Anything exciting? Whoa, this is the conference.
Your mic.
Holy smokes! It just turned on.
Hello.
Thanks. Anything exciting this morning?
It's always exciting.
That's a good attitude.
All right, I think we're ready to start. Welcome, everyone. I'm Josh Schimmer from the Cantor Fitzgerald Equity Research Team. Very pleased to introduce from Zura Bio, we have Robert Lisicki, Chief Executive Officer, Varinder Badial, Chief Financial Officer. Gentlemen, welcome. Oh, did I give it...? Kiran Reynolds-
Sorry.
Chief Medical Officer. I saw Varinder here, so I got a little confused there. All right, maybe start with a quick snapshot of the company, and we've got some really big events coming around the corner. What should we be watching for, for Zura?
Yeah. Hey, thanks, Josh. It's on behalf of the company, thank you for the opportunity and the invitation. Company is a early-stage biotech company. We have three clinical stage assets that are all phase II ready. All of those assets were in license, and the idea was pretty simple, which is, if you look at the history of antibodies in autoimmune disease, you see that there's been a ceiling in response and remission that's been seen. So the approach that we're taking is to use multifunctional antibody that can have effect against multiple cytokines, Th1, Th2 disease. We think it offers a real change and hope for patients moving forward. We've been successful as a company. We've raised $250 million since we started.
Established executive team with deep history in I& I and more than $8 billion in M&A over the last few years as well. There are two internal catalysts that are really important for us. The first is we expect to initiate our first phase II study with our lead asset, ZB-106. That's a combination BAFF/IL-17 inhibitor, and we expect to initiate that study in Q4 of this year. Those studies typically are around 100 patients and take four to six quarters to fully enroll, so we'd likely get the data toward the back half of 2026. The second is the initiation of a phase II study in hidradenitis suppurativa, with that same asset. That study would initiate in the first half of 2025 and read out in 2026.
We're also really excited about our two additional assets. We have a combination IL-7 TSLP inhibitor and an IL-33 RAGE inhibitor as well. Some of the external readouts that are gonna be important in Q4 of this year. Q32 Bio has an IL-7 TSLP that is reading out in atopic dermatitis and alopecia areata. We're watching that closely. We're very curious to see what the data shows. Roche and Sanofi Regeneron have either IL-33s or ST2 receptor antagonists that read out as well, and our third asset is, as I mentioned, an IL-33 inhibitor. A lot of exciting, I think, events coming over the next six to 12 months and a lot of value inflection for the company.
Got it. So since it is next up, will be the Q32 Bio phase II readout for the IL-7 antibody program, IL-7 receptor antibody program. Maybe just kind of walk us through some of the biology of targeting IL-7 receptor, and then kind of the downstream effects of that TSLP and IL-7, and what do you think you get by combining those into one target?
Yeah. Kiran, do you want to take that one?
Yeah. So IL-7, I mean, I think it's a really exciting cytokine target. I think it's been underappreciated. If you think about it, it's highly pleiotropic, it's kind of like a master cytokine, controls T effector activation, survival. So by taking and downplaying IL-7 receptor, you potentially have impact on a whole ton of diseases. So you probably know these genetic polymorphisms are linked with, atopic dermatitis, asthma, Type 1 diabetes, multiple sclerosis, and so on. So I think really it's been probably underappreciated. I think it's fantastic now that there's some early validation, right, clinically from OSE's data and UC, and I think, we're very much looking forward to the Q32 readout because I think it's gonna help us. As Rob mentioned, we really look for a clinical validation here before we kind of move forward, so that's the next step for us.
Yeah, I think the other piece to that, too, Josh, is the TSLP inhibition. So, right, when you think about diseases like atopic dermatitis and even UC, there is a march that, right, these patients go through that. It may initially be more Th1 or Th2, but then may mold to Th2, Th1 on the back half. AD, that's certainly the case, and we have an asset that inhibits both Th1, Th2. So I think that's exciting as well because it's a new modality and approach.
So when we're talking about a somewhat novel target such as this, like, what is the process to figure out which indications are most likely to benefit, and not only most likely to benefit, but in a way that will be commercially competitive?
Yeah, it's a great question. If you look at all three companies with IL-7, whether it's OSE, Q32, or Zura, we've all identified kind of the same eight lead indications. So I guess that's a good thing, we're all thinking kind of in a similar way. Part of it is based on the polymorphisms that Kiran mentioned. So when we think about it, we look at the data that the data readout that's expected, and we develop kind of an internal benchmark, right? What's compelling to us, and what would be commercially attractive, and what would also bring capital to the company? So AD and AA are gonna be in the initial ones we look at, so that's pretty easy. If the data, in our opinion, is compelling, then we can move forward with a phase II study.
I think the other thing that we evaluate is there a reason for us to believe we could show a better effect than Q32? We believe that there is, based on some of the characteristics of our molecule relative to theirs. If they show a good effect, we would try to move quickly into AD, AA, or potentially both indications.
... Maybe for these two indications, what do we know about TSLP inhibition in alopecia and or atopic derm?
I think the TSLP's kind of easier to. There's more data out on the atopic derm. Obviously, you've seen the tezepelumab had a study, and I think one of the questions we often get is, you know, how come that wasn't a positive study? And I think actually there's, Mike, our CSO, has spoken quite eloquently about this. I think really it's partly a design issue. So that study was designed with a, a kind of run-in period with a high-potency corticosteroid. It was a combination therapy rather than monotherapy, and I don't think really it gave tezepelumab the best chance to show efficacy. There've been follow-on molecules since then have been in the public domain recently, with a sort of more potent, long-acting TSLP blockade, which actually has reached its p-value.
So, I think, I think that there definitely is promise in terms of TSLP contributing to atopic dermatitis, and I think maybe to bring it back to the IL-7 story, I think really it's like together, what you have is, in my opinion, the IL-7's gonna do the kind of main work here, but you have the additional benefit and perhaps even breadth of population to target patients who have the IL-7 plus TSLP in some, some cases. So, I think that's really the, the benefit. I think in alopecia, it's a little bit more tricky.
There, I would argue that perhaps the IL-7 is the biggest driver because CD8s entering into the scalp are the main cause of the disease, and there we've shown data from the Type 1 diabetes study we did, that we reduced CD8 levels in the blood, and we also assume, therefore, in the tissue.
Yeah, just to add on the, the alopecia really briefly is the TSLP benefit may be on its ability to disrupt the dendritic cells. And when you look at hair follicles in AA, you see the swarm of bees with all of these antigen-presenting cells that are causing hair loss in a site that wouldn't. So, the two pieces we look at are CD8, and the decreases in CD8 based on our Type 1 diabetes study were significant. They're in the range of 70%, which is ideally what you might want to see in, in an autoimmune disease or alopecia. TSLP gives you the additional benefit of interfering with dendritic cell activity as well.
Would you expect, targeting TSLP and IL-7 to kind of be synergistic for having both of those, or is it more like additive?
That's a good question.
Oh, that's a magic question, as always.
Yeah.
You know, I think it's, you know, your question alludes to the fact that it's often pretty hard to predict, right, from preclinical data, what the corresponding clinical efficacy is gonna look like. I guess if I was gonna speculate, I would say, you know, one of them is a predominantly an alarmin, right? The TSLP, more of an innate mechanism, whereas the IL-7's more adaptive. So hey, you know, two potentially different key pathways, but actually, you know, perhaps they synergize, and I guess the time will tell.
Yeah, the kind of market need is different, too, for those two indications, right? In alopecia, there's just a need for something, right? JAKs work well, but because of toxicity, acceptability is mixed with derms and with patients. So almost anything that shows effect and doesn't cause harm, I think, has the potential to do well. In AD, it's a little bit different, right? Where you'd want to see, Josh, that additive effect, just because the landscape's becoming more crowded, more competitive. So can you show a benefit that others in the market perhaps aren't able to?
And you, you mentioned a potential advantage for crebankitug over bempikibart, if I'm pronouncing that?
Yeah
... Q32 Bio product correctly. Maybe you can elaborate a little bit on what those differences are and how you think they may manifest clinically.
Yeah.
Yeah, I think there are two key differences. Probably the most important in our view, and has perhaps been a bit overlooked, is that the Fc function of the antibody is, I think, critical to part of the mechanism of action here. And what I mean by that is OSE or IgG4, which doesn't have much Fc function, so it cannot activate antibody-dependent cytotoxicity. As we saw from the Q32 deck, they mentioned that theirs is an IgG1, but it's effectorless, which I presume means there's some Fc disabling, whereas ours is an intact IgG1. And so as probably part of the mechanism by which our drug works is that it leads to some cytotoxicity of the effector T cells by... and therefore reduces the numbers.
Actually, there was recently a nice paper from the OSE group published in Blood saying that one of the mechanisms by how IL-7 works in the clinic is probably by depleting some of the effector cells, so given that we've shown already in the type 1 diabetes study, quite good depletion of the effector cells, up to 70% in disease patients, while preserving the Tregs, I think that really this is probably, in my mind, the key reason why we're differentiated. So-
Kiran, was that in reference to OSE or Q32 Bio or both?
Both.
Okay.
Yeah, Q32, if it is Fc kind of effector less, is much less likely to have an impact on the cell counts, and obviously, we haven't seen any data from them. But I think that's a question for us to be... We look forward to hearing more about. And then the second point, just to finish, TSLP, we've discussed a bit about why that might be important in the two diseases, but actually, our potency is really significantly higher than the Q32 asset, maybe up to, in the preclinical assays, up to 300-fold.
So then, what are you looking for to make your own decision to advance or not advance, I guess, given the product profile differentiation, even if they're not able to show anything of interest or compelling, you still may? Just given the different constructs. So what is it that, about their data set that may inform your next steps?
Yeah, that's, you know, we just had that discussion this morning. So ideally, in a phase II study in AD, you'd wanna see an EASI-75 delta for a new asset, be between twenty and thirty. Then there's a rationale for us, I think, to believe that we could show a better effect than that, right? So then the question becomes: Okay, what if the delta is fifteen to twenty? Is that sufficient for you to believe and have enough confidence to say you'd move forward? That one's harder to answer until you see some more discrete data from the study, IGA III versus IGA IV, prior DUPI exposure, those kinds of things. But ideally, in a phase II study, you're gonna, wanna show an EASI-75 delta of twenty to thirty to give confidence to move forward.
How quickly could you move forward if you decide to do so based on that data update?
Yeah, so the approach we take with any of our assets that is not currently clinically validated is kind of hurry up and wait. So we do as much work as we can with at-risk activity. That's capital preservation still, but gets us in a position to initiate a study. So to give you an example of that, we start to talk to CROs, we talk to opinion leaders, we do advisory boards, we get a sense for kind of their input, we design the study, and we cost it out. So then the only limitation is how quickly can you contract with the CRO and complete the IND. Typically, that's up to two quarters for most companies. So if you get data in December, you're probably looking at something mid 2025 for us.
Got it. Maybe we can toggle over to tibulizumab, the BAFF/IL-17 bispecific for systemic sclerosis and hidradenitis suppurativa. Maybe you can talk a little bit, starting with systemic sclerosis, some of the validation for both of those targets, IL-17, as well as BAFF.
Yeah. So if I maybe kick off with the SSC part of what's really important for us, which we've flagged, is that really we wanna see clinical data. So there are two key studies that inform our choice of choosing systemic sclerosis. The first one was a kind of smallish investigator-led study in belimumab, which showed early signs of efficacy, both in skin and lung. But a much larger study by brodalumab, which was in Japan, a phase III study there, up to a hundred patients, showed really quite remarkable changes in the skin improvement, MRSS score, as well as improvement in the lung with FVC.
So, you know, often we get asked, "Well, maybe one of the cytokines kind of treats skin, and one treats lung." But I guess the data I'm just sharing with you suggests that perhaps actually, both targets contribute both to the skin and lung, and so there's a chance really here to treat the totality of disease.
Have other IL-17 antibodies been explored in systemic sclerosis, or primarily brodalumab?
Yeah, it's an interesting question. We asked that, Rob. I don't know if you wanna comment.
Yeah, I think that. So the short answer is no, Josh, and it's probably an element of timing. So the initial IL-17s were all studied in psoriasis, PsA, and AS, large, common autoimmune conditions with really attractive markets. The brodalumab was parsed out into three different companies in three different regions of the world. So the only study that's been done in SSC is by brodalumab in Japan. Kyowa Kirin owns the compound. It's a very small contribution to their overall portfolio. So the assumption would be that those other agents didn't wanna risk studying an orphan disease and potentially put at risk their label if you saw some offset effect, and it creates some pricing disparity as well. If you look at pricing in SSC, it's orphan pricing versus psoriasis, which is more consistent with common indications.
So I think we tend to think of systemic sclerosis as perhaps more B-cell-mediated Th2 more than Th1. Thoughts? Any thoughts as to why an IL-17 targeting approach, which perhaps is a little bit more T-cell/Th1 oriented, may have a good effect here? Or, I mean... Or are we oversimplifying this dichotomy of Th1 and Th2, and it's really just a haze of things in different patients?
Oh, I'd love... if only, Mike, our CSO, is here, he would really go to town on that. I think that it's a fair point. I mean, I think that someone once described T-cell differentiation more as like energy states. If you remember your electron shells in terms of, you know, they can move between different energy states, and I think there is a lot of plasticity with T-cells. But to come back to your question, I guess the Th17 or the kind of equivalent, making IL-17, actually, the preclinical data is pretty strong for IL-17 in skin fibrosis. So in the bleomycin assay mouse model, it's been shown that if you block IL-17, you really ameliorate the skin disease and the lung as well, actually.
If you look at patients with SSC, they have higher amounts of IL-17 in their circulation, higher amounts in their skin. I think there is really quite a lot of preclinical data to say that IL-17 contributes. You know, we've learned this from the whole of immunology. It's every patient with a single disease doesn't really respond to a single agent, psoriasis being the slight exception. Almost outside of that, you know, you never treat the whole population. I think the idea of going past a single target has got to be key for really changing the landscape in SSC.
How do you think about getting the most out of a phase II trial for an indication like systemic sclerosis, where the endpoints can be difficult to measure, whether it's assessing skin tightness itself is not the easiest thing to do. Even pulmonary fibrosis and measurements can be difficult to capture in smaller trials?
... Yeah, I think that's a great point, and I think this is why SSC has been a kind of graveyard for so many molecules. So we really have gone deep with trying to understand the clinical challenges, the patient heterogeneity. We've been partnering with Dr. Khanna and Dr. Denton, who are co-PIs for our study. And I think the kind of lessons we've learned here is a few things. One is we really need to balance the right patient with feasibility. If we get the perfect patient, but we can't get enough of them in our study, we're in trouble, and equally, if we don't should we say, avoid regressors, those are patients who their skin improves without treatment, then essentially will dilute our signal.
So we spent a lot of time on this issue around the MRSS and feel that our inclusion, exclusion criteria really learns from previous studies. In terms of the lung, you need a big study to show FVC, right? Changes in FVC, 200 plus. So that's kind of almost a phase III study. So we found an innovative way to try and get around that by using high sensitivity HRCT and by using an AI-based quantification, and this really offers the chance to kind of have your cake and eat it, which is de-risk the phase III, where we clearly will need to use FVC, and there's a high concordance between HRCT and FVC changes, but actually avoid having to go all the way up to a 200-patient study.
Our primary will focus on the skin, but we'll have very deep insights into what's happening in the lung.
Yeah, and I'll add one other. The part of the historic challenges have really been around the modified Rodnan skin score. So how do you try to mitigate against that? One of the choices we made was to choose a CRO that I think the CRO has probably done more systemic sclerosis studies in the last five years than any other CRO, including recent studies, phase II and phase III. The value of that is this, is that the skin score is an subjective evaluation, and it's not simple or easy, and it's not done commonly. So having sites and investigators that are skilled and trained, and you can rely on to do it correctly, we think is important and decreases the relative risk of a negative readout of the study.
How, how many patients do you expect the phase II to evaluate, and which doses will you explore?
Yeah, so we've got a single dose, and we're having our study population is 80 patients, so 40 per arm. However, we will be doing a sample size re-estimation during the study to potentially increase up to 100 if the standard deviation turns out to be slightly higher than predicted.
And that-
Yeah.
-and timelines for the trial under the original design, and then if it needs to be expanded.
Yeah, to just quickly on the. So part of—we both share this philosophy, which phase II study should be, you know, kind of no dosing regrets in a phase II study. So Kiran's led an awful lot of work with the team and some experts to understand what is the right dose and schema to use. We're testing a high dose. In the phase I studies, it was 30 to 300 milligrams. We're on the high end of that range, and we're also going to include a loading dose. We think fast response matters, right, for patients staying in studies, and expectation is the study initiates in December. It'll take us probably up to three quarters to fully enroll those 80 patients, and then you need 24 weeks on last patient in.
Second half of 2026 is the expectation. Currently, we're planning to conduct a study in three regions, but we do feasibility work on potentially adding a fourth region as well.
Got it.
If you went to a hundred patients, would it still be a second half 2026, or would that kick it into 2027s?
I think maybe what I'd say two things. One is that the aim is to do that kind of early read sufficiently soon for us to be able to change either the regions or sites to impact on recruitment. And secondly, we're gonna make that contingent on successful recruitment to date. Clearly, it's not gonna be in anyone's favor if we're recruiting behind schedule to then bump up the study. So I think part of it is to manage that as a kind of joint decision around both the standard deviation, but also in terms of how recruitment is going. But we have contingencies planned.
Yeah.
We'd aim to still deliver to the same timeline.
Do you have a sense when you would be in the position to make that decision about trial size, and how and what would you be able to disclose at that point?
Yeah. So it, we wouldn't be disclosing anything on the efficacy, and I think that's really. Rob and I spent quite a lot of time discussing that, and I think really from our experience, one of the challenges that folks have faced is when they try and do interim reads on small studies, proof of concept, and two things happen: One is you make the wrong call, and secondly, you just erode your alpha by kind of looking at the data and making the endpoint harder for yourself. I think our goal here is to design the right study and then be patient and wait till we get the results. So that review of the standard deviation will be only that. It won't be looking at the data.
Got it. And so there would be no futility analysis accompanying it, really, primarily standard deviation. Why don't we turn to the program for HS, where IL-17 inhibition is very well validated, less so on the B-cell component and BAFF. So what is the evidence that targeting BAFF and HS may be able to amplify the effect of IL-17 inhibition?
Yeah, there's been a lot of anecdotal evidence and case reports. Fostamatinib was in an open label study. There's data on CD20 inhibition as well. I think the most compelling piece of data, though, is the Novartis platform study, remibrutinib, which is a BTK inhibitor. They shared the readout of that study at the AAD in March of this year. You were probably there. I think it was in your backyard. And you know, the data looked really consistent with what IL-17 shows. So the HiSCR-75 placebo-adjusted delta was around 25, so a little less than the IL-17s, but in range. There's also good evidence, preclinical evidence, of the role that BAFF plays in HS lesions, particularly in the chronic phase. And when you look at those patients, right, they express BAFF differently than psoriasis or AD or healthies.
BAFF clearly plays a role preclinically. BTKI inhibition showed a clinical benefit, and what our aspiration is, is to show broader and deeper effect in HS and potentially show a better effect against draining tunnels as well, where BAFF is certainly overexpressed.
Maybe you can frame that phase II trial design for HS and the timelines for this program.
Yep. Our aim is to submit the IND in Q1 of 2025 and deliver hopefully ahead of SSC, but certainly within 2026. In terms of the design, we're planning to take two doses and an even higher dose, potentially a Q2W dose, because of some of the issues we've seen with our competitors around dose ranging in HS. In terms of design, we're focusing at the moment on HiSCR as a key endpoint, but we're currently in discussions with KOLs, and we've selected a specialist dermatology CRO to partner with us, so we're making good progress.
Between HS and scleroderma, do you have a hierarchy of which you think is most likely to succeed? Are there, are they both kind of comparable in terms-
Yeah-
... Sorry.
I think it's comparable. I think it's fair to say. I mean, I think it's easy to look at HS and look at the validation in IL-17 and say: "Okay, at least you're gonna show an IL-17 like effect," and there's some contribution from, from BAFF. In scleroderma, there's less clinical validation on the seventeen side, and it's such a-
Mm.
So much heterogeneity within the disease, it's maybe a little bit more challenging. We expect the HS data first, and I think you would argue that the probability of success there is a bit higher.
And why is the systemic sclerosis program moving to the clinic faster? I was gonna-
Well, HS will move faster for-
Sorry, I thought you said systemic sclerosis enters the clinic first, but reads out second.
That's correct. Yeah.
The question is more about, like, just entering the clinic.
Yeah.
What puts-
It's really around the supply, patient supply. So what will make HS a little distinct is that it'll be dominantly a U.S. study, so you'll have more patients to recruit from. It's less duration, right? You can do either a 12-week or a 6-week, 16 weeks, so there's less exposure. And your pool of patients is around 500,000. So we expect it will recruit more quickly. Historically, HS studies do, so we'll likely get that data in advance of SSC.
Got it. Moving to torudokimab, the IL-33 antibody. I guess we've recently saw some phase II data from AstraZeneca. We're gonna get phase III in COPD for targeting IL-33 from Regeneron and Sanofi. Roche has a program here as well. How are you thinking about potential to differentiate, and what? In this context, what are the signals you're looking for to advance the program?
Yeah. Well, I, I'll start first on this one-
Yeah
... Kiran, is the. So anyone who can show a reduction in exacerbations, right, is going to be successful within this space, given the need. A lot has been learned about the expression of ST2, in particular in prior smokers or current smokers. The Roche product targets ST2, so it's a little bit distinct and different. Sanofi, Regeneron product is IL-33. What's less clear to us is whether or not it has any activity against RAGE. And the benefit there is it's another opportunity to downregulate inflammation that might be triggered by RAGE activation. The AstraZeneca program does. So I think that the differences for us will be twofold. The first is potentially broader degree of inhibition, and when you look at GM-CSF inhibition, we've done comparisons to look at torudokimab against itepekimab.
And in those comparisons, those preclinical comparisons, the potency is about five and a half fold greater. So then the question for us becomes: What could we do to accelerate trial? And there is an opportunity to consider moving directly into a phase III at risk in COPD. It's an opportunity. I think it depends on how strong the signal is, particularly from the Sanofi Regeneron product.
Do you want to hit the AZ one quickly?
No, I think that's... You've given a great answer. I mean, I think the bottom line here is, in COPD, there's so much unmet need. The issue really here is for us to be able to pivot at speed and use some of the data modeling around the dose to plan our phase III with the right partner.
On that last point, Kiran, about partners, when is the right time? Like, there's potentially a lot on your plate, probably far more than a small company can accomplish across these programs. When do you feel like you kind of have to start making decisions about which to partner in which settings?
I think that those are milestone-based events where the market almost dictates that to you. So I think after the Q32 readout with their IL-7 compound, if they show a really profound effect, my sense is we're gonna have some strategic, kind of, inbound interest around partnering assets. I think the same will be true with torudokimab, Josh. If the IL-33 data from Sanofi is super positive, I think it's gonna generate interest, and that gives us optionality as a company and flexibility, and we can make those decisions at that time.
And then, for tibulizumab, you plan on advancing that on your own until a certain point, or would you partner that one?
Again, I think it always. It's kind of I'm agnostic to that. Like, from my experiences, a lot of it depends on what you assess the value of your compounds to be relative to what externals may assess that value, right? If you out-license or give up terms after phase II, you de-risk, but you give up value. If you wait to post phase III, you keep the value. So, I think it's a trade-off decision we're gonna have to make probably toward 2026, but we have some time and the benefit of the data to make that decision.
I think we're at, we're out of time. Robert, Kiran, thank you so much for joining and giving us the Zura Bio update.