Okay, good morning. We're happy to be hosting Cavaletta Bio. With us today we have Dr. Stephen Nickberger, CEO, Dr. Arun Duff, the Chief Business Officer, and Steve Cavill, the Chief Commercial Officer. So to start, could you guys provide Dell Stans, the pivotal myositis trial, and sort of key catalysts we should be focusing on for...
...data presentations recently at ULAR can reliably reset immunomodulator-free responses that are durable. The vast majority are beginning to develop insights from the translational data in the first month or two that predict whether or not the patient is going to actually, in that vein, there was a very interesting poster presented on Friday, what we believe are the predictors of durability based on all of the evidence that we've seen so far with ResoCell. And the third thing is we're able to innovate as a result of these insights, right? So our preconditioning free regimens are starting to be given to more and more patients. In pemphigus and in lupus, we're doing dose, identify the best dose to go forward with, without fludarabine and without cyclophosphamide. In those indications, particularly in lupus, where the young women are the most sensitive to avoiding, most motivated by avoiding cyclophosphamide. So overall, ResoCell looks to have an excellent tolerability profile, a very effective, reliable ability to reset the immune system, and the ability to deliver real advances into our myositis pivotal program now. We're excited to kind of layer out the next year.
So kind of going down that vein, before we jump into the ULAR data, so for ResoCell, it's an autologous 4-MBV CD19 CAR-T. And given the breadth of approaches being investigated in autoimmunity, I mean, how is ResoCell differentiated from not just competitor autologous CAR-Cs, but also, you know, allogeneics and bispecific approaches? And sort of where does ResoCell fit in the competitive landscape there?
Among autologous, Nature Biotechnology had a review of data that's previously written in this paper. ResoCell looked to have a side effect profile, CRS risk, both the frequency and the magnitude, ICANN's risk, and overall safety profile, tolerability profile of ResoCell. looks like it will be second to none in the autologous space, a very excellent tolerability and safety profile with the vast majority, 97% of patients, no ICANs of any sort, you know, 94% of patients, either no ICANs, which is about two-thirds of them, or if they have ICANs, it tends to be a fever and not much else. So among autologous products, we feel really good because they're all pretty much effective in comparable ways, and the difference in autoimmune disease is going to be safety. So that brings me to in vivo, and I think I'm going to very quickly comment on bispecifics. Far better than rituximab. They will replace many of the chemotherapeutic or other agents that are currently used in these diseases. There will be better therapy for many, many patients, chronic therapy, when added on to existing. no longer want to be patients, you want to reset, and that's what we believe. In vivo, really interesting data presented recently, right? Legend had some CD1920 data that looked very promising for those that they treated. Then the Colonia data, BCMA targeting, their data also looked very interesting. Neither of them has a very high hurdle to remember how safe ResiCell is in the future. That's the bar for safety. The other thing that needs to be durability of treatment effect, not because our patients are regaining their normal B-cell population, the right product for us.
Jumping to the ULAR data, so last week you shared several important updates at ULAR. So let's start with the data in myositis. So you showed that five out of six dermatomyositis patients and immunomodulator free remissions at week 16. So could you frame this result in the context of read-through to your ongoing pivotal reset myositis study?
Yeah, I'm happy to do that, Mark. Thank you for the question. I think a nice place to start is that of six dermatomyositis patients, adults, and the first juvenile dermatomyositis patient all were able to at least secure a moderate or a major TIS response while discontinuing and remaining off all immunomodulators for the duration of the follow-up. Now, not only that, but in those patients who achieve that.
Yeah, yeah, it's an important piece, right? So, you know, Stephen talked about the Nature Biotech article. You know, we're kind of clearing that first toxicity question around the program. Best in class, it appears to now. The second thing, and, you know, we just have to wait this out to see how long these patients continue to respond. So now you're starting to see that, right, a year and a half. The reason why the year and a half milestone is very important is in the private insurance side of the house, which is the overwhelming majority of payment for ResoCell. This is obviously a very different patient population than the ones I've been involved with in cancer, which is extremely important and we could talk about that on the side but the the fact that the commercial insurers have been very clear in terms of the milestone that they would like to be seen a minimal of a year year and a half uh year and two years plus obviously they'd like to see multi multi-years we all would but in terms of that initial milestone and this the important part of this point that we've done the research around this because we knew going into ular what the data we were going to be presenting. So we did some research with payers as well as U.S. providers, hospitals. And what we did not present to them, which we will because we're building it right now, is the economic impact models that drug-free represents for them in this patient population. It's significant. So it's very exciting now from a payment perspective. We're starting now to clear that hurdle, that requirement around durability. And as we get closer to them and closer to our launch of the program, we'll be able to demonstrate the economic impact, which is obviously going to have a lot of interest for them anyway.
So, you know, on the line of durability, you guys mentioned that durability in dermatomyositis patients is 1.5 years, but in ACEs patients, durability was more variable. And I was wondering if there's any sort of how you're thinking about treatment and responses for the ACEs subgroup.
Yeah, absolutely, Mark. Just a little bit of context of the way our registrational perspective, the remaining small. In the antisynthetic syndrome patients, these patients have rapid responses, deep responses, and at least in the Phase I-II data, most of them are achieving the primary endpoint. However, somewhere between month six and onwards, and this is the case in our data and in the academic data also presented by Shet at ULAR actually this past week, at some point in that journey. Now, a lot of times these patients are significantly better off than when they originally started late as follow-up and as long as long. It seems like there is, from a physiologic perspective, a difference in the mechanism of disease, which may allow for rapid and deep responses early and some emergence or breakthrough of disease as we continue to follow. So there's still more to be learned, but those are some of the early findings.
And sort of, you know, kind of understanding that finding, Are there particular indications where you think, you know, a resin cell could be, you know, best applicable given, you know, like you're saying, there are CD19 cells that are, CD19 negative cells that are active in this particular subset?
So it's a really good question. It's exactly why we designed the studies across the portfolio the way we did. So each of our studies evaluate a single weight-based dose in cohort to gather that data in that pop. You'll see how that data is on that data to determine, does this make sense to extend to a registrational study? Does it make sense to continue evaluating? Does it make sense that this should not be an indication where CD19 CAR-T should be developed? We came up with that design kind of as a cross-functional team. This is now three or four years ago so that we could efficiently develop more but still able to make independent decisions across each indication based on the data that we And so a great example here is in our myositis registrational program, we have an opportunity for durable responses to emerge. It also allows us to be, so those are, those are learnings that we've been able to sort of obtain and apply into that study.
So along, for the pivotal study design, you recently initiated the registrational study in myositis, and if you can walk us through sort of the recent myositis study design with any timelines for data, but also, you know, given the recent changes in commentary from the FDA, could you provide any color on your FDA interactions regarding study alignment and point selection and your overall confidence in the single-arm study design.
Yeah, so a few highlights, and then I want to turn it over to see for an important feature here in terms of why the design is important for commercial uptake. A patient study, a single-arm evaluating a weight-based dose of RezaCell, primarily dermatomyositis, now prioritizing the juvenile dermatomyositis data, which we'll plan to submit when we submit the myositis BLA. Importantly in this study is the opportunity to evaluate outpatient dosing. And with the safety profile that Steve and Stephen talked about in terms of what is emerging for RezaCell, where in myositis we've had no ICANs observed whatsoever in the patients that have been treated to date, we've seen all patients either have no CRS or grade 1 CRS of transient fever across the portfolio so far based on the data reported at ULAR. All of this has helped us enable the ability to enable outpatient dosing in the registration, and in the phase 1-2 expansion cohorts, actually. And maybe I can turn it over to Steve to talk about why outpatient dosing, there's no question from a patient and provider experience perspective, can be really positive. But maybe, Steve, you can talk about what that means for the commercial opportunity and the reduction of burden on the health care system.
Yeah, I mean, normally side of the carer, you don't really, there's not a lot of conversation around that with a lot of product launches. However, with cell therapies in particular, it's been one of the biggest rate limiters for AutoCART therapies for cancer. And if you look at just the treated eligible patient population in cancer therapies, you see anywhere between 20% to 25% of all eligible patients actually being treated. One of the challenges, the reason for that, was that there was only so much inpatient capacity to treat these patients. So here you are basically, you know, you're launching into large patient populations, and, you know, the ecosystem cannot actually, you know, take those patients and treat them all as an inpatient administered product. So one of the key strategies behind ResoCell and the toxicity profile is what enables this to happen is to safely treat these patients in the hospital outpatient setting first and eventually to transition into the full outpatient setting. And it's all predicated on this toxicity profile that was originally discussed by Stephen up front is that you have now what appears to be the safest product in the class that's going to enable that to happen. So obviously patients love being able to take it as an outpatient, right, of course. The hospitals love it because payment's much better for them. That's been also a rate limit for them. And the payers love this because now you're able to treat these patients and totally reduce total cost of inpatient admissions. And you're looking at taking from a million-dollar-plus patient administered in the inpatient setting and significantly reducing that cost point for a payer. So it's an exciting part of the launch, and it's a key focus for us as we move forward.
For sure. You know, keeping hospital beds open is great for everyone. Sort of what safety parameters are you monitoring in the study to support an outpatient label, and what proportion of patients do you expect will be treated in the community outpatient setting? You take piece, and I'll take doctors.
Let's do it, yeah. So from a safety profile or sort of parameters perspective, what are we looking at? It's really in leverage, and this is thanks to the guy on my right here, Steve, with Carvicti. is half of new outpatients were being started or half of new patient starts were happening in the outpatient setting. With Rezacel, we're seeing with a significantly more favorable safety profile in terms of lower CRS frequency, lower CRS severity, lower ICANN frequency in particular, a real opportunity to move much earlier in sort of the line of therapy, not the line of therapy, but in terms of how Rezacel can sort of move early to launch in the outpatient setting. It's why we incorporated the option in our outpatient study to begin with. And maybe, Steve, you can walk through kind of how we see the transition to outpatient happening and how quickly what that speed was like.
Yeah, that's a key point. You know, we've talked about, you know, what Broome was talking about, my old program with Carvicti, it took about three years to get to that point of about 50% or so new starts in the clinic for these hospitals. The rate limiter, again, that you start to run into is these patients are still extremely ill, these end-stage and even mid-stage cancer patients that many of these programs are treating historically. The beauty that I keep coming back to is the beauty of this program, these folks are very ambulatory, they're younger, and they're working class, right? So they want to continue to continue on with their lives. The adoption sequence in outpatient here that we're starting to see in the research that we're performing based upon the profile that we have been demonstrating at ULAR, that data, is way faster than the three-year point that I referenced in terms of my old program. So you're going to, like I said earlier, you're going to see a very rapid adoption on the back of the infrastructure that's been created with Carvicti. Many of the sites are the same. And again, all the data that we're seeing that we are fielding right now is suggesting a rapid uptake there so fast that we are looking at how do we safely now move this to your point about really community practice. Community practice, it's limited right now. You see it a little bit. It's spotty with Carvicti. So the proof of concept has been established in really sick patients. Like I said, it's our intention to follow the model that we created before but really start to open it up. You have to do it. In order to reclassify these CAR-T therapies to really treat the patient populations to fulfill the potential of them, you have to do that. But it's the first time ever that a product like this has had a profile to enable you
to actually get there. Gotcha. So you touched on the inclusion of juvenile demetromyocytus patients, and given you have rare pediatric disease designation for a red cell in JEM. How many JEM patients will the pivotal study enroll? And also, could you talk about the significance here for both review timelines and capital
Yeah, talk about the FDA kind of discussion and how those are going. So don't think we forgot it, but we can fold it into this question. I think adult population, this is really only on the capital infusion point. Oh, from the priority review vouchers, if you look in the last probably three months, have three to six months, have sold anywhere from, you know, let's say $180 to $200 million on. Now this is multiple sales. I think for us as an emerging biotech company, why that's important is if we are able to obtain the priority review voucher at the time of approval, that's now immediate non-dilutive capital that comes in and allows us to fund the business, to fund the launch in a way that's really differentiated because most companies don't have that opportunity. And so when we think about doing all the things that can help Steve enable an excellent launch and when we can think about funding the business within myositis and within the broader portfolio, that type of capital infusion really can come in handy.
Yeah, for sure. That's really meaningful. So in the last few minutes, I know we have several other programs to touch on, so we're going to pivot to Reset SSE. So you additionally announced plans to initiate the single-arm registrational study in systemic sclerosis in the fourth quarter, and you showed strong data at ULAR demonstrating durable responses through week 36 for that indication. Could you walk us through the key findings at ULAR and the decision to pursue SSC as the second registrational study? Absolutely. So SSC is one of the highest
burden in terms of mortality and morbidity of autoimmune diseases that exist in the landscape. I think you summarized it nicely actually in terms of what the key findings were. The one point I would add on is that in systemic sclerosis what we saw pretty consistently is that the responses actually seem to increase in magnitude over time as patients remain off all the data we saw at week 12 we saw at week 36 and then even if you extend it out a little further to week 52 those responses seem to be increasing in magnitude over time and for us that was an interesting finding consistent with the academic, it takes an average or a median 7.5% improvement in FPC. And that can be hard to contextualize, it just looks like numbers on a paper. But the two approved medications at week 52 in their registrational studies actually had FPC worsening in one at 52 weeks, and the other had FPC stabilization, which means from time zero to week 52, there was either no change in FPC, or the worsening was simply less than the worsening that you would have if you were not on that medication. Again, in contrast with Resicel, what we're seeing is an improvement of 7.5% at week 36 across the patients that were identified. And that type of really unprecedented data across them is really what guided us. For us, it's a 20%-
It was not taking any medicines anymore. The vast majority of patients are no longer on any medication. And when we talk about other modalities or, you know, other categories of drug, remember, those are all on top of existing therapy with chronic administration of the new and probably very expensive therapy, right? So when you put it all together, the proposition for ResoCell in autoimmune disease I think compares quite favorably on the safety and tolerability to, frankly, any alternative modality, any alternative therapeutic opportunity that you may have for these patients if they want to go off their medicines and they want to no longer be a patient. This is the one way you can get there. And if I tell you that the primary side effect of ResoCell is safety related to a fever that occurs day 7 to day 12 in that range, it's about a third of patients. Last time we saw an ICANNs was about 14 or 15 months ago. Now, we may have one tomorrow, and we'll have them from time to time. But the risk of ICANNs is, you know, we've dosed 50 or 60 patients in that period of time. This is not autologous CAR-T of the past when it comes to the safety profile or when it comes to the value proposition. And then the flip side that we're not talking about today, but is our ability to industrialize and automate manufacturing and lower the cost of goods to among the lowest in the industry at launch. It's just something nobody's ever seen before. So I think it takes diving in to really explore each of these.
Yeah, another, I think, key value proposition and data you showed at ULR was around the no preconditioning program. And so for those unfamiliar, maybe, could you explain why eliminating preconditioning could be such a key value proposition for patients?
And this is in the 50-plus patients that Stephen just referenced that we presented is an ability to reliably see an immune system reset. And we actually, in the translational poster on Saturday, defined what the immune system reset was, both from a B-cell depletion perspective and a B-cell repopulation perspective. I know we don't have enough time to go into it, but it really is a poster worth looking into because those parameters are going to be key as we look forward to evaluate how other modalities do or don't achieve immune system reset and, for us, guiding our own efforts in the PC-free regimen. So what did we share in PC-free? In the first two patients with lupus who were treated with the lowest dose of Rezacel without preconditioning, We saw in one of those patients, they achieved essentially the hallmark of immune system reset from a depletion. And we saw another, the second patient, achieve a 90% decrease in prifolus. What that demonstrated was similar to the patients that we reported in pemphigus at that same lowest dose. We appear to be at a threshold. Some patients may respond, but not completely other player that's in it.
Yeah, no, likewise, I agree. I think the potential to get rid of preconditioning is huge for the field. So sort of in the last couple of minutes, could you just remind us of your cash runway and sort of how you're thinking about cash burn in the context of, you know, pivotal study expansion, expanding your programs, and also, you know, commercial build-out as you potentially get ready for the first ResSell launch?
Yeah, sure. So after the – for those who aren't familiar, we recently completed a $150 million financing, which included many of our current investors, a number of new large mutual funds, sovereign wealth, Eli Lilly among the investors. With that cash, in addition to the cash on hand, brought us to about a quarter of a billion dollars of cash. That will take us well into 2027. In 2027, the delivery of our pivotal data on myositis, scleroderma, we are not committing to specific timelines for presenting the preconditioning free dairy and any other indication, partly because we recognize that this is incredibly important information, and we are clearly leading the field. And frankly, from a competitive standpoint, we don't want to educate the world on what's going to work well in terms of dosing. The opportunity to break away from the field with regard to PC-free, paramount. So the timeline and nature of it.
That makes sense. I think that's a good place to end it. Thank you so much to the team. Really appreciate your time. Thank you. Thanks, Mark.
Appreciate it.