Kasimov, I'm one of the Senior Biotech Analyst here at Evercore, and it's my pleasure to host our next discussion with Upstream Bio and the company's CEO, Rand Sutherland. Rand, thank you for being here with us in Miami.
Cory, thank you for having us.
Yeah, so starting this one the way I've started them all, so it's like the end of the year, kind of good, an opportune time to kind of look back and reflect on kind of what are the biggest accomplishments for Upstream over the course of 2025, help us level set sort of this conversation as we start to think about 2026.
Yeah, I think the biggest sort of accomplishment for us as a company is just the transition from sort of an early stage clinical development company to more of a mid-stage development company. You know, as you're well aware, we released some really exciting phase II placebo-controlled data for our drug verekitug in chronic rhinosinusitis with nasal polyps. The data were outstanding, really showing that, you know, the sort of preclinical and early clinical data that suggested that the molecule was highly potent, actually that translated to the sort of later stage development space with really very strong efficacy and importantly, being able to deliver that with every 12-week dosing. So we're very excited about that profile. We're very excited about the data because they then read through, we think, to, you know, what will be coming in the first quarter of 2026, and that's our data in severe asthma.
It's been a great year for the company. I think, you know, now really strong clinical validation of a very clear through line about this molecule and its potency and what it can potentially deliver, and we're looking forward to extending that.
Awesome. So before we dive into the trials themselves, I want to ask a couple of kind of like mechanistic and landscape type questions. So I guess to start from a mechanistic point of view, what are the key differences between verekitug versus, relative to Amgen's Tezspire or tezepelumab?
Yeah, so verekitug is a monoclonal antibody and it targets the receptor for TSLP as opposed to the ligand, which tezepelumab and other agents in development target. That, as we've learned over time, is a meaningful distinction because the very basis for this pharmacological profile is the fact that by virtue of targeting the receptor, you're going after a target that is expressed at a much lower level than is the ligand, and that is also refreshed at a much lower level than the ligand is. So it takes a very small amount of our drug to actually fully occupy free TSLP receptors and do so for up to 24 weeks after the last dose. And so that, you know, clear distinction is reflected in a predicted effect on exhaled nitric oxide suppression that's about another 50% greater than that observed with tezepelumab.
It actually, you know, is associated with EC50s and EC90s that are around 300-fold greater, lower, you know, numerically than those of tezepelumab and other drugs in development, so a very clear pharmacological profile and again, driven by the fact that we're targeting the receptor, and I would just note that we're the only drug in development targeting the receptor, and so that's a unique position to be in for us.
Okay, and so like the Tezspire is obviously the bar because it's the commercial, it's the commercial ones, the FDA-approved asset that's out there. There's also a number of others in active area of development. So how does verekitug differ from like the TSLP YTE molecules in the clinic, and are those going to be able to achieve some of that extended dosing that you think you'll be able to do?
Yeah, well, I think again, the first and most important distinction is our target, which is the receptor versus the ligand and what that means. And, you know, we've now validated this clinically and have shown, you know, very robust data. I think, you know, a clear distinction besides the target is sort of how you get to this extended dosing. Obviously, the YTE modification is a form of Fc engineering. It, you know, interferes with the recycling of the molecule. It extends the half-life. It doesn't really do anything to alter the potency. And so it's essentially a pharmacological exercise then the extent to which you can get extended coverage for, you know, how long that coverage lasts and what the magnitude of that coverage is based on the dose that you've chosen.
You know, what we've learned as we've started to see some of the profiles of these molecules emerge is that, you know, it's going to be an important question for physicians and patients as to what is not only the magnitude of the effect, but its durability. We're learning from conversations with KOLs and others that there really is no desire to trade off any degree of efficacy for durability. So it's very important that, you know, how you get to extended dosing interval, you know, our preclinical and early clinical data suggests that, you know, again, even with relatively small amounts of verekitug , we have complete occupancy of the TSLP receptor for up to 24 weeks after the last dose. That's accompanied by commensurate reductions in exhaled nitric oxide and blood eosinophils.
And so our hypothesis is that not only will we have, you know, efficacy that matches best in class across biologics in general, but that that durability will be, you know, quite significant and hopefully not subject to any loss of either symptom control or exacerbation reduction over time.
Okay, and then last thing on sort of the landscape, curious how competitive you expect bispecifics to be in indications that you're looking at?
Yeah, I think it's early days for bispecifics. I think there are a lot of sort of interesting biological, you know, plausibility questions that can be brought to bear, and I think it's reasonable to ask if one plus one, you know, is more than one. You know, we'll see, I think, is the answer to date. You know, there are some data, you know, for example, with lunsekimig, which is a program that Sanofi is prosecuting in asthma that suggests that you can have very good efficacy with the TSLP IL-13 bispecific. I would note that the efficacy that they've demonstrated thus far in a very similarly designed multiple ascending dose trial is very similar to the efficacy that we delivered, and I'm talking about suppression of exhaled nitric oxide here. So, you know, not yet evidence that there is clear distinction based on that highly translatable biomarker.
Of course, we'll be waiting for clinical data to see. We've also recently seen some placebo-controlled data with the TSLP IL-13 bispecific in atopic dermatitis that suggests that the efficacy there, and this is EASI-75, that the efficacy there is similar to that achieved with lebrikizumab. So, you know, I think we're going to need more data, but, you know, right now there's not a clear sign beyond biologic plausibility that, you know, bispecifics are going to deliver, you know, differentiated efficacy here, but there's more to come.
Okay, all right, so now let's dive into your trials and maybe start with the CRS data you mentioned a couple of months ago. What did we learn from that phase II VIBRANT study, and how does that inform the path going forward?
Sure, so I think it's important to note that, you know, CRS with nasal polyps is a highly TH2-driven disease. It's one in which, you know, all of the drugs that have been approved in severe asthma and CRS with NP, you know, there's significant evidence of efficacy. And so it's sort of a perfect, you know, proof of concept indication almost for our molecule. You know, what we learned, and it's a disease that's marked, by the way, by, you know, significant almost, you know, complete pansinusitis and then the growth of these polyps, which are essentially just, you know, little outpouchings of tissue that further obstruct the sinus cavity. And so what you're looking to achieve there clinically is improvement in patient symptomatology. It's very important. You're looking to improve, you know, the overall degree of sinusitis, and that can be measured on CT scan.
You typically use as one of two co-primary endpoints an endoscopic evaluation of the nasal polyp burden itself. So, you know, these are very, you know, stereotyped approaches to clinical development. There's actually FDA guidance. It was very important to us to design a trial that not only could detect, you know, changes in these important outcomes, but do so in a way that was generalizable. What we observed was a 1.8-point reduction in the endoscopic nasal polyp score. That was the primary endpoint in this trial. We also saw substantial reductions in the nasal congestion score, which is the sort of patient-reported outcome. Again, CT scan evidence of improvement in sinusitis and some other measures as well. All of this was delivered at, you know, both clinical significance and statistical significance.
We were also very pleased to see that despite not being powered to do so, we were able to deliver reductions overall in the need for either systemic corticosteroid or surgery as rescue therapy, a very important, you know, clinical outcome for patients, physicians, and payers. So it was really a great set of data. I think that, you know, all of this happening, by the way, at Q12 week dosing. And so for us, a profile that's very strong, very much sort of at or even sort of at the far end of best in class and, you know, again, giving us the potential for significant read-through to severe asthma because of the overlap I mentioned earlier. And also, I think really very much giving us reason to move forward in phase III.
What are the next steps there? Do you go talk to the FDA now with this data in hand, you wait for asthma and go in and more holistically do that?
Yeah, I think if you were asking me this question a year or so ago, we might have sort of gone ahead, but we've worked very hard over the course of the last year to pull our asthma data forward. Those are coming in the first quarter of next year. And so now we're in this very fortunate position where we're going to have several hundred patients' worth of, you know, really robust exposure PK and clinical data from two indications. You know, we're going to be able to hopefully prosecute regulatory interactions, phase III development, initiation, and execution almost simultaneously with the goal of potentially even, you know, launching in both indications at around the same time, which would be unique for any biologic in the space thus far. So we are going to wait for our asthma data.
We're then going to move as quickly as possible into phase III and get going soon.
Okay, and we'll come back to future plans in a minute. We obviously talked well before your VIBRANT data came out, and you were optimistic at that point about the asthma trial. How much did the positive CRS data like kind of boost that confidence that you have going into your VALIANT data in the first quarter of next year?
Yeah, I think what we've learned as we've looked at development programs and now sort of labeled indications in molecules targeting IgE, IL-5, IL-4, and TSLP is that, you know, in general, the level of efficacy that's observed in CRS with NP is commensurate with that that's observed in severe asthma, at least categorically, and so you see, you know, the more highly efficacious biologics sort of clustering if you were to do a two by two sort of in the top right of that quadrant, the less efficacious, you know, towards the lower left. You know, our hope is that we're going to be in the top right with dupilumab and tezepelumab, and, you know, we'll see.
Okay, and so as we think about this asthma data release in the first quarter, when you think about a bar there, do you need to show data that's comparable to tezepelumab's phase II-B PATHWAY asthma data? Is that the bar that you think about?
You know, the way that we look at this is to look sort of broadly across the highly efficacious, you know, biologics landscape in this indication. You know, in that universe, there are some outlier trials with, you know, sort of higher degrees of efficacy, but in general, efficacy seems to land at around a 50% or so reduction in annualized asthma exacerbation rate. I think that's, you know, a, what we've designed our study to be able to detect and deliver. Again, you know, we're not just talking about relative efficacy. We're talking about relative efficacy and extended dosing. And so for us, being able to deliver around a 50% reduction in asthma exacerbations at Q12 week dosing would be a substantial improvement versus standard of care. We get very consistent feedback both from one-on-one conversations with experts and from market research that that is a very valuable profile.
You know, that's what we're hoping for. Now, could we deliver something better? I think if you go back and look at the PK/PD modeling and data from our earlier stage studies, there is the potential given our greater degree of exhaled nitric oxide suppression that we could deliver upsized efficacy, but we don't think it's prudent to be promising that at this point.
Right, absolutely. Do you expect, and perhaps you already know this, but do you expect that the baseline patient demographics in VALIANT will be similar to PATHWAY?
We do. We worked very hard to, you know, set up our inclusion criteria and our trial design such that it, you know, is generalizable. I mean, you know, there's a reason that these trials are done the way that they're done, and it's, you know, not to be boring and rubber stamp and like everybody else. It's because the context in which these programs have been sort of developed and where they've converged over time is very much around where the unmet needs are, what regulators want to see, what's important to, you know, physicians and patients and payers. So we've set out to, you know, really pull together a patient population that's very similar to that that others have. And based on our monitoring thus far, we appear to have achieved that, and, you know, we'll be able to report those data very shortly.
When you think back to the Tezspire data going from phase II-B to phase III, this isn't all that uncommon. You saw efficacy come down a bit. Do you have any views as to why that happened, or is it just the progression from phase II to phase III?
Yeah, I don't have a, you know, it's not like I can highlight one sort of inclusion criterion or, you know, endotype or something that drove that. I mean, these are probabilistic experiments. You do enough of them, and you're going to see some sort of data falling across a distribution. You know, there were, if you dig into the FDA review documentation for that program, you know, there were some things about that trial that suggests it's a bit of an outlier. So, you know, we don't think that 70% is a bar that we should be setting for ourselves in phase II, nor do we think, and again, this is on the basis of data from a lot of programs, that a 20% falloff in efficacy from phase II to phase III should be expected either.
So, you know, we will see what happens, but sort of landing in this highly efficacious realm of around 50% reduction in phase II and phase III, again, with Q12 or in the case of severe asthma, maybe even Q24 week dosing would be a very compelling clinical profile.
Okay, and I want to follow up on that, on the notion of whether you're dosing every two, let's call it three months or six months. Three months is a big advance from where we are today.
It is.
How important is it that you get that dosing interval out to every six months? Like, does it matter that much relative to Tezspire, or is it more about future competition that could come down the road?
Yeah, so I think the way that we're looking at it, obviously in the context of our program, is that, you know, if we could deliver perfectly robust efficacy at Q12 or Q24 weeks, what would we do? It is interesting that, you know, most of the sort of patient convenience is delivered by going from Q2 to four weeks to Q12 weeks in market research responses. There is a little bit of an additional sort of driver of value going from 12 to 24 weeks, but, you know, those data from our market research were actually acquired in an era before we started to see clinical data from some of the YTE programs. And again, I think, you know, it's going to be very important for anybody who has a six-monthly dose drug to be able to deliver significant efficacy and durable efficacy.
We're learning that, you know, there is no desire to make a trade-off between efficacy and convenience. And so again, I think, you know, most of the value is obtained getting to Q12 weeks. If that can be done with really great efficacy, that's ideal. And it would have to be very robust, very durable, and very significant efficacy delivered at Q24 weeks for that to be, I think, a differentiated program in the market.
Right, okay. Now to come back to something we touched on before, and that's kind of the plans for phase III for hopefully asthma and certainly CRS with nasal polyps. When you go talk to the FDA, how much discussion has taken place with the FDA already? And do you potentially foresee even faster paths to market given like even this morning, like some of the news that's coming out of the FDA and talking about single trials and things like that?
Yeah, I think it's hard for us to speculate. I mean, you know, we need to see a little bit of precedent there and experience before we could, you know, rely on that. I think, you know, where there is a lot of precedent and experience is in biologics development and these indications. The approach that we've taken is to try to, you know, prosecute programs that are sequential in nature with phase II trials that are robustly powered, that have regulatory endpoints, that are placebo-controlled, that do dose ranging, you know, trials that really give us the kind of data that, you know, if the trials are positive, we can go and as part of an end of phase II and then end of phase III negotiation, potentially have those phase II trials included as one of two pivotal programs, pivotal trials in the program.
So, you know, our, I think, going in hypothesis is that if the data are good, we would be able to have a robust discussion about this with the regulators and hopefully have the next step be a single phase III trial in each indication.
Okay, and then you obviously have a phase II COPD trial ongoing as well. In terms of the trial design, maybe just like remind us of that. Are there any nuances relative to some of the other work that's been done in this indication? And when could we expect to see data from that one? I know it's further out.
Yeah, so it is further out. And in fact, we just, you know, dosed our first patient over the summer. This is an almost 700-patient global trial. So it's a little early for us to have much precision around when to read out. As soon as we get there, we'll obviously share that news. I think in terms of drug development, biologics development in COPD, you know, it's great to see that dupilumab has been approved. It's clearly having a very strong launch that really clearly indicates substantial unmet need in COPD. And, you know, as a pulmonary physician, I'm very happy to see now that we have, you know, highly efficacious options to add to ICS/LABA/LAMA. I think what we learned from tezepelumab's phase II program in COPD is that TSLP appears to be an attractive target.
In fact, you know, one of the reasons we went public was to be able to garner the resources to prosecute our COPD program. You know, the opportunity there is to continue to push the envelope in terms of magnitude of efficacy as measured by, you know, frequency of COPD exacerbations. There is this interesting question around, you know, breadth of eligible patient population in COPD as well. I think, you know, what we saw, you know, tantalizing signs of in the tezepelumab program is that there were, we think, some signals of efficacy even in the lower Eos group. That's the, you know, the sub 300 or the sub 150 population. You know, we do believe because of the potency of our molecule that there is the potential that we could deliver efficacy in a very broad population in COPD.
So we have set up our program to, you know, while focusing principally on the 150 and up subset as the sort of target population, we are, you know, robustly testing in an exploratory manner whether or not there might be the ability to also demonstrate efficacy in sub 150 patients as well. So our hope is that, you know, like the tezepelumab label in severe asthma, we would have a broad population that would be eligible for our drug coming out of our program.
Okay, that'd be fantastic. All right, we're down to five seconds left. So with that, we'll end it. Thank you very much and good luck with that data in the first quarter.
Thank you. We appreciate it.