able to command a fairly robust price for tumor patients and for the need that's being unmet. The opportunity set is pretty rich in terms of the overall market opportunity. Again, when we think about it as an ultra-rare indication, there's two buckets, one being insulinoma patients. Of the 15,000 or so that are diagnosed every year, 3,000 have malignancies and can be a challenge to manage. Of that subset, a good 1,200 are potentially addressable patients. We're focused at the national cancer centers, at least at the initial launch.
When we do the sub-segmentation conservatively, we look at about 750 patients on the insulinoma side. Of those 750, again, this is late stage disease, and so we factor in a conservative thought of about two years of potential duration of treatment, and that puts us at about 1,500 patients. On the other side are the non-islet cell tumors, and that is a much larger pool, a whole variety of different tumors that it's not insulin that's implicated, but IGF-2, generally speaking, in solid mass tumors like hepatocellular carcinoma. Of the world and universe of these tumors, there are about 6,000 that are very serious, and 40% of those are malignant and refractory, that often are a challenge to be managed. Of that subset, about 1,500 of those patients we would anticipate as the initial target at National Cancer Institute.
About the same number from an insulinoma perspective, and we assume about a one-year treatment duration. Altogether, it's about 3,000 patients just as our initial push into this market. Again, at a very significant price point per patient per year.
Right. That's an incidence population, 3,000. How do you think about that price point? I guess, what's the latest you're saying on that?
I think what we're seeing is if we bracket at the pediatric level, anywhere from a $400,000 to $600,000 per patient per range in rare disease, what we've seen in the pediatric. Based on the weight-based dosing, we're well into the high hundreds of thousands of dollars, if not into the seven figures for the cancer patients.
Yeah. Makes sense. Maybe just going back to the patient identification, so you mentioned the national cancer centers. I guess once you have therapy available for these centers, they'll know how to reach out to you, or is that the right way to think about it?
Yeah, I think it's a good way to think about it. There's a lot of education and a lot of awareness in market shaping in terms of the severity of hypoglycemia and the unmet need. We're doing a lot of that work right now across the country.
There's a lot of interest that we're seeing from the medical oncologists as well as the adult endos in terms of how to treat and think about serious and refractory hypoglycemia.
Yeah. Okay. Your phase III CHI study missed on the primary endpoint, and you stated publicly that both you and the FDA believe that the primary endpoint is a confounder based upon the potential for functional unblinding. Now it seems unusual that FDA has not asked you to do another study, and instead wants to independently review the full phase III data in the open label extension datasets. To start off, did you submit the CHI dataset to the FDA for their review?
That's imminent. We'll be very soon actually submitting that data set. I think just backing up, I think it's very encouraging what we've seen from the FDA, and I know this has appeared in the press as well, the way they are responding to what happened with functional unblinding, which we definitely believe occurred in the sunRIZE study, and their recognition of the primary endpoint being a confounder, and their willingness and interest in looking at things like what's happening in the open label extension, as well as the data that we've also partially shared publicly, which is the CGM data. Looking at the difference in the treatment arms and in the placebo group, where we believe it's very demonstrable that there is a clinically meaningful benefit in a high unmet need, which would support advancement of the program without the need to do necessarily another study.
Given the agency's engagement and willingness to make the extra effort with us, we will submit the data and give them a chance to take a look at the data sets and apply their own sensitivity analysis and their own scrutiny from a statistics perspective and hopefully agree with us, in fact, that we can actually point to CGM in particular and look to then advance the program.
Got it. When do you expect to submit that to FDA?
We'll submit it this month.
This month?
Yeah.
Okay.
It'll be submitted this month, and then based on the guidance from the agency, they will take the time over the summer, approximately 60 days or so. They may have questions about the data, but we'll work with them. From there, we would expect, later in the fall, to have an answer for all of us in terms of what the next steps for the program may be.
Got it. It should be some sort of an update. Your guidance is the second half of this year, but you think by fall time.
Yeah, it should be. Should be in the fall time.
Okay. Do you anticipate another breakthrough therapy designation meeting with FDA, or will the agency provide written feedback on the path forward following the internal review?
Well, that's another interesting aspect of our engagement with the agency is we really will file the data under the IND, and a meeting is not required. We always could request a meeting with our breakthrough therapy designation, but the agency has expressed a willingness and an interest in actually just working with us. If they have questions, they can respond to us. Ultimately, we would expect a letter or conclusion in terms of what the next steps for the program would be.
Got it. Is it largely the same FDA team that handled the prior CHI and tumor HI interactions?
It is. It's very much the same team, and I think one of the things that'll be interesting for all of us is we will have the tumor HI study that'll be complete in the second half of the year, and we'll also have then a path forward for what the congenital program will look like. I think as those two intersect at that time point, I think it opens up for a very, hopefully, productive and a solid path forward in terms of looking at the next step, particularly as we think about a BLA.
Now, there's no assurance, of course, that we are going to be green-lighted to file a BLA for congenital, or that the tumor study will be complete and successful as we would expect it to be. Should that actually be the case, I think that really then unlocks a lot of potential value for what Rezolute is and our path forward and what investors and others can expect. Most importantly, the patients, families, and the treatment providers in terms of getting this therapy finally into the hands of patients.
Yeah, interesting. For getting a BLA submitted, so if you get the green light for CHI, how quickly do you think you can get that put together?
Either for CHI alone or for tumor alone or for both, we'll be prepared in the first half of next year to file a BLA.
Got it.
As a team internally, we are working on all of our readiness to ensure that we're prepared to be able to file that BLA.
Okay. Just clarifying for the open label extension or for the CHI data that you're submitting to FDA, will that include the open label extension data set in there?
We have shared with the Agency how the children are progressing in the open label. The vast majority of children remain in open label extension. We will update them and provide some more color when we submit the data set on CGM. However, we're not going to have a separate cut specifically on open label extension as a data set itself, but more just in terms of looking at the reduction in background therapies that we've noticed, looking at the number of children that are now on monotherapy in the open label extension. All of that and some more granularity we'll share in summary format with the Agency in addition to the data sets.
How much additional follow-up will be in there?
Yeah, there will be follow-up, but it will not be a complete data set on OLE because we have not just structured it that fashion.
Got it. Okay. Can you just walk through potential scenarios for the regulatory update? If FDA requires an additional small study, such as a neonate study, what could that look like? Has this come up at all with the agency?
Well, I think that's another interesting thing about our engagement with the agency. Very often, I think we all from our different experiences, if you have a lack of stat sig on your primary endpoint, you're often faced with the prospect of having to do another study. There's been no discussion with the agency of doing any other study. The discussion's all been around actually investigating the data and understanding whether the data's meaningful in CGM, notwithstanding the miss in terms of stat sig. I think that's probably the most interesting part about this is that there is not a specific study or an idea of a study at this stage. To your question, there are a variety of outcomes that can happen.
Today, I think largely the way we are valued and thought of is based on the tumor program. So I think the announcement we made this week has given a lot of confidence to investors that given that we're tracking very much like the EAP, and what we can expect most likely from a top-line announcement around the tumor study. Again, this is the second half of the year. The agency could take a look at our data. They could do a variety of things. The first thing they could do for congenital is to say, "We don't see it. We don't see that there's a signal here.
We're going to ask you to do another randomized control trial. That's something that we will not do, because that would be chasing our tail in a fashion, given what we've seen with functional unblinding, that just doesn't make sense.
Yeah.
We think that's very unlikely that the agency would ask us to do that. That's one possibility. The other possibility, to your point, Maury, is they could ask us to do a small neonate study, perhaps, and where neonates are on a glucose infusion and very much like the cancer patients that are on glucose infusion. We've had patients that are in the pediatric population that are on glucose infusion, and we've had them come off, including in the sunRIZE study. We've actually already done that. The question is, would the agency ask us to do that confirmatory after filing, or would it be a precursor to file? That would be the only question. That's all really great upside, we believe that's staring at us, with the exception of doing an RCT, which again, I think is unlikely.
All of that will be a positive announcement potentially.
I think we'd be remiss not to mention the tumor side of the equation, given that that readout will happen, and then a sequencing of BLA filings. We're going to work with the agency on the path forward and how do we actually take both, hopefully, programs forward into a BLA.
Yeah. Could it potentially be a single BLA?
That we're going to investigate all options. Of course, we'd like the broadest label possible, and we think it makes sense given the underlying disease. We'll be going into, I think, an open discussion and again, a lot of upside discussion with the agency.
Yeah. Makes sense. Just to clarify for the tumor setting, you said that you enrolled one more patient, or has that patient been treated, or?
We have eight patients, and one patient is newly enrolled.
We don't have data on that patient.
Six, we do have data, and that's what we've released. Then, of course, the seventh patient, unfortunately passed away.
Yeah. Okay. Makes sense. For the open label extension data set, can you just talk about the clinical benefit that you're seeing with placebo crossover patients and treatment arm patients with more than 50 staying on long term?
I think, as I noted, that what we're really seeing is a reduction in other medical therapies. That's been very noteworthy, as well as a significant number of the children that are on monotherapy across both, now that all children are actually in the open label extension. I think that's very encouraging in terms of the clinical benefit that's occurring and that these patients and families are actually benefiting from the drug. I think it's actually powerful in terms of seeing that, particularly monotherapy.
There's no other explanation when this is glucose, whether a drug is active and working, if in fact the child is only taking our drug.
Yeah. Makes sense. You plan to establish pediatric orphan pricing with the CHI BLA, which would also anchor pricing for the tumor hyperinsulinism opportunity. Does the pivotal miss change your original pricing assumptions, or are those intact still?
They remain intact. In the first half of this year, we've done some additional work, just to even shore that up further. Our pricing assumptions are very much, we believe, in line with what you see industry-wide. It really, whether we launch Tumor first or Congenital first, the pricing will remain the same.
Got it. Okay. For the patients, you've noted a significant share of the erso patients have reduced or discontinued background standard of care, suggesting meaningful insulin receptor engagement. How do you plan to demonstrate total clinical value to payers, particularly glycemic control, hypoglycemia reduction, and standard of care displacement to support the premium pricing?
Well, I think, first and foremost, in this patient population, we're talking about refractory hypoglycemia, meaning these children have already failed medical management, whether it's somatostatin analogs, diazoxide. Our target patient population, they're in need, and they're in need of an additional therapy. The answer can't be pancreatectomy, because removing a child's pancreas is not a therapy. Even I think the surgeons that do those procedures would agree. This is a massive unmet need. I think the demonstration of that for payers is very clear. To support that, of course, we will have our data coming out of everything from our phase II study, phase III study, and in terms of the benefit and the reduction in hypoglycemia that we see on the therapy. Again, we're treating refractory patients.
Are you having conversations with the payers currently?
We've done our research, absolutely.
Yeah.
Yeah.
Got it. Okay. One KOL, Kawal, noted that about 40% of diazoxide responsive patients still experience one to two level three events per year, which he characterized as unacceptable. Even with a phase III primary endpoint miss, what are your expectations for uptake in the diazoxide responsive population if you can get to market?
We do exclude about 40% of the 3,000 individuals with congenital hyperinsulinism because they are on diazoxide or somewhat responsive. I think it's fair to say that there will be, over time, most likely, an increase in use in the therapy. Diazoxide is not the ideal drug for this patient population, given the side effects, everything from pulmonary hypertension and risks associated with that to just the overall administration of diazoxide and what it may mean in terms of hypertrichosis and other things. We will, I think, see some additional upside on that, but again, today it's not baked into our market forecast.
Yeah. Okay. Makes sense. You've commented on patient advocacy in the past. Maybe talk a little bit more about that and how your conversations have been with FDA and beyond.
The patient advocacy group, Congenital Hyperinsulinism International, they've been fantastic. They've been a partner with us as we look to advance our therapy, and hopefully have it available to patients and their families. They're very much a part of us with our FDA engagement, and their voice has been heard, I believe very clearly by the agency, and the division in particular. We'll continue to support them and vice versa because it's time. It's been decades that we have been treating this disease and doing the best we can with medical management, and unfortunately, having options like pancreatectomy. It's time that we get a robust, durable therapy into the hands of patients and their families.
Got it. Makes sense. For more than a year, you've publicly made a point that you believe that erso is a universal treatment for all forms of HI. Presumably, that could include some other indications as well. How are you thinking about that commercially?
The antibody is designed exactly that. It's agnostic to the cause, whether it's a congenital cause, what the specific genetics are. Again, agnostic because it works downstream. Or the acquired forms. In the acquired forms, whether it's a tumor, as we've talked about, whether it's an insulinoma or a non-islet cell tumor. It's agnostic because it's looking at the insulin receptor and the overstimulation and the excessive glucose uptake. In the surgical setting, that is another acquired form. We would fully expect to be able to treat patients that are refractory to existing therapies or even potentially, hopefully, new therapies. As an ultra-rare disease company, very specifically focused on hyperinsulinism, we hope that there are new therapies, and we're cheering on all of those who may be looking at different modes and ways of treating patients with hypoglycemia.
We really are, and we think of ourselves as the therapy of choice when it's truly needed. Our therapy is expensive. Hopefully there are other options that we can continue to advance to treat the broader population. If there are GI-related surgeries that are causing severe refractory hypoglycemia that can't otherwise be managed, then we absolutely will be a therapy that should be made available to those patients as well.
Would you have to get added to some sort of guidelines, or would you have to run a study there?
Something less than a study.
Okay.
We will explore that and see, but I think first things first, we'll see how that market evolves and develops. I think importantly, our therapy will be there, and we'll be prepared to address it.
Got it. Makes sense. With potentially two positive announcements across both indications this fall, what's next for the company? Specifically, will you look to grow the company by in-licensing a new compound?
Yeah, we have a lot in front of us. We had a lot in front of us last year, and that continues, and you're right. Planning for success, we would love to see both tumor HI as well as congenital HI on a path for BLA next year. That would be wonderful, I think, for the community and for all of us. With that, we would expect development of our company, our growth and ability with currency to be able to look to bring on other potential opportunities in the ultra-rare disease space, and we'll be thoughtful about doing that, both in terms of time, when we do that, and what type of opportunity to advance.
We absolutely will, and I think every small company should as you grow because that's how you evolve and grow in terms of from a small company to a mid-size company and beyond. We'll definitely be on the look. Today is not the day for that. We have much to do over the next six months and a year. Absolutely, we'll be looking at that as we grow.
Got it. Maybe just to close up, you've got the two big events later this year. How should investors think about these catalysts and any nuances around timing that you want to point out there?
I think this year is another big year for us as last year was with the tumor HI readout in the second half of the year. Given what we've seen in the first half of that study, hopefully the study finishes just like that, and that sets us up very clearly, we believe, for filing a BLA for the tumor HI indication in 2027. On congenital, getting an answer to the question of how do we take the next step in that program, and hopefully that is also going to be a path to filing a BLA for congenital. That would be huge. I think even in the next six months, there will be some significant advancements for us as a company and further clarity for all of us.
Got it. Thanks so much for joining us today, Nevan.
Thank you. Appreciate it. Thanks, Maury.