All right. Welcome, everyone, to Jefferies London Healthcare Conference 2025. My name is Roger Song, one of the senior analysts covering mid-cap b iotech in the U.S. It is my pleasure to introduce our next presenting company, Zenas BioPharma CEO, Lonnie Moulder. We will have a hybrid mode, and Lonnie is going to do some presentation, and then we have a Q&A to follow. Lonnie, welcome.
Thank you, Roger. We really appreciate being here and thank Jefferies. Fantastic conference. I'll be making some forward-looking statements, so I refer you to the appropriate SEC filings. We have a summary deck here. Our full deck is online, and we're using that during our one-on-ones. I wanted to highlight some key aspects to what we're doing at Zenas. As you can see here, we have a rather robust portfolio of programs. We recently expanded the pipeline quite a bit with a transaction that brought in several new molecules. Let's start out with, first of all, obexelimab. As many of you may know, obexelimab is concluding a phase III trial in IgG4-related disease. In fact, the last patient out has occurred.
We'll be headed towards database lock analysis and around the end of the year, the top-line phase III results, which, as you know, is one of the biggest moments in a biopharma company's life cycle. Following that, we have a lupus program reporting out later in 2026. We actually are at about 70% enrollment. We'll conclude enrollment and then report out that 24-week top-line endpoint. Recently, we reported out the RMS, or relapsing multiple sclerosis, phase II data set on obexelimab, and the results were just outstanding. We'll talk a bit about that. A lot is going on with obexelimab, but as far as the expanded pipeline of rilzabrutinib for multiple sclerosis, specifically progressive-type disease, PPMS and SPMS, the PPMS trial has already started, and an SPMS trial will begin in the first quarter of 2026.
Following that, two IND enabling programs headed into phase I next year, and I'll just touch briefly on the IL-17 oral small molecule program as we move through the presentation here. Highlighting obexelimab, many of you are familiar with this mechanism of action. It's novel. There's no other agent that does what it does, which is co-engage a key marker on B cells, CD19, and also utilizing the Fc portion of the antibody engages Fc gamma R2b, also known as CD32b. That co-engagement of those two targets leads to profound B cell inhibition that's been well validated in multiple nonclinical studies and across multiple clinical studies, including the recently reported out RMS study that shows that this is a very potent inhibitor of B cell activity, and the dosing regimen that we're utilizing is truly optimized. What does it actually lead to?
A reduction in antibody production, which is relevant in those diseases driven a bit more by autoantibodies, but also cytokine production. In our hands, we demonstrated it reduces the processing of antigens for presentation to T cells by B cells. Multifaceted, a very interesting molecule. We moved into a phase III program based on, of course, our confidence in the molecule from a nonclinical standpoint, but also a very successful phase II clinical trial. This just summarizes the key aspects of the trial. In IgG4-related disease, you may know as a disease of inflammation that impacts multiple organs. Patients usually present with three or four organs involved, and it is the type of disease that does not remit on its own. If not treated, it leads to substantial organ damage, ultimately to fibrosis.
You need to quickly stop flares, and you need to manage the inflammation on an ongoing basis. In this trial, as you can see on the y-axis, looking at the IgG4-RI or responder index, a dramatic improvement within the first two months. The primary endpoint was just a two-point drop, and you can see all of the patients here achieved that. Only one patient flared in this study ultimately, and that is a really strong result. We moved into a phase III program, and we had great confidence in this phase III program because of the phase II results. Also, the design of the program is looking at optimizing what a drug like this can do, and that is prevent future flares and to decrease inflammation.
The way the trial is set up, patients are in a flare state, they're screened, confirmed they're in flare, they're administered a steroid regimen to put the patient into remission, and then the patients are followed over 52 weeks and looking at flares. The primary endpoint is time to disease flare. Now, this is the same trial design that was utilized by the recently approved Uplizna label expansion for IgG4-RD. As you may know, Amgen has two quarters of launch that have been quite successful, actually. Based on the data sets that we're looking at, they're having a really, really strong launch. Back to the trial design, this trial design is now well validated. In fact, what we were wondering about when we designed the study is what would the control arm do?
Because we had two prior phase III trials that we used as the basis for powering the study, and now with the MITIGATE results, that's the Uplizna phase III, we anticipate that the placebo flare rate will approach 60%. With our drug potentially being closer to the 10% range, that leads to quite profound results. The study is probably a bit overpowered at 194 patients, the largest study ever conducted in this disease. As I said, last patient out has already occurred, and phase III top-line results we're excited to be bringing forward about the end of the year.
If you look at the molecule overall and how it could differentiate in the marketplace, of course, we know it's a very potent inhibitor of B cells and has the other aspects of the mechanism I described, but we think over time the sustained remission could differentiate it because it's administered subcutaneously on a repeated basis. Target engagement is always there, exposure is there for that purpose, and continuous impact on B cell activity, unlike the intermittent IV infusion dose of the competitive product. There are some other opportunities here. Our investigators are really excited about the fact that they can pause the drug if they need to, to allow the B cell compartment to come back for potentially administering vaccinations annually, or if there's some clinical sequelae associated with a comorbidity or an infection, you could take advantage of that.
Whereas with a B cell depleting antibody, you're sort of stuck, actually. We know that patients prefer at-home subcutaneous administration. We know that we won't have infusion reactions since it's not an IV infusion, and we think the copay will economically be more favorable for patients as a Medicare Part D at-home subcutaneous administration compared to IV infusions. The overall market opportunity, there's probably 30,000-40,000 patients in the U.S. and a similar number in Europe. We know there are approximately 20,000 that are diagnosed today and treated on an ongoing basis, and that's based on claims data.
If you take that population, and we believe over half of those patients require continual therapy, and dollarize it to the current market product, you come up with about a $3 billion+ market opportunity in the U.S. just for that segment, not for the overall population, to be conservative just for that segment. A recent market research study that we deployed, we have the initial results. It's a typical quantitative market research study. We call them A2Us, Attitude Trial and Usage Studies, 161 clinicians, and provided obexelimab a 45% share compared to Uplizna and rituximab. We think that bodes well because of the differentiation that this product has. One other reason we're highly confident in the phase III results is based on the RMS study results. Just briefly, the RMS study, this is a classical phase II study in patients with relapsing multiple sclerosis.
We reported this out recently. You can see what's done here is two-to-one randomization, drug obexelimab versus placebo, measuring new enhancing GAD lesions, gadolinium lesions, T1 lesions, specifically over the 8 to 12-week time point. That's the ideal way to set up a study, and the results were profound. This is a new benchmark for B cell targeting in an RMS study, a 95% risk reduction, and really confirms how potent this mechanism is, and in addition, how sustained it is, and that the optimized dosing regimen has really paid off in this trial. Obviously, that gives us a lot of confidence in the IgG4-RD phase III study and other programs that we're pursuing, including the lupus program. While on MS, why don't I just touch on our newest molecule, rilzabrutinib? This is a BTK inhibitor. We think it's potentially a best-in-class BTK inhibitor.
Why BTK inhibitors in MS? I think people are getting their head around all the potential here to impact compartmentalized inflammation. You can target B cells in the periphery like B cell depleting antibodies, anti-CD20 antibodies do, and that inflammation impact does help in the CNS, of course. They're highly effective. If you really want to impact progressive disease, the compartmentalized inflammation, get to silent progression, getting into the brain would be ideal. That way, you're not only hitting peripheral B cells, you're hitting central B cells, but also immune cells, the innate system, macrophages, and also microglia, which are critical for the neurodegeneration pathway. Having a highly brain-penetrant BTK inhibitor, not only hitting the periphery, but the central nervous system is generating a lot of enthusiasm. I think a number of the pharma companies now, you've seen that Novartis with remerbrutinib is moving forward in MS now.
Fenerbrutinib just reported that they had positive results in a progressive MS study, and of course, the tolebrutinib approval is coming up in December. Why relabrutinib? We think it's the best-in-class BTK inhibitor. First of all, from a selectivity standpoint, off-target side effects, it stands out along with remerbrutinib. CNS concentration, a higher level along with fenerbrutinib, but when you look at potency, it really stands out with some of the others. When you put it all together, potency in the brain, what is the CNS concentration IC90 ratio for relabrutinib? It's 15x greater than tolebrutinib, 25x greater than fenerbrutinib, and 5x greater than fenerbrutinib, remerbrutinib, fenerbrutinib. We think that optimizes the pharmacology of a BTK inhibitor to give you the greatest opportunity to differentiate in patients with progressive disease.
Similar design of phase II with rilzabrutinib from what you saw with obexelimab, and here again with the ideal dose, 80 mg once daily, why is that the most effective dose? It has the highest Cmax, the greatest blood-brain barrier penetration, had a 90% reduction in lesions. We're conducting the PPMS study. You can see here, two-to-one randomization, SPMS study to start in the first quarter with the classical endpoints agreed with both FDA and EMA. I probably do not have to describe the market opportunity there. Just finally, we're really excited about our earlier stage pipeline. I'll just highlight the small molecule oral IL-17 A/A, A/F inhibitor. InnoCare worked on this for many years. It's really cracked the code. This molecule has the right ADME properties to bring into the clinic, 80% bioavailability in the monkey study, and some really good experimental results.
We will talk much more about this as we head into 2026 and enter phase I with a phase I trial design that will include in the second part actual patients. We will have patient data on this molecule in 2027. You can see what we have been able to accomplish in 2025 and what we plan to accomplish throughout 2026 and 2027, a number of really important value-driving milestones across the portfolio, with the biggest one, of course, being top-line results for IgG4-RD coming up around the end of the year. With that, I will open it up for questions, Roger.
Excellent. Thanks for the presentation. Yeah, you can have a seat here. Very clear, IgG4 is the next major focus and probably the major driver for the next inflection point. The recent MS milestone data is really impressive. You just showed setting the new standard for the risk reduction. How should we think about the re-through from the MS to IgG4? Maybe just stay on the MS given this impressive data. What's the path forward? You have some strategy.
Yeah, the bridge from the MS study results to IgG4-RD, if you think about the history of the drug with IgG4-RD, I showed briefly the phase II results. Those phase II results were based on an older IV formulation that really did not optimize exposure. In fact, in another study that was run previously, a phase II-A study run by Xencor, the original sponsor, in lupus, it showed that patients that had the right exposure leading to a C trough that was at the median of the population or above had twice the outcome, double the outcome in the primary endpoint. So we really needed, as we thought about the dosing regimen, to optimize C- trough, and that is what we did with the subcutaneous regimen.
If you think about the strong IgG4-RD phase II results and now provide a much better dosing regimen and a dosing regimen that's now validated in the MS study. Those RMS results showing a 95% risk reduction, as I said, the benchmark for B cell targeting agents now in phase II RMS studies using the T1 GAD enhancing lesion endpoint gives us a great deal of confidence in the molecule and the dosing regimen we selected. Of course, as one conducts trials, blinded trials, as a sponsor, you look at blinded results along the way. You monitor the health of the trial. When we look at the overall number of flares that have occurred in this trial, and then we look at the actual curve associated with the blinded flares, it fits optimally where we would want it to be for a great outcome.
Of course, it's blinded data. It's the combined arms, but this trial's delivering what you would anticipate if you're going to have a strong outcome. All that together gives us a lot of confidence.
Excellent. Great. How about the MS in terms of?
Yeah, so for MS, the phase II MS study, the primary endpoint, of course, was the 12-week readout. There's a 24-week readout that includes another, I think, 18 secondary and exploratory endpoints. Some of those endpoints are classical. We'll still look at T1 lesions, T2 lesions, phase rim lesions. We'll look at NFL, neurofilament light, which is a good biomarker for neurodegeneration, and a number of other measures, including some novel scanning techniques to really understand from a translational medicine standpoint what obexelimab could mean in MS. I will say there's a challenge, though, in moving forward in RMS. In RMS, in today's world, the type of patients you get have a very low level of activity in clinical trials because the patients with higher levels of activity are already receiving a B cell agent, and that leads to lower relapses.
Right now, the FDA endpoint for relapsing MS studies is a reduction in annualized relapse rate. If the annualized relapse rate is already so low, it's hard to differentiate. If you go back to our phase II trial and note the actual number of GAD lesions, it was quite low, which was even a greater challenge for the drug to perform that well when the control arm was also very low. I think it bodes well for the mechanism and the activity. To move into phase III with an annualized relapse rate primary endpoint could be a challenge. We'll see how the FDA thinks about other possibilities, PIRA being a potential endpoint, which is progression independent of relapse activity.
As you know, over time, what's most important is to impact the disability progression of these patients, to alter the journey that they have in MS, not just the relapses. We'll see how that goes. Importantly, we've accelerated our overall multiple sclerosis strategy with the in-license of rilzabrutinib. Now we're already in a phase III program in MS, and it's in the area of greatest unmet needs. PPMS, there's only one approved drug. SPMS, today, there are no approved drugs. We anticipate tolebrutinib being approved at year-end. The greatest need is really the progressive disease and is a very large market opportunity. The mechanism of BTK inhibitor, especially the differentiated pharmacology of rilzabrutinib, I think is ideal for that setting.
Yeah. Yeah, with the rilzabrutinib, and now you have two shots ongoing, right? If you want to tackle, you want to address the MS population. But with this obexelimab for the RMS data, it's pretty impressive. Then you can seek some creative way to move forward together in terms of the label or potential approval for the CD19. Got it. Okay. For the IgG4, you just mentioned looking at the blinded data, seems the drug performed, all the trial performed as expected, overall flare rate. Can you just remind us how you powered the study? Because I remember when you designed the study, you're using a more conservative way to power. With the MITIGATE, the obinutuzumab trial, supposed to be you are well overpowered. The expectation is aligned with your powering or aligned with the MITIGATE trial?
Yeah, the expectations align with what we're seeing in MITIGATE, which kind of overwhelms the initial concept. Because when we powered this, we were super conservative. This is the first phase III study that a young biopharmaceutical company is doing. You want to be conservative in your assumptions. There were two prior randomized trials in IgG4-RD where we were able to look at the control arm in those trials and determine what would a control arm perform like. You come up with your own assumption for your drug. Based on the phase II data, where the flare rate was under 10%, we knew that we were optimizing the dosing regimen and we could do better. Those original two randomized trials, the control arms performed at 40%-45% flare for the control, but those included continuous steroid treatment in those arms.
Whereas our phase III trial and the Uplizna MITIGATE trial, no steroid in the control arm. You would expect that a control arm with no steroids would have a higher flare rate than 40%-45%. We always thought it would be over 50%, but we sized the trial assuming it could be 35%, which is super conservative. For our drug, we had always assumed maybe 10% flare rate, even though it was lower in the phase II trial and we've optimized the dose. For our powering, we assumed 15%. We added 5% to it. The trial is super overpowered. It's 194 patients we enrolled, whereas the MITIGATE trial of Uplizna, which had very strong results, enrolled 135 patients. I think in these trial designs, you could probably get away with 80-100 patients and have enough power.
For us, this is our first indication, so we need a safety database of a certain size, and we agreed with the agency on the size of the trial to also support the safety database.
Got it. Got it. And then the.
Yeah. So what did we see with the MITIGATE study? The control arm, placebo only, no background steroids, a 60% flare rate. So we assume 50%-60% is what we'll see, and that should deliver strong results.
Yeah. Excellent. Yeah. So you're way overpowered based on an original assumption with Mitigate, you're still kind of.
We're still.
You're going to see a lot better. Okay. Great. Maybe just for the new license, this late stage, phase III stage of the BTK. How should we think about compare to the current BTK and then in the future market for PPMS and SPMS? Thinking about the potential label, liver monitoring versus the current kind of the potential label as a second to the market potential.
Yeah. So the entire class of BTK inhibitors, I think, has really caught a wave recently. Some of that started with the tolebrutinib results, and now you see an approval of BTK inhibitor for autoimmune disease with rilzabrutinib from Novartis, and now they're moving into progressive MS. Of course, we have evobrutinib that announced that two trials were successful. We don't know what the results are. They'll be presented at a meeting. We have the ACTRIMS meeting, the big American MS meeting in February. I'm not sure if that's where they'll present the data or not. Obviously, the BTK field is moving along. We know from a mechanism standpoint, it's really optimizing what you want to do with not only B cells, but also innate cells in the central compartment.
As I showed on the slide, rilzabrutinib from a pharmacology standpoint is the most optimal agent, the most selective, so less off-target side effects. This is a drug that's been on the market for several years in China. We have a complete safety database of patient experience. It's known in China as one of the best tolerated BTK inhibitors. It's now the second most prescribed BTK inhibitor in China, only second to B1s. It's past J& J, past AstraZeneca because it's a very active drug and it's very well tolerated. We're going to leverage that in the MS setting. The trial designs that we have, we have a lot of confidence in being able to execute on those based on our MS team and what they've been able to do with obexelimab in MS.
The trial designs are, as I said during the presentation, are agreed to with FDA and EMA, and we look forward to updating you along the way.
Excellent. Okay. We did not even talk about the lupus for the obexelimab next year data readout. You also have IL-17, you just mentioned. You will tell us a little bit more. You have a lot going on, and then next year or around year-end and the IgG4, and then the MS ongoing, and then lupus next year will be a very exciting year.
That's a good summary. Thank you, Roger.
Thank you. All righty.
Appreciate it.
Thank you. Thank you, everyone.
Thanks for coming.