Kiniksa Pharmaceuticals Q1 2024 Earnings Call Transcript

Quartr
Provided by Quartr
April 23, 2024

There are 11 speakers on the call.

Operator

Good day and thank you for standing by and welcome to the Koniska Pharmaceuticals First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Rachel Frank, Head of Investor Relations.

Operator

Please go ahead.

Speaker 1

Thank you, operator. Good morning, everyone, and thank you for joining Kinix's call to discuss our Q1 2024 financial results and recent portfolio execution. A press release highlighting these results can be found on our website under the Investors section. As for the agenda, our Chief Executive Officer, Sanj K. Patel will start with an introduction.

Speaker 1

Ross Mote, our Chief Commercial Officer will provide an update on our Archilis commercial execution. John Paolini, our Chief Medical Officer, will provide an AbiPrabar program review and Mark Ragosa, our Chief Financial Officer, will review our Q1 2024 financial results and finally, Sanj will return for closing remarks and to kick off the Q and A session for which Evan Tassari, our Chief Operating Officer, will also be on the line. Before getting started, please note that we will be making forward looking statements today that are subject to risks and uncertainties that may cause actual results to differ materially from these statements. A review of such statements and risk factors can be found on this slide as well as under the caption Risk Factors contained in our SEC filings. These statements speak only as of the date of this presentation, and we undertake no obligation to update such statements except as required by law.

Speaker 1

With that, I will turn it over to Sanj.

Speaker 2

Thanks, Rachel, and good morning, everyone. We are very encouraged with the Arclis commercial progress. We continued to build upon the Arclis performance this quarter marked by reaching an increasing number of recurrent pericarditis patients and growing to a net product revenue of $78,900,000 We continue to see strength across key commercial drivers, including growing prescriber adoption and high physician and patient satisfaction, which has been supported by our focus on frequent engagement with the existing and potential prescribers. Importantly, we're also seeing an expanding utilization of Arclist as a steroid sparing therapy for patients suffering from recurrent pericarditis. Looking to the year ahead, we now expect Arcolist full year sales to be between $370,000,000 to $390,000,000 and this would represent 63% year over year growth at the midpoint.

Speaker 2

In terms of our pipeline, we recently announced plans to initiate a Phase 2b trial with abiguPAR in Sjogren's disease. This is a debilitating disorder with no current FDA approved therapies. And we believe abiprobar has the potential to provide meaningful benefit to patients. Doctor. John Paolini, our Chief Medical Officer will provide additional details about our planned Phase IIb trial, which is expected to initiate in the second half of this year.

Speaker 2

And with that, I'll now turn it over to Ross to review our commercial execution.

Speaker 3

Thank you, Sanj. I want to start by highlighting that end of Q1 marks the 3rd anniversary of the approval of Arcolis in recurrent periculitis, and we continue to deliver robust growth and be excited by the future of this franchise. In Q1, Arclis' net revenue was $78,900,000 which is an 85% growth versus Q1 of 2023. This revenue growth also represents strong quarter on quarter growth, especially against the backdrop of Q1 specialty industry headwinds and a gross to net of 13.5 percent, which was predominantly due to co pay resets. The net revenue growth was in part due to an acceleration in the number of prescribers.

Speaker 3

Total prescribers of our list since launch grew to approximately 2,000 at the end of Q1, making it the largest quarter on quarter growth since launch. Additionally, we continue to observe robust underlying fundamentals across our commercialization, including greater than 90% payer approval of completed cases, a total average duration of therapy of 23 months and high physician and patient satisfaction with Arcolis. Recurrent periculitis is a debilitating, rare, flaring disease where patients are widely dispersed across the country. Since Arcolyst's approval as the 1st and only FDA approved drug for the disease, we've been making robust inroads through our field teams and our marketing strategy to educate both physicians and patients on the disease. We've seen increasing acknowledgment that interleukin-one alpha and beta are the underlying drivers of the disease.

Speaker 3

And once patients become recurrent, they require a targeted treatment to address the disease directly. As a result, the total prescriber base has continued to grow every quarter since launch. And as physicians gain positive prescribing experience and witness the impact Arclis can have on their patients, more and more physicians are becoming repeat prescribers. In fact, in Q1, greater than 40% of all new prescriptions were written by healthcare professionals who are repeat prescribers. We are making solid progress towards our ambition of Arcolis becoming the standard of care in recurrent pericarditis.

Speaker 3

For the next slide, I'll hand the call over to Doctor. John Paulini, our Chief Medical Officer, to share some of the latest information coming from our Resonance Registry describing the evolution in recurrent pericarditis management since launch. John?

Speaker 4

Thanks, Ross. We're very excited to share some insights we've gained from our residents registry and that we've recently shared at the American College of Cardiology. The data show a paradigm shift in RP management amongst cardiologists at the 21 participating centers in the U. S, away from the steroid based 2015 European Society of Cardiology guidelines and towards a steroid sparing approach using IL-one pathway inhibition. Amongst these registry patients with a median 3 year RP disease duration, IL-one pathway inhibition use increased to 25% of medication patient years in 2023 with ArcoList use driving this pattern.

Speaker 4

Also, amongst patients who had failed aspirin NSAIDs and colchicine and intensified treatment, the proportion of patients who transition to rilanocept has increased year on year with commensurately fewer patients transitioning to corticosteroids, such that by 2023, 65% of transitions were made to Arcolis with a 2:one preference over corticosteroids. These data affirm the evidence based adoption and growth of the steroid sparing paradigm by RP focused cardiologists. Back to you, Ross.

Speaker 3

Thanks, John. These compelling new data from pericarditis focused cardiologists mirror our promotional messaging that recurrent pericarditis is an interleukin-one alpha and beta driven disease. Harklist addresses the root cause of the disease and should be utilized prior to corticosteroids. Our Q1 net revenue growth signifies strong underlying business fundamentals and with only 9% of the target population address as of the end of 2023, we have a significant opportunity ahead. In Q1, we delivered robust growth that broke through the typical Q1 industry headwinds.

Speaker 3

As such, we're pleased to increase our revenue guidance for 2024 from $360,000,000 to $380,000,000 to $370,000,000 to $390,000,000 And with that, I'll hand it back to John to discuss AbiPrudart.

Speaker 4

John? Thanks, Ross. As Sanj mentioned and as we outlined in our previous announcement, several factors contributed to our decision to move forward with abeprudart in Sjogren's disease. Importantly, Sjogren's disease is debilitating disease currently with no FDA approved therapies. 2nd, there is substantial external proof of concept that inhibition of the CD40, CD154 co stimulatory interaction could be an efficacious therapeutic approach for Sjogren's disease.

Speaker 4

Additionally, the totality of the Phase 2 AbiPruevar data we've generated, including highly statistically significant reductions in rheumatoid factor of approximately 40% across all three dose regimens, demonstrate clear biological activity of the molecule and thus bolster our confidence in the potential efficacy in Sjergren's disease in Phase 2b with either biweekly or monthly subcutaneous dosing. Understanding that there are other assets in development for Sjergren's disease, we believe abiprudart has the potential to demonstrate comparable efficacy, but with a more convenient route of administration, a profile which could potentially represent a compelling and differentiated option for patients. With that in mind, we are planning to initiate in the second half of twenty twenty four a randomized double blind placebo controlled Phase 2b trial designed to evaluate the treatment response of chronic subcutaneous administration of abiprobar in patients with Sjogren's disease. The intended trial design begins with a placebo controlled portion that will randomize approximately 201 patients in a 1:1:1 ratio to receive abiprudar 400 milligrams subcutaneously biweekly, 400 milligrams subcutaneously monthly or placebo over a period of 24 weeks. The primary efficacy endpoint will be changed from baseline versus placebo in the EULAR disease activity index called SDI at week 24.

Speaker 4

Subsequently, we plan for patients to enter a long term extension in which all participants will receive active treatment for an additional 24 weeks. I will now turn the call over to Mark to discuss the Q1 financials. Mark?

Speaker 5

Thanks, John. Our detailed Q1 2024 financial results can be found in the press release we issued earlier this morning. Over the next couple of minutes, I'd like to call your attention to a few items on this slide. First, total revenue in the Q1 of 2024 was $79,900,000 driven by Arclis net product revenue, which grew 85% year over year to $78,900,000 2nd, ARCLIS collaboration operating profit in the first quarter grew 142% year over year to $40,200,000 and primarily drove collaboration expenses of $20,800,000 3rd, higher cost of goods sold and collaboration expenses, both of which are largely driven by ARCless revenue growth, as well as the advancement of AbiPrUVARK development and investment related to ARCless commercialization drove year over year operating expense growth in the Q1. 4th, net loss in the Q1 was $17,700,000 compared to $12,300,000 in the Q1 of last year.

Speaker 5

And lastly, our cash balance at the end of the Q1 was 213,600,000 dollars This balance reflects net cash flow of $7,200,000 inclusive of the $10,000,000 development milestone received from Genentech in the Q1 that was previously recognized as revenue in the Q4 of 2023. We continue to expect cash reserves as well as strong commercial execution and financial discipline to support our current operating plan, which we expect to remain cash flow positive on an annual basis. And with that, I'll turn the call back to Sanj for closing remarks.

Speaker 2

Thanks, Mark. As you've heard, we remain committed to advancing all areas of our business in the year ahead. Importantly, we expect our robust commercial performance to meaningfully contribute to our strong financial position and our ability to drive growth across the business. Based on the current operating plan, which includes advancing abiprivast through Phase 2 development in Crohn's disease, we expect to remain cash flow positive on an annual basis. We're excited by the opportunity to continue to provide life changing medicines for patients, and we believe we're in a strong position to deliver on our goals.

Speaker 2

I do want to thank all of you for your time today and I'll now hand it back to the operator for any questions.

Operator

And thank you. And our first question comes from Anupam Rama from JPMorgan. Your line is now open.

Speaker 4

Hi, guys. Thanks so much for taking the question and congrats on the quarter. For Arcolyst, it seems like the physician prescribers continue to grow here. How much do you attribute this to the expanded sales force and getting to those kind of next tier of physicians versus deeper penetration into some of your top centers and existing academic center relationships? Thanks so much.

Speaker 3

Yes. Thanks, Anupam. This is Ross. Thank you very much for the question. So certainly, we did go into 2024 with around 85 representatives, which gave us a boost in the coverage that we could achieve across the U.

Speaker 3

S. So we went from covering around 6,000 physicians up to 11,000. So certainly, some of it is down to the larger field team that we have that have enabled us to certainly increase the breadth of health care professionals that we could reach, but also within those top tier high decile doctors that we really focus on have the highest throughputs of recurrent pericarditis patients, also increasing the frequency within those. So we do think that's an important element along with just continued execution that we've always been focused on and the message that we've got to deliver and the number of patients we've got to help out there. And we still believe there's a huge opportunity ahead of us.

Speaker 3

So you see from the 11,000 doctors that we target, we've now got around 2,000 prescribers in total since launch. So that alone tells you we've got a huge headroom ahead. And certainly, out of those 2,000 prescribers, not all of them, but within that target population of the 11,000 to 12. So we've got a long way to go to continue to grow the breadth of prescribing, so the total prescriber base as well as the repeat prescribing, which you can see is a range of 24% of an ever significantly increasing base of total prescribers. So the fact that they contributed around 40% of all the new enrollments that we had within Q1 also tells you that the prepescribers are growing nicely and contributing significantly to the business as well.

Speaker 3

So thanks for the question. We're very pleased with where we are and the opportunity we have ahead.

Speaker 4

Thanks so much for taking our question.

Operator

And thank you. And one moment for our next question. And our next question comes from Paul Choi from Goldman Sachs. Your line is now open.

Speaker 6

Hi, thanks. Good morning and congratulations on the good start to the year. My first question is for Ross and just with regard to Arcolyst patient behavior. Can you just maybe comment on if you are seeing any trends in terms of patients who discontinued therapy coming back maybe a little faster versus prior quarters? And just sort of what the messaging on restarting and maintenance of therapy has been like and how that resonated?

Speaker 6

And then I had a boobie proof question for John Eckertwerts as a follow-up.

Speaker 3

Okay. So I'll make a start on the Arclis one and then hand back to you Paul for the proof of questions. So thank you for that. So I think we haven't seen any significant changes in patient behavior from different cohorts that we're aware of, different types of patients around either the rate in which they stop therapy or indeed with the restart. And the restart rate, interestingly, has remained consistent for quite some time now.

Speaker 3

About 45% of all those patients who stop therapy come back on to restart. And generally, patients are able to restart if they suffer from ongoing symptomology or the symptomology returns. Very often, they have fields left on their prescription. They have their payer approval in place. Sometimes they have stock on hand still from when they were on it previously.

Speaker 3

So it's often very simple for patients to restart therapy if they do suffer from the disease continuously, just acknowledging that this is a chronic disease. For most patients, it's multiple years. So for these patients, if they stop too early, it's likely the symptomology will indeed come back. We just continue to focus on our education with health care professionals about the natural history of the disease. And that's where patients who suffer for 2 or more recurrences, they generally have about 3 years' worth of median duration of therapy.

Speaker 3

1 third of the patients still suffer from the disease 5 years out. And you may remember from our clinical experience recently from our long term extension portion of our study, the median was 2 years' worth of Ocular's treatment up to 3 years. So we've seen the total duration of therapy grow over time in the commercial setting, most recently around 23 months. But we really continue to focus on the natural history and just want patients to stay on therapy throughout the expected course of their disease, which is, as I say, often multiple years.

Speaker 6

Okay, great. Thanks for that Ross. And then for John, as you look at the prior RA data and the available preclinical data for obebruvart, can you maybe just comment on as you think about your Phase 2 plan for Sjogren's, just what areas you think obibrupar might be able to show evidence of differentiation? Or what I guess gives you the confidence or potential success here relative to some of the other assets in the class that may be further along in the clinic? Thank you.

Speaker 5

Sure. Thank you, Paul,

Speaker 4

and I appreciate the question. Yes, we have confidence in the data that we've generated so far with abiprobar. The data from Phase 1 show, of course, important suppression of the mechanism as evidenced by suppression of antibody formation. And then we carried that forward into the Phase 2 program where we saw with all three dosing regimens, so with weekly, biweekly and even monthly dosing, suppression of rheumatoid factor to around 40% that was highly statistically significant. And then that translated into clinical outcomes using the DAS 28 CRP score.

Speaker 4

So that's showing us that in a clinical setting, we have strong target engagement. And that's with any of the 3 dosing regimens. What that means then translated forward in terms of, let's try to say differentiation, is that we've worked hard on making sure that we have a high concentration liquid formulation that supports chronic subcutaneous dosing. And so that ability to give abiprivart as a subcutaneous drug rather than it's an intravenous drug in these rheumatologic diseases And then to be able to spread out the dosing interval, so to test not only biweekly dosing, which is pretty standard, but even to stretch it out to potentially monthly dosing, which would be relatively unique in this space to have monthly subcutaneous dosing. To us gives us a lot of confidence as we go forward into the Sjogren study that AbiPruevark has the opportunity, the potential opportunity to show differentiation across other assets.

Speaker 6

Great. Thank you.

Operator

And our next question comes from David Nierengarten from Wedbush Securities. Your line is now open.

Speaker 7

Thanks for taking the question. I had 2. So maybe following up on the Sjogren's kind of competitive landscape,

Speaker 8

I was

Speaker 7

curious who you considered your main competitor and if as a subpart of that, how predictive do you think the rheumatoid factor is reduction for symptom relief in Sjogren's? And then a quick question on Arcolis. I mean, it seems obvious, but just checking that the physician kind of paradigm seems to be shifting to aspirin, maybe colchicine in the frontline kind of recurrent pericarditis setting for the majority of patients and then Arcolis. Is that a fair characterization of the market shift? Thanks.

Speaker 3

Yes. Hi, David. This is Ross. I'll start with the Arclis one and then I could hand over to Edwin, our our COO for the other prebiotic question. So yes, just to summarize, I think that's a fair characteristic.

Speaker 3

I think you're saying for patients that, first of all, suffer from pericarditis that are generally treated with NSAIDs and often colchicine as well. Often when they come back and then recurrent patients, it's often the same treatment regimen, but with longer duration. And then obviously, we're focused patients that are on their 2nd recurrence or more and making sure that ARCLIS is really the standard of care choice for those patients. At that time, they've clearly been the current patients and suffered from the disease ongoing, breaking through the usual early therapy options and really requiring something that targets the risk of the disease. So yes, indeed, that's the way we're seeing it.

Speaker 3

And as John shared with the residents registry, we're starting to see those key physicians that are focused on pericarditis as a disease utilizing our list of head of corticosteroids, which again is exactly the position that we are aiming for. Stefan?

Speaker 8

Yes. Hey, David. Thanks. Thanks for the question. So we obviously look at the competitive landscape with a broad lens and follow all of the programs currently in clinical studies and producing data.

Speaker 8

Maybe to narrowly answer your question, looking at the CD40, CD154 antagonist class alone, there were 3 others that have either produced results or are studying their asset in Sjogren's disease. And those would be the Horizon now Amgen molecule, tazodalapab, which is currently rolling in a Phase 3 study with IV formulation. There is Iskalumab from Novartis, which has finished the Phase 2 program with biweekly subcu dosing. Both of those programs have demonstrated statistically significant efficacy in this population, which give us a lot of confidence going into this study that we're in the right patient population to potentially demonstrate efficacy. And then the 3rd program is a Sanofi program called prexelimab, which is studied been studied in Sjogren's subcutaneously, but with no results reported as of yet.

Speaker 8

And I think we're given the data we generated to date with 404, we're pretty excited about our study and the ability to test not only exclusively a subcutaneous formulation, but also testing it biweekly and also monthly.

Operator

And one moment for our next one moment. And our next question comes from Geoff Meacham from Bank of America. Your line is now open.

Speaker 9

Good morning, guys. Thanks for the question and congrats on a good quarter. Ross, just on Arcolas, you've had a successful launch so far, but obviously raising awareness, I suspect will be key. So are there plans to publish resonance and are there other studies that you guys were thinking about in terms of raising the profile? And then second question for Sanj, you'll obviously be investing in EvuProBark going forward, but you guys have committed to remaining cash flow positive.

Speaker 9

So I guess the question is how important is profitability or pipeline expansion from a on a strategic basis relative to your commercial investments in Arcolas? Thanks, guys.

Speaker 3

Thanks, Jeff. John, do you want to start? Absolutely. Thanks, Jeff, for

Speaker 4

the question. Yes, we're really excited about the residents registry, because that's really an important tool by which we're learning about recurrent tarditis, epidemiology and disease management. And importantly, there are more than 20 centers across the U. S. That are led by cardiologist investigators who have a focus on recurrent pericarditis.

Speaker 4

And these are really the leading edge of managing the disease. So in that sense, the data serve as an example for other clinicians around the country who are seeking to grow their knowledge base. So what we're looking to do and as we've done in the past is this is a 5 year registry and we're kind of right in the middle of it right now. So about halfway enrolled, about halfway through the follow-up period, adding patients all the time. We've presented at prior scientific meetings and we just presented at the American College of Cardiology.

Speaker 4

And there's a lot of information in this registry that we hope to harvest as we go forward and gaining a lot of insights about it. And this time around, the fact that we learned about the penetration of IL-one pathway inhibition is a concept. And then importantly, that these evidence based cardiologists are adopting a steroid sparing paradigm in the treatment of the disease, meaning that they're moving from the NSAIDs and colchicine directly to IL-one pathway inhibition. And that's really been driven by Arcolis and that's been a growing trend year on year. To us, it's important and exciting data that people are taking the evidence and really using that to drive management of their patients.

Speaker 4

So we look forward to harvesting other information from the new centers and from these cardiologists as we go forward. So more to come. Thank you so much for the question.

Speaker 3

And Jed, to your second part

Speaker 2

of your question, I mean, as you said, we did disclose this in this quarter that we based on our current operating plan, we do expect to remain cash flow positive on an annual basis. But that said, growth and creating value are certainly remain quite paramount. And while we're very excited about continuing the development of Efgruvart, as you've seen, we've shown this highly active molecule today with a compelling safety profile. We're very pleased with the ongoing commercial execution with Arcolist. We continue actually to look very hard at business development opportunities across a whole range of areas.

Speaker 2

So really all of that tells you that our first and primary goal is to create value. Certainly, the current operating plan means that we expect to

Speaker 3

remain cash flow positive on an annual basis.

Speaker 2

But ultimately, it's value creation that's important to us. So I think we're in a great position. Obviously, we've got a great financial position right now. And obviously, a lot of exciting development coming forward. So yes, I think we're in a great spot.

Speaker 2

Thanks guys.

Operator

And thank you. And one moment for our next question. And our next question comes from Liisa Bayko from Evercore ISI. Your line is now open.

Speaker 10

Hi. Just congrats on the quarter and great to see you being able to be sustainably cash flow positive. Just to drill down a little bit more on abaprobar, can you maybe talk through some of the characteristics that make you feel like you'd be competitive, maybe specifically some of the pharmacokinetic dynamic in Phase 2 data that kind of leads you to believe that? And just still kind of curious about any findings on kind of the treatment benefit over placebo in Cohort 4 and kind of what that means from RA as you think about transition to a different disease? Obviously, there's kind of a bit more of a placebo response in the RA study.

Speaker 10

Kind of any implications or read through to what we might expect from the next phase of development? Thanks.

Speaker 4

Hi, Lisa, and thank you so much for that question. Yes. So with regard to the pharmacokinetics of abiprivart, as you might remember, what we have shown previously is that the threshold for target engagement and suppression of antibody formation is at a plasma concentration of roughly 2 micrograms per ml. And what we've shown in our pharmacokinetic curves in the modeling that comes from that is that even with the monthly dose of abiprivart, so 400 milligrams given every 4 weeks, the trough plasma concentrations are roughly around 20 to 30 micrograms per ml. So roughly an order of magnitude greater than the plasma concentration, which is required to suppress antibody formation.

Speaker 4

And then the biweekly and the weekly dose levels are providing even higher plasma concentration. So in that sense, that's the reason why we have confidence in the rheumatoid factor data, which showed a 40% reduction across all three of those dosing regimens with highly statistically significant p values with 2 or 3 zeros demonstrating really the strength of that finding. So that's kind of the fundamentals and the fact that this is all being done with a subcutaneous formulation that really provides a lot of flexibility going forward for chronic dosing. And then in terms of how that then translates forward into Sjogren's disease, as we mentioned that there's substantial external proof of concept that this mechanism has been implicated and is highly involved in the pathophysiology of the disease and that suppression of this mechanism could be an efficacious approach. And so by taking the biweekly and the monthly dose into Sjogren's disease, we believe that we have a solid platform, if you will, for delivering enough drug to suppress the mechanism and to do that in a manner that would be convenient for patients.

Speaker 4

And the other part of that, of course, is that by following this out over a longer period of time, we get more experience with the chronic use of the drug. So there's a placebo controlled portion upfront and then that's followed by a longer term extension where all the patients remain on active therapy and so that we can understand the full magnitude of the effect of the drug over time. So thanks so much for the question.

Speaker 10

Thanks.

Operator

Anne, thank you. And I'm showing no further questions. I would now like to turn the call over to Sanj Patel, Chief Executive Officer for closing remarks.

Speaker 2

Thanks, operator. Appreciate all the questions and everyone joining the call today. Clearly, we've got a very exciting year ahead of us and we're very much looking forward to continue to execute and providing additional updates in the future. So with that, have a great day. Thank you.

Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.

Powered by Quartr
Earnings Conference Call
Kiniksa Pharmaceuticals Q1 2024
00:00 / 00:00