Annual General Meeting Transcript - ANAB 2025-09-29

Operator

Good day. Thank you for standing by. Welcome to the NAPTIS conference call. At this time, all participants 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 11 on your telephone. You will then hear an automated message advice when your hand is raised. Please note that today's conference may be recorded. I will now hand the conference over to your speaker host, Dan Vega, president and CEO of NAPTIS.

Speaker 5

please go ahead sir good afternoon and thank you for joining us today we are excited to discuss today the further evolution of anaptis with our intention to separate our biopharma operations from our substantial royalty assets this separation is designed to maximize value by creating two companies each with different business objectives and opportunities after my prepared remarks our CFO, Dennis Mulroy, and I will be available to take your questions. This presentation contains forward-looking statements. Please refer to our SEC filings for further details. For the past 20 years, Anaptis has been known for generating best-in-class antibodies. Gemperly and Imcidolumab are two previous successes discovered by Anaptis. Both are realizing value through our financial collaborations, as well as have positively impacted patient lives. Geprely's commercial uptake over the last 12 months, combined with its anticipated future growth, is nothing but impressive. This results in an outsized, tiered royalty stack, payable from GSK, that flows through to Anaptis. We are equally excited about Anaptis' proprietary development stage portfolio of immune cell modulating antibodies, including rosnilumab, AMB033, and AMB101. Enaptis is also well capitalized today, with approximately $300 million in cash as of the end of Q2 2025 and cash runway through year-end 2027. Our intention is to separate Enaptis into two independent, publicly traded companies. For simplicity, we are referencing generic names for these two companies, Royalty Management Co. and Biopharma Co. Royalty Management Co., upon completion of the separation, will manage the future royalties and milestones from assets tied to our financial collaborations with GSK and Vanda. This company's focus will be to protect and return the value generated by these assets back to its shareholders. It is expected that minimal infrastructure and staff will be required to manage this company. We also anticipate NAPSIS's NOL carry-forwards and tax credits will remain tied to this business. Much like Enaptis does today, Biopharmaco will continue to develop and potentially commercialize its high-potential programs focused on autoimmune and inflammatory diseases. We plan to launch Biopharmaco with a new name and with adequate capital to fund operations for at least two years through significant value-driving events. Stepping back since March, we have repurchased approximately 10% of outstanding shares in Enaptis. This reflects our conviction that at current trading levels, Anastas' stock is significantly undervalued relative to our royalty assets alone, to say nothing of the value of our biopharma portfolio in cash. As we approach the point at which additional investment may be needed to advance Rosnilamab into pivotal studies, we believe a number of alternatives to further finance our development stage portfolio exist both prior to and after the separation into two companies. That said, we feel it is important to provide clarity now regarding our future intentions for the royalties. I want to repeat that we are committed to protecting and returning the value of the Jeopardy royalties to our shareholders, regardless of any potential capital needed in the future to advance the development of Rosnoamab, AMB033, or AMB101. Overall, we believe each of the two companies' different business models will enable investors to align their investment philosophies and portfolio allocation with the strategic opportunities and financial objectives of each company. Gemperly has emerged as a blockbuster drug with the potential to impact hundreds of thousands of patients by treating multiple types of solid tumors, including women's cancers. Data suggests Gemperly is best in class when compared head-to-head versus Keytruda, as evidenced by its meaningfully greater response rates and overall survival data in a Phase II parallel study in frontline non-small cell lung cancer. Gemperly plus chemo is also the only immuno-oncology regimen to show statistically significant and clinically meaningful overall survival data in all comers with first-line endometrial cancer. Gemperly was approved in this indication last summer in the U.S. and in January of this year in Europe. As a result, over the past year, total revenues have inflected. Gemperly sold $262 million in Q2 2025 alone, nearly doubling from the prior year Q2 2024. Jeopardy remains on the steep part of its growth trajectory. For the past two years and as recently as two weeks ago, GSK has reiterated the guidance of peak Jeopardy sales for monotherapy indications alone of more than 2 billion pounds. This implies greater than $2.7 billion. And GSK's Wall Street analysts are playing catch-up. A year ago, Wall Street consensus peak sales were only $1.3 billion. Consensus now stands at $1.9 billion, which is still 30% below GSK's guidance. We anticipate consensus will continue to track upwards as GSK reports future growth from further market penetration in endometrial cancer, as well as potential indication expansion. For an example of indication expansion opportunities, GEMPERLE demonstrated impressive data in the intent-to-cure setting in a proof-of-concept study showing 100% complete response in DMMR rectal cancer. GSK's pivotal trials in this indication is fully enrolled with top-line data expected in the second half of 2026. Overall, GEMPERLE development is ongoing in three monotherapy registrational studies, as well as in selected Phase II studies across different additional indications. GSK is also in or planning Phase 1-2 trials of Gemberley in combinations, including with EDCs from within their portfolio. So now let's transition to how this impacts Enaptis and Royalty Management Co. Our royalty tiers from GSK begin at 8% for the first $1 billion of Gemberley revenues. These quickly ramp to a peak of 25% on all Gemberley revenues over $2.5 billion in a calendar year. To provide an example of the magnitude of these potential royalties to Enaptis, in a year that GSK sells $2.7 billion of Jemperly, which is GSK's guidance for monotherapy indications, the royalties payable for that year would be $390 million to Anaptis. Currently, Anaptis' receivables from Jemperly are payable to a group called Sagard as a result of prior capped royalty deals. This obligation will terminate once Sagard has received an aggregate payback of $600 million. Enaptis is estimating that SagerD will have accrued approximately $250 million in royalties and milestones through the end of this year, 2025. The current and conservative Wall Street analyst consensus implies SagerD will be paid down by Q2 of 2028. Alternatively, assuming Gemperly only achieves 10% quarter-over-quarter growth moving forward, the SagerD paydown will be accelerated to be as soon as mid-2027. This is realistic, given Gemperly's current revenue growth last quarter was a strong 19%, and the quarter prior was 16%. With composition of MATTER IP up through 2036, there is tremendous residual value, post-sagre paydown, of the Gemperly Royalties to Enaptis. Additionally, under our financial collaboration on IMSIDOL and ABLA-VANDA, we are eligible to receive up to $35 million for future regulatory and sales milestones in addition to a flat 10% royalty on global net sales. VANDA has guided to a BLA submission for the treatment of GPP later this calendar year. Now, we'll move on to Biopharmaco. Operationally, this will look similar to Enaptis today. Our programs all target pathogenic cells that are significantly elevated in autoimmune diseases, but are only present in lower trace amounts in healthy tissue. Each of our programs is designed to potently eliminate or modulate these specific disease-driving cells. I'll first highlight our Phase I development stage pipeline. AMB033 is a potentially best-in-class CD122 antagonist with optimized dual IL-15 and IL-2 signaling inhibition. We have initiated a Phase 1b trial for AMB033 in celiac disease, and we anticipate initiating a trial in a second indication in 2026. We are hosting an investor event focused on this specific program on Tuesday, October 14th. We are also developing AMB101, a potentially best-in-class BDCA2 modulator that targets plasma cytoid dendritic cells. Since earlier this year, we are moving through a SAD-MAD dose escalation Phase 1a study in healthy volunteers. Combined with rosnilumab, we have several significant upcoming catalysts and believe our robust pipeline and antibody R&D capabilities will position BiopharmaCo for long-term success. Wearing rosnilumab is a selective and potent depleter of pathogenic T cells. This year, we reported positive Phase 2b data in rheumatoid arthritis. Importantly, there is a favorable safety and tolerability profile with no treatment-related SAEs and no malignancies reported in the 318 rosneumab-treated patients. Additionally, we observed JAK-like efficacy over six months and durable responses that last at least 12 to 14 weeks off drug through this nine-month study. In addition, we have fully enrolled a Phase II trial on ulcerative colitis. We are focused on developing a differentiated therapeutic for this disease that is tolerable and drives deep and stable remissions over the one-year treatment period in the study. Initial data through the first 12 weeks is upcoming this November or December. We plan to follow up in 2026 with longer-term data, initially with at least all patients through six months of treatment. As the initially enrolled patients in the UC trial have just begun to reach the one-year mark, I want to emphasize our blinded surveillance continues to suggest a favorable safety and tolerability profile that is consistent with prior Rosnoamab trials. As we've previously disclosed, we are assessing multiple strategic paths forward for Rosnoamab. One, we could execute a potential global partnership to help advance development in all indications, including RANUC. Or two, we could independently advance in one Phase III indication. We've stated for a long time that we prioritize advancing ulcerative colitis, assuming we achieve our six-month TPP. options also exist to advance an RA independently however before we progress along that path we are prudently awaiting to read out these phase two results on ulcerative colitis importantly the outcome and timing of the strategic assessment for us no map could impact how the economic value is allocated between royalty management co and biopharma co here are a final few points before we go into Q&A we anticipate completing the separation by year-end 2026 well maybe as early as the first half of 26. We are allowing flexibility, for example, to assess and make an optimal strategic decision on the task board for OSNOMAP. Additionally, while the separation is anticipated to be a taxable event, we are very focused on minimizing the overall taxes for this transaction. Specific details and decisions regarding tax structure, as well as the board composition, leadership, and financial operations of both companies will be disclosed at a later time in 2026. In conclusion, I want to emphasize the potential transformative nature of the journey we are embarking on. The separation of Enaptis into two independent entities is a bold step forward toward unlocking strong, sustainable growth and maximizing the value recognized across the two sets of assets, the royalties and the biopharma development portfolio. We are confident this will create significant value for our shareholders while continuing our long history of innovation. Now, I'll hand it over to the operator for Dennis and I to take

Operator

a few questions. Thank you. Thank you. Ladies and gentlemen, to ask a question at this time, you will need to press star 1-1 on your telephone and wait for your name to be announced. In order to accommodate all participants in the queue, please limit yourself to one question per person. Please stand by while we compile the CanAir roster. Now, first question coming from the line Anupam Rama with J.P. Morgan. Yolan is now open. Hey, guys. Thanks so much for taking the question

Anupam Rama, Analyst — J.P. Morgan

and thanks for the slides. Just wondering if you could provide a little more color on why this is the right time to announce this strategy, given you'll have the three-month UC data here in the next several weeks. And by the time you get to the separation in 2026, you'll have a much better understanding of the totality of the TTP for Rosalindamab and UC. I think you made a comment that some of the UC data could impact how the funds flow between RoyaltyCo and BiopharmaCo.

Speaker 5

Thanks so much, guys. Thanks for the question, Anupam, and a really good one. We're always proactively and objectively assessing our strategic options in the business overall. And, you know, as I just walked through, it's been clear over the last year that the value of the royalties for Gempa Lee has substantially increased. And we've also put the second relationship in with Vanda. And these are very tangible assets today. They're commercial, near-commercial stage royalties. And, you know, at this point, I think it's clear we're also stating very directly that we intend to protect the value of these royalties and we're looking to maximize the value of all the two sets of assets. So once you've made this decision, there's no reason to delay announcing our intention. But to your question, this decision is independent of any clinical data moving forward. It's independent of development milestones or any advancement across the portfolio overall. So I think that's a key point here. No matter what happens with brosnowab and colitis moving forward, moving forward in RA, a partnership, the ROZNOMAB strategic outcomes are going to pass one way or another, but the value of the royalties and the value of the rest of the portfolio are specifically going to be different entities moving forward, and we think that's going to set both entities up for maximizing value overall. And as we play through ROZNOMAB, I think there will be a choice here on how to allocate the economic value one of the reasons we are announcing this will happen by year-end of 2026 is to allow us the time to work through how we're advancing Ross thank you our next question coming

Operator

from the lineup yet in snitch up with Guggenheim your line is now open hey

Yatin Suneja, Analyst — Guggenheim

Can you guys hear me? Yes. Hidan, thank you so much for the details. I appreciate that. And I actually like the split, as you know, from the analysis on the royalties. So it's pretty good. So two questions for me. One would be what would be the size of capital that would be required for this royalty co? And then, you know, the one question that we generally see when we did the analysis on the royalties cheese and then how the split would work. Is the impact of biosimilar on the PD one? I would love to hear from you how are you looking at that and how you're addressing those questions. Thank you.

Speaker 5

Sure. Thanks for the questions. So first you're asking about the capital required for the Royalty Management Co. It's too early to begin to get into specifics, but the overall needs of the royalty management co would be pretty minimal it doesn't require a huge team to run a public company and the idea here is it would be a slim profile it would be separated obviously from anaptis but also i think what's important is the cash that would ultimately come into royalty management co tangibly from gemperly is not far away either once you get out through some period of time in 2026, plus or minus within a year, even the company will be generating direct cash. So we think you need a very de minimis amount of capital to operationalize this business, particularly when you're just thinking about a timeframe that you need to cover between day one and the direct. You asked a second question around owners with, I think, Cotruda. I think overall, I don't want to speak for Merck. How they're thinking about Cotruda over time is pretty important in the business. They recently had an approval of a subcutaneous form of Cotruda where they've announced publicly that pricing will be at parity. I think that's a point. We're benefiting here that Gemperly is focused in areas where Catruda isn't or doesn't have the same quality of data. So endometrial cancer, GEMPOLI is the only drug that has overall survival in endometrial cancer, which is obviously one of the bigger value drivers moving forward. I think overall, when you look at the combination of the superiority of GEMPOLI as an asset and the continuity of the business overall over at Merck that we feel we're in a pretty good position here which are really moving forward through the life cycle of its IP. And then, you know, finally, we are in the early part of a sales curve that has a combination, as you know, between volume and price. And there's going to be a lot of volume growth here moving forward. Lastly, and this is even as recently as Keytruda Subcutaneous was approved a few weeks ago, So GSK is also out there very focused on talking about the ability to exceed their guidance of the 2.7 billion U.S. dollars at peak sales, knowing all this information overall. And we do have some confidence in how they're leading into that. So I think the totality here is we feel pretty good about the next 10 years of Jumper the

Operator

Our next question, coming from the line of Joseph Talmud, TD Cowan. Yelan is now open.

Joseph Talmud, Analyst — TD Cowen

Hi there. good evening um thank you for taking my questions um maybe the first one just a little bit of a clarification um because i know at the beginning of the call you indicated funding to year end 27 but that the biopharma company would have two years of uh runway kind of post the the spin there so are you anticipating any additional funds coming into the company or kind of how how do we reconcile um that and i guess uh does the risk does the spin kind of um obviously both both sides of the business, I think you would agree are undervalued, and that's why you're doing this. But I guess, does this action kind of reflect any recent change in the conviction of any of your specific biopharma programs in particular? Any comments on that would be

Speaker 5

helpful. Thanks. I'll just start with the last question. I want to completely take this off the table. This announcement has nothing to do with our confidence in the portfolio, out, nothing to do with likely success in the UC trial, but we're acknowledging that at some point in the future, particularly for rosnoamab, there will require additional investments to advance the program. There's many ways to think about how to capitalize that drug that are independent of this announcement or of a separation, but what we're very clearly stating is that we're protecting the value of the royalties from future deletion. And so I think that's an important point to emphasize. But how we move forward with Rosnilumab, we're going to have choice. And like we mentioned, if you partner a drug, it'll bring in capital. There's various ways to work with investors or other strategic parties or other types of alternative investors to further capitalize programs moving forward. and I actually think that this announcement, whether it's before or after a separation event, gives us more flexibility to capitalize rosnoamab. We've said for a long time the guidance through urine 2027 and cash does not include executing the phase three trials for rosnoamab. That still remains to be the point. We have plenty of capital to finish off the colitis trial to enable phase three development for Osnoa, as well as fully invest in TAMB033, the initial indication of celiac and potentially additional indications over time. So we feel like we're in a very good capital position out of the gate. We're committed to two years of capital for that business, and we have alternatives for OsnoaMab. Same we do today, but I just think this

Operator

actually gives us more flexibility, not less. Our next question coming from the lineup. Andy Chen with MOOC Research. Your own is now open.

Speaker 6

Hey, thank you. So I imagine if you're looking for a deal with another partner and that deal probably has to come to fruition before your intended separation and you have your intended separation by year end, 2026, does that mean you're confident that an attractive deal will be available by that time? and if you don't have a deal by then and then you separate, how would that affect the negotiation leverage for Biopharmaco at that time? Thank you.

Speaker 5

Yeah, thanks, Andy. So, you know, again, clarification here. We're announcing that. Now, it's not practical just from a legal basis what we have to do with the SEC, for example, to do this in 2025. So we're really talking about that 12-month window. and this could be as early as, but we are allowing for flexibility to assess and make an optimal strategic decision on the path forward for RosMilomab. So I don't think we should be hedging do we do a transaction on RosMilomab with a partner before or after a separation or even that's the best path forward, particularly given the separation where I think we're going to have a lot more flexibility on how to think about RosMilomab. So RosMilomab is an option value And like we said in the prepared remarks, if we do put a relationship in place in front of the actual separation, there could be an opportunity to work through how to allocate the economic value of the drug. But we could also, and this could be the optimal decision, get the separation behind us and then transact or move forward rosnilumab independently after the separation. I think we have all these options are on the table, and we'll be working through that. So that kind of sits in the middle right now to work through. But what we're being very intentional about here is generally instead of going to one company, AMB033 and AMB101 are going to another. Rosnilmat, there's a bias to operate, obviously, into the biopharmaco, but that could look different depending on the timing of how the advancement works and when we get the separation completed.

Operator

Thank you. Our next question coming from the Lionel, Alex Thompson with Stiefel. Yelan is now open.

Speaker 5

Thanks for taking our question. I guess on the relationship between RoyaltyCo and Biopharmaco, do you expect Biopharmaco

Joseph Talmud, Analyst — TD Cowen

to have any economic interest in RoyaltyCo, or will this be a complete separation?

Speaker 5

Thanks, Alex. So as it relates to GEMPRLE and IMSA-DOLMAB, we think it will be a clean break. and then all the nuance and flexibility around Rosnoa.

Operator

And our next question coming from the lineup, Martin Fenn with Redbush Securities. Your line is now open. Martin Fenn, your line is open. Please check your mute button. Please skip again if you have a question. Our next question in queue coming from the lineup, Yasmin Rahimi with Vipersandler. Your line is now open.

Yasmin Rahimi, Analyst — Piper Sandler

Good afternoon, team. Thank you so much for the updates. Obviously, this does make quite sense because if you look at your market cap, you've not been getting full value for the royalization, nor have you gotten full credit for your pipeline, right? So obviously, splitting them out could bring two different shareholder bases and drive value. I guess the question for you is, given that you are in discussion with partners, do you think the separation is just making it simpler for a transaction transaction to occur with a potential partner. I'm just trying to figure out that if you didn't change anything, what the outcome would have been and whether this just makes those dialogue with strategics simpler in some way or some sort of form. I appreciate any color. Yeah, thanks.

Speaker 5

Thanks, Yaz. So, a couple points. One, I'm not sure this announcement plays into when and how to transact on Rosnilumab with parties any differently, one way or the other. It's what we're saying here is the royalties are in one area, the majority of biopharmacos going in the other, and we can transact on Rosnilumab at any time before or after. I think we have that flexibility I did not think this is going to impact excitement around RosnoMab and the ability to partner a separate point is we are explicitly not announcing any sort of strategic alternative process or putting it I do think that we have a very viable path forward independently on RosnoMab we have a huge event coming up with ulcerative colitis not just the initial 12-month data, but the six-month PPP and the follow-up one-year data that we want to play through and really assess our options. So, while I appreciate the question on partnering, it could be a lot more advantageous to at least out of the gate, smooth forward here with one indication on ResNOMAB without a partner. And I do think this gives that option a lot.

Operator

Our next question, coming from the line of Dave Risingo with Leering Partners,

Derek Arquilla, Analyst — Wells Fargo

your line is now open thanks very much and thanks for hosting the call so I'm I'm curious just to have you talk a little bit more please about I guess two things first with respect to this type of transaction are there any certain benchmark or representative types of publicly traded entities or exits of royalty companies that you would point us to, Dan? And then second, I think you've addressed it, but is there any more color you can provide on the scenarios for how the economic value of rosnilumab may be allocated between the royalty company and the biopharma company?

Speaker 5

Sure. Yeah. What's unique here is the absolute size of Gemperly being embedded in a company that looks like Anaptis today. There have been other high-value royalty programs within companies. I think on a relative basis to where we are as in any of Anaptis, this is quite unique. And there aren't a lot of this type of a transaction over time. So I think what we're doing is pretty unique, not just because of the overall value for Gemperly, which I think one of the other analysts mentioned earlier that is just dramatically undervalued, but also the strength and breadth of what we have in the R&D operations and how well capitalized we are. So I'm not going to point, I think, everyone to some alternative. I think there's plenty of companies that exist that focus on royalties in one way or another. I think our initial vision out of the gate here is this entity for the royalties of these assets and returning that back to shareholders. There's ultimately going to be choices of how to return that value over time that will be decided and communicated as we get closer. as it relates to the second question Dave I'm not sure I have much more to add if there was a transaction done ahead of the separation you'd have a economic relationship in place with another partner and I think we'd have to assess what that looks like at the time I think there's too many scenarios to them all right now of what that could look like but we would have some sort of an option to but that's far from certain and like I said whether we partner or not is kind of choice one whether we do it before or after the separation is how we think. Question coming from the line of Derek Arquilla with Wells Fargo.

Operator

Yelena Snellfin.

Derek Arquilla, Analyst — Wells Fargo

Hey, thanks for taking the questions. Maybe just to, can you highlight the potential tax impacts of the split and any of the minimization strategies you're taking?

Anupam Rama, Analyst — J.P. Morgan

And then also, what milestones can you reach for 033 and 101 within your expected cash runway for biopharma codes?

Speaker 5

I'll let Dennis answer the first part of the question.

Anupam Rama, Analyst — J.P. Morgan

Yeah, thanks, Derek. We're very focused on minimizing the overall strategies of this transaction in both the corporate and shareholder level. And timing and method of separation to minimize the potential.

Speaker 5

I'll provide more details when we get closer to the transaction being effective, but I think it's important, although we're focused on minimizing taxes, the bigger picture is the overall value creation from where we are today

Anupam Rama, Analyst — J.P. Morgan

or if we were to remain in the company's current.

Speaker 5

Yeah, and I'll just, like I mentioned on the prepared remarks, we've repurchased approximately 10% of the company today. We are so dramatically undervalued on either piece separately. When you separate these businesses, we do think it's going to create a lot of value for shareholders. There's various discount rates that are different for different types of companies and assets. The net value is the most.

Operator

Thank you. And that's all the time we have for our question and answer session. Ladies and gentlemen, that was our conference for today. We thank you for your participation, and you may now disconnect.