Good morning, everyone. My name is Balaji Prasad. I'm the Senior Analyst for the Spec Pharma coverage of Barclays. Continuing with the Spec Pharma track, I'm delighted to have the management team of Savara: Matthew Pauls, the Chairman and Chief Executive Officer of Savara, and Dr. Ray Pratt, the Chief Medical Officer. Ray and Matt, thanks so much for joining us today.
Thank you very much.
Maybe to kickstart the proceedings, can you walk us through the current status of your lead asset, molgramostim, and also the indication just to introduce the company to the investors who are probably unfamiliar with the story?
Sure. Yeah. Thank you very much. We appreciate the invite to participate. So I'm Matt Pauls, Chair and Chief Executive Officer of Savara. Savara is a publicly traded company, and it's the strategy is a single-asset molgramostim nebulizer solution, our novel inhaled biologic, that is being studied for a rare lung disease, aPAP, which we'll of course talk about in detail. The company has cash runway into 2026. And most importantly, our phase III data readout is at the end of the second quarter, so we are in the home stretch. I'll have Ray then talk about just molgramostim and the phase III program.
Great. Yeah. Thanks, Ray.
Yeah. molgramostim is, as Matt said, our novel inhaled biologic. It's a recombinant GM-CSF. The pathophysiology and the biology of aPAP is due to the presence of autoantibodies against GM-CSF in people. And GM-CSF is absolutely required for alveolar macrophage function. molgramostim nebulizer solution is designed to deliver GM-CSF to the alveolar macrophages via nebulization and therefore stimulate them to return the balance of surfactant production and surfactant catabolism. We're currently in the phase III program, which is a double-blind, placebo-controlled trial of molgramostim nebulizer solution administered once daily against placebo. It's a 48-week study. And, as Matt said, we will be reporting out the results at the end of the second quarter this year.
Great. Thank you, Ray. Maybe, for the benefit of those listening in, can you discuss the prevalence and the incidence of aPAP and the current standard of care and how this is currently addressed?
Sure. Yeah. So I'll tackle the Epi question, and then I'll turn it over to Ray to talk about the current standard of care. So the Epi literature right now, there are three sources. And the range right now of diagnosed prevalence between those three publications is about six or seven per 1 million. To the latest data, the Kitamura data from 2019, which is suggestive of a diagnosed prevalence rate that's actually more like 26 per 1 million. We, Savara, have done claims database analysis in the United States where we can access data like that, where we looked at 300 million lives. And what we have identified is, in the United States there are approximately 3,600 patients in the United States that are currently diagnosed with aPAP.
And that was based on those people having at least one ICD-9 or ICD-10 code for aPAP assigned to their claims records. We also then identified via a machine learning model, in those same 300 million lives based on the characteristics of the 3,600 patients that are diagnosed with aPAP, we assigned a machine learning algorithm to those same lives and identified approximately another 1,400 patients whom we highly suspect should be diagnosed with aPAP. So more to come on that. Therefore, when you look at the sensitivity range around diagnosed prevalence, you know, there at kind of the floor level, there's six or seven per 1 million. Probably at the higher level as of today, you're looking at more like mid-20s per 1 million. And then our claims database kind of falls right in the middle there.
The last thing I'll say on this, Balaji, is that it's important to note that, like other rare respiratory, you know, orphaned respiratory diseases, LAM, Alpha-1, prior to there being the introduction of a diagnostic to help accelerate time to diagnosis and then therefore the number of diagnosed, and a therapeutic, you know, approved therapeutic that physicians can use, and a sponsor that comes in and invests in the category, you need all of that to help continue to structure and organize these orphaned rare disease markets, which we're in the process of doing. Ray, do you wanna talk about standard of care?
Yeah. Sure. The standard of care right now, there is no approved therapeutic anywhere in the world. The only option that many of these patients have is to find a site that can actually perform what's known as a whole lung lavage, which is, as it sounds, pretty bad situation. You need to be under general anesthesia. You need to intubate each of the lungs separately so that you can ventilate one and oxygenate the patient while you then infuse 15 to 30 liters of saline into the other one to wash the surfactant out. This works temporarily in the short term. Some patients may get a response that lasts for a year or two. Other patients may not. But it does not address the basic biology of the disease. It does not, you know, improve the function of the macrophages and maintain the balance of surfactant.
The surfactant actually, you know, starts reaccumulating as soon as you stop.
Got it. And so, getting back to the commercial to the clinical study, can you take us through a bit more around the way the trial's set up and the endpoints that you're trying to meet, and what's the requirements from the regulator side here?
Okay. Yeah. The current primary endpoint for our IMPALA 2 study is a measure of gas exchange called the diffusion capacity for carbon monoxide. Okay? And this was in the IMPALA 1 study a very robust result that showed an improvement compared to placebo over the 24 weeks of the trial. We're also looking at secondary endpoints, including the St. George's Respiratory Questionnaire, which is a questionnaire that looks at the patient's functioning, is commonly used in other respiratory diseases like COPD and ILD. And we also have a exercise capacity test where we put patients on a treadmill and push them to their maximum ability. This is in lieu of what was in the IMPALA 1 study, which was the 6-minute walk test, which was not a very robust test to show patients improvement.
Sure. So as we come closer to the readout, what would be an effective result that you'd be happy with that would have a clear path towards the filing for the drug?
Yeah. So, Ray, do you wanna take it?
Yeah. I mean, I think, at the moment, you know, the primary endpoint is the change from baseline in the DLCO at week 24. And we need to have at least one of the secondary endpoints moving in the right direction or, you know, numerically trending to improvement. And we believe that will give us a path forward. Now, the study is blinded through 48 weeks so that we will have also all the data available at a 48-week period of time, because, again, looking at the durability of the effect.
Got it. And so do you anticipate needing any additional studies, or do you think that with IMPALA 2 results, you'd be able to file, soon after that?
Yeah. We are, yes. So IMPALA 2 results, assuming positivity as Ray outlined, will be adequate to move forward with, you know, regulatory filings.
Got it. So maybe then stepping back to the commercial side of the market. So we spoke about the U.S. market potential and the number of patients around here. Can you also, like, extrapolate this or take this outside ex-U.S.? What is the ex-U.S. opportunity looking like and at least some of the addressable markets for you?
Yes. So I think the way to look at this is what I had outlined earlier, should really be overlaid in other geographies based on the fact that it's, you know, this is an autoimmune disorder, so there's no founder's effect. So, you know, we think that, again, the range in Europe, the range in Japan is very similar to what I outlined earlier. So when we started this journey a few years ago, and we had not done our claims database work, you know, we were anchored around 5,000 or 6,000 patients between Japan, U.S., and Europe that we thought were addressable. We then, you know, in looking at the Kitamura data from 2019, realized that there probably was a whole host of patients around the world that were currently undiagnosed.
We then did our claims database work, and it's very clear that we were looking kind of at the low end of the range previously. So if you look then and you apply really this kind of 10 to 12 per 1 million, rather than six or mid-20s, you just go right down the middle, what you would find, between Japan, U.S, and Europe, is, you know, more like you'd be up in the 15,000-20,000 patients rather than 5,000-10,000. We think that this is, again, a kind of a classic orphaned rare disease first mover, market that just needs investment and structure.
Sure. Got it. So, clearly, it would come to raising more awareness about the disease, or working out additional ways to discover this or diagnose this. So can you help us understand what are the disease awareness efforts that the company is involved in currently, both within the US outside?
Yes. So, what are we doing about that organization and structure and raising awareness? We announced last December that in the United States, we launched a free blood-based antibody testing program here in the United States. So physicians in the United States today can go to our disease state awareness website and order a free blood antibody testing kit that they can then order the kit. It gets shipped to them. They draw the blood. They then send it to our lab. And for no cost, they get results normally within about seven days. The test is, you know, 100% sensitive and specific. And then they also get a titer level readout. So that, that's just up and running now. And we think, again, that's best practice.
And when you look at analogs, LAM, Alpha-1, and I can go right down the line there, that's a very important platform to have up and running early, which we've done. We're going to do the same thing in Europe by the end of this year. So we've committed to that. And then in parallel to that, we have rolled out a very thoughtful disease state awareness campaign here in the United States. And we are communicating digitally, electronically right now with the approximate 15,000 pulmonologists in the U.S. and reminding them of the hallmark symptoms of aPAP and then encouraging them to test when they suspect aPAP via our no-cost antibody testing program. It's in its infancy stage, but it's up and running. And we're looking forward to continuing to you know allocate capital to help build the market.
Got it. And how intensive or cost-intensive is this for you to develop and offer this free of cost?
So it took us just under a year to get the platform up and running. And so we've not talked specifically about what the cost is per test, etc., but as you can imagine, you know, there are other analogs like free genetic screening and other rare diseases that you can anchor on and what the cost structure looks like. For us around investment, I think it's important to note that prior to the IMPALA 2 data results right now, we wanted to make sure that we had our disease state awareness campaign up and running and in the US, the platform around no-cost antibody testing, which we've done. Post-IMPALA 2 results, assuming that we have a positive study, you probably can also assume that we will allocate and, you know, significant additional investment behind both disease state awareness and our no-cost antibody testing so.
Got it. That will definitely lead me on to probe more on the cash flow side. But before I go there, I do wanna discuss the disease burden a bit more, Dr. Ray. I mean, you spoke about lung lavage under general anesthesia. It looks like a fairly intensive procedure. So can you explain the pros and cons of this and especially the cost involved with the lung lavage, currently?
Yeah. We don't really know the exact cost because there's really no single code that defines, you know, whole lung lavage. But you can imagine, in the United States, we've heard estimates anywhere from, you know, a low level of about $30,000 to over $150,000-$200,000 for the procedure, again, depending on the patient. If the patient comes through pretty easily, then, you know, they get out of the hospital quickly. Unfortunately, because this treatment can be very vicious for patients. Some of them end up in the intensive care unit on a ventilator for two or three days until the lung settles down and oxygenates again better. So it's a high range of costs there.
Got it. How frequently does the lavage need to be done?
We don't know exactly the frequency. This is, again, something first of all, there aren't that many centers that are equipped to do this type of a study or this type of a treatment. And then the patients have to agree to actually undergo this. And, as we've been getting more and more into talking to patients and physicians who do this, we're finding that there are many patients that will alter their lifestyle to avoid having to have this done. You know, they may have had one done, and they didn't have a good experience. And they'll do anything they possibly can to avoid having to do this again.
Balaji, I just would put a little emphasis or put greater emphasis on the fact that the need for a chronic therapeutic that addresses the biology of aPAP is. It's very evident. A barbaric procedure like a lung lavage that Ray I think described well, that is a potentially temporary solve for a patient. It is not a long-term, clearly not a long-term biological, you know, therapeutic to address a rare, you know, autoimmune disease. And so we're very hopeful that molgramostim nebulizer solution in IMPALA 2 is going to prove to be safe and effective and that we can get it in the hands of physicians around the world as fast as possible.
Great. As we head towards trial readout and assuming that you achieve your DLCO baseline change and meet the secondary endpoint, what are the next steps that we need to look forward to? So what is the time that will you need to prepare dossier and file and get into commercial prep?
Sure. So, I'll start with the second part first, the commercial prep. So as we talked about in the United States, we're already off and running with regard to organizing and structuring the market, and raising awareness. And obviously, with our no-cost blood antibody test, in Europe, we've already started the early phases of pre-commercial work in the key strategic markets. And that will be ongoing. With regard to filing, the first step is to get the BLA filed here in the U.S. And that would be, while it's a broad range, we have guided to filing in the first half of 2025. So top-line data by the middle of this year, and then in the first half of 2025, file the BLA. We will provide more clarity and specificity as we get on the other side of IMPALA 2.
But right now, that's the assumption. And then kind of a natural sequence outside the United States and Europe as well as Japan and potentially other territories.
Got it. And, especially for the OUS regions, how do you plan to go about on the commercial front? Do you plan to front-end it yourselves or work with a partner? And what kind of if it's a partner, what's the nature of the partnerships looking like?
So, right now, the base case is that we're doing the work Savara is doing the work to prepare to go it alone all over the world if necessary, if warranted. We also, for example, in the Asia-Pacific region, have said very clearly and consistently that for a single asset rare disease company to fully integrate in Asia-Pacific can sometimes, you know, that can be a difficult thing. We will endeavor to be ready to do that. We also will be just open-minded and pragmatic. You know, Europe, again, we're doing the pre-commercial work now. And we will be ready to launch it on our own there. And then of course, in the US, we can surely launch this on our own if we so desire.
Got it. Probably brings me to the last part of this equation. So clinical trials, progress forward, commercial launch, cash flow. So you said that you are currently capitalized on up to 2026, but would love to understand the cash burn rate, current cash burn rate, and your additional need for capital, if any, and how are you thinking about the next couple of years?
Yes. So we have guided to, well, most recent capital report is that we have $162 million on the balance sheet as of the end of 2023. We've guided to also having cash comfortably into 2026. That allows us to do all the commercial pre-commercial prep. It also allows us to launch in the U.S. and do also expanded access program that we intend to launch in the middle of this year. And we were able to extend the open-label extension of IMPALA 2. With regard to cash flow, we've not provided any more guidance than comfortably into 2026. And neither have we commented on capitalization strategy, and/or, you know, approach, timing, etc.
Got it. Great. Matt and Dr. Ray, it's a pleasure having you over here. I'd love to invite you to provide some closing comments and all the best for the readout.
So, thanks again for the invite to attend and participate. I'm very proud of the work that the Savara team have done. We're also grateful to be working with many members of the aPAP community and ecosystem around the world. We are very hopeful that we will be in a position to work really hard to get molgramostim nebulizer solution in the hands of physicians and, most importantly, the human beings, the patients that are dealing with aPAP every day, get it to them around the world as fast as we can. And we'll know very soon. And we're looking forward to that, so.
We're looking forward to those updates too. All the best. Thank you for joining us here at Barclays Conference. I also wish you a productive day at the conference.
Thank you.
Thank you.
Thank you.
Okay.