IDEAYA Biosciences, Inc. (IDYA) Earnings Call Transcript

Good morning, everyone. Welcome to the first day of our Cantor Healthcare Conference. My name is Li Watsek, a biotech analyst here at Cantor. And today, I'm very pleased to have the IDEAYA team with us today, Yujiro and Josh, and thank you very much for being here. And by the way, congratulations on the severe deal yesterday, a very exciting time. And I would say IDEAYA is probably shaping out to be one of the highest conviction names for us internally. I understand you guys have a lot of exciting updates coming up over the next 6 months, including a pivotal top line that's for daro. So I think today will be a great opportunity for you guys to maybe set the stage for investors and right before your R&D Day, your 10th anniversary. So that's very exciting. So maybe I'll just maybe hand it over to you guys to give some quick intro remarks.

For sure. So first, thank you so much, Li, for the kind of introduction, and thank you to Cantor for the opportunity to participate this year. Li, as you said, we're thrilled to be here this time this year, marks a very important milestone for the company. It's our 10-year anniversary. As you know, on Monday, September 8, we're going to be holding our 10-year anniversary R&D Day. We have 3 clinical data updates that we're guiding for that event. So we hope for all those people that can either dial in virtually or be there in person, we'll make sure it's definitely worth people's time. I would say big picture here, Li, as you know, we have 7 programs that are either in the clinic or at IND stage. We announced our new asset in the clinic today in the PRMT5 space. and we are planning to have 9 programs in the clinic by the end of the year. I would say within that, I would focus on 3 core areas for us at least for this conversation. First is what we're doing with darovasertib, obviously, an agent that we have a lot of confidence in that we believe has the opportunity to be the standard of care across the uveal melanoma patient journey. As you just mentioned, and I'm sure we'll talk about it here in a bit, we announced what we think is a terrific partnership with Servier. We think they're going to be really fantastic partners for us to ensure we're able to get this therapy to patients worldwide. Beyond darovasertib, the next 2 key focus areas for us will be in DLL3. We saw your terrific note. You're just poking your colleague here a moment ago. And we concur with a lot of the thesis of that note, which is our view that DLL3, we think, can be the next big antigen in the ADC arena. So as you know, we'll have over 70 patients of data. We'll be presenting here in the next couple of days. Finally, third is an MTAP deletion. Our perspective is that IDEAYA is the industry leader in the area of MTAP. We have multiple assets here, 2 that are either now in the clinic or IND stage. And as you know, we have a third program we're targeting for the clinic next year. So with that, maybe we'll open it up. And I think maybe just on the last part with the IND engine. One of the key themes you will hear on Monday, September 8 is really our continued investment an advancement of our capabilities in artificial intelligence drug discovery. I think what makes us unique is our ability to integrate novel cancer biology with this capability in AI drug discovery. So our Chief Scientific Officer, Michael White, will be spending a bit of time on that. And hopefully, that will also generate a lot of enthusiasm.

Okay. Great. So clearly, a lot on your plate this year. Maybe start with the Servier deal that you guys did yesterday. I thought that was a pretty interesting one that's for ex U.S. rights for daro. Talk to us about the thought process behind that? And why is it a good deal for you guys long term?

Yes. I'll let Josh take that, and I think have him just cover kind of what our thinking here was both commercially as well as sort of broader P&L impact of the company. Josh?

Yes. So we're thrilled to have announced the Servier deal. Obviously we have a lot of respect for what they are as an organization and think they bring a lot to the table as we think about broadly commercializing darovasertib. We view the opportunity with Servier really from a couple of different lenses. One was just obviously the capital and the deal terms that it afforded us here in the near term. We have a lot in the pipeline, as we have alluded to. We think this capital gives us a lot of flexibility to really focus in on those key areas that Yujiro alluded to and drive development there. Two, it's really focused in the U.S. We're obviously an emerging biotech company. Having a strong partner ex U.S. gives us the ability to really focus in on sticking the launch here in the U.S. And so some of the timing aspects around that relate to some of the pre-commercial work we have to do today. And then third, ungating the adjuvant study, which we talked about in our release, being able to start that with Servier sharing some of those costs is huge for us. And so I think the ability to engage some of those studies in the adjuvant space as well as the capital infusion that it gives us and the ability to focus on our core areas of focus that you alluded to are some of the reasons we thought this would be a good time to do it and the partner that we chose is an established well-known name ex U.S. So we're thrilled to have been able to get that done.

All right. That makes a lot of sense. I guess we want to maybe move into the DLL3 ADC. Obviously, the data is coming up this weekend at World Lung Conference. That's very exciting, over 70 patients of data. So that could be very substantial. And I think in my view, I mean, you guys got this asset last year from Hungry. And to me, that's probably one of the more underappreciated assets for you guys. And as you mentioned, we did a deep dive into the DLL3 space, and we think there is a lot of -- a ton of opportunity here for you guys to untap. So maybe for our audience, set the expectations for what we're going to see this weekend? And then what would be the bar for success?

Yes, sure. So in terms of what you'll see, so Li, as you mentioned, there will be over 70 patients worth of data. It will include both dose escalation as well as 3 expansion cohorts. And in those expansion cohorts, there will be roughly 20-some-odd patients per expansion cohort. So in summary, it's going to be a sizable data set from that perspective. Here, what people should expect is an AE table, patient baseline characteristics. Here, what I can tell you is the patient baseline characteristic, just bigger picture, and we publicly noted this in the past, which is roughly half of the patients are second line and the remainder are third, fourth plus line patients. Here, in addition, on the efficacy side, what you should expect to see is a waterfall plot, obviously, response rate type information. We will show a swimlane plot as well as some preliminary median progression-free survival data. The second-line data is not sufficiently mature. But again, I think we'll be able to provide a lot of information. In terms of what success looks like, I would say, across all lines of treatment, and this would be targeting a confirmed response rate. So we may not have a fully confirmed response rate, likely about 1/4 or so patients are still too early. But here, ideally, if you can have a confirmed response rate in the 60s across all lines and then in the second-line setting, can you have in the mid-60s and above confirmed response rate. So we think that would be a win. On the PFS side, Li, as you know, in this indication, for example, IMDELLTRA got approval, accelerated approval and extension stage of small cell, and they showed a PFS of 4-some-odd months. So what would get people excited? I would hope something in the 6 months plus would be clearly, at least we think clear value from a durability perspective.

Okay. So it sounds like response rate, you think the bar is probably in the 60-something percent range across all lines and PFS, 6-month plus is probably a good outcome. But for this data update, we probably wouldn't have PFS data, right? So -- but we'll have the swimmer lanes. So we will have some sense of durability.

Yes. So no, we will have -- we will show a PFS Kaplan-Meier curve. The all lines, PFS will have preliminary data. The data is not very mature yet. For the second line, it's just too early. And my comment around the sort of what would success look like, that would be not for second line, but across all lines.

Okay. Got it. And then in terms of differentiation, obviously, IMDELLTRA, which is T cell engager is approved here. And then you also got another DL3DC, Zai Lab that showed pretty strong data in the 60%, 70% response rate. So when you think about how you can position yourself and differentiate from these 2 assets, any points that you want to highlight in terms of maybe safety or efficacy side?

Yes. Look, I think, Li, here, as you know, the data is still relatively early, including from one of the peer companies that you mentioned. I would also emphasize that some of the response rate numbers that have been put out there are not confirmed response rates. And as you know, from a regulatory perspective, that's frankly all that really matters. And in particular, in an indication like small cell lung cancer, where you know, progression can be very quick. I think one just has to, at least I think, focus on the confirmed response rate numbers is the one that's going to matter. As it relates to IMDELLTRA, I think there -- I think, Li, what you're highlighting is there is another category of assets in DLL3, specifically around the T cell engagers. And I think there, what we can say is that the data has been promising. As you know, IMDELLTRA in their approval study showed a response rate in the 40s. We talked about the PFS and roughly 4-some-odd months. Median duration response, I believe, was in that 9- to 10-month range. They did see high -- fairly high AEs were roughly 60% SAEs, about half of patients that had cytokine release syndrome as well as a neurological tox called ICANS, which they had black box warnings for both. You do have to be under initial hospital monitoring to get that agent. And we do know if any indication is a community cancer, it's small cell lung cancer. So we think if you can deliver greater efficacy in the form of response rate, greater PFS and a greater safety profile, we have a clear opportunity, at least we believe, to really be the agent or the class of agents that could really be the backbone in small cell now that it will be about who has the best-in-class agent. Let's have this conversation in a few days and with actual real data that's out there. But we feel good about this update. And I think there will be a lot of eyes on this presentation when we present it in Barcelona here in the next couple of days.

Okay. So I think one sort of safety event that many investors are very focused on, especially associated with topo-I-payload is ILD risk, and we've seen that maybe with some of your competitor molecules. So how are you thinking about this risk associated with your molecule? I understand you talked about the linker system might be more stable and you have some clinical evidence to support that. Maybe walk us through that.

Yes. So that's correct. And the ADC area, specifically topo ADCs and also in lung cancer, interstitial lung disease or also known as ILD is definitely one of the AEs that you have to watch for. When you look at large meta-analysis that have been done in the ADC arena, you'll find that the typical AE rate for ILD in lung cancer studies with typical ADCs is roughly about 10%. So the highest indication where you see ILD is actually colorectal cancer, about roughly 15% as we all know, in HER2 has about a 12% ILD rate, obviously, a different indication. But their grade 5 ILD, I believe, is 0.9% from their approval study. So I think where you got to really focus on is that grade 3 and higher ILD rate. I think in lung cancer in general, so for example, even KEYTRUDA, you do see roughly a mid-single-digit ILD rate in lung cancer as a PD-1 antibody. So it is something that you're going to see. I think where we're going to be focused as part of this update is what is the ILD rate we see, in particular, what's the grade 3 and higher ILD rate we see? And do we see any grade 5, obviously, is going to be -- is another one I think people will be focused on. I'll be brief, more brief on this. What are the parameters that typically drive ILD rates for ADCs? And this is based on historical published data that's out there. We talked about the indication as being a parameter. Second is DAR levels. So DAR 8, not surprisingly, typically has more ILD than DAR 4, the payload. But importantly, another parameter that has been associated with higher ILD rates is how cleavable that linker is. And that's where we do think we may have a differentiation opportunity from Zai. As you know, our linker system is different. Ours is a tetrapeptide linker, which cleaves once internalized through lysosomal degradation by enzymes such as cathepsins. Zai is specifically engineered to be a tumor microenvironment linker, which is specifically designed not only to cleave once it's intracellularly but extracellularly as well. So as you know, they've already noted what doses they're pursuing. And what we have publicly said is all of the expansion dose we're evaluating are at higher doses beyond what Zai explored from at least their public communications that we understood, which I believe is 1.6. Which is okay.

Okay. Great. So I guess we're going to see the data this weekend. And then in terms of the development time line, I think one thing is interesting, if we look at Zai, they're moving to Phase II/III later this year. And you guys just started the trial in the U.S. just recently, but you seem very confident that you're actually not really lagging behind. So tell us why you are so confident and how much data from China you guys can leverage?

Look, fairly recently, we saw recent data. It was over 70-plus patients, as you mentioned, from the peer company. That's exactly what we're going to be sharing in our update, right, here in a couple of days. We've -- patient exposure has been or experienced over 100 patients at this point. As you noted, we got IND clearance in the U.S. several months ago. Our perspective is that this is not going to be one based on a few months. It's going to be one based on who has the right clinical development strategy and obviously, who has the best-in-class profile. So we're very focused right now on what that clinical development plan is. And so Li, I won't be able to give you all of the specifics because I'd have a very upset Chief Medical Officer. But all we can say is we're thinking through this very, very thoroughly. But clearly, an opportunity in small cell, we believe clearly an opportunity for some type of monotherapy accelerated approval path. You'll hear more about how we're thinking about clinical combination strategies, including with immunotherapies as well as with a key proprietary asset we have in the DNA damage repair arena called PARG/IDE161, which, as you know, we think has the ability to enhance the durability of this class of agents around to ADCs. So I know I threw quite a lot at you there, but hopefully, several things to think about.

And I guess for small cell lung, obviously, DLL3 is a very interesting antigen. It's validated, but we've been getting questions from investors. There are other antigens out there, B7H3 they just got breakthrough designation. So that's clearly moving forward. And you see some other antigen like SEZ6 that could be very specific to small cell lung as well. So how are you guys thinking about DLL3 versus some of the other antigens?

Yes. Look, our perspective on this is that our view is DLL3 is the key antigen or at least we think the most exciting antigen for small cell lung cancer. And there's a couple of reasons for that. One is the level of upregulation of DLL3 versus some of these other antigens, specifically in small cell lung cancer. Perhaps the most important is really around what drives resistance to ADCs, right? And as you know, there's really 2 areas of focus there. One is resistance around the payload mechanism. And second is around up or down regulation specifically of that antigen that's related to that ADC. The reason why DLL3, I would say, historically has been such a big focus for pharma in small cell is because DLL3 is directly connected to a key transcription factor called ASCL 1 was directly involved in the survival in small cell lung cancer. So it's directly tied to this key survival oncogene, which DL3 is directly connected with. So the small cell lung cancer cell should not be downregulating that antigen, right? So the bet we're making, which is why we actually -- we at risk went to in-license this from Hungry. And just so we were very, very well down the line before the first data came out from Zai. And so hopefully, people appreciate we went in there, did our work. So we think that should play out and where that should play out versus these other antigens like B7H3 is ultimately response rate and, of course, durability. SEZ6, we saw the recent abstract published at World Cancer Lung Conference, all say is ours is embargo, theirs was not. So people can make that judgment of which data they're more excited about.

That's a good point. So I do want to move on to daro. So clearly, it's going to be a big year for this asset. And then maybe start with the neoadjuvant setting. And I think next Monday, you're going to share some vision loss data. I do think investors may struggle a little bit sort of how to put that into the right context. What can you say to sort of guide investors towards what types of vision loss data that we're going to see and how to sort of interpret that data?

Yes. So here also, I think when we talked about the Servier partnership, I would also note that as part of their diligence, they did review the data that's going to get presented here at R&D Day as well as the ESMO oral presentation as well as the OS data that's going to be shared at SMR, here fairly soon. As it relates to the R&D Day presentation, so here, what people should expect is 20 to 30 patients in the plaque brachytherapy cohort with a specific focus on the visual outcomes data. And so here, Li, there will be more data than what people have seen in the past. That's really the bottom line. And here, people will see a waterfall of ocular tumor shrinkage. And I think here, the question should be how deep are those responses, how consistent are those tumor reductions and a larger denominator. And obviously, that's going to be very important. Next is what are we seeing as it relates to these visual prediction tools, whether that's the amount of radiation exposure. And here, the connection is quite simple. More radiation means more vision loss. Second is what do we see as it relates to visual prediction data, and that's where we're going to have Dr. Singh present from the Cleveland Clinic as I'm sure you know, it's actually his software that was developed by the Cleveland Clinic specifically. So he'll kind of walk through what that whole setup is. And then lastly is data we have not shown before, which is what is the actual impact we see to vision during neoadjuvant treatment. As you know, Li, a lot of the focus has been what is the impact of vision post plaque therapy, but we have not actually talked about do we actually see improvement in vision during the neoadjuvant therapy. So we think it will be informative and hopefully, we'll give people more comfort about that specific cohort and those endpoints. And our CMO, Dr. Singh will give their perspective, and we're also happy to facilitate that analyst Q&A as well.

That's very exciting if you can show vision improvement. And I know you guys are also going to present at ESMO as well, perhaps in more patients. Is there any sort of new information that we should expect from that update relative to the R&D Day?