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spk02: Ladies and gentlemen, thank you for standing by, and welcome to the Connect Biopharma first half 2021 financial results conference call. At this time, all participant lines are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star then one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star then zero. I would now like to hand the conference over to your host today, Matt Steinberg of FinPartners. Please go ahead.
spk01: Thank you, Operator, and welcome to Connect Biopharma's first half 2021 financial results call. Joining me today is Dr. Zhang Wei, co-founder and CEO, Selwyn Ho, Chief Business Officer, and Eric Hall, Interim CFO. Today's call is being webcast and will be posted on the company's website for playback. During today's call, management will provide an update across our pipeline programs and review our first half 2021 financial results. Following our prepared remarks, we will open the call to Q&A. Before we begin, let me briefly review our forward-looking statements. During today's call, we will make various forward-looking statements. Investors are cautioned that our forward-looking statements are based on current expectations and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those indicated by our forward-looking statements. Please read the safe harbor statement contained in our press release that we issued yesterday afternoon, as well as risk factors contained in Connect Biopharma's registration statement on Form F-1, for a more complete discussion of these risks and uncertainties. Now, I'd like to turn the call over to Wei.
spk08: Thank you, Matt, and good day to everyone. I would like to welcome everyone to our first financial results conference call. Before providing an update to each of our exciting clinical trials and recent progress, let me first provide a brief overview of our company and the team. Connect Biopharma is a global, Clinical State Biopharmaceutical Company focused on improving the lives of patients by developing therapies for the treatment of T-cell-driven inflammatory diseases. Connect has a growing team of more than 80 full-time employees comprised of seasoned industry leaders with significant global experience in immunology drug discovery and development. Headquartered in China, we have ongoing clinical development and operations in the U.S., China, Australia, and Europe. We specialize in designing and developing product candidates that moderate the immune system, with a particular focus on B cells. By leveraging our internal expertise and unique insights in therapeutic targeting of the immune system, our goal is to identify highly differentiated, potentially best-in-class product candidates against validated targets, as well as potential first-in-class molecules against novel targets. We focus on targeting inflammatory diseases with significant unmet medical needs affecting millions of patients worldwide. Since our founding, we have advanced two internally discovered molecules into Phase II clinical development. The first being our lead product candidate that is designed to treat atopic dermatitis, or AD, severe persistent asthma, chronic rhinosinusitis with nasal polyps, and other Type II inflammatory diseases Our second clinical candidate is an immune modulator for the treatment of inflammatory bowel disease, including ulcerative colitis and Crohn's disease. We also have a third molecule that recently entered in a phase one trial in healthy volunteers for the potential treatment of chronic inflammatory colitis. Our innovative approach to drug discovery is designed to speed up the identification of potentially highly differentiated immune modulators. Now let me turn to an update on our recent milestones and pipeline updates. In March, we completed an IPO listing of our American depository shares on the NASDAQ Global Select Market. The offering raised net proceeds of approximately $204.5 million, which significantly enhanced our cash balance, enabling us to invest in and advance our pipeline. Our strong investor support is further underscored by the $440 million raised today from top-tier investors, which includes $135 million from a Series C financing that we completed in December 2020. In addition to this successful listing, we have expanded our executive leadership team, the hiring of Dr. Sarin Ho as Chief Business Officer, Mr. Yawing Yu, Felix, as our Vice President of Finance, and Mr. Jianbian as General Counsel and Chief Compliance Officer are important steps in advancing our organizational growth strategy. Each of our new team members have extensive experience in their respective fields, and we look forward to their many contributions to our growing team. In January, we established a scientific advisory board which is comprised of clinical development and program medication experts with deep experience in dermatology, inflammatory bowel disease, asthma, and other diseases that have resulted in many successful drug approvals. These seven world-class experts have already provided invaluable insight, driving our efforts in building a highly efficient discovery and development organization. We thank them for their support as we continue to advance our clinical pipeline which I will now discuss in greater detail. We have a pipeline of potentially highly differentiated product candidates against validated targets, and for all of these, CONNECT has full global development and commercialization rights. Starting with our lead product candidate, GBP201 is currently in a Phase IIb trial for the treatment of adult patients with moderate to severe atopic dermatitis. The global market size for atopic dermatitis is large and growing. At the end of 2020, we estimate there was approximately $10.4 billion, and it's expected to grow to $19.3 billion by 2025. CBP201 is a novel human monoclonal IgG4 antibody directed against IL-4R alpha, a common subunit for IL-4 and IL-13 receptors. which is a validated target for the only currently FDA-approved biologic therapy. In a randomized placebo-controlled phase 1A trial in healthy volunteers, administration of a single dose of CBP201 was well-tolerated and led to suppression of a serum biomarker of inflammation. In a randomized placebo-controlled phase 1B trial in AD patients, we observed meaningful results which demonstrated rapid improvement in signs and symptoms of aging, arthritis, AD disease severity, and patient quality of life. Although no head-to-head trials have been conducted, we believe that CBP201 may have three potential advantages over the current standard of care. First, It binds to a region of IL-4R-alpha that is distinct from that bound by dupilumab and associated with high binding affinity and potency for IL-4R-alpha, which we believe may lead to improved clinical response. Second, it may have a faster onset of action as demonstrated by data in a Phase 1B trial. And finally, it may provide a longer duration of drug exposure after subcutaneous injections as evidenced by data from our Phase 1A trial and unpublished data from our Phase 1B trial. In April, we announced that we completed full enrollment of our Phase 2B trial, this global, randomized, double-blind placebo-controlled trial to assess the efficacy, safety, PK and PD profile of CBP201. was designed to enroll 220 patients and has been conducted at 60 sites across the U.S., China, Australia, and New Zealand. In this trial, CBP201 or placebo was administered to eligible adults with moderate to severe AD for 16 weeks with eight weeks of follow-up. We remain on track to report top-line results from this trial in the fourth quarter of 2021. We also plan to initiate a China standalone pivotal trial for CVP201 in 80 patients in the third quarter of 2021 as part of our country-specific development strategy. In addition to atopic dermatitis, we are conducting clinical trials to assess the potential of CVP201 in other diseases driven by the dysregulation of the Th2 immune response, where dupilumab has already demonstrated efficacy. These include phase two trials of CBP201 in asthma and chronic rhinosinusitis with nasal polyps. In May, we dose the first patient from the phase two clinical trial evaluating CBP201 in adult patients with moderate to severe persistent asthma. We believe that the global market opportunity for asthma biologic is growing rapidly, with a total market size projected to grow to $6.1 billion by 2024. This asthma trial is a global, randomized, double-blind placebo-controlled trial to assess the efficacy and safety of two doses of CBP201 administered subcutaneously to eligible patients. It's expected to enroll approximately 300 patients across 80 study sites and is divided into a treatment period of 24 weeks and a follow-up period of eight weeks. With regard to our global phase two nasal polyps trial, we remain on track to dose the first patient in the second half of 2021. Now, turning to our second molecule that's in Phase IIb. GVP307 is a potentially differentiated, orally administered immune modulator for the treatment of inflammatory bowel disease. It's a small molecule modulator of S1P1, a regulator of T cell mobilization out of lymph nodes into the periphery. Blocking S1P1 leads to reductions in the levels of these T cells in circulation and a reduction at the site of inflammation. S1P1 is a validated therapeutic target with three drugs approved to treat multiple sclerosis, and the FDA approved one of these drugs for UC in May 2021. The estimated global market for UC was approximately $5.4 billion in 2020. and the estimated global market for CD was approximately $7.4 billion in 2019. We believe that CBP307 as an oral therapy has the potential to address these diseases due to its specificity, PK and PD properties observed in preclinical studies and early clinical trials. We are conducting a global phase 2b trial in UC and anticipate reporting top-line results in the first quarter of 2022. In addition, we intend to initiate a global clinical trial in CD based on the preliminary clinical responses observed in a limited number of patients in an earlier CD clinical trial. Finally, We initiated a Phase I trial in healthy volunteers to explore the potential of CBP174, a peripherally-restricted histamine-free receptor antagonist for oral administration, to treat chronic itch associated with skin inflammation. We believe that the ability to quickly alleviate itch in a setting of AD has the potential to complement the antipyretic effects of disease-modifying IL-4 alpha blockers. such as CBP201 or dupilumab. Our preclinical model have indicated that CBP174 led to reductions in scratching within the first 30 minutes of dosing, which could potentially translate to rapid reduction in characters in a clinic. This randomized double-blind placebo control single ascending dose trial in healthy volunteers aims to evaluate the safety, tolerability, and PK of CBP 174 given orally. Following dosing, each volunteer will be followed for up to seven days. We expect to report top-line results in the second half of 2021. To summarize, the first half of 2021 has been a period of significant progress for Connect. Highlights include our initial public offering in March and execution against our objectives and strategies, despite the uncertainties stemming from the global pandemic. We now have several important upcoming data readouts expected in the second half of 2021 and into the beginning of 2022. We believe our growing body of evidence will validate our approach in developing differentiated therapies for T-cell-driven inflammatory diseases with significant unmet medical needs. Now, I would like to turn the call over to Eric Hall for an overview of our first half 2021 financial results.
spk07: Eric Hall Thank you, Wei, and good morning, everyone. Yesterday, we filed our Form 6-K for the sixth month ended June 30th, 2021, which contains detailed financial results and is available on the SEC and Connect websites. Although I'm not going to review our detailed results during today's call, I will briefly discuss our cash position and the strengthening of the balance sheet. With a successful listing of our American depository shares, or ADSs, on NASDAQ in March 2021, we raised net proceeds of approximately U.S. dollars $204.5 million, or RMB $1,320 million. Supported mainly by these proceeds, we had cash and cash equivalents of RMB $2,025 million or US dollar $313.5 million as of June 30th, 2021 compared to RMB $1,010.1 million as of December 31st, 2020. During the period ended June 30th, 2021 net cash use and operating activities was RMB $252.8 million or US dollar $39.1 million. compared to RMB 53 million in the prior year period. The increase in the use of cash was due primarily to increased R&D and administrative expenses, as well as the expansion of our clinical trials and development of additional pipeline therapies. We believe, based on our current operating plan and expected expenditures, that our existing cash, cash equivalents, and short-term investments in wealth management products will be sufficient to meet our anticipated cash and capital expenditure requirements for at least the next 12 months. That concludes our repair remarks. Operator, you may now open the call for questions.
spk02: Thank you. As a reminder to ask a question, you will need to press star then 1 on your telephone. To withdraw your question, please press the pound key. Please stand by while we compile the Q&A roster. Our first question comes from the line of Kelly Shee with Jefferies. Your line is now open.
spk03: Hey, this is Hao calling in for Kelly Hsieh. Thanks for taking me questions, and congrats on the progress. So maybe two questions from my side. First is for the Phase IIb CBP201 trials. Based on maybe your feedback from the KOLs, what efficacy and safety profile would make CBP201 stand out versus 2%? And what's the efficacy premium that CBP201 needs to demonstrate to stand out? And the second question is, given a standalone CBP201 trial is initiated in China, could you help us to understand the development plan of CBP201 in China and what may be required for the potential BLA submission in the future. Thank you.
spk08: Thank you so much for the question. The CBP201 phase two trial, as we mentioned earlier today, it's already, we have completed the enrollment, so we're expecting data readout in the fourth quarter of this year. And we're looking forward to that very exciting time to share our data. Now, as we mentioned earlier, that CVP201 does have a number of characteristics that gives the confidence to expect that it will produce positive data going forward. And I'm going to turn this to Sarwin to address the question and also the the question on the China Standalone study.
spk06: Thank you, Wei, and thank you, Hao, for the question. So three parts to that. So the first question you had was regarding what do KOLs think with regards to the degree of differentiation required to be successful, which was, I think, related to a second question about how we felt about that. Was that correct? Yes, that's correct. Okay, so as you're aware, the trial design for the Phase 2B study has really three objectives. The first one is we are doing dose ranging and therefore want to establish between the three doses that we have, which is a 600 milligram loading dose followed by a Q2 300 milligram dose every two weeks. The 600 milligram loading dose followed by 150 milligrams every two weeks. And then the 600 milligram loading dose followed by 300 milligrams every four weeks. So with those doses, we hope to be able to replicate obviously what we've seen in phase one. And as we mentioned, we believe that we have a signal for potential superiority when you look at it side by side or greater efficacy at least. We also hope that we're able to replicate the demonstration of rapid onset of action as we've seen in our Phase 1b study. And finally, this is the first time that we'll be dosing the Q4W dosing regimen. So as Waze mentioned, we hope that we'll be able to show an extension of the dosing interval with a similar type of efficacy profile but using less frequent injections. When we've spoken to KOLs regarding this type of study design and what would appear to be different, it does really depend on the measures that you're looking at and the outcomes. But generally speaking, a 7% plus difference on something like the EC75 or the IGA01 would start to convince people that there may be some differences if you had put these properly in a head-to-head study. Clearly, they'll be doing this on a side-by-side basis. And I think that's our philosophy as well. We're very much aligned with what the KOs are saying. So a 7% plus would be something that we would hope to be able to demonstrate. Now, of course, there's multiple scenarios and we're obviously looking at not just efficacy superiority, but as we said, demonstrating that rapid onset of action and also demonstrating potential greater convenience by using Q4W. So that's kind of the way we're thinking about the study. Clearly, we'll have the results we have in quarter four this year, and we'll be able to talk about that more. Your other question around the China study, as Wade's mentioned, We have planned to initiate that study in the second half of this year. You may have seen that the study is now being posted on clinicaltrials.gov. And so the study design has been demonstrated there. It's basically a multi-center randomized controlled clinical study, again, looking at adult patients with moderate to severe atopic dermatitis. We estimate that the potential enrollment required will be around about 250 patients. In the initial 16-week phase, we'll be looking at a dose of CBP201 versus placebo. The idea of this study, as we've described before, is that we believe that this, combined with the evidence that we generated from the global phase 2 study in atopic dermatitis, which does have Chinese patients recruited, will deliver a package of evidence that we believe may help to advance and accelerate the submission and then ultimately hopefully the approval in China.
spk03: Great. Thank you so much and congrats again.
spk02: Thank you. Our next question comes from the line of Thomas Smith with SBB LeRinc. Your line is now open.
spk05: Hey, guys. Thanks for taking the questions, and congrats on all the progress. A couple questions on our end. On the upcoming phase 2b atopic derm data for 201, You have trial sites in the U.S., China, New Zealand, and Australia. At this point, do you have visibility into the regional makeup of patients who are in the study? Are most of the patients coming from the U.S. or from Asia? Or if you don't have visibility, can you talk about your expectations for the regional makeup of patients in the study?
spk08: Thank you so much. Yes, and I think we can share a little bit about what we know so far. This is a, first of all, a global study in enrolling patients in these four countries, and the study, as we said earlier, has been going well, and we have completed enrollment. Our expectation is that the majority of the patients in this study will come from the U.S., as you'll probably know that we started the study from the U.S. side and then some other countries that follow the initiation. So in the end, we expect to have a majority of patients from the U.S., but each of these countries will have some contribution. Shaowen, do you have anything to add to?
spk06: No, that's exactly the right way.
spk05: Okay, got it. And then on the pathway for 201 in China and atopic derm, can you just give us an update on your recent regulatory interactions? And do you think, is it possible to seek breakthrough therapy designation with your current data set, or is that perhaps something that you'd look to do once you have the Phase IIb data set?
spk08: So, let me quickly kind of address this first, and then Saorin can expand if needed. So, again, this is a trial. We call it a pivotal trial because we sort of model the study design with what we understand in previous examples of trial sites and design that would allow products to be approved in China. we will be able to get our top-line data from our 2B trial, the global trial, that has all the different dosing regimens. And as you know, that study also includes a significant number of patients from China. And so the China standalone study will then expand on those observations as well. So that is sort of the idea going into this. With respect to the breakthrough therapy status, certainly we do not have to wait until the completion of the China standalone study to apply. I think if we see significant signals that point to a direction of excellent efficacy or onset or some other parameters, yes, we do have the ability to apply for breakthrough status, as you said that dupilumab, as you understand that dupilumab right now is the only IL-4 receptor, IL-4 antibody available in China. Flowing, do you have additional comment?
spk06: Thanks, Wei, and Tom, thanks for the question. I think the only thing I'd add is The regulatory pathway for accelerated trial and approval in China, as you mentioned, the obvious route that could be considered would be breakthrough therapy. And in terms of qualification criteria, yes, we would probably have to demonstrate evidence of some clinical superiority. And therefore, looking at the data timelines and the cadence, as we said, we don't need to wait to start the study, but once we do have the Phase IIb data from the global study, given that there are numbers of China patients within that study, we can review the data and, if applicable, apply for that based on that criteria.
spk05: Okay, got it. Yeah, really helpful commentary. Thank you, guys.
spk08: Thank you.
spk02: Thank you. As a reminder to ask a question, you will need to press star then one on your telephone. Our next question comes from the line of Joe Cantanzaro with Piper Sandler. Your line is now open.
spk04: Hey, guys. Thanks so much for taking my questions here, and congrats on all the progress. Just wanted to follow up on the expected Phase IIb AD data. later this year, could you maybe help set expectations around what we should expect to see in a top-line release? Should we expect to see details on, you know, absolute number of IGA responders, EZ-75 responders, insight into, you know, other secondary endpoints, week four time points? Just want to get a sense of what we should expect to see. Thanks, and I have a follow-up.
spk08: Thank you, Joel. Thank you for the question, and I'll have someone address this question.
spk06: Thanks, Joe, for the question. So expectation-wise, at the moment, we're still clarifying the exact readout timelines for the study and working with our partner CRO to determine what will be available at which point. The expectations that we'd like to set is that at the bare minimum, we will obviously say whether or not we've hit the top line or not. And as you're aware, the primary endpoint is based on baseline change from EC at week 16. We hope to be able to demonstrate and reveal other secondary endpoints pretty much similar in the way that we discussed the Phase 1b readout in January last year. But at this point in time, I can't absolutely confirm that because we're still in discussions with the CRO.
spk04: Okay, got it. Fair enough, and that's helpful. And then my follow-up question As we think about China, I think Sanofi had commented earlier this year that the early AD launch for Dupixent within China was exceeding its early expectations. I'm wondering if you've heard anything or learned anything around that launch that you could speak to as we think about a potential future launch for CBP201. Thanks.
spk08: Thank you. And Soren will also answer this question.
spk06: So, Joe, obviously, we believe that the entry of a biologic in China is great for patients there. Certainly, with Dupilumab being in the same class as ourselves, we feel that a lot of work is being done now by Sanofi to develop the marketplace, to get access to for Duprimab to patients. We recognize and reflect on the same information that you've probably seen and heard, which is that the launch has met or even exceeded their expectations. We're hearing that the patient access is gradually improving, given the recent NRDL And we hope to be able to leverage that because they will be doing some great work in providing that access and getting the product out to patients through the hospital systems and through their various channels. In terms of additional information, I'd say that we're monitoring this closely. We expect them to announce the results over time and call out the China performance and because it's an expanding market, and we hope that their success is clear, basically for the benefit of patients, but also it allows us to confirm the potential for 201 in China, should we be able to demonstrate our hope for efficacy in our Phase II trial.
spk08: Okay, got it. And just one thing to add to is that Now, the Sanofi news is obviously also a very good news, I think, for a company like Connect with developing alpha receptor, alpha blockers for Chinese patients. And I think that from what we see on the ground, we do have a sense that there are a lot of patients there that really are looking for efficacy therapy like alpha receptor, alpha blockers. And we can see that. from the enthusiasm of patients coming to participate in clinical trials. And so I think the signal that we're seeing here is fairly positive. The other thing we are pleased to see is that unlike some other therapies where it already has been a crowded space in terms of the same category of products competing there in China, the IL-4 receptor alpha blocker Right now, there's only one approved drug there available. And given the number of patients in China, we are really optimistic about what we can do with a product like CBP201 in China.
spk04: Okay, got it. Thanks so much for taking my questions.
spk02: Thank you. That concludes our question and answer session. I would now like to turn the call back to Wei for closing remarks.
spk08: Thank you. Well, it's been an exciting first half of 2021 for Connect Biopharma. We transitioned to being a public company and strengthened our financial position with our IPO, completed enrollment of our Phase 2B trial in AD, initiated two clinical trials, and expanded the talent of our executive leadership team. Looking ahead, we have multiple clinical milestones anticipated in 2021 and 2022, including data results for CBP201, CBP307, and CBP174. Our patient-centric focus gives our team the motivation to develop potentially best-in-class and first-in-class product candidates targeting inflammatory diseases with significant unmet medical needs. We look forward to updating you on this important readout in the coming months. Thank you for joining us today, and thank you for your continued support.
spk02: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.
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