Good afternoon, everyone. Welcome to the Piper Sandler Healthcare Conference. My name is Yas Rahimi. I'm a senior biotech analyst here at Piper Sandler. Really excited to have Upstream Bio and Rand here with me. Lots to cover over the next 25 minutes. I think 2025 was a big year with the chronic sinusitis readout, and 2026 is going to be even more exciting with the VALIANT asthma data upcoming here in 1Q. I think maybe the first question is just we did some math at the back of the envelope. Just want to make sure the timing is correct. You finished enrollment completion in, we think, on June 9th of this year, and it is a 24-week study.
So you take 24, you add four weeks for the screening period, and then you add another six to eight weeks for data analysis, and then boom, you come out February, March, and that is 1Q. So it seems like your guidance, based on our math, correct us as long as it's in alignment to the timing of the data readout.
First, yes, thanks for having us. I'm thrilled to be here and spend some time with you. Yes, I think your math lines up quite well with our previous guidance of data in Q1.
Okay. Next question is, which we get, is I think everyone from the investor community who's paying attention understands sort of the bar for success is a 50% exacerbation reduction on a placebo-adjusted basis. I think maybe where they need a little bit clarity on is, given that you're testing quarterly dosing as well as every six months dosing, help us understand sort of base case assumption for the readout to best case assumption, both across efficacy and durability.
So, I mean, I think the way that we are thinking of this is really informed by the data that we've generated in the program to date. This indicates that we have a highly potent molecule that potency manifests itself really in two ways. The first is through an ability, depending on the trial, to either suppress biomarkers or actually lead to clinical efficacy that is as good as anything else out there, and to also do that at an extended dosing interval. So our Phase 2 data from chronic rhinosinusitis with nasal polyps showed that we could clearly deliver really sort of best in class meeting efficacy at Q12 weeks. So this is very consistent with the preclinical data and the early clinical data. So I think putting the asthma data in that context is a really great way to think of it.
If you look across sort of the universe of biologics programs in severe asthma, around a 50% reduction in exacerbations is what's typically seen. I think if we can deliver that and deliver it at a Q12 or Q24 week dosing interval, that will be a highly differentiated profile for verekitug. It would be one that we would hope then to validate in Phase 3. And if we do that, we believe that we will have a substantially differentiated and quite valuable molecule.
Okay. And then, team, we often get post the data, you're going to be getting ready for a Phase 3. So a lot of investors often ask us, have you looked across the totality of asthma Phase 3 studies in the translation from going to Phase 2 to Phase 3? So if you could maybe talk about that, how exacerbation rates hold up in totality of studies across different agents when we transition, and then also maybe put it into perspective with the Tez's data.
Yeah. It's an interesting question. There are a number of different approaches that typically get taken in Phase 2. They're not all the same. In some cases, the endpoints may differ a little bit. In some cases, the design may actually be to inform the design of the Phase 3. And so we're seeking certain types of signals. Again, I think if you just take a step back and look broadly across data, something in the 50% range is, I think, reasonable to expect is not unusual. There are cases where exacerbation rate reductions of up to 70% have been observed. Those trials, those particular data tend to be accompanied by some other aspects of the trial results that indicate that those trials might, to some extent, be outliers. So look, clinical trials are probabilistic events. They're experiments.
They don't yield exactly the same results exactly in the same way, even if you were to take the same patient population and replicate it 500x . So there are some variations, but I think if you look broadly across the universe, you look at what people are expecting, you look at what experts in the field want to see, again, around a 50% reduction in annualized asthma exacerbation rate. And in our case, hopefully at both Q12 and Q24 weeks of dosing, again, would be, we think, a very strong outcome.
What is a typical annualized exacerbation rate in patients with asthma that have an eosinophil count of 300?
It varies. I mean, we clearly design these trials to identify patients who have evidence of the endpoint that we're trying to modify. So typically, patients in these trials will have two or more exacerbations in the last year. Again, it varies a little bit across program, but that's certainly the signal that we're trying to seek as an inclusion criterion for patients to participate in the trial.
Okay. And I think you have also publicly noted with enrollment completion that when you compare your study to the Tez's studies or other Phase 2b biologic studies, it's very similar in terms of patient population. So if you could just share some nuggets around that, and then also comment whether standard of care has changed or evolved over time.
Right. So both good questions. I think in general, while there are circumstances in which one can take a differentiated approach to clinical development and see that bear fruit, this is a case really where I think regulators, payers, physicians, patients are all trying to understand how do these medicines differ from each other, and you look at the biologics that are approved in severe asthma, and they differ in a few different ways with regard to the magnitude of their efficacy, dosing interval, the endotype of the patients that are most responsive to the medicine, and so we take all of that into account when we design our trials. Now, the field has sort of converged around a fixed set of inclusion criteria, patient characteristics, phenotypic characteristics, and we are very much in the same realm as everybody else.
We are, of course, interested in replicating what tezepelamab, Tezspire has observed in terms of having a very broad patient eligibility with regard to blood eosinophils. So we are very carefully monitoring that and testing verekitug across the full range of patients with eosinophilia. And again, are looking at very typical sort of clinical exacerbation, lung function, symptom control type of criteria and endpoints in our study.
Very helpful. And obviously, one of the questions that will also come up post the data readout is taking the study, engaging with the agency. Oh, actually, before we go there, it's like you're targeting TSLP receptor instead of the ligand.
That's right.
That leads to, and you have four times higher potency. And you also have shown FeNO data that is substantially higher than we have seen with any other biologics. So, and you've done a great job enrolling the right patient population that's consistent. So if you take all of these individual information, you could kind of step back and really get excited about verekitug's value proposition that one could even argue is very high POS to show not only what we have already shown 12 weeks, but 24 weeks, but you could even see a differentiated potency profile. Because the question is like, I don't know if we have gotten better in the translation of FeNO to exacerbation rates.
Yeah. So I think the potency differentiation here is really the basis of the entire story. The potency, it really revealed itself even preclinically as potentially being a few fold greater than that of tezepelamab. And then as we moved into the clinic and actually acquired PK and PD data from patients and then subjected those to modeling, we found actually that the potency of our molecule was actually several hundred fold in the clinic greater than that of tezepelamab. So how does that manifest itself? Well, first, it manifests itself in a predicted ability to have a greater effect in suppressing exhaled nitric oxide than tezepelamab. That's important because, as you referenced, exhaled nitric oxide is a significant indicator of a patient being at risk for asthma exacerbations. It's sort of overall then a reflection of that, the degree of asthma severity.
It's also very responsive to treatment and a very strong predictor of treatment. So we think it's a very translatable biomarker, probably the most translatable biomarker in severe asthma. And again, what this potency has translated to when we subject the data to PK/PD modeling is a very clear sense that over a 48-week period, both 100 mg every 12 weeks and 400 every 24 weeks keep the vast majority of a model patient population above our EC90 for exhaled nitric oxide. That's a very strong and very conservative efficacy threshold and one that leads us going in to believe that, yes, both of those dose regimens could potentially translate to significant reductions in asthma exacerbation rates.
Now, we need the data to really validate that modeling and actual clinical data in hand are two things, but these, again, are data that have been very consistent and clear throughout the life of the program and give us strong reason to be optimistic.
So for the next steps post the VALIANT data, you would be actually starting a phase. What's your thought process? Would you want to move a single dose forward? What is the selection criteria between the two regimens? What would the potential size and design look like?
Yeah. So we've been talking about asthma, severe asthma, but maybe I'll just also loop in chronic rhinosinusitis with nasal polyps here because we've been fortunate to have executed our asthma program so well that we were able to pull the timelines forward such that these two programs are really revealing their data at about the same time. Now, why does that matter? I'm not just patting ourselves on the back here. It's actually very important to be able to have the totality of evidence from both trials to be able to really do very robust dose selection for phase three. We've had around 100, 150 patients of exposure data prior to verekitug reading out. We're going to have another 360 patients' worth of data, three different dose regimens. Now we've got two different disease states, healthy volunteers.
So a very rich and robust set of PK data and PD data to help us understand and model dose selection for Phase 3. I'm making such a big point about this because dose selection for Phase 3, as everybody knows, is one of the, if not the most important decisions that you make in the life of a program. And so we're fortunate to have a very deep data set to allow us to do that. Now, because we're also doing it with both data from CRS with NP and severe asthma, our hope is that we can essentially prosecute these programs contemporaneously, both with regulators and in the clinic ultimately if we move forward.
And yes, I think ideally we would choose one dose regimen that would apply to both diseases that would, I think from the standpoint of a very clear and understandable label, lack of complexity be an ideal outcome. We need to see if the data support that, but yes, that's our ambition. And just to the point of how quickly will we be doing this, we'll be doing it as quickly as possible.
Okay. And another question that will, I think, often come up is sort of positioning in the competitive landscape of agents in asthma. Are there any other long-acting therapies in development that are in late-stage development and how does verekitug compare to those late-stage longer-acting therapies?
Yeah. I think we've been fortunate just because of how this program has evolved over time and how strong the data have been to be able to look both forward and backward in terms of the competition. From a very early standpoint, we've sort of said, look, based on our ability to alter biomarkers, based on our potential for extended dosing, how that's all going to potentially translate to efficacy. We have the potential to come in and compete against marketed products like Tezspire, Dupixent, Nucala, and others, potentially with a TPP that is differentiated and could really allow us to compete in that universe. So that's an important thing for us to think about and to really focus on a differentiation strategy. Then there's the question about, well, who else is targeting TSLP? How are they doing it? Where are they in development, et cetera?
What I would emphasize here is that we do have the ability by virtue of the potency of our molecule to dose this drug either twice a year or 4x a year in clinical trials. Our hope is that that translates ultimately to clinical practice. We do that and get there by virtue of potency. There are others who are prosecuting long-acting ligand-targeting antibodies, all of whom are using FC engineering to essentially extend the half-life of the molecule. And then by virtue of doing that, not by altering potency, but simply by changing half-life, then choosing extended half-life dosing for their development programs. There are a number of different approaches and companies that are doing this, so I don't think it's useful to get into all of them, but I think it is important to note that the laws of pharmacology apply here.
So there is a clear sort of matrix that has to be understood in terms of what dosing interval you choose, what dose of a drug is required to provide optimal coverage over that dosing interval, and then to really understand, okay, what is optimal coverage? How do you define it in terms of magnitude of effect? But equally importantly, how do you define it in terms of durability of effect? And so there are trade-offs that one has to make along the way to achieve essentially a maximum feasible dose to get the degree of coverage that is durable and then to decide exactly what that dose interval is. So that's a very different approach. There are a number of different companies working through that right now. It's a very different approach than ours.
And the companies that are doing it, I think, are in relatively early days in terms of development, whereas we've already read out Phase 2 data in CRS with NP. We'll be reading out Phase 2 data in severe asthma in the next quarter. And for us, these are the types of Phase 2 trials that have been developed with regulatory enabling endpoints with sufficient power to detect clinically meaningful differences. Trials that, subject to successful negotiations with regulators, could serve as one of two pivotal trials in a BLA submission.
Is the thought process also to stagger the studies when you meet with the agency? So you would be starting potentially a single large asthma study and then a chronic sinusitis study like concurrently to one another, or are you thinking to stagger the studies? Just I'm sure chronic sinusitis is less competitive, so you could probably enroll faster, but I guess how do you envision sort of the cadence of the focus?
I think at a very high level, and we still have work to do before we can commit to everything. And of course, all of this is subject to regulatory interactions, but I think our ambition would be to try to kick these off approximately simultaneously. I mean, that itself is unique. If you look at most other programs, they've had a lead indication, then a second, and then a third. For us to be able to come in and address two important sources of ongoing unmet need relatively simultaneously would be a great position to be in. And of course, I would just remind that not so far behind, we've got COPD coming as well.
One of the things I always get from investors, they understand asthma is a large market, but they don't understand why there's only less than 10% on biologics. Is it just a function of patients not qualifying for the eosinophilic count to be eligible? Is it market access driven? What is going to change over what needs to change over the next five-year time horizon to continue growing the usage of biologics in asthma?
Yeah, so we hear various numbers quoted in terms of percent penetration. Some will say 20, maybe even a little bit higher than 20%. But you're right, it is still lower than desired, and look, these are 20% of eligible patients, so these are patients who meet the eosinophil or severity or background therapy non-response criteria. I think, look, depending on where in the world you are, yes, access can be an issue. I mentioned a little bit, I think, about some of the complexity in terms of the different development programs and now marketed products in terms of who's eligible, what kind of efficacy you can see, in which diseases the drug is approved, and all of that factors in. There are also different prescribing patterns by different types of prescribers, allergists perhaps being most comfortable with biologics, and pulmonologists coming online.
I think in CRS with nasal polyps, we've got now a group of ENT prescribers to help understand the virtue of these biologics. So there are a number of variables that go into play. But what's been very clear about the market historically is that when a new agent, and this is in severe asthma, when a new agent comes to market, if it's differentiated in some way, and let's just look at how great Tezspire's launch has been, Tez's differentiated perhaps with the best efficacy of all and no biomarker restriction in terms of who's eligible, a medicine like that can come in and be disruptive and take substantial share, yet do it not through eroding the share of others, but by driving penetration.
So I think there's still room and need for innovation here, and we see that as a potential driver of market penetration and market opportunity as well.
Great. Well, Rand, do you crush the meetings? I know I've asked a lot from you after a big dinner last night, and you've been on meetings nonstop till right now. So just want to say thank you so much for a great discussion. We're super excited. Can't wait for the data. And thank you again for being part of our conference. So let's thank Rand, Mike, for a great discussion.
Perfect. Thank you. Appreciate it.