Conference Transcript - ABCL 2026-11-11

Stephen Willey, Analyst — Stiefel

All right. Good morning, everyone. I'm Stephen Willey, one of the senior biotech analysts here at Stiefel. I'm glad to have with us to kick off day two, the CEO of Upsellera, 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.

Carl Hansen, CEO

Thanks for having me, Steve. Yeah, maybe just really quickly, for those that don't know, Epsolar 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, you know, the first evidence of that.

Stephen Willey, Analyst — Stiefel

You're going to spend a lot of time on 635, if that's okay with you. All right. So you top line the data. This is the phase two data back in August. 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, you know, how those efficacy and safety metrics compare to the standard of care or small molecules that are on the market.

Carl Hansen, CEO

Sure. So ABCIL 635 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 menopause-like state that comes from hormone deprivation associated with cancer therapy. It is following a couple of small molecules, which you alluded to, Fezlinatant and Elenzenatant, both of which are approved, one by Astellis and the other by Bayer. And we developed an antibody with the hypothesis that an antibody would allow us to dose higher and have better target engagement, and that 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.

Stephen Willey, Analyst — Stiefel

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 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, you know, PK, PD receptor occupancy phenomenon?

Carl Hansen, CEO

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 a surprise versus some of the recent data on the small molecules, if you look back at some of the early clinical development of Fezlinatant, 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. You know, the results, you know, even exceeded what our upside scenario was. So we're very pleased with that.

Stephen Willey, Analyst — Stiefel

Yeah. Because I think in that Fezlinitin dose optimization data that maybe you're referencing, the phase 2A, I mean, they push dose, what, three times higher, four times higher than the current labeled dose. There was a little bit of a reduction, but it certainly wasn't the magnitude of reduction that you

Carl Hansen, CEO

guys were able to achieve in the phase two. I'm tempted to say antibodies are better than small molecules.

Stephen Willey, Analyst — Stiefel

You can go ahead and say it. You're an antibody guy.

Carl Hansen, CEO

I'm an antibody guy.

Stephen Willey, Analyst — Stiefel

I thought the responder analyses were also pretty compelling. You're seeing a greater than 90% reduction in frequency and severity, and I think like 60% and 30% of patients respectively. 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 four 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?

Carl Hansen, CEO

Yeah, so two points to make there. So thanks for bringing that up. So one of the things that we saw, which was, you know, really compelling is that after a single dose, it was a single 600 milligram dose, and the efficacy readout is after four weeks, which is one of the efficacy readouts that would support a registrational trial. And there we saw that there was 37% of participants that had complete resolution. So, you know, I don't know if you're allowed to use the word cure, but, you know, on a four-week basis, completely relieved 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 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're going to get a bit more information on that as part of the OLE, perhaps. And certainly as we go into phase three.

Stephen Willey, Analyst — Stiefel

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 OLE program?

Carl Hansen, CEO

Yeah, so for the OLE, so we, it's a, 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. And of course, that would set up a dosing regimen in the future that could include a loading dose at the beginning. Then we measure at four weeks. That's the only efficacy readout. And then after the four weeks, we are watching the drug washout. 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 3. After the 12-week period, both the placebo arm and the active arm have the opportunity to have another single dose, so another single dose 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.

Stephen Willey, Analyst — Stiefel

Have you said what percentage of patients have chosen to enroll into the open label extension portion?

Carl Hansen, CEO

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.

Stephen Willey, Analyst — Stiefel

Okay. Maybe you can speak a little bit to what do you think is in... Prove or 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're getting on frequency severity and that magnitude of benefit is just translating to better sleep in these patients?

Carl Hansen, CEO

I mean, that is basically what we think. So, you know, as background, you know, 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 LinQuit product has better performance on sleep, and that has been attributed to the NK1R activity, and perhaps that also has led to some risks or warnings associated with somulence for NK1R. 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 NK1R. And our, my interpretation of that would be that You know, the sleep benefit from LinQuit 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 sawmulins.

Stephen Willey, Analyst — Stiefel

What does your KOL feedback suggest about the sleep improvement that LinQuit provides? And how that's translated into share gains here in the commercial setting.

Carl Hansen, CEO

Yeah, I'm not sure we've got that. That direct feedback, you know, if you look at Scripps, Linquit definitely is growing the market, and it's growing faster than Vioza, but that has to be interpreted also in the backdrop that Vioza, post-launch, got a boxed warning for liver injury, and so there's perhaps a greater liver toxicity signal on Vioza versus Linquit. So the combination of those two things seems to be driving Lindquit 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 things apart just yet.

Stephen Willey, Analyst — Stiefel

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?

Carl Hansen, CEO

Sure, yeah. So we... We're finishing up the phase two. And so, as I mentioned, you know, 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 sort of post-phase meetings with the FDA and other regulatory bodies. Uh, to engage in discussions, get alignment on what the phase three will be. Uh, those meetings, you know, 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 CMC and the devices all lined up to start the phase three. 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.

Stephen Willey, Analyst — Stiefel

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 MIG followed by the 300 MIG 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.

Carl Hansen, CEO

So, you know, 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 know, the efficacy that we've seen says you don't need to go higher, and that does fit into a 2 mil auto injector. So, you know, in terms of a commercial product and convenience, that's great. We haven't, we haven't decided on any final doses. You know, if it were to change, it would be a lower dose or less frequent. And the efficacy data that we showed. You know, 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 asked 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.

Stephen Willey, Analyst — Stiefel

So it's safe to assume that patients in the phase two are maintaining these diaries. Beyond week four, so you're going to get placebo-adjusted reads? Yes, that's right.

Carl Hansen, CEO

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.

Stephen Willey, Analyst — Stiefel

Okay. So you talked about the inclusion into FDA's modeled and formed 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?

Carl Hansen, CEO

Yeah, so I don't want to, you know, preempt what the alignment or the conversation with the regulators will be, but one of the, you know, 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, you know, 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 efficacy. 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, this phase 2. To go directly into phase 3, 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 very large efficacy that we've seen, powering the study is not a problem. So we could, 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.

Stephen Willey, Analyst — Stiefel

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.

Carl Hansen, CEO

Yeah, so that's a good question. You know, the typical guidance is a safety database that would include about 1,500 patients. So that's, you know, plus or minus, that's about right. And that's in line with what was done with Linquid 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, you know, in the U.S., in Canada, maybe Australia, maybe Europe. So it's going to be 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.

Stephen Willey, Analyst — Stiefel

Okay. I know the screen failure rates in these trials have historically been pretty high. Is that just a function of… Um, uh, patients failing or screen failing on the basis of that moderate to severe score that's required.

Carl Hansen, CEO

Yeah, the there's a couple, uh. A couple of criteria, I think, that drive the screening failure. 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 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, you know, 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, you know, in clinical trials, that's paramount.

Stephen Willey, Analyst — Stiefel

Maybe you can speak a little bit to, you know, how these data may or may not have changed your perception of the addressable market opportunity for menopausal BMS. You know, I'm guessing there's probably a pricing premium that you can capture relative to the small molecules, but do you? 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?

Carl Hansen, CEO

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 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 5000 per year. If you've got a product with better efficacy and safety and convenience, 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 commercial question of where do you price, where are the indications, how do you balance up access for patients in the U.S. versus ex-U.S. and other markets. So on all those dimensions, we think ABCL 635 now looks 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's multiples of that.

Stephen Willey, Analyst — Stiefel

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 a 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.

Carl Hansen, CEO

It's a great, I think there's a, there's a, it's, 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 the box warning, many, many more women are having that conversation and looking for treatment. So that is why you're seeing, you know, hormone products in short supply right now. And yeah, and Sorry. I don't think they're coming for me. That's okay. We've got the cops coming in the background here. In terms of prescribers, you know, one of the things that I think also is shifting is in 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, you know, 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, you know, starting to go through, you know, online menopause clinics and virtual prescription. And we see that sort of direct to consumer. Uh, model as being something that's really going to take off in the menopause side. Um, so if you're asking, like, how, if you ask the question, where, where do you engage on the commercial front? Um, 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.

Stephen Willey, Analyst — Stiefel

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 towards a direct consumer model.

Carl Hansen, CEO

Yeah, we're having a very in-depth look at that. It's still early, so we're not committing, but these new avenues of commercializing products like this, particularly a product like this where... You can self-diagnose very well. So you know basically what's happening. It's very straightforward 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 ones 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, either in partner with a large company or perhaps even independently. So let's say 10 years ago, if you're going to launch this, you're thinking, I need 1,500 sales reps across the U.S. 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. You know, 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.

Stephen Willey, Analyst — Stiefel

Okay. And then any thoughts around what duration of therapy could possibly look like here?

Carl Hansen, CEO

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 years. And there is, you know, 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, you know, that's a particularly interesting population, because 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 unmet need to be looked at.

Stephen Willey, Analyst — Stiefel

Okay. I know you talked about having interest in oncology markets. I think those are proof of concept studies that start. This year? Probably next year, sorry. Next year, yes. Next year. And then you also rolled out kind of a next-gen Half-Life extended analog of 635, 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 a half-life extended. So is that 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?

Carl Hansen, CEO

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 factor 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 I said it on the earnings call recently that, you know, 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 by 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.

Stephen Willey, Analyst — Stiefel

Maybe just last question. 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 of DCs in the pipeline that you're going to be putting into IED 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?

Carl Hansen, CEO

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, or 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, you know, keep that up over time and maybe bring, you know, 1 or 2 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.

Stephen Willey, Analyst — Stiefel

Carl. Thank you very much. Appreciate it. Always a pleasure, Steve. Thanks, everyone.