STIFEL 2026 HEALTHCARE CONFERENCE - ABCELLERA BIOLOGICS INC

All right. Good morning, everyone. I'm Stephen Willey, one of the Senior Biotech Analysts here at Stiefel. I'd be glad to have with us to kick off day two, the CEO of Abcelera, Carl Hansen. So, Carl, thanks for joining us. Not sure if there's any some opening statements you'd like to make before we jump right into Q&A. Thanks for having me, Steve. Yeah, maybe just really quickly, for those that don't know, Abseller is a biotech company located in Vancouver. We have, over the years, built a platform for the development of antibody medicines. I believe we have a very significant competitive advantage in solving some difficult problems. And the mission of the company is to apply that internally and to repeatedly invent, develop and ultimately commercialize breakthrough medicine. So we've made a transition recently, and I think we're going to talk today about ABCL-635, which we view as the first evidence of that. You're going spend a lot of time on 635. I figured. That's okay with you. All right. So you top-lined the data. This is the phase two data back in August. Yeah. I think it took a lot of us by surprise in a very good way. Maybe you can just kind of walk us through the high points of the data and how those efficacy and safety metrics compare to the standard of care or small molecules that are on the market. Sure. So, abcl635 is a first-in-class antibody for the non-hormonal treatment of vasomotor symptoms or hot flashes associated with menopause or that are associated with a menopauselike state that comes from hormone deprivation associated with cancer therapy. It is following a couple of small molecules, which you alluded to, theslonitant and elenzanitant, both of which are approved, one by Astellas and the other by Bayer. And we developed an antibody with the hypothesis that an antibody would allow us to dose more, to dose higher and have better target engagement. And then an antibody would be immune from some of the liabilities of the small molecules, either off-target effects or liver toxicity. So we had some preliminary data on that that we released earlier, which was a biomarker measurement of testosterone suppression, which showed we could engage the right part of the brain. And then the big readout, as you mentioned, was in August. And our TPP was to come up with a product that looked like it had the same efficacy as the small molecules but was safer and had more convenient dosing once monthly. The upside surprise was that the efficacy turned out to be much, much better. So we showed in that data, which was a study of about 92 patients, one-to-one placebo-controlled, that we had a 50% placebo-controlled reduction in hot flashes. that's roughly twice the reduction in frequency that's been seen with either of the small molecules on the severity score we had a difference that was anywhere from three and a half to five times as great as the small molecules and we got all of that with a clean safety profile and a pk pd relationship that looks like it supports the tpp of once monthly so across the board you know, we now think we've got a killer product here and one that could really redefine non-hormonal care for hot flashes. And we are now getting ready to bring that forward into late-stage development. Okay. Maybe kind of going back to the surprise element of this, right? And I guess from my perspective, there was certainly kind of a suggestion within the small molecule fuel data, right? That there was kind of this ceiling effect on just kind of the magnitude and severity of reduction that you could achieve with this mechanism. And it looks like you were able to break through that ceiling. So what's your best guess as to what's driving that, right, because you're leveraging the same mechanism, obviously. Is this a PK, PD, receptor occupancy phenomena? Yeah, our best, I mean, I think that's right. I think it's a receptor occupancy. It's how completely can you engage and shut down NK3R. And while it's surprised versus some of the recent data on the small molecules, if you look back at some of early clinical development of fezolinatant where they did dose ranging and they looked at efficacy, there certainly is a hint there that they left a lot of efficacy on the table. And that was because of limitations in dosing associated with liver toxicity. So we had a thesis that you could do better. I think the results even exceeded what our upside scenario was. So, we're very pleased with that. Yeah. Because I think in that Fezolinitin dose optimization data that maybe you're referencing, the phase 2A, I mean, they pushed dose, what, three times higher, four times higher than the current label dose. And there was a little bit of a reduction, but it certainly wasn't the magnitude of reduction that you guys were able to achieve in the in the phase two i'm tempted to say antibodies are better than small molecules yeah you can go ahead and say it you're an antibody guy i'm an antibody boy guy all right yeah um i thought the responder analyses were also pretty compelling right you're seeing a greater than 90 reduction in frequency and severity and i think like 60 and 30 percent of patients respectively um and this is all happening just after a single dose, right, at week four. So I know the small molecule data kind of suggests that, you know, what you get at week 4 is kind of what you get into perpetuity. But again, this being an antibody, would you expect to maybe see kind of a different trend emerge here as you get these patients to, you know, more steady state? Yeah, so two points to make there. So thanks for bringing that up. So one of the things that we saw, which was, you really compelling is that after a single dose was a single 600 milligram dose and we the efficacy readout is after four weeks uh which is one of the efficacy redotes that would support a registrational trial and there we saw that there was 37 percent of participants that had complete resolution so um you know i don't know if you're allowed to use the word cure but you know on a four-week basis uh completely relieve the symptoms of ems and that's something that is unprecedented as far as we know for any of the non-hormonal treatments and in fact you know compares you know at least equally if not favorably to what has been reported for hormone therapy there's a there's few studies in hormone therapy that look at the same endpoints as carefully but the ones that exist you know we there certainly are some that exist where we look like we're clearly more efficacious even than hormone therapy so that's quite compelling The second part of your question is what we expect in terms of, you know, persistence. You know, our baseline expectation based on what's happened with small molecules is that the efficacy that you see is largely preserved from four weeks going forward. So that's our baseline. And, of course, we're going to get, you Know, a bit, we'll get a bit more information on that as part of the OLE, perhaps, and certainly as we go into phase three. Okay. Within the OLE component of the trial, are patients again receiving a single dose, or are they going to be getting dosed on a once-monthly basis through the OLA program? Yeah, so just to sort of review the study, so the study started with a single dose of 600 milligrams. Now, 600 milligrams was selected because it best represents what would be the steady-state accumulation of a once monthly 300 milligram injection. So we wanted to test what's the efficacy at what will be the steady state uh and of course that that would set up you know a a dosing regimen in the future that could include a a loading dose at the beginning then we measure at four weeks that's the only efficacy readout uh and then after the four weeks we are watching the drug uh wash out and so we're doing that so that we get over that next eight weeks a high-resolution correlation between efficacy and exposure of the drug, which we're then going to use to model what will be the subsequent exposure in phase three. After the 12-week period, both the placebo arm and the active arm have the opportunity to have another single dose, so another single dosage of 600, and there will be another efficacy readout at four weeks, and of course, we're going to monitor the safety. So when that data comes through, and we expect to share that data sometime early next year, we will have essentially three times as much efficacy data because we'll have the first cohort in the active and then both the active and the placebo on the next four-week efficacy readout. Okay. Have you said what percentage of patients have chosen to enroll into the open label extension portion? Yeah, we got asked that on the earnings call. We haven't disclosed the actual number, except to say that it's the large majority of patients that have decided to roll over. Okay. Maybe you can speak a little bit to what do you think is driving the improvements in sleep score that you saw, right? So I know that LinkWit provides benefit here. It also hits NK1R. but do you think that the benefit that you're seeing here is really just simply attributable to the depth of improvement that you are getting on frequency severity and that magnitude of benefit is just translating to better sleep in these patients? I mean that is basically what we think so as background the two small molecules that are approved, Vioza which is a straight NK3R antagonist and then Linquit, which as you mentioned, is a dual NK1R, NK3R antagonist. If you look at the sleep results from registrational studies of those two products, you see that the Linquid product has better performance on sleep. And that has been attributed to the NK2R activity. And perhaps that also has led to some risks or warnings associated with somnolence for NK4R. Now, we have a straight NK3R antagonist, so we have no NK1R activity. But when we looked at the sleep scores, and this was one of the very positive surprises, there are actually multiple positive surprises was that we had a sleep score that was, you know, at least equivalent to Linquit despite not hitting NK2R. And my interpretation of that would be that, you know, the sleep benefit from Linquid is a combination of reducing VMS and having the NK1R activity. And by having a much greater effect on the hot flashes side, we were able to get the same sleep benefit without the side effect of somnolence. What does your KOL feedback suggest about the sleep improvement that Linkwit provides and how that's translated into share gains here in the commercial setting. Yeah, I'm not sure we've got that direct feedback. If you look at scripts, Linquit definitely is growing in the market, and it's growing faster than Vioza, but that has to be interpreted also in the backdrop that Viozza, post-launch, got a boxed warning for liver injury, and so there's perhaps a greater liver toxicity signal on VioZA versus Linquid. So the combination of those two things seems to be driving Linquit to have greater uptake right now. The sleep benefits have definitely been promoted a lot, and that's something that comes up at conferences. But I don't know if we're able to tease those two thing apart just yet. Okay. Can you maybe just walk us through those action items that need to be completed before you'll be ready to initiate a registrational program? Sure, yeah. So we're finishing up the phase two. And so, as I mentioned, the phase two is basically a single dose, an efficacy, and then a washout period, followed by the OLE. And that is intended to give us a very precise dose response data set. From that data set, we can model what should be the appropriate dose to take into phase three. And we have been admitted to the FDA's model-informed drug development program. So we'll be meeting post-phase meetings with the FDA and other regulatory bodies to engage in discussions, get alignment on what the phase three will be. Those meetings are just starting to happen, and they'll be happening through the first part of next year. And then the other thing we need to do is get the CMC and the devices all lined up to start the phase 3. So that work is running in parallel. And right now I'd say that those activities are roughly in sync. And then, of course, you need to find sites and boot them up and the rest of it. But certainly we'll be moving into late-stage studies for menopausal VMS next year. And in the meantime, we'll also be starting some studies in the oncology indications for prostate cancer and breast cancer. Okay. I think you had previously suggested that you were interested in pursuing kind of this induction maintenance dosing regimen as part of a phase three and in subsequent development like oncology. I Think the initial induction with 600 meg followed by the 300 meg maintenance that would that maintenance dose would allow you to kind of fit into just a convenient like once monthly auto injector correct that's right so um you know the the highest dosing so a loading dose followed by once monthly 300 i think that's probably going to be that's the highest that we would go forward with and largely because you knowthe efficacy that we've seen says you don't need to go higher and that does fit into a two mil auto injecter so you know in terms of a commercial product and convenience that looks great we haven't we haven'T decided on any final doses. If it were to change, it would be a lower dose or less frequent. And the efficacy data that we showed, we got a great effect even at week one, but that effect continued to grow over the four-week period. So at the first week or the first measurement, we already have an effect that's as big as the small molecules, and then it goes to basically twice that big by four weeks. And over the four-week period, there hasn't been a decline. So what we're going to be seeing is how does that efficacy change as drug washes out? And from that, we'll go forward. You know, if you ask me today, I'd say, you know, 600, 300 is probably one of the doses we'd look at. We might consider a lower dose as well. So it's safe to assume that patients in the phase two are maintaining these diaries beyond week four? So you're going get placebo-adjusted reads? Yes, that's right. Yeah, So on the active control, actually on both placebo and active, patients have a daily diary where they're reporting both the frequency and severity of hot flashes. The clinical team has done an outstanding job there. So the data compliance is, you know, in the mid to high 90s, like an almost unheard of compliance on that. And that allows us to get essentially real time data on every patient as to what is efficacy and then overlay that on top of PK information that we have. Okay. So you talked about the inclusion into FDA's model, the Informed Drug Development Program. How does that then allow you? So if you do choose to go induction maintenance, does inclusion into that program still allow you to fast track that dosing regimen into a potential phase three, despite the fact that it's not been clinically evaluated in patients? Yeah, so I don't want to preempt what the alignment or the conversation with the regulators will be, but the reason we entered into the MIDD program and one of the advantages is that the program is designed to allow for more sophisticated modeling of PK-PD relationships to inform phase three development and not to have to go through the empirical testing of all the doses that you want in phase two and then step them forward. So it's precisely for that, that we went into it. This program, because of the very rapid or very tight temporal correlation between target engagement and advocacy, and because the well understood, you know, biomarkers and the well-understood biology fits beautifully into this program. So we are very optimistic that we will be able to use the data that we have from this phase two to go directly into phase three, despite the fact we haven't done, you know, repeat dosing on a variety of different doses. If, in fact, that was not the case and we had to have more than one dose, we could easily accommodate that. And, you know, part of the reason for that is that the, you know, this is going to be developed for a common indication, and you need quite a large safety database. And given the, the very large efficacy that we've seen, powering the study is not a problem. So we could, you Know, apart from the logistics and the complication of doing it, we could have multiple arms testing multiple doses, and still not have to enroll more patients. Okay. Can you maybe just speak to a high level as to what a phase three program could look like? You mentioned the exposure data you need to generate just maybe from like a patient number and projection of trial sites. Yeah. So the that's a good question. So, the, you know, the typical guidance is a safety database that would include about fifteen hundred patients. So that's, you Know, plus or minus, that's about right. And that's in line with what was done with Linquit and Vioza. And we would expect the same, although I think, you know, given the biology of the mechanism, there may be an opportunity to have a smaller safety database because liver toxicity in terms of an on-mechanism, you know, consideration would be much lower. So that's roughly the size. We were able to recruit 92 patients in, you know, less than a dozen sites only in Canada in about six months. So we don't expect that recruitment is going to be a real limiter. Of course, we want to get sites in the U.S., in Canada, maybe Australia, maybe Europe. So it's going to a global trial. I don't have the exact numbers, but it'll be multiples of the number of sites. And in terms of the timeline, if you look at Linquit, roughly two and a half years from first patient in to readout. So that's what we're benchmarking. I think there could be an opportunity to go faster, but what's most important is that you do these things right and you get high-quality data. Okay. I know the screen failure rates in these trials have historically been pretty high. Is that just a function of patients failing or screen failing on the basis of that moderate to severe score that's required? Yeah. There's a couple criteria, I think, that drive the screen failures. So one of them is what you mentioned, which is you want to enroll patients that have a sufficiently high frequency of moderate to severe events. And we have, you know, in our phase two, we had an inclusion criteria that sort of matched that frequency with what was done with Vioza. So about 10 events per day on average. So when you're screening patients, there'll be some patients that believe they have very high events. But then when you have the screening period, you find it's actually lower. And so those patients are not included. We found, I think, early that, you know, our screening failure rate was something like 75%, but that got better and was like 65% later on. And the reason for that was better understanding how to engage with patients and have the early questions so you're not bringing patients into screening that are going to fail. The other thing you screen for is compliance, is, you Know, are patients good at accurately and reliably filling in the diaries? And so part of the screening is also making sure that you're getting the patients that are going to be the best subjects to get high-quality data. And in clinical trials, that's paramount. Okay. Maybe you can speak a little bit to how these data may or may not have changed your perception of the addressable market opportunity for menopausal VMS. You know, I'm guessing there's probably a pricing premium that you can capture relative to the small molecules, but do you think this data maybe infers some expansion of the market beyond, you know, those that you've historically talked about as being either contraindicated or just not tolerating hormonal therapy? Yeah, I mean, basically, we think this data, you know, if it holds through to phase three, and we have every reason to think that it will, you know, quite dramatically increases the commercial potential for a product on multiple dimensions. You know, so first of all, you know, today, we're looking at a product that has potential to have better efficacy, better safety and better convenience than any other product that's out there for non-hormonal treatment, not only including NK3R, but including other drugs that are used as non- hormonal alternatives. So not a little bit better, but like, you know, miles better in efficacy. So in terms of market share, we think there's a real opportunity to have, you Know, a big chunk of that market. The other piece is that, you know the efficacy that we're seeing, as I mentioned, is at least comparable to what people are seeing on hormone therapy. And so, you know, amongst women that may be eligible for hormone therapy, but decide not to take it, there'll be some that look at other options. And if the options are safer and highly efficacious, you're going to get more people that transition from maybe trying hormone therapy into something like, like abcl635. And then, as you mentioned, on the pricing, You know, the current small molecules have a net price of about $5,000 per year. If you've got a product with better efficacy and safety and convenience, you know, you certainly could make an argument to have a higher pricing, which expands it. And that's something we're looking at. And I think it's going to be a question of – it's a commercial question of where do you price, where do the indications, how do you balance up, you know, access for patients in the U.S. versus ex-U.S., and other markets. So on all those dimensions, we think ABCL635 now looks, you now, much, much better. And coming into this, even with the TPP of equal efficacy and better safety, we thought it could be a blockbuster product. Now we think it is multiples of that. I know this market's been characterized by a shortage of hormonal therapy. Recently, yes. I think after FDA changed their guidelines, there was obviously a lot of demand for hormonal products. Estrogens typically delivered through a patch. Those patches are in very short supply. It's a good business right now. It's good business. I'm also guessing that because of those supply constraints, there's probably some patients and prescribers now who are gaining experience with non-hormonal therapy who maybe would not have otherwise. So do you see that as kind of a little bit of a tailwind or a table setting for 635? It's a great question. I think it's an amazing time to be bringing forward a product like this, And there's a big tailwind. So, you know, the the removal of the box warning from hormone therapy, you know, I think really put fuel on a fire that was already burning. I think there was already a big discussion about, hey, VMS is a real problem. People do not have to just, you know, be told that, hey you're getting older, just deal with it. They're seeking treatment. And then with removal of box warning, many, many more women are having that conversation and looking for treatment so that that is why you're seeing you know hormone products uh in short supply right now uh and yeah and uh sorry you're i don't think they're coming for me that's okay yeah we got got the uh the cops coming in the background here and um and in terms of prescribers uh you know one of the things that i think also is shifting is maybe, let's say, five years ago, I think the large majority of prescriptions of hormone therapy was coming from OBGYNs. Increasingly, you're seeing more primary care prescriptions. And then on top of that, we're in this trend where patients are having much more control of their own health care. You're seeing patients that are starting to go through online menopause clinics and virtual prescription. And we see that sort of direct-to-consumer model as being something that's really going to take off in the menopause side. So if you're asking, like, how, if you ask the question, where do you engage on the commercial front? I think that's changing very rapidly, and the shift seems to be, you know, from OBGYN, which will always be important, but also to GPs, and then also to, you know, direct-to-consumer, which is an exciting trend here. Okay. So, no, you're still very early here, but how do you think about the company's ability to either lead or even participate in a commercialization effort here, right, specifically given the way that you just characterized the market kind of moving maybe more towards primary care prescribing, maybe more toward a direct-consumers model? Yeah, we're having a very, you know, in-depth look at that. It's still early, so we're not committing, but, you know, these new avenues of commercializing products like this, particularly, you now, a product like this where you can self-diagnose very well, so you know basically what's happening. It's very straightforward, you know, to engage with a website and then to get referred to, let's say, telehealth and get confirmation and a prescription. And then increasingly you're seeing models where you can get direct fill and delivery right to your house. And if the price is right, and depending on what the price elasticity is, there can even be direct pay where you're going alongside of insurance providers. So all of that, you know, is just happening now. The GLP-1s have really driven that. We're maybe two years into that trend. We see that growing immensely. And, if you think about that trend and how powerful that has been on the obesity medicine, then it's very exciting to think you have another product that would fit so nicely into that model. I also think that's the kind of model that a smaller company could do effectively, you know, either in partner with a large company or perhaps even independently. So, you Know, let's say, you Now, 10 years ago, if you're going to launch this, you're thinking I need, you now, 1500 sales reps across the US. That really feels like a big company game. If you're talking about setting up a technology-enabled website, if you're using electronic means of getting the message out, engaging with patients, building that direct relationship, and managing to step around what has been the Byzantine process of selling drugs in the U.S. and particularly ex-U.S., that's something that's quite compelling. And we're definitely having a hard look at that. Okay. And then any thoughts around what duration of therapy could possibly look like here? Yeah, so, well, that's a good question. I mean, we expect the therapy, you know, if everything holds, will be highly efficacious. So we expect people will get great relief and want to stay on it. If you look at the median time of hot flashes, it's about seven years. So per patient, about seven year. There is, you now, quite a long tail on that. So there's, you know, maybe 10, even 20% of patients that have hot flashes that persist out past 10 years. So that's, uh, you Know, that's a particularly interesting population because, uh. Even those patients that take hormone therapy, there still is guidance about how long you should take hormone therapy. And so having an option that persists even longer, we think is an important, uh unmet need to be looked at. Okay. I know you talked about, um, having interest in oncology markets. I think those are proof of concept studies that start this year or next year. Next year. Yes. Next year on. And then you also rolled out kind of a next gen half life extended analog. Yes. Six, three, five, which I know in the world that we live in now. Right. It's you develop something interesting on the antibody side. And there's a company that has come right behind you that has a half life expanded. So is that you're now the company coming right behind us? Is that primarily a defense mechanism or do you see an opportunity to maybe differentiate these two products on kind of like an indication basis? Well, I think it's, you know, it is certainly defensive or I'd call it offensive. So we've got a breakthrough result. We want to make sure that we make the most of that result. We do believe that based on 635, we can make a product that's as efficacious and even more convenient. And importantly, you know, we don't know exactly what the dosing interval would be, but let's say that it's three months instead of a month, right? Then you've reduced your cost of goods by a factor of three, and you've increased your supply by a vector of three as well. So in an indication like this where there are millions of women in the U.S., in Europe, and other places that are potential customers and where you might want to reach them, having that lower cost of goods and also having that greater supply I think could be a big commercial advantage. I'll just add before I finish there that, and I said it on the earnings call recently, that bringing the next-gen version in should not in any way be interpreted as backing away from 635. We're all in on that product. We think it's going to be a dynamite product. But it's making sure that we also press that advantage. And then exactly how we position those two products is an interesting commercial discussion. And that could be by indication. It could be bi-geography. There could be different pricing. So it's something we haven't fully thought about, but we see the optionality is very positive. Okay. Maybe just last question. And with respect to the earlier stage pipeline, I know you have a couple of candidates that move into the clinic next year. You just announced a couple D.C.s in the pipeline that you're going to be putting into I&D enabling studies. Just what are your thoughts kind of around how you expect the pipeline to evolve here over the course of the next, you know, 12, 24 months? Sure. So we've got thanks for asking. And, you Know, all the attention always goes on 635. But it's my job to always tell people, wait a second. You know, we're not a one-trick pony. There's a platform here that's going to continue to deliver innovation. So we have two other programs, 688 and 386, that are currently in ID-enabling studies. And, you know, if all goes well, those will be in the clinic next year. Behind that, we have just recently announced two more, well, three more. We mentioned 992. ABCL-992 is a half-life extended 635. We have 385, which is an undisclosed program in oncology. And we have another program, ABCL-646, which is an undisclosed, first-in-class, highly potent antagonist antibody against an ion channel target. As mentioned on the call, we're not going to be releasing a lot of information on those. But you're going to see, obviously, new programs coming to the clinic next year. And our strategy is to keep that up over time and maybe bring one or two additional development candidates forward on a yearly basis. And so 635 is the tip of the iceberg, and we're hoping to build that as we go forward. All right. Carl, thank you very much. Appreciate it. Always a pleasure, Steve. Thanks, everyone.