All right, good morning, everyone. My name is Cory Kasimov, one of the senior biotech analysts here at Evercore, and it's my pleasure to host our next discussion with Zenas BioPharma, Emmanuel Walter, and the company's CEO, Lonnie Moulder. Lonnie, thank you for being here today. So hard to believe we're already in December. Clearly been a big and busy and productive year for you guys. Given the timing of this discussion, I'd love to start by asking you to reflect back on 2025, talk about what you think the company's biggest accomplishments were.
Sure, sure. First of all, thank you for having us. This is a fantastic conference. I'll be making some forward-looking statements, and I refer you to our SEC filings. So we're wrapping up 2025, which was quite eventful for the company, of course. We started out the year with our patients already enrolled in the phase III IgG4-related disease trial of obexelimab, so headed towards what was ultimately last patient out in November. So obviously, a lot of work was being done throughout the year. That's done typically in clinical trials as you clean databases and get ready for the final run at doing your analysis.
So that kept the team quite busy. And then doing a lot of pre-BLA activities. You can fill out a lot of the modules of a BLA well in advance, and the teams have been working on that.
But along the way, as we thought about building out the company, of course, there are other things we can do with Obexelimab. So we were also enrolling the lupus study that we'll be reporting out third quarter of next year, and that study continues to enroll. A pretty significant event, I think, for us in our minds, as it validated Obexelimab's mechanism and the dosing regimen we are using in all our trials, was the readout of the MoonStone Global phase II randomized study in RMS, relapsing multiple sclerosis. So we accrued that trial, 116 patients in about nine or ten months, which was fantastic. Shut down enrollment in June and then did the analysis in the fall.
And as you probably know, those results really set a new benchmark for B-cell targeting agents in RMS with a 95% reduction in new T1 GAD-enhancing lesions versus the control arm, placebo. So that, I think, really reinforced the mechanism: highly potent, effective, sustained. And then in addition, the dosing regimen that we moved into our clinical trials, the IgG4 clinical trial, the MoonStone trial of RMS, and then the SunStone trial in lupus, I think the team nailed the regimen.
And then, of course, as a company that is being built on business development, we put in place a significant transaction, as you know, really building our pipeline, doubling down on our MS strategy with orelabrutinib, which is now in a phase III trial in progressive MS, PPMS specifically, an additional phase III trial in secondary progressive MS that will begin in the first quarter of next year.
Alongside of that, two other molecules that will be in the clinic next year. It's almost next year now. An oral IL-17 inhibitor and a brain penetrant TYK2 inhibitor. The team's quite busy with all of that. Then some financing. We were quite pleased to have Royalty Pharma come alongside of us as a partner. They provided a significant amount of capital upfront and more capital to come in an overall $300 million potential financing around obexelimab, primarily with their work done on IgG4-related disease, where they really dug into the market opportunity and the science and actually did the transaction before phase III data.
We're wrapping up the year here, and around the end of the year, we will have that phase III data for obexelimab and IgG4-related disease. It was a busy year.
Yeah, for sure. All right, there's a lot in there that.
Sorry, that was long-winded, but there was a lot that happened.
You addressed a lot of my questions too. And I obviously want to dig into the IgG4 data readout with INDIGO pending. Before we do, I want to go back, though, to those very impressive results from the MoonStone study in MS. You kind of addressed the read-through a little bit. We're going to get an additional 24-week update from that next year, right? What additional learnings are you hoping for, and how might kind of the totality of that data inform a path forward in MS if you indeed choose to push obexelimab forward?
Sure. So you're obviously referring to the MoonStone additional work. The primary endpoint is a 12-week readout. That's what we already covered. And then there's a 24-week readout. At week 12 for each patient, if they're on the placebo arm, they cross over to the drug arm. So this next 12 weeks that occur that will read out every patient in the study received obexelimab. And so we have 24-week data on some patients and 12-week data on other patients, but we can look back at comparing baseline to what happened at 24 weeks. And for the placebo patients, compare from 12- 24 and just get a sense of the dynamic of the effect on a variety of parameters.
And a lot of secondary and tertiary endpoints, actually almost 20, are being evaluated, and they'll report out over time.
But the key ones are to follow up on the T1 GAD-enhancing lesions, T2 lesions, paramagnetic rim lesions, and then some biomarkers, NFL. And then we'll have EDSS. It's still a little short for that, but get some indications of impact on disability. And then some other biomarkers and novel scanning techniques of different portions of the brain.
Got it.
All of that together, I think, just bolsters what this mechanism can mean in MS, not just for in the RMS setting, which is relapses, but also indicators of impacting progression, disability progression. When we have those data sets, we'll reflect on what could be the next step. What I would say, and this is important for people to understand, right now, the primary endpoint in RMS studies, that is the acceptable regulatory path, is annualized relapse rates. The patients that are available for clinical studies in today's world have less disease activity because patients that have high disease activity are already on a B-cell approach.
So when you're thinking about a clinical trial, you have to recognize that the annualized relapse rate will already be fairly low.
In these trials, typically, you're comparing to an active agent, an older, less effective agent, but an active agent. So to separate from that agent in a randomized controlled trial when the ARR is already low is tough. So you could think about perhaps a non-inferiority trial program versus an approved drug like Ocrevus could be doable, or evolve the agency's thinking on the primary endpoint and look at something more like PIRA, progression independent of relapse activity, because it's really the progression, the disability progression that's the issue with the patients, not whether the MRI is lighting up necessarily with inflammation.
So we'll have our data in hand, and we'll see if there's some evolution in how the FDA thinks about it. But right now, we're not declaring any next step because there's an important regulatory discussion that has to take place.
We kind of have our hands full right now with IgG4-related disease reporting out, a submission, a launch, and some other important progress.
Makes sense. Makes sense. Okay, so on to the main event, at least in the near term. So the aforementioned INDIGO study, where you'll flip that data card around the end of the year. So obexelimab demonstrated encouraging results in a small phase II trial. How confident are you in the translatability of improvements in responder index to the phase III endpoints of time to flare or flare-free rate?
Yeah. So we had the benefit, first of all, of having a phase II study with the drug, with actually a less, I would say, a less effective dosing regimen. It was the original phase II a study that was conducted with the original sponsor of the drug. And that IV regimen had a high Cmax and low Ctrough. And we know from work we did from a PK efficacy analysis standpoint that Ctrough is really important. You have to maintain target engagement for constant inhibition of the B-cells. So we selected this regimen, this sub-Q regimen, to maintain target engagement, high Ctrough, and strong potent inhibition. And the MoonStone study showed, yes, you have it.
So if you take the phase II results, which there was less than a 10% flare rate in that study and sustained disease remission, over 90% of the patients had that.
That's a less effective regimen, we believe. Based on that alone, we have a lot of confidence in the readout. Of course, we have blinded data. When you are conducting a large randomized study, you look at the blinded data from time to time. Internally, you call it checking on the health of the study. How are things looking? Is it lining up with your original assumptions? We know what the overall blinded flare rate is, and we know what the Kaplan-Meier curve on a blinded basis looks. We don't know the arms. We just know what it looks like.
You could take that and you look at the Uplizna Phase III MITIGATE study, and we know how many flares they had if you combine their two arms. We know what their Kaplan-Meier curve looks like when you combine the two arms.
We look at and assess that and say, the study is performing the way we would want it to perform to deliver really strong results. Of course, it's blinded data, but that's how you think about monitoring phase III studies, and we're pleased with what we're seeing. We're quite confident in delivering the results.
So when you think about Amgen's work in MITIGATE and the readout you'll have with INDIGO, how are you hoping or expecting the product is differentiated?
Yeah, I think fundamentally we start out differentiated, of course, as you know, there's this bifurcation in thought that we think will take place over time. Do I want to, clinician thinking, do I want to deplete this patient's B-cell compartment continuously for the rest of their life for this chronic disease? I'm going to just keep pounding their B-cell compartment, wiping it out every six months. Or do I want to use an inhibitor that demonstrates the same level of efficacy, assume potency, sustainability, but I can pull back at any time if I need to? Comorbidities, I want to vaccinate the patients annually. There's an issue of some kind.
I want to lay another therapy on for another disease the patient might have with a comorbidity, and I don't want a wiped-out B-cell compartment. So right there, there's a different thought process, and I think we can differentiate.
And then, which is kind of a standard in rheumatology today, it's at-home auto injectors for many products. We will be an at-home auto injector. It doesn't require going to an infusion center. And we think there's also some economic advantages as a specialty pharmacy at-home drug under Medicare Part D and even in the private plans versus an infusion Medicare Part B, the copay is different. So you put that all together, I think there's inherent differentiation. And then when it comes to the efficacy in the clinical trial, we're confident in what the drug will deliver. We think over time, because it's sustained treatment, there aren't gaps with these B-cell depleting agents.
This was first identified in the MS field where patients that receive Ocrevus, as they approach their six-month time period, some of them start feeling that I may be having a relapse because B-cells are being reconstituted, and we know in the MITIGATE study leading to the label of that drug, 15% of the patients have normalized B-cell counts before their next dose, so they're at risk, not just for a flare, but the smoldering inflammation that's damaging organs along the way, so our continued at-home dosing, we think, can protect those patients.
Interesting. Okay. So assuming everything goes well with Indigo, how do you think about the current market opportunity in IgG4-RD?
So I think we conservatively build our thinking around the 20,000 or so patients that are already diagnosed in the U.S. and have been treated in the past. We know that from claims data. I think the field believes it's probably more like 30,000 to 40,000 patients because it's a disease up until a few quarters ago, didn't have an approved drug. And I think diagnosis will improve. There's a patient support group now that's active. So I think there could be 30,000 to 40,000 patients in the U.S. and a similar number in Europe. And at the pricing of the competitive drug, which is over $250,000 a year, it adds up to a sizable market if you do the math. A
nd we think we can get a good share of that. What we're pleased to see, as you know, the competitive drug has an indication in NMOSD.
It's been on the market, and we've watched in the second quarter of this year, which was their first quarter of launch, and the third quarter of this year, their second quarter of launch, how the sales have grown for that brand overall, and we purchase claims data, so we actually have a sense of the number of physicians prescribing, which now is over 300, and then the number of patients for new starts. And if you just do the math around that, their first quarter of sales, we believe, was probably in the mid-$20 million range, and their second quarter of sales launch exceeded $40 million. I think that's a pretty good launch.
Absolutely. Absolutely. All right, before we move on from obexelimab, wanted to just quickly touch on Lupus, given you have the phase II SunStone results coming out, believe about middle of next year. Can you just frame expectations going into that readout?
Yeah, so the Lupus study is a 190-patient study, randomized one-to-one, where patients classically have some level of background steroid and other therapies. And then in our study, they knocked the steroid dose down to a five-milligram prednisone equivalent or less at the initial part of the study. And then, of course, we're looking for a classical measure, a BICLA endpoint here. And what we would want to see is something that's north of probably a 20-percentage-point difference from placebo. The approved drugs are in the teens. I think we would hope to do better than that.
And in addition, we have a study where we're assessing a biomarker population. It's an all-comer study, but a third of the patients, based on a prior phase IIA, identified a population that were biomarker positive. It was a small N retrospective, so we're doing it prospectively in this study.
And in that phase IIa study, the effect size, benefit over placebo, was almost 50%. So we're looking forward to getting the results in the overall population and the biomarker population third quarter next year and then determining what the path forward would be. And we would hope to be able to move forward into phase III and layer that into our rheumatology franchise we're building right next to IgG4-RD because we'll have the commercial organization in place for rheumatology on that launch.
Okay. All right, so we're down to our last couple of minutes. We're just now getting to the InnoCare deal. I guess just to start on it, you bring in the BTK inhibitor, orelabrutinib, among other assets, as you mentioned upfront. How do you see this product differentiating from the other BTK inhibitors in MS?
Yeah. And first of all, I think people are beginning to recognize and will recognize even more that this category, this class of agents, is going to be really important. You can see what Novartis is doing with remibrutinib. Obviously, it was the first non-cancer launch in the U.S. with CSU. They're in an RMS study. They're now in a progressive MS study. We have tolebrutinib awaiting approval from the agency this month for SPMS. And then fenebrutinib. And there was a news release that fenebrutinib had achieved positive outcomes in two trials.
So we know these agents are effective because if they can penetrate into the brain, not only hit B-cells in the periphery, hit B-cells in the brain, but microglia and impact neurodegeneration, that mechanism can be really important for disability progression.
So for our drug, when you look at brain penetration, potency, and selectivity, it's the most selective for tolerability. From a brain penetration and potency standpoint, that ratio is far superior to the other agents, and it's once a day as a covalent inhibitor. So we think the pharmacology is best in class, and the phase II study results over a 90% reduction in T1 GAD-Enhancing Lesions, 96 weeks of follow-up data that we did diligence on, looking at NFL, looking at EDSS. We think it's the best in class BTK inhibitor.
Great. There's a lot more questions I'd love to ask you about it, but we're unfortunately out of time. So we'll get to those another time. Thank you, Lonnie, very much.
Thank you.
Appreciate it.